“Anika’s recent strategic transformation has provided commercial diversity and generated top-line revenue growth year-over-year for the quarter, despite the COVID-19 pandemic impact,” said
Second Quarter Financial Results
- Total revenue for the second quarter of 2020 increased 1% year-over-year to
$30.7 million, compared to $30.4 millionfor the second quarter of 2019. The increase in total revenue was due primarily to new Orthopedic Joint Preservation and Restoration revenue, which resulted from the acquisitions of Parcus Medical and Arthrosurface in the first quarter of 2020, partially off-set by lower Joint Pain Management revenue as a result of the COVID environment.
- Cost of product revenue, research and development expenses and selling, general and administrative expenses for the second quarter of 2020 were
$36.0 million, compared to $18.5 millionfor the second quarter of 2019. The increase was due primarily to higher cost of product revenue, selling and marketing expenses related to the Company’s newly acquired sales infrastructure, acquisition related amortization expenses and product rationalization charges associated with certain non-core legacy products. Acquisition related non-cash expenses and product rationalization non-cash charges during the quarter totaled $6.9 million.
- Included in total operating expenses for the second quarter of 2020 was a
$4.2 millionincrease in fair value related to acquisition contingent consideration liabilities, recorded as a non-cash expense, as a result of the estimated improved performance of the recently acquired companies following the easing of COVID restrictions in the U.S.
- Net loss for the second quarter of 2020 was
$7.7 million, or $0.54loss per diluted share, compared to net income of $9.4 million, or $0.67per diluted share, for the second quarter of 2019. Adjusted net income (see description below) for the second quarter of 2020 was $1.2 million, or $0.09per diluted share.
- Adjusted EBITDA (see description below) for the second quarter of 2020 was
$5.6 million, compared to $14.8 millionfor the second quarter of 2019. The year-over-year decrease was due primarily to increases in cost of product revenue and related revenue mix and selling and marketing expenses.
- Cash, cash equivalents and investments were
$144.4 millionas of June 30, 2020, compared to $184.9 millionas of December 31, 2019. The decrease in cash, cash equivalents and investments was due to $93.0 millionof upfront payments for the acquisitions of Parcus Medical and Arthrosurface, offset by the $50.0 milliondrawdown on the Company’s existing credit facility.
Recent Business Highlights
- Augmented the leadership team to maximize talent utilization and efficiency, as well as drive performance, including the appointments of:
Bart Bracy, former Senior Vice President and Co-Founder of Parcus Medical, as Vice President of Sales and Marketing for the Americasregion; Steven Ek, former President and Chief Executive Officer of Arthrosurface, as Vice President of Research and Development; Mark Brunsvold, former President and Co-Founder of Parcus Medical, as President of Sports Medicine; and James Chaseas Senior Vice President of International Sales and Marketing, with expanded responsibility for Anika’s operations in Padua, Italy.
- Completed the integration of the Company’s
U.S.commercial organization, which includes 35 sales professionals in addition to shared sales operations and marketing functions.
- Expanded the TACTOSET franchise, Anika’s surgically delivered regenerative therapy for bone repair procedures focused on treating insufficiency fractures, to include a small bone cannula set enabling improved and more accurate access in small joints and extremities.
- Completed prelaunch activities for six sports medicine surgical devices and instruments, which recently received
U.S. Food and Drug Administrationclearance. The new products are used in procedures ranging from rotator cuff repair to arthroscopic knee repairs and the treatment of arthritis damage in the hand and wrist. The products will be commercialized through Anika’s recently expanded sales and marketing team through the third quarter of 2020.
- Continued international expansion of the Company’s joint pain management business through the launch and first sales of CINGAL in
Australia, as well as the receipt of visocsupplement product approvals in Finlandand Serbia.
To supplement the financial measures prepared in accordance with