Cytomedix Reports First Quarter 2012 Financial Results
Cytomedix Reports First Quarter 2012 Financial Results
Record Product Sales Showed Increase of 23%; Conference Call Begins Wednesday, May 16th at 10:00 a.m. Eastern Time
GAITHERSBURG, MD -- (Marketwire) -- 05/15/12 -- Cytomedix, Inc. (OTCBB: CMXI) (the "Company"), a regenerative therapies company commercializing and developing innovative platelet and adult stem cell technologies for wound and tissue repair, today announced financial results for the three months ended March 31, 2012.
Financial highlights for the 2012 first quarter include (all comparisons are with the 2011 first quarter):
-- Total revenues increased 121% to $3.02 million from $1.37 million -- Product sales increased 23% to $1.69 million from $1.37 million -- Licensing revenue of $1.33 million was recorded as partial recognition of the $4.50 million non-refundable option payments received to date in connection with the potential strategic supply and distribution partnership for the AutoloGel(TM) System -- Net loss to common stockholders of $4.74 million or $0.07 per share included $3.44 million in non-recurring and/or non-cash expenses and transaction costs, compared with a net loss to common stockholders of $1.50 million or $0.03 per share -- Cash used in operations was $0.51 million compared with $1.29 million
Martin P. Rosendale, Chief Executive Officer of Cytomedix, said, "The first quarter of 2012 and recent weeks have been noteworthy for Cytomedix. In addition to posting double-digit revenue growth with our commercial products, we made significant inroads with our reimbursement initiatives for AutoloGel and received an additional $2.5 million non-refundable option payment from our potential strategic partner for AutoloGel. Most significantly, we expanded our commitment to regenerative medicine with the acquisition of Aldagen in February 2012 and now have in place the three pillars of regenerative medicine with autologous stem cells, platelet-derived signal molecules and plasma scaffolds.
"The acquisition of Aldagen broadened our footprint in regenerative medicine and provided us with a robust pipeline of product candidates in areas of large unmet medical need. We are in the process of integrating the Aldagen technology into the business and have made progress with ongoing development programs. We have advanced the Phase 2 RECOVER-Stroke trial, which is assessing ALD-401 to treat post-acute ischemic stroke, and saw positive data from a Phase 1 clinical trial of ALD-201 to treat ischemic heart failure published in the American Heart Journal.
"We continued to post significant revenue growth for the Angel(R) Whole Blood Separation System during the quarter, and we look forward to expanding its potential with enhanced targeted marketing efforts as well as expansion into other indications where we can increase utilization. We have a 510(k) application on file with the U.S. Food and Drug Administration for Angel to process bone marrow and are evaluating our strategy to leverage the utility of this product in sports medicine and orthopedics where there is a growing market opportunity. In addition, we also posted a record revenue quarter for AutoloGel even though our commercial sales focus was on Angel while AutoloGel efforts were dedicated to reimbursement and partnership initiatives.
"During the quarter we substantially strengthened our balance sheet, simplified our capital structure and increased our shareholders' equity, which along with growing product sales positions us to implement our strategic growth plan. The year is off to a strong start and we remain very encouraged by the prospects for both our commercial products and our pipeline," concluded Mr. Rosendale.
First Quarter Financial Results
Total revenues for the first quarter of 2012 were $3.02 million, an increase of 121% compared with total revenues of $1.37 million for the first quarter of 2011. The increase was largely attributable to the recognition of $1.33 million in license revenue from the $4.50 million in total non-refundable option fees received to date in connection with the potential agreement with a global pharmaceutical company, as well as from higher sales of the Angel and AutoloGel Systems.
Sales from the Angel product line increased 18% to $1.51 million from $1.28 million in the prior-year first quarter. Record quarterly AutoloGel System sales of $164,000 increased 89% compared with the first quarter of 2011.
Gross profit for the first quarter of 2012 increased 201% to $2.17 million from $720,000 for the same period in 2011, primarily due to the $1.33 million in licensing revenue that had no related cost of revenue. Gross profit on product sales increased 16% to $838,000.
