SALT LAKE CITY, Aug. 13, 2015 (GLOBE NEWSWIRE) — Amedica Corporation (Nasdaq:AMDA), an innovative biomaterial company which develops and manufactures silicon nitride as a platform for biomedical applications, today announced financial results for the second quarter ended June 30, 2015.
Second Quarter 2015 Highlights
- Year-to-date operational cash burn levels decreased by 37% year-over-year.
- Cash and cash equivalents totaled $12.4 million, while net cash used in operating activities during the first half of 2015 decreased by $3.1 million from the prior year period.
- Two-year performance data from the CASCADE clinical trial will be available at the beginning of the fourth quarter 2015, with an anticipated final device clearance response from the FDA in late fourth quarter 2015 or early first quarter 2016.
- Signed an original equipment manufacturer (OEM) letter of intent supply agreement with a leading orthopedic device design and manufacturing company.
“During this past quarter, we continued to make progress on our strategic initiatives,” said Dr. Sonny Bal, Chairman and CEO of Amedica Corporation. “We continue our focus on financial discipline and I am very pleased with the private label and OEM partner progress we’ve made this past quarter. Despite sales declines since our necessary restructuring in the first half of this year, we remain confident in our strategy of becoming a biomaterials company. With the appropriate changes made, and based on valuable feedback, we anticipate increased adoption of our material going forward. We are acutely focused on bringing additional new and innovative solutions to the market throughout the balance of this year that offer distinct advantages toward improving efficacy in spinal fusion procedures. With recent operational, clinical, and regulatory accomplishments, Amedica is positioned to capture additional market share, enhance our ability to show the advantages of silicon nitride, and promote wider adoption of the material across a number of biomedical platforms.”
Second Quarter 2015 Financial Results
For the three months ended June 30, 2015, total product revenue decreased $1.1 million, or 18%, as compared to the same period in 2014. The decrease was primarily due to decreased sales of non-silicon nitride products, which decreased by $0.7 million, or 23%, for the three months ended June 30, 2015 as compared to the same period in 2014. This decline was primarily due to lower metals sales as a result of a decline in the level of activity for a few key surgeons and a continued focus and investment in sales and marketing efforts of the Company’s silicon nitride products. Silicon nitride sales decreased by $0.3 million, or 13%, as compared to the same period in 2014. This decline was primarily attributable to the loss of a few key surgeons during the quarter, which was partially offset by increased recruiting efforts of our sales organization. These efforts have resulted in new surgeons using silicon nitride products, which the Company expects to outweigh the year-to-date declines in revenue in the second half of 2015.
Cost of revenue for the quarter decreased $0.2 million, or 15%, as compared to the same period in 2014. The decrease in cost of revenue was primarily a result of reduced sales for the current year period, as compared to the same period in 2014. Excluding the impact of excess or obsolete inventory for both years, second quarter 2015 gross margins ended at 78% of total sales, as compared to 80% during the prior year period. Although product costs have reduced through production efficiencies and lower overhead costs, the decline in gross margins was due to private label sales during the second quarter of 2015, which have lower gross margins due to lower selling prices, but higher operating contribution margins since no commissions are paid and require less operating expenses to support these sales.
Operating expenses for the second quarter of 2015 declined by 60%, or $8.8 million, from the prior year period, to $6.0 million. This year-over-year decline in operating expenses is primarily due to the actions taken by the Company to simplify the organization and align financial objectives earlier in the year, as well as lower commission costs and a $6.6 million reduction in stock-based compensation expense during the second quarter of 2015.
Net loss for the second quarter was $5.9 million, compared to $13.2 million in the prior-year period, primarily as a result of reduced stock-based compensation and operating expenses for the period.
Adjusted EBITDA, which is defined as earnings before deductions for interest, taxes, depreciation, amortization, non-cash stock compensation expense, change in fair value of our derivative liabilities, offering costs, and loss on extinguishment of debt for the second quarter 2015 was ($2.0) million, compared to ($3.2) million for the prior year period.
Cash and cash equivalents totaled $12.4 million as of June 30, 2015. The decline in total cash burn year-over-year was driven by a decrease in operational cash burn of $4.1 million in the second quarter of 2015, as compared to the prior year period. Total principal debt obligations were $24.3 million as of June 30, 2015.
2015 Business Outlook
The Company maintains its previously stated estimates of total annual revenue in the range of $19-$20 million, which includes increased 2015 silicon nitride sales growth of 15-20%. The Company expects the impact from the previously announced financial and operational alignment actions to deliver $5-$7 million of annualized operating profit benefit. These changes are anticipated to reduce total cash burn, increase financial sustainability, and strengthen the balance sheet, positioning the Company to maintain compliance with all debt covenants into Q4 of this year and become operating cash flow breakeven during the second half of 2016. Additionally, the Company maintains its previously stated guidance of four OEM or private label partners to be announced during 2015.
Conference Call
The Company will hold an investor conference call to discuss the second quarter financial results on Thursday, August 13, 2015 at 5:00 p.m. Eastern Time. The Company invites all interested parties to join the call by dialing (855) 455-6055, any time after 4:50 p.m. Eastern Time on August 13th. The Conference ID number is 96945584. International callers should dial (484) 756-4308. A live audio webcast of the call will be available through a link on the Company’s web site, at http://investors.amedica.com/events.cfm. The call will be archived telephonically for one week and can be accessed by calling (855) 859-2056 in the U.S., or (404) 537-3406 from outside the U.S. The Conference ID for the audio replay is 96945584.
About Amedica Corporation
Amedica is focused on the development and application of medical-grade silicon nitride ceramics. Amedica markets spinal fusion products and is developing a new generation of wear- and corrosion-resistant implant components for hip and knee arthroplasty. The Company manufactures its products in its ISO 13485 certified manufacturing facility and through its partnership with Kyocera, the world’s largest ceramic manufacturer. Amedica’s spine products are FDA-cleared, CE-marked, and are currently marketed in the U.S. and select markets in Europe and South America through its distributor network and its growing OEM partnerships.
For more information on Amedica or its silicon nitride material platform, please visit www.amedica.com.
