Cytori Provides Business Update and Reports Third Quarter and Nine Month 2012 Results Business Wire SAN DIEGO -- November 08, 2012 During the third quarter and first nine months of 2012, Cytori Therapeutics (NASDAQ: CYTX) advanced its cardiac cell therapy pipeline and achieved important strategic commercial and regulatory milestones. Additionally, Cytori reaffirmed its $9 million revenue guidance for the year. The Company accomplished the following objectives since the end of the second quarter: Strategic *Awarded a U.S. Government contract with the Biomedical Advanced Research and Development Authority (“BARDA”), a division of the Department of Health and Human Services. The contract is valued at up to $106 million and will be used to develop Cytori’s cell therapy for the treatment of thermal burns combined with radiation injury. Contract activities are currently underway including the initiation of key proof of concept studies in addition to accelerating development of the next generation Celution® system. Clinical Pipeline *Initiated enrollment in ATHENA, the U.S. clinical trial of Cytori’s cell therapy for refractory heart failure; the trial is on track to fully enroll by mid-2013. *Resumed enrollment in ADVANCE, a European acute myocardial infarction trial; primary emphasis of the trial continues to be completion of country and site clearances. Commercial Business *Expanded Japanese market access in the third quarter by obtaining a full commercial operational license for Cytori Therapeutics K.K. and Class 1 medical device clearance for the Celution® and Puregraft® based technologies. In combination, these resulted in the highest gross quarterly product shipments to date. *Expanded Celution® CE Mark certification to include indications-for-use in wound healing and tissue ischemia. Operations & Financial Performance *Reduced net cash used in operating activities in the first nine months of 2012 compared to the first nine months of 2011, driven by reductions in sales, general and administrative expenses. “This quarter we made significant progress on both the clinical and commercial fronts which will help drive our growth in 2013 and beyond,” said Christopher J. Calhoun, chief executive officer for Cytori Therapeutics. “Throughout the rest of the year and into 2013, we will look to continue to expand enrollment in our ongoing clinical trials, achieve additional strategic partnerships and secure more approvals that drive revenue growth.” Financial Results Product revenues were $1.3 million and $4.7 million for the third quarter and first nine months of 2012, respectively, compared with $2.1 million and $5.9 million for the same periods in 2011. Additionally, based on the receipt of the Japan commercial operational license and Class 1 device clearance late in the third quarter of 2012, Cytori shipped an additional $1.7 million of systems and consumables that we expect to recognize as product revenue in a subsequent quarter. Cytori reaffirms its $9 million revenue guidance for 2012 based on already achieved shipments and anticipated orders. Gross profit was $0.6 million and $2.2 million for the third quarter and first nine months of 2012, compared to $1.2 million and $3.0 million for the same periods of 2011, respectively. Research and development expenses increased to $3.6 million and $9.6 million for the third quarter and first nine months of 2012, compared to $2.8 million and $8.9 million, the same periods respectively in 2011. This planned increase is principally associated with the emergence of the ATHENA trial. In contrast, sales, general and administrative expenses were reduced to $6.2 million and $18.9 million in the third quarter and first nine months of 2012, a decrease of 13% compared to both the third quarter of 2011 ($7.2 million) and the first nine months of 2011 ($21.8 million) respectively. Net cash used in operating activities for the third quarter of 2012 was $7.9 million compared to $7.9 million for the same period in 2011 and $8.2 million in the second quarter of 2012. Net loss was $11.2 million, or ($0.19) per share, and $28.5 million, or ($0.49) per share, for the third quarter and first nine months of 2012, respectively. This compares to $8.3 million, or ($0.15) per share, and $25.5 