Gross margin on product sales for the three months ended March 31, 2012 was 50% compared with 53% for the comparable 2011 period, primarily the result of a shift in product mix to lower-margin products as the Company recorded a significant number of Angel device sales to international distributors and wrote off some obsolete inventory.
First quarter cash margin on product sales, excluding $116,000 in patent amortization and depreciation expense, was 56%. Cash margin is a non-GAAP financial measure, most directly comparable to gross margin, and should not be considered as an alternative thereto. Cytomedix defines cash margin as gross margin exclusive of patent amortization and depreciation expense, and it is a significant performance metric used by management to indicate cash profitability on product sales.
Operating expenses for the first quarter of 2012 increased to $4.89 million from $2.20 million in the prior-year first quarter. This increase was primarily attributable to transaction related costs associated with the Aldagen acquisition of approximately $528,000, and approximately $979,000 in non-recurring, non-cash stock compensation expense for options granted to former Aldagen employees, consultants and board members. The Company also incurred additional expenses in the 2012 first quarter related to reimbursement, regulatory and marketing initiatives.
Other expense for the first quarter of 2012 of $2.0 million compared with other income of $78,000 in the first quarter of 2011. The change was primarily due to approximately $1.50 million in non-cash inducement expense associated with common stock issued in exchange for the early conversion of Series D preferred stock and incentive warrants issued in exchange for the early exercise of existing warrants. Additionally, there was an approximate $424,000 in expense associated with non-cash interest costs and change in fair value of derivative liabilities.
Net loss to common stockholders for the first quarter of 2012 was $4.74 million or $0.07 per share, compared with a net loss to common stockholders of $1.50 million or $0.03 per share for the first quarter of 2011.
Cash and Liquidity
Cash and cash equivalents as of March 31, 2012 were $8.50 million, compared with $2.25 million as of December 31, 2011. The Company used $509,000 in cash to fund operating activities during the first quarter 2012. An additional $1.18 million in cash from warrant exercises was received post quarter end associated with the remaining binding commitments for warrant exercises by June 30, 2012.
Andrew Maslan, Cytomedix's Chief Financial Officer, noted, "During the first quarter of 2012, we considerably strengthened our balance sheet with the receipt of the additional $2.5 million non-refundabl e payment in connection with the option agreement with a top 20 global pharmaceutical company to extend the exclusive due diligence period for the rights to negotiate a license agreement for AutoloGel until June 30, 2012. In addition we raised $5.0 million in a private placement from certain Aldagen investors and received $1.1 million from the exercise of existing options and warrants.
"In addition to strengthening our balance sheet, we took a number of steps to simplify our capital structure, including the redemption of Series A and B preferred stock and the conversion of Series D preferred stock. Series E preferred stock issued to Aldagen investors as the upfront consideration in February will automatically convert into common shares upon shareholder approval of an increase to authorized common shares at our upcoming Special Shareholders' Meeting on May 18th.
"Importantly, we are pleased to report that we have significantly increased shareholders' equity to $10.3 million from $3.3 million at year-end 2011. We expect a further significant increase of approximately $19 million to equity as the conversion of Series E preferred stock to common stock occurs, and believe maintaining a healthy shareholders' equity balance will be important as we consider an uplisting to a national stock exchange," added Mr. Maslan.
For additional information, please refer to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed with the U.S. Securities and Exchange Commission on May 15, 2012.
Cytomedix management will hold a conference call to discuss these results and answer questions beginning at 10:00 a.m. Eastern time on Wednesday, May 16, 2012. Shareholders and other interested parties may participate in the call by dialing 888-679-8034 (domestic) or 617-213-4847 (international) and entering passcode 23291244. The call will also be broadcast live on the Internet at www.streetevents.com, www.fulldisclosure.com and www.cytomedix.com.
A replay of the conference call will be available beginning two hours after its completion through May 23, 2012 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode 78509324. The call will also be archived for 90 days at www.streetevents.com, www.fulldisclosure.com and www.cytomedix.com.
