News - Loss narrows significantly
Crescita Therapeutics loses $424,000 in Q1 2018
2018-05-09 10:50 ET - News Release
Mr. Serge Verreault reports
CRESCITA THERAPEUTICS REPORTS 2018 FIRST QUARTER RESULTS
Crescita Therapeutics Inc. has released its financial results for the first quarter ended March 31, 2018.
Q1 2018 year-over-year financial and operational highlights:
- Positive adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $100,000, up $2.4-million versus Q1 2017;
- Revenue of $3.6-million, up $1.6-million versus Q1 2017;
- Operating expenses reduced by $1.1-million versus Q1 2017;
- Net loss per share from continuing operations improved by 20 cents to three cents versus Q1 2017;
- Ended the quarter with cash of $9.5-million;
- Announced the launch of Pliaglis in the United States, recognizing $1.4-million in royalty revenue in the quarter;
- Successfully completed a rights offering, raising net proceeds of approximately $3.5-million in equity financing to support the company's growth;
- Appointed Serge Verreault as chief executive officer.
"Our disciplined approach to executing our growth strategy is starting to produce visible results that are in line with our operational plan to make Crescita profitable and to deliver value to our customers and shareholders," said Serge Verreault, president and chief executive officer of Crescita.
Mr. Verreault added: "We are encouraged by the growth prospects in the U.S. market following the launch of Pliaglis by our licensing partner during the quarter as it represents a significant expansion opportunity for Crescita. We continued to streamline our operations by reducing our SG&A [selling, general and administrative] costs by $1.3-million versus Q1 2017; we strengthened our financial position by adding $3.5-million in cash to our balance sheet through our rights offering; and we reported positive adjusted EBITDA of $100,000 in the quarter."
Q1 2018 financial results
The first quarter 2018 management discussion and analysis, condensed consolidated interim financial statements, and accompanying notes can be found on the company's website and have been filed with SEDAR.
Q1 2018 FINANCIAL RESULTS (in thousands of dollars, except earnings per share) Three months ended March 31, March 31, 2018 2017 Revenue $ 3,649 $ 2,080 Cost of goods sold 1,306 1,031 Research and development 229 386 Selling, general and administrative 2,395 3,705 Interest expense, net 147 49 Total operating expenses 4,077 5,171 Other (income) expenses (4) 39 Net (loss) from continuing operations (424) (3,130) Net (loss) from discontinued operations - (63) Net (loss) (424) (3,193) Net (loss) from continuing operations per share (0.03) (0.23) Selected cash flow information Cash and cash equivalents, end of period 9,455 13,772 Cash used in operating activities (1,070) (3,516) Cash used in investing activities - (43) Cash (used in) provided by financing activities 3,520 (1,000)
Cash and cash equivalents
Cash and cash equivalents were $9.5-million as at March 31, 2018, compared with $5.2-million at March 31, 2017. In the prior year's quarter, the company had $8.6-million of restricted short-term investments held as collateral for the company's letter of credit. The restriction on these funds was lifted as part of the Knight loan amendment in the third quarter of 2017. The current quarter includes $3.5-million in net proceeds from the company's rights offering. By adjusting each quarter's cash balance for these non-recurring items, the respective total cash balances, on a comparable basis, would have been $5.9-million in Q1 2018 and $13.8-million in Q1 2017. For the three months ended March 31, 2018, the company significantly reduced its cash utilization from $4.6-million in Q1 2017 to $1.1-million.
Revenue
Total revenue, consisting of product sales, outlicensing and services revenue, was $3.6-million for the quarter ended March 31, 2018, compared with $2.1-million for the three months ended March 31, 2017, representing an increase of $1.5-million. During the quarter, the company recognized $1.4-million ($1-million (U.S.)) in royalty revenue from the launch of Pliaglis in the U.S. market by its licensing partner. Q1 2018 revenue also includes the incremental revenue of $200,000 from the acquisition of the Alyria product line from Sanofi Consumer Health Inc., concluded on Aug. 8, 2017.
Operating expenses
Total operating expenses for the three months ended March 31, 2018, were $4.1-million, compared with $5.2-million for the three months ended March 31, 2017, representing a decrease of $1.1-million, or 21 per cent. The decrease was mainly due to savings in SG&A expenses of $1.3-million and, to a lesser extent, savings in R&D (research and development) expenses of $200,000. The improvement in SG&A expenses was mainly driven by a reduction in head-count-related costs following the reorganization of various corporate functions in connection with the centralization of the company's operations to its Laval facility; a reduction in professional and accounting fees in connection with regulatory matters involving the Intega acquisition; as well as savings in logistics costs.
Net loss from continuing operations
Loss from continuing operations for the quarter ended March 31, 2018, was $400,000, compared with $3.1-million in the prior year's quarter. The year-over-year improvement of $2.7-million was primarily driven by the recognition in the quarter of net royalty revenues from the U.S. launch of Pliaglis in the amount of $1.2-million, the net contribution from the incremental sales of Alyria for $100,000, as well a combined reduction of $1.5-million in SG&A and R&D expenses as a result of the company's sustained efforts at rationalizing its cost structure.
About Crescita Therapeutics Inc.
Crescita is a publicly traded, Canadian commercial dermatology company with a portfolio of non-prescription skin care products for the treatment and care of skin conditions and diseases and their symptoms and prescription drug products for the treatment of pain. Crescita owns multiple proprietary drug delivery platforms that support the development of patented formulations that can facilitate the delivery of active drugs into or through the skin.
We seek Safe Harbor.