Myomo, Inc. (NYSE American: MYO) (“Myomo” or the “Company”), a wearable medical robotics company that offers increased functionality for those suffering from neurological disorders and upper-limb paralysis, today announced financial results for the first quarter ended March 31, 2020.
Financial and operational highlights include the following (all comparisons are with the first quarter of 2019 unless otherwise noted):
- Revenue was $1.0 million, up 21% compared with $0.8 million.
- Revenue from direct billing was a record 62% of total revenue, compared with 26% of total revenue.
- Gross margin increased 300 basis points to 68.4% from 65.4%.
- The reimbursement pipeline contained more than 700 MyoPro units as of March 31, 2020, compared with 594 units as of December 31, 2019.
- 72% of the MyoPro pipeline now represents direct billing units and more than 90% of the new candidates entering the pipeline during the first quarter are to be directly billed to insurance payers.
- Backlog, which represents insurance authorizations received but not yet converted to revenue, was 80 units as of March 31, 2020, a 51% increase compared with 53 units as of December 31, 2019; approximately 30% of the December 31, 2019 backlog was converted into revenue in the first quarter.
Management Commentary
“I’m pleased we were able to deliver solid topline financial results and a growing backlog in this challenging environment, where MyoPro fittings have been delayed by efforts to contain the coronavirus,” said Paul R. Gudonis, Myomo’s chairman and chief executive officer. “Our focus during the second quarter is to continue to grow our pipeline and authorizations backlog via telehealth and social media marketing, while reducing our spending as we wait for public health and travel restrictions to be eased so that we can resume fitting and delivering our MyoPro product to the growing number of patients in the queue.”
Financial Results
For the Three Months
| Period-to-Period
| |||||||||||||
2020 | 2019 | $ | % | |||||||||||
Revenue | $ | 1,008,145 | $ | 830,066 | $ | 178,079 | 21 | % | ||||||
Cost of revenue | 318,651 | 286,802 | 31,849 | 11 | % | |||||||||
Gross profit | $ | 689,494 | $ | 543,264 | $ | 146,230 | 27 | % | ||||||
Gross margin | 68 | % | 65 | % | 3 | % | ||||||||
Revenue for the first quarter of 2020 was $1.0 million, an increase of 21% compared with the first quarter of 2019. Revenue growth was achieved through a higher average selling price, reflecting a record amount of direct billing revenues, partially offset by a slightly lower number of revenue units in the first quarter of 2020, compared with the same period a year ago.
Gross margin for the first quarter of 2020 was 68%, compared with 65% for first quarter of 2019. The increase primarily reflects a higher average selling price.
Operating expenses for the first quarter of 2020 were $4.1 million, an increase of 27% over the first quarter of 2019. The increase primarily reflects higher compensation costs associated with the addition of sales, customer service and reimbursement personnel, as well as higher marketing expenses and professional service expenses.
Operating loss for the first quarter of 2020 increased to $3.4 million from $2.7 million in the first quarter of 2019. Net loss for the first quarter of 2020 was $3.8 million, compared with a net loss of $2.6 million, for the same period of 2019. Net loss in the first quarter of 2020 includes a charge of $0.2 million related to the partial extinguishment of the Company’s term loan.
Adjusted EBITDA1 for the first quarter of 2020 was a negative $3.3 million, compared with a negative $2.5 million for the first quarter of 2019. A reconciliation of GAAP net loss to this non-GAAP financial measure appears below.
Financial Outlook
“As a result of public health mandates and travel restrictions that are temporarily constraining our revenues, we expect second quarter revenue to be substantially below first quarter revenue,” said Mr. Gudonis. “We have taken actions to reduce payroll and other costs by over $500,000 in the second quarter in order to minimize the cash burn, which nonetheless is expected to be higher in the quarter due to expected usage of cash for working capital. We are hopeful that operations will return to a more normal pace in the coming weeks. Until then, we continue to have success in building our authorization backlog, which currently stands at a record 100 MyoPro units that we intend to deliver and convert into revenue as rapidly as possible once conditions allow.”
Liquidity
Cash and cash equivalents as of March 31, 2020 were $13.7 million. Cash burn was $2.4 million for the first quarter. The Company believes it has sufficient cash to meet its operating requirements for at least the next 12 months. However, if public health and travel restrictions continue into the third quarter of 2020, the Company may require additional capital to fund its operations beyond the second quarter of 2021.
Conference Call and Webcast Information
Myomo will hold a conference call today at 4:30 p.m. ET. To access the conference call, please dial 1-844-707-6932 (U.S.) or 1-412-317-9250 (International). A webcast of the call can also be accessed at Myomo’s Investor Relations page at http://ir.myomo.com/.
A replay of the webcast will be available beginning approximately one hour after the completion of the live conference call at http://ir.myomo.com/. A dial-in replay of the call will be available until May 28, 2020; please dial 1-877-344-7529 (U.S.) or 1-412-317-0088 (International) and provide the passcode #10143817.
