-- Grew product revenues 41% year-over-year. Revenue generating units
increased by 48 to a cumulative total of 149 and nearly 1,400
consumables were shipped during 2010;
-- Reported improved heart function in two cardiovascular disease clinical
trials and initiated our European pivotal heart attack trial. Cytori is
seeking EU approval for use in no-option chronic myocardial ischemia
patients;
-- Achieved European approval of the Celution System in breast
reconstruction, reported 12 month data from our RESTORE-2 trial and
successfully launched PureGraft™ into the U.S. and European plastic
and reconstructive surgery markets;
-- Made progress towards getting into the U.S. market with multiple
submissions underway for FDA approval or clearance of Celution® as
part of a comprehensive US regulatory strategy intended to achieve
market entry; and
-- Strengthened our cash and cash equivalents balance with $52.7 million
at the end of 2010 compared with $12.9 million at the end of 2009. Part
of this increase resulted from a $10 million equity investment from
Astellas Pharma, including certain negotiating rights to a potential
liver disease partnership.
Product revenues were $8.3 million for 2010, compared to $5.8 million for
2009, which includes $2.4 million in fourth quarter 2010 product sales.
Gross profit improved to $4.3 million for 2010 compared to $2.4 million in
2009, including $1.2 million in gross profit in the fourth quarter 2010.
Product revenue growth is attributable mostly to increased sales of systems
to private pay plastic surgery clinics, academic centers performing
independent investigator-initiated studies and the sale of two
StemSource® Cell Banks. Toward the end of the year, Cytori also started
to see increased impact from PureGraft™ sales for body contouring
procedures.
Cytori ended the year with 149 revenue generating units compared to 101 at
the start of year, with 1,392 consumables shipped in 2010 compared to 1,205
shipped in 2009. This includes a record 437 consumables shipped during the
fourth quarter of 2010, of which 350 were re-orders. The percentage of
re-orders increased in 2010 to 77% compared to 64% for 2009, a positive
trend reflecting the recurring revenue opportunity once a system is
installed. Separately, 1,847 PureGraft consumables were shipped in 2010, a
sign that Cytori is penetrating the growing fat grafting market in the
United States and abroad.
Net cash used in operations was $23.6 million in 2010 compared to $23.8
million in 2009, including $4.8 million in the fourth quarter of 2010.
During the year, there was a decrease in research and development expenses
related to clinical trial costs, offset with, among other items, an
increase in SG&A, as we expanded our sales efforts worldwide.
Outlook
"Our key initiatives for 2011 will be to drive enrollment in the ADVANCE
heart attack trial, seek approval for no option chronic myocardial ischemia
patients in Europe, execute our U.S. regulatory and development strategy,
and grow the commercial business," said Christopher J. Calhoun, chief
executive officer of Cytori. "The pieces are coming together for
accelerating revenue growth, with expanded indications, longer-term data,
and pursuit of country level payment in key geographies. We anticipate the
impact from recent RESTORE-2 data to have a greater effect on revenue
growth toward the latter half of the year."
About Cytori
Cytori is a leader in providing patients and physicians around the world
with medical technologies that harness the potential of adult regenerative
cells from adipose tissue. The Celution® System family of medical devices
and instruments is being sold into the European and Asian cosmetic and
reconstructive surgery markets but is not yet available in the United
States. Our StemSource® product line is sold globally for cell banking
and research applications. Our PureGraft™ products are available in
North America and Europe for fat grafting procedures. www.cytori.com
Cautionary Statement Regarding Forward-Looking Statements
This press release includes forward-looking statements regarding events,
trends and business prospects, which may affect our future operating
results and financial position. Such statements, including, but not limited
to, those regarding our belief in the recurring revenue opportunities for
sales of our consumable products, our ability to continue to penetrate the
fat grafting market with our PureGraft™ products, our ability to obtain
regulatory approval for our products both in the United States and abroad
and our ability to accelerate revenue growth, are all subject to risks and
uncertainties that could cause our actual results and financial position to
differ materially. Some of these risks and uncertainties include, but are
not limited to, risks related to our history of operating losses, the need
for further financing and our ability to access the necessary additional
capital for our business, the quality and effectiveness of our products,
the effectiveness of our regulatory and sales and marketing programs, the
acceptance of our clinical data, dependence on third party performance, as
well as other risks and uncertainties described under the "Risk Factors" in
Cytori's Securities and Exchange Commission Filings on Form 10-K and Form
10-Q. We assume no responsibility to update or revise any forward-looking
statements to reflect events, trends or circumstances after the date they
are made.
