Completed Exchange Transaction with
Convertible Note Holders Representing 94% of Outstanding
Principal
– Record Q3 Revenue of $48.1 Million, 63% Year
on Year Growth and Above Upper End of Q3 Guidance Range –
NanoString Technologies, Inc. (NASDAQ:NSTG), a leading provider
of life science tools for discovery and translational research,
today reported financial results for the third quarter ended
September 30, 2023. The Company also announced it had reached
agreement with holders to exchange approximately $216 million, or
94%, principal amount of its Convertible Notes for new Senior
Secured Notes due September 1, 2026 and common stock warrants.
“The last few months have been extraordinarily productive for
our team. During the third quarter, we delivered record revenue
while reducing our cash burn by nearly 50% sequentially,” said Brad
Gray, President and CEO of NanoString. “In the early weeks of Q4,
we took critical steps to transform our financial profile through a
reorganization that helps support our march to breakeven, and sets
us up to achieve our goal of a first full year of profitability in
2025.”
“We were pleased to complete the exchange transaction with the
largest holders of our Convertible Notes, with these major
investors showing their conviction in our business opportunity,”
said Thomas Bailey, Chief Financial Officer of NanoString. “The
longer-dated notes provide the window needed for us to achieve
profitability prior to maturity, which we believe will support
improved terms and availability of any new financing that may be
required. In addition to the maturity date extension, updated terms
allow for payment-in-kind interest for the first year as we work to
optimize our cash burn and profitability profile.”
Third Quarter Financial Highlights
- Total revenue of $48.1 million
- Spatial biology revenue of $28.9 million
- nCounter revenue, inclusive of all service and other revenue,
of $19.2 million
- Cash, cash equivalents and short-term investments balance of
$97.1 million as of September 30, 2023
Spatial Biology
- Accelerated CosMx SMI shipments during Q3, resulting in Q3
spatial biology instrument revenue growth of 350%
year-over-year
- Successfully defended sizeable CosMx instrument order book,
fulfilling or retaining approximately 95% of cumulative orders as
of September 30, 2023
- Recorded spatial biology consumables revenue growth of 70%
year-over-year, and approximately $70,000 of annualized
pull-through driven by a steady GeoMx consumables pull-through over
a larger installed base supplemented by growing shipments of CosMx
consumables
- Announced the launch of the GeoMx IO Proteome Atlas (IPA)
assay, which enables spatial profiling of more than 500
immuno-oncology relevant protein targets from Formalin-Fixed,
Paraffin-Embedded (FFPE) tissue sections with commercial
availability expected in Q4 2023
- Grew total spatial biology system installed base to
approximately 510 systems, an increase of approximately 55%
year-over-year
- Total peer-reviewed publications featuring our spatial biology
platforms were approximately 340 as of September 30, 2023,
representing an increase of approximately 180 publications in the
last 12 months
nCounter
- Recorded nCounter revenue, inclusive of all service and other
revenue, of $19.2 million and approximately $37,000 of annualized
pull-through
- Total installed base of our nCounter platforms of approximately
1,140, an increase of approximately 3% year-over-year
- Total peer-reviewed publications featuring nCounter were
approximately 7,315 as of September 30, 2023, representing an
increase of approximately 1,215 publications in the last 12
months
Financial
- Completed exchange with holders of approximately $216 million
principal amount of the Company's Convertible Senior Notes due
March 1, 2025 for new Senior Secured Notes, with key updated terms
as follows:
- Maturity extended to September 1, 2026
- Interest rate of 6.95% per year, with interest payable
quarterly
- Interest payable in-kind in the form of additional notes in the
first year, at the Company’s election
- Issuance of warrants to purchase 16 million shares of common
stock, with an exercise price of $1.69, replacing approximately 4.5
million shares of common stock potentially issuable under the old
Convertible Senior Notes
- Secured by substantially all of the assets of the Company
2023 Outlook
Management updated its financial outlook for 2023 with results
now expected as follows:
- Total revenue of $175 to $180 million, as compared to the
previous range of $175 to $185 million
- Spatial biology revenue of $96 to $100 million, as compared to
the previous range of $100 to $105 million
- nCounter revenue, inclusive of all service and other revenue,
of $79 to $80 million, as compared to the previous range of $75 to
$80 million
- Adjusted EBITDA loss of approximately $80 to $85 million, as
compared to the previous range of $65 to $75 million
Financial Results
We have elected to present selected non-GAAP, or adjusted,
financial measures, including Adjusted EBITDA. These adjusted
financial measures are calculated excluding certain items that may
make it more challenging to compare our GAAP operating results
across periods. Such items may include stock-based compensation,
depreciation and amortization, or one-time charges such as
transaction related fees and expenses or restructuring charges and
severance costs. A reconciliation of adjusted financial measures to
the nearest comparable GAAP financial measure can be found in the
tables at the end of this press release.
