KORU Medical Systems Announces 2021 Second Quarter Financial Results
KORU Medical Systems (NASDAQ: KRMD) reported second-quarter 2021 results with net revenue of $5.5 million, reflecting a 28.3% decline year-over-year but a 2% sequential increase. The gross margin was 58.1%, down 5.6 percentage points from last year, influenced by lower volumes. The company reported a net loss of $1.1 million or $(0.03) per diluted share, unchanged from Q2 2020. Despite these challenges, CEO Linda Tharby noted a rebound in the subcutaneous immunoglobulin market and a focus on growth strategies for their SCIg therapy franchise.
- Positive sequential revenue growth of 2% in Q2 2021.
- Growth observed in the domestic core business and novel therapies.
- Net revenue declined by 28.3% year-over-year.
- Gross margin decreased by 5.6 percentage points due to lower volumes.
- Adjusted diluted earnings per share fell to $(0.02), $0.04 lower than Q2 2020.
- Non-GAAP adjusted EBITDA declined to $(0.3) million from $1.8 million in Q2 2020.
Repro Med Systems, Inc. dba KORU Medical Systems (NASDAQ: KRMD) ("KORU Medical" or the "Company"), a leading medical technology company focused on the development, manufacturing, and commercialization of innovative and easy-to-use specialty infusion solutions that improve quality of life for patients, today reported financial results for the second quarter ended June 30, 2021.
Second Quarter 2021 Summary:
-
Solid net revenue of
$5.5 million ; positive sequential quarterly growth -
Gross margin of
58.1% -
Net loss of
$1.1 million
"We are pleased with our performance and sequential revenue growth in the second quarter and look forward to continuing to build growth and momentum in the second half of 2021. We are beginning to see a rebound in growth in the subcutaneous immunoglobulin market, and we are well positioned to remain the category leader," said Linda Tharby, KORU Medical's CEO. "We are focused on executing on our strategy, driving growth in our core SCIg therapy franchise through commercial efforts to increase penetration of home subcutaneous delivery, building a pipeline of subcutaneous therapeutic candidates and introducing product and technology innovations to generate further topline growth. "
Second Quarter 2021 Financial Results
Net sales were
Gross margin was
Total operating expenses for the second quarter of 2021 were
Net loss for the second quarter of 2021 was
Non-GAAP adjusted EBITDA for the second quarter of 2021 was
About KORU Medical Systems
KORU Medical Systems develops, manufactures, and commercializes innovative and easy-to-use specialty infusion solutions that improve quality of life for patients around the world. The FREEDOM Syringe Infusion System currently includes the FREEDOM60® and FreedomEdge® Syringe Infusion Drivers, Precision Flow Rate Tubing™ and HIgH-Flo Subcutaneous Safety Needle Sets™. These devices are used for infusions administered in the home and alternate care settings. For more information, please visit www.korumedical.com.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. All statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by words such as "believe", "look forward," "focused on" and "indicating". Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, uncertainties associated with the shift to increased healthcare delivery in the home, new patient diagnoses, customer ordering patterns, COVID-19, innovation and competition, and those risks and uncertainties included under the captions "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2020, which is on file with the SEC and is available on our website at www.korumedical.com/investors and on the SEC website at www.sec.gov. All information provided in this release and in the attachments is as of June 30, 2021. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.