About Cytomedix, Inc.
Cytomedix, Inc. develops, sells and licenses regenerative biological therapies primarily for wound care, inflammation and angiogenesis. The Company markets the AutoloGel(TM) System, a device for the production of autologous platelet rich plasma ("PRP") gel for use on a variety of exuding wounds and the Angel(R) Whole Blood Separation System, a blood processing device and disposable products used for the separation of whole blood into red cells, platelet poor plasma ("PPP") and PRP in surgical settings. On February 8, 2012 Cytomedix closed the acquisition of Aldagen, a biopharmaceutical company developing regenerative cell therapies based on its proprietary ALDH bright cell ("ALDHbr") technology, currently in a Phase 2 trial for the treatment of ischemic stroke. For additional information please visit www.cytomedix.com
Non-GAAP financial measures
The non-GAAP financial measures discussed in the text of this press release and accompanying non-GAAP supplemental information are financial measures used by our management to evaluate our operating performance and to calculate our cash profitability. These non-GAAP measures are not in accordance with, or an alternative for, U.S. generally accepted accounting principles ("GAAP") and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles and management exercises judgment in determining which items should be excluded in the calculation of non-GAAP measures. While we believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP, we believe that non-GAAP measures are valuable in analyzing our cash profitability. Management analyzes current and future results on a GAAP basis as well as a non-GAAP basis and also provides GAAP and non-GAAP measures in our earnings release. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. The non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, GAAP financial measures. We believe that the presentation of non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to our financial condition and results of operations. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in our SEC filings.
Safe Harbor Statement
Statements contained in this press release not relating to historical facts are forward-looking statements that are intended to fall within the safe harbor rule for such statements under the Private Securities Litigation Reform Act of 1995. The information contained in the forward-looking statements is inherently uncertain, and Cytomedix' actual results may differ materially due to a number of factors, many of which are beyond Cytomedix' ability to predict or control, including among many others, risks and uncertainties related to the Company's ability to successfully integrate the Aldagen acquisition, to successfully manage contemplated clinical trials, to manage and address the capital needs, human resource, management, compliance and other challenges of a larger, more complex and integrated business enterprise, viability and effectiveness of the Company's sales approach and overall marketing strategies, commercial success or acceptance by the medical community, competitive responses, the Company's ability to list its securities on a national stock exchange, the Company's ability to raise additional capital and to continue as a going concern, and Cytomedix's ability to execute on its strategy to market the AutoloGel(TM) System as contemplated. To the extent that any statements made here are not historical, these statements are essentially forward-looking. The Company uses words and phrases such as "believes", "forecasted," "projects," "is expected," "remain confident," "will" and/or similar expressions to identify forward-looking statements in this press release. Undue reliance should not be placed on forward-looking information. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual events to differ from the forward-looking statements. More information about some of these risks and uncertainties may be found in the reports filed with the Securities and Exchange Commission by Cytomedix, Inc. Cytomedix operates in a highly competitive and rapidly changing business and regulatory environment, thus new or unforeseen risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. Except as is expressly required by the federal securities laws, Cytomedix undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason. Additional risks that could affect our future operating results are more fully described in our U.S. Securities and Exchange Commission filings, including our Annual Report for the year ended December 31, 2011 and other subsequent filings. These filings are available at www.sec.gov.
