- Net recurring operating result stabilized despite COVID-19
- Strong revenue recovery since June
- Cash runway secured until mid-2022
Regulatory News:
SpineGuard (FR0011464452 – ALSGD) (Paris:ALSGD), an innovative
company that deploys its DSG® (Dynamic Surgical Guidance) sensing
technology to secure and streamline the placement of bone implants,
announced today financial results for the half year ending June 30,
2020, as approved by the Board of Directors on September 15,
2020.
Pierre JEROME, Chairman & CEO of SpineGuard, said:
‘As experienced by many industry peers, whose revenue depends on
hospital elective surgeries, our half-year financial results were
significantly impacted by the postponement of non-urgent surgeries
in the context of the global pandemic. Despite a shortfall of
revenue of nearly 50% in Q2, at the initial outbreak of the virus,
the recurring operating results were close to breakeven without
jeopardizing our innovation strategy. The robotic program
developments are advancing well and we are excited by the growing
prospective opportunities. Regarding the new DSG Connect platform,
the feedback from the first European users have been very
encouraging and we continue to expect a US clearance by year end.
The company also secured, in the first half of 2020, a cash runway
by adopting permanent financial discipline, the signing of a new
equity line and the opening of the Chapter 11 proceedings and its
French equivalent. We are progressing actively with our main
bondholders and new potential strategic partners to finalize the
‘safeguard exit plan’ which will be presented soon to both the US
and French Courts under the supervision of the French Trustee, Mr.
Thévenot. I would also like to take this opportunity to thank the
entire SpineGuard Team for their remarkable spirit and tenacity
throughout this particularly challenging period.’
€ thousands – IFRS
H1 2020
H1 2019
H1 2018
Revenue
2,275
3,445
3,626
Gross margin
1,915
2,914
3,131
Gross margin (% of revenue)
84,1%
84,6%
86,3%
Sales, distribution, marketing
-1,309
-1,868
-2,436
Administrative costs
- 852
- 986
- 980
Research & Development
-311
-470
-554
Recurring operating profit /
(loss)
- 557
- 409
- 839
Non-recurring operating costs
-597
-92
0
Operating profit / (loss)
-1,153
-501
-839
Financial result
-235
-326
-229
Income tax
-
21
-19
Net profit / (loss)
-1,389
-805
-1,086
EBITDA
-854
-351
-483
NB: unaudited
Recurring Operating loss under control despite impact of
COVID-19
Despite the pandemic, the recurring operating loss was well
controlled and stands at € -557 K vs. € -409 K and EBITDA at € -854
K at June 30, 2020 compared to € -351 K at June 30, 2019.
Operating expenses were € 2,472 K for H1 2020, compared with €
3,332 K, a decrease of € 850 K (26%) compared with June 30,
2019.
Gross margin of 84.1% at June 30, 2020 remains consistent
compared with prior year result of 84.6%. The change mainly
reflects a global stability of ASP’s and non-recurring higher costs
of manufacturing in the context of the pandemic.
For H1 2020, the Company reported revenues of € 2,275 K, down
34% (35% cc) compared with H1 2019. Revenue was significantly
impacted by the COVID-19 pandemic from mid-March with a peak at the
end of April and a progressive resuming of sales in May and
June.
Revenue in the United States decreased 36% cc (-35% reported) to
€ 1,864 K in the first half of 2020, compared with € 2,867 K in the
first half of 2019. In the rest of the world, revenue decreased by
29% during the first half of 2020 to € 411 K compared with € 578 K
in the first half of 2019.
2,422 DSG units were sold in the first half of 2020 compared
with 3,875 in the first half of 2019, including 1,508 in the United
States, representing 62% of total units sold.
Working capital requirements were € 87 K compared with € 919 K
at December 31, 2019.
At June 30, 2020, cash and cash equivalents were € 1,189 K
compared with € 1,399 K at December 31, 2019, and is explained as
follows:
- Operating cash flow of € -436 K compared with the same period
last year of € -491 K.
- Postponement of payments for social benefits in France for €
170 K
- Equity funding using the equity line (OCAPI) for a gross amount
of € 600 K throughout the period.
- The payment of interests to Norgine Ventures and Harbert
European Growth of € 33 K.
- The voluntary filing for Chapter 11 in the USA and its
equivalent in France (‘procédure de sauvegarde’) stopped the
reimbursement of the principal of the venture loans and of the
Bpifrance loan.
- For the same reason, € 242 K (of which € 30k in the USA)
remained unpaid to creditors.
The Company’s workforce count is 14 at H1 2020 and stable
compared to the end of December 2019.
Impact of COVID-19 on the half-year financials:
Until mid-March, the Company was performing ahead of plan.
