Aurora Spine Corporation (“Aurora Spine” or the “Company”) (TSXV:
ASG) (OTCQB: ASAPF), a designer and manufacturer of innovative
medical devices that improve spinal surgery outcomes, today
announced the financial results for the second quarter ended June
30, 2022. All figures are in U.S. dollars.
Q2 Financial
and Business Highlights
- Sales Growth –
Strong quarter over quarter sales and comparable quarter growth.
Sales grew 14.5% from Q1 2022 to Q2 2022 and 67.7% over Q2
2021.
- Positive EBITDAC –
$96,285 in Q2 compared to ($153,972) in Q1 and ($480,837) in Q2
2021. EBITDAC is a non-GAAP financial measure (defined below).
- Zip Stenosis
Indication – The Company received FDA clearance of a new
Lumbar Spinal Stenosis Indication for Use for its ZIP™ family of
MIS implants.
- Patent Issued -
the issuance of United States Patent No: 11,331,199 entitled
"Spinal Implant for Motion Preservation or Fusion." This patent
covers Aurora's ZIPFlex™ Technology for a minimally invasive
posterior interlaminar implant for motion preservation that could
be adapted into a fusion or non-fusion device while implanted in a
patient via a small modular attachment.
- FDA 510(K) Clearance
- received FDA 510(k) clearance for its DEXA SOLO-L™
spinal fusion system. The 3D printed standalone anterior lumbar
interbody fusion device (ALIF) was developed as part of the world’s
first bone density matched implant based on Aurora’s patented DEXA
Technology Platform.
Management Commentary
Mr. Trent Northcutt, President and Chief Executive Officer of
Aurora Spine, stated, “The second quarter results continued
Aurora’s momentum with another record revenue quarter. These
results stem directly from the sales and marketing strategy we
established during 2021 and the industry’s emergence from the
pandemic. Our proprietary products continue to be utilized by
surgeons and pain interventionalists and we are seeing adoption of
our products from more doctors that have participated in our
nationwide training sessions.”
Mr. Northcutt continued, “During the second quarter we continued
to enhance the company’s intellectual property, which will add
value over the longer term. We obtained FDA 510(k) clearance on our
second product in our DEXA series, the DEXA SOLO-L, which is a 3D
printed standalone anterior lumbar interbody fusion device using
Aurora’s proprietary DEXA technology to match these implants
against a patient’s bone density score. We also received FDA
clearance on another indication for ZIP, Lumbar Spinal Stenosis,
and expect this to expand the usage for our ZIP family of MIS
implants. Finally, in addition, a patent was issued by the USPTO
covering Aurora’s ZIPFlex Technology, a spinal implant that can be
easily interchanged between acting as a motion preservation or
fusion device. Advancing these new products in our pipeline is very
important to our company’s strategy and we anticipate that many of
these products will pave the way for future growth for years to
come.”
Mr. Northcutt concluded, “As the second quarter results
demonstrated, we are executing on our plan and are very excited
about our future. We are experiencing continued momentum heading
into the second half of 2022 and into 2023. We have several
catalysts in place for additional growth, one of them being the
SiLO-TFXTM, a titanium/non-bone version of our SiLO SI Joint
product, which we expect to be available later this year. We also
continue to expand our training sessions and anticipate surpassing
our goal of meeting with 400 doctors by the end of 2022.”
Mr. Chad Clouse, Chief Financial Officer of Aurora Spine, added,
“Second quarter results were again record revenues for Aurora and
cashflow positive for the quarter. We continue to make key
investments for the future including building certain inventories
to create additional instrument kits to ship to new customers later
this year and into 2023. While receivables continued to rise, we
are keenly focused on collections and expect to see a reduction in
the receivables balance.”
Financial Results
Total revenues for the second quarter of 2022 were $4.07 million
an increase of 67.7% when compared to $2.43 million in the same
quarter one year ago and compared to $3.55 million for the first
quarter of 2022, an increase of 14.5%. The improvement in revenues
were due to more procedures incorporating Aurora products like the
ZIP and SiLO and the hospitals and surgery centers returning to
more normal operations post-pandemic and as more procedures using
Aurora products being done in surgery centers.
