Avinger Reports Third Quarter 2020 Financial Results
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Avinger Reports Third Quarter 2020 Financial Results

Tuesday, November 10, 2020 4:01 PM
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Earnings

57% Sequential Increase in Revenue

10 New Account Launches in Third Quarter

REDWOOD CITY, CA / ACCESSWIRE / November 10, 2020 / Avinger, Inc. (NASDAQ:AVGR), a commercial-stage medical device company marketing the first and only intravascular image-guided, catheter-based system for diagnosis and treatment of Peripheral Artery Disease (PAD), today reported results for the third quarter ended September 30, 2020.

Third Quarter and Recent Highlights

  • Revenue increased 57% sequentially to $2.3 million, driven by a 71% increase in Pantheris disposable sales
  • Gross margin rose sequentially to 34%, due to increased sales activity and continued cost containment
  • Launched 10 new Lumivascular accounts in the third quarter, with additional new sites already launched in the fourth quarter
  • Received 510(k) clearance for Tigereye™, Avinger's next generation CTO-crossing device, and initiated U.S. limited launch at key opinion leader sites in October
  • Increased cash on hand to $25.3 million at September 30, 2020, which is anticipated to fund our growth initiatives through 2021

Jeff Soinski, Avinger's President and CEO, commented, "The third quarter saw a significant acceleration of case activity, driving a 57% sequential increase in revenue and gross margin of 34%, effectively returning Avinger to its pre-COVID business levels. We added 10 new customer sites in the third quarter, with more sites already added in the fourth quarter and a robust pipeline of sales opportunities. By maintaining our lean operating expense profile, we improved bottom line performance over the prior year while continuing to invest in our strategic growth initiatives."

"Beginning in the fourth quarter, we also took a key step forward in our growth strategy with completion of the first U.S. commercial cases for Tigereye, our next generation CTO-crossing catheter. Patient outcomes have been compelling, demonstrating the power of Tigereye's enhanced imaging, steerability and new distal tip design. We will continue launching at key opinion leader sites throughout the fourth quarter, then progress to full commercial availability in the first quarter of 2021. Similar to the successful Pantheris SV launch, we expect Tigereye to fuel higher revenue growth opportunities across both existing and new user sites.

"Through our capital raising activities and efficient cost structure, the Company ended the quarter with more than $25 million in cash, which is anticipated to fund our growth initiatives through 2021. We now have the capital to drive increased utilization of our Lumivascular solutions, support the rollout of our Tigereye CTO-crossing catheter, finalize the development of our enhanced L300 Lightbox, and advance our clinical efforts in support of expanded use and reimbursement. We believe these initiatives will advance our competitive position and revenue growth opportunities in 2021 and beyond."

Third Quarter 2020 Financial Results

Total revenue was $2.3 million for the third quarter of 2020, an increase of 57% from the second quarter of 2020 and a decrease of 4% from the third quarter of 2019. The sequential increase in revenue reflected a swift recovery from the effects of the COVID-19 pandemic in the June quarter as Avinger saw a strong return to outpatient treatments for PAD. Pantheris revenues continued to show strength, growing 71% over the prior quarter, and slightly over the prior year.

Gross margin for the third quarter of 2020 was 34%, increasing from 24% in the second quarter of 2020 and down slightly from 35% in the third quarter of 2019. Operating expenses for the third quarter of 2020 were $4.9 million, compared with $4.0 million in the second quarter of 2020 and down 11% from $5.5 million in the third quarter of 2019.

Net loss and comprehensive loss for the third quarter of 2020 was $4.5 million, compared with $4.0 million in the second quarter of 2020 and $4.6 million in the third quarter of 2019.

Adjusted EBITDA, as defined under non-GAAP measures in this press release, was a loss of $3.5 million, compared with a loss of $2.9 million in the second quarter of 2020, and an improvement of 10% year-over-year compared with a loss of $3.9 million in the third quarter of 2019.

For more information regarding non-GAAP financial measures discussed in this press release, please see "Non-GAAP Financial Measures" below, as well as the reconciliation of GAAP to non-GAAP measures provided in the tables below.

Balance Sheet

Cash and cash equivalents totaled $25.3 million as of September 30, 2020, compared with $16.6 million as of June 30, 2020. In the third quarter of 2020, Avinger received approximately $12.0 million in net proceeds from underwritten public offerings.

Conference Call

Avinger will hold a conference call today, November 10, 2020 at 4:30pm ET to discuss its third quarter 2020 financial results.

Individuals interested in listening to the conference call may do so by dialing +1-201-689-8031. To listen to a live webcast, please visit http://www.avinger.com and select Investor Relations. A webcast replay of the call will be available on Avinger's website following completion of the call at www.avinger.com.

About Avinger, Inc.

Avinger is a commercial-stage medical device company that designs and develops the first and only image-guided, catheter-based system for the diagnosis and treatment of patients with Peripheral Artery Disease (PAD). PAD is estimated to affect over 12 million people in the U.S. and over 200 million worldwide. Avinger is dedicated to radically changing the way vascular disease is treated through its Lumivascular platform, which currently consists of the Lightbox imaging console, the Ocelot family of chronic total occlusion (CTO) catheters, and the Pantheris® family of atherectomy devices. Avinger is based in Redwood City, California. For more information, please visit www.avinger.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our future performance, patient benefits of Tigereye, expected revenue growth from sales of Tigereye, the timing of full commercial availability of Tigereye, and development of other products. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include our dependency on a limited number of products; the resource requirements related to Pantheris, TIGEREYE and our Lightbox imaging console; the outcome of clinical trial results; as well as the other risks described in the section entitled "Risk Factors" and elsewhere in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 6, 2020, and subsequent Form 10-Qs. These forward-looking statements speak only as of the date hereof and should not be unduly relied upon. Avinger disclaims any obligation to update these forward-looking statements.