Volumes were then immediately impacted with a peak in the second
half of March and in April. While sales gradually resumed in May
and June, the shortfall compared to the second quarter of 2019 is
close to 50%. The pandemic also delayed the alpha phase for the
launch of the new DSG-Connect platform as surgeries began to slowly
resume only by mid-June.
Updates on French ‘safeguard’ and US Chapter 11
procedures:
Assisted by the French Trustee (‘administrateur’) Maître
Thévenot, the Company is currently drafting its safeguard plan
taking into consideration the progress made with several potential
strategic partners. Once finalized, the plan will be presented to
the French Court of Commerce, depending on the hearing schedules,
the date for which has not yet been determined. This presentation
must be made in coordination with the American procedure which has
already had several hearings in March and June. This phase will
enable SpineGuard to formalize a proposal for debt
restructuring.
The Company is therefore continuing its discussions with its
main creditors to arrange the "venture" debt and the FEI Innovation
loan respectively. The current procedure does not exclude the
possibility of a pre-packed agreement which would shorten its
duration.
Pending the finalization of the safeguard plan, the payment of
debts prior to the opening of the procedure are frozen. It should
also be remembered that the safeguard procedure freezes any ability
to exercise existing securities or collateral. As a reminder, as at
January 31, 2020, the outstanding capital amounted to € 3.8 M
compared to € 4.5 M at the conclusion of the 'venture' bond debt
and of € 0.9 M against € 1.5 M for the FEI Innovation loan.
Outlook:
The cash position as of June 30, 2020 of € 1.2 M plus the
secured equity line facility for € 2.4 M means that the total cash
available to the Company is € 3.6 M. Considering the current cash
position, the secured convertible bond facility and the recurring
expected business, the Company estimates that it can fund its needs
until mid-2022.
SpineGuard remains focused on the following objectives for the
second half of 2020:
1. Continue the pre-launch in Europe of the
new generation of PediGuard equipped with the DSG-Connect module, a
wireless interface which adds the visual signal to the audio to
optimize signal processing, allowing data recording as forensic
evidence to perform clinical studies on bone quality.
2. Obtain DSG-Connect clearance and initiate
its pre-launch in the US before the end of 2020.
3. Continue to provide scientific evidence of
the value of DSG for surgical robotics.
4. Maintain, as feasibly possible, the course
of operational profitability in the context of COVID-19.
5. Intensify collaboration with ConfiDent ABC
on dental applications with the co-development of a new generation
of products incorporating DSG technology.
6. Close other industrial and strategic
partnerships, specifically for the robotic application, assisted by
the investment bank Healthios Capital Markets.
The company’s half-year financial report is
available in the Investors > Exchange filings section of the
www.spineguard.com website.
Next financial press release: Third quarter 2020 revenue
on October 15, 2020.
About SpineGuard®
Founded in 2009 in France and the USA by Pierre Jérôme and
Stéphane Bette, SpineGuard is an innovative company deploying its
proprietary radiation-free real time sensing technology DSG®
(Dynamic Surgical Guidance) to secure and streamline the placement
of implants in the skeleton. SpineGuard designs, develops and
markets medical devices that have been used in over 80,000 surgical
procedures worldwide. Fifteen studies published in peer-reviewed
scientific journals have demonstrated the multiple benefits DSG®
offers to patients, surgeons, surgical staff and hospitals.
Building on these solid fundamentals and several strategic
partnerships, SpineGuard has expanded its technology platform in a
disruptive innovation: the « smart » pedicle screw launched late
2017 and is broadening the scope of applications in dental
implantology and surgical robotics. DSG® was co-invented by Maurice
Bourlion, Ph.D., Ciaran Bolger, M.D., Ph.D., and Alain Vanquaethem,
Biomedical Engineer.
For further information, visit www.spineguard.com
Disclaimer
The SpineGuard securities may not be offered or sold in the
United States as they have not been and will not be registered
under the Securities Act or any United States state securities
laws, and SpineGuard does not intend to make a public offer of its
securities in the United States. This is an announcement and not a
prospectus, and the information contained herein does and shall not
constitute an offer to sell or the solicitation of an offer to buy,
nor shall there be any sale of the securities referred to herein in
the United States in which such offer, solicitation or sale would
be unlawful prior to registration or exemption from
registration.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200915005091/en/
SpineGuard Pierre Jérôme CEO & Chairman Tel.: +33 1
45 18 45 19 p.jerome@spineguard.com
SpineGuard Manuel Lanfossi CFO Tél.: +33 1 45 18 45 19
m.lanfossi@spineguard.com
NewCap Investor Relations & Financial Communication
Mathilde Bohin / Pierre Laurent Tel.: +33 1 44 71 94 94
spineguard@newcap.eu
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