Ekso Bionics Holdings, Richmond, California, posted financial results for the three- and nine-month periods ending September 30.
Financial highlights of the third quarter (3Q) include:
- Medical device revenue increased $0.3 million, or 39 percent, compared to 3Q 2014. Engineering services revenue increased by $1 million, or 128 percent, compared to the three months ended September 30, 2014.
- Gross profit remained relatively unchanged compared to 3Q 2014. The decrease in gross profit and margins for the company’s medical devices was more than offset by improvements in gross profit and margins for its engineering services business.
- Sales and marketing expenses increased $0.7 million, or 45 percent, compared to 3Q 2014, due to an increase in sales and marketing personnel and related resources, the greatest of which is a $0.3 million increase in compensation-related costs. Research and development expenses increased $0.6 million, or 56 percent, compared to 3Q 2014, primarily due to a $0.5 million increase in compensation-related expenses as a result of increases in headcount and $0.1 million in development of the company’s industrial business. General and administrative expenses were relatively unchanged as compared to 3Q 2014.
- Total other income (expenses), net decreased $15.8 million, compared to 3Q 2014. The decrease was primarily attributable to a non-cash benefit in the 2014 period relating to outstanding warrants, with no comparable amount in the 2015 period. Due to the price-based anti-dilution provision in the warrants, the company was required to classify the warrants as a liability and to adjust their fair value to market at each measurement period. In November 2014, the holders of a majority of the warrants approved an amendment to remove the price-based anti-dilution provisions in the warrants. As a result, the warrants are no longer recorded as a liability effective November 2014 because they met the criteria for equity treatment.
- The net loss for 3Q 2015 was $5.2 million, compared to net income of $12 million for the same period of 2014. The net income in the 2014 period was primarily due to a non-cash gain of $15.8 million related to warrant liabilities.
Nine-month financial highlights are as follows:
- Medical device revenue increased $1.1 million, or 56 percent, and engineering services revenue increased by $1.7 million, or 95 percent, both compared to the same period last year.
- Gross profit increased $0.4 million, or 37 percent, compared to the same period last year. The decrease in gross profit and margins for the company’s medical devices was more than offset by improvements in gross profit and margins for its engineering services. The improvement in this segment was driven primarily by a better balance of higher margin projects compared to the prior year.
- Sales and marketing expenses increased $1.7 million, or 34 percent, compared to the same period last year, due to an increase in sales and marketing personnel and regulatory and public relations expenses, the greatest of which is an increase of $0.7 million in compensation related costs. Research and development expenses increased $1.9 million, or 73 percent, compared to the same period last year, primarily due to a $1.5 million increase in compensation-related expenses as a result of increases in headcount to support the company’s increase in government projects and $0.3 million in expenses related to the development of its industrial business. General and administrative expenses were relatively unchanged as compared to the nine months ended September 30, 2014.
- Total other expense for the same period last year reflected a $1.6 million decrease compared to the same period last year, primarily due to a $1.2 million non-cash charge in the 2014 period relating to outstanding warrants, with no comparable amount in the 2015 period. The $1.2 million of prior year warrant liability charges was attributable to warrants issued in the private placement offering in the first quarter of 2014. Interest expense decreased by $0.4 million during the same period last year, compared to the prior year periods due to the repayment of outstanding debt in January 2014.
- The net loss for the nine months period ended September 30 was $14.9 million, compared to a net loss of $13.6 million for the same period of 2014. The net loss in the 2014 period included a $1.2 million non-cash warrant liability-related charge.
- Since the company’s inception, it has incurred recurring net losses and negative cash flows from operations. Net losses of $33.8 million were incurred for the year ended December 31, 2014, and $14.9 million for the nine months ended September 30, 2015. In addition, operating activities used $15 million for the year ended December 31, 2014, and $13.1 million for the nine months ended September 30, 2015.
