Investor Relations

<< Back

Press Release

March 4, 2021 at 4:05 PM EST

Anika Reports Fourth Quarter and Year-End 2020 Financial Results

Completed Transformative Year with Q4 2020 Revenue Up 10% Year-Over-Year,
Full Year 2020 Revenue up 14%
Well Positioned for Growth in 2021

BEDFORD, Mass., March 04, 2021 (GLOBE NEWSWIRE) -- Anika Therapeutics, Inc. (NASDAQ: ANIK), a global joint preservation company that creates and delivers meaningful advancements in early intervention orthopedic care, today reported financial results for its fourth quarter and year-ended December 31, 2020.

Fourth Quarter 2020 Financial Summary

  • Revenue in the fourth quarter of 2020 increased 10% year-over-year to $32.7 million, compared to $29.8 million, due to Joint Preservation and Restoration revenue following the acquisitions of Parcus Medical, LLC and Arthrosurface, Inc., in the first quarter of 2020, offset by lower Joint Pain Management revenue as a result of the COVID environment.
  • Gross margin of 51% includes a 16-point negative impact from $5.2 million of acquisition-related expenses.
  • Net loss was $15.7 million, or $1.10 loss per share, compared to net income of $4.1 million, or $0.28 per diluted share, in the prior year. Net loss this quarter included a non-cash charge for goodwill impairment offset by a reduction in the value of contingent consideration, netting to a charge of $11.9 million, or $0.84 per diluted share. Adjusted net income1 for the quarter was $1.7 million, or $0.12 per diluted share, compared to $6.3 million, or $0.43 per diluted share, in the prior year.
  • Adjusted EBITDA1 for the quarter was $4.0 million, compared to $11.1 million for the prior year.
  • Operating cash flow during the quarter was $2.6 million. Cash, cash equivalents and investments totaled $98.3 million, compared to $124.8 million as of September 30, 2020. Anika repaid the remaining $25.0 million outstanding under its credit facility in the fourth quarter of 2020.

Fiscal Year 2020 Financial Summary

  • Revenue for 2020 increased 14% to $130.5 million compared with $114.6 million, due to Joint Preservation and Restoration revenue following the acquisitions of Parcus Medical and Arthrosurface in the first quarter of 2020, partly offset by lower Joint Pain Management revenue as a result of the COVID environment.
  • Gross margin of 53% includes a 13-point negative impact from $16.9 million of acquisition-related expenses.
  • Net loss of $24.0 million, or $1.69 loss per share, compared to net income of $27.2 million, or $1.89 per diluted share, in the prior year. Net loss in 2020 included a non-cash charge for goodwill impairment offset by a reduction in the value of contingent consideration, netting to a charge of $13.8 million, or $0.97 per diluted share. Adjusted net income1 for the year was $10.1 million, or $0.71 per diluted share, compared to $29.4 million, or $2.05 per diluted share.
  • Adjusted EBITDA1 was $23.9 million, compared to $49.2 million for the prior year.
  • Full year operating cash flow was $13.1 million.

1 See description of non-GAAP financial information contained in this release.

“I am very proud of the Anika team and their accomplishments this year given the extraordinarily challenging market and the complicated work environment associated with the COVID pandemic,” said Cheryl R. Blanchard, Ph.D., Anika’s President and CEO. “We successfully ended the year with double-digit revenue growth and positive operating cash flow, despite the COVID-related slowdown in elective procedures that impacted our global business. 2020 was a transformative year for Anika as we integrated our two acquisitions, Parcus Medical and Arthrosurface, and thereby accelerated diversification of our portfolio and business, leveraging our strength in osteoarthritis pain management as we expand in the higher growth orthopedic spaces of regenerative solutions, soft tissue repair and bone preserving joint technologies. Within this greater than $8 billion global market opportunity, we remain focused on our stated 2024 targets of doubling revenues, expanding profitability, and creating tremendous value for our customers, their patients, and our shareholders.”

2020 Business Highlights

  • Successfully navigated the business through the COVID-19 pandemic with no significant disruptions delivering quality products and support for our customers and their patients
  • Completed transformative acquisitions of Parcus Medical and Arthrosurface, diversifying our portfolio and expanding our market opportunity into the >$8 billion joint preservation market.
  • Strengthened the senior leadership team and board of directors with nine new additions
  • Completed the integration of the U.S. and international commercial organizations which includes a large network of dedicated distributors
  • Launched seven new joint preservation products; received 510(k) clearance for our WristMotion Total Arthroplasty System, which preserves as much natural motion as possible and could help patients avoid joint fusion
  • Initiated enrollment in our pilot clinical study for Cingal in the US (our next-generation combination viscosupplement) and resumed enrollment in our clinical trial for Hyalofast for approval in the US (our hyaluronic acid based cartilage regeneration solution); we continue to sell both Cingal and Hyalofast in over 30 countries outside the United States

Fiscal 2021 Outlook

Due to the continued uncertainty in the global market associated with the impact of the COVID-19 pandemic, the company is not providing detailed financial guidance for 2021 at this time.

