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LDR Holding Corporation Reports Record Revenue for Fourth Quarter and Fiscal Year 2015

AUSTIN, Texas, Feb. 17, 2016 (GLOBE NEWSWIRE) -- 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 fiscal year ended December 31, 2015.

Fourth Quarter and Fiscal Year 2015 Highlights

  • Total revenue in the fourth quarter of 2015 increased 12.7% to $44.5 million, or 16.2% on a constant currency basis compared to the fourth quarter of 2014.
  • For fiscal year 2015, total revenue increased 16.4% to $164.5 million, or 21.3% on a constant currency basis compared to fiscal year 2014.
  • Revenue from exclusive technology products in the fourth quarter of 2015 grew 15.9% to $41.6 million, or 18.3% on a constant currency basis compared to the fourth quarter of 2014.
  • For fiscal year 2015, revenue from exclusive technology products grew 21.9% to $152.4 million, or 25.4% on a constant currency basis compared to fiscal year 2014.
  • Revenue in the United States increased 15.4% to $36.9 million in the fourth quarter of 2015, compared to the fourth quarter of 2014, and represented 82.9% of total revenue.
  • For fiscal year 2015, revenue in the United States increased 22.1% to $133.8 million, compared to fiscal year 2014.
  • As of December 31, 2015, LDR had $115.1 million in cash and cash equivalents, $148.0 million in working capital (including cash and cash equivalents) and $5.8 million in debt.

Revenue from exclusive cervical products grew 26.0%, or 28.6% on a constant currency basis, in the fourth quarter of 2015 to $32.1 million, compared to the fourth quarter of 2014. For fiscal year 2015, revenue from exclusive cervical products grew 31.9%, or 35.9% on a constant currency basis, to $114.8 million, compared to fiscal year 2014.

The performance during the fourth quarter and full year was primarily driven by the continued strong growth of Mobi-C® and successful cross-selling of ROI-C®, supporting the effectiveness of the Company's strategy to gain market share in the cervical spine segment.

Christophe Lavigne, President and Chief Executive Officer of LDR, commented, “We finished 2015 with a record quarter in revenue led by strong growth in our exclusive cervical technology products, and a record quarter for Mobi-C. As our results demonstrate, we are increasingly being recognized as a leader in bringing global cervical solutions to surgeons with both non-fusion and fusion technologies. With our exclusive lumbar products, we continued our progress on the clinical evaluation and development of our Minimal Implant Volume (MIVo) products during the fourth quarter, which we believe will support our long-term strategy to penetrate the lumbar market.”

Mr. Lavigne added, “We are pleased that our first two peer-reviewed papers with five-year patient outcome data for our unique Mobi-C technology were recently published. The first, in the Journal of Neurosurgery: Spine, shows a lower rate of subsequent surgeries for Mobi-C versus fusion and the second, in Neurosurgery, demonstrates the cost effectiveness of two-level cervical disc replacement. We are encouraged by these recent developments as both publications add to the growing weight of clinical evidence supporting cervical disc replacement and Mobi-C, in particular. We believe the increasing availability of long-term publications, along with the updated NASS coverage recommendation in support of both one and two-level cervical disc replacement, will drive continued penetration of cervical disc replacement into the estimated $1.2 billion U.S. cervical fusion market.”

Additional Financial Highlights

International revenue increased 1.0% during the fourth quarter of 2015 to $7.6 million, or 19.4% on a constant currency basis compared to the fourth quarter of 2014. For fiscal year 2015, international revenue decreased 3.3% to $30.6 million, or increased 18.5% on a constant currency basis compared to fiscal year 2014.

Gross profit for the fourth quarter of 2015 was $36.6 million and gross margin was 82.3%, compared to gross profit of $32.7 million and gross margin of 82.7% for the fourth quarter of 2014. Gross profit for the year ended December 31, 2015 was $137.2 million and gross margin was 83.4%, compared to a gross profit of $116.8 million and a gross margin of 82.7% for the year ended December 31, 2014.

Net loss for the fourth quarter of 2015 was $4.8 million, or $0.16 per share, compared to a net loss of $3.1 million, or $0.12 per share, for the same quarter a year ago. For the year ended December 31, 2015, net loss totaled $15.9 million, or $0.57 per diluted share, compared to a net loss of $11.0 million, or $0.43 per diluted share, for fiscal year 2014.