(dollars in thousands)
Three Months Ended September
30,
GAAP
Non-GAAP
2023
2022
2023
2022
Revenue
$
48,089
$
29,541
$
48,089
$
29,541
Cost of revenue
30,686
13,723
28,219
12,572
Gross margin
36
%
54
%
41
%
57
%
Research and development
17,115
16,992
13,351
14,542
Selling, general and administrative
36,755
33,767
26,732
28,442
Adjusted EBITDA
N / A
N / A
$
(20,213
)
$
(26,015
)
Non-operating expense, net
(944
)
(1,749
)
(944
)
(1,749
)
Net loss
$
(37,411
)
$
(36,690
)
$
(21,157
)
$
(27,764
)
Nine Months Ended September
30,
GAAP
Non-GAAP
2023
2022
2023
2022
Revenue
$
128,051
$
92,840
$
128,051
$
92,840
Cost of revenue
83,314
44,353
75,939
41,117
Gross margin
35
%
52
%
41
%
56
%
Research and development
51,447
51,755
40,434
43,972
Selling, general and administrative
113,197
106,234
85,754
88,063
Adjusted EBITDA
N / A
N / A
$
(74,076
)
$
(80,312
)
Non-operating expense, net
(2,410
)
(5,927
)
(2,410
)
(5,927
)
Net loss
$
(122,317
)
$
(115,429
)
$
(76,486
)
$
(86,239
)
Supplemental Information
As a supplement to the table above, we have posted to the
investor relations section of our website, at
https://investors.nanostring.com/financials/quarterly-results/default.aspx,
supplemental financial data that include our adjusted financial
measures as compared to the nearest comparable GAAP financial
measures, for the third quarter of 2023 and the nine months ended
September 30, 2023, and for each quarter of and the full year of
2022.
Conference Call
Management will host a conference call today beginning at 1:30
pm PT / 4:30 pm ET to discuss these results and answer questions.
Investors and other interested parties can register for the call in
advance by visiting https://conferencingportals.com/event/aLWevwch.
Following registration, an email confirmation will be sent
including dial-in details and unique conference call codes for
entry. Registration is open throughout the call, but to ensure
connection for the full call, registration in advance is
recommended. The link to the webcast and audio replay will be made
available at the Investor Relations website: www.nanostring.com. A
replay of the call will be available beginning November 6, 2023 at
7:30pm ET through midnight ET on November 13, 2023. To access the
replay, dial (800) 770-2030 or (647) 362-9199 and reference
Conference ID: 72369. The webcast will also be available on our
website for one year following the completion of the call.
Non-GAAP, or Adjusted, Financial Information
We believe that the presentation of non-GAAP, or adjusted,
financial information provides important supplemental information
to management and investors regarding financial and business trends
relating to our financial condition and results of operations.
Reconciliation of adjusted financial measures to the most directly
comparable financial result as determined in accordance with GAAP
are included at the end of this press release following the
accompanying financial data. A reconciliation of adjusted guidance
measures, including Adjusted EBITDA, to corresponding GAAP measures
is not available without unreasonable effort due to the uncertainty
regarding certain expenses that may be incurred in the future, and
we are also unable to predict the probable significance of such
adjusted guidance measures. Accordingly, in reliance on the
exception provided by Item 10(e)(1)(i)(B) of Regulation S-K, we
have not provided a reconciliation for adjusted guidance measures
provided in this press release. For further information regarding
why we believe that these adjusted measures provide useful
information to investors, the specific manner in which management
uses these measures and some of the limitations associated with the
use of these measures, please refer to “Notes Regarding Non-GAAP
Financial Information” at the end of this press release.
About NanoString Technologies, Inc.
NanoString Technologies, a leader in spatial biology, offers an
ecosystem of innovative discovery and translational research
solutions, empowering our customers to map the universe of biology.
The GeoMx® Digital Spatial Profiler is a flexible and consistent
solution combining the power of whole tissue imaging with gene
expression and protein data for spatial whole transcriptomics and
proteomics. The CosMx™ Spatial Molecular Imager is a single-cell
imaging platform powered by spatial multiomics enabling researchers
to map single cells in their native environments to extract deep
biological insights and novel discoveries from one experiment. The
AtoMx™ Spatial Informatics Platform is a cloud-based informatics
solution with advanced analytics and global collaboration
capabilities, enabling powerful spatial biology insights anytime,
anywhere. At the foundation of our research tools is our nCounter®
Analysis System, which offers a secure way to easily profile the
expression of hundreds of genes, proteins, miRNAs, or copy number
variations, simultaneously with high sensitivity and precision. For
more information, visit www.nanostring.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 expectations for demand for
our products and growth in our business, future revenue growth,
future operating results, future cash flows, the impact of new and
potential products and technology, the growth trajectory of our
nCounter, GeoMx, and CosMx offerings, the impact of our convertible
note exchange transaction on our financial condition, and spatial
biology franchises, our estimated 2023 operating results and our
anticipated GAAP and non-GAAP operating results. 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 market acceptance of our products;
delays or denials of regulatory approvals or clearances for
products or applications; the extent and duration of adverse
conditions in the general domestic and global economic markets; the
effects of ongoing litigation; the impact of competition; the
impact of expanded sales, marketing, product development and
clinical activities on operating expenses; delays or other
unforeseen problems with respect to manufacturing and product
development; as well as the other risks set forth in our filings
with the Securities and Exchange Commission. These forward-looking
statements speak only as of the date hereof. NanoString
Technologies disclaims any obligation to update these
forward-looking statements.
