Neuronetics, Inc. (NASDAQ: STIM), a commercial stage medical
technology company focused on designing, developing and marketing
products that improve the quality of life for patients who suffer
from psychiatric disorders, today announced its financial and
operating results for the first quarter of 2021.
First Quarter 2021 Highlights
- First quarter 2021 revenue of $12.3
million, compared to $11.5 million in first quarter 2020, primarily
due to an increase in U.S. treatment session revenue
- First quarter revenues surpassed our guidance midpoint by $0.8
million
- Cash and cash equivalents were
$121.3 million as of March 31, 2021, inclusive of proceeds from our
follow-on offering of 5,566,000 shares of our common stock raising
$80.6 million in net cash in February 2021
- Launched new 5 STARS to Success,
Precision Pulse, digital media strategy, and advertising messaging
to drive awareness and NeuroStar Advanced Therapy treatment session
growth
- Enhanced TrakStar® Cloud system, a
HIPAA-compliant, proprietary software that manages NeuroStar
Advanced Therapy patient data, to improve clinician productivity
and optimize time spent with patients
- NeuroStar Advanced Therapy Outcomes
Registry data published in Brain Stimulation Journal
- Robert Cascella appointed as
Chairman of the Board of Directors effective May 27, 2021
“The first quarter was very exciting. Not only did we drive
strong double-digit growth in treatment session revenues, but we
also implemented our new commercial strategy in conjunction with
the launch of our expanded and realigned sales organization,” said
Keith J. Sullivan, President and Chief Executive Officer of
Neuronetics. “We’ve seen a 30% increase in patients requesting
appointments and are expecting to see accelerating positive impact
throughout the year from our new digital media strategies,
advertising, and customer support programs that are all designed to
bring the benefits of NeuroStar Advanced Therapy for Mental Health
to the people who need it.”
First Quarter 2021 Financial and Operating
Results
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Revenues by Geography |
|
|
|
Three Months ended March 31, |
|
|
|
2021 |
|
2020 |
|
|
|
|
|
|
Amount |
|
Amount |
|
% Change |
|
|
|
|
(in thousands, except percentages) |
|
United States |
|
$ |
11,802 |
|
$ |
11,177 |
|
6 |
|
% |
International |
|
|
486 |
|
|
299 |
|
63 |
|
% |
Total revenues |
|
$ |
12,288 |
|
$ |
11,476 |
|
7 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
Total revenue for the first quarter of 2021 was $12.3 million,
an increase of 7% over first quarter 2020 revenue of $11.5 million.
During the quarter, total U.S. revenue increased by 6% and
international revenue increased by 63% over the prior year
quarter. The U.S. revenue growth was driven by an increase in U.S.
treatment session revenue and the international revenue growth was
driven by an increase in NeuroStar Advanced Therapy for Mental
Health System sales.
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|
United States Revenues by Product Category |
|
|
|
Three Months ended March 31, |
|
|
|
2021 |
|
2020 |
|
|
|
|
|
Amount |
|
Amount |
|
% Change |
|
|
|
(in thousands, except percentages) |
|
NeuroStar Advanced Therapy System |
|
$ |
1,755 |
|
$ |
2,594 |
|
(32 |
) |
% |
Treatment sessions |
|
|
9,629 |
|
|
8,193 |
|
18 |
|
% |
Other |
|
|
418 |
|
|
390 |
|
7 |
|
% |
Total United States revenues |
|
$ |
11,802 |
|
$ |
11,177 |
|
6 |
|
% |
|
|
|
|
|
|
|
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United States NeuroStar Advanced Therapy System |
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Revenues by Type |
|
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|
Three Months ended March 31, |
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|
2021 |
|
2020 |
|
|
|
|
|
Amount |
|
Amount |
|
% Change |
|
|
|
(in thousands, except percentages) |
|
NeuroStar Capital |
|
$ |
1,589 |
|
$ |
2,410 |
|
(34 |
) |
% |
Operating lease |
|
|
108 |
|
|
155 |
|
(30 |
) |
% |
Other |
|
|
58 |
|
|
29 |
|
100 |
|
% |
Total U.S. NeuroStar Advanced Therapy System revenues |
|
$ |
1,755 |
|
$ |
2,594 |
|
(32 |
) |
% |
|
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|
|
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|
U.S. NeuroStar Advanced Therapy System revenue for the first
quarter of 2021 was $1.8 million, a decrease of 32% over first
quarter 2020 revenue of $2.6 million. The decrease was primarily
driven by a lower number of NeuroStar systems sold in the first
quarter of 2021, which was partially offset by an increase in the
blended NeuroStar average selling price over the prior year period.
