Ekso Bionics Holdings, Richmond, California, reported financial results for the fourth quarter (4Q) and full-year (FY) ended December 31, 2016.
The 4Q 2016 results are as follows:
- Device and related revenue was $2.3 million. This amount includes $1.5 million for medical device sales during the period, $0.2 million of medical device service revenue, and $0.6 million for industrial sales. This compares to device and related revenue of $1.1 million for 4Q 2015. This amount includes $0.9 million derived from current and prior year sales that was amortized on a straight-line basis during the period and $0.2 million of medical device service revenue.
- Engineering service revenue was $0.3 million for 4Q 2016 compared to $0.8 million for 4Q 2015. This result reflects the company’s decision earlier in the year to shift engineering resources away from billable engineering services and to internal development efforts.
- Gross profit for 4Q 2016 of $0.8 million was primarily derived from device and related revenue. This amount includes a gross profit of $0.5 million from medical device sales and service and gross profit of $0.2 million from industrial sales. This compares to a gross loss of $0.2 million for 4Q 2015.
- Sales and marketing expenses increased $0.3 million, or 14 percent, for 4Q 2016 compared to 4Q 2015, primarily due to increased costs associated with sales and marketing efforts related to industrial products.
- Research and development expenses increased $0.3 million, or 12 percent, for 4Q 2016 compared to 4Q 2015 due to the shift of resources away from billable engineering services, which were recognized as a cost of engineering services revenue, to internal development efforts for next-generation home mobility and industrial products.
- General and administrative expenses increased $0.7 million, or 35 percent, for 4Q 2016 compared to 4Q 2015, primarily due to an increase of $0.3 million in employee compensation expenses, an increase of $0.3 million related to a decrease in absorption of operating direct and indirect costs into inventory, and a $0.1 million increase in depreciation and amortization primarily related to acquiring assets from Equipois, Manchester, New Hampshire, in December 2015.
The FY 2016 financial results are as follows:
- Device and related revenue was $13.3 million. Contributing to this revenue was $6.5 million of previously deferred revenue that was recognized as a result of a change of an accounting estimate related to revenue recognition. Revenue also includes $4.7 million of revenue derived from medical device sales during the period, $0.9 million of medical device service revenues, and $1.2 million of industrial sales revenue. For FY2015, device and related revenue was $4.3 million. This amount includes $3.6 million derived from current and prior year sales that was amortized on a straight-line basis during the period and $0.7 million of medical device service revenue.
- In conjunction with the aforementioned shift in focus of engineering efforts, engineering services revenue was $0.9 million for FY 2016 compared to $4.4 million in the prior year.
- Gross profit for FY 2016 was $2.9 million, of which $2.6 million was attributable to device and related revenue. Medical device gross profit was $2.3 million, industrial gross profit was $0.3 million and engineering services gross profit was $0.3 million. The medical gross profit includes $1.2 million related to the change in accounting estimate. Gross profit for FY 2015 was $1.2 million. This amount includes $0.3 million related to medical device sales and $0.9 million for engineering services.
- Sales and marketing expenses increased $1.7 million, or 19 percent, during FY 2016 compared to FY 2015. The increase includes $1 million related to Ekso’s industrial business. The increase also includes $0.7 million related to the company’s medical device business, which was primarily driven by using consultants for clinical studies, reimbursement and marketing.
- Research and development expenses increased $2.4 million, or 37 percent, during FY 2016 compared to FY 2015. The increase includes $1.2 million related to the company industrial business, which was primarily driven by a reallocation and increase in headcount. This increase also includes $1.2 million related to the shift of resources from engineering services to internal development efforts.
- General and administrative expenses increased $3.9 million, or 55 percent, during FY 2016 compared to FY 2015. The increase was primarily driven by an increase of $2.4 million in employee compensation expense, which included a noncash stock-based compensation expense increase of $1.1 million, a one-time severance expense of $0.3 million and an increase in regulatory compliance personnel of $0.3 million. Stock-based compensation expense included a one-time $0.8 million noncash charge related to the modification of stock options previously granted to the company’s former CEO. Depreciation and amortization expenses in general and administrative expenses increased $0.6 million, primarily related to acquiring assets from Equipois. A decrease in absorption of direct and indirect operating costs in inventory in 2016 as compared to 2015 also contributed $0.6 million to the increase in general and administrative expenses.
Net loss applicable to common shareholders in 4Q 2016 was $5.6 million, or a basic net loss of $0.29 per common share. For FY 2016, net loss was $33.8 million, or a basic net loss of $1.87 per common share. Net loss applicable to common shareholders for FY 2016 included a noncash preferred deemed dividend of $10.3 million, partially offset by a noncash gain of $4.3 million on the revaluation of a warrant liability. Both noncash items were associated with the equity financing in December 2015.
Cash on hand on December 31, 2016, was $16.8 million, compared to $19.6 million on December 31, 2015. For FY 2016, the company used $25 million of cash in operations, compared to $18.3 million for FY 2015. The increase in cash used was driven by general increases in operating expenses such as selling, marketing, and research and development. The increase also includes a one-time increase in inventory, as well as some investment in certain inventory.
