Cytori Reports Third Quarter Business Update and Financial Results
Product revenues for the third quarter of 2011 increased to $2.1 million, compared to $1.5 million in the third quarter of 2010. Gross profit increased to $1.2 million with a gross margin of 56% in the third quarter of 2011, compared to a gross profit of $0.6 million and a gross margin of 39% in the third quarter of 2010.
Net cash used in operating activities improved to $7.9 million in the third quarter of 2011 from $9.0 million in the second quarter of 2011. Third quarter 2011 operating expenses, excluding related to the change in the fair value of the warrant and option liabilities were $10.0 million, compared with $10.9 million in the second quarter of 2011. At the end of the third quarter, Cytori had $40.8 million in cash and cash equivalents and $2.0 million in accounts receivable.
"In the third quarter, we improved our cash position, reduced operating expenses and favorably amended our loan facility led by GE Capital," said Mark E. Saad, chief financial officer. "The equity agreement with Seaside 88 was an important factor in achieving the amended loan terms which significantly extended maturity and deferred principal payments. Expenses improved in Q3 compared to Q2, with reductions sales and marketing costs that reflect more targeted sales efforts."
"This quarter, we made progress building market access for our lead breast reconstruction and cardiovascular therapies," said Christopher J. Calhoun, chief executive officer. "We also continued to generate revenues from a mix of products sold principally into the translational research and cosmetic surgery markets. Operationally, we are focused on ensuring revenue is achieved in a regionally profitable manner and lowering our cash utilization rate. This is reflected in the reduction in net cash used in operating activities during the quarter."
Recent progress to establish European market access for breast reconstruction includes:
- Final 12-month RESTORE 2 trial results presented in September at the Oncoplastic Reconstructive Breast Society meeting in the UK
- Final manuscript completed for the RESTORE 2 trial and under peer-review for publication
- Favorable economic assessment of Celution® from NHS National Innovation Centre (NIC) in the UK
- Inclusion of breast reconstruction therapy in joint British surgical, reconstructive and aesthetic society guidelines
Progress in our cardiovascular pipeline includes:
- Completed US chronic myocardial ischemia pre-IDE meeting with FDA
- US IDE/PMA pilot (Phase I/II) application submission expected Q4 2011
- EU notified body application for 'no option chronic heart disease' indications-for-use submitted, under evaluation
- EU pivotal (Phase II/III) prospective acute myocardial infarction trial (ADVANCE) initiated
- Final manuscript completed for APOLLO trial and under peer-review for publication
Conference Call Information and Shareholder Letter
Cytori will host a management conference call at 5:00 p.m. Eastern Time today to further discuss these results. The live audio webcast of the conference call may be accessed under "Webcasts" in the Investor Relations section of Cytori's website (http://ir.cytoritx.com). The webcast will be available live and by replay two hours after the call and archived for one year. More details on our business are contained in the 'November 2011 Shareholder Letter' which is posted on the homepage of our investor relations website.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements regarding events, trends and business prospects, which may affect our future operating results and financial position. Such statements, including, but not limited to, those regarding our ongoing efforts to build market access for breast reconstruction and cardiovascular therapies, to ensure that revenues are achieved in a regionally profitable manner, and to lower our quarterly cash utilization rate, are all subject to risks and uncertainties that could cause our actual results and financial position to differ materially. Some of these risks and uncertainties include, but are not limited to, risks related to our history of operating losses, the need for further financing and our ability to access the necessary additional capital for our business, the quality and effectiveness of our products, the effectiveness of our regulatory and sales and marketing programs, the quality and acceptance of our clinical data, dependence on third party performance and the risk of natural disasters and other occurrences that may disrupt the normal business cycles in areas of our global operations, as well as other risks and uncertainties described under the "Risk Factors" section in Cytori's Securities and Exchange Commission Filings on Form 10-K and Form 10-Q. We assume no responsibility to update or revise any forward-looking statements to reflect events, trends or circumstances after the date they are made.
Cytori Therapeutics, Inc.
Cytori is a leader in cell therapy, providing patients and physicians around the world with medical technologies that harness the potential of adult regenerative cells from adipose tissue. The Celution® System family of medical devices and instruments is being sold into the European and Asian cosmetic and reconstructive surgery markets but is not yet available in the United States. Our StemSource® product line is sold in multiple countries for cell banking and research applications. Our PureGraft(TM) products are available in North America and Europe for fat grafting procedures. www.cytori.com