The NanoString logo, NanoString, NanoString Technologies, GeoMx,
CosMx, AtoMx and nCounter are trademarks or registered trademarks
of NanoString Technologies, Inc., in the United States and/or other
countries.
NANOSTRING TECHNOLOGIES,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenue:
Instruments
$
23,608
$
8,023
$
52,607
$
26,664
Consumables
18,297
16,582
59,330
51,897
Services and other
6,184
4,936
16,114
14,279
Total revenue
48,089
29,541
128,051
92,840
Costs and expenses:
Cost of revenue
30,686
13,723
83,314
44,353
Research and development
17,115
16,992
51,447
51,755
Selling, general and administrative
36,755
33,767
113,197
106,234
Total costs and expenses (a) (b)
84,556
64,482
247,958
202,342
Loss from operations
(36,467
)
(34,941
)
(119,907
)
(109,502
)
Other income (expense):
Interest income
1,355
774
4,167
1,331
Interest expense
(1,897
)
(1,887
)
(5,677
)
(5,650
)
Other expense, net
(451
)
(579
)
(669
)
(1,286
)
Total other expense, net
(993
)
(1,692
)
(2,179
)
(5,605
)
Net loss before provision for income
tax
(37,460
)
(36,633
)
(122,086
)
(115,107
)
Benefit (provision) for income tax
49
(57
)
(231
)
(322
)
Net loss
$
(37,411
)
$
(36,690
)
$
(122,317
)
$
(115,429
)
Net loss per share, basic and diluted
$
(0.78
)
$
(0.79
)
$
(2.58
)
$
(2.49
)
Weighted average shares used in computing
basic and diluted net loss per share
47,715
46,529
47,341
46,320
(a) Includes $7.4 million and $5.5 million
of stock-based compensation expense for the three-month period
ended September 30, 2023, and 2022, respectively, and $23.5 million
and $19.6 million for the nine months ended September 30, 2023, and
2022, respectively.
(b) Includes $4.0 million and $1.6 million
of depreciation and amortization expense for the three-month period
ended September 30, 2023 and 2022, respectively and $11.4 million
and $5.2 million for the nine months ended September 30, 2023, and
2022, and respectively.
NANOSTRING TECHNOLOGIES,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
September 30,
December 31,
2023
2022
Assets
(Unaudited)
Current assets:
Cash and cash equivalents
$
93,802
$
112,250
Restricted cash and equivalents
296
898
Short-term investments
3,299
84,282
Accounts receivable, net
48,352
31,506
Inventory, net
55,159
43,273
Prepaid expenses and other
10,899
14,565
Total current assets
211,807
286,774
Property and equipment, net
44,991
44,457
Operating lease right-of-use assets
14,420
17,581
Other assets
3,495
4,600
Total assets
$
274,713
$
353,412
Liabilities and Stockholders’ Equity
(Deficit)
Current liabilities:
Accounts payable
$
33,335
$
16,619
Accrued liabilities
9,573
7,884
Accrued compensation and other employee
benefits
14,545
17,494
Customer deposits
1,653
1,757
Deferred revenue, current portion
12,848
9,588
Operating lease liabilities, current
portion
5,578
5,518
Total current liabilities
77,532
58,860
Deferred revenue, net of current
portion
5,623
3,754
Long-term debt, net
227,764
226,622
Operating lease liabilities, net of
current portion
14,360
18,362
Total liabilities
325,279
307,598
Total stockholders’ equity (deficit)
(50,566
)
45,814
Total liabilities and stockholders’ equity
(deficit)
$
274,713
$
353,412
Notes Regarding Non-GAAP Financial Information. In
addition to our results reported in accordance with U.S. generally
accepted accounting principles (“GAAP”), we believe certain
non-GAAP, or adjusted, measures are useful in evaluating our
operating performance. We use adjusted financial measures to
evaluate our ongoing operations and for internal planning and
forecasting purposes. We believe that adjusted financial measures,
when taken collectively, may be helpful to investors because it
provides consistency and comparability with past financial
performance. However, adjusted financial information has
limitations as an analytical tool and should not be considered in
isolation or as a substitute for financial information presented in
accordance with U.S. GAAP. In particular, other companies,
including companies in our industry, may calculate similarly titled
non-GAAP or adjusted measures differently or may use other measures
to evaluate their performance, all of which could reduce the
usefulness of our adjusted financial measures as tools for
comparison. A reconciliation is provided below for adjusted
financial measures to the most directly comparable financial
measure stated in accordance with U.S. GAAP. Investors are
cautioned that there are a number of limitations associated with
the use of non-GAAP, or adjusted, financial measures as analytical
tools. Investors are encouraged to review the related U.S. GAAP
financial measures and the reconciliation of these adjusted
financial measures to their most directly comparable U.S. GAAP
financial measure, and not to rely on any single financial measure
to evaluate our business.
