electroCore, Inc. (Nasdaq: ECOR), a commercial-stage bioelectronic
medicine company and wellness company, today announced first
quarter 2023 financial results and provided an operational update.
First Quarter 2023 and
Recent Highlights
- Record revenue of $2.8 million, an increase of approximately
46% over first quarter 2022
- The Air Force Research Laboratories reported human performance
data from its study suggesting that gammaCore™ non-invasive
vagus nerve stimulation (nVNS) can improve second language
learning
- Truvaga™ users reported improvement in stress, better sleep,
more energy, and improved mood in recent focus group
- Announced the National Institute on Drug Abuse (NIDA), part of
the National Institutes of Health (NIH), has awarded Emory
University and the Georgia Institute of Technology a 3-year, $6.0
million grant through the NIH Helping to End Addiction Long Term
(HEAL) Initiative to conduct a pivotal clinical trial of gammaCore
nVNS for the treatment of opioid use disorder (OUD)
- Reported results from a pre-clinical trial of nVNS in a model
of traumatic brain injury
“We recorded revenue of $2.8 million during the first quarter of
2023, an increase of 46% over the first quarter of 2022,” stated
Dan Goldberger, Chief Executive Officer of electroCore. “We made
significant strides with our marketing and sales efforts for
Truvaga, bringing in net sales of about $147,000 in the first full
quarter since launching in December 2022. Furthermore, we are
excited about the continued momentum and interest behind all our
product offerings, including prescription
(Rx) gammaCore for certain medical conditions, TAC-STIM™
for human performance and Truvaga for consumer wellness.”
First Quarter 2023 Financial
Results
For the quarter ended March 31,
2023, electroCore reported net sales of $2.8 million
compared to $1.9 million during the same period
of 2022, which represents an approximately 46% increase
over the prior year. The increase of $881,000 is due to an increase
in net sales across all major channels.
(in thousands) |
|
Three months ended March 31 |
|
Three months ended March 31 |
|
% Change |
Channel |
|
2023 |
|
2022 |
|
|
Rx gammaCore - Department of Veteran Affairs and Department of
Defense |
|
$ |
1,705 |
|
|
$ |
1,240 |
|
|
38 |
% |
Rx gammaCore - U.S.
Commercial |
|
|
430 |
|
|
|
276 |
|
|
56 |
% |
Outside the United States |
|
|
410 |
|
|
|
305 |
|
|
34 |
% |
Truvaga |
|
|
147 |
|
|
|
— |
|
|
N/A |
|
TAC-STIM |
|
|
88 |
|
|
|
— |
|
|
N/A |
|
Other |
|
|
— |
|
|
|
78 |
|
|
-100 |
% |
|
|
$ |
2,780 |
|
|
$ |
1,899 |
|
|
46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit for the first quarter of 2023 was $2.3 million as
compared to $1.5 million for the first quarter of 2022. Gross
margin for the first quarter of 2023 was 84%, compared to 81% in
the first quarter of 2022.
Total operating expenses in the first quarter of 2023 were
approximately $8.5 million as compared to $7.1 million in the first
quarter of 2022.
Research and development expense in the first quarter of 2023
was $1.8 million as compared to $934,000 in the first quarter of
2022. This increase was primarily due to targeted investments to
support the future iterations of our therapy delivery platform,
including the use of our intellectual property around the delivery
of smartphone-integrated and smartphone-connected non-invasive
therapies.
Selling, general and administrative expense in the first quarter
of 2023 was $6.7 million as compared to $6.2 million in the first
quarter of 2022. The increase was driven by severance charges of
$332,000, as well as continued targeted investments in sales and
marketing to support our commercial efforts, offset by decreases in
insurance and stock-based compensation expense.
GAAP net loss in the first quarter of 2023 was $5.9 million
compared to the $5.6 million net loss in the first quarter of
2022.
Adjusted EBITDA net loss in the first quarter of 2023 was $5.1
million as compared to a net loss of $4.6 million in the first
quarter of 2022.
The Company defines adjusted EBITDA net loss as GAAP net loss,
adjusting to exclude non-operating gains/losses, depreciation and
amortization, stock-based compensation expense, severance and other
related charges, inventory reserve charges, legal fees associated
with stockholders’ litigation, and benefit from income taxes. A
reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net
loss has been provided in the financial statement tables included
in the press release.
Net cash used in operating activities in the quarter ended March
31, 2023, was approximately $5.9 million as compared to $4.8
million in the first quarter of 2022. This increase is primarily
due to our investment in product evolution expenditures.
Cash, cash equivalents and restricted cash at March 31, 2023
totaled approximately $12.2 million, as compared to approximately
$18.0 million as of December 31, 2022.
Full Year 2023 Outlook
The Company reiterated its revenue guidance of $14.0-$15.0
million for the year ending December 31, 2023. The Company believes
that its legacy headache channels will again grow by more than 50%
to at least $12.0 million for the full year and revenue from new
products in the Truvaga and TAC-STIM brands could be more than $2.0
million for the full year.
The Company expects net cash usage in the remainder of 2023 to
be below the average quarterly net cash usage in 2022. Net cash
usage will decrease as revenues increase, new product development
is completed, and operating expenses continue to be rationalized.
Therefore, the Company expects net cash usage to decrease
significantly as the year progresses.
Webcast and Conference Call Information
electroCore’s management team will host a conference call
today, May 3, 2023, beginning at 4:30 PM EDT.