REPRO MED SYSTEMS, INC. |
||||||||
BALANCE SHEETS |
||||||||
(UNAUDITED) |
||||||||
|
|
|
|
|
|
|||
|
|
June 30, |
December 31, |
|||||
|
|
2021 |
2020 |
|||||
|
|
|
|
|
|
|||
ASSETS |
|
|
|
|
|
|||
|
|
|
|
|
|
|||
CURRENT ASSETS |
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
26,538,478 |
|
$ |
27,315,286 |
|
|
Accounts receivable less allowance for doubtful accounts of |
|
|
2,577,400 |
|
|
2,572,954 |
|
|
Inventory |
|
|
7,562,750 |
|
|
6,829,772 |
|
|
Prepaid expenses |
|
|
461,553 |
|
|
807,780 |
|
|
TOTAL CURRENT ASSETS |
|
|
37,140,181 |
|
|
37,525,792 |
|
|
Property and equipment, net |
|
|
1,110,550 |
|
|
1,167,623 |
|
|
Intangible assets, net of accumulated amortization of |
|
|
834,644 |
|
|
843,587 |
|
|
Operating lease right-of-use assets |
|
|
166,483 |
|
|
236,846 |
|
|
Deferred income tax assets, net |
|
|
1,327,230 |
|
|
125,274 |
|
|
Other assets |
|
|
19,812 |
|
|
19,812 |
|
|
TOTAL ASSETS |
|
$ |
40,598,900 |
|
$ |
39,918,934 |
|
|
|
|
|
|
|
|
|||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|||
|
|
|
|
|
|
|||
CURRENT LIABILITIES |
|
|
|
|
|
|||
Accounts payable |
|
$ |
1,005,653 |
|
$ |
624,920 |
|
|
Accrued expenses |
|
|
1,771,666 |
|
|
2,610,413 |
|
|
Accrued payroll and related taxes |
|
|
390,326 |
|
|
287,130 |
|
|
Finance lease liability – current |
|
|
1,030 |
|
|
2,646 |
|
|
Operating lease liability – current |
|
|
142,450 |
|
|
141,293 |
|
|
TOTAL CURRENT LIABILITIES |
|
|
3,311,125 |
|
|
3,666,402 |
|
|
Operating lease liability, net of current portion |
|
|
24,033 |
|
|
95,553 |
|
|
TOTAL LIABILITIES |
|
|
3,335,158 |
|
|
3,761,955 |
|
|
Commitments and contingencies (Refer to Note 3) |
|
|
|
|
|
|||
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|||
Common stock, |
|
|
479,106 |
|
|
466,801 |
|
|
Additional paid-in capital |
|
|
39,376,131 |
|
|
35,880,986 |
|
|
Treasury stock, 3,420,502 shares at June 30, 2021 and December 31, 2020, respectively, at cost |
|
|
(3,843,562 |
) |
|
(3,843,562 |
) |
|
Retained earnings |
|
|
1,252,067 |
|
|
3,652,754 |
|
|
TOTAL STOCKHOLDERS' EQUITY |
|
|
37,263,742 |
|
|
36,156,979 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
40,598,900 |
|
$ |
39,918,934 |
|
REPRO MED SYSTEMS, INC. |
||||||||||||||||
STATEMENTS OF OPERATIONS |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended |
Six Months Ended |
|||||||||||||
|
|
June 30, |
June 30, |
|||||||||||||
|
|
2021 |
2020 |
2021 |
2020 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||
NET SALES |
|
$ |
5,528,174 |
|
$ |
7,708,904 |
|
$ |
10,959,125 |
|
$ |
14,038,913 |
|
|||
Cost of goods sold |
|
|
2,317,990 |
|
|
2,799,024 |
|
|
4,517,087 |
|
|
5,340,823 |
|
|||
Gross Profit |
|
|
3,210,184 |
|
|
4,909,880 |
|
|
6,442,038 |
|
|
8,698,090 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative |
|
|
4,085,945 |
|
|
3,201,831 |
|
|
9,078,774 |
|
|
5,964,811 |
|
|||
Litigation |
|
|
— |
|
|
2,346,914 |
|
|
— |
|
|
2,446,072 |
|
|||
Research and development |
|
|
386,878 |
|
|
298,196 |
|
|
723,719 |
|
|
554,221 |
|
|||
Depreciation and amortization |
|
|
118,415 |
|
|
94,940 |
|
|
233,888 |
|
|
182,164 |
|
|||
Total Operating Expenses |
|
|
4,591,238 |
|
|
5,941,881 |
|
|
10,036,381 |