For the three months ended March 31, 2021 and 2020, the Company
sold 23 and 38 systems, respectively, during each period.
U.S. treatment session revenue for the first quarter of 2021 was
$9.6 million, an increase of 18% over the first quarter of 2020 of
$8.2 million. The revenue growth was primarily driven by an
increase in per click treatment session volume over the prior year
period.
In the first quarter, U.S. treatment session revenue per active
site was $10,512 as compared to $9,418 during the first quarter of
2020.
Gross margin for the first quarter of 2021 was 81.9%, an
increase of approximately 640 basis points from first quarter of
2020 gross margin of 75.5%. The increase was primarily a result of
a change in the product mix of revenues compared to the prior year
quarter.
Operating expenses during the first quarter of 2021 were $17.0
million, a decrease of $2.0 million compared to $19.0 million in
the first quarter of 2020. The decrease was primarily driven by
lower product development and sales expenses compared to the prior
year quarter.
Net loss for the first quarter of 2021 was $(7.9) million, or
$(0.31) per share, as compared to first quarter 2020 net loss of
$(12.6) million, or $(0.68) per share. Net loss per share was based
on 25,149,880 and 18,680,542 weighted-average common shares
outstanding for the first quarters of 2021 and 2020,
respectively.
EBITDA for the first quarter of 2021 was $(6.6) million as
compared to the first quarter of 2020 EBITDA of $(10.8) million.
See the accompanying financial table that reconciles EBITDA, which
is a non-GAAP financial measure, to net loss.
Cash and cash equivalents were $121.3 million as
of March 31, 2021. This compares to cash and cash
equivalents of $49.0 million as of December 31, 2020 and $63.6
million as of March 31, 2020.
Common Stock Offering
On February 2, 2021, the Company closed an underwritten
public offering of 5,566,000 shares of its common stock, including
the exercise in full by the underwriters of their option to
purchase up to an additional 726,000 shares of common stock, at a
public offering price of $15.50 per share. Net proceeds from the
offering were $80.6 million.
TrakStar® Cloud
On March 9, 2021, the Company announced upgrades to its
TrakStar® Cloud system, a HIPAA-compliant, proprietary software
that manages NeuroStar Advanced Therapy patient data. The latest
improvements, made with insights from practicing clinicians, are
designed to optimize time spent with patients while limiting time
spent in practices on paperwork and other administrative tasks. The
TrakStar Cloud patient data management system allows physicians to
proactively manage, easily track and reliably report on data for
people suffering from Major Depressive Disorder (MDD) who are being
treated with NeuroStar.
Business Outlook
For the full year 2021, the Company now expects to report
total worldwide revenue between $59 million and $63 million, up
from previously issued guidance of between $58 million and $62
million.
For the full year 2021, the Company now expects operating
expenses to be between $64 million and $68 million.
For the second quarter of 2021, the Company expects to report
total worldwide revenue of between $14 million and $15 million.
Webcast and Conference Call Information
Neuronetics’ management team will host a conference call on May
4, 2021 beginning at 8:30 a.m. Eastern Time. Investors
interested in listening to the conference call on your telephone,
please dial (877) 472-8990 for United States callers or +1 (629)
228-0778 for international callers and reference confirmation code
2124449, approximately ten minutes prior to start time. To access
the live audio webcast or subsequent archived recording, visit the
Investor Relations section of Neuronetics’ website at
ir.neuronetics.com. The replay will be available on the Company’s
website for approximately 60 days.
