Third quarter revenue of $4.0 million, up 8%
sequentially 130 authorizations and orders results in a record-high
backlog of 184 units
Conference call begins at 4:30 p.m. Eastern
time today
Myomo, Inc. (NYSE American: MYO) (“Myomo” or the
“Company”), a wearable medical robotics company that offers
increased functionality for those suffering from neurological
disorders and upper-limb paralysis, today announced financial
results for the three and nine months ended September 30, 2022.
Financial and operational highlights for the third quarter of
2022 include the following:
- Product revenue was $4.0 million, up 8% sequentially;
- Revenue units were 87, up 9% sequentially;
- MyoPro orders and insurance authorizations were received for
130 patients, up 27% sequentially;
- Backlog, which represents insurance authorizations and orders
received but not yet converted to revenue, was a record 184 units,
up 13% sequentially;
- 419 new candidates were added to the patient pipeline,
consistent with the prior quarter and up 26% from the third quarter
of 2021, which resulted in 1,112 MyoPro® candidates overall in the
pipeline as of September 30, 2022;
- Direct billing channel represented 79% of revenue, compared
with 85% in the prior year period;
- Gross margin was 66.5%, down 820 basis points from Q3 2021 and
up 100 basis points sequentially; and,
- Cost per pipeline add remained approximately $2,500, down
almost 50% from the peak several quarters ago.
Management Commentary
“The growth in the patient pipeline we reported in the second
quarter resulted in sequential growth in authorizations and orders
in the third quarter,” stated Paul R. Gudonis, Myomo’s chairman and
chief executive officer. “As a result, we are carrying a
record-high backlog into the fourth quarter. Fourth quarter backlog
also includes our highest quarterly total for orders from the VA
channel, which accounts for more than 10% of the backlog. Pipeline
additions continued to be strong in the third quarter, leading to a
record number of candidates in the insurance reimbursement process.
We have learned from the challenges experienced a year ago due to
competition from holiday and election advertising, leading us to
fine-tune our marketing efforts to maximize lead generation, while
minimizing expected growth in cost per pipeline add in the fourth
quarter."
Financial Results
For the Three Months Ended
September 30,
Period- to-Period
Change
For the Nine Months Ended
September 30,
Period- to-Period
Change
2022
2021
$
%
2022
2021
$
%
Product revenue
$
3,968,201
$
4,383,957
$
(415,756
)
(9
)%
$
10,513,702
$
9,824,740
$
688,962
7
%
License revenue
-
-
-
N/M
1,000,000
-
1,000,000
N/M
Total revenue
3,968,201
4,383,957
(415,756
)
(9
)%
11,513,702
9,824,740
1,688,962
17
%
Cost of revenue
1,331,217
1,110,204
221,013
20
%
3,888,217
2,634,922
1,253,295
48
%
Gross profit
$
2,636,984
$
3,273,753
$
(636,769
)
(19
)%
$
7,625,485
$
7,189,818
$
435,667
6
%
Gross margin %
66.5
%
74.7
%
-8.2
%
66.2
%
73.2
%
-7.0
%
Revenue for the third quarter of 2022 was $4.0 million, a
decrease of 9%, compared with the third quarter of 2021, but an
increase of 8% sequentially. Growth in revenue was driven by a
higher average selling price (ASP). Myomo recognized revenue on 87
MyoPro units in the third quarter of 2022, down 15% from the same
period a year ago. Year-to-date revenue of $11.5 million was up
17%, compared with the same period a year ago. Excluding the
partial joint venture license payment received in the first quarter
of 2022, year-to-date product revenue of $10.5 million was up 7%
compared with the same period a year ago.
Gross margin for the third quarter of 2022 was 66.5%, compared
with 74.7% for the third quarter of 2021. The decrease was driven
by higher product costs in the current inflationary environment,
partially offset by a higher ASP. Year-to-date gross margin was
66.2%, compared with 73.2% in the year-ago period.
