FORE-SIGHT® disposable sensor sales increased 22% in 2016
2016 sales up 14% to $22.2 million
Conference Call Begins at 10:00 a.m. Eastern Time Today
BRANFORD, Conn., March 09, 2017 (GLOBE NEWSWIRE) -- CAS Medical Systems, Inc. (NASDAQ:CASM) (CASMED), a leader in medical products for non-invasive patient monitoring of tissue oxygenation, today reported financial results for the three and 12 months ended December 31, 2016.
Net sales from continuing operations for the fourth quarter of 2016 were $5.5 million, up 3% from $5.3 million for the fourth quarter of 2015. The Company incurred a net loss applicable to common stockholders for the fourth quarter of 2016 of $1.9 million, or $0.07 per share, compared with a net loss applicable to common stockholders for the fourth quarter of 2015 of $2.1 million, or $0.08 per share.
Highlights for the fourth quarter and full-year 2016 compared with their respective prior-year periods include the following:
- Fourth-quarter FORE-SIGHT sales increased 4% and represented 81% of net sales.
- Fourth-quarter FORE-SIGHT disposable sensor sales increased 15% and represented 74% of net sales.
- For the full year, U.S. FORE-SIGHT sales increased 20%, driven by a 23% increase in FORE-SIGHT U.S. disposable sensor sales.
- A net 88 FORE-SIGHT cerebral oximeters were shipped worldwide in the fourth quarter with a net 45 units shipped in the U.S. and a net 43 units shipped to international customers. Excluding returns, a record 82 units were shipped in the U.S.
- The number of FORE-SIGHT cerebral oximeters shipped worldwide as of December 31, 2016, was 2,088, up 22% from December 31, 2015, and the U.S. installed base was 1,120, up 23% versus the prior year.
- Gross profit margin in the fourth quarter improved to 58.2% from 51.6% in the prior-year period, driven by higher FORE-SIGHT sensor sales, lower costs, and improved manufacturing efficiencies, among other factors.
- As of December 31, 2016, CASMED had cash, cash equivalents, and borrowings available under its line of credit of $7.6 million.
Management Commentary
“The financial results we are reporting today are consistent with the preliminary results we announced on January 10, 2017. Notably, U.S. FORE-SIGHT sensor sales growth of 16% for the fourth quarter marked our 27th consecutive quarter of double-digit domestic sensor growth over the prior year,” said Thomas M. Patton, President and Chief Executive Officer of CASMED. “For the year, U.S. sensor sales increased 23% and contributed to gross margin expansion throughout the year. Our domestic growth last year came from a mix of market share gains and market expansion as we continued to capture accounts from competitors, gained new ‘greenfield’ accounts that had not recently utilized a tissue oximetry product, and increased usage from hospitals that were already FORE-SIGHT customers. Most gratifying is that these results came in the midst of a complete overhaul and expansion of our U.S. selling organization, which is now nearly complete with 15 sales territories staffed and just two more open territories to fill.
“We are expecting another year of growth in 2017 with total FORE-SIGHT sales increasing in the mid-teen percentages. This includes our outlook for a 20% increase in FORE-SIGHT sensor sales and a 20% increase in the U.S. installed base. We expect growth to accelerate in the second half of 2017 as our newer sales reps become more productive.”
Fourth-Quarter Financial Results
Net sales from continuing operations for the fourth quarter of 2016 increased 3% to $5.5 million, from $5.3 million for the fourth quarter of 2015. FORE-SIGHT oximetry sales increased 4% to $4.5 million, compared with the prior-year period. FORE-SIGHT disposable sensor sales increased 15% to $4.0 million, including 16% growth in FORE-SIGHT U.S. disposable sensor sales. Sales of non-invasive blood pressure product and services were $1.0 million, a 1% increase from the fourth quarter of 2015. FORE-SIGHT sales accounted for 81% of net sales from continuing operations for the fourth quarter of 2016.
The operating loss for the fourth quarter of 2016 was $1.1 million, an improvement of $0.7 million from the fourth quarter of 2015. Higher sales and gross profit and lower operating expenses were responsible for the improvement. Gross profit margin for the fourth quarter of 2016 increased to 58.2%, from 51.6% for the prior-year period, primarily due to a shift in product mix to FORE-SIGHT sensors, product cost reductions and manufacturing efficiencies. Operating expenses for the fourth quarter of 2016 decreased 7% to $4.3 million from the prior-year period, due to lower clinical research and marketing expenses.
Full-Year Financial Results
Net sales from continuing operations for 2016 increased 14% to $22.2 million from $19.5 million in 2015. FORE-SIGHT oximetry sales increased 17% to $18.0 million for 2016 and included a 22% increase in FORE-SIGHT disposable sensor sales to $15.9 million. Sales of non-invasive blood pressure product rose 3% in 2016 to $4.2 million.
