March 15, 2018
PARIS & SAN FRANCISCO–(BUSINESS WIRE)–Regulatory News:
SpineGuard (Paris:ALSGD) (FR0011464452 – ALSGD), an innovative company that develops and markets instruments designed to secure the placement of surgical implants by bringing real-time digital technology into the operating room, reported today its full-year 2017 financial results as approved by the Board of Directors on March 14, 2017.
|€ thousands – IFRS audited||Dec 31, 2017||Dec 31, 2016|
|Revenue||8 174||7 463|
|Gross Margin||6 952||6 354|
|Gross margin (% of revenue)||85,1 %||85,1 %|
|Sales, distribution & marketing||6 116||6 643|
|Administrative costs||2 116||2 049|
|Research & Development||1 267||1 295|
|Operating profit / (loss)||-2 547||-3 633|
|Non recurring operating costs||-415||0|
|Financial Result||-1 163||-545|
|Net profit / (loss)||-4 125||-4 178|
Stephane Bette, CEO of SpineGuard said: « The full-year results demonstrate that we can achieve our goal of operational profitability by the end of 2018. We generated solid growth while launching our innovative technology platform. In 2017 SpineGuard signed 2 major strategic partnerships: for distribution in China with XinRong Medical; and an exclusive worldwide DSG™ licensing to Adin for dental implant surgery. Furthermore, the early commercial success of the DSG screw with our partner Zavation in 2017 bodes well for 2018.”
Solid growth of revenue and strong improvement of the operating profit
Full year revenue was € 8,174k, growing 10% (12% cc). The United States represented 61% of the 8,764 DSG™-enabled devices sold by Dec. 31, 2017 and 81.5% of the revenue. Sales grew in the US by 14% (cc).
Gross margin remains stable at 85.1% and grew by € 598k. This was the result of a combination of stable OUS prices, ASP increases in the USA and improvements in manufacturing costs (despite unfavorable exchange rates).
Operating expenses decreased by € 488k (4.9%) thanks to the company reorganization initiated in the second half of 2017 and to rigorous control of operational expenses.
As expected, SpineGuard greatly reduced its operating loss to € -2,547k (vs. € -3,633k), i.e. an improvement of € +1 087k (close to +30%) for the full-year with a progress of € +505k in the second half of 2017.
Non-recurring operating costs related to the reorganization amount to € 415k.
Net loss was € -4,125k (vs. € -4,178k) after taking into account the financial result impacted by the unrealized exchange rate losses and by the concurrent increase of the paid interest related to contracted loans.
Working capital requirement decreased by € 249k as the result of a reduction of the inventory dedicated to late 2016 new product launch.
At Dec. 31, 2017, cash and cash equivalents were € 1.2M, plus the secured € 2.0M of convertible bonds (OCAPI) for a total of € 3.2M.
2017: SpineGuard reached the following key milestones
In the United States, SpineGuard’s leading market, the company continued its solid progress supported by the following events:
- The FDA cleared the DSG™ integration module for the smart screw in January. The subsequent pre-launch period enabled SpineGuard to collect the positive clinical experiences of 100 surgeries.
- In October, Zavation and SpineGuard officially launched the Z-Direct smart screw at the annual congress of the North American Spine Society (NASS) to great acclaim.
- Penetration of university hospitals continues to grow, with 38 centers using PediGuard® in their training process by year-end.
In the rest of the world, the company focused its marketing and training support activities toward major commercial partners and signed a major distribution agreement with XinRong Medical for China, Hong-Kong and Macao.
SpineGuard broadened the scope of its DSG™ technology platform beyond Spine with the completion of an exclusive license deal in dental implantology with the Israeli Group Adin Dental Systems, a high growth potential market.
In an area of strong interest, SpineGuard obtained the world’s first experimental validation with the laboratory Institut des Systèmes Intelligents et de Robotique of the Paris Sorbonne University that demonstrated how DSG™ technology can stop a surgical robot automatically when an impending bone breach is detected.
Promising perspectives in 2018:
- Growing adoption by physicians and various orthopedic industry players of DSG™-enabled devices (industry partnerships, distributors, universities).
- The commercial launch of the Z-Direct smart screw with Zavation in the USA and additional partnerships for DSG™ screw expansion.
- A broadening of the scope of DSG™ applications: robotics, visualization module and non-spine.
- Reaching operating profitability by the end of 2018.
Nomination of Pierre Jerome as successor of Alan Olsen as Chairman of the Board
The Board of Directors accepted Alan Olsen’s resignation from his role of Chairman of the Board during its March 14th meeting. Alan served as Chairman of the Board of SpineGuard since 2010 and will remain a Director until the term of his mandate expires on May 17, 2018. The Board of Directors sincerely thanks Alan for his unwavering support over the last nine years.
Maurice Bourlion, SpineGuard Board Director and co-inventor of DSG® technology says: “On behalf of all Board members, I sincerely thank Alan Olsen for his major contribution to SpineGuard’s progress. Since 2010, he has organized and managed the governance of the company, while also sharing his great experience with the company. Today Pierre Jerome, co-founder of the company, takes over as Chairman. With Pierre, we will be able to pursue our growth strategy and our path towards profitability”.
During the same meeting, the Board of Directors named Pierre Jérôme – co-founder of SpineGuard – as new Chairman of the board.
« I would like to warmly thank the board of directors for their vote of confidence in giving me this new responsibility, as well as Alan Olsen for his contribution to the development of SpineGuard since his nomination in 2010; I wish him all the best. The company under the leadership of Stéphane is now well on track toward profitability while continuing to demonstrate the strong potential of its DSG™ technology through sustained growth and innovation. The Chinese market, the smart pedicle screw, dental implantology and the robotic applications are now as many tangible opportunities that I will strive, along with the other board members, to help Stéphane and his team fully materialize so that our shareholders can harvest the fruit of their investment” concludes Pierre Jérôme.
Next financial press release: First Quarter 2018 revenue on April 5, 2018.
Founded in 2009 in France and the USA by Pierre Jérôme and Stéphane Bette, SpineGuard’s mission is to make spine surgery safer by bringing real-time digital technology into the operating room. Its primary objective is to establish its proprietary DSG™ (Dynamic Surgical Guidance) technology as the global standard of surgical care, starting with safer screw placement in spine surgery and then in other surgeries. PediGuard®, the first device designed using DSG, was co-invented by Maurice Bourlion, Ph.D., Ciaran Bolger, M.D., Ph.D., and Alain Vanquaethem, Biomedical Engineer. It is the world’s first and only handheld device capable of alerting surgeons to potential pedicular or vertebral breaches. Over 60,000 surgical procedures have been performed worldwide with DSG™ enabled devices. Numerous studies published in peer-reviewed medical and scientific journals have demonstrated the multiple benefits that PediGuard® delivers to patients, surgical staff and hospitals. SpineGuard is expanding the scope of its DSG™ platform through strategic partnerships with innovative medical device companies and the development of smart instruments and implants. SpineGuard has offices in San Francisco and Paris. For further information, visit www.spineguard.com.
Chief Executive Officer
Tél. : +33 (0)1 45 18 45 19
Chief Financial Officer
Investor Relations & Financial Communication
Florent Alba / Pierre Laurent
Tél. : +33 (0)1 44 71 94 94