Vericel Corp. (VCEL)

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Vericel Reports Record Third Quarter Revenues, Net Income and Operating Cash Flow
November 5, 2019 at 8:01 AM EST
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Product Revenues of $30.5 Million Increase 36% Over Third Quarter 2018
Full Year 2019 Revenue Guidance Raised to $116 to $118 Million
Conference Call Today at 8:30am Eastern Time

CAMBRIDGE, Mass., Nov. 05, 2019 (GLOBE NEWSWIRE) -- Vericel Corporation (NASDAQ:VCEL), a leader in advanced therapies for the sports medicine and severe burn care markets, today reported financial results for the third quarter ended September 30, 2019, and recent business highlights.

Third Quarter 2019 Financial Highlights

Total net product revenues increased 36% to $30.5 million compared to $22.5 million in the third quarter of 2018, marking the tenth consecutive quarter with record revenues for the reported quarter;
MACI® net revenue of $20.6 million and Epicel® net product revenue of $9.9 million, the highest quarterly Epicel revenue in history;
Gross margin of 69% compared to gross margin of 64% in the third quarter of 2018;
Net income of $3.5 million, or $0.07 per share, compared to a net loss of $1.1 million, or $0.02 per share, in the third quarter of 2018;
Non-GAAP adjusted EBITDA of $6.8 million compared to $0.9 million in the third quarter of 2018;
Operating cash flow of $7.9 million;
As of September 30, 2019, the company had $74.7 million in cash and short-term investments compared to $82.9 million as of December 31, 2018; and
Full year 2019 revenue guidance for MACI and Epicel raised to $116 to $118 million compared to previous full year revenue guidance of $112 to $116 million.

Recent Business Highlights
During and since the third quarter of 2019, the company:

Announced plans to expand the MACI sales force from 49 to 76 sales representatives and from six to nine sales regions by the second quarter of 2020;
Completed an initial expansion of the burn care sales team from six to nine sales representatives and burn clinical specialists; and
Announced initiation of the NexoBrid® Expanded Access Treatment Protocol (NEXT) to treat patients with deep partial- and full-thickness burns in the United States during the preparation and review of the NexoBrid Biologics License Application.

“We are very pleased with the growth of our business and expect to maintain strong double-digit revenue growth for the foreseeable future as we continue to make targeted investments in our sports medicine and burn care commercial franchises,” said Nick Colangelo, president and CEO of Vericel. “Given the consistent improvement in our gross profit and operating margin, we believe that we are also well-positioned to generate strong profit and cash flow growth in the years ahead.”

Third Quarter 2019 Results
Total net product revenues for the quarter ended September 30, 2019 increased 36% to $30.5 million compared to $22.5 million in the third quarter of 2018. Total net product revenues for the quarter included $20.6 million of MACI® (autologous cultured chondrocytes on porcine collagen membrane) net revenue and $9.9 million of Epicel® (cultured epidermal autografts) net revenue, compared to $16.4 million of MACI net revenue and $6.0 million of Epicel net revenue, respectively, in the third quarter of 2018.

Gross profit for the quarter ended September 30, 2019 was $21.2 million, or 69% of net revenues, compared to $14.3 million, or 64% of net revenues, for the third quarter of 2018.

Total operating expenses for the quarter ended September 30, 2019 were $18.1 million, compared to $15.7 million for the same period in 2018. The increase in operating expenses was primarily due to a $1.1 million increase in stock-based compensation expenses, a $0.8 million increase in marketing expenses and a $0.7 million increase in MACI sales force expenses driven by the sales force expansion in the second quarter of 2019.

Vericel’s net income for the quarter ended September 30, 2019 was $3.5 million, or $0.07 per share, compared to a net loss of $1.1 million, or $0.02 per share, for the third quarter of 2018.

Non-GAAP adjusted EBITDA was $6.8 million for the quarter ended September 30, 2019 compared to $0.9 million in the third quarter of 2018. A table reconciling non-GAAP measures is included in this press release for reference.

As of September 30, 2019, the company had $74.7 million in cash and short-term investments compared to $82.9 million as of December 31, 2018.

Full Year 2019 Financial Guidance

The company now expects total MACI and Epicel net product revenues for the full year 2019 to be in the range of $116 to $118 million, compared to the previous full year revenue guidance of $112 to $116 million.

Conference Call Information
Today's conference call will be available live at 8:30am Eastern Standard Time and can be accessed through the Investor Relations section of the Vericel website at http://investors.vcel.com/events-presentations. A slide presentation with highlights from today’s conference call will be available on the webcast and in the Investor Relations section of the Vericel website. Please access the site at least 15 minutes prior to the scheduled start time in order to download the required audio software if necessary. To participate in the live call by telephone, please call [phone] and reference Vericel Corporation's second-quarter 2019 investor conference call. If calling from outside the U.S., please use the international phone number [phone].

If you are unable to participate in the live call, the webcast will be available at http://investors.vcel.com/events-presentations until November 5, 2020. A replay of the call will also be available until 11:00am (EDT) on November 10, 2019 by calling [phone], or from outside the U.S. at [phone]. The conference ID is 1685887.