million, or ($0.48) per share for the third quarter and first nine months of 2011, respectively. Net loss for the third quarter and first nine months of 2012 includes a net non-cash charge of $1.2 million and $1.7 million respectively related to the change in the fair value of warrant and option liabilities compared to non-cash credit of $1.0 million and $3.0 million for the same periods, respectively in 2011. At the end of the third quarter of 2012, Cytori had $17.6 million of cash and cash equivalents and $3.2 million of accounts receivable and expected revenue from the additional product shipments in the third quarter. Management Conference Call Webcast and Shareholder Letter Information Cytori will host a management conference call at 5:00 p.m. Eastern Time today to further discuss the company's progress. The webcast will be available live and by replay two hours after the call and may be accessed under "Webcasts" in the Investor Relations section (http://ir.cytori.com) of Cytori's website. If you are unable to access the webcast, you may dial in to the call at +1.877.402.3914, Conference ID: 42763342. More details on our business are contained in the 'November 2012 Shareholder Letter' posted on the homepage of our Investor Relations website. About Cytori Cytori Therapeutics is developing cell therapies based on autologous adipose-derived regenerative cells (ADRCs) to treat cardiovascular disease and repair soft tissue defects. Our scientific data suggest ADRCs improve blood flow, moderate the immune response and keep tissue at risk of dying alive. As a result, we believe these cells can be applied across multiple “ischemic” conditions. These therapies are made available to the physician and patient at the point-of-care by Cytori’s proprietary technologies and products, including the Celution® system product family. www.cytori.com Cautionary Statement Regarding Forward-Looking Statements This press release includes forward-looking statements regarding events, trends and business prospects, which may affect our future operating results and financial position, such as our expectation of completion of enrollment of the ATHENA clinical trial by mid-2013, and our revenue guidance of $9 million for the year. Such statements are subject to risks and uncertainties that could cause our actual results and financial position to differ materially. Some of these risks include clinical and regulatory uncertainties, such as those associated with the ATHENA clinical trial, including risks in the collection and results of clinical data, final clinical outcomes, dependence on third party performance, performance and acceptance of our products in the marketplace, and other risks and uncertainties described under the "Risk Factors" in Cytori's Securities and Exchange Commission Filings. We assume no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made. CYTORI THERAPEUTICS, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) As of September 30, As of December 31, 2012 2011 Assets Current assets: Cash and cash equivalents $ 17,628,000 $ 36,922,000 Accounts receivable, net of reserves of $455,000 and of 1,463,000 2,260,000 $474,000 in 2012 and 2011, respectively Inventories, net 3,411,000 3,318,000 Other current assets 1,090,000 837,000 Total current assets 23,592,000 43,337,000 Property and equipment, net 2,242,000 1,711,000 Restricted cash and cash 350,000 350,000 equivalents Investment in joint venture 122,000 250,000 Other assets 1,756,000 1,772,000 Intangibles, net 26,000 192,000 Goodwill 3,922,000 3,922,000 Total assets $ 32,010,000 $ 51,534,000 Liabilities and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable and accrued $ 5,588,000 $ 5,334,000 expenses Current portion of long-term 9,767,000 2,487,000 obligations Total current liabilities 15,355,000 7,821,000 Deferred revenues, related 1,107,000 3,520,000 party Deferred revenues 5,147,000 5,244,000 Warrant liability 1,871,000 627,000 Option liability 2,400,000 1,910,000 Long-term deferred rent 684,000 504,000 Long-term obligations, net of 15,178,000 21,962,000 discount, less current portion Total liabilities 41,742,000 41,588,000 Commitments and contingencies Stockholders’ equity (deficit): Preferred stock, $0.001 par value; 5,000,000 shares authorized; -0- shares