Adjusted EBITDA for the fourth quarter of 2015 was $(3.2) million compared to adjusted EBITDA of $(0.7) million for the fourth quarter of 2014. For the year ended December 31, 2015, adjusted EBITDA was $(6.9) million, compared to an adjusted EBITDA of $(0.8) million for fiscal year 2014.

2016 Guidance

Based on LDR’s results for the year ended December 31, 2015, the Company expects revenue for the full year 2016 to be in the range of $187.5 million to $189.5 million, or 14% to 15.2% growth on a reported basis. Changes in foreign exchange rates are expected to negatively impact 2016 reported revenue by approximately 1.0%. This implies revenues, before any foreign exchange impact, in the range of $189.1 million to $191.1 million for the full year 2016 or 15% to 16.2% growth constant currency.

Conference Call

LDR Holding Corporation will host a conference call today at 5:00 p.m. Eastern Time to discuss its fourth quarter and fiscal year 2015 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.

For those who are not available to listen to the live webcast, the webcast replay will be archived for 12 months on LDR’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 can be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect," “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. 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 revenues, 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 Annual Report on Form 10-K, filed on February 20, 2015, 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 Mobi® non-fusion and VerteBRIDGE® fusion technology platforms and are designed for applications in the cervical and lumbar spine. These technologies are designed to 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. In August 2013, LDR 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, such as Adjusted EBITDA and revenue on a constant currency basis, in this press release and accompanying tables.

Management defines EBITDA as net income (loss) plus interest (income) expense, net, income tax expense and depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA plus stock-based compensation expense and other interest (expense), net. 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.

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 has limitations that should be considered before using this measure to evaluate the Company’s liquidity or 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.

Management calculates revenue on a constant currency basis by using the average foreign exchange rates for each month during the previous year and applying these rates to foreign-denominated revenue in the corresponding months in the current quarter. The difference between revenue calculated based on these foreign exchange rates and revenue calculated in accordance with GAAP is referred to as the foreign exchange impact on revenue. Management uses revenue on a constant currency basis to improve comparability between periods as though fluctuations from changes in foreign currency did not exist.

Revenue on a constant currency basis should not be considered in isolation or as a substitute for revenue prepared in accordance with GAAP as it is not indicative of revenue as determined under GAAP. Management’s calculation of revenue on a constant currency basis may differ from that of other companies.

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.


LDR HOLDING CORPORATION AND SUBSIDIARIES
REVENUE BY GEOGRAPHY AND PRODUCT CATEGORY
(in thousands)
(Unaudited)
Three Months
Ended December 31,
Change
GAAP 2015/
GAAP 2014
Change
Constant Currency
2015/

GAAP 2014
2015 2014 $ % $ %
Revenue in the United States $36,945 $32,010 $4,935 15.4% $4,935 15.4%
International revenue 7,596 7,523 73 1.0 1,463 19.4
Total revenue $44,541 $39,533 $5,008 12.7% $6,398 16.2
Exclusive cervical products $32,136 $25,506 $6,630 26.0% $7,304 28.6%
Exclusive lumbar products 9,415 10,340 (925) (8.9) (731) (7.1)
Exclusive technology products 41,551 35,846 5,705 15.9 6,573 18.3
Traditional fusion products 2,990 3,687 (697) (18.9) (175) (4.7)
Total revenue $44,541 $39,533 $5,008 12.7% $6,398 16.2


Year Ended
December 31,
Change
GAAP 2015/
GAAP 2014
Change
Constant Currency
2015/

GAAP 2014
2015 2014 $ % $ %
Revenue in the United States $133,843 $109,597 $24,246 22.1% $24,246 22.1%
International revenue 30,616 31,657 (1,041) (3.3) 5,854 18.5
Total revenue $164,459 $141,254 $23,205 16.4% $30,100 21.3
Exclusive cervical products $114,800 $87,035 $27,765 31.9% $31,228 35.9%
Exclusive lumbar products 37,633 37,978 (345) (0.9) 574 1.5
Exclusive technology products 152,433 125,013 27,420 21.9 31,802 25.4
Traditional fusion products 12,026 16,241 (4,215) (26.0) (1,702) (10.5)
Total revenue $164,459 $141,254 $23,205 16.4% $30,100 21.3

__________
(1) Revenue on a constant currency basis is calculated using the average foreign exchange rates for each month during the previous year and applying these rates to foreign-denominated revenue in the corresponding months in the current period. The difference between revenue calculated based on these foreign exchange rates and revenue calculated in accordance with GAAP is reconciled on the last page of this press release.