Operating expenses for the third quarter of 2022 were $5.5
million, an increase of 3%, compared with the third quarter of
2021. The increase was driven primarily by higher compensation and
advertising costs. Advertising costs of $1.0 million increased 14%,
compared with the third quarter of 2021. Year-to-date operating
expenses were $16.1 million, an increase of 9% over the same period
a year ago.
Operating loss for the third quarter of 2022 was $2.8 million,
compared with $2.0 million for the third quarter of 2021. Net loss
for the third quarter of 2022 was $2.8 million, or $0.40 per share,
compared with a net loss of $2.1 million, or $0.36 per share, for
the third quarter of 2021. Operating loss for the first nine months
of 2022 was $8.4 million, compared with $7.6 million for the same
period a year ago. Net loss for the first nine months of 2022 was
$8.6 million, or $1.24 per share, compared with $7.6 million, or
$1.38 per share, for the same period a year ago.
Adjusted EBITDA for the third quarter of 2022 was negative $2.5
million, compared with negative $1.7 million for the third quarter
of 2021. Adjusted EBITDA was a negative $7.4 million for the nine
months ended September 30, 2022, compared with $6.6 million for the
year-ago period. A reconciliation of GAAP net loss to this non-GAAP
financial measure appears below.
Liquidity
Cash and cash equivalents as of September 30, 2022 were $7.4
million. Cash used in operating activities was $2.8 million for the
third quarter of 2022. In order to enhance liquidity, the Company
has called for a special shareholders meeting to be held in
December 2022 to approve the sale of the full $5.0 million of
availability under its equity line of credit with Keystone Capital
Partners.
Business Outlook
“We expect to be able to report modest sequential product
revenue growth in the fourth quarter,” said Gudonis. “While growing
the pipeline will be seasonally challenging in the fourth quarter
due to competition from holiday and election advertising, we expect
to enter 2023 with a much larger pipeline than we entered 2022,
positioning the Company for stronger product revenue growth in
2023."
Conference Call and Webcast Information
Myomo will hold a conference call today at 4:30 p.m. Eastern
time to discuss these results and answer questions. Participants
are encouraged to pre-register for the call at this link. Callers
who pre-register will be given a conference passcode and unique PIN
to gain immediate access to the call and bypass the live operator.
Participants may pre-register at any time including up to and after
the start of the call. Those unable to pre-register may participate
by dialing 844-707-6932 (U.S.) or 412-317-9250 (International). A
webcast of the call will also be available at Myomo’s Investor
Relations page at http://ir.myomo.com/.
A replay of the webcast will be available beginning
approximately one hour after the completion of the live conference
call at http://ir.myomo.com/. A dial-in replay of the call will be
available until November 24, 2022 at 877-344-7529 (U.S. toll-free),
855-669-9658 (Canada toll-free) or 412-317-0088 (International),
with passcode 2914843.
Non-GAAP Financial Measures
Myomo is providing financial information that has not been
prepared in accordance with generally accepted accounting
principles in the United States, or GAAP. This information includes
Adjusted EBITDA. This non-GAAP financial measure is not in
accordance with, or an alternative for, GAAP and may be different
from similar non-GAAP financial measures used by other companies.
Myomo believes the use of this non-GAAP financial measure provides
supplementary information for investors to use in evaluating
operating performance and in comparing Myomo’s financial measures
with other companies in its industry, many of which present similar
non-GAAP financial measures. Adjusted EBITDA is EBITDA adjusted for
stock-based compensation expense. This non-GAAP financial measure
is not meant to be considered superior to or a substitute for
results of operations prepared in accordance with GAAP, and should
be viewed in conjunction with GAAP financial measures. Investors
are encouraged to review the reconciliation of this non-GAAP
measure to its most directly comparable GAAP financial measure. A
reconciliation of GAAP to the non-GAAP financial measures has been
provided in the tables included as part of this press release.
