ReShape Lifesciences Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 2, 2018

Attached files

file filename
8-K - 8-K - ReShape Lifesciences Inc.oblnq2-18earnings8xk.htm



Obalon Announces Second Quarter 2018 Financial Results
SAN DIEGO, CA August 2, 2018 (GLOBE NEWSWIRE) -- Obalon Therapeutics, Inc. (NASDAQ:OBLN), a vertically integrated medical technology company with the first and only FDA-approved swallowable, gas-filled intragastric balloon system for the treatment of obesity, today announced its unaudited financial results as of and for the second quarter ended June 30, 2018.
Second Quarter 2018 highlights:
•
Total revenue of $2.7 million increased 103% vs Q1-18 and 39% vs Q2-17
•
US revenue of $1.5 million increased 211% vs Q1-18 and decreased 20% vs Q2-17
•
US Reorders were $1.0 million, or 64% of US sales, an increase of 221% vs Q1-18 and 61% vs Q2-17
•
Operating loss of $9.6 million decreased 20% vs $12.1 million in Q1-18 and increased 26% vs $7.6 million in Q2-17
•
Amended loan agreement providing access to additional $10.0 million
•
Filed PMA-S response for Touch dispenser
•
Filed PMA-S for Touch-compatible Navigation system

The Company reported revenue of $2.7 million for the second quarter of 2018, compared to $1.3 million for the first quarter of 2018 and $2.0 million for the second quarter of 2017. Net loss was reported at $9.8 million for the second quarter of 2018, compared to $12.1 million for the first quarter of 2018 and $7.7 million for the second quarter of 2017. Net loss per share for the second quarter of 2018 was $0.57 as compared to $0.71 for the first quarter of 2018 and $0.46 for the second quarter of 2017.
Cost of revenue was $1.7 million for the second quarter of 2018, up from $0.8 million for the first quarter of 2018 and $1.0 million for second quarter of 2017. Gross profit for the second quarter of 2018 was $1.0 million, resulting in a gross margin of 37%, compared to a gross profit of $0.6 million and gross margin of 43% for the first quarter of 2018 and a gross profit of $1.0 million and gross margin of 50% for the second quarter of 2017.

1


Research and Development expense for the second quarter of 2018 totaled $3.4 million, up from $2.6 million for the first quarter of 2018 and $2.8 million for the second quarter of 2017. Selling, General and Administrative expense decreased to $7.3 million for the second quarter of 2018 as compared to $10.0 million for the first quarter of 2018 and increased from $5.9 million for the second quarter of 2017.
Operating loss for the second quarter of 2018 was $9.6 million, down from $12.1 million for the first quarter of 2018, but up from $7.6 million for the second quarter of 2017.
As of June 30, 2018, cash, cash equivalents and short-term investments were $25.2 million.
“We are pleased with the increase in revenue compared to Q1-18, especially with reorder revenues from existing customers,” said Bill Plovanic, CFO of Obalon. “In Q2-18, we reduced our cash usage by $2.7 million compared to Q1-18. We believe this, along with the $25.2 million cash on hand at the end of Q2-18 and access to an additional $10.0 million of debt, furthers our ability to support the continued development of this novel and exciting non-surgical treatment for obesity.”

Call Information
A conference call to discuss second quarter 2018 financial results is scheduled for today, August 2, 2018, at 8:30 AM Eastern Time (5:30 AM Pacific Time). Interested parties may access the conference call by dialing (844) 889-7791 (U.S.) or (661) 378-9934 (international) using passcode 6384879.  Media and individuals will be in a listen-only mode. Participants are asked to dial in a few minutes prior to the call to register for the event.  The conference call will also be webcast live at: https://edge.media-server.com/m6/p/jud3fsps.
An archive of the webcast will be available for twelve months following the event on the Obalon Therapeutics, Inc. website located at http://investor.obalon.com in the “News & Events” section. 
About Obalon Therapeutics, Inc.
Obalon Therapeutics, Inc. (NASDAQ:OBLN) is a San Diego-based company focused on developing and commercializing novel technologies for weight loss. The Obalon management team has over 150 combined years of experience in developing and commercializing novel

2


medical technologies with a track record of financial and clinical excellence. For more information, please visit www.obalon.com.
For Obalon Therapeutics, Inc.
Investor Contact:
William Plovanic
Chief Financial Officer
Obalon Therapeutics, Inc.
Office: +1 760 607 5103
wplovanic@obalon.com
Media:
Megan Driscoll
EvolveMKD
Office Phone: +1 646 517 4220
mdriscoll@evolvemkd.com



3




OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except shares and per share data)

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2018
 
2017
 
2018
 
2017
 
(Unaudited)
Revenue
$
2,732

 
$
1,963

 
$
4,078

 
$
3,435

Cost of revenue
1,732

 
990

 
2,501

 
1,813

Gross profit
1,000

 
973

 
1,577

 
1,622

Operating expenses:
 
