AxoGen, Inc. (NASDAQ:AXGN) Q3 2019 Earnings Conference Call - Final Transcript

Nov 06, 2019 • 04:30 pm ET

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AxoGen, Inc. (NASDAQ:AXGN) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Peter J. Mariani

up 28% over the prior year. The increase includes higher compensation expenses, including higher non-cash stock compensation, and litigation and related costs. As a percentage of revenue, G&A expense in Q3 was 27%, consistent with the prior year.

Net loss in the third quarter was $5.6 million or $0.14 per share compared to $4.1 million or $0.11 per share in the prior year. Excluding the impact of non-cash stock compensation as well as litigation and related charges, adjusted net loss and net loss per share in Q3 of 2019 was $2.6 million and $0.07 per share, compared to $1.9 million and $0.05 per share in the prior year.

Adjusted EBITDA loss in the quarter, which also excludes the impact of stock compensation, litigation and related charges, was $3 million, compared to an adjusted EBITDA loss of $2.4 million in the prior year. On our balance sheet; we ended the quarter with $106.1 million in cash, cash equivalents and investments compared to $109.1 million at the end of Q2.

Turning to our guidance; as Karen mentioned we are reiterating our 2019 revenue guidance of between $106 million and $110 million, and we continue to expect gross margins will exceed 80%. Additionally, we now expect to have between 105 and 110 direct sales reps by year-end, compared to our previous expectation of at least 115 direct sales reps by the end of the year.

In the third quarter, we continue to make investments across the organization to build a foundation for long-term sustainable growth. ***8***

sustainable growth. We are also pleased with the moderation of spending growth over the last two quarters, following a year of significant investment. We will continue to invest in our commercial team and broader capabilities to drive top line growth. However, we also expect these investments to deliver near term results, and ultimately drive leverage in the business model.

And with that, I'd like to hand the call back over to Karen.

Executive
Karen Zaderej

Thanks Pete. AxoGen remains a leading company solely dedicated to improving the quality of life for patients suffering from peripheral nerve damage. We believe that we're building a foundation, based on science and clinical outcomes, that will allow us to address these important unmet clinical challenges. We are confident that the underlying fundamentals driving our business are strong, and we believe that the continued execution of our strategic initiatives will deliver long-term sustainable growth. I want to thank our investors for their ongoing support and the AxoGen team for their commitment to our values and mission to revolutionize the science of nerve repair.

Before taking questions, I'd like to end our prepared remarks by featuring a patient Jessica, whose quality of life was improved by nerve repair, using the AxoGen algorithm. After receiving a breast cancer diagnosis in June 2017, Jessica underwent a grueling five months of chemotherapy, followed by a double mastectomy the day after Christmas. While she braved her treatment to save her life, she worried about what life would be like after