Form 8-K
0000898437 False 0000898437 2021-11-04 2021-11-04 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

_________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  November 4, 2021

_______________________________

Anika Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

_______________________________

Delaware001-1402704-3145961
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

32 Wiggins Avenue

Bedford, Massachusetts 01730

(Address of Principal Executive Offices) (Zip Code)

(781) 457-9000

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareANIKNASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 
 
Item 2.02. Results of Operations and Financial Condition.

The following information, including the exhibit attached hereto, is intended to be furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.

On November 4, 2021, Anika Therapeutics, Inc. issued a press release announcing its financial results for the third quarter and nine months ended September 30, 2021. The full text of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number Description
   
99.1 Press Release of Anika Therapeutics, Inc. dated November 4, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 Anika Therapeutics, Inc.
   
  
Date: November 4, 2021By: /s/ CHERYL R. BLANCHARD        
  CHERYL R. BLANCHARD
  President and Chief Executive Officer
  

 

EdgarFiling

EXHIBIT 99.1

Anika Reports Third Quarter 2021 Financial Results

Revenue growth of 25% year-over-year
Company revises revenue growth outlook for 2021 to 9-11% on COVID Delta headwinds

BEDFORD, Mass., Nov. 04, 2021 (GLOBE NEWSWIRE) -- Anika Therapeutics, Inc. (NASDAQ: ANIK), a global joint preservation company in early intervention orthopedics, today reported financial results for its third quarter ended September 30, 2021.

Third Quarter 2021 Financial Summary

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

Recent Operational Highlights

“We continue to make progress in our transformational strategy as Anika establishes itself in the joint preservation and restoration markets,” Cheryl R. Blanchard, Ph.D., Anika’s President and CEO, commented. “We are pleased with our third quarter results despite the continued headwinds and ongoing unpredictability due to COVID, and more recently the Delta variant. We are seeing the demand for our products in the ambulatory surgical center as a significant opportunity as we continue to invest in expanding our product portfolio for minimally invasive joint preservation treatments. We remain laser focused on our long-term strategy to double our revenues by 2024, off our 2019 base despite near term COVID challenges.”

Fiscal 2021 Outlook

The Company expects its overall revenue for fiscal year 2021 to grow 9-11% year-over year, compared with previous guidance of 11-14%, primarily due to the increased impact of COVID. This annual revenue growth is driven by Joint Preservation and Restoration growth in the upper-teens percent range with mid-single digit growth in Joint Pain Management. Other revenue is expected to grow mid-single digits for the year.

There remains continued uncertainty in the global market associated with the impact of the COVID pandemic, and the Company’s outlook for fiscal 2021 is subject to changing dynamics associated with COVID including additional variants, vaccine distribution, and other related developments.

Conference Call Information

Anika’s management will hold a conference call and webcast to discuss its financial results and business highlights today, Thursday, November 4, 2021 at 5:00 pm ET. The conference call can be accessed by dialing 1-866-437-2398 (toll-free domestic) or 1-856-344-9206 (international) and providing the conference ID number 8047540. 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. The Company presents these non-GAAP financial measures because it uses them as supplemental measures in internally assessing the Company’s operating performance, and, in the case of Adjusted EBITDA, it is set as a key performance metric to determine executive compensation. The Company also recognizes that these non-GAAP measures are commonly used in determining business performance more broadly and believes that they are helpful to investors, securities analysts, and other interested parties as a measure of comparative operating performance from period to period.

Adjusted Gross Margin

In Q3 2021, adjusted gross margin is defined by the Company as adjusted gross profit divided by total revenue. The Company defines adjusted gross profit as GAAP gross profit excluding amortization of certain acquired assets, the impact of inventory fair-value step up associated with our recent acquisitions and non-cash product rationalization charges.

Adjusted EBITDA

In Q3 2021, 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 expenses, 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, and non-cash product rationalization charges.

Adjusted Net Income and Adjusted EPS

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, and the non-cash product rationalization charges. 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 of 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, and non-cash product rationalization charges. Again, the Company is also specifically excluding the impacts of goodwill impairment charges and changes in the fair value of contingent consideration associated with recent acquisition transactions, each on a tax effected basis if applicable.

A reconciliation of adjusted gross profit to gross profit (and the associated adjusted gross margin calculation), 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.

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 two sentences of the quotation from Dr. Blanchard, and in the section captioned “Fiscal 2021 Outlook” related to potential future revenues and the impacts of COVID. 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.

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.  

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

 

         
Anika Therapeutics, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
         
  For the Three Months Ended September 30, For the Nine Months Ended September 30,
   2021   2020   2021   2020 
Revenue $39,536  $31,694  $111,973  $97,769 
Cost of Revenue  16,513   14,351   47,164   45,487 
Gross Profit  23,023   17,343   64,809   52,282 
         
Operating expenses:        
Research and development  7,673   5,217   21,327   15,799 
Selling, general and administrative  17,500   15,903   53,664   44,884 
Goodwill impairment  -   -   -   18,144 
Change in fair value of contingent consideration  (3,450)  4,150   (21,920)  (16,176)
Total operating expenses  21,723   25,270   53,071   62,651 
Income (loss) from operations  1,300   (7,927)  11,738   (10,369)
Interest and other expense, net  (48)  (228)  (141)  (118)
Income (loss) before income taxes  1,252   (8,155)  11,597   (10,487)
Income taxes  694   (1,744)  1,670   (2,161)
Net income (loss) $558  $(6,411) $9,927  $(8,326)
         