Consolidated Balance Sheets
As of December 31,
--------------------------
2010 2009
(Unaudited)
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 52,668,000 $ 12,854,000
Accounts receivable, net of reserves of
$306,000 and of $751,000 in 2010 and 2009,
respectively 2,073,000 1,631,000
Inventories, net 3,378,000 2,589,000
Other current assets 834,000 1,024,000
------------ ------------
Total current assets 58,953,000 18,098,000
Property and equipment, net 1,684,000 1,314,000
Restricted cash and cash equivalents 350,000 --
Investment in joint venture 459,000 280,000
Other assets 566,000 500,000
Intangibles, net 413,000 635,000
Goodwill 3,922,000 3,922,000
------------ ------------
Total assets $ 66,347,000 $ 24,749,000
============ ============
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses $ 6,770,000 $ 5,478,000
Current portion of long-term obligations 6,453,000 2,705,000
------------ ------------
Total current liabilities 13,223,000 8,183,000
Deferred revenues, related party 5,512,000 7,634,000
Deferred revenues 4,929,000 2,388,000
Warrant liability 4,987,000 6,272,000
Option liability 1,170,000 1,140,000
Long-term deferred rent 398,000 --
Long-term obligations, net of discount, less
current portion 13,255,000 2,790,000
------------ ------------
Total liabilities 43,474,000 28,407,000
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, $0.001 par value; 5,000,000
shares authorized; -0- shares issued and
outstanding in 2010 and 2009 -- --
Common stock, $0.001 par value; 95,000,000
shares authorized; 51,955,265 and
40,039,259 shares issued and 51,955,265 and
40,039,259 shares outstanding in 2010 and
2009, respectively 52,000 40,000
Additional paid-in capital 232,819,000 178,806,000
Accumulated deficit (209,998,000) (182,504,000)
Treasury stock, at cost -- --
------------ ------------
Total stockholders' equity (deficit) 22,873,000 (3,658,000)
------------ ------------
Total liabilities and stockholders' equity
(deficit) $ 66,347,000 $ 24,749,000
============ ============
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Three Months Ended For the Years Ended
December 31, December 31,
------------------------ ------------------------
2010 2009 2010 2009
(Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Product revenues
Related party $ 9,000 $ 9,000 $ 590,000 $ 591,000
Third party 2,369,000 1,253,000 7,664,000 5,246,000
----------- ----------- ----------- -----------
2,378,000 1,262,000 8,254,000 5,837,000
Cost of product
revenues 1,175,000 749,000 3,908,000 3,394,000
----------- ----------- ----------- -----------
Gross profit
(loss) 1,203,000 513,000 4,346,000 2,443,000
----------- ----------- ----------- -----------
Development revenues:
Development, related
party -- 1,590,000 2,122,000 8,840,000
Research grants and
other 158,000 26,000 251,000 53,000
----------- ----------- ----------- -----------
158,000 1,616,000 2,373,000 8,893,000
----------- ----------- ----------- -----------
Operating expenses:
Research and
development 2,661,000 3,226,000 9,687,000 12,231,000
Sales and marketing 3,684,000 2,213,000 11,040,000 6,583,000
General and
administrative 3,240,000 3,129,000 12,570,000 10,415,000
Change in fair value
of warrants 540,000 3,016,000 (1,285,000) 4,574,000
Change in fair value
of option
liabilities (150,000) (360,000) 30,000 (920,000)
----------- ----------- ----------- -----------
Total operating
expenses 9,975,000 11,224,000 32,042,000 32,883,000
----------- ----------- ----------- -----------
Operating loss (8,614,000) (9,095,000) (25,323,000) (21,547,000)
----------- ----------- ----------- -----------
Other income (expense):
Interest income 3,000 -- 9,000 20,000
Interest expense (763,000) (307,000) (2,052,000) (1,427,000)
Other income
(expense), net 174,000 (79,000) 23,000 (218,000)
Equity loss from
investment in joint
venture (53,000) (9,000) (151,000) (44,000)
----------- ----------- ----------- -----------
Total other income (639,000) (395,000) (2,171,000) (1,669,000)
----------- ----------- ----------- -----------
Net loss (9,253,000) (9,490,000) (27,494,000) (23,216,000)
=========== =========== =========== ===========
Basic and diluted net
loss per common share $ (0.18) $ (0.24) $ (0.60) $ (0.65)
=========== =========== =========== ===========
Basic and diluted
weighted average
common shares 50,207,187 39,043,024 45,947,966 35,939,260
=========== =========== =========== ===========
Consolidated Statement of Cash Flows
For the Years Ended
December 31,
----------------------------
2010 2009
(Unaudited)
------------- -------------
Cash flows from operating activities:
Net loss $ (27,494,000) $ (23,216,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 931,000 1,681,000
Amortization of deferred financing costs
and debt discount 703,000 709,000
Warranty provision (reversal) -- (23,000)
Increase (reduction) in allowance for
doubtful accounts 460,000 663,000
Change in fair value of warrants (1,285,000) 4,574,000
Change in fair value of option liability 30,000 (920,000)
Stock-based compensation 3,055,000 2,649,000
Equity loss from investment in joint
venture 151,000 44,000
Increases (decreases) in cash caused by
changes in operating assets and
liabilities:
Accounts receivable (902,000) (986,000)
Inventories (777,000) (446,000)
Other current assets 36,000 41,000
Other assets (110,000) 75,000
Accounts payable and accrued expenses 811,000 413,000
Deferred revenues, related party (2,122,000) (8,840,000)
Deferred revenues 2,541,000 (57,000)
Long-term deferred rent 398,000 (168,000)
------------- -------------
Net cash used in operating activities (23,574,000) (23,807,000)
------------- -------------
Cash flows from investing activities:
Proceeds from the sale and maturity of
short-term investments -- --
Purchases of short-term investments -- --
Purchases of property and equipment (610,000) (221,000)
Cash invested in restricted cash (350,000) --
Investment in joint venture (330,000) --
------------- -------------
Net cash used in investing activities (1,290,000) (221,000)
------------- -------------
Cash flows from financing activities:
Principal payments on long-term obligations (5,454,000) (2,053,000)
Proceeds from long-term obligations 20,000,000 --
Debt issuance costs and loan fees (559,000) --
Proceeds from exercise of employee stock
options and warrants 7,128,000 531,000
Proceeds from sale of common stock 45,486,000 23,196,000
Costs from sale of common stock (1,923,000) (1,336,000)
Proceeds from sale of treasury stock -- 3,933,000
------------- -------------
Net cash provided by financing
activities 64,678,000 24,271,000
------------- -------------
Net increase in cash and cash
equivalents 39,814,000 243,000
Cash and cash equivalents at beginning of
year 12,854,000 12,611,000
------------- -------------
Cash and cash equivalents at end of year $ 52,668,000 $ 12,854,000
============= =============
Contact Information: Contact: Tom Baker +1.858.875.5258 tbaker@cytori.com