Full Press Release Details
Reports Strong First Quarter 2018 Financial Results
N.J., May 8, 2018 - CytoSorbents Corporation (NASDAQ: CTSO), a critical care immunotherapy leader using its CytoSorb
blood purification technology to treat deadly inflammation in critically-ill and cardiac surgery patients around the world, reports
financial and operational results for the quarter ending March 31, 2018.
2018 Financial Highlights:
2018 Operational Highlights:
Dr. Phillip Chan, Chief Executive Officer
of CytoSorbents stated, "With the execution of a solid first quarter, we are on track to have another record year of CytoSorb
sales with expected strong growth and achievement of operating profitability on a quarterly basis later this year. To help support
this growth, we have strengthened the Company in a number of key areas.
"In addition, we continue to advance our clinical programs.
Following the announcement of the first patient enrolled into the pivotal REFRESH 2 trial a couple of weeks ago, we expect the
clinical progress on this important study to accelerate with now a total of 26 sites in various stages of evaluation, qualification,
and initiation. Meanwhile, the REMOVE endocarditis cardiac surgery trial that is being funded by the German Federal Ministry of
Health and Education has already enrolled 22 patients at 3 centers since the first patient enrollment in late January, with an
additional 3 sites to start soon."
join us on our previously announced earnings call today at 4:45PM EST where we will cover our progress. We will also respond to
questions from the audience during our live Q&A session. The investor presentation and a written transcript of the conference
call will be available within a week of the webcast."
Conference Call Details:
Date: Tuesday, May 8, 2018
Time: 4:45 PM Eastern Time
Participant Dial-In: 323-794-2551
Live Presentation Webcast: http://public.viavid.com/index.php?id=129408
It is recommended that participants dial
in approximately 10 minutes prior to the start of the call. There will also be a simultaneous live webcast of the conference
call that can be accessed through the following audio feed link: http://public.viavid.com/index.php?id=129408
An archived recording and written transcript
of the conference call will be available under the Investor Relations section of the Company's website at http://cytosorbents.com/investor-relations/financial-results/
Results of Operations
Comparison for the three months ended
March 31, 2018 and 2017:
Revenue from product sales was approximately
$4,433,000 in the three months ended March 31, 2018, as compared to approximately $2,596,000 in the three months ended March 31,
2017, an increase of approximately $1,837,000, or 71%. This increase was primarily driven by an increase in direct sales from both
new customers and repeat orders from existing customers, an increase in distributor sales, and strength of the Euro.
Grant income was approximately $491,000
for the three months ended March 31, 2018 as compared to approximately $517,000 for the three months ended March 31, 2017, a decrease
of approximately $26,000. This decrease was a result of timing of certain grant revenue.
Total revenues were approximately $4,925,000
for the three months ended March 31, 2018, as compared to total revenues of approximately $3,114,000 for the three months ended
March 31, 2017, an increase of approximately $1,811,000 or 58%.
For the three months ended March 31, 2018
and 2017, cost of revenue was approximately $1,568,000 and $1,254,000, respectively, an increase of approximately $314,000. Product
cost of revenues increased approximately $305,000 during the three months ended March 31, 2018 as compared to the three months
ended March 31, 2017 due to increased sales. Product gross margins were approximately 74% for the three months ended March 31,
2018, as compared to approximately 68% for the three months ended March 31, 2017. This increase in gross margin of 6% was
due to a reduction in the cost of devices manufactured as a result of production efficiencies achieved, as well as a favorable
mix of sales between direct customers and distributors and the impact of the increase in the exchange rate of the Euro.
Research and Development Expenses:
For the three months ended March 31, 2018,
research and development expenses were approximately $1,780,000 as compared to research and development expenses of approximately
$469,000 for the three months ended March 31, 2017. The increase of approximately $1,311,000 was due to increase in costs related
to our clinical studies and trials of approximately $867,000, an increase in our clinical related salaries of approximately $211,000,
an increase in non-clinical research and development salaries of approximately $96,000, an increase in new product development
costs of approximately $70,000, an increase in stock-based compensation of approximately $49,000 and increases in other non-clinical
research and development costs of approximately $18,000.