|
|
9,147,268 |
|
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Net Operating Loss |
|
|
(1,381,054 |
) |
|
(1,032,001 |
) |
|
(3,594,343 |
) |
|
(449,178 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Non-Operating Income/(Expense) |
|
|
|
|
|
|
|
|
|
|||||||
Gain/(Loss) on currency exchange |
|
|
1,239 |
|
|
(2,594 |
) |
|
(14,478 |
) |
|
(13,091 |
) |
|||
(Loss)/Gain on disposal of fixed assets, net |
|
|
— |
|
|
(5,522 |
) |
|
736 |
|
|
(5,522 |
) |
|||
Interest income, net |
|
|
9,950 |
|
|
(5,002 |
) |
|
19,721 |
|
|
14,028 |
|
|||
TOTAL OTHER INCOME/(EXPENSE) |
|
|
11,189 |
|
|
(13,118 |
) |
|
5,979 |
|
|
(4,585 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|||||||
LOSS BEFORE INCOME TAXES |
|
|
(1,369,865 |
) |
|
(1,045,119 |
) |
|
(3,588,364 |
) |
|
(453,763 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|||||||
Income Tax Benefit/(Expense) |
|
|
245,316 |
|
|
(30,919 |
) |
|
1,187,677 |
|
|
(172,847 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|||||||
NET LOSS |
|
$ |
(1,124,549 |
) |
$ |
(1,076,038 |
) |
$ |
(2,400,687 |
) |
$ |
(626,610 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|||||||
NET LOSS PER SHARE |
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Basic |
|
$ |
(0.03 |
) |
$ |
(0.03 |
) |
$ |
(0.05 |
) |
$ |
(0.02 |
) |
|||
Diluted |
|
$ |
(0.03 |
) |
$ |
(0.03 |
) |
$ |
(0.05 |
) |
$ |
(0.02 |
) |
|||
|
|
|
|
|
|
|
|
|
|
|||||||
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|||||||
Basic |
|
|
44,489,853 |
|
|
40,361,924 |
|
|
44,226,936 |
|
|
40,018,559 |
|
|||
Diluted |
|
|
44,489,853 |
|
|
40,361,924 |
|
|
44,226,936 |
|
|
40,018,559 |
|
REPRO MED SYSTEMS, INC. |
||||||||
STATEMENTS OF CASH FLOWS |
||||||||
(UNAUDITED) |
||||||||
|
|
|
|
|
|
|||
|
|
For the
|
||||||
|
|
June 30, |
||||||
|
|
2021 |
2020 |
|||||
|
|
|
|
|
|
|||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|||
Net Loss |
|
$ |
(2,400,687 |
) |
$ |
(626,610 |
) |
|
Adjustments to reconcile net loss to net cash (used in)/provided by operating activities: |
|
|
|
|
|
|||
Stock-based compensation expense |
|
|
1,339,356 |
|
|
784,821 |
|
|
Stock-based litigation settlement expense |
|
|
— |
|
|
1,285,102 |
|
|
Depreciation and amortization |
|
|
233,888 |
|
|
182,164 |
|
|
Deferred income taxes |
|
|
(1,201,956 |
) |
|
(145,770 |
) |
|
(Gain)/Loss on disposal of fixed assets |
|
|
(736 |
) |
|
5,522 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|||
(Increase)/Decrease in accounts receivable |
|
|
(4,446 |
) |
|
268,619 |
|
|
Increase in inventory |
|
|
(732,978 |
) |
|
(1,278,811 |
) |
|
Decrease/(Increase) in prepaid expenses and other assets |
|
|
346,227 |
|
|
(156,316 |
) |
|
Increase in accounts payable |
|
|
380,733 |
|
|
347,350 |
|
|
Increase in accrued payroll and related taxes |
|
|
103,196 |
|
|
333,272 |
|
|
(Decrease)/Increase in accrued expenses |
|
|
(838,747 |
) |
|
1,389,588 |
|
|
Increase in accrued tax liability |
|
|
— |
|
|
318,618 |
|
|
NET CASH (USED IN)/PROVIDED BY OPERATING ACTIVITIES |
|
|
(2,776,150 |
) |
|
2,707,549 |
|
|
|
|
|
|
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|||
Purchases of property and equipment |
|
|
(152,223 |
) |
|
(363,750 |
) |
