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Lombard Medical Reports 2015 Fourth Quarter, Full Year Financial Results

Global 2015 Revenue Grew by 13.8% Over 2014; 
U.S. Revenue for the Year Grew 42.1% Over 2014

IRVINE, Calif., Feb. 22, 2016 (GLOBE NEWSWIRE) -- Lombard Medical, Inc. (NASDAQ:EVAR), a medical device company focused on endovascular aneurysm repair (EVAR) of abdominal aortic aneurysms (AAAs), today reported financial results and provided an operational update for the fourth quarter and year ended December 31, 2015.

As reported in January, full year revenue increased 13.8% over 2014 with total full year revenue of $15.1 million in 2015. On a constant currency basis, revenue for 2015 grew by 17.9%. Fourth quarter 2015 revenue was $2.9 million.

Gross margin for the year increased to 45.1% in 2015 as compared to the prior year’s 43.2%.

Recent Operational Highlights

  • In January 2016, the first ever live case of Lombard’s new Altura® endovascular stent graft took place at the Leipzig Interventional Course in Germany.
  • In February 2016, the first commercial Altura procedure was completed at the University Hospital of South Manchester in the UK.

Operational and Financial Results

Global Aorfix® revenue was $15.1 million for 2015 as compared to $13.3 million in 2014. Fourth quarter 2015 revenue of $2.9 million compared to $4.8 million in the same prior year period. The fourth quarter of 2014 was positively impacted by a non-recurring distributor stocking shipment to Lombard’s Japanese distribution partner. 

Year-to-date gross margin of 45.1% compared favorably to the prior year rate of 43.2%, inclusive of gross margins of 28.2% in Q4 2015. Fourth quarter margins were adversely impacted by reduced overhead absorption coupled with the Company’s transition of manufacturing activities to the new generation IntelliFlex™ LP delivery system. With respect to IntelliFlex, the Company continues to anticipate CE Mark and European launch of this new delivery system in the summer of 2016, however, FDA approval and U.S. launch is now anticipated in the second half of this year due to a recent FDA request for additional data to support the submission of this category of delivery systems for approval.

In the U.S., revenue grew 42.1% to $4.6 million in 2015 as compared to $3.2 million in the prior year. Fourth quarter 2015 U.S. revenue of $1.2 million was flat as compared to the prior year.

In Japan, procedure rates continued to rise as physicians performed 128 Aorfix procedures in the 2015 fourth quarter compared to 92 in the prior year period.  For the full year 2015, Japanese procedures totaled 436 cases compared to 112 in 2014.

Total operating expense for the 2015 fourth quarter and full year was $12.8 million and $46.1 million, respectively, compared to $11.1 million and $41.9 million in the prior year periods. The net loss for the fourth quarter of 2015 was $11.6 million, or $0.58 loss per share, compared to a net loss of $8.3 million, or $0.51 loss per share, for the fourth quarter of 2014. The net loss for 2015 was $37.8 million, or $2.13 loss per share, compared to $34.8 million, or $2.39 loss per share, for 2014. 

The Company’s balance sheet as of December 31, 2015 showed total cash and cash equivalents of $32.3 million

CEO Simon Hubbert said, “2015 was a transformative year with the acquisition of Altura Medical in July and subsequent preparation for the Altura launch in Europe which is now underway.  We have increased our direct sales force in the UK and Germany where we aim to demonstrate the impact of a unique portfolio approach that highlights Altura, our revolutionary new stent graft system that promises to transform AAA treatment into a simple, efficient, and potentially outpatient procedure for many patients, alongside Aorfix, the only AAA stent graft with global approval to treat neck angulation up to 90 degrees. We believe this provides for the most competitive portfolio approach in the AAA market which will lead to significant market share growth in 2016.”  

Insider Buying

During the fourth quarter of 2015 and through the date of this release, the Company’s senior management and members of the board of directors acquired 101,281 shares of Lombard stock in the open market.  There were no sales. 

Company Outlook

The Company expects to achieve year-over-year revenue growth in 2016 of approximately 20%.

Conference Call

Lombard’s management will discuss the Company's financial results for the fourth quarter and year ended December 31, 2015 and provide a general business update during a conference call beginning at 10:30 a.m. Eastern Time today, Monday, February 22, 2016.  To join the call, participants may dial 1-877-407-4018 (domestic), 0800-756-3429 (UK toll-free) or 1-201-689-8471 (international).  To listen to a live webcast of the conference call, visit the Events and Presentations page under the Investors tab at www.lombardmedical.com. An archived replay of the webcast will be available shortly following the completion of the call on the Events and Presentations page under the Investors tab at www.lombardmedical.com.