About Myomo
Myomo, Inc. is a wearable medical robotics company that offers
improved arm and hand function for those suffering from
neurological disorders and upper-limb paralysis. Myomo develops and
markets the MyoPro product line. MyoPro is a powered upper-limb
orthosis designed to support the arm and restore function to the
weakened or paralyzed arms of certain patients suffering from CVA
stroke, brachial plexus injury, traumatic brain or spinal cord
injury, ALS or other neuromuscular disease or injury. It is
currently the only marketed device that, sensing a patient’s own
EMG signals through non-invasive sensors on the arm, can restore an
individual’s ability to perform activities of daily living,
including feeding themselves, carrying objects and doing household
tasks. Many are able to return to work, live independently and
reduce their cost of care. Myomo is headquartered in Boston,
Massachusetts, with sales and clinical professionals across the
U.S. and representatives internationally. For more information,
please visit www.myomo.com.
Forward-Looking Statements
This press release contains forward-looking statements regarding
the Company’s future business expectations, including expectations
for fourth quarter revenue, the state of the patient pipeline
entering 2023 and its cash runway, which are subject to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are only predictions and
may differ materially from actual results due to a variety of
factors.
These factors include, among other things:
- We have a history of operating losses and our financial
statements for the period ended September 30, 2022 include
disclosures regarding there being substantial doubt about our
ability to continue as a going concern.
- the direct and indirect impact of the novel coronavirus
(COVID-19) on our business and operations, including fabrication
and delivery, sales, patient consultations, supply chain,
manufacturing, insurance reimbursements and employees;
- our ability to continue normal operations and patient
interactions in order to deliver and fit our custom-fabricated
device;
- our marketing and commercialization efforts;
- our ability to achieve reimbursement from third-party payers
for our products, including CMS for Medicare Part B patients;
- our dependence upon external sources for the financing of our
operations, to the extent that we do not achieve or maintain cash
flow breakeven;
- our ability to effectively execute our business plan and scale
up our operations;
- our expectations as to our product development programs,
and;
- general market, economic, environmental and social factors that
may affect the evaluation, fitting, delivery and sale of our
products to patients.
More information about these and other factors that potentially
could affect our financial results is included in Myomo’s filings
with the Securities and Exchange Commission, including those
contained in the risk factors section of the Company’s annual
report on Form 10-K, quarterly reports on Form 10-Q and other
filings with the Commission. The Company cautions readers not to
place undue reliance on any such forward-looking statements, which
speak only as of the date made. Although the forward-looking
statements in this release of financial information are based on
our beliefs, assumptions and expectations, taking into account all
information currently available to us, we cannot guarantee future
transactions, results, performance, achievements or outcomes. No
assurance can be made to any investor by anyone that the
expectations reflected in our forward-looking statements will be
attained, or that deviations from them will not be material and
adverse. The Company disclaims any obligation subsequently to
revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the
occurrence of anticipated or unanticipated events.
(Tables to follow)
MYOMO, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2022
2021
2022
2021
Revenue
Product revenue
$
3,968,201
$
4,383,957
$
10,513,702
$
9,824,740
License revenue
—
—
1,000,000
—
3,968,201
4,383,957
11,513,702
9,824,740
Cost of revenue
1,331,217
1,110,204
3,888,217
2,634,922
Gross profit
2,636,984
3,273,753
7,625,485
7,189,818
Operating expenses:
Research and development
690,407
641,228
1,982,815
1,769,739
Selling, general and administrative
4,765,218
4,662,796
14,085,523
12,982,413
5,455,625
5,304,024
16,068,338
14,752,152
Loss from operations
(2,818,641
)
(2,030,271
)
(8,442,853
)
(7,562,334
)
Other (income) expense
Other (income) expense, including interest
income, net
(28,959
)
4,055
(32,343
)
10,193
Loss on equity investment
16,652
-
49,860
-
(12,307
)
4,055
17,517
10,193
Loss before income taxes
(2,806,334
)
(2,034,326
)
(8,460,370
)
(7,572,527
)
Income tax expense
23,382
22,696
93,202
66,604
Net loss
$
(2,829,716
)
$
(2,057,022
)
$
(8,553,572
)
$
(7,639,131
)
Weighted average number of common
shares outstanding:
Basic and diluted
7,064,188
5,681,121
6,880,918
5,530,259
Net loss per share attributable to
common stockholders
Basic and diluted
$
(0.40
)
$
(0.36
)
$
(1.24
)
$
(1.38
)
MYOMO, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
September 30,
December 31,
2022
2021
(unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$
7,420,020
$
15,524,378
Accounts receivable, net
1,595,266
1,960,037
Inventories, net
1,482,935
808,308
Prepaid expenses and other current
assets
553,696
799,164
Total Current Assets
11,051,917
19,091,887
Operating lease assets with right of
use
604,960
632,906
Equipment, net
239,955
275,289
Investment in Jiangxi Myomo Medical
Assistive Appliance Co. Ltd.