|
Proceeds from disposal of property and equipment |
|
|
9,065 |
|
|
— |
|
|
Purchases of intangible assets |
|
|
(23,978 |
) |
|
(149,523 |
) |
|
NET CASH USED IN INVESTING ACTIVITIES |
|
|
(167,136 |
) |
|
(513,273 |
) |
|
|
|
|
|
|
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|||
Borrowings from indebtedness |
|
|
— |
|
|
3,500,000 |
|
|
Proceeds from issuance of equity |
|
|
1,230,000 |
|
|
26,567,861 |
|
|
Common stock issuance as settlement for litigation |
|
|
938,094 |
|
|
— |
|
|
Payments on finance lease liability |
|
|
(1,616 |
) |
|
(3,717 |
) |
|
NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
|
2,166,478 |
|
|
30,064,144 |
|
|
|
|
|
|
|
|
|||
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
(776,808 |
) |
|
32,258,420 |
|
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
|
27,315,286 |
|
|
5,870,929 |
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
|
$ |
26,538,478 |
|
$ |
38,129,349 |
|
|
|
|
|
|
|
|
|||
Supplemental Information |
|
|
|
|
|
|||
Cash paid during the periods for: |
|
|
|
|
|
|||
Interest |
|
$ |
47 |
|
$ |
13,554 |
|
|
Income Taxes |
|
$ |
850 |
|
$ |
— |
|
|
|
|
|
|
|
|
|||
Schedule of Non-Cash Operating, Investing and Financing Activities: |
|
|
|
|
|
|||
Issuance of common stock as compensation |
|
$ |
153,446 |
|
$ |
120,004 |
|
|
Issuance of common stock as settlement for litigation |
|
$ |
938,094 |
|
$ |
938,094 |
|
REPRO MED SYSTEMS, INC. |
||||||||||||
SUPPLEMENTAL INFORMATION |
||||||||||||
(UNAUDITED) |
||||||||||||
The following table summarizes our net sales for the three and six months ended June 30, 2021 and 2020: |
||||||||||||
|
|
|
|
|
|
|
|
|
||||
|
Three Months |
Six Months |
||||||||||
Ended June 30, |
Ended June 30, |
|||||||||||
|
2021 |
2020 |
2021 |
2020 |
||||||||
Net Sales |
|
|
|
|
|
|
|
|||||
Domestic |
$ |
4,597,797 |
$ |
5,557,577 |
$ |
9,010,214 |
$ |
10,430,343 |
||||
International |
|
859,694 |
|
853,043 |
|
1,838,600 |
|
1,837,910 |
||||
Novel Therapies |
|
70,683 |
|
1,298,284 |
|
110,311 |
|
1,770,660 |
||||
Total |
$ |
5,528,174 |
$ |
7,708,904 |
$ |
10,959,125 |
$ |
14,038,913 |
REPRO MED SYSTEMS, INC. |
||||||||||||||||
SUPPLEMENTAL INFORMATION |
||||||||||||||||
(UNAUDITED) |
||||||||||||||||
A reconciliation of our non-GAAP measures is below: |
||||||||||||||||
|
|
|||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||
Reconciliation of GAAP Net (Loss) |
June 30, |
June 30, |
||||||||||||||
to Non-GAAP Adjusted EBITDA: |
2021 |
2020 |
2021 |
2020 |
||||||||||||
GAAP Net Loss |
$ |
(1,124,549 |
) |
$ |
(1,076,038 |
) |
$ |
(2,400,687 |
) |
$ |
(626,610 |
) |
||||
Tax (Benefit)/Expense |
|
(245,316 |
) |
|
30,919 |
|
|
(1,187,677 |
) |
|
172,847 |
|
||||
Depreciation and Amortization |
|
118,415 |
|
|
94,940 |
|
|
233,888 |
|
|
182,164 |
|
||||
Interest Income, Net |
|
(9,950 |
) |
|
5,002 |
|
|
(19,721 |
) |
|
(14,028 |
) |
||||
Reorganization Charges |
|
224,605 |
|
|
— |
|
|
1,193,880 |
|
|
— |
|
||||
Discontinued Product Expense |
|
— |
|
|
(31,581 |
) |
|
— |
|
|
77,977 |
|
||||
Litigation Expenses |
|
— |
|
|
2,346,914 |
|
|
— |
|
|
2,446,071 |
|
||||
Manufacturing Initiative Expenses |
|
149,718 |
|
|
25,957 |
|
|
201,441 |
|
|
