Exhibit 99.1
LDR HOLDING CORPORATION REPORTS FOURTH QUARTER AND FISCAL YEAR 2013 RESULTS
Fourth quarter revenue increased 28.1% year-over-year to $32.0 million
AUSTIN, Texas, February 27, 2014 - LDR Holding Corporation (NASDAQ: LDRH), a global medical device company focused on designing and commercializing novel and proprietary surgical technologies for the treatment of patients suffering from spine disorders, today reported its financial results for the fourth quarter and year ended December 31, 2013.
Fourth Quarter 2013 Revenue Highlights
| • | Total revenue for the quarter ended December 31, 2013 increased 28.1% to $32.0 million, compared to $25.0 million for the quarter ended December 31, 2012. |
| • | Revenue from exclusive technology products grew 32.9% to $27.5 million, compared to the fourth quarter of 2012. |
| • | Revenue in the United States increased 37.3% to $24.9 million in the quarter, compared to $18.1 million in the fourth quarter of 2012, and represented 77.7% of total revenue. |
| • | International revenue increased 3.8% during the fourth quarter of 2013 to $7.1 million, representing 22.3% of total revenue. |
LDR's revenue from exclusive technology products grew 32.9% to $27.5 million in the fourth quarter of 2013, while revenue from traditional fusion products increased 5.1% to $4.5 million. Revenue from sales of the Company's exclusive cervical products grew 31.8% in the fourth quarter of 2013, compared with the fourth quarter of 2012, due principally to the growth of Mobi-C. Additionally, revenue from LDR's exclusive lumbar products in the fourth quarter increased 34.7% compared with the fourth quarter of 2012, in part due to FDA approval of the Avenue L Lateral lumbar fusion interbody device that was introduced in the United States in September 2012.
Christophe Lavigne, President and Chief Executive Officer of LDR Holding, commented, “We are pleased with our strong performance, especially the robust sales growth in our exclusive technology products. We are gratified by the strong interest among spine surgeons in education and training sessions for Mobi-C, the first and only cervical disc replacement device to receive FDA approval to treat both one-level and two-level cervical disc disease. In the sales area, the availability of Mobi-C and its superiority claim has been quite attractive to independent sales agencies which otherwise do not have access to cervical disc replacement devices. Mobi-C is clearly helping us to win over spine practices as new accounts to LDR.”
Gross profit for the fourth quarter of 2013 was $26.6 million and gross margin was 83.2%, compared to a gross profit of $20.9 million and a gross margin of 83.7% for the fourth quarter of 2012.
On a geographic basis, for the fourth quarter of 2013, LDR's revenue in the United States increased 37.3% to $24.9 million, compared to $18.1 million in the fourth quarter of 2012, and represented 77.7% of total revenue. LDR's international revenue increased 3.8% for the fourth of quarter 2013 to $7.1 million, representing 22.3% of total revenue.
Net loss for the fourth quarter of 2013 totaled $15.1 million, or $0.69 per share, which included $7.4 million in noncash expense related to the beneficial conversion of promissory notes and $5.5 million in noncash accretion related to warrants and discounts on long-term debt, compared to a net loss of $2.4 million, or $0.52 per share, for the same quarter a year ago.
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Adjusted EBITDA for the fourth quarter of 2013 was $1.0 million compared to an adjusted EBITDA of $1.1 million for the fourth quarter of 2012.
Fiscal Year 2013 Revenue Highlights
For the year ended December 31, 2013, LDR's total revenue was $111.6 million, an increase of 22.7%, compared to $90.9 million for the same period a year ago. For fiscal year 2013, revenue from LDR's exclusive technology products grew 27.5% to $92.8 million, while revenue from traditional fusion products increased 3.7% to $18.8 million.
Gross profit for the year ended December 31, 2013 was $93.6 million and gross margin was 83.9%, compared to a gross profit of $76.1 million and a gross margin of 83.8% for the same period in 2012. Gross margin was favorably impacted by a higher mix of exclusive technology products and increased sales in the United States.
For the year ended December 31, 2013, LDR's revenue in the United States increased 27.0% to $82.3 million, compared to $64.8 million for the same period a year ago. International revenue increased 12.1% to $29.3 million, compared to $26.1 million for the same period a year ago.