Legal, Financial and Other Consulting
Legal, financial and other consulting expenses
were approximately $416,000 for the three months ended March 31, 2018, as compared to approximately $280,000 for the three months
ended March 31, 2017. The increase of approximately $136,000 was due to an increase in employment agency fees of approximately
$79,000 related to the recruitment of senior level personnel and an increase in legal fees of approximately $44,000 related to
certain corporate initiatives and an increase in auditing and accounting fees of approximately $21,000. These increases were offset
by a decrease consulting fees of approximately $8,000.
Selling, General and Administrative
Selling, general and administrative expenses
were approximately $4,262,000 for the three months ended March 31, 2018, as compared to approximately $2,667,000 for the three
months ending March 31, 2017. The increase of $1,595,000 was due to increase in salaries, commissions, and related costs of approximately
$696,000, an increase in royalty expenses of approximately $146,000 due to the increase in product sales, additional sales and
marketing costs, which include advertising and conferences of approximately $81,000, an increase in travel and entertainment and
other costs of approximately $84,000, an increase in stock-based compensation of approximately $520,000, an increase in public
relations costs of approximately $43,000, an increase in rent expense of approximately $11,000 related to the new expansion of
manufacturing and office facilities and an increase in other general and administrative cost increases of approximately $14,000.
Interest Income (Expense), Net:
For the three months ended March 31, 2018,
interest expense was approximately $239,000, as compared to interest expense of approximately $120,000 for the three months ended
March 31, 2017. This increase in interest expense of approximately $119,000 is directly related to the additional interest expense
related to the Company's draw down of the Term B Loan (as defined in the Loan and Security Agreement dated as of June 30,
2016 with Bridge Bank) on June 30, 2017 in the amount of $5,000,000.
Gain (Loss) on Foreign Currency Transactions:
For the three months ended March 31, 2018,
the gain on foreign currency transactions was approximately $358,000 as compared to approximately $153,000 for the three months
ended March 31, 2017. The 2018 first quarter gain is directly related to the increase in the exchange rate of the Euro to the U.S.
dollar at March 31, 2018 as compared to December 31, 2017. The exchange rate of the Euro to the U.S. dollar was $1.23 per Euro
at March 31, 2018 as compared to $1.20 per Euro at December 31, 2017.
Liquidity and Capital Resources
Since inception, our operations have been
primarily financed through the issuance of debt and equity securities. At March 31, 2018, we had current assets of approximately
$24,515,000 including cash on hand of approximately $21,090,000 and current liabilities of approximately $3,986,000.
On June 30, 2016, the Company and its wholly-owned
subsidiary, CytoSorbents Medical, Inc. (together, the "Borrower"), entered into a Loan and Security Agreement with
Bridge Bank, a division of Western Alliance Bank, (the "Bank"), pursuant to which the Company borrowed $10 million
in two equal tranches of $5 million (the "Original Term Loans"). On March 29, 2018 (the "Closing Date"),
the Original Term Loans were refinanced with the Bank pursuant to an Amended and Restated Loan and Security Agreement by and between
the Bank and the Borrower (the "Amended and Restated Loan and Security Agreement"), under which the Bank agreed to
loan the Borrower up to an aggregate of $15 million to be disbursed in two tranches (1) one tranche of $10 million (the "Term
A Loan") which was funded on the Closing Date and used to refinance the Original Term Loans, and (2) a second tranche of
$5 million which may be disbursed at the Borrower's sole request prior to March 31, 2019 provided certain conditions are
met (the "Term B Loan" and together with the Term A Loan, the "Term Loans"). The proceeds of the Term Loans
will be used for general business requirements in accordance with the Amended and Restated Loan and Security Agreement.