Revenue of $4.4 million up 128% over prior year, up 159% year-to-date
Gross margin of 75% up 1,900 basis points over prior year
Backlog increased to 177 units
Conference call begins at 4:30 p.m. Eastern time today
Myomo, Inc. (NYSE American: MYO) (“Myomo” or the “Company”), a wearable medical robotics company that offers increased functionality for those suffering from neurological disorders and upper-limb paralysis, today announced financial results for the three and nine months ended September 30, 2021.
Financial and operational highlights for the third quarter of 2021 include the following (all comparisons are with the third quarter of 2020, unless otherwise noted):
- Revenue was $4.4 million, up 128% and representing the highest quarterly revenue in the Company’s history
- Revenue from the direct billing channel was a record 85% of total revenue, up from 74% in the second quarter of 2021
- Revenue units were 102, up 100% including 37 units where orders and insurance authorizations were received during the quarter
- Gross margin was 75%, up 1,900 basis points
- Backlog, which represents insurance authorizations and orders received but not yet converted to revenue, was a record 177 units as of September 30, 2021, up 11% from June 30, 2021
- Orders and insurance authorizations were for 133 patients to receive a MyoPro®
- The reimbursement pipeline as of September 30, 2021 consisted of 920 MyoPro candidates, including 331 additions to the pipeline during the third quarter
Management Commentary
“We are proud to be reporting both the highest quarterly revenue and the highest direct billing channel revenue in the Company’s history. These achievements demonstrate the continued success of our transition to being a direct provider of the MyoPro to our patients,” stated Paul R. Gudonis, Myomo’s chairman and chief executive officer. “Our focus is on growing the pipeline and backlog to position the Company for a strong start to 2022, while remaining ever mindful of our mission to improve the lives of people with upper-limb paralysis.”
Financial Results
| For the Three Months Ended September 30, |
Period-to-Period Change |
For the Nine Months Ended September 30, |
Period-to-Period Change |
|||||||||||||
| 2021 | 2020 | $ | % | 2021 | 2020 | $ | % | |||||||||
| Revenue | $ 4,383,957 | $ 1,926,660 | $ 2,457,297 | 128% | $ 9,824,740 | $ 3,793,395 | $ 6,031,345 | 159% | ||||||||
| Cost of revenue | 1,110,204 | 855,338 | 254,866 | 30% | 2,634,922 | 1,592,851 | 1,042,071 | 65% | ||||||||
| Gross profit | $ 3,273,753 | $ 1,071,322 | $ 2,202,431 | 206% | $ 7,189,818 | $ 2,200,544 | $ 4,989,274 | 227% | ||||||||
| Gross margin | 75% | 56% | 19% | 73% | 58% | 16% |
Revenue for the third quarter of 2021 was $4.4 million, an increase of 128% compared with the third quarter of 2020. Growth was driven by an increase in the number of revenue units and a higher average selling price. Myomo recognized revenue on 102 units in the third quarter of 2021, an increase of 100% compared with the third quarter of 2020. Year-to-date revenue of $9.8 million was up 159% compared with the same period a year ago.
Gross margin for the third quarter of 2021 was 75%, compared with 56% for the third quarter of 2020. Margin expansion primarily reflects a higher average selling price and improved fixed cost coverage resulting from higher unit volume. The Company delivered 108 units to patients in the third quarter. Year-to-date gross margin was 73%, compared with 58% in the year-ago period.
Operating expenses for the third quarter of 2021 were $5.3 million, an increase of 47% compared with the third quarter of 2020. This increase was driven by higher clinical and reimbursement headcount and higher advertising costs to generate more leads and additions to the pipeline. Operating expenses for the first nine months of 2021 were $14.8 million, an increase of 34% compared with the same period a year ago.
Operating loss for the third quarter of 2021 decreased to $2.0 million from $2.5 million for the third quarter of 2020. Net loss for the third quarter of 2021 was $2.1 million, or $0.36 per share, compared with a net loss of $2.8 million, or $0.70 per share, for the third quarter of 2020. Net loss available to common stockholders for the first nine months of 2021 was $7.6 million, or $1.38 per share, compared with $10.5 million, or $3.63 per share, for the comparable period in 2020. Net loss available to common stockholders for the first nine months of 2020 included a deemed dividend of $0.7 million related to the repricing of certain warrants.
Adjusted EBITDA1 for the third quarter of 2021 was negative $1.7 million, compared with negative $2.3 million for the third quarter of 2020. Adjusted EBITDA for the first nine months of 2021 was negative $6.7 million, compared with negative $8.3 million for the same period a year ago. A reconciliation of GAAP net loss to this non-GAAP financial measure appears below.
Liquidity
Cash and cash equivalents as of September 30, 2021 were $12.6 million. Cash used in operating activities was $2.2 million in the third quarter of 2021. The Company continues to believe its existing cash is sufficient to fund operations for at least the next 12 months.
Business Outlook
“While we expect to report strong year-over-year revenue growth for 2021, we face some short-term challenges in the fourth quarter. Although there are a record number of units in backlog, a temporary labor shortage at one of our subcontractors constrained capacity and deliveries in the early part of the quarter,” said Mr. Gudonis. “Capacity at that subcontractor has returned to nearly normal, but it will be difficult to make up all the delayed shipments by the end of the year. Therefore, those deliveries and associated revenue may be realized in early 2022. In addition, we are appealing a number of recent claim denials after receipt of a pre-authorization and delivery to the patient. As a result of these factors, it is difficult to forecast revenue for the fourth quarter.”
Conference Call and Webcast Information
Myomo will hold a conference call today at 4:30 p.m. Eastern time to discuss these results and answer questions. Participants are encouraged to pre-register for the call here. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the start of the call. Those without internet access or unable to pre-register may participate by dialing 844-707-6932 (U.S.) or 412-317-9250 (International). A webcast of the call will also be available at Myomo’s Investor Relations page at http://ir.myomo.com/.
A replay of the webcast will be available beginning approximately one hour after the completion of the live conference call at http://ir.myomo.com/. A dial-in replay of the call will be available until November 24, 2021; please dial 877-344-7529 (U.S.) or 412-317-0088 (International) and provide the passcode 1016253.
Non-GAAP Financial Measures
Myomo is providing financial information that has not been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. This information includes Adjusted EBITDA. This non-GAAP financial measure is not in accordance with, or an alternative for, GAAP and may be different from similar non-GAAP financial measures used by other companies. Myomo believes the use of this non-GAAP financial measure provides supplementary information for investors to use in evaluating operating performance and in comparing Myomo’s financial measures with other companies in its industry, many of which present similar non-GAAP financial measures. Adjusted EBITDA is EBITDA adjusted for stock-based compensation expense, the impact of the fair value revaluation of derivative liabilities and loss of extinguishment of debt. This non-GAAP financial measure is not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP, and should be viewed in conjunction with GAAP financial measures. Investors are encouraged to review the reconciliation of this non-GAAP measure to its most directly comparable GAAP financial measure. A reconciliation of GAAP to the non-GAAP financial measures has been provided in the tables included as part of this press release.