For the year ended December 31, 2013, net loss totaled $27.9 million, or $3.09 per diluted share, which included $7.4 million in noncash expense related to the beneficial conversion of promissory notes, $6.9 million in noncash accretion related to warrants and discounts on long-term debt and $5.6 million in noncash expenses associated with the revaluation of warrants leading up to the IPO, compared to a net loss of $9.7 million, or $2.10 per diluted share, for the same period a year ago.
For the year ended December 31, 2013, adjusted EBITDA was $3.0 million, compared to an adjusted EBITDA of $2.2 million for the same period a year ago.
Mr. Lavigne added, “Our exclusive technology products uniquely meet surgeon and patient needs and represent a significant sales opportunity in today’s spine marketplace. With the completion of our initial public offering last October, we have the resources to take full advantage of this opportunity through investments in surgeon training and education, our reimbursement and corporate organization, and our sales and marketing infrastructure. These investments will enhance LDR's competitive position and growth profile.”
Balance Sheet and Liquidity
As of December 31, 2013, LDR had $56.7 million in cash and cash equivalents, $55.4 million in working capital and $25.3 million in debt. The balance sheet reflects the benefit of LDR's initial public offering of its common stock that closed on October 15, 2013. In the initial public offering, LDR raised net proceeds of approximately $77.5 million after the underwriting discount and offering expenses.
2014 Annual Meeting
The Company will be holding its 2014 Annual Meeting of Stockholders on June 3, 2014.
Conference Call
LDR Holding Corporation will host a conference call today at 5:00 p.m. Eastern Time to discuss its fourth quarter 2013 financial results. The conference call will be available to interested parties through a live audio webcast available through LDR's website at www.ldr.com. Those without internet access may join the call from within the United States by dialing (877) 312-5637; outside the United States, by dialing (253) 237-1149.
A telephone replay will be available for two weeks following the call by dialing (855) 859-2056 for domestic participants and (404) 537-3406 for international participants. When prompted, please enter the
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replay pin number 63933767. For those who are not available to listen to the live webcast, the call will be archived for 90 days on LDR Holding's website.
Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this press release include the intent, belief or current expectations of LDR and members of its management team with respect to LDR's future business operations as well as the assumptions upon which such statements are based. Forward-looking statements include specifically, but are not limited to, LDR's market opportunities, growth, future products, market acceptance of its products, sales and financial results and such statements are subject to risks and uncertainties such as the timing and success of new product introductions, physician acceptance, endorsement, and use of LDR's products, regulatory matters, competitor activities, changes in and adoption of reimbursement rates, potential product recalls, effects of global economic conditions and changes in foreign currency exchange rates. Additional factors that could cause actual results to differ materially from those contemplated within this press release can also be found in LDR's Risk Factors disclosure in its Quarterly Report on Form 10-Q, filed on November 7, 2013, and in LDR's other filings with the SEC. LDR disclaims any responsibility to update any forward-looking statements.
About LDR Holding Corporation
LDR Holding Corporation is a global medical device company focused on designing and commercializing novel and proprietary surgical technologies for the treatment of patients suffering from spine disorders. LDR's primary products are based on its exclusive VerteBRIDGE fusion and Mobi non-fusion technology platforms and are designed for applications in the cervical and lumbar spine. These technologies enable products that are less invasive, provide greater intra-operative flexibility, offer simplified surgical techniques and promote improved clinical outcomes for patients as compared to existing alternatives. LDR recently received approval from the U.S. Food and Drug Administration (FDA) for the Mobi-C cervical disc replacement device, the first and only cervical disc replacement device to receive FDA approval to treat both one-level and two-level cervical disc disease. For more information regarding LDR Holding, visit www.ldr.com.
Use of Non-GAAP Financial Measures
To supplement LDR's consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), LDR uses certain non-GAAP financial measures in this release, including Adjusted EBITDA. Management defines Adjusted EBITDA as operating income (loss) plus depreciation and amortization and stock-based compensation expense. The Company presents Adjusted EBITDA because management believes it is a useful indicator of operating performance. LDR's management uses Adjusted EBITDA principally as a measure of operating performance and believes that Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies in industries similar to LDR. Management also uses Adjusted EBITDA for planning purposes, including the preparation of the annual operating budget and financial projections.