Conference Call Information

Anika’s management will hold a conference call and webcast to discuss its financial results and business highlights today, Thursday, March 4th at 5:00 pm ET. The conference call can be accessed by dialing 1-855-327-6837 (toll-free domestic) or 1-631-891-4304 (international) and providing the conference ID number 10012940. A live audio webcast will be available in the "Investor Relations" section of Anika’s website, www.anika.com. A slide presentation with highlights from the conference call will be available in the Investor Relations section of the Anika website. A replay of the webcast will be available on Anika’s website approximately two hours after the completion of the event.

Non-GAAP Financial Information

Non-GAAP financial measures should be considered supplemental to, and not a substitute for, the Company’s reported financial results prepared in accordance with GAAP. Furthermore, the Company’s definition of non-GAAP measures may differ from similarly titled measures used by others. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, Anika strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety.

Adjusted EBITDA

Anika presents adjusted EBITDA because management uses it as a supplemental measure in assessing the Company’s operating performance, and the Company believes that it is helpful to investors, securities analysts and other interested parties as a measure of comparative operating performance from period to period. The Company recognizes adjusted EBITDA as a commonly used measure in determining business value and as such, uses it internally to report results. It is also one of the performance metrics that determines management incentive compensation.

In 2020, adjusted EBITDA is defined by the Company as GAAP net income excluding depreciation and amortization, interest and other income (expense), income taxes, stock-based compensation expense, acquisition related costs, non-cash charges related to goodwill impairment and changes in the fair value of contingent consideration associated with the Company’s recent acquisitions as a result of the COVID pandemic, in-process research and development (IPR&D) write-offs, and product rationalization charges associated with certain non-core legacy products.

Adjusted Net Income and Adjusted EPS

In addition to adjusted EBITDA, the Company is reporting its fourth quarter 2020 results with respect to adjusted net income (net loss) and adjusted diluted Earnings (loss) per Share (EPS) with respect to adjusted net income. The Company believes that adjusted net income and adjusted diluted EPS also provide additional useful information for investors as they assess the Company’s operating performance, as they are measures that the Company evaluates regularly when assessing its own performance. Adjusted net income and adjusted diluted EPS are not calculated identically by all companies, and therefore the Company’s measurements of adjusted net income and adjusted diluted EPS may not be comparable to similarly titled measures reported by other companies. Adjusted net income is defined by the Company as GAAP net income excluding acquisition related expenses, inclusive of the impact of purchase accounting, on a tax effected basis, as well as certain IPR&D write-offs and the non-cash product rationalization charges associated with certain non-core legacy products. In the context of adjusted net income, the impact of purchase accounting includes amortization of inventory step up and intangible assets recorded as part of purchase accounting for acquisition transactions. The amortized assets contribute to revenue generation, and the amortization of such assets will recur in future periods until such assets are fully amortized. These assets include the estimated fair value of certain identified assets acquired in acquisitions in 2020 and beyond, including in-process research and development, developed technology, customer relationships and acquired tradenames. As a result of COVID, the Company is also specifically excluding the impacts of goodwill impairment charges and changes in the fair value in contingent consideration associated with the acquisition transactions, each on a tax effected basis. Adjusted diluted EPS is defined by the Company as GAAP diluted EPS excluding acquisition related expenses and the impact of purchase accounting, each on a tax-adjusted per share basis, as well as certain IPR&D write-offs and the non-cash product rationalization charges associated with certain non-core legacy products. Again, the Company is also specifically excluding the impacts of goodwill impairment charges and changes in the fair value in contingent consideration associated with the acquisition transactions, each on a tax effected basis if applicable. The Company is reporting this financial measure to the Board of Directors in order to facilitate an appropriate assessment of the Company’s performance and the impact of the COVID pandemic.

A reconciliation of adjusted EBITDA to net income, adjusted net income to net income and adjusted diluted EPS to diluted EPS, the most directly comparable financial measures calculated and presented in accordance with GAAP, is shown in the tables at the end of this release.

About Anika
Anika Therapeutics, Inc. (NASDAQ: ANIK), is a global joint preservation company that creates and delivers meaningful advancements in early intervention orthopedic care. We partner with clinicians to understand what they need most to treat their patients and we develop minimally invasive products that restore active living for people around the world. We are committed to leading in high opportunity spaces within orthopedics, including osteoarthritis pain management, regenerative solutions, soft tissue repair and bone preserving joint technologies. Anika is headquartered in Massachusetts with operations in the United States and Europe. For more information about Anika, please visit www.anika.com.