Gross margin on total revenues were 52.6% for the second quarter
of 2022, compared to 41.4% in Q2 of 2021 and compared to 53.5%
during the first quarter of 2022. The year-over-year improvement in
gross margins is attributable to the company’s strategy of selling
more proprietary, Aurora Spine products. As the company continues
to focus on growing sales of proprietary products, gross margin has
the capabilities for additional improvements, dependent upon sales
mix and shipping costs.
Total operating expenses were $2.368 million for the second
quarter of 2022, compared to $1.879 million in the second quarter
of 2021, and compared to $2.288 million for the first quarter of
2022. Operating expenses increased from the second quarter one year
ago due to a return to normalized operations, the addition of new
key salespeople, as well as higher research and development costs
for new products and clinical studies.
EBITDAC (a non-GAAP figure non IFRS measure defined as Earnings
before Interest, Tax, Depreciation, Amortization and Stock based
compensation) was $0.10 million for the second quarter of 2022,
compared to $(0.48) million in the second quarter of 2021 and
$(0.15) million in the first quarter of 2022. EBITDAC improved
sequentially due to improved sales and gross profit.
Net loss was $(0.160) million for the second quarter of 2022,
compared to a loss of $(0.387) million in the first quarter of 2022
and improved from the second quarter of 2021 of a loss of $(0.700)
million. Basic and diluted net (loss) income per share was $(0.00)
per share in the second quarter of 2022 and $(0.01) per share for
the first quarter of 2021 and $(0.01) per share in the second
quarter of 2021.
Full financial statements can be found on SEDAR at
(www.sedar.com).
SELECTED BALANCE SHEET INFORMATION
The following table summarizes selected key financial data.
As at |
June 30, 2022$USD |
March 31, 2022$USD |
December 31, 2021$USD |
Cash |
758,980 |
1,436,568 |
3,172,575 |
Trade receivables |
4,057,976 |
3,687,321 |
2,668,174 |
Prepaid expenses and deposits |
699,302 |
874,088 |
674,687 |
Inventory |
2,856,730 |
2,336,767 |
1,889,640 |
Current assets |
8,372,988 |
8,498,077 |
8,405,076 |
Intangible assets |
949,117 |
850,678 |
854,331 |
Property and equipment |
1,937,480 |
1,383,640 |
1,304,242 |
Total assets |
11,259,585 |
10,569,062 |
10,563,649 |
Current liabilities |
3,450,121 |
2,996,425 |
2,627,281 |
Long-term liabilities |
2,721,942 |
2,352,821 |
2,367,056 |
Share capital |
25,087,474 |
25,087,474 |
25,087,474 |
SELECTED QUARTERLY INFORMATION
The Company’s functional currency is the US
dollar (USD). The functional currency of the Company’s US
subsidiary Aurora is USD.
Operating results for each quarter for the last two fiscal years
are presented in the table below.
