MARIETTA, Ga., April 27, 2010 /PRNewswire via COMTEX/ — MiMedx Group, Inc.(MDXG 1.49, +0.14, +10.37%) announced today its financial results for the first quarter ended March 31, 2010.
The Company recorded its first significant revenues during the quarter ended March 31, 2010. First quarter of 2010 revenues were $114,900, compared to no revenues reported for the first quarter of 2009. The Company reported a net loss from operations of $2.6M, which represents an 11% improvement as compared to the same period in 2009. This improvement also includes an incremental investment of $273,009 for sales & marketing expense related to building the Company’s global sales distribution network and extensive sales training program. The net loss for the first quarter of 2010 was $3.1M, or $.06 per diluted common share, which includes a non-cash interest expense charge of $499,610 for the unamortized discount on the conversion of the 3% Convertible Senior Secured Notes into common stock as of March 31, 2010. In 2009, the net loss was $2.9M for the first quarter, or $0.07 per diluted common share. Earnings before interest, taxes, depreciation and amortization (EBITDA)* were a loss of $2.3M for the first quarter of 2010, compared to a loss of $2.6M reported in the first quarter of 2009. Total long term debt decreased $3.0M as compared to December 31, 2009, as a result of the aforementioned conversion of notes payable to common stock. Stockholder’s equity as of March 31, 2010, was $7.4M as compared to $6.1M as of December 31, 2010.
The Company’s first quarter revenues and net loss were in line with expectations and the Company’s business plan. The results included the impact of production ramp-up and product launch costs for the HydroFix(TM) Vaso Shield and Spine Shield products, as well as planned investments in animal studies that were undertaken to facilitate FDA clearance of several new products. During the quarter, the Company also closed its Tampa-based administrative offices and consolidated all accounting and investor relations functions into its Marietta, Georgia headquarters.
Parker H. “Pete” Petit, Chairman and CEO, stated, “We are pleased with our first quarter results, especially in the development of our first significant revenues in the United States and internationally. During the quarter, we initiated the “soft launch” of our HydroFix(TM) Vaso Shield in the United States and our HydroFix(TM) Spine Shield internationally. Both products contributed to our first quarter revenues.
We were also pleased with the progress we made during the quarter in reducing our manufacturing costs. We successfully implemented reductions in the costs of manufacturing our HydroFix(TM) Vaso Shield and Spine Shield, and also made good progress in our preproduction environment by reducing costs for our collagen fiber. Since both of these products are expected to have high gross profit margins as sales develop, we are optimistic about the positive profit impact these cost reductions will have in future periods. ”
The Company also reported its progress in signing contractual agreements with numerous sales representative organizations in the United States and in identifying a number of foreign distributors that have a high level of interest in marketing the Company’s products. William C. “Bill” Taylor, President and COO said, “We have been able to attract quality rep groups in the U.S. because they see the opportunity with our currently available HydroFix(TM) products and our soon to be available CollaFix(TM) products that are manufactured from our collagen fibers. In the international market, the distributors are enthusiastic about our HydroFix(TM) Spine Shield product line.”
The Company further reported that it has offered holders of certain of its warrants to convert their warrants into common stock, on or before May 1, 2010, at a discounted cash exercise price. Petit added, “At this time, our expectations are that we will raise approximately $4 million through this offer.”
“We are encouraged relative to the progress of our business, and we believe we are off to a good start in 2010. We look forward to communicating our results throughout the year,” concluded Petit.
MiMedx management will host a live broadcast of its first quarter conference call on April 27, 2010, beginning at 10:30 a.m. Eastern Time. A listen-only simulcast of the MiMedx Group conference call will be available online at the Company’s website atwww.mimedx.com or at www.earnings.com. A 30-day online replay will be available approximately one hour following the conclusion of the live broadcast. The replay can also be found on the Company’s website at www.mimedx.com or at www.earnings.com.
* Earnings before interest, depreciation and amortization is a non-GAAP financial measure and should not be considered a replacement for GAAP results. For a reconciliation of this non-GAAP financial measure to the most directly comparable financial measure, see accompanying table to this release.
About MiMedx Group, Inc.
MiMedx Group, Inc. is an integrated developer, manufacturer and marketer of patent protected biomaterial-based products and is in the process of transitioning from a development-focused concern to an operating company focused on sales growth and profitability. The Company’s assets include intellectual property protecting its CollaFix(TM) collagen-based technology for augmentation of soft and connective tissue diseases and trauma and intellectual property protecting HydroFix(TM), a novel durable hydrogel technology. The Company has received FDA clearance for HydroFix(TM) Vaso Shield, which is indicated for use as a cover for vessels following anterior spinal surgery, and European clearance (CE Mark) for its HydroFix(TM) Spine Shield, which is indicated for use as an adhesion barrier for anterior spinal surgery. More information about MiMedx Group can be found at www.mimedx.com.
