Full Press Release Details
electroCore Announces Third Quarter 2019 Financial Results
Continued growth in prescribing physicians, paid months of therapy and dispensed prescriptions
Company to host conference call and webcast today, November 13, at 4:30pm ET
November 13, 2019 at 4:05 PM EST
BASKING RIDGE, N.J.,
November 13, 2019 electroCore, Inc. (Nasdaq: ECOR), a commercial-stage bioelectronic medicine company, today announced third quarter 2019 financial results and provided an operational update.
Third Quarter 2019 and Recent Highlights
I accepted the CEO role at electroCore because I firmly believe in the potential of the
company s novel non-invasive vagus nerve stimulation technology to treat serious headache conditions, said Dan Goldberger, Chief Executive Officer of electroCore. With FDA-cleared indications for acute treatment of the pain associated with each of migraine and episodic cluster headache, and cluster headache prevention, we have the ability to address significant commercial and
government market opportunities that have gone largely untapped to this point. We have a novel, proprietary technology and very large addressable markets, and I, together with the rest of the electroCore team, look forward to unlocking the potential
of gammaCore for the benefit of patients as well as our shareholders.
Third Quarter 2019 Financial Results
For the quarter ended September 30, 2019, electroCore reported net sales of approximately $683,000, compared to $151,000 in the third quarter of 2018. Net
sales were $623,000 in the second quarter and $410,000 in the first quarter of 2019. These increases in revenue reflect increased sales in the United States and the United Kingdom.
Total operating expenses for third quarter of 2019 were approximately $11.2 million, compared to $13.6 million in the third quarter of 2018. The
decrease was due primarily to a reduction in SG&A expense, which declined to approximately $8.1 million in the third quarter of 2019 from approximately $11.3 million for the comparable period in 2018, primarily driven by a decrease in
compensation and other expenses consistent with the cost reduction plan implemented in June 2019. The third quarter of 2019 included restructuring and other severance related costs of $0.8 million.
GAAP net loss from operations for the third quarter of 2019 was $10.7 million as compared to a loss of
$13.2 million in the third quarter of 2018.
Adjusted EBITDA net loss from operations for the third quarter of 2019 was a loss of $8.4 million,
a 34% decrease when compared to adjusted EBITDA net loss from operations of $12.7 million for the same period last year.
adjusted EBITDA net loss from operations as GAAP net loss from operations, excluding income tax expense, stock-compensation expense, restructuring and other severance related charges, legal fees associated with stockholders litigation and total
other income /expense. A reconciliation of GAAP net loss from operations to Non-GAAP adjusted EBITDA net loss from operations has been provided in the financial statement tables included in this press release.
Cash and cash equivalents and marketable securities at September 30, 2019 totaled approximately $33.5 million, as compared to approximately
$68.6 million at December 31, 2018. Net cash usage for the quarter ended September 30, 2019 was approximately $7.6 million, which included cash outflows of approximately $0.8 million related to severance payments and CEO
recruitment costs. By comparison, net cash usage was $11.2 million in the second quarter of 2019 and $16.2 million in the first quarter of 2019.
As previously disclosed, based on its current cash resources, and revenue and expense forecasts, electroCore believes that it will have adequate resources to
fund its operations into the beginning of 2021.
Webcast and Conference Call Information
electroCore s management team will host a conference call today beginning at 4:30 p.m. ET. Investors interested in listening to the conference call, or
webcast may do so by dialing 877-407-4018 for domestic callers or 201-689-8471 for
international callers, using Conference ID: 13695210, or by connecting to the Web: http://public.viavid.com/index.php?id=136380
webcast of the event will be available on the Investors section of the Company s website at: www.electrocore.com.
electroCore, Inc. is a commercial stage bioelectronic medicine company dedicated to improving patient outcomes through its platform non-invasive vagus nerve stimulation therapy initially focused on the treatment of multiple conditions in neurology and rheumatology. The company s current indications are for the preventative treatment of
cluster headache and acute treatment of migraine and episodic cluster headache.
For more information, visit www.electrocore.com.
Forward-Looking Statement
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements include, but are not limited to, statements about electroCore s business prospects and product development plans, its expected net cash usage and cash burn rates and liquidity outlook, pipeline or potential markets for its
technologies, and other statements that are not historical in nature, particularly those that utilize terminology such as anticipates, will, expects, believes, intends, other words of
similar meaning, derivations of such words and the use of future dates. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the ability to raise the
additional funding needed to continue to pursue electroCore s business and product development plans, the inherent uncertainties associated with developing new products or technologies, the ability to commercialize gammaCore , competition in the industry in which electroCore operates and overall market conditions. Any forward-looking statements are made as of the date of this press release, and electroCore assumes no
obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by law. Investors should consult all of the information set forth
herein and should also refer to the risk factor disclosure set forth in the reports and other documents that electroCore files with the SEC available at www.sec.gov.