Quarters ended |
June 30,
2022$ |
March 31, 2022$ |
December 30, 2021$ |
September 30, 2021$ |
June 30, 2021$ |
March 31, 2021$ |
December 31, 2020$ |
September 30, 2020$ |
Revenue |
4,067,166 |
|
3,551,964 |
|
2,964,980 |
|
2,892,540 |
|
2,425,397 |
|
2,261,890 |
|
2,437,228 |
|
2,368,692 |
|
Cost of goods sold |
(1,926,683 |
) |
(1,650,355 |
) |
(1,602,047 |
) |
(1,536,244 |
) |
(1,421,393 |
) |
(1,151,572 |
) |
(1,533,983 |
) |
(1,230,824 |
) |
Gross profit |
2,140,483 |
|
1,901,609 |
|
1,362,933 |
|
1,356,296 |
|
1,004,004 |
|
1,110,318 |
|
903,245 |
|
1,137,868 |
|
Operating expenses |
2,367,985 |
|
2,288,186 |
|
2,266,897 |
|
1,724,513 |
|
1,879,479 |
|
1,672,131 |
|
1,400,165 |
|
1,146,672 |
|
EBITDAC** |
96,285 |
|
(153,972 |
) |
(566,569 |
) |
(171,247 |
) |
(480,837 |
) |
(191,430 |
) |
185,104 |
|
477,060 |
|
Net income (loss) |
(159,667 |
) |
(386,577 |
) |
(903,964 |
) |
(368,217 |
) |
(700,405 |
) |
(386,743 |
) |
(42,181 |
) |
336,163 |
|
Basic and diluted income (loss) per share*** |
(0.00 |
) |
(0.01 |
) |
(0.01 |
) |
(0.01 |
) |
(0.01 |
) |
(0.01 |
) |
(0.00 |
) |
0.01 |
|
* Adjusted by gains and
(losses) on sale of equipment.** EBITDAC is a
non-GAAP, non IFRS measure defined as Earnings before Interest,
Tax, Depreciation, Amortization and Stock based compensation. This
amount includes Gains (losses) on sale of property and equipment
and Other income (expense).*** Outstanding options
and warrants have not been included in the calculation of the
diluted loss per share as they would have the effect of being
anti-dilutive.
Conference Call Details
Date and Time: Monday, August 29, 2022, at
11:00 a.m. ET/8:00am Pacific Time
Call-in Information: Interested parties can
access the conference call by dialing (844) 861-5497 or (412)
317-5794.
Webcast: Interested parties can access the
conference call via a live webcast via the following link:
https://app.webinar.net/0617xnKbZaA or at the Investor Relations
section of the Company's website at
https://www.aurora-spine.com/investors-v02.
Replay: A teleconference replay of the call
will be available until September 5, 2022, at (877) 344-7529 or
(412) 317-0088, replay access code 2888677. Additionally, a replay
of the webcast will be available at:
https://app.webinar.net/0617xnKbZaA or in the Investor Relations
section of the Company's website at
https://www.aurora-spine.com/investors-v02 for 90 days.
About Aurora Spine
Aurora Spine is focused on bringing new solutions to the spinal
implant market through a series of innovative, minimally invasive,
regenerative spinal implant technologies. Additional information
can be accessed at www.aurora-spine.com or
www.aurorapaincare.com.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward-Looking Statements
This news release contains forward-looking information that
involves substantial known and unknown risks and uncertainties,
most of which are beyond the control of Aurora Spine, including,
without limitation, those listed under "Risk Factors" and
"Cautionary Statement Regarding Forward-Looking Information" in
Aurora Spine's final prospectus (collectively, "forward-looking
information"). Forward-looking information in this news release
includes information concerning the proposed use and success of the
company’s products in surgical procedures. Aurora Spine cautions
investors of Aurora Spine's securities about important factors that
could cause Aurora Spine's actual results to differ materially from
those projected in any forward-looking statements included in this
news release. Any statements that express, or involve discussions
as to, expectations, beliefs, plans, objectives, assumptions or
future events or performance are not historical facts and may be
forward-looking and may involve estimates, assumptions and
uncertainties which could cause actual results or outcomes to
differ unilaterally from those expressed in such forward-looking
statements. No assurance can be given that the expectations set out
herein will prove to be correct and, accordingly, prospective
investors should not place undue reliance on these forward-looking
statements. These statements speak only as of the date of this
press release and Aurora Spine does not assume any obligation to
update or revise them to reflect new events or circumstances.
Contact:
Aurora Spine Corporation
Trent Northcutt
President and Chief Executive Officer
(760) 424-2004
Chad Clouse
Chief Financial Officer
(760) 424-2004
www.aurora-spine.com
Adam Lowensteiner
LYTHAM PARTNERS, LLC
Phoenix | New York
Telephone: 646-829-9700
asapf@lythampartners.com
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