electroCore Announces Fourth Quarter and Full Year 2023 Financial Results
electroCore, Inc. (ECOR) reported a significant increase in net sales for the full year 2023, reaching $16.0 million, an 87% growth over 2022. The company highlighted revenue growth across major channels, including prescription gammaCore devices and nonprescription products. Despite a rise in gross profit and a decrease in research and development expenses, the company faced increased operating expenses, resulting in a GAAP net loss of $18.8 million for 2023. Adjusted EBITDA net loss improved in Q4 2023 compared to Q4 2022. The company's cash position decreased from $18.0 million in 2022 to $10.6 million in 2023, despite raising $7.5 million through a direct offering in July 2023.
Positive
Significant increase in net sales for electroCore, Inc. (ECOR) in 2023, reaching $16.0 million, an 87% growth over 2022.
Revenue growth seen across major channels, including prescription gammaCore devices and nonprescription products.
Gross profit for 2023 was $13.2 million with a gross margin of 83%, up from $7.0 million and 81% in 2022.
Operating expenses increased to approximately $32.5 million in 2023 compared to $29.9 million in 2022.
Research and development expenses decreased to $5.3 million in 2023 due to cost-cutting measures.
GAAP net loss for 2023 was $18.8 million, an improvement from the $22.2 million net loss in 2022.
Adjusted EBITDA net loss improved in Q4 2023 to $2.9 million from $4.7 million in Q4 2022.
Net cash used in operating activities decreased to $14.7 million in 2023 from $16.6 million in 2022.
Cash position decreased from $18.0 million in 2022 to $10.6 million in 2023, despite raising $7.5 million through a direct offering in July 2023.
Negative
Decrease in cash position from $18.0 million in 2022 to $10.6 million in 2023 despite raising $7.5 million through a direct offering in July 2023.
An 87% increase in net sales for electroCore is a significant leap, indicative of a robust demand for the company's bioelectronic medicine and wellness products. The gross margin improvement from 81% to 83% suggests that the company is effectively managing its cost of goods sold (COGS), a key indicator of operational efficiency and profitability. However, the reported GAAP net loss of $18.8 million, despite being an improvement over the previous year's $22.2 million, raises concerns about the company's current profitability and cash burn rate.
Investors should note the company's cash position which decreased from $18.0 million to $10.6 million year-over-year, signaling a substantial cash burn despite the capital raised in July. This trend, if sustained, could lead to future liquidity challenges or the need for additional funding, which might dilute current shareholders or impose additional debt burdens.
Adjusted EBITDA net loss figures are often scrutinized as they exclude certain expenses that are nonetheless real costs to the business. The improvement in adjusted EBITDA net loss from $19.0 million to $15.4 million indicates some level of cost control, but stakeholders should be wary of overreliance on these figures for a true health assessment of the company.
The substantial revenue growth in the prescription gammaCore segment, particularly from the VA/DoD channel, suggests that electroCore is gaining traction within the governmental healthcare sector, which is a promising sign for future contracts and stability. The expansion in international sales and the successful introduction of nonprescription products like Truvaga and TAC-STIM also highlight the company's diversification strategy and potential for market expansion.
However, the slight decrease in U.S. commercial sales of Rx gammaCore raises questions about market saturation or competitive pressures in the domestic market. It is important to analyze the company's marketing strategies and customer acquisition costs to ensure that the increased spending in these areas is yielding proportional benefits.
Investors should consider the company's product pipeline and any upcoming regulatory milestones that could significantly impact future sales. The R&D investments mentioned by the company in smart phone-integrated therapies could represent a strategic move to capitalize on the growing digital health market.
The performance of electroCore's medical devices, such as gammaCore, is a testament to the increasing acceptance and integration of bioelectronic medicine into treatment paradigms. The technology's non-invasive nature and application in various conditions, including migraine and cluster headache, may be driving its adoption. The company's ability to maintain a high gross margin suggests that its products have a competitive edge in terms of cost-effectiveness and value proposition to healthcare providers.
Future R&D focus on smart phone-connected therapies could tap into the trend of personalized and accessible healthcare solutions. The efficacy and user-friendliness of such technologies will be critical for their success. It will be important to monitor clinical trial outcomes and peer-reviewed publications to assess the potential impact of these therapies on patient outcomes and healthcare costs.
03/13/2024 - 04:05 PM
Record full year 2023 net sales of $ 16.0 million increased 87% over $8.6 million for the full year 2022
Company to host conference call and webcast today, March 13, 2024 at 4:30pm EST
ROCKAWAY, N.J., March 13, 2024 (GLOBE NEWSWIRE) -- electroCore, Inc. (Nasdaq: ECOR) (the “Company”), a commercial-stage bioelectronic medicine and wellness company, today announced fourth quarter and full year 2023 financial results.