The operating loss for 2016 was $4.9 million, an improvement of $1.7 million from 2015. The improvement was led by increased net sales and higher gross profit margin, which were slightly offset by a modest 2% increase in operating expenses. Gross profit margin for 2016 improved to 54.6% from 51.2% for 2015.
Income from discontinued operations for 2016 of $1.8 million included a gain of $2.9 million on the sale of the Company’s neonatal intensive care product assets in March of 2016, which was partially offset by losses from discontinued operations of $0.2 million during 2016 and $0.9 million of income tax expense. Income tax expense of $0.9 million associated with the sale of the product line was offset by a $0.9 million income tax benefit recorded against continuing operations. The Company does not expect to pay income taxes for 2016.
The Company recorded a net loss applicable to common stockholders for 2016 of $4.6 million, or $0.17 per common share, compared with a net loss applicable to common stockholders for 2015 of $8.3 million, or $0.32 per common share.
Cash and cash equivalents were $5.5 million as of December 31, 2016, compared with $7.5 million as of December 31, 2015. As of December 31, 2016, $2.1 million of borrowings were available under the Company’s line of credit.
Conference Call Information
CASMED will host a conference call beginning at 10:00 a.m. Eastern time today to discuss fourth- quarter and full-year 2016 results and answer questions. Conference call dial-in information is as follows:
- U.S. callers: (866) 239-5859
- International callers: (702) 495-1913
Individuals interested in listening to the live conference call via the Internet may do so by logging on to the Company's website at http://corporate.casmed.com/corporate-info.
A telephone replay will be available from 1:00 p.m. Eastern time on March 9, 2017, through 11:59 p.m. Eastern time on March 23, 2017. Replay dial-in information is as follows:
- U.S. callers: (855) 859-2056
- International callers: (404) 537-3406
- Conference ID number (U.S. and international callers): 68572530
- The replay will also be available at www.casmed.com.
About CASMED® – Monitoring What's Vital
CASMED products are designed to provide unique non-invasive monitoring solutions that are vital to patient care. The Company's FORE-SIGHT® Cerebral Oximeters provide a highly accurate, non-invasive measurement of tissue oxygenation in the brain. Direct monitoring of tissue oxygenation can provide a superior and powerful tool to alert clinicians to otherwise unrecognized and dangerously low levels of oxygen in the brain and empower them to improve patient care. In addition to FORE-SIGHT oximeters and accessories, the Company also provides proprietary non-invasive blood pressure monitoring solutions for OEM use. For further information regarding CASMED, visit the Company's website at www.casmed.com.
Statements included in this press release, which are not historical in nature, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements relating to the future performance of the Company are subject to many factors including, but not limited to, the customer acceptance of the products in the market, the introduction of competitive products and product development, the impact of any product liability or other adverse litigation, working capital and availability of capital, commercialization and technological difficulties, the impact of actions and events involving key customers, vendors, lenders, competitors, and other risks detailed in the Company’s Form 10-K for the year ended December 31, 2015, and other subsequent Securities and Exchange Commission filings.
Such statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. When used in this press release, the terms "anticipate," "believe," "estimate," "expect," "may," "objective," "plan," "possible," "potential," "project," "will,” and similar expressions identify forward-looking statements. The forward-looking statements contained in this press release are made as of the date hereof, and we do not undertake any obligation to update any forward-looking statements, whether as a result of future events, new information, or otherwise.