Investors interested in listening to the
conference call, or webcast may dial 877-269-7756 for
domestic callers or 201-689-7817 for international callers,
using Conference ID: 13738144, or by connecting to the Web:
electroCore Earnings Webcast. An archived webcast of the
event will be available on the “Investors” section of the company’s
website at: www.electrocore.com.
About electroCore, Inc.
electroCore, Inc. is a commercial stage
bioelectronic medicine and wellness company dedicated to improving
health through its non-invasive vagus nerve stimulation (“nVNS”)
technology platform. Our focus is the commercialization of medical
devices for the management and treatment of certain medical
conditions and consumer product offerings utilizing nVNS to promote
general wellbeing and human performance in the United States and
select overseas markets.
Forward-Looking Statements
This press release and other written and oral statements made by
representatives of electroCore 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 expectations for revenue and
net cash usage for 2023, electroCore’s business prospects and
clinical and product development plans; its pipeline or potential
markets for its technologies; the timing, outcome and impact of
regulatory, clinical and commercial developments; business
prospects around its Truvaga wellness and TAC-STIM human
performance offerings and other new products and markets, and other
statements that are not historical in nature, particularly those
that utilize terminology such as "anticipates," "will," "expects,"
"believes," "intends," and 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™,
TAC-STIM™, and Truvaga™, the potential impact and effects of
COVID-19 on the business of electroCore, electroCore’s results of
operations and financial performance, inflation and currency
fluctuations, and any measures electroCore has and may take in
response to COVID-19 and any expectations electroCore may have with
respect thereto, competition in the industry in which electroCore
operates and overall economic and 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
electroCore files with the SEC available at www.sec.gov.
Contact:Rich CockrellCG
Capital404-736-3838ecor@cg.capital
|
electroCore, Inc.Condensed Consolidated
Statements of Operations(unaudited)(in thousands, except
per share data) |
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
Net sales |
|
$ |
2,780 |
|
|
$ |
1,899 |
|
Cost of goods sold |
|
|
458 |
|
|
|
360 |
|
Gross profit |
|
|
2,322 |
|
|
|
1,539 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Research and development |
|
|
1,809 |
|
|
|
934 |
|
Selling, general and administrative |
|
|
6,710 |
|
|
|
6,186 |
|
Total operating expenses |
|
|
8,519 |
|
|
|
7,120 |
|
Loss from operations |
|
|
(6,197 |
) |
|
|
(5,581 |
) |
Other (income) expense |
|
|
|
|
|
|
|
|
Interest and other income |
|
|
(119 |
) |
|
|
(4 |
) |
Other expense |
|
|
— |
|
|
|
5 |
|
Total other (income)
expense |
|
|
(119 |
) |
|
|
1 |
|
Loss before income taxes |
|
|
(6,078 |
) |
|
|
(5,582 |
) |
Benefit from income taxes |
|
|
211 |
|
|
|
— |
|
Net loss |
|
$ |
(5,867 |
) |
|
$ |
(5,582 |
) |
Net loss per share of common
stock - Basic and Diluted |
|
$ |
(1.24 |
) |
|
$ |
(1.20 |
) |
Weighted average number of
common shares outstanding - Basic and Diluted |
|
|
4,743 |
|
|
|
4,652 |
|
|
|
|
|
|
|
|
|
|
|
electroCore, Inc.Condensed Consolidated
Balance Sheet Information(unaudited)(in thousands) |
|
|
|
|
|
|
|
March 31, 2023 |
|
December 31, 2022 |
Cash and cash equivalents |
|
$ |
11,908 |
|
|
$ |
17,712 |
|
Restricted cash |
|
$ |
250 |
|
|
$ |
250 |
|
Total assets |
|
$ |
18,300 |
|
|
$ |
24,756 |
|
Current liabilities |
|
$ |
5,848 |
|
|
$ |
7,045 |
|
Total liabilities |
|
$ |
6,453 |
|
|
$ |
7,670 |
|
Total equity |
|
$ |
11,847 |
|
|
$ |
17,086 |
|
|
|
|
|
|
|
|
|
|
(Unaudited) Use of Non-GAAP Financial
MeasureThe Company is presenting adjusted EBITDA net loss
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 gains and charges not related to
its regular, ongoing business, including, without limitation,
non-cash charges and certain large and unpredictable charges such
as restructuring expenses.
The Company defines adjusted EBITDA net loss as GAAP net loss,
adjusting to exclude non-operating gains/losses, depreciation and
amortization, stock-based compensation expense, severance and other
related charges, inventory reserve charges, legal fees
associated with stockholders’ litigation, and benefit from income
taxes.
Following is a reconciliation of GAAP net loss to non-GAAP
adjusted EBITDA net loss (in thousands):
|
|
Three Months ended March 31, |
|
|
2023 |
|
|
2022 |
|
GAAP net loss |
$ |
(5,867 |
) |
|
$ |
(5,582 |
) |
Depreciation and
amortization |
|
122 |
|
|
|
106 |
|
Stock-based compensation |
|
572 |
|
|
|
777 |
|
Inventory reserve charge |
|
75 |
|
|
|
— |
|
Severance and other related
charges |
|
332 |
|
|
|
— |
|
Legal fees associated with
stockholders' litigation |
|
— |
|
|
|
61 |
|
Interest and other (income) expense |
|
(119 |
) |
|
|
1 |
|
Benefit
from income taxes |
|
(211 |
) |
|
|
— |
|
Adjusted EBITDA net
loss |
$ |
(5,096 |
) |
|
$ |
(4,637 |
) |
|
|
|
|
|
|
|
|
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 available; 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 requirements; 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 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 to
non-GAAP adjusted EBITDA net loss has been provided in the
preceding financial statements table of this press release.
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