MELA Sciences Reports Third Quarter 2015 Financial Results

HORSHAM, Pa., Nov. 12, 2015 (GLOBE NEWSWIRE) -- MELA Sciences, Inc. (NASDAQ:MELA), a medical technology company dedicated to developing and commercializing innovative products for the treatment and diagnosis of serious dermatological disorders, today reported financial results for the third quarter ended September 30, 2015.

Third Quarter and Recent Corporate Highlights

• Third quarter revenue for the acquired businesses was $8.2 million in line with expectations.
• The installed base of XTRAC systems in the U.S. expanded to 698 systems, up from 590 at the end of the third quarter 2014, as reported to us by PhotoMedex.
• Achieved positive non-GAAP adjusted income in first full quarter of combined operations. See Non-GAAP Measures below.
• Integration of the acquired businesses into MELA is essentially complete.

MELA Sciences acquired the XTRAC and VTRAC business from PhotoMedex, Inc. on June 22, 2015. Therefore, operating results for the three and nine months ended September 30, 2015 include activity from the XTRAC and VTRAC businesses from July 1, 2015 through September 30, 2015 for the three-month period and from June 23, 2015 through September 30, 2015 for the nine-month period. As a result of purchase accounting rules, the operating results of the XTRAC and VTRAC businesses for the three and nine months ended September 30, 2014 are not included in consolidated statements of operations for the periods ended September 30, 2014.

Commenting on the third quarter, Michael R. Stewart, President and CEO stated: "The XTRAC recurring revenue in the third quarter continued to show positive growth of over 5%. The installed base of placed lasers in the United States also increased by 5% to nearly 700 lasers. The average annualized revenue per system now exceeds $42,000. All of these results met our expectations and demonstrate the integration of the XTRAC business into MELA has successfully occurred."

Continuing, Stewart added: "The transforming of MELA is well underway. In addition to the integration activities that have been accomplished thus far, we are now reviewing new branding initiatives that we expect to implement before the end of 2015 that we believe will better reflect the new company and the market that we serve."

Reported Financial Results

Revenues for the third quarter of 2015 were $8.3 million compared with revenues for the third quarter of 2014 of $0.2 million, which did not include revenues from the XTRAC and VTRAC businesses.

Net loss for the third quarter of 2015 was $12.2 million or ($1.29) per share, which included a non-cash deemed dividend of $3.0 million, other expense of $1.3 million for the change in fair value of warrant liability, $5.6 million in interest expense and $1.7 million in depreciation and amortization expenses. This compares with a net loss for the third quarter of 2014 of $2.3 million or ($0.44) per share, which included other income of $2.1 million for the change in fair value of warrant liability, $0.5 million in interest expense and $0.5 million in depreciation and amortization expenses.

Revenues for the nine months of 2015 were $9.0 million compared with revenues for the nine months of 2014 of $0.5 million, which did not include revenues from the XTRAC and VTRAC businesses.

Net loss for the nine months of 2015 was $27.3 million or ($3.42) per share, which included a non-cash deemed dividend of $3.0 million, other expense of $0.7 million for the change in fair value of warrant liability, $4.8 million in inventory obsolescence charges; $8.7 million in interest expense; $0.5 million in acquisition costs and $2.3 million in depreciation and amortization expenses. This compares with net loss for the nine months of 2014 of $9.6 million or ($1.89) per share, which included other income of $7.2 million for the change in fair value of warrant liability, $3.4 million in registration rights liquidated damages, $0.5 million in interest expense and $1.4 million in depreciation and amortization expenses.

As of September 30, 2015 the company had cash, cash equivalents and short-term investments of $3.3 million including $0.1 million of restricted cash, compared with $11.4 million of unrestricted cash as of December 31, 2014.

Non-GAAP Measures

To supplement the Company's consolidated financial statements, prepared in accordance with GAAP, the Company provides certain non-GAAP measures of financial performance. These non-GAAP measures include non-GAAP adjusted income.

The Company's reference to these non-GAAP measures should be considered in addition to results prepared under current accounting standards, but are not a substitute for, nor superior to, GAAP results. These non-GAAP measures are provided to enhance investors' overall understanding of our current financial performance and to provide further information for comparative purposes.

Specifically, the Company believes the non-GAAP measures provide useful information to both management and investors by isolating certain expenses, gains and losses that may not be indicative of the Company's core operating results and business outlook. In addition, the Company believes non-GAAP measures enhance the comparability of results against prior periods. Reconciliation to the most directly comparable GAAP measure of all non-GAAP measures included in this press release is as follows:

MELA previously announced the scheduling of a conference call with investors to review the results of the Third quarter. The following is the pertinent information for accessing that call. 

About MELA Sciences, Inc.  (www.melasciences.com)     

MELA Sciences is a medical technology company focused on the dermatology market. Its products include the XTRAC^® laser and VTRAC^® excimer lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions, and the MelaFind^® system used to assist in the identification and management of melanoma skin cancer.

Safe Harbor

This press release includes "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995. These statements include but are not limited to the Company's plans, objectives, expectations and intentions and may contain words such as "will," "may," "seeks," and "expects," that suggest future events or trends. These statements, including the Company's ability to generate the anticipated revenue stream from the acquired business, the Company's ability to generate sufficient cash flow to fund the Company's ongoing operations beginning in 2015 or at any time in the future, including support for the MelaFind system through the reimbursement process and the Company's ability to integrate and transition the acquired business effectively and build a leading franchise in medical dermatology, are based on the Company's current expectations and are inherently subject to significant uncertainties and changes in circumstances. Actual results may differ materially from the Company's expectations due to financial, economic, business, competitive, market, regulatory and political factors or conditions affecting the Company and the medical device industry in general, as well as more specific risks and uncertainties set forth in the Company's SEC reports on Forms 10-Q and 10-K. Given such uncertainties, any or all of these forward-looking statements may prove to be incorrect or unreliable. The Company assumes no duty to update its forward-looking statements and urges investors to carefully review its SEC disclosures available at www.sec.gov and www.melasciences.com.

CONTACT: Investor Contacts:
         Christina L. Allgeier
         MELA Sciences, Inc.
         215-619-3267
         callgeier@melasciences.com
         
         Andrew McDonald
         LifeSci Advisors, LLC
         646-597-6987
         Andrew@LifeSciAdvisors.com