 
 

 
 
 
 
Research and development
3,352

 
2,760

 
5,991

 
5,160

Selling, general and administrative
7,250

 
5,853

 
17,256

 
11,793

Total operating expenses
10,602

 
8,613

 
23,247

 
16,953

Loss from operations
(9,602
)
 
(7,640
)
 
(21,670
)
 
(15,331
)
Interest expense, net
(57
)
 
(35
)
 
(94
)
 
(89
)
Other expense
(94
)
 
(55
)
 
(115
)
 
(55
)
      Net loss
(9,753
)
 
(7,730
)
 
(21,879
)
 
(15,475
)
Other comprehensive income (loss)
—

 
—

 
6

 
(18
)
Net loss and comprehensive loss
$
(9,753
)
 
$
(7,730
)
 
$
(21,873
)
 
$
(15,493
)
Net loss per share, basic and diluted
$
(0.57
)
 
$
(0.46
)
 
$
(1.29
)
 
$
(0.93
)
Weighted-average common shares outstanding, basic and diluted
17,039,876

 
16,637,335

 
17,013,529

 
16,599,891
























4


OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except shares and par value data)
 
June 30, 2018
 
December 31, 2017
Assets
(Unaudited)
Current assets:
 

 
 

Cash and cash equivalents
$
24,212

 
$
21,108

Short-term investments
997

 
23,292

Accounts receivable, net of allowance of $433 and $239, respectively
3,049

 
4,223

Inventory
1,842

 
1,418

Other current assets
857

 
1,714

Total current assets
30,957

 
51,755

Property and equipment, net
1,514

 
1,346

Total assets
$
32,471

 
$
53,101

Liabilities and Stockholders’ Equity
 

 
 

Current liabilities:
 

 
 

Accounts payable
$
1,445

 
$
1,276

Accrued compensation
2,132

 
4,494

Deferred revenue
302

 
510

Other current liabilities
2,552

 
1,773

Current portion of long-term loan
3,965

 
1,958

Total current liabilities
10,396

 
10,011

     Deferred rent
44

 
13

     Long-term loan, excluding current portion
5,980

 
7,964

Total long-term liabilities
6,024

 
7,977

Total liabilities
16,420

 
17,988

Commitments and contingencies
 
 
 
Stockholders’ equity:
 

 
 

Common stock, $0.001 par value; 100,000,000 and 300,000,000 shares authorized as of June 30, 2018 and December 31, 2017, respectively; 17,858,704 and 17,500,604 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively
18

 
18

Additional paid-in capital
149,285

 
146,474

Accumulated other comprehensive gain (loss)
1

 
(5
)
Accumulated deficit
(133,253
)
 
(111,374
)
Total stockholders’ equity
16,051

 
35,113

Total liabilities and stockholders’ equity
$
32,471

 
$
53,101

















5


OBALON THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 
Six Months Ended June 30,
 
2018
 
2017
 
(Unaudited)
Operating activities:
 

 
 

Net loss
$
(21,879
)
 
$
(15,475
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 

Depreciation
276

 
136

Stock-based compensation
2,603

 
1,079

Loss on disposal of fixed assets
107

 
—

(Accretion) amortization of investment (discount) premium, net
(7
)
 
11

Amortization of debt discount
22

 
20

Change in operating assets and liabilities:
 
 
 

Accounts receivable, net
1,174

 
(1,757
)
Accounts receivable from related party
—

 
515

Inventory
(424
)
 
80

Other current assets
857

 
539

Accounts payable
275

 
58

Accrued compensation
(2,362
)
 
(116
)
Accrued clinical expenses
418

 
91

Deferred revenue
(208
)
 
85

Other current and long term liabilities
424

 
326

Net cash used in operating activities
(18,724
)
 
(14,408
)
Investing activities:
 

 
 

Purchases of short-term investments
(995
)
 
(64,928
)
Maturities of short-term investments
23,301

 
12,500

Purchase of property and equipment
(657
)
 
(559
)
Net cash provided by (used in) investing activities
21,649

 
(52,987
)
Financing activities:
 

 
 

Proceeds from stock issued under employee stock purchase plan
148

 
210

Proceeds from sale of common stock upon exercise of stock options
31

 
37

Net cash provided by financing activities
179

 
247

Net increase (decrease) in cash and cash equivalents
3,104

 
(67,148
)
Cash and cash equivalents at beginning of period
21,108

 
72,975

Cash and cash equivalents at end of period
$
24,212

 
$
5,827

Supplemental cash flow information:
 

 
 

Interest paid
$
307

 
$
270

Property and equipment in accounts payable
$
106

 
$
96



6

ReShape Lifesciences Inc. Reports