Net income (loss) per share:        
  Basic $0.04  $(0.45) $0.69  $(0.59)
  Diluted $0.04  $(0.45) $0.68  $(0.59)
         
Weighted average common shares outstanding:        
  Basic  14,429   14,205   14,389   14,202 
  Diluted  14,647   14,205   14,588   14,202 


    
Anika Therapeutics, Inc. and Subsidiaries
Consolidated Balance Sheets
(in thousands, except per share data)
(unaudited)
    
 September 30, December 31,
ASSETS 2021   2020 
Current assets:   
Cash, cash equivalents and investments$90,976  $98,318 
Accounts receivable, net 32,352   24,102 
Inventories, net 35,019   46,209 
Prepaid expenses and other current assets 7,433   8,754 
Total current assets 165,780   177,383 
Property and equipment, net 49,111   50,613 
Right-of-use assets 21,397   22,619 
Other long-term assets 23,671   15,420 
Intangible assets, net 85,021   91,157 
Goodwill 7,950   8,413 
Total assets$352,930  $365,605 
    - 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Accounts payable$7,942  $8,984 
Accrued expenses and other current liabilities 17,339   14,793 
Contingent consideration 3,490   13,090 
Total current liabilities 28,771   36,867 
Other long-term liabilities 1,489   1,244 
Contingent consideration -   22,320 
Deferred tax liability 12,972   11,895 
Lease liabilities 19,638   20,879 
    
Stockholders’ equity:   
Common stock, $0.01 par value 144   143 
Additional paid-in-capital 63,864   55,355 
Accumulated other comprehensive loss (5,319)  (4,542)
Retained earnings 231,371   221,444 
Total stockholders’ equity 290,060   272,400 
Total liabilities and stockholders’ equity$352,930  $365,605 


 
Anika Therapeutics, Inc. and Subsidiaries
Reconciliation of GAAP Gross Profit to Adjusted Gross Profit
(per share data)
(unaudited)
       
       
  For the Three Months Ended September 30, For the Nine Months Ended September 30,
      in thousands  2021  2020   2021  2020 
Gross Profit $23,023 $17,343  $64,809 $52,282 
Product rationalization related charges  -  -   2,063  1,920 
Acquisition related intangible asset amortization  1,562  1,562   4,686  4,283 
Acquisition related inventory step up  1,458  3,273   6,244  7,396 
Adjusted Gross Profit $26,043 $22,178  $77,802 $65,881 
       
Adjusted Gross Margin  66% 70%  69% 67%
       
       
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 September 30, For the Nine Months Ended September 30,
      in thousands, except per share data  2021  2020   2021  2020 
Net income (loss) $558 $(6,411) $9,927 $(8,326)
Interest and other expense, net  48  228   141  118 
Provision (benefit) for income taxes  694  (1,744)  1,670  (2,161)
Depreciation and amortization  1,789  1,718   5,226  5,132 
Share-based compensation  2,863  1,920   7,919  3,953 
Product rationalization  -  -   2,063  2,892 
Acquisition related expenses  -  -   -  4,157 
Acquisition related intangible asset amortization  1,787  1,760   5,361  4,831 
Acquisition related inventory step up  1,458  3,273   6,244  7,396 
Goodwill impairment  -  -   -  18,144 
Change in fair value of contingent consideration  (3,450) 4,150   (21,920) (16,176)
Adjusted EBITDA $5,747 $4,894  $16,631 $19,960 
       
       
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 September 30, For the Nine Months Ended September 30,
      in thousands, except per share data  2021  2020   2021  2020 
Net income (loss) $558 $(6,411) $9,927 $(8,326)
Product rationalization, tax effected  -  -   1,590  2,377 
Acquisition related expenses, tax effected  -  -   -  3,174 
Acquisition related intangible asset amortization, tax effected  1,146  1,340   3,898  3,688 
Acquisition related inventory step up, tax effected  935  2,492   4,626  5,646 
Goodwill impairment, tax effected  -  -   -  15,773 
Change in fair value of contingent consideration, tax effected  (1,865) 3,336   (17,152) (13,873)
Adjusted net income $774 $757  $2,889 $8,459 
       
 
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 September 30, For the Nine Months Ended September 30,
      in thousands, except per share data  2021  2020   2021  2020 
Diluted earnings (loss) per share (EPS) $0.04 $(0.45) $0.68 $(0.59)
Product rationalization, tax effected  -  -   0.11  0.17 
Acquisition related expenses per share, tax effected  -  -   -  0.22 
Acquisition related intangible asset amortization, tax effected  0.08  0.09   0.27  0.26 
Acquisition related inventory step up, tax effected  0.06  0.18   0.32  0.40 
Goodwill impairment, tax effected  -  -   -  1.11 
Change in fair value of contingent consideration, tax effected  (0.13) 0.23   (1.18) (0.98)
Adjusted diluted EPS $0.05 $0.05  $0.20 $0.59 
         


Revenue by Product Family
(in thousands, except percentages)
(unaudited)
          
 For the Three Months Ended September 30, For the Nine Months Ended September 30,
in thousands 2021 % 2020 %  2021 % 2020 %
Joint Pain Management 26,153 66%$18,439 58%  69,790 62%$66,168 68%
Joint Preservation and Restoration 11,193 28% 11,715 37%  35,296 32% 26,233 27%
Other 2,190 6% 1,540 5%  6,887 6% 5,368 5%
Revenue 39,536 100% 31,694 100%  111,973 100% 97,769 100%