Forward-Looking Statements

This press release may contain forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, concerning the Company's expectations, anticipations, intentions, beliefs or strategies regarding the future which are not statements of historical fact, including those statements in the last sentence of the paragraph following the section captioned “Fiscal Year 2020 Financial Summary” related to potential future revenues and profitability. These statements are based upon the current beliefs and expectations of the Company's management and are subject to significant risks, uncertainties, and other factors. The Company's actual results could differ materially from any anticipated future results, performance, or achievements described in the forward-looking statements as a result of a number of factors including, but not limited to, (i) the Company's ability to successfully commence and/or complete clinical trials of its products on a timely basis or at all; (ii) the Company's ability to obtain pre-clinical or clinical data to support domestic and international pre-market approval applications, 510(k) applications, or new drug applications, or to timely file and receive FDA or other regulatory approvals or clearances of its products; (iii) that such approvals will not be obtained in a timely manner or without the need for additional clinical trials, other testing or regulatory submissions, as applicable; (iv) the Company's research and product development efforts and their relative success, including whether we have any meaningful sales of any new products resulting from such efforts; (v) the cost effectiveness and efficiency of the Company's clinical studies, manufacturing operations, and production planning; (vi) the strength of the economies in which the Company operates or will be operating, as well as the political stability of any of those geographic areas; (vii) future determinations by the Company to allocate resources to products and in directions not presently contemplated; (viii) the Company's ability to successfully commercialize its products, in the U.S. and abroad; (ix) the Company's ability to provide an adequate and timely supply of its products to its customers; and (x) the Company's ability to achieve its growth targets. Additional factors and risks are described in the Company's periodic reports filed with the Securities and Exchange Commission, and they are available on the SEC's website at www.sec.gov. Forward-looking statements are made based on information available to the Company on the date of this press release, and the Company assumes no obligation to update the information contained in this press release.


Anika Therapeutics, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
                 
    For the Three Months Ended December 31,   For the Year Ended December 31,
      2020       2019     2020       2019
Product revenue   $ 32,688     $ 29,767   $ 130,457     $ 114,512
Licensing, milestone and contract revenue     -       5     -       98
Total revenue     32,688       29,772     130,457       114,610
Cost of revenue     15,943       8,649     61,431       28,747
Gross Profit     16,745       21,123     69,026       85,863
                 
Operating expenses:                
Research and development     7,632       4,084     23,431       16,665
Selling, general and administrative     15,179       12,237     60,063       34,950
Goodwill impairment charge     24,376       -     42,520       -
Change in fair value of contingent consideration     (12,490 )     -     (28,666 )     -
Total operating expenses     34,697       16,321     97,348       51,615
Income (loss) from operations     (17,952 )     4,802     (28,322 )     34,248
Interest and other income (expense), net     (185 )     360     (302 )     1,873
Income (loss) before income taxes     (18,137 )     5,162     (28,624 )     36,121
Provision (benefit) for Income taxes     (2,480 )     1,111     (4,642 )     8,928
Net income (loss)   $ (15,657 )   $ 4,051   $ (23,982 )   $ 27,193
                 
Net income (loss) per share:                
Basic   $ (1.10 )   $ 0.28   $ (1.69 )   $ 1.93
Diluted   $ (1.10 )   $ 0.28   $ (1.69 )   $ 1.89
                 
Weighted average common shares outstanding:                
Basic     14,275       14,280     14,222       14,121
Diluted     14,275       14,621     14,222       14,374
                 


       
Anika Therapeutics, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
       
  December 31,   December 31,
ASSETS   2020       2019  
Current assets:      
Cash, cash equivalents and investments $ 98,318     $ 184,943  
Accounts receivable, net   24,102       23,079  
Inventories, net   46,209       21,995  
Prepaid expenses and other current assets   8,754       4,289  
Total current assets   177,383       234,306  
Property and equipment, net   50,613       50,783  
Right-of-use assets   22,619       22,864  
Other long-term assets   15,420       7,478  
Intangible assets, net   91,157       7,585  
Goodwill   8,413       7,694  
Total assets $ 365,605     $ 330,710  
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current liabilities:      
Accounts payable $ 8,984     $ 3,832  
Accrued expenses and other current liabilities   14,793       12,445  
Contingent consideration   13,090       -  
Total current liabilities   36,867       16,277  
Other long-term liabilities   1,244       357  
Contingent consideration   22,320       -  
Deferred tax liability   11,895       4,331  
Lease liabilities   20,879       21,367  
Stockholders' equity:      
Common stock, $0.01 par value   143       143  
Additional paid-in-capital   55,355       48,707  
Accumulated other comprehensive loss   (4,542 )     (5,898 )
Retained earnings   221,444       245,426  
Total stockholders' equity   272,400       288,378  
Total liabilities and stockholders' equity $ 365,605     $ 330,710  
       


