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Lombard Medical Reports 2016 Third Quarter, Nine-Month Financial Results

IRVINE, Calif., Oct. 27, 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 for the third quarter and nine months ended September 30, 2016.

Financial Results
For the 2016 third quarter, global revenue was $3.0 million as compared to $4.2 million in the same prior year period.  For the first nine months of 2016, global revenue was $9.8 million compared to $12.2 million in the prior year period. 

The year-over-year reduction in global revenue is attributable to the redeployment of commercial resources from the US to Europe to support the launch of the Altura® endovascular stent graft along with delayed stocking orders from the Company’s Japanese distribution partner as it prepares for approval and launch of the IntelliFlex™ LP delivery system.

Partially offsetting the reduction in revenue was performance in the Company’s European direct markets (Germany and the UK) where revenue increased by 33.6 percent for the quarter over the same period of last year and 25.8 percent for the nine month year-to-date period.

Gross margin for the 2016 third quarter and first nine months was 11.5 percent and 17.9 percent, respectively, compared to 48.8 percent and 49.2 percent for the prior year periods.  As was the case in the 2016 second quarter, third quarter margins were adversely impacted by several factors including manufacturing start-up expense related to the launch of the Altura product line into Europe and other locations outside the US.  Additionally, reduced overhead absorption on lower volume coupled with the Company’s transition of manufacturing activities to the new generation IntelliFlex delivery system contributed to the margin variance. 

Operating expense for the 2016 third quarter and first nine months was reduced to $7.1 million and $23.1 million, respectively, compared to $11.4 million and $33.4 million in the prior year periods.  The significant decrease in operating expense was primarily attributable to the reduction in the US sales force, trimming non-essential programs and general cost control activities in all areas of the business.

The net loss for this year’s third quarter was $7.4 million, or $0.37 loss per share, compared to a net loss of $8.5 million, or $0.45 loss per share, for the third quarter of 2015.  For the first nine months of 2016, the net loss was $23.3 million, or $1.17 loss per share, compared to $26.2 million, or $1.54 loss per share, for the prior year period. 

As of September 30, 2016, the Company had cash and cash equivalents of $9.9 million

Conference Call
Lombard’s management will not be holding a conference call to discuss the Company's results for the third quarter as management continues to focus on the exploration of strategic alternatives as described in the prior quarter-end release dated August 22, 2016. To listen to a live webcast of the August 22, 2016 conference call, visit the Investors/Events and Presentations section of the Lombard website at www.lombardmedical.com

About Lombard Medical, Inc.
Lombard Medical, Inc. is a 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 the UK and Germany in February 2016 with a broader international rollout currently underway.  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, 2016.  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.

For further information:

Lombard Medical, Inc.
Simon Hubbert,
Chief Executive Officer
William J. Kullback,
Chief Financial Officer

 
 
Tel:+1 949 379 3750 / +44 (0)1235 750 800

Tel: +1 949 748 6764

- Tables Follow –


Consolidated Statements of Comprehensive Loss
(In Thousands, Except Per Share Amounts)
(Unaudited)
 
    Three months ended
September 30,
  Nine months ended
September 30,
      2016         2015         2016         2015    
Revenue   $   3,044       $   4,227       $   9,769       $   12,171    
Cost of sales     2,694         2,164         8,020         6,183    
Gross profit     350         2,063         1,749         5,988    
                         
Selling, marketing and distribution expenses     3,600         5,384         11,197         17,331    
Research and development expenses     1,739         2,915         6,336         7,961    
Administrative expenses     1,776         3,144         5,594         8,069    
Total operating expenses     7,115         11,443         23,127         33,361    
Operating loss     (6,765       (9,380       (21,378       (27,373  
                         
Finance income     18         32         89         114    
Finance costs     (547       (335       (1,633       (591  
Change in fair value of contingent liabilities     (289               (997          
Loss before taxation     (7,583       (9,683       (23,919       (27,850  
Taxation     161         1,223         576         1,651    
Loss for the period   $   (7,422     $   (8,460     $   (23,343     $   (26,199  
                         
Other comprehensive income/(loss):                        
Items that may subsequently be reclassified to profit or loss                        
Currency translation differences     (700       (938       (3,052       (688  
Total comprehensive loss for the period   $   (8,122     $   (9,398     $   (26,395     $   (26,887  
                         