LDR HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2015 2014
Unaudited
ASSETS
Current assets:
Cash and cash equivalents $115,084 $73,883
Accounts receivable, net 29,412 26,484
Inventory, net 29,721 24,996
Other current assets 7,924 4,864
Prepaid expenses 1,886 1,419
Deferred tax asset, current 296
Total current assets 184,027 131,942
Property and equipment, net 20,653 19,025
Goodwill 6,621 6,621
Intangible assets, net 4,028 3,858
Long-term investments 2,738
Restricted cash 1,000
Deferred tax assets 7,043 192
Other assets 529 171
Total assets $226,639 $161,809
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $11,428 $8,302
Accrued expenses 19,495 19,366
Short-term financing 4,486 4,343
Current portion of long-term debt 601 1,009
Total current liabilities 36,010 33,020
Line of credit, net of discount 18,166
Long-term debt, net of discount and current portion 677 1,422
Deferred tax liabilities 740
Other long-term liabilities 670 760
Total liabilities 37,357 54,108
Commitments and contingencies
Stockholders' equity:
Common stock 29 27
Treasury stock at cost (8) (8)
Additional paid-in capital 306,509 205,920
Accumulated other comprehensive loss (6,657) (3,500)
Accumulated deficit (110,591) (94,738)
Total stockholders' equity 189,282 107,701
Total liabilities and stockholders' equity $226,639 $161,809


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,
Year ended December 31,
2015 2014 2015 2014
Revenue $44,541 $39,533 $164,459 $141,254
Cost of goods sold 7,906 6,843 27,260 24,418
Gross profit 36,635 32,690 137,199 116,836
Operating expenses:
Research and development 3,230 3,014 11,753 12,323
Sales and marketing 29,450 26,268 109,141 87,506
General and administrative 10,821 7,067 38,774 27,720
Total operating expenses 43,501 36,349 159,668 127,549
Operating loss (6,866) (3,659) (22,469) (10,713)
Other operating income (expense):
Other income, net 157 634 1,012 2,037
Interest income 49 6 61 27
Interest expense (39) (179) (531) (898)
Total other income, net 167 461 542 1,166
Loss before income taxes (6,699) (3,198) (21,927) (9,547)
Income tax benefit (expense) 1,943 67 6,074 (1,430)
Net loss (4,756) (3,131) (15,853) (10,977)
Other comprehensive loss:
Foreign currency translation (675) (1,294) (3,157) (3,698)
Comprehensive loss $(5,431) $(4,425) $(19,010) $(14,675)
Net loss per common share:
Basic and diluted $(0.16) $(0.12) $(0.57) $(0.43)
Weighted average number of shares outstanding:
Basic and diluted 29,351,171 26,127,613 27,783,149 25,288,284


LDR HOLDING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Three Months Ended
December 31,
Year ended December 31,
2015 2014 2015 2014
Operating activities:
Net loss $(4,756) $(3,131) $(15,853) $(10,977)
Adjustments to reconcile net loss to cash used in operating activities:
Bad debt expense 386 133 1,510 603
Provision for excess and obsolete inventories 1,643 216 2,846 1,173
Depreciation and amortization 1,615 1,333 6,250 4,682
Stock-based compensation 2,091 1,585 9,364 5,225
Amortization of debt issuance costs 4 6 16 20
Deferred income tax expense (2,148) 104 (7,425) 278
Loss on disposal of assets 16 47 141 246
Unrealized foreign currency gains (848) 818 (1,149) (389)
Changes in operating assets and liabilities:
Restricted cash (1,000) (1,000) 2,000
Accounts receivable (3,502) (3,299) (5,246) (5,557)
Prepaid expenses and other current assets (1,911) 1,318 (3,812) (474)
Inventory (3,804) (2,245) (9,120) (10,059)
Other assets 9 (370) (15)
Accounts payable 2,228 598 2,852 1,008
Accrued expenses 633 (1,734) 847 2,815
Other long-term liabilities (50) 150
Net cash used in operating activities (9,403) (4,242) (19,999) (9,421)
Investing activities:
Purchase of long-term investment (2,730) (2,730)
Proceeds from sale of property and equipment 14 4 74 19
Purchase of intangible assets (771) (61) (1,400) (626)
Purchase of property and equipment (863) (6,337) (7,089) (11,229)
Net cash used in investing activities (4,350) (6,394) (11,145) (11,836)
Three Months Ended
December 31,
Year ended December 31,
2015 2014 2015 2014
Financing activities:
Proceeds from issuance of common stock in public offering 92,000 36,628
Stock issuance costs 2 6 (5,129) (2,634)
Exercise of stock options 656 1,395 3,030 2,363
Proceeds from issuance of stock under Employee Stock Purchase Plan 790 106 1,474 2,148
Proceeds from Employee Stock Purchase Plan 120 95 120 95
Purchase of treasury stock (8)
Payments on capital leases (3) (9) (15) (42)
Payments on line of credit (18,166)
Net proceeds on short-term financings 3,979 446 301 2,035
Proceeds from long-term debt 96
Payments on long-term debt (206) (305) (1,007) (1,710)
Net cash provided by financing activities 5,338 1,734 72,704 38,875
Effect of exchange rate on cash (12) (251) (359) (413)
Net change in cash and cash equivalents (8,427) (9,153) 41,201 17,205
Cash and cash equivalents, beginning of period 123,511 83,036 73,883 56,678
Cash and cash equivalents, end of period $115,084 $73,883 $115,084 $73,883