Anika Therapeutics, Inc. and Subsidiaries
Reconciliation of GAAP Net Income to Adjusted EBITDA
(in thousands, except per share data)
(unaudited)
                 
    For the Three Months Ended December 31,   For the Year Ended December 31,
      in thousands, except per share data     2020       2019       2020       2019  
Net income (loss)   $ (15,657 )   $ 4,051     $ (23,982 )   $ 27,193  
Interest and other expense (income), net     185       (360 )     302       (1,873 )
(Benefit) provision for income taxes     (2,480 )     1,111       (4,642 )     8,928  
Depreciation and amortization     1,714       1,532       6,844       5,991  
Stock-based compensation     1,433       1,947       5,386       6,087  
Product rationalization related charges     -       -       2,892       -  
IPR&D impairment     1,414           1,414       -  
Acquisition related expenses     -       2,859       4,168       2,859  
Acquisition related intangible asset amortization     1,789           6,620      
Acquisition related inventory step up     3,697           11,082      
Goodwill impairment charge     24,376       -       42,520       -  
Change in fair value of contingent consideration (benefit)     (12,490 )     -       (28,666 )     -  
Adjusted EBITDA   $ 3,981     $ 11,140     $ 23,938     $ 49,185  
                 
                 
Anika Therapeutics, Inc. and Subsidiaries
Reconciliation of GAAP Net Income to Adjusted Net Income
(in thousands, except per share data)
(unaudited)
                 
    For the Three Months Ended December 31,   For the Year Ended December 31,
      in thousands, except per share data     2020       2019       2020       2019  
Net income (loss)   $ (15,657 )   $ 4,051     $ (23,982 )   $ 27,193  
Product rationalization related charges, tax effected     -       -       2,376       -  
IPR&D impairment, tax effected     1,414           1,414      
Acquisition related expenses, tax effected     -       2,256       3,146       2,256  
Acquisition related intangible asset amortization, tax effected     1,304           4,997      
Acquisition related inventory step up     2,696           8,365      
Goodwill impairment, tax effected     21,929       -       37,702       -  
Change in fair value of contingent consideration, tax effected (benefit)     (9,999 )     -       (23,872 )     -  
Adjusted net income   $ 1,687     $ 6,307     $ 10,146     $ 29,449  
                 
                 
Anika Therapeutics, Inc. and Subsidiaries
Reconciliation of GAAP Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share
(per share data)
(unaudited)
                 
    For the Three Months Ended December 31,   For the Year Ended December 31,
      in thousands, except per share data     2020       2019       2020       2019  
Diluted earnings (loss) per share (EPS)   $ (1.10 )   $ 0.28     $ (1.69 )   $ 1.89  
Product rationalization related charges, tax effected     -       -       0.17       -  
IPR&D impairment, tax effected     0.10           0.10      
Acquisition related expenses per share, tax effected     -       0.15       0.22       0.16  
Acquisition related intangible asset amortization, tax effected     0.09           0.35      
Acquisition related inventory step up     0.19           0.59      
Goodwill impairment, tax effected     1.54       -       2.65       -  
Change in fair value of contingent consideration, tax effected (benefit)     (0.70 )     -       (1.68 )     -  
Adjusted diluted EPS   $ 0.12     $ 0.43     $ 0.71     $ 2.05  
                 


Anika Therapeutics, Inc. and Subsidiaries
Supplemental Financial Data
                       
 
Revenue by Product Family and Gross Margin
(in thousands, except percentages)
(unaudited)
                       
  For the Three Months Ended December 31,   For the Year Ended December 31,
    2020   %     2019   %     2020   %     2019   %
Joint Pain Management $ 16,861   52 %   $ 26,403   89 %   $ 83,029   64 %   $ 103,466   90 %
Joint Preservation and Restoration   13,135   40 %     560   2 %     39,368   30 %     2,070   2 %
Other   2,692   8 %     2,804   9 %     8,060   6 %     8,976   8 %
Product Revenue   32,688   100 %     29,767   100 %     130,457   100 %     114,512   100 %
                       
Licensing, milestone and contract revenue   -   -       5   0 %     -   -       98   0 %
Total Revenue $ 32,688   100 %   $ 29,772   100 %   $ 130,457   100 %   $ 114,610   100 %
                       
Gross Profit $ 16,745       $ 21,123       $ 69,026       $ 85,863    
Gross Margin   51%         71%         53%         75%    

 

For Investor Inquiries:
Anika Therapeutics, Inc.
Mark Namaroff, 781-457-9287
Executive Director, Investor Relations and Corporate Communications
mnamaroff@anika.com 


Primary Logo

Source: Anika Therapeutics Inc.