Non-GAAP Financial Measures

Avinger has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). The Company uses these non-GAAP financial measures internally in analyzing its financial results and believes that the use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing the Company's financial results with other companies in its industry, many of which present similar non-GAAP financial measures.

The presentation of these non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's financial statements prepared in accordance with GAAP. A reconciliation of the Company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review these reconciliations.

Adjusted EBITDA. Avinger defines Adjusted EBITDA as net loss and comprehensive loss plus interest expense, net, plus other income, net, plus stock-based compensation expense plus certain inventory charges plus certain depreciation and amortization expense. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP financial measures as analytical tools. Furthermore, these non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP, and the components that Avinger excludes in its calculation of non-GAAP financial measures may differ from the components that its peer companies exclude when they report their non-GAAP results of operations. Avinger compensates for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures. In the future, the Company may also exclude other non-recurring expenses and other expenses that do not reflect the Company's core business operating results.

Investor Contact:

Mark Weinswig
Chief Financial Officer
Avinger, Inc.
(650) 241-7916
[email protected]

Matt Kreps
Darrow Associates Investor Relations
(214) 597-8200
[email protected]

Condensed Statements of Operations and Comprehensive Loss
(in thousands) (unaudited)

 
  For the Three Months Ended     Nine Months Ended  
 
  September 30,     June 30,     September 30,     September 30,     September 30,  
 
  2020     2020     2019     2020     2019  
 
                             
Revenue
  $ 2,302     $ 1,466     $ 2,410     $ 6,029     $ 6,569  
Cost of revenue
    1,525       1,107       1,563       4,392       4,629  
Gross profit
    777       359       847       1,637       1,940  
 
                                       
Operating expense
                                       
Research and development
    1,417       1,297       1,371       4,308       4,120  
Selling, general, and administrative
    3,461       2,654       4,091       10,501       12,168  
Total operating expense
    4,878       3,951       5,462       14,809       16,288  
 
                                       
Operating loss
    (4,101 )     (3,592 )     (4,615 )     (13,172 )     (14,348 )
 
                                       
Other (expense) income, net:
                                       
Interest expense, net
    (432 )     (412 )     (307 )     (1,212 )     (849 )
Other income (expense), net
    8       4       299       8       868  
Net loss and comprehensive loss
    (4,525 )     (4,000 )     (4,623 )     (14,376 )     (14,329 )
Accretion of preferred stock dividends
    (967 )     (967 )     (895 )     (2,901 )     (2,685 )
Net loss attributable to common stockholders
  $ (5,492 )   $ (4,967 )   $ (5,518 )   $ (17,277 )   $ (17,014 )
 
                                       
 
                                       
Net loss per share attributable to common stockholders
                                       
basic and diluted
  $ (0.08 )   $ (0.18 )   $ (0.70 )   $ (0.46 )   $ (2.75 )
 
                                       
Weighted average common shares used to compute
                                       
net loss per share, basic and diluted
    69,459       27,310       7,900       37,246       6,189  
 
                                       

Condensed Balance Sheets
(in thousands, except per share amounts) (unaudited)

 
  September 30,     December 31,  
Assets
  2020     2019  
Current assets:
           
Cash and cash equivalents
  $ 25,326     $ 10,943  
Accounts receivable, net of allowance for doubtful accounts of $19
               
at both September 30, 2020 and December 31, 2019
    1,341       1,458  
Inventories
    3,994       3,912  
Prepaid expenses and other current assets
    524       311  
Total current assets
    31,185       16,624  
 
               
Right of use asset
    4,269       4,856  
Property and equipment, net
    942       1,661  
Other assets
    550       684  
Total assets
  $ 36,946     $ 23,825  
 
               
Liabilities and stockholders' equity
               
 
               
Current liabilities:
               
Accounts payable
  $ 632     $ 663  
Accrued compensation
    1,455       1,782  
Accrued expenses and other current liabilities
    683       654  
Leasehold liability, current portion
    787       722  
Borrowings, current portion
    11,632       8,967  
Series A preferred stock dividends payable
    2,900       -  
Total current liabilities
    18,089       12,788  
 
               
Leasehold liability, long-term portion
    3,483       4,135  
Borrowings, long-term portion
    911       -  
Other long-term liabilities
    9       7  
Total liabilities
    22,492       16,930  
 
               
Stockholders' equity:
               
Convertible preferred stock, par value $0.001
    -       -  
Common stock, par value $0.001
    85       10  
Additional paid-in capital
    377,080       355,220  
Accumulated deficit
    (362,711 )     (348,335 )
Total stockholders' equity
    14,454       6,895  
Total liabilities and stockholders' equity
  $ 36,946     $ 23,825  
 
               

Reconciliation of Adjusted EBITDA to Net loss and comprehensive loss
(in thousands) (unaudited)

 
  For the Three Months Ended     For the Nine Months Ended  
 
  September 30,     June 30,     September 30,     September 30,     September 30,  
 
  2020     2020     2019     2020     2019  
 
                             
Net loss and comprehensive loss
  (4,525 )   (4,000 )   (4,623 )   (14,376 )   (14,329 )
Add: Interest expense, net
    432       412       307       1,212       849  
Add: Other (income) expense, net
    (8 )     (4 )     (299 )     (8 )     (868 )
Add: Stock-based compensation
    384       325       523       1,160       1,532  
Add: Certain inventory charges
    -       96       -       96       -  
Add: Certain depreciation and amortization charges
    223       228       226       676       654  
Adjusted EBITDA
  (3,494 )   (2,943 )   (3,866 )   (11,240 )   (12,162 )
 
                                       

SOURCE: Avinger, Inc.

Avinger, Inc.
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