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CYTOMEDIX, INC. CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, 2012 2011 ------------ ------------ (UNAUDITED) ASSETS Current assets Cash (including $4 million of cash dedicated for clinical trials and related matters) $ 8,480,996 $ 2,246,050 Short-term investments, restricted 53,176 52,840 Accounts and other receivable, net 1,853,320 1,480,463 Inventory 511,826 548,159 Prepaid expenses and other current assets 490,133 695,567 Deferred costs, current portion 136,436 136,436 ------------ ------------ Total current assets 11,525,887 5,159,515 Property and equipment, net 1,797,753 978,893 Deferred costs 283,110 317,219 Intangible assets, net 34,410,037 2,916,042 Goodwill 1,323,649 706,823 Other long-term assets 9,256 -- ------------ ------------ Total assets $ 49,349,692 $ 10,078,492 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $ 2,599,841 $ 1,849,133 Deferred revenues, current portion 1,824,359 654,721 Dividends payable on preferred stock -- 105,533 Derivative liabilities, current portion -- 528,467 ------------ ------------ Total current liabilities 4,424,200 3,137,854 Note payable 2,100,000 2,100,000 Series E liability 18,955,742 -- Contingent consideration 11,109,020 -- Derivative and other liabilities 2,446,971 1,559,055 ------------ ------------ Total liabilities 39,035,933 6,796,909 ------------ ------------ Commitments and contingencies Stockholders' equity Series A Convertible preferred stock; $.0001 par value, authorized 5,000,000 shares; 2012 issued and outstanding - 0 shares; 2011 issued and outstanding - 97,663 shares; 2012 liquidation preference of $0; -- 10 2011 liquidation preference of $97,663 Series B Convertible preferred stock; $.0001 par value, authorized 5,000,000 shares; 2012 issued and outstanding - 0 shares; 2011 issued and outstanding - 65,784 shares; 2012 liquidation preference of $0; 2011 liquidation preference of $65,784 -- 7 Series D Convertible preferred stock; $.0001 par value, authorized 2,000,000 shares; 2012 issued and outstanding - 0 shares; 2011 issued and outstanding - 3,300 shares; 2012 liquidation preference of $0; 2011 liquidation preference of $3,300,000 -- -- Common stock; $.0001 par value, authorized 100,000,000 shares; 2012 issued and outstanding - 70,913,196 shares; 2011 issued and outstanding - 55,536,292 shares 7,091 5,554 Common stock issuable 2,121,149 -- Subscriptions receivable (2,121,149) -- Additional paid-in capital 66,212,471 54,458,170 Accumulated deficit (55,905,803) (51,182,158) ------------ ------------ Total stockholders' equity 10,313,759 3,281,583 ------------ ------------ Total liabilities and stockholders' equity $ 49,349,692 $ 10,078,492 ============ ============ CYTOMEDIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended March 31, -------------------------- 2012 2011 ------------ ------------ (UNAUDITED) (UNAUDITED) Revenues Product Sales $ 1,686,392 $ 1,365,613 License Fees 1,330,362 -- ------------ ------------ Total revenues 3,016,754 1,365,613 ------------ ------------ Cost of revenues Cost of sales 848,436 645,384 ------------ ------------ Total cost of revenues 848,436 645,384 ------------ ------------ Gross profit 2,168,318 720,229 ------------ ------------ Operating expenses Salaries and wages 2,062,128 726,063 Consulting expenses 829,047 336,482 Professional fees 463,037 236,921 Research, development, trials and studies 357,308 59,946 General and administrative expenses 1,176,227 843,544 ------------ ------------ Total operating expenses 4,887,747 2,202,956 ------------ ------------ Loss from operations (2,719,429) (1,482,727) ------------ ------------ Other income (expense) Interest, net (267,145) (250,381) Change in fair value of derivative liabilities (220,314) 378,125 Inducement expense (1,512,148) -- Other -- (50,237) ------------ ------------ Total other income (expenses) (1,999,607) 77,507 ------------ ------------ Loss before provision for income taxes (4,719,036) (1,405,220) Income tax provision 4,609 5,000 ------------ ------------ Net loss (4,723,645) (1,410,220) Preferred dividends: Series A preferred stock -- 2,199 Series B preferred stock -- 1,496 Series D preferred stock 13,562 82,875 ------------ ------------ Net loss to common stockholders $ (4,737,207) $ (1,496,790) ============ ============ Loss per common share -- Basic and diluted $ (0.07) $ (0.03) ============ ============ Weighted average shares outstanding -- Basic and diluted 63,262,699 46,059,041 ============ ============
Contacts: Cytomedix, Inc. Martin Rosendale, Chief Executive Officer Andrew Maslan, Chief Financial Officer David Jorden, Executive Chairman (240) 499-2680
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