149,140
-
Other assets
111,034
95,330
Total Assets
$
12,157,006
$
20,095,412
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current Liabilities:
Accounts payable and accrued expenses
3,649,085
3,949,784
Current operating lease liability
441,386
333,380
Deferred revenue
23,053
249
Total Current Liabilities
4,113,524
4,283,413
Deferred revenue, net of current
portion
685
1,246
Non-current operating lease liability
220,901
401,622
Total Liabilities
4,335,110
4,686,281
Commitments and Contingencies
—
—
Stockholders’ Equity:
Preferred stock
—
—
Common stock
706
687
Additional paid-in capital
94,454,914
93,537,807
Accumulated other comprehensive loss
(11,466
)
(60,677
)
Accumulated deficit
(86,615,794
)
(78,062,222
)
Treasury stock, at cost
(6,464
)
(6,464
)
Total Stockholders’ Equity
7,821,896
15,409,131
Total Liabilities and Stockholders’
Equity
$
12,157,006
$
20,095,412
MYOMO, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
For the Nine Months Ended September
30,
2022
2021
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss
$
(8,553,572
)
$
(7,639,131
)
Adjustments to reconcile net loss to net
cash used in operations:
Depreciation
143,742
95,238
Stock-based compensation
917,126
831,046
Bad debt expense
26,075
—
Loss on disposal of asset
—
202
Amortization of right-of-use assets
253,611
126,529
Loss on equity investment
49,860
—
Other non-cash charges
99,771
463
Changes in operating assets and
liabilities:
—
—
Accounts receivable
362,759
(1,281,989
)
Inventories
(752,720
)
52,734
Prepaid expenses and other current
assets
240,050
(422,881
)
Other assets
(15,705
)
—
Accounts payable and accrued expenses
(264,182
)
577,238
Operating Lease Liabilities
(298,380
)
(51,462
)
Deferred revenue
22,244
(2,512
)
Other liabilities
—
(4,637
)
Net cash used in operating activities
(7,769,321
)
(7,719,162
)
CASH USED IN INVESTING
ACTIVITIES
(307,408
)
(302,527
)
CASH PROVIDED BY FINANCING
ACTIVITIES
-
8,388,076
Effect of foreign exchange rate changes on
cash
(27,629
)
(890
)
Net (decrease) increase in cash, cash
equivalents and restricted cash
(8,104,358
)
365,497
Cash, cash equivalents and restricted
cash, beginning of period
15,524,378
12,241,261
Cash, cash equivalents and restricted
cash, end of period
$
7,420,020
$
12,606,758
MYOMO, INC.
RECONCILIATION OF GAAP NET
LOSS TO ADJUSTED EBITDA
(unaudited)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2022
2021
2022
2021
GAAP net loss
$
(2,829,716
)
$
(2,057,022
)
$
(8,553,572
)
$
(7,639,131
)
Adjustments to reconcile to Adjusted
EBITDA:
Interest (income) expense and other
expense, net
(28,959
)
4,055
(32,343
)
10,193
Depreciation expense
49,097
36,910
143,742
95,238
Stock-based compensation
305,633
301,763
917,126
831,046
Loss on investment in minority
interest
16,652
—
49,860
—
Income tax expense
23,382
22,696
93,202
66,604
Adjusted EBITDA
$
(2,463,911
)
$
(1,691,598
)
$
(7,381,985
)
$
(6,636,050
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221110005893/en/
For Myomo: ir@myomo.com Investor Relations: Kim Sutton Golodetz
LHA Investor Relations kgolodetz@lhai.com 212-838-3777
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