LifeSci Public Relations
Condensed Consolidated Statements of Operations
thousands, except per share data)
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Consolidated statements of operations: | ||||||||||||||||
| Net sales | $ | 683 | $ | 151 | $ | 1,715 | $ | 625 | ||||||||
| Cost of goods sold | 354 | 97 | 766 | 387 | ||||||||||||
| Gross profit | 329 | 54 | 949 | 239 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 2,275 | 2,333 | 8,279 | 9,007 | ||||||||||||
| Selling, general and administrative | 8,143 | 11,272 | 28,156 | 30,105 | ||||||||||||
| Restructuring and other severance related charges | 805 | 1,997 | ||||||||||||||
| Total operating expenses | 11,223 | 13,606 | 38,432 | 39,111 | ||||||||||||
| Loss from operations | (10,894 | ) | (13,552 | ) | (37,483 | ) | (38,872 | ) | ||||||||
| Other income/(expense) | ||||||||||||||||
| Change in fair value of warrant liability | (1,871 | ) | ||||||||||||||
| Interest and other income, net | 206 | 355 | 850 | 580 | ||||||||||||
| Other expense | (5 | ) | (17 | ) | (264 | ) | ||||||||||
| Total other income/(expense) | 206 | 350 | 833 | (1,555 | ) | |||||||||||
| Loss before income taxes | (10,688 | ) | (13,202 | ) | (36,650 | ) | (40,427 | ) | ||||||||
| Provision for income taxes | 2 | 2 | ||||||||||||||
| Net loss from operations | (10,688 | ) | (13,204 | ) | (36,650 | ) | (40,430 | ) | ||||||||
| Less: Net income attributable to noncontrolling interest | 55 | |||||||||||||||
| Total net loss attributable to Electrocore LLC and electroCore, Inc., subsidiaries and affiliates | $ | (10,688 | ) | $ | (13,204 | ) | $ | (36,650 | ) | $ | (40,485 | ) | ||||
| Net loss attributable to Electrocore LLC, subsidiaries and affiliate | (21,118 | ) | ||||||||||||||
| Net loss attributable to electroCore, Inc., subsidiaries and affiliate | (10,688 | ) | (13,204 | ) | (36,650 | ) | (19,366 | ) | ||||||||
| Weighted average shares of common shares outstanding - Basic and Diluted | 29,352,026 | 29,261,942 | 29,339,384 | 29,261,942 | ||||||||||||
| Net loss per common stock - Basic and Diluted | $ | (0.36 | ) | $ | (0.45 | ) | $ | (1.25 | ) | $ | (0.66 | ) |
Condensed Consolidated Balance Sheet Information
| As of September 30, | As of December 31, | |||||||
| 2019 | 2018 | |||||||
| (unaudited) | ||||||||
| Cash and cash equivalents | $ | 6,549 | $ | 7,600 | ||||
| Marketable securities | $ | 26,940 | $ | 60,963 | ||||
| Total assets | $ | 44,090 | $ | 73,504 | ||||
| Current liabilities | $ | 10,246 | $ | 7,073 | ||||
| Total liabilities | $ | 11,796 | $ | 7,319 | ||||
| Stockholder s equity | $ | 32,295 | $ | 66,186 |
Reconciliation of GAAP net loss from operations to Non-GAAP adjusted EBITDA net loss from operations
(Unaudited) Use of Non-GAAP Financial Measure
The Company is presenting adjusted EBIDTA net loss from operations because it believes this measure is a useful indicator of its operating performance.
electroCore management uses this non-GAAP measure principally as a measure of the Company s core operating performance and believes that this measure is useful to investors because it is frequently used
by the financial community, investors, and other interested parties to evaluate companies in the Company s industry. The Company also believes that this measure is useful to its management and investors as a measure of comparative operating
performance from period to period. Additionally, the Company believes its use of non-GAAP adjusted EBITDA net loss from operations facilitates management s internal comparisons to historical operating
results by factoring out potential differences caused by charges not related to its regular, ongoing business, including, without limitation, non-cash charges and certain large and unpredictable charges such
as restructuring expenses.[insert paragraph break]
The Company has presented adjusted EBITDA net loss from operations as a
non-GAAP financial measure in this press release. The Company defines adjusted EBITDA net loss from operations as its reported GAAP net loss from operations excluding income tax expense, depreciation and
amortization, stock-based compensation, restructuring and other severance related charges, legal fees associated with stockholders litigation and total other income /expense and other income and expense.
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| (in thousands) | ||||||||||||||||
| GAAP net loss from operations | $ | (10,688 | ) | $ | (13,204 | ) | $ | (36,650 | ) | $ | (40,430 | ) | ||||
| Provision for income taxes | $ | $ | 2 | $ | $ | 2 | ||||||||||
| Depreciation and amortization | $ | 99 | $ | 21 | $ | 152 | $ | 42 | ||||||||
| Stock-based compensation | $ | 1,220 | $ | 827 | $ | 2,690 | $ | 6,458 | ||||||||
| Restructuring and other severance related charges | $ | 805 | $ | $ | 1,997 | $ | ||||||||||
| Legal fees associated with stockholders litigation | $ | 322 | $ | $ | 322 | $ | ||||||||||
| Total other (income)/expense | $ | (206 | ) | $ | (350 | ) | $ | (833 | ) | $ | 1,555 | |||||
| Adjusted EBIDTA net loss from operations | $ | (8,448 | ) | $ | (12,705 | ) | $ | (32,322 | ) | $ | (32,373 | ) |
The Company s use of a non-GAAP measure has
limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of its results as reported under GAAP. Some of these limitations are:
the non-GAAP measure does not reflect interest or tax payments that may represent a reduction in cash
although depreciation and amortization are non-cash charges, the assets being
depreciated and amortized may have to be replaced in the future, and the non-GAAP measure does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure
the non-GAAP measure does not reflect the potentially dilutive impact of
equity-based compensation; and
the non-GAAP measure does not reflect changes in, or cash
requirements for, working capital needs;
other companies, including companies in electroCore s industry, may calculate adjusted
EBITDA net loss from operations differently, which reduces its usefulness as a comparative measure.
Because of these and other limitations, you should
consider the non-GAAP measure together with other GAAP-based financial performance measures, including various cash flow metrics, net loss and other GAAP results. A reconciliation of GAAP net loss from
operations to non-GAAP adjusted EBITDA net loss from operations has been provided in the preceding financial statement table of this press release.