Basic and diluted loss per ordinary share                        
From continuing operations   $   (0.37     $   (0.45     $   (1.17     $   (1.54  
                         




Consolidated Balance Sheets
(In Thousands, Except Per Share Amounts)
(Unaudited)
 
      September 30,
2016
  December 31,
2015
Assets              
Goodwill     $   15,671       $   16,052    
Intangible assets       20,951         21,889    
Property, plant and equipment       2,001         3,043    
Trade and other receivables       171         176    
Non-current assets       38,794         41,160    
               
Inventories       8,942         6,462    
Trade and other receivables       4,576         4,168    
Taxation recoverable       1,974         1,618    
Cash and cash equivalents       9,857         32,332    
Current assets       25,349         44,580    
Total assets       64,143         85,740    
               
Liabilities              
Trade and other payables       8,143         8,236    
Current portion of borrowings       2,642            
Current liabilities       10,785         8,236    
               
Borrowings       23,423         23,115    
Deferred tax liabilities       674         674    
Contingent consideration       11,597         10,600    
Non-current liabilities       35,694         34,389    
Total Liabilities       46,479         42,625    
               
Net assets     $   17,664       $   43,115    
               
Equity              
Called up share capital     $   199       $   199    
Share premium account       63,853         63,853    
Capital reorganization reserve       205,686         205,686    
Translation reserve       (1,782       1,270    
Accumulated loss       (250,292       (227,893  
Total equity     $   17,664       $   43,115    
               



Consolidated Statements of Changes in Equity
(In Thousands, Except Per Share Amounts)
(Unaudited)
 
      SHARE
CAPITAL
  SHARE
PREMIUM
ACCOUNT
  TRANSLATION
RESERVE
  CAPITAL
REORGANIZATION
RESERVE
  ACCUMULATED
LOSS
  TOTAL
EQUITY
At January 1, 2015     $   162       $   49,608       $   2,245       $   205,686       $   (192,868     $   64,833    
Loss for the period                                       (26,199       (26,199  
Share-based compensation                                       2,047         2,047    
Issuance of ordinary shares       37         14,245                                 14,282    
Currency translation                       (688                       (688  
At September 30, 2015     $   199       $   63,853       $   1,557       $   205,686       $   (217,020     $   54,275    
                                       
At January 1, 2016     $   199       $   63,853       $   1,270       $   205,686       $   (227,893     $   43,115    
Loss for the period                                       (23,343       (23,343  
Share-based compensation                                       944         944    
Currency translation                       (3,052                       (3,052  
At September 30, 2016     $   199       $   63,853       $   (1,782     $   205,686       $   (250,292     $   17,664    




Consolidated Cash Flow Statements
(In Thousands)
(Unaudited)
 
      Nine Months Ended
September 30,
      2016   2015
Cash outflow from operating activities              
Loss before taxation     $   (23,919     $   (27,850  
Depreciation and amortization of licenses, software and property, plant and equipment       1,848         1,336    
Share based compensation expense       944         2,047    
Loss on disposal of tangible assets       36         66    
Net finance expense/(income)       1,396         477    
Change in fair value of contingent liabilities       997            
Increase in inventories       (3,372       (917  
Decrease in receivables       (833       (1,238  
Increase/(decrease) in payables       514         (397  
Net cash used in operating activities       (22,389       (26,476  
Research and development tax credits received / (income tax paid)       (17       967    
Net cash outflow from operating activities       (22,406       (25,509  
               
Cash flows from investing activities              
Interest received       53         71    
Purchase of property, plant and equipment       (260       (1,017  
Proceeds from disposal of tangible assets       104            
Cash paid for acquisition               (200  
Purchase of intangible assets               (15  
Net cash flows used in investing activities       (103       (1,161  
               
Cash flows from financing activities              
Interest paid       (1,186       (325  
Proceeds from issue of loan notes       2,399         16,500    
Loan notes transaction costs               (413  
Loan notes repaid               (5,331  
Net cash flows (used in)/from financing activities       1,213         10,431    
(Decrease)/increase in cash and cash equivalents       (21,296       (16,239  
               
Cash and cash equivalents at beginning of period       32,332         53,334    
Effects of exchange rates on cash and cash equivalents       (1,179       (401  
Cash and cash equivalents at end of period     $   9,857       $   36,694    
               


 

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