Safe Harbor Statement
This press release includes statements that look forward in time or that express management’s beliefs, expectations or hopes. Such statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, the expected gross profit margins on the Company’s products and the positive impact of cost reductions in future periods, the interest level of foreign distributors in the Company’s products, the timing of the availability of the Company’s CollaFix(TM) products, the amount of money that will be raised from the discount offer to certain warrant holders, and that first quarter activities and results are indicative of future performance. These statements are based on current information and belief, and are not guarantees of future performance. Among the risks and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking statements include that the Company currently requires additional capital to survive and achieve its goals, which may be difficult or impossible to obtain through the discount offer to certain warrant holders or otherwise, that the Company may not receive requisite regulatory clearances and/or approvals to be able to market a full range of products or that such clearances or approvals may be delayed, that cost reductions may not be sustained or be sufficient to enable the Company to achieve profitability, that the Company may not be able to establish an effective distribution system for its products in the U.S. or abroad, that the Company’s products may not gain the anticipated acceptance in the marketplace or that acceptance may be delayed, and the risk factors detailed from time to time in the Company’s periodic Securities and Exchange Commission filings, including, without limitation, its 10-K filing for the fiscal year ended December 31, 2009. By making these forward-looking statements, MiMedx Group does not undertake to update them in any manner except as may be required by the Company’s disclosure obligations in filings it makes with the Securities and Exchange Commission under the federal securities laws.
MIMEDX GROUP, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Period from
Inception
(November 22,
Three Months Ended 2006)
March 31, through
---------
2010 2009 March 31, 2010
---- ---- --------------
REVENUES:
Net Sales $114,855 $- $114,855
OPERATING
COSTS AND
EXPENSES:
Cost of
products
sold 379,588 - 379,588
Research
and
development
expenses 572,404 957,084 9,312,239
Acquired
in-
process
research
and
development - - 7,177,000
Selling,
General &
Administrative
expenses 1,711,157 1,915,594 22,355,164
(Gain)/loss
on sale of
assets - - (275,428)
--- --- --------
LOSS FROM
OPERATIONS (2,548,294) (2,872,678) (38,833,708)
OTHER
INCOME
(EXPENSE),
net
Financing
expense
associated
with
issuance
of common
stock for
registration
rights
waivers - - (1,305,100)
Financing
expense
associated
with
warrants
issued
in
connection
with
convertible
promissory
note (568,636) - (1,544,469)
Net
interest
(expense)
income,
net (25,155) 694 345,215
Change in
fair value
of
investment,
related
party - - (41,775)
--- --- -------
LOSS BEFORE
INCOME
TAXES (3,142,085) (2,871,984) (41,379,837)
Income
taxes - - -
--- --- ---
NET LOSS (3,142,085) (2,871,984) (41,379,837)
---------- ---------- -----------
Accretion
of
redeemable
common
stock and
common
stock with
registration
rights
to fair
value - - (2,158,823)
--- --- ----------
Loss
attributable
to common
shareholders $(3,142,085) $(2,871,984) $(43,538,660)
=========== =========== ============
Net loss
per common
share
Basic and
diluted $(0.06) $(0.07)
====== ======
Shares used
in
computing
net loss
per common
share
Basic and
diluted 51,227,540 38,549,350
========== ==========
MIMEDX GROUP, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
March 31,
December
2010 31,
(unaudited) 2009
----------- ----
Current assets:
Cash and cash equivalents $1,627,505 $2,653,537
Trade Accounts Receivable 115,655
Inventory 68,276 30,920
Prepaid expenses and other current
assets 171,854 121,277
------- -------
Total current assets 1,983,290 2,805,734
Property and equipment,
net of accumulated depreciation of $1,059,438
(March)
and $948,445 (December) 954,260 1,049,597
Goodwill 857,597 857,597
Intangible assets, net of accumulated
amortization of $1,631,657 (March)
and $1,464,674 (December) 4,430,343 4,597,326
Deferred financing costs - 192,627
Deposits and Other Long Term
Receivables 111,180 189,202
------- -------
Total assets $8,336,670 $9,692,083
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses $928,050 $629,349
Total current liabilities 928,050 629,349
Long term convertible debt, face value
$3,472,000, less unamortized
discount of $550,748 and including
accrued interest of $69,604
(December) - 2,990,856
--- ---------
Total liabilities 928,050 3,620,205
------- ---------
Commitments and contingency (Notes
4 and 8) - -
Stockholders' equity:
Preferred stock; $.001 par value; 5,000,000
shares authorized and 0 (March and December)
shares
issued and outstanding - -
Common stock; $.001 par value; 100,000,000
shares authorized and 58,500,083 (March) and
50,002,887 (December)
shares issued and outstanding 58,550 50,003
Additional paid-in capital 50,924,762 46,454,482
Treasury stock (50,000 shares at
cost) (25,000) (25,000)
Deficit accumulated during the
development stage (43,549,692) (40,407,607)
----------- -----------
Total stockholders' equity 7,408,620 6,071,878
--------- ---------
Total liabilities and stockholders'
equity $8,336,670 $9,692,083
========== ==========
MIMEDX GROUP, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
Non-GAAP Financial Measures and Reconciliation
As used herein, "GAAP" refers to generally accepted accounting
principles in the United States. We use various numerical measures
in conference calls, investor meetings and other forums which are or
may be considered "Non-GAAP financial Measures" under Regulation G.
We have Provided below for your reference supplemental financial
disclosure for these measures, including the most directly
comparable GAAP measure and an associated reconciliation.
Reconciliation of Net Loss to Earnings before Interest, Depreciation
& Amortization (EBITDA)
Three Months Ended
March 31,
---------
2010 2009
---- ----
Net Loss (Per GAAP) $(3,142,085) $(2,871,984)
Add back:
Income Taxes - -
Financing expense assoc. with
warrants issued in connection
with convertible promissory
note (568,636) -
Net interest (exp)/inc., net (25,155) (694)
Depreciation Expense 110,992 111,820
Amortization Expense 166,983 166,704
EBITDA $(2,270,319) $(2,594,154)
=========== ===========
SOURCE MiMedx Group, Inc.