Fourth Quarter 2023 and Recent Highlights
Reported record full year of 2023 revenue of $16.0 million , an increase of approximately 87% over full year of 2022 Record revenue in the fourth quarter of 2023 of $5.2 million , an increase of approximately 103% over the fourth quarter of 2022 Fourth Quarter and Full Year 2023 Financial Results
For the year ended December 31, 2023, electroCore reported net sales of $16.0 million , compared to $8.6 million during the same period of 2022, which represents an approximately 87% increase over the prior year. The increase of $7.4 million is due to an increase in net sales across major channels including our prescription gammaCore medical devices sold in the U.S. and abroad; and revenue from the sales of our nonprescription general well-being and human performance Truvaga and TAC-STIM products.
Three months ended Year ended (in thousands) December 31, December 31, Channel 2023 2022 % Change 2023 2022 % Change Rx gammaCore – VA/DoD $ 3,113 $ 1,539 102% $ 9,636 $ 5,099 89% Rx gammaCore – U.S. Commercial 483 489 (1% ) 1,797 1,735 4% Outside the United States 523 429 22% 1,821 1,618 13% Truvaga 323 15 * 1,027 15 * TAC-STIM 749 88 * 1,749 125 * $ 5,191 $ 2,560 103 % $ 16,030 $ 8,592 87 % * not applicable
Gross profit for the full year of 2023 was $13.2 million as compared to $7.0 million for the full year of 2022. Gross margin was 83% and 81% for the years ended December 31, 2023 and 2022, respectively.
Total operating expenses for the full year of 2023 were approximately $32.5 million , as compared to $29.9 million for the full year of 2022.
Research and development expense for the full year of 2023 was $5.3 million as compared to $5.5 million for the full year of 2022. This decrease in research and development expense was due to a decrease in compensation associated with cost cutting measures effected April 1, 2023, offset by targeted investments to support the future iterations of our therapy delivery platform, including the use of our intellectual property around the delivery of smart phone-integrated and smart phone-connected non-invasive therapies.
Selling, general and administrative expense for the full year of 2023 was $27.2 million as compared to $24.3 million for the full year of 2022. This increase was due to greater variable selling and marketing costs consistent with our increase in sales and severance charges, offset by decreases in insurance and stock-based compensation expenses.
GAAP net loss for the full year of 2023 was $18.8 million , as compared to the $22.2 million net loss for the full year of 2022.
Adjusted EBITDA net loss in the fourth quarter of 2023 was a loss of $2.9 million as compared to a loss of $4.7 million in the fourth quarter of 2022. Adjusted EBITDA net loss for the full year of 2023 was a loss of $15.4 million , as compared to an adjusted EBITDA net loss of $19.0 million for the full year of 2022.
The Company defines adjusted EBITDA net loss as GAAP net loss, adjusting to exclude non-operating gains/losses, depreciation and amortization, stock-compensation expense, write-off of right of use operating lease, inventory reserve charges, legal fees associated with stockholders’ litigation, and provision/benefit from income taxes. A reconciliation of GAAP net loss to Non-GAAP adjusted EBITDA net loss has been provided in the financial statement tables included in this press release.
Net cash used in operating activities for the full year ended December 31, 2023 was $14.7 million , as compared to $16.6 million for the full year of 2022.
Cash, cash equivalents and restricted cash at December 31, 2023, totaled approximately $10.6 million , as compared to approximately $18.0 million as of December 31, 2022. In July 2023, the Company raised net proceeds of approximately $7.5 million through a registered direct offering and concurrent private placements priced “at the market” under NASDAQ rules.
Webcast and Conference Call Information
electroCore’s management team will host a conference call today, March 13, 2024, beginning at 4:30 pm EST.
Investors interested in listening to the conference call or webcast may do so by dialing 877-407-8835 for domestic callers or 201-689-8779 for international callers, using conference ID: 13744117, or connecting to the Web at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=ISZCGFO3 . An archived webcast of the event will be available on the “Investors” section of the Company’s website at: www.electrocore.com.
About electroCore, Inc.
electroCore, Inc. is a commercial stage bioelectronic medicine and wellness company dedicated to improving health through its non-invasive vagus nerve stimulation (“nVNS”) technology platform. Our focus is the commercialization of medical devices for the management and treatment of certain medical conditions and consumer product offerings utilizing nVNS to promote general wellbeing and human performance in the United States and select overseas markets.
For more information, visit www.electrocore.com.