Non-GAAP Financial Measures
Myomo has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. This information includes Adjusted EBITDA. This non-GAAP financial measure is not in accordance with, or an alternative for, GAAP and may be different from similar non-GAAP financial measures used by other companies. Myomo believes that the use of this non-GAAP financial measure provides supplementary information for investors to use in evaluating operating performance and in comparing Myomo’s financial measures with other companies in its industry, many of which present similar non-GAAP financial measures. Adjusted EBITDA is EBITDA adjusted for stock-based compensation expense, the impact of the fair value revaluation of derivative liabilities and loss of extinguishment of debt. This non-GAAP financial measure is not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP, and should be viewed in conjunction with GAAP financial measures. Investors are encouraged to review the reconciliation of this non-GAAP measure to its most directly comparable GAAP financial measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.
About Myomo
Myomo, Inc. is a wearable medical robotics company that offers improved arm and hand function for those suffering from neurological disorders and upper-limb paralysis. Myomo develops and markets the MyoPro product line. MyoPro is a powered upper-limb orthosis designed to support the arm and restore function to the weakened or paralyzed arms of certain patients suffering from CVA stroke, brachial plexus injury, traumatic brain or spinal cord injury, ALS or other neuromuscular disease or injury. It is currently the only marketed device that, sensing a patient’s own EMG signals through non-invasive sensors on the arm, can restore an individual’s ability to perform activities of daily living, including feeding themselves, carrying objects and doing household tasks. Many are able to return to work, live independently and reduce their cost of care. Myomo is headquartered in Cambridge, Massachusetts, with sales and clinical professionals across the U.S. and representatives internationally. For more information, please visit www.myomo.com.
Forward-Looking Statements
This press release contains forward-looking statements regarding the Company’s future business expectations, including the impact of COVID-19 on the Company’s revenues in the second quarter of 2020 and beyond, its current authorization backlog and its cash runway, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors.
These factors include, among other things:
- the direct and indirect impact of the novel coronavirus (COVID-19) on our business and operations, including fabrication and delivery, sales, patient consultations, supply chain, manufacturing, insurance reimbursements and employees;
- our ability to resume normal operations and resume interactions with patients in order to cast, deliver and fit our custom-fabricated device, which is impacting our ability to generate revenues;
- our sales and commercialization efforts;
- our ability to achieve reimbursement from third-party payers for our products;
- our dependence upon external sources for the financing of our operations, to the extent that we do not achieve or maintain cash flow breakeven;
- our ability to effectively execute our business plan and scale up our operations;
- our expectations as to our development programs, and;
- general market, economic, environmental and social factors that may affect the evaluation, fitting, delivery and sale of our products to patients.
More information about these and other factors that potentially could affect our financial results is included in Myomo’s filings with the Securities and Exchange Commission, including those contained in the risk factors section of the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q and other filings with the Commission. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Although the forward-looking statements in this release of financial information are based on our beliefs, assumptions and expectations, taking into account all information currently available to us, we cannot guarantee future transactions, results, performance, achievements or outcomes. No assurance can be made to any investor by anyone that the expectations reflected in our forward-looking statements will be attained, or that deviations from them will not be material and adverse. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
MYOMO, INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | ||||||||
For the Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Revenue | $ | 1,008,145 | $ | 830,066 | ||||
Cost of revenue | 318,651 | 286,802 | ||||||
Gross profit | 689,494 | 543,264 | ||||||
Operating expenses: | ||||||||
Research and development | 506,953 | 446,348 | ||||||
Selling, general and administrative | 3,604,968 | 2,779,711 | ||||||
4,111,921 | 3,226,059 | |||||||
Loss from operations | (3,422,427 | ) | (2,682,795 | ) | ||||
Other expense (income) | ||||||||
Change in fair value of derivative liabilities | (82,101 | ) | (41,970 | ) | ||||
Interest (income) expense and other expense, net | 135,209 | (42,765 | ) | |||||
Non-cash interest expense, debt discount | 166,643 | — | ||||||
Loss on extinguishment of debt | 159,202 | — | ||||||