(Tables to follow)
| CAS MEDICAL SYSTEMS, INC. | |||||||||||||||
| STATEMENTS OF OPERATIONS | |||||||||||||||
| Unaudited | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | ||||||||||||
| Net sales from continuing operations | $ | 5,481,404 | $ | 5,310,170 | $ | 22,237,825 | $ | 19,486,570 | |||||||
| Cost of sales | 2,290,955 | 2,492,710 | 10,091,331 | 9,516,525 | |||||||||||
| Gross profit | 3,190,449 | 2,817,460 | 12,146,494 | 9,970,045 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 764,438 | 930,259 | 3,436,618 | 3,514,362 | |||||||||||
| Selling, general and administrative | 3,517,890 | 3,661,567 | 13,575,219 | 13,097,167 | |||||||||||
| Total operating expenses | 4,282,328 | 4,591,826 | 17,011,837 | 16,611,529 | |||||||||||
| Operating loss | (1,091,879 | ) | (1,774,366 | ) | (4,865,343 | ) | (6,641,484 | ) | |||||||
| Interest expense | 262,764 | 210,617 | 1,048,207 | 859,372 | |||||||||||
| Other income | (8,949 | ) | (3,264 | ) | (42,521 | ) | (4,658 | ) | |||||||
| Loss from continuing operations before income taxes | (1,345,694 | ) | (1,981,719 | ) | (5,871,029 | ) | (7,496,198 | ) | |||||||
| Income tax expense (benefit) | 73,780 | (66,993 | ) | (948,422 | ) | (209,197 | ) | ||||||||
| Loss from continuing operations | (1,419,474 | ) | (1,914,726 | ) | (4,922,607 | ) | (7,287,001 | ) | |||||||
| Discontinued operations | |||||||||||||||
| (Loss) income from discontinued operations | (179,722 | ) | 215,528 | (201,239 | ) | 621,826 | |||||||||
| (Loss) gain on sale of discontinued operations | (31,079 | ) | (24,120 | ) | 2,911,016 | (24,120 | ) | ||||||||
| Income tax (benefit) expense | (73,780 | ) | 66,993 | 948,422 | 209,197 | ||||||||||
| (Loss) income from discontinued operations | (137,021 | ) | 124,415 | 1,761,355 | 388,509 | ||||||||||
| Net loss | (1,556,495 | ) | (1,790,311 | ) | (3,161,252 | ) | (6,898,492 | ) | |||||||
| Preferred stock dividend accretion | 380,350 | 354,850 | 1,482,595 | 1,383,200 | |||||||||||
| Net loss applicable to common stockholders | $ | (1,936,845 | ) | $ | (2,145,161 | ) | $ | (4,643,847 | ) | $ | (8,281,692 | ) | |||
| Loss per common share from continuing | |||||||||||||||
| operations - basic and diluted | $ | (0.07 | ) | $ | (0.09 | ) | $ | (0.24 | ) | $ | (0.34 | ) | |||
| Income per common share from discontinued | |||||||||||||||
| operations - basic and diluted | $ | - | $ | 0.01 | $ | 0.07 | $ | 0.02 | |||||||
| Per share basic and diluted net loss applicable | |||||||||||||||
| to common stockholders: | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.17 | ) | $ | (0.32 | ) | |||
| Weighted-average number of common | |||||||||||||||
| shares outstanding: | |||||||||||||||
| Basic and diluted | 26,849,344 | 26,760,276 | 26,826,792 | 25,700,942 | |||||||||||
| CAS MEDICAL SYSTEMS, INC. | ||||||||||
| BALANCE SHEETS | ||||||||||
| Unaudited | ||||||||||
| December 31, | December 31, | |||||||||
| 2016 | 2015 | |||||||||
| Cash and cash equivalents | $ | 5,488,706 | $ | 7,528,292 | ||||||
| Accounts receivable | 3,322,400 | 2,921,720 | ||||||||
| Notes and other receivables | 557,217 | 384,673 | ||||||||
| Inventories | 1,595,668 | 1,428,425 | ||||||||
| Other current assets | 322,148 | 364,444 | ||||||||
| Assets associated with discontinued operations | 85,349 | 906,339 | ||||||||
| Total current assets | 11,371,488 | 13,533,893 | ||||||||
| Property and equipment | 8,827,604 | 8,406,649 | ||||||||
| Less accumulated depreciation | (6,266,097 | ) | (6,173,823 | ) | ||||||
| 2,561,507 | 2,232,826 | |||||||||
| Intangible and other assets, net | 790,971 | 813,017 | ||||||||
| Total assets | $ | 14,723,966 | $ | 16,579,736 | ||||||
| Accounts payable | $ | 1,074,939 | $ | 1,459,798 | ||||||
| Accrued expenses | 2,239,985 | 1,833,502 | ||||||||
| Notes payable | 70,015 | 82,377 | ||||||||
| Current portion of long-term debt, less unamortized debt issuance costs | 840,471 | 2,616,992 | ||||||||
| Liabilities associated with discontinued operations | 92,942 | 199,940 | ||||||||
| Total current liabilities | 4,318,352 | 6,192,609 | ||||||||
| Deferred gain on sale and leaseback of property | 91,603 | 226,240 | ||||||||
| Long-term debt, less current portion and unamortized debt issuance costs | 6,580,851 | 4,207,629 | ||||||||
| Other long-term liabilities | 320,000 | 300,000 | ||||||||
| Total liabilities | 11,310,806 | 10,926,478 | ||||||||
| Series A convertible preferred stock | 8,802,000 | 8,802,000 | ||||||||
| Series A exchangeable preferred stock | 5,135,640 | 5,135,640 | ||||||||
| Common stock | 109,715 | 109,567 | ||||||||
| Additional paid-in capital | 30,557,093 | 29,636,087 | ||||||||
| Treasury stock | (101,480 | ) | (101,480 | ) | ||||||
| Accumulated deficit | (41,089,808 | ) | (37,928,556 | ) | ||||||
| Total stockholders' equity | 3,413,160 | 5,653,258 | ||||||||
| Total liabilities & stockholders' equity | $ | 14,723,966 | $ | 16,579,736 | ||||||