About Neuronetics
Neuronetics, Inc. is a commercial-stage medical technology
company focused on designing, developing, and marketing products
that improve the quality of life for patients who suffer from
psychiatric disorders. Our first commercial product, the NeuroStar®
Advanced Therapy System, is a non-invasive and non-systemic
office-based treatment that uses transcranial magnetic stimulation,
or TMS, to create a pulsed, MRI-strength magnetic field that
induces electrical currents designed to stimulate specific areas of
the brain associated with mood. The system is cleared by the United
States Food and Drug Administration, or FDA, for the treatment of
major depressive disorder in adult patients who have failed to
achieve satisfactory improvement from prior antidepressant
medication in the current episode. NeuroStar is also available in
other parts of the world, including Japan, where it is listed under
Japan’s national health insurance. Additional information can be
found at www.neuronetics.com.
“Safe harbor” statement under the Private Securities
Litigation Reform Act of 1995:
Statements in the press release regarding Neuronetics, Inc.
(the “Company”) that are not historical facts constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements may be identified by terms such as “outlook,”
“potential,” “believe,” “expect,” “plan,” “anticipate,” “predict,”
“may,” “will,” “could,” “would” and “should” as well as the
negative of these terms and similar expressions. These statements
include those relating to: the Company’s business outlook and
current expectations for upcoming quarter and fiscal year
2021, including with respect to revenue, operating expense, growth,
and any statements of assumptions underlying any of the foregoing
items. These statements are subject to significant risks and
uncertainties and actual results could differ materially from those
projected. The Company cautions investors not to place undue
reliance on the forward-looking statements contained in this
release. These risks and uncertainties include, without limitation,
risks and uncertainties related to: the impact of COVID-19 on the
Company’s operational and budget plans as well as general political
and economic conditions, including as a result of efforts by
governmental authorities to mitigate COVID-19, such as travel bans,
shelter in place orders and third-party business closures and the
related impact on resource allocations, manufacturing and supply
chains and patient access to commercial products; the Company’s
ability to execute its business continuity; the Company’s ability
to achieve or sustain profitable operations due to its history of
losses; the Company’s reliance on the sale and usage of its
NeuroStar Advanced Therapy for Mental Health System to generate
revenues; the scale and efficacy of the Company’s salesforce;
availability of coverage and reimbursement from third-party payors
for treatments using the Company’s products; physician and patient
demand for treatments using the Company’s products; developments in
respect of competing technologies and therapies for the indications
that the Company’s products treat; product defects; the Company’s
ability to obtain and maintain intellectual property protection for
its technology; developments in clinical trials or regulatory
review of NeuroStar Advanced Therapy for Mental Health System for
additional indications; and developments in regulation in the
United States and other applicable jurisdictions. For a discussion
of these and other related risks, please refer to the Company’s
recent SEC filings which are available on the SEC’s website at
www.sec.gov. These forward-looking statements are based on the
Company’s expectations and assumptions as of the date of this press
release. Except as required by law, the Company undertakes no duty
or obligation to update any forward-looking statements contained in
this press release as a result of new information, future events,
or changes in the Company’s expectations.