About Lombard Medical, Inc.

Lombard Medical, Inc. is an Irvine, CA-based medical device company focused on the $1.7bn market for minimally invasive treatment of abdominal aortic aneurysms (AAAs).  The Company has global regulatory approval for Aorfix®, an endovascular stent graft which has been specifically designed to treat patients with the broadest range of AAA anatomies, including aortic neck angulation up to 90 degrees.  The Company has also achieved CE Mark for the Altura® endograft system, an innovative ultra-low profile endovascular stent graft that offers a simple and predictable solution for the treatment of more standard AAA anatomies.  Altura was launched in Europe in January 2016, with an international rollout planned for later in 2016.  For more information, please visit www.lombardmedical.com.

Forward-Looking Statements

This announcement contains forward-looking statements that reflect the Company’s current expectations regarding future events.  These forward-looking statements generally can be identified by the use of words or phrases such as “believe,” “expect,” “future,” “anticipate,” “look forward to,” “intend,” “plan,” “foresee,” “may,” “should,” “will,” “estimates,” “outlook,” “potential,” “optimistic,” “confidence,” “continue,” “evolve,” “expand,” “growth” or words and phrases of similar meaning. Statements that describe objectives, plans or goals also are forward-looking statements.  Forward-looking statements are subject to risks, management assumptions and uncertainties.  Actual results could differ materially from those projected herein and depend on a number of factors, including the success of the Company’s research and development and commercialization strategies, the uncertainties related to the regulatory process and the acceptance of the Company’s products by hospitals and other medical professionals, the uncertainty of estimated revenues and profits, the uncertainty of current domestic and international economic conditions that could adversely affect the level of demand for the Company’s products and increased volatility in foreign exchange rates, the inability to raise additional funds, and the risks, uncertainties and other factors described under the heading “Risk Factors” in the Company’s Form 20-F filed with the Securities and Exchange Commission dated April 29, 2015.  Readers are urged to consider these factors carefully in evaluating the forward-looking statements. The forward-looking statements included herein are made only as of the date of this report and the Company undertakes no obligation to update these statements in the future.

- Tables Follow –

Consolidated Statements of Comprehensive Income
for the three- and twelve-month periods ended December 31, 2015 (unaudited)
 
        Three months ended
December 31,
  Twelve months ended
December 31,
          2015       2014       2015       2014  
         $’000    $’000    $’000    $’000
Revenue         2,943       4,758       15,114       13,277  
Cost of sales         (2,113 )     (2,553 )     (8,296 )     (7,541 )
Gross profit         830       2,205       6,818       5,736  
Gross margin         28 %     46 %     45 %     43 %
                     
Selling, marketing and distribution expenses         (5,794 )     (5,786 )     (23,125 )     (21,363 )
Research and development expenses         (3,318 )     (2,737 )     (11,279 )     (9,213 )
Administrative expenses         (3,638 )     (2,616 )     (11,707 )     (9,800 )
Initial Public Offering expenses         -       -       -       (1,503 )
Total operating expenses         (12,750 )     (11,139 )     (46,111 )     (41,879 )
Operating loss         (11,920 )     (8,934 )     (39,293 )     (36,143 )
                     
Finance income—interest receivable         20       58       134       247  
Finance costs         (269 )     (24 )     (860 )     (83 )
Loss before taxation         (12,169 )     (8,900 )     (40,019 )     (35,979 )
Taxation         564       617       2,215       1,227  
Loss for the period         (11,605 )     (8,283 )     (37,804 )     (34,752 )
                     
Other comprehensive income:                    
Items that may be subsequently reclassified to profit or loss                    
Currency translation differences         (287 )     39       (975 )     (1,947 )
Total comprehensive loss for the period         (11,892 )     (8,244 )     (38,779 )     (36,699 )
                     
Basic and diluted loss per ordinary share (cents)                    
From continuing operations         (58.4 )     (51.2 )     (212.9 )     (238.7 )


Consolidated Balance Sheet
as at December 31, 2015 (unaudited)
 
          2015       2014  
         $’000    $’000
Assets            
Goodwill         16,052       3,289  
Intangible assets         21,889        1,970  
Property, plant and equipment         3,043       3,087  
Other receivables         176       348  
Non-current assets         41,160       8,694  
             