LDR HOLDING CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO NON-GAAP FINANCIAL MEASURES
(in thousands, except margin percentages)
(Unaudited)
Three Months Ended
December 31,
Years Ended December 31,
2015 2014 2015 2014
Net loss $(4,756) $(3,131) $(15,853) $(10,977)
Interest (income) expense, net (10) 173 470 871
Income tax (benefit) expense (1,943) (67) (6,074) 1,430
Depreciation and amortization 1,615 1,333 6,250 4,682
EBITDA (5,094) (1,692) (15,207) (3,994)
Stock-based compensation 2,091 1,585 9,364 5,225
Other income, net (157) (634) (1,012) (2,037)
Non-GAAP adjusted EBITDA $(3,160) $(741) $(6,855) $(806)
Non-GAAP adjusted EBITDA margin (7.1)% (1.9)% (4.2)% (0.6)%



LDR HOLDING CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP REVENUE TO NON-GAAP REVENUE ON A CONSTANT CURRENCY BASIS
(in thousands)
(Unaudited)
Three Months Ended December 31,
GAAP Foreign
Exchange
Impact on
International
Revenue
Non-GAAP
Revenue on
a Constant
Currency
Basis (1)
GAAP 2015 on a Constant
Currency Basis /

2014
2015 2015 2015 2014 $ %
Revenue in the United States $36,945 $ $36,945 $32,010 $4,935 15.4%
International revenue 7,596 1,390 8,986 7,523 1,463 19.4
Total revenue $44,541 $1,390 $45,931 $39,533 $6,398 16.2
Exclusive cervical products $32,136 $674 $32,810 $25,506 $7,304 28.6%
Exclusive lumbar products 9,415 194 9,609 10,340 (731) (7.1)
Exclusive technology products 41,551 868 42,419 35,846 6,573 18.3
Traditional fusion products 2,990 522 3,512 3,687 (175) (4.7)
Total revenue $44,541 $1,390 $45,931 $39,533 $6,398 16.2


Years Ended December 31,
GAAP Foreign
Exchange
Impact on
International
Revenue
Non-GAAP
Revenue on
a Constant
Currency
Basis (1)
GAAP 2015 on a Constant
Currency Basis /

2014
2015 2015 2015 2014 $ %
Revenue in the United States $133,843 $ $133,843 $109,597 $24,246 22.1%
International revenue 30,616 6,895 37,511 31,657 5,854 18.5
Total revenue $164,459 $6,895 $171,354 $141,254 $30,100 21.3
Exclusive cervical products $114,800 $3,463 $118,263 $87,035 $31,228 35.9%
Exclusive lumbar products 37,633 919 38,552 37,978 574 1.5
Exclusive technology products 152,433 4,382 156,815 125,013 31,802 25.4
Traditional fusion products 12,026 2,513 14,539 16,241 (1,702) (10.5)
Total revenue $164,459 $6,895 $171,354 $141,254 $30,100 21.3

__________
(1) Revenue on a constant currency basis is calculated using the average foreign exchange rates for each month during the previous year and applying these rates to foreign-denominated revenue in the corresponding months in the current period. The difference between revenue calculated based on these foreign exchange rates and revenue calculated in accordance with GAAP is listed as foreign exchange impact in the table above.

Contacts Robert McNamara Executive Vice President and Chief Financial Officer LDR Holding Corporation (512) 344-3333 Matthew Norman Director, Investor Relations LDR Holding Corporation (512) 344-3408

Source:LDR Holding Corporation