Investor Contact:
Mark R. KlausnerWestwicke
Partners443-213-0501ir@neuronetics.com
Media Contact:
Gina KentVault
Communications610-455-2763gkent@vaultcommunications.com
NEURONETICS, INC.Statements of
Operations(Unaudited; In thousands, except per
share data)
|
|
|
|
|
|
|
|
|
|
Three Months ended |
|
|
|
March 31, |
|
|
|
2021 |
|
|
2020 |
|
|
Revenues |
|
$ |
12,288 |
|
|
$ |
11,476 |
|
|
Cost of revenues |
|
|
2,221 |
|
|
|
2,811 |
|
|
Gross Profit |
|
|
10,067 |
|
|
|
8,665 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
Sales and marketing |
|
|
8,561 |
|
|
|
10,723 |
|
|
General and administrative |
|
|
6,104 |
|
|
|
5,287 |
|
|
Research and development |
|
|
2,311 |
|
|
|
3,021 |
|
|
Total operating expenses |
|
|
16,976 |
|
|
|
19,031 |
|
|
Loss from Operations |
|
|
(6,909 |
) |
|
|
(10,366 |
) |
|
Other (income) expense: |
|
|
|
|
|
|
|
Interest expense |
|
|
985 |
|
|
|
1,523 |
|
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
924 |
|
|
Other income, net |
|
|
(13 |
) |
|
|
(200 |
) |
|
Net Loss |
|
$ |
(7,881 |
) |
|
$ |
(12,613 |
) |
|
Net loss per share of common
stock outstanding, basic and diluted |
|
$ |
(0.31 |
) |
|
$ |
(0.68 |
) |
|
Weighted-average common shares
outstanding, basic and diluted |
|
|
25,150 |
|
|
|
18,681 |
|
|
|
|
|
|
|
|
|
|
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|
NEURONETICS, INC.Balance
Sheets(Unaudited; In thousands, except per share
data)
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2021 |
|
|
2020 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
121,277 |
|
|
$ |
48,957 |
|
Accounts receivable, net |
|
|
6,964 |
|
|
|
7,166 |
|
Inventory |
|
|
5,401 |
|
|
|
3,720 |
|
Current portion of net investments in sales-type leases |
|
|
1,930 |
|
|
|
1,887 |
|
Current portion of prepaid commission expense |
|
|
1,135 |
|
|
|
1,096 |
|
Prepaid expenses and other current assets |
|
|
2,239 |
|
|
|
2,186 |
|
Total current assets |
|
|
138,946 |
|
|
|
65,012 |
|
Property and equipment,
net |
|
|
866 |
|
|
|
730 |
|
Operating lease right-of-use
assets |
|
|
3,320 |
|
|
|
3,418 |
|
Net investments in sales-type
leases |
|
|
1,958 |
|
|
|
2,331 |
|
Prepaid commission
expense |
|
|
5,255 |
|
|
|
5,300 |
|
Other assets |
|
|
1,962 |
|
|
|
1,866 |
|
Total Assets |
|
$ |
152,307 |
|
|
$ |
78,657 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
3,241 |
|
|
$ |
3,749 |
|
Accrued expenses |
|
|
5,152 |
|
|
|
7,319 |
|
Deferred revenue |
|
|
1,912 |
|
|
|
2,020 |
|
Current portion of operating lease liabilities |
|
|
602 |
|
|
|
594 |
|
Current portion of long-term debt, net |
|
|
— |
|
|
|
— |
|
Total current liabilities |
|
|
10,907 |
|
|
|
13,682 |
|
Long-term debt, net |
|
|
34,791 |
|
|
|
34,620 |
|
Deferred revenue |
|
|
1,614 |
|
|
|
1,741 |
|
Operating lease
liabilities |
|
|
3,024 |
|
|
|
3,121 |
|
Total Liabilities |
|
|
50,336 |
|
|
|
53,164 |
|
Commitments and contingencies (Note 16) |
|
|
— |
|
|
|
— |
|
Stockholders’ Equity: |
|
|
|
|
|
|
Preferred stock, $0.01 par value: 10,000 shares authorized; no
shares issued or outstanding at March 31, 2021 and December 31,
2020, respectively |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value: 200,000 shares authorized; 25,756
and 19,114 shares issued and outstanding at March 31, 2021 and
December 31, 2020, respectively |
|
|
258 |
|
|
|
191 |
|
Additional paid-in capital |
|
|
387,134 |
|
|
|
302,842 |
|
Accumulated deficit |
|
|
(285,421 |
) |
|
|
(277,540 |
) |
Total Stockholders’ Equity |
|
|
101,971 |
|
|
|
25,493 |
|
Total Liabilities and Stockholders’ Equity |
|
$ |
152,307 |
|
|
$ |
78,657 |
|