Inventories         6,462       4,895  
Trade and other receivables         4,168       3,911  
Taxation recoverable         1,618       2,064  
Cash and cash equivalents         32,332       53,334  
Current assets         44,580       64,205  
Total assets         85,740       72,899  
             
Liabilities            
Trade and other payables         (8,236 )     (5,434 )
Current liabilities         (8,236 )     (5,434 )
             
Borrowings         (23,115 )     (2,632 )
Deferred tax liabilities         (674 )     -  
Contingent consideration         (10,600 )     -  
Non-current liabilities         (34,389 )     (2,632 )
Total Liabilities         (42,625 )     (8,066 )
             
Net assets         43,115       64,833  
             
Equity            
Called up share capital         199       162  
Share premium account         63,853       49,608  
Capital reorganization reserve         205,686       205,686  
Translation reserve         1,270       2,245  
Accumulated loss         (227,893 )     (192,868 )
Total equity         43,115       64,833  



Consolidated Statements of Changes in Equity
for the twelve month period ended December 31, 2015 (unaudited)
 
    Share
Capital
  Share
Premium
  Other
Reserves
  Translation
Reserve
  Capital
Reorganization
Reserve
  Accumulated
Loss
  Total
Equity
     $’000    $’000    $’000    $‘000    $‘000    $’000    $’000
At January 1, 2014     52,406       134,305       19,087       4,192     -     (160,657 )     49,333  
Loss for the period     -       -       -       -     -     (34,752 )     (34,752 )
Share-based compensation     -       -       -       -     -     2,541       2,541  
Capital reorganization     (52,294 )     (134,305 )     (19,087 )     -     205,686     -       -  
Issue of ordinary shares     50       54,950       -       -     -     -       55,000  
Share issue expenses     -       (5,342 )     -       -     -     -       (5,342 )
Currency translation     -       -       -       (1,947 )   -     -       (1,947 )
At December 31, 2014     162       49,608       -       2,245     205,686     (192,868 )     64,833  
                             
Loss for the period     -       -       -       -     -     (37,804 )     (37,804 )
Share-based compensation     -       -       -       -     -     2,779       2,779  
Issue of ordinary shares     37       14,245       -       -     -     -       14,282  
Currency translation     -       -       -       (975 )   -     -        (975 )
At December 31, 2015     199       63,853       -       1,270     205,686      (227,893 )     43,115  


Consolidated Cash Flow Statements
for the twelve month period ended December 31, 2015 (unaudited)
 
          2015       2014  
         $’000    $’000
Loss before taxation         (40,019 )     (35,979 )
Depreciation and amortization of licenses, software and property plant and equipment         1,798       1,171  
Share-based compensation expense         2,779       2,541  
Loss on sale of tangible assets         66       -  
Net finance expense/(income)         726       (164 )
Increase in inventories         (1,779 )     (1,841 )
Increase in receivables         (185 )     (483 )
(Decrease)/increase in payables         234       (790 )
Net cash used in operating activities         (36,380 )     (35,545 )
Research and development tax credits         2,584       1,172  
Net cash outflow from operating activities         (33,796 )     (34,373 )
             
Cash flows from investing activities            
Interest received         87       167  
Purchase of property, plant and equipment         (1,239 )     (1,481 )
Purchase of intangible assets         (15 )     (266 )
Cash paid for acquisition         (200 )     -  
Net cash flows used in investing activities         (1,367 )     (1,580 )
             
Cash flows from financing activities            
Interest paid         (688 )     -  
Proceeds from issue of loan notes         21,000       -  
Loan notes repaid         (5,331 )     -  
Loan notes issuance expenses         (438 )     -  
Proceeds from issue of ordinary shares         -       55,000  
Share issue expenses         -       (5,342 )
Net cash flows from financing activities         14,543       49,658  
             
(Decrease)/Increase in cash and cash equivalents         (20,620 )     13,705  
Cash and cash equivalents at beginning of year         53,334       40,866  
Effects of exchange rates on cash and cash equivalents         (382 )     (1,237 )
Cash and cash equivalents at end of year         32,332       53,334  


For further information:
Lombard Medical, Inc.
Simon Hubbert,
Chief Executive Officer
Tel:+1 949 379 3750 / +44 (0)1235 750 800
William J. Kullback,
Chief Financial Officer
Tel: +1 949 748 6764

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