Full Press Release Details
Nevro Reports Fourth Quarter and Full Year 2017 Financial Results and Provides 2018 Outlook
Redwood City, Calif., February 22, 2018 - Nevro Corp. (NYSE: NVRO), a global medical device company that is providing innovative evidence-based solutions for the treatment of chronic pain, today reported financial results for the three months and full year ended December 31, 2017.
2017 Accomplishment & Highlights:
Fourth Quarter Financial Results
Revenue for the quarter ended December 31, 2017 was $98.0 million versus $70.5 million during the same period of the prior year, representing 39% growth as reported. U.S. revenue for the three months
ended December 31, 2017 was $81.1 million, representing 45% growth as reported. International revenue was $16.9 million, representing growth of 10% in constant currency and 17% on an as-reported basis. The increase in revenue was primarily attributable to the continued adoption of the Senza system.
Gross profit for the fourth quarter of 2017 was $69.5 million, representing a 71% gross margin, up from $48.8 million, representing a 69% gross margin, in the same period of the prior year.
Operating expenses for the fourth quarter of 2017 were $71.7 million compared to $55.1 million in the same period of the prior year, representing an increase of 30%. The increase in operating expenses was driven primarily by increased headcount and related personnel costs, as well as legal expenses associated with intellectual property litigations.
Loss from operations for the fourth quarter of 2017 was $2.2 million compared to $6.3 million for the same period of the prior year.
Revenue Guidance for Full Year 2018
Nevro reiterates worldwide revenue for 2018 to be in the range of $400.0 to $410.0 million, which was first announced in January 2018.
Webcast and Conference Call Information
Management will host a conference call today beginning at 1:30 p.m. PT / 4:30 p.m. ET. Individuals interested in listening to the conference call may dial (866) 393-4306 for domestic callers, or (734) 385-2616 for international callers (Conference ID: 2584428), or access the webcast on the "Investors" section of the company's web site at: www.nevro.com/investors.
Headquartered in Redwood City, California, Nevro is a global medical device company focused on providing innovative products that improve the quality of life of patients suffering from debilitating chronic pain. Nevro has developed and commercialized the SENZA spinal cord stimulation (SCS) system, an evidence-based, non-pharmacologic neuromodulation platform for the treatment of chronic pain. The SENZA system is the only SCS system that delivers Nevro's proprietary HF10 therapy. Senza, Senza II, HF10, Nevro and the Nevro logo are trademarks of Nevro.
Forward-Looking Statements
In addition to historical information, this press release contains forward-looking statements with respect to our business, capital resources, revenue projections, strategic initiatives and growth, reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including continuing adoption of, and interest in, Senza in the U.S. and international markets; and our expectations for worldwide revenue for the full year 2018. These forward-looking statements are based upon information that is currently available to us or our current expectations, speak only as of the date hereof, and are subject to numerous risks and uncertainties, including our ability to successfully commercialize our products; our ability to manufacture
our products to meet demand; the level and availability of third-party payor reimbursement for our products; our ability to effectively manage our anticipated growth; our ability to protect our intellectual property rights and proprietary technologies; our ability to operate our business without infringing the intellectual property rights and proprietary technology of third parties; competition in our industry; additional capital and credit availability; our ability to attract and retain qualified personnel; and product liability claims. These factors, together with those that are described in greater detail in our Annual Report on Form 10-K that we expect to file on February 22, 2018, as well as any reports that we may file with the SEC in the future, may cause our actual results, performance or achievements to differ materially and adversely from those anticipated or implied by our forward-looking statements. We expressly disclaim any obligation, except as required by law, or undertaking to update or revise any such forward-looking statements. Our results for the full year and quarter ended December 31, 2017 are not necessarily indicative of our operating results for any future periods.