Forward-Looking Statements www.sec.gov
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electroCore, Inc. Consolidated Statements of Operations (in thousands, except per share data) Three months ended Year ended December 31, December 31, 2023 2022 2023 2022 Net sales $ 5,191 $ 2,560 $ 16,030 $ 8,592 Cost of goods sold 1,100 640 2,804 1,616 Gross profit 4,091 1,920 13,226 6,976 Operating expenses Research and development 1,108 1,628 5,321 5,520 Selling, general and administrative 6,941 6,209 27,174 24,330 Total operating expenses 8,049 7,837 32,495 29,850 Loss from operations (3,958 ) (5,917 ) (19,269 ) (22,874 ) Other (income) expense Interest and other income (135 ) (142 ) (433 ) (287 ) Other expense 184 1 184 6 Total other income 49 (141 ) (249 ) (281 ) Loss before income taxes (4,007 ) (5,776 ) (19,020 ) (22,593 ) (Provision) Benefit from income taxes (25 ) (14 ) 186 431 Net loss $ (4,032 ) $ (5,790 ) $ (18,834 ) $ (22,162 ) Net loss per share of common stock - Basic and Diluted $ (0.61 ) $ (1.22 ) $ (3.42 ) $ (4.69 ) Weighted average number of common shares outstanding - Basic and Diluted 6,616 4,744 5,515 4,729 All common stock share and per share data reflects the reverse stock split effective February 15, 2023.
electroCore, Inc. Consolidated Balance Sheet Information (in thousands) December 31, 2023 December 31, 2022 Cash and cash equivalents $ 10,331 $ 17,712 Restricted cash $ 250 $ 250 Total assets $ 16,102 $ 24,756 Current liabilities $ 8,123 $ 7,045 Total liabilities $ 8,660 $ 7,670 Total equity $ 7,442 $ 17,086
(Unaudited) Use of Non-GAAP Financial Measure
The Company is presenting adjusted EBITDA net loss because it believes this measure is a useful indicator of its operating performance. Management uses this non-GAAP measure principally as a measure of the Company’s core operating performance and believes that this measure is useful to investors because it is frequently used by the financial community, investors, and other interested parties to evaluate companies in the Company’s industry. The Company also believes that this measure is useful to its management and investors as a measure of comparative operating performance from period to period. Additionally, the Company believes its use of non-GAAP adjusted EBITDA net loss from operations facilitates management’s internal comparisons to historical operating results by factoring out potential differences caused by gains and charges not related to its regular, ongoing business, including, without limitation, non-cash charges and certain large and unpredictable charges such as restructuring expenses.
The Company defines adjusted EBITDA net loss as GAAP net loss, adjusting to exclude non-operating gains/losses, depreciation and amortization, stock-compensation expense, write-off of right of use operating lease, inventory reserve charges, legal fees associated with stockholders’ litigation, and provision/benefit from income taxes. A reconciliation of GAAP net loss to Non-GAAP adjusted EBITDA net loss is provided in the financial statement table below.
Three months ended Year ended December 31, December 31, (in thousands) 2023 2022 2023 2022 GAAP net loss $ (4,032 ) $ (5,790 ) $ (18,834 ) $ (22,162 ) Depreciation and amortization 227 148 962 548 Stock-based compensation 400 587 1,698 2,682 Inventory reserve charge 424 217 682 217 Severance and other related charges 19 - 464 - Legal fees associated with stockholders’ litigation 8 251 50 400 Interest and other income / expense 49 (141 ) (249 ) (281 ) Provision (benefit) from income taxes 25 14 (186 ) (431 ) Adjusted EBITDA net loss $ (2,880 ) $ (4,714 ) $ (15,413 ) $ (19,027 )
The Company’s use of a non-GAAP measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of its results as reported under GAAP. Some of these limitations are: (i) the non-GAAP measure does not reflect interest or tax payments that may represent a reduction in cash available; (ii) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and the non-GAAP measure does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (iii) the non-GAAP measure does not reflect the potentially dilutive impact of equity-based compensation; and (iv) the non-GAAP measure does not reflect changes in, or cash requirements for working capital needs; other companies, including companies in electroCore’s industry, may calculate adjusted EBITDA net loss differently, effectively reducing its usefulness as a comparative measure.
Because of these and other limitations, you should consider the non-GAAP measure together with other GAAP-based financial performance measures, including various cash flow metrics, net loss, and other GAAP results. A reconciliation of GAAP net loss to non-GAAP adjusted EBITDA net loss has been provided in the preceding financial statements table of this press release.
What were electroCore, Inc.'s (ECOR) net sales for the full year 2023?
electroCore reported net sales of $16.0 million for the full year 2023, representing an 87% increase over 2022.
What contributed to the increase in net sales for electroCore in 2023?
The increase in net sales was attributed to growth across major channels, including prescription gammaCore devices and revenue from nonprescription products.
What was electroCore's gross profit for 2023?
electroCore's gross profit for 2023 was $13.2 million with a gross margin of 83%.
How did electroCore's operating expenses change in 2023 compared to 2022?
Operating expenses increased to approximately $32.5 million in 2023 from $29.9 million in 2022.
What was electroCore's GAAP net loss for 2023?
electroCore reported a GAAP net loss of $18.8 million for 2023, an improvement from the $22.2 million net loss in 2022.
