Amedica released its first quarter financial results and reported 7 percent increase in silicon nitride ceramic revenue.
Here are 11 things to know:
1. The total product revenue was down 18 percent in the first quarter to $4.7 million primarily due to a 37 percent decrease in the company's nonsilicon nitride business from lower metals sales.
2. There was a decrease in the gross profit for the first quarter, which totaled $3.2 million in 2015, compared with $4.1 million in 2014.
3. The gross margin declined from 72 percent in 2014 to 68 percent in 2015. The decline in gross margins was due to private label sales during the first quarter of this year which have lower gross margins due to lower selling prices and higher operating contribution margins as no commissions are paid and require less operating expeses to support these sales.
4. The operating expenses declined 12 percent to $7.2 million due primarily to the company's efforts to simplify the organization and align financial objectives earlier in the year and lower commission costs and stock-based compensation expense during the first quarter of this year
5. Net loss for the first quarter was $5.4 million, up from 4.7 million reported in the same period last year, while interest expense incurred during the quarter increased.
6. Cash and cash equivalents totaled $14.9 million and total debt obligations were $24.3 million when the quarter ended.
7. Amedica estimates the 2015 silicon nitride sales will grow 15 percent to 20 percent, up from the previous guidance.
8. Total annual revenue is expected to reach $19 million to $20 million.
9. Amedica estimates a decline in annual revenue due to the financial and operational alignment actions, which are expected to deliver $5 million to $7 million of annualized operating profit benefit.
10. The structural changes are expected to reduce total cash burn, increase financial sustainability and strengthen the balance sheet to position the company to maintain compliance with all debt covenants into the fourth quarter of the year and become operating cash flow break even for the second half of 2016.
11. Amedica maintained guidance for the four additional OEM or private label partners announced during the 2015 balance.
"We remain committed to rapidly upgrading our long-ignored metals product line as we experienced larger than anticipated declines in sales this quarter, which also affected our silicon nitride business to a lesser extent due to its pull through effect," said Amedica CEO Sonny Bal, MD. "We've listened to our surgeons and agents, and have made the appropriate changes this quarter to ensure increased adoption of our material going forward. Despite increased share price volatility from past financial transactions, I firmly believe that our recent operational, clinical and regulatory accomplishments have positioned Amedica to capture additional market share enhanced our ability to show the advantages of silicon nitride and promote wider adoption of the material across a number of biomedical platforms."