A reconciliation of the non-GAAP financial measures used in this release to the most comparable U.S. GAAP measures for the respective periods can be found in a table later in this release immediately following the condensed consolidated statements of cash flows. Adjusted EBITDA should not be considered in isolation or as a substitute for a measure of the Company's liquidity or operating performance prepared in accordance with GAAP and is not indicative of operating income (loss) from operations as determined under GAAP. Adjusted EBITDA and other non-GAAP financial measures have limitations that should be considered before using these measures to evaluate the Company's liquidity or
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financial performance. Adjusted EBITDA does not include certain expenses that may be necessary to review LDR's operating results and liquidity requirements. Management's definition and calculation of Adjusted EBITDA may differ from that of other companies.
Contacts:
Robert McNamara
Executive Vice President and Chief Financial Officer
LDR Holding Corporation
(512) 344-3333
Bob Yedid
Managing Director
ICR, Inc.
(646) 277-1250
bob.yedid@icrinc.com
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LDR HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
| December 31, 2013 | December 31, 2012 | |||||||
| Unaudited | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 56,678 | $ | 19,135 | ||||
| Accounts receivable, net | 22,193 | 16,309 | ||||||
| Inventory, net | 17,690 | 16,772 | ||||||
| Other current assets | 4,780 | 3,768 | ||||||
| Prepaid expenses | 1,593 | 806 | ||||||
| Total current assets | 102,934 | 56,790 | ||||||
| Property and equipment, net | 12,695 | 12,296 | ||||||
| Goodwill | 6,621 | 6,621 | ||||||
| Intangible assets, net | 3,073 | 2,619 | ||||||
| Restricted cash | 2,000 | 2,000 | ||||||
| Related party notes receivable | — | 270 | ||||||
| Deferred tax assets | 513 | 554 | ||||||
| Other assets | 157 | 441 | ||||||
| Total assets | $ | 127,993 | $ | 81,591 | ||||
| LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Current portion of long-term debt | $ | 1,763 | $ | 1,903 | ||||
| Line of credit, net of discount | 18,162 | — | ||||||
| Accounts payable | 8,128 | 7,855 | ||||||
| Accrued expenses | 16,324 | 10,759 | ||||||
| Short-term financing | 2,641 | 1,772 | ||||||
| Deferred tax liabilities | 540 | 542 | ||||||
| Total current liabilities | 47,558 | 22,831 | ||||||
| Line of credit, net of discount | — | 18,985 | ||||||
| Long-term debt, net of discount and current portion | 2,758 | 30,326 | ||||||
| Warrant liability | — | 4,167 | ||||||
| Other long-term liabilities | — | 913 | ||||||
| Total liabilities | 50,316 | 77,222 | ||||||
| Commitments and contingencies | ||||||||
| Series C redeemable convertible preferred stock | — | 35,000 | ||||||
| Stockholders' deficit: | ||||||||
| Series A-1 convertible preferred stock | — | 11 | ||||||
| Series A-2 convertible preferred stock | — | 18 | ||||||
| Series B convertible preferred stock | — | 15 | ||||||
| Common stock | 24 | 5 | ||||||
| Additional paid-in capital | 161,216 | 25,603 | ||||||
| Accumulated other comprehensive loss | 198 | (457 | ) | |||||
| Accumulated deficit | (83,761 | ) | (55,826 | ) | ||||
| Total stockholders' deficit | 77,677 | (30,631 | ) | |||||
| Total liabilities, redeemable preferred stock and stockholders' deficit | $ | 127,993 | $ | 81,591 | ||||
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LDR HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands, except share and per share amounts)
(Unaudited)
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Revenue | $ | 31,978 | $ | 24,966 | $ | 111,594 | $ | 90,918 | ||||||||
| Cost of goods sold | 5,386 | 4,061 | 17,947 | 14,770 | ||||||||||||
| Gross profit | 26,592 | 20,905 | 93,647 | 76,148 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 2,165 | 2,214 | 9,380 | 10,751 | ||||||||||||