issued — — and outstanding in 2012 and 2011 Common stock, $0.001 par value; 95,000,000 shares authorized; 58,720,627 and 56,594,683 59,000 57,000 shares issued and outstanding in 2012 and 2011, respectively Additional paid-in capital 261,113,000 252,338,000 Accumulated deficit (270,904,000 ) (242,449,000 ) Total stockholders’ equity (9,732,000 ) 9,946,000 (deficit) Total liabilities and $ 32,010,000 $ 51,534,000 stockholders’ equity (deficit) CYTORI THERAPEUTICS, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) For the Three Months For the Nine Months Ended September 30, Ended September 30, 2012 2011 2012 2011 Product $ 1,314,000 $ $ 4,741,000 $ 5,908,000 revenues 2,134,000 Cost of product 703,000 942,000 2,588,000 2,893,000 revenues Gross profit 611,000 1,192,000 2,153,000 3,015,000 Development revenues: Development, — — 2,413,000 1,231,000 related party Research grant 2,000 5,000 21,000 19,000 and other 2,000 5,000 2,434,000 1,250,000 Operating expenses: Research and 3,555,000 2,830,000 9,615,000 8,948,000 development Sales and 2,450,000 3,618,000 7,406,000 10,560,000 marketing General and 3,777,000 3,538,000 11,489,000 11,230,000 administrative Change in fair value of 863,000 (1,536,000 ) 1,244,000 (3,714,000 ) warrant liability Change in fair value of option 300,000 570,000 490,000 680,000 liability Total operating 10,945,000 9,020,000 30,244,000 27,704,000 expenses Operating loss (10,332,000 ) (7,823,000 ) (25,657,000 ) (23,439,000 ) Other income (expense): Interest income — 3,000 3,000 7,000 Interest (857,000 ) (489,000 ) (2,582,000 ) (1,923,000 ) expense Other income (17,000 ) 25,000 (91,000 ) (36,000 ) (expense), net Equity loss from investment (42,000 ) (51,000 ) (128,000 ) (153,000 ) in joint venture Total other income (916,000 ) (512,000 ) (2,798,000 ) (2,105,000 ) (expense) Net loss $ ) $ ) $ ) $ ) (11,248,000 (8,335,000 (28,455,000 (25,544,000 Basic and diluted net $ (0.19 ) $ (0.15 ) $ (0.49 ) $ (0.48 ) loss per common share Basic and diluted weighted 58,713,036 53,900,250 58,292,911 52,775,861 average common shares CYTORI THERAPEUTICS, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Nine Months Ended September 30, 2012 2011 Cash flows from operating activities: Net loss $ (28,455,000 ) $ (25,544,000 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 712,000 621,000 Amortization of deferred financing 706,000 471,000 costs and debt discount Provision for doubtful accounts 99,000 274,000 Change in fair value of warrant 1,244,000 (3,714,000 ) liability Change in fair value of option 490,000 680,000 liability Share-based compensation expense 2,907,000 2,578,000 Equity loss from investment in 128,000 153,000 joint venture Increases (decreases) in cash caused by changes in operating assets and liabilities: Accounts receivable 698,000 (168,000 ) Inventories (93,000 ) (775,000 ) Other current assets (253,000 ) 132,000 Other assets 16,000 (764,000 ) Accounts payable and accrued 254,000 (396,000 ) expenses Deferred revenues, related party (2,413,000 ) (1,231,000 ) Deferred revenues (97,000 ) 189,000 Long-term deferred rent 180,000 70,000 Net cash used in operating (23,877,000 ) (27,424,000 ) activities Cash flows from investing activities: Purchases of property and (1,077,000 ) (458,000 ) equipment Net cash used in investing (1,077,000 ) (458,000 ) activities Cash flows from financing activities: Principal payments on long-term (210,000 ) (4,460,000 ) debt Proceeds from long-term debt — 9,444,000 Debt issuance costs and loan fees — (719,000 ) Proceeds from exercise of employee 988,000 2,849,000 stock options and warrants Proceeds from sale of common stock 4,946,000 9,038,000 Costs from sale of common stock (64,000 ) (135,000 ) Net cash provided by financing 5,660,000 16,017,000 activities Net decrease in cash and cash (19,294,000 ) (11,865,000 ) equivalents Cash and cash equivalents at 36,922,000 52,668,000 beginning of period Cash and cash equivalents at end $ 17,628,000 $ 40,803,000 of period Contact: Cytori Therapeutics Investors Tom Baker +1.858.875.5258 email@example.com or Media Megan McCormick +1.858.875.5279 firstname.lastname@example.org
Cytori Provides Business Update and Reports Third Quarter and Nine Month 2012 Results
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