135,759 |
|
||||
Stock-based Compensation Expense |
|
605,172 |
|
|
423,853 |
|
|
1,339,356 |
|
|
784,821 |
|
||||
Non-GAAP Adjusted EBITDA |
$ |
(281,905 |
) |
$ |
1,819,966 |
|
$ |
(639,520 |
) |
$ |
3,159,001 |
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
Reconciliation of Reported Diluted EPS |
|
June 30, |
|
June 30, |
||||||||||||
to Non-GAAP Adjusted Diluted EPS: |
|
2021 |
|
2020 |
|
2021 |
2020 |
|||||||||
Reported Diluted Earnings Per Share |
|
$ |
(0.03 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.05 |
) |
$ |
(0.01 |
) |
|
Reorganization Charges |
|
|
0.01 |
|
|
|
— |
|
|
|
0.03 |
|
|
— |
|
|
Discontinued Product Expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
Litigation Expenses |
|
|
— |
|
|
|
0.06 |
|
|
|
— |
|
|
0.06 |
|
|
Manufacturing Initiative Expenses |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
||
Stock-based Compensation Expense |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
— |
|
|
Tax (Expense) Adjustment |
|
|
— |
|
|
|
(0.02 |
) |
|
|
(0.01 |
) |
|
(0.01 |
) |
|
Non-GAAP Adjusted Diluted Earnings Per Share |
|
$ |
(0.02 |
) |
|
$ |
0.02 |
|
|
$ |
(0.02 |
) |
$ |
0.04 |
|
Reorganization Charges. We have excluded the effect of reorganization charges in calculating our non-GAAP measures. We incurred significant expenses in connection with the departure and replacement of our chief executive officer and the recruiting of two new board members, which we would not have otherwise incurred in periods presented as part of our continuing operations.
Discontinued Product Expense. We have excluded the effect of expenses related to a discontinued product line in calculating our non-GAAP measures. We did not incur any related expense in 2021.
Litigation. We have excluded litigation expenses in calculating our non-GAAP measures. Litigation expenses in 2020 included professional fees associated with our litigation with EMED, which discontinued as a result of the settlement on May 20, 2020.
Manufacturing Initiative Expenses. We have excluded the effect of expenses related to creating manufacturing efficiencies, in calculating our non-GAAP measures. We incurred expenses in connection with these initiatives which we would not have otherwise incurred in periods presented as part of our continuing operations. We expect to incur related expenses for the next six to nine months.
Stock-based Compensation Expense. We have excluded the effect of stock-based compensation expense in calculating our non-GAAP measures. We record non-cash compensation expense related to grants of options for executives, employees and consultants, and grants of common stock to our board of directors and our CEO. Depending upon the size, timing and the terms of the grants, the non-cash compensation expense may vary significantly but will recur in future periods. Adjusted EBITDA for the six months ended June 30, 2021 included stock-based compensation expense of
View source version on businesswire.com: https://www.businesswire.com/news/home/20210811005797/en/
FAQ
What were KORU Medical's Q2 2021 earnings results?
How did KORU Medical perform compared to Q2 2020?
What is the current outlook for KORU Medical's SCIg therapy?