| Sales and marketing | 19,915 | 14,368 | 67,676 | 51,846 | ||||||||||||
| General and administrative | 5,417 | 4,143 | 18,915 | 14,825 | ||||||||||||
| Total operating expenses | 27,497 | 20,725 | 95,971 | 77,422 | ||||||||||||
| Operating income (loss) | (905 | ) | 180 | (2,324 | ) | (1,274 | ) | |||||||||
| Other operating income (expense): | ||||||||||||||||
| Other income (expense) | (293 | ) | (523 | ) | (771 | ) | (987 | ) | ||||||||
| Interest income | — | 6 | 10 | 26 | ||||||||||||
| Interest expense | (247 | ) | (925 | ) | (3,273 | ) | (3,240 | ) | ||||||||
| Accretion related to warrants and discounts on long-term debt | (5,547 | ) | (503 | ) | (6,900 | ) | (1,404 | ) | ||||||||
| Expense related to beneficial conversion of promissory notes | (7,413 | ) | — | (7,413 | ) | — | ||||||||||
| Change in fair value of common stock warrants | — | (185 | ) | (5,593 | ) | (1,643 | ) | |||||||||
| Total other income (expense), net | (13,500 | ) | (2,130 | ) | (23,940 | ) | (7,248 | ) | ||||||||
| Loss before income taxes | (14,405 | ) | (1,950 | ) | (26,264 | ) | (8,522 | ) | ||||||||
| Income tax expense | (700 | ) | (476 | ) | (1,671 | ) | (1,179 | ) | ||||||||
| Net loss | (15,105 | ) | (2,426 | ) | (27,935 | ) | (9,701 | ) | ||||||||
| Other comprehensive loss: | ||||||||||||||||
| Foreign currency translation | 110 | 718 | 655 | 742 | ||||||||||||
| Comprehensive loss | $ | (14,995 | ) | $ | (1,708 | ) | $ | (27,280 | ) | $ | (8,959 | ) | ||||
| Net loss per common share: | ||||||||||||||||
| Basic and diluted | $ | (0.69 | ) | $ | (0.52 | ) | $ | (3.09 | ) | $ | (2.10 | ) | ||||
| Weighted average number of shares outstanding: | ||||||||||||||||
| Basic and diluted | 21,809,672 | 4,629,131 | 9,040,567 | 4,615,352 | ||||||||||||
| Pro forma net loss per share: | ||||||||||||||||
| Basic and diluted | $ | (0.64 | ) | $ | (1.19 | ) | ||||||||||
| Weighted average number of shares used in computing pro forma net loss per share: | ||||||||||||||||
| Basic and diluted | 23,432,964 | 23,400,463 | ||||||||||||||
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LDR HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Operating activities: | ||||||||||||||||
| Net loss | $ | (15,105 | ) | $ | (2,426 | ) | $ | (27,935 | ) | $ | (9,701 | ) | ||||
| Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||||||||||||||||
| Bad debt expense | 142 | 255 | 517 | 587 | ||||||||||||
| Provision for excess and obsolete inventories | (148 | ) | 717 | 641 | 1,565 | |||||||||||
| Depreciation and amortization | 1,094 | 869 | 4,024 | 3,133 | ||||||||||||
| Stock-based compensation | 771 | 81 | 1,269 | 295 | ||||||||||||
| Accretion related to warrants and discounts on long-term debt | 5,547 | 503 | 6,900 | 1,404 | ||||||||||||
| Change in fair value of common stock warrants | — | 185 | 5,593 | 1,643 | ||||||||||||
| Beneficial conversion related to promissory notes | 7,413 | — | 7,413 | — | ||||||||||||
| Deferred income tax expense (benefit) | 37 | (250 | ) | 37 | (250 | ) | ||||||||||
| Loss on disposal of assets | 19 | 64 | 57 | 163 | ||||||||||||
| Unrealized foreign currency loss (gains) | 298 | 452 | 713 | 817 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Cash restricted for line of credit agreement | — | — | — | (1,000 | ) | |||||||||||
| Accounts receivable | (3,638 | ) | (822 | ) | (6,313 | ) | (3,114 | ) | ||||||||
| Prepaid expenses and other current assets | (128 | ) | 463 | (2,141 | ) | 660 | ||||||||||
| Inventory | (1,260 | ) | (1,531 | ) | (1,231 | ) | (5,504 | ) | ||||||||
| Other assets | (126 | ) | 57 | 215 | 99 | |||||||||||
| Accounts payable | 1,746 | 1,872 | 16 | 2,027 | ||||||||||||
| Accrued expenses | 2,220 | (473 | ) | 4,505 | 1,921 | |||||||||||
| Other long-term liabilities | (1,080 | ) | 346 | (50 | ) | 892 | ||||||||||
| Net cash provided by (used in) operating activities | (2,198 | ) | 362 | (5,770 | ) | (4,363 | ) | |||||||||