378,953 | (84,735 | ) | ||||||
Loss before income taxes | (3,801,380 | ) | (2,598,060 | ) | ||||
Income tax expense | 613 | — | ||||||
Net loss | $ | (3,801,993 | ) | $ | (2,598,060 | ) | ||
Deemed dividend on repricing of warrants (Revised) | 670,632 | 797,637 | ||||||
Net loss attributable to common stockholders | $ | (4,472,625 | ) | $ | (3,395,697 | ) | ||
Weighted average number of common shares outstanding: | ||||||||
Basic and diluted | 1,778,708 | 498,050 | ||||||
Net loss per share attributable to common stockholders (1) | ||||||||
Basic and diluted | $ | (2.51 | ) | $ | (6.82 | ) | ||
(1) | Share and per share amounts have been restated to give effect to the Company's 1-for-30 reverse stock split effected January 30, 2020 |
MYOMO, INC. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
March 31, | December 31, | |||||||
2020 | 2019 | |||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 13,726,482 | $ | 4,465,455 | ||||
Accounts receivable, net | 299,287 | 424,287 | ||||||
Inventories, net | 602,881 | 439,533 | ||||||
Prepaid expenses and other current assets | 937,218 | 820,206 | ||||||
Total Current Assets | 15,565,868 | 6,149,481 | ||||||
Restricted cash | 75,000 | 75,000 | ||||||
Deferred offering costs | 131,976 | 219,240 | ||||||
Equipment, net | 139,205 | 154,972 | ||||||
Total Assets | $ | 15,912,049 | $ | 6,598,693 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Current portion of long-term debt, net of discount of $298,542 and $676,703 at March 31 2020 and December 31, 2019, respectively | $ | 1,427,393 | $ | 1,763,887 | ||||
Accounts payable and accrued expenses | 2,628,328 | 1,738,450 | ||||||
Derivative liabilities | 40,605 | 378,239 | ||||||
Deferred revenue | 4,131 | 2,913 | ||||||
Customer advance payments | 27,340 | 40 | ||||||
Total Current Liabilities | 4,127,797 | 3,883,529 | ||||||
Long-term debt, net of discount of $36,169 at December 31, 2019 | — | 888,961 | ||||||
Deferred revenue | 1,495 | 1,495 | ||||||
Total Liabilities | 4,129,292 | 4,773,985 | ||||||
Commitments and Contingencies | ||||||||
Stockholders’ Equity: | ||||||||
Common stock | 281 | 57 | ||||||
Additional paid-in capital | 71,716,915 | 57,957,097 | ||||||
Accumulated deficit | (59,927,975 | ) | (56,125,982 | ) | ||||
Treasury stock, at cost | (6,464 | ) | (6,464 | ) | ||||
Total Stockholders’ Equity | 11,782,757 | 1,824,708 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 15,912,049 | $ | 6,598,693 | ||||
MYOMO, INC. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | ||||||||
Three Months Ended March 31, | 2020 | 2019 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net loss | $ | (3,801,993 | ) | $ | (2,598,060 | ) | ||
Adjustments to reconcile net loss to net cash used in operations: | ||||||||
Depreciation | 26,388 | 21,627 | ||||||
Stock-based compensation | 123,209 | 207,605 | ||||||
Bad debt expense | 24,000 | 16,275 | ||||||
Non-cash interest expense, debt discount | 166,643 | — | ||||||
Amortization of original issue discount | 67,132 | — | ||||||
Loss on extinguishment of debt | 159,202 | — | ||||||
Change in fair value of derivative liabilities | (82,101 | ) | (41,970 | ) | ||||
Loss on disposal of asset | — | 320 | ||||||
Other non-cash charges | (3,159 | ) | — | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 101,000 | (33,912 | ) | |||||
Inventories | (169,826 | ) | (131,871 | ) | ||||
Prepaid expenses and other current assets | (117,016 | ) | (128,256 | ) | ||||
Other assets | 57,987 | — | ||||||
Accounts payable and accrued expenses | 974,991 | (432,998 | ) | |||||
Deferred revenue | 1,218 | 23,850 | ||||||
Customer advance payments | 27,300 | (22,492 | ) | |||||
Net cash used in operating activities | (2,445,025 | ) | (3,119,882 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES | (7,878 | ) | (5,404 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | 11,713,953 | 5,818,051 | ||||||
Effect of foreign exchange rate changes on cash | (23 | ) | — | |||||
Net increase in cash, cash equivalents and restricted cash | 9,261,027 | 2,692,765 | ||||||
Cash, cash equivalents and restricted cash, beginning of period | 4,540,455 | 6,615,794 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 13,801,482 | $ | 9,308,559 | ||||
MYOMO, INC. | ||||||||
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA | ||||||||
(unaudited) | ||||||||
For the Three Months
| ||||||||
2020 | 2019 | |||||||
GAAP net loss | $ | (3,801,993 | ) | $ | (2,598,060 | ) | ||
Adjustments to reconcile to Adjusted EBITDA: | ||||||||
Interest (income) expense and other expense, net | 135,209 | (42,765 | ) | |||||
Non-cash interest expense, debt discount | 166,643 | — | ||||||
Loss on extinguishment of debt | 159,202 | — | ||||||
Depreciation expense | 26,388 | 21,627 | ||||||
Stock-based compensation | 123,209 | 207,605 | ||||||
Change in fair value of derivative liabilities | (82,101 | ) | (41,970 | ) | ||||
Income tax expense | 613 | — | ||||||
Adjusted EBITDA | $ | (3,272,830 | ) | $ | (2,453,563 | ) | ||
1 Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization adjusted for stock-based compensation expense, the impact of the fair value revaluation of derivative liabilities and loss on extinguishment of debt.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200514005137/en/
Contacts:
ir@myomo.com