Expenses excluded from non-GAAP, or adjusted, cost of
revenue, gross margin, research and development expense and
selling, general and administrative expense and net loss. We
exclude stock-based compensation expense and depreciation and
amortization expense, which are non-cash expenses, from certain of
our adjusted financial measures because we believe that excluding
such items provides meaningful supplemental information regarding
operational performance. We exclude certain expenses related to
cloud computing arrangement implementation expenses, litigation
expenses, and other business development expenses from certain of
our adjusted financial measures because such expenses have no
direct correlation to the continuing operation of our business as
such expenses are non-recurring or non-operating in nature, and
therefore we believe excluding these items provides meaningful
supplemental information regarding operational performance.
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP financial
measure defined as GAAP net loss adjusted for stock-based
compensation expense, depreciation and amortization, net interest
expense, net other expense, provision for income tax and other
special items as determined by management, including certain
expenses related to cloud computing arrangement implementation
expenses, litigation expenses, and other business development
expenses.
The following tables reflect the reconciliation between GAAP and
non-GAAP measures (in thousands).
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Net loss - GAAP
$
(37,411
)
$
(36,690
)
$
(122,317
)
$
(115,429
)
Stock-based compensation
7,440
5,519
23,502
19,644
Depreciation and amortization
3,992
1,647
11,434
5,151
Interest expense, net
542
1,113
1,510
4,319
Other expense, net
451
579
669
1,286
Benefit (provision) for income tax
(49
)
57
231
322
Other business development expense
—
—
—
393
Litigation expense
4,669
1,604
10,436
3,534
Cloud computing arrangement implementation
expense
153
156
459
468
Adjusted EBITDA - non-GAAP
(20,213
)
(26,015
)
(74,076
)
(80,312
)
Non-operating expense, net
(944
)
(1,749
)
(2,410
)
(5,927
)
Net loss - non-GAAP
$
(21,157
)
$
(27,764
)
$
(76,486
)
$
(86,239
)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
GAAP Cost of revenue
$
30,686
$
13,723
$
83,314
$
44,353
Stock-based compensation
(831
)
(740
)
(2,444
)
(2,015
)
Depreciation and amortization
(1,636
)
(411
)
(4,931
)
(1,221
)
Non-GAAP Cost of revenue
$
28,219
$
12,572
$
75,939
$
41,117
GAAP Gross margin
36
%
54
%
35
%
52
%
Non-GAAP Gross margin
41
%
57
%
41
%
56
%
GAAP Research and development
$
17,115
$
16,992
$
51,447
$
51,755
Stock-based compensation
(2,044
)
(1,743
)
(6,133
)
(5,304
)
Depreciation and amortization
(1,720
)
(707
)
(4,880
)
(2,479
)
Non-GAAP Research and development
$
13,351
$
14,542
$
40,434
$
43,972
GAAP Selling, general and
administrative
$
36,755
$
33,767
$
113,197
$
106,234
Stock-based compensation
(4,565
)
(3,036
)
(14,925
)
(12,325
)
Depreciation and amortization
(636
)
(529
)
(1,623
)
(1,451
)
Other business development activities
—
—
—
(393
)
Litigation expense
(4,669
)
(1,604
)
(10,436
)
(3,534
)
Cloud computing arrangements
implementation expense
(153
)
(156
)
(459
)
(468
)
Non-GAAP Selling, general and
administrative
$
26,732
$
28,442
$
85,754
$
88,063
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231106327991/en/
Doug Farrell Vice President, Investor Relations & Corporate
Communications dfarrell@nanostring.com Phone: 206-602-1768
NanoString Technologies (NASDAQ:NSTG)
Graphique Historique de l'Action
De Déc 2024 à Jan 2025
NanoString Technologies (NASDAQ:NSTG)
Graphique Historique de l'Action
De Jan 2024 à Jan 2025