Investor Relations Contact:
Nevro Investor Relations
Consolidated Statements of Operations and Comprehensive Loss
(in thousands, except share and per share data)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (unaudited) | ||||||||||||||||
| Revenue | $ | 97,963 | $ | 70,531 | $ | 326,674 | $ | 228,504 | ||||||||
| Cost of revenue | 28,451 | 21,692 | 98,981 | 75,433 | ||||||||||||
| Gross profit | 69,512 | 48,839 | 227,693 | 153,071 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 9,943 | 11,276 | 37,560 | 33,729 | ||||||||||||
| Sales, general and administrative | 61,741 | 43,832 | 219,712 | 142,423 | ||||||||||||
| Total operating expenses | 71,684 | 55,108 | 257,272 | 176,152 | ||||||||||||
| Loss from operations | (2,172 | ) | (6,269 | ) | (29,579 | ) | (23,081 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income (expense), net | (1,616 | ) | (1,780 | ) | (6,738 | ) | (4,709 | ) | ||||||||
| Other income (expense), net | (131 | ) | (1,193 | ) | 1,067 | (1,097 | ) | |||||||||
| Loss on extinguishment of debt | - | - | - | (1,268 | ) | |||||||||||
| Loss before income taxes | (3,919 | ) | (9,242 | ) | (35,250 | ) | (30,155 | ) | ||||||||
| Provision for income taxes | 392 | 583 | 1,408 | 1,623 | ||||||||||||
| Net loss | (4,311 | ) | (9,825 | ) | (36,658 | ) | (31,778 | ) | ||||||||
| Changes in foreign currency translation adjustment | (319 | ) | 283 | (360 | ) | (163 | ) | |||||||||
| Changes in gains (losses) on short-term investments | (311 | ) | (44 | ) | (204 | ) | (340 | ) | ||||||||
| Net change in other comprehensive loss | (630 | ) | 239 | (564 | ) | (503 | ) | |||||||||
| Comprehensive Loss | $ | (4,941 | ) | $ | (9,586 | ) | $ | (37,222 | ) | $ | (32,281 | ) | ||||
| Net loss per share, basic and diluted | $ | (0.15 | ) | $ | (0.34 | ) | $ | (1.25 | ) | $ | (1.12 | ) | ||||
| Weighted average shares used to compute net loss per share, basic and diluted | 29,664,926 | 28,817,333 | 29,424,054 | 28,485,003 |
Consolidated Balance Sheets
(in thousands, except share and per share data)
| December 31, | December 31, | |||||||
| 2017 | 2016 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 42,845 | $ | 41,406 | ||||
| Short-term investments | 226,467 | 234,951 | ||||||
| Accounts receivable, net | 67,287 | 52,818 | ||||||
| Inventories, net | 98,119 | 85,221 | ||||||
| Prepaid expenses and other current assets | 6,463 | 5,895 | ||||||
| Total current assets | 441,181 | 420,291 | ||||||
| Property and equipment, net | 8,819 | 7,132 | ||||||
| Other assets | 3,250 | 2,354 | ||||||
| Restricted cash | 806 | 806 | ||||||
| Total assets | $ | 454,056 | $ | 430,583 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 18,492 | $ | 16,162 | ||||
| Accrued liabilities and other | 39,512 | 26,036 | ||||||
| Total current liabilities | 58,004 | 42,198 | ||||||
| Long-term debt | 145,019 | 138,140 | ||||||
| Other long-term liabilities | 1,861 | 1,211 | ||||||
| Total liabilities | 204,884 | 181,549 | ||||||
| Stockholders' equity | ||||||||
| Common stock, $0.001 par value, 290,000,000 shares authorized, 29,737,561 and 28,886,862 shares issued and outstanding at December 31, 2017 and 2016, respectively | 30 | 29 | ||||||
| Additional paid-in capital | 508,228 | 470,869 | ||||||
| Accumulated other comprehensive loss | (1,242 | ) | (678 | ) | ||||
| Accumulated deficit | (257,844 | ) | (221,186 | ) | ||||
| Total stockholders' equity | 249,172 | 249,034 | ||||||
| Total liabilities and stockholders' equity | $ | 454,056 | $ | 430,583 |