|
|
|
|
|
|
|
|
|
NEURONETICS, INC.Statements of Cash
Flows(Unaudited; In thousands)
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
2021 |
|
|
2020 |
|
Cash Flows from Operating
Activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(7,881 |
) |
|
$ |
(12,613 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
281 |
|
|
|
301 |
|
Share-based compensation |
|
|
2,196 |
|
|
|
1,196 |
|
Non-cash interest expense |
|
|
171 |
|
|
|
782 |
|
Cost of rental units purchased by customers |
|
|
99 |
|
|
|
70 |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
622 |
|
Changes in certain assets and liabilities: |
|
|
|
|
|
|
Accounts receivable, net |
|
|
202 |
|
|
|
383 |
|
Inventory |
|
|
(1,681 |
) |
|
|
(104 |
) |
Net investment in sales-type leases |
|
|
330 |
|
|
|
(368 |
) |
Leasehold reimbursement |
|
|
— |
|
|
|
836 |
|
Prepaid commission expense |
|
|
6 |
|
|
|
(419 |
) |
Prepaid expenses and other assets |
|
|
206 |
|
|
|
285 |
|
Accounts payable |
|
|
(694 |
) |
|
|
(1,299 |
) |
Accrued expenses |
|
|
(2,168 |
) |
|
|
(3,227 |
) |
Deferred revenue |
|
|
(235 |
) |
|
|
(95 |
) |
Net Cash Used in Operating Activities |
|
|
(9,168 |
) |
|
|
(13,650 |
) |
|
|
|
|
|
|
|
Cash Flows from Investing
Activities: |
|
|
|
|
|
|
Purchases of property and equipment and capitalized software |
|
|
(675 |
) |
|
|
(266 |
) |
Net Cash Used in Investing Activities |
|
|
(675 |
) |
|
|
(266 |
) |
|
|
|
|
|
|
|
Cash Flows from Financing
Activities: |
|
|
|
|
|
|
Proceeds from issuance of long-term debt |
|
|
— |
|
|
|
35,000 |
|
Repayment of long-term debt |
|
|
— |
|
|
|
(32,500 |
) |
Payments of debt issuance costs |
|
|
— |
|
|
|
(721 |
) |
Proceeds from exercises of stock options |
|
|
1,592 |
|
|
|
76 |
|
Proceeds from common stock offering |
|
|
80,972 |
|
|
|
— |
|
Payments of common stock offering issuance costs |
|
|
(401 |
) |
|
|
— |
|
Net Cash Provided by Financing Activities |
|
|
82,163 |
|
|
|
1,855 |
|
Net Increase (Decrease) in Cash and Cash Equivalents |
|
|
72,320 |
|
|
|
(12,061 |
) |
Cash and Cash Equivalents, Beginning of Period |
|
|
48,957 |
|
|
|
75,708 |
|
Cash and Cash Equivalents, End of Period |
|
$ |
121,277 |
|
|
$ |
63,647 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures (Unaudited)
EBITDA is not a measure of financial performance under generally
accepted accounting principles in the United States, or GAAP, and
should not be construed as a substitute for, or superior to, GAAP
net loss. However, management uses both the GAAP and non-GAAP
financial measures internally to evaluate and manage the Company’s
operations and to better understand its business. Further,
management believes the addition of the non-GAAP financial measure
provides meaningful supplementary information to, and facilitates
analysis by, investors in evaluating the Company’s financial
performance, results of operations and trends. The Company’s
calculation of EBITDA may not be comparable to similarly designated
measures reported by other companies, because companies and
investors may differ as to what type of events warrant
adjustment.
The following table reconciles reported net loss to EBITDA:
|
|
|
|
|
|
|
|
|
|
Three Months ended |
|
|
|
March 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
(in thousands) |
|
Net loss |
|
$ |
(7,881 |
) |
|
$ |
(12,613 |
) |
|
Interest expense |
|
|
985 |
|
|
|
1,523 |
|
|
Income taxes |
|
|
— |
|
|
|
— |
|
|
Depreciation and
amortization |
|
|
281 |
|
|
|
301 |
|
|
EBITDA |
|
$ |
(6,615 |
) |
|
$ |
(10,789 |
) |
|
|
|
|
|
|
|
|
|
|
|
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