| Investing activities: | ||||||||||||||||
| Proceeds from sale of property and equipment | 1 | 19 | 54 | 50 | ||||||||||||
| Purchase of intangible assets | (406 | ) | (125 | ) | (780 | ) | (675 | ) | ||||||||
| Purchase of property and equipment | (1,350 | ) | (1,059 | ) | (3,963 | ) | (5,245 | ) | ||||||||
| Net cash used in investing activities | (1,755 | ) | (1,165 | ) | (4,689 | ) | (5,870 | ) | ||||||||
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LDR HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
(in thousands)
(Unaudited)
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Financing activities: | ||||||||||||||||
| Proceeds from issuance of common stock | 86,250 | 62 | 86,250 | 71 | ||||||||||||
| Issuance costs from initial public offering | (8,744 | ) | — | (8,744 | ) | — | ||||||||||
| Proceeds from Employee Stock Purchase Plan | 976 | — | 976 | — | ||||||||||||
| Exercise of stock options | 60 | — | 235 | 132 | ||||||||||||
| Dividends on Series C Preferred Stock | (17,143 | ) | — | (17,143 | ) | — | ||||||||||
| Payments on capital leases | (6 | ) | (7 | ) | (22 | ) | (163 | ) | ||||||||
| Net proceeds (payments) on short-term financings | (162 | ) | 116 | 759 | 551 | |||||||||||
| Proceeds from line of credit | 376 | 8,967 | 376 | 11,767 | ||||||||||||
| Payments from line of credit | (431 | ) | — | (1,209 | ) | — | ||||||||||
| Proceeds from long-term debt | — | 1,311 | — | 16,311 | ||||||||||||
| Payments on long-term debt | (12,303 | ) | (378 | ) | (13,711 | ) | (4,603 | ) | ||||||||
| Debt issuance costs | — | (54 | ) | — | (198 | ) | ||||||||||
| Proceeds from exercise of common stock warrants | 4 | — | 4 | — | ||||||||||||
| Net cash provided by financing activities | 48,877 | 10,017 | 47,771 | 23,868 | ||||||||||||
| Effect of exchange rate on cash | 122 | 85 | 231 | (99 | ) | |||||||||||
| Net change in cash and cash equivalents | 45,046 | 9,299 | 37,543 | 13,536 | ||||||||||||
| Cash and cash equivalents, beginning of period | 11,632 | 9,836 | 19,135 | 5,599 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 56,678 | $ | 18,581 | $ | 56,678 | $ | 19,135 | ||||||||
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LDR HOLDING CORPORATION AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME (LOSS) TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share amounts)
(Unaudited)
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Operating income (loss), as reported | $ | (905 | ) | $ | 180 | $ | (2,324 | ) | $ | (1,274 | ) | |||||
| Add back: | ||||||||||||||||
| Depreciation and amortization | 1,094 | 869 | 4,024 | 3,133 | ||||||||||||
| Stock-based compensation | 771 | 81 | 1,269 | 295 | ||||||||||||
| Non-GAAP adjusted EBITDA | $ | 960 | $ | 1,130 | $ | 2,969 | $ | 2,154 | ||||||||
| Non-GAAP adjusted EBITDA margin | 3.0 | % | 4.5 | % | 2.7 | % | 2.4 | % | ||||||||
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LDR HOLDING CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP NET LOSS PER SHARE TO PRO FORMA NET LOSS PER SHARE
(in thousands)
(Unaudited)
| Quarter Ended December 31, 2013 | Year Ended December 31, 2013 | |||||||
| Numerator | ||||||||
| Net loss attributable to common stockholders | $ | (15,105 | ) | $ | (27,935 | ) | ||
| Denominator | ||||||||
| GAAP weighted average shares outstanding - basic and diluted | 21,810 | 9,041 | ||||||
| Conversion of preferred stock upon the IPO | 954 | 8,444 | ||||||
| Conversion of convertible notes upon the IPO | 168 | 1,484 | ||||||
| Common shares issued in the IPO | 500 | 4,423 | ||||||
| Common shares issued in the exercise of the preferred stock warrant during the IPO | 1 | 8 | ||||||
| Weighted average number of shares used in computing pro forma net loss per share - basic and diluted | 23,433 | 23,400 | ||||||
| Pro forma net loss per share - basic and diluted | $ | (0.64 | ) | $ | (1.19 | ) | ||
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