Entellus Medical Inc. 03.01.17
Entellus Medical Inc. ended 2016 on a strong note.
Revenue for the fourth quarter increased 20 percent to $21.7 million from $18.1 million during the same period in 2015. The sales growth is attributable to increased demand for new products and an increase in sales of the company’s XprESS family of products through broader account penetration in both the office and the operating room (OR). Foreign currency exchange rates negatively impacted revenue by approximately $0.1 million in the quarter, ended Dec. 31, 2016.
“We are pleased to report solid fourth quarter results. Entellus Medical had a very successful 2016 with many accomplishments as we further extended our leadership position in the office setting,” said Robert White, president and CEO of Entellus Medical. “I am confident that we are well positioned to maintain our positive momentum into 2017, and we look forward to continuing the trend toward in-office procedures driven by our clinical, economic and strategic value within the ear, nose, and throat space.”
Gross margin for the fourth quarter of 2016 was 74.1 percent, compared to 76 percent for the same period in 2015. Gross margin was impacted by product mix and continued geographic expansion.
Operating expenses for the fourth quarter of 2016 were $22.9 million, an increase of 26 percent compared to $18.2 million for the fourth quarter of 2015. The increase in operating expenses was primarily due to increased compensation and other employee-related expenses resulting from expansion of the company’s sales and corporate staff, the launch of new products and other corporate charges, including expenses associated with our recent senior management changes.
Net loss for the quarter was $7.3 million, or 39 cents per share, compared with a net loss of $5 million, or 27 cents per share, for Q4 2015. Entellus Medical ended the fourth quarter of 2016 with $32.3 million in cash, cash equivalents, and short-term investments. In January 2017, the company completed an underwritten public offering raising net proceeds of over $45 million for the company.
Revenue for the year increased 22 percent to $75.2 million from $61.6 million during 2015. The growth in revenue was attributable to increased demand for new products and an increase in sales of the company’s XprESS family of products through broader account penetration in both the office and the OR, despite foreign currency exchange rates negatively impacting revenue by approximately $0.2 million for the year. International revenue was $3.5 million for 2016, compared to $659,000 in 2015.
Gross margin for 2016 was 75.1 percent, compared to 77.2 percent for 2015. Gross margin was impacted by product and geographic sales mix, as well as investment in expanded capacity for future growth.
Operating expenses for 2016 were $83.2 million, an increase of 31 percent compared to $63.4 million for 2015. The increase in operating expenses was primarily due to increased compensation and other employee-related expenses resulting from expansion of the company’s sales and corporate staff, the launch of new products and other corporate charges, including expenses associated with our recent senior management changes.
Net loss for the year was $28.7 million, or $1.53 per share, compared with a net loss of $18.3 million, or $1.06 per share, for 2015.
Recent Highlights and Accomplishments
2017 Financial Outlook
Entellus Medical expects full year 2017 revenue will range between $86 million and $90 million, representing growth of 14 percent to 20 percent over 2016 revenue. Gross margin is expected to be in a range of 72 percent to 74 percent for the full year 2017. Full year 2017 net loss is expected to be in a range of $24 million to $32 million.
Entellus Medical expects first quarter 2017 revenue will be in a range of $19 million to $20 million, representing growth of 12 percent to 18 percent over the first quarter of 2016. Gross margin is expected to be in a range of 72 percent to 74 percent for the first quarter of 2017. First quarter 2017 net loss is expected to be in a range of $9 million to $11 million.
Entellus Medical designs products for the minimally invasive treatment of chronic and recurrent sinusitis in both adult and pediatric patients. The Entellus Medical platform of products provides effective and easy-to-use solutions intended to help simplify everything from diagnosis and patient selection, to complex case revisions and post-operative care. Entellus Medical’s core product lines, XprESS Multi-Sinus Dilation Systems, MiniFESS Surgical Instruments, XeroGel Nasal Dressing, and FocESS Imaging & Navigation, combine to enable ENT physicians to perform a broad range of procedures in the office and simplify treatment based in the operating room. The company is based in Plymouth, Minn.
Revenue for the fourth quarter increased 20 percent to $21.7 million from $18.1 million during the same period in 2015. The sales growth is attributable to increased demand for new products and an increase in sales of the company’s XprESS family of products through broader account penetration in both the office and the operating room (OR). Foreign currency exchange rates negatively impacted revenue by approximately $0.1 million in the quarter, ended Dec. 31, 2016.
“We are pleased to report solid fourth quarter results. Entellus Medical had a very successful 2016 with many accomplishments as we further extended our leadership position in the office setting,” said Robert White, president and CEO of Entellus Medical. “I am confident that we are well positioned to maintain our positive momentum into 2017, and we look forward to continuing the trend toward in-office procedures driven by our clinical, economic and strategic value within the ear, nose, and throat space.”
Gross margin for the fourth quarter of 2016 was 74.1 percent, compared to 76 percent for the same period in 2015. Gross margin was impacted by product mix and continued geographic expansion.
Operating expenses for the fourth quarter of 2016 were $22.9 million, an increase of 26 percent compared to $18.2 million for the fourth quarter of 2015. The increase in operating expenses was primarily due to increased compensation and other employee-related expenses resulting from expansion of the company’s sales and corporate staff, the launch of new products and other corporate charges, including expenses associated with our recent senior management changes.
Net loss for the quarter was $7.3 million, or 39 cents per share, compared with a net loss of $5 million, or 27 cents per share, for Q4 2015. Entellus Medical ended the fourth quarter of 2016 with $32.3 million in cash, cash equivalents, and short-term investments. In January 2017, the company completed an underwritten public offering raising net proceeds of over $45 million for the company.
Revenue for the year increased 22 percent to $75.2 million from $61.6 million during 2015. The growth in revenue was attributable to increased demand for new products and an increase in sales of the company’s XprESS family of products through broader account penetration in both the office and the OR, despite foreign currency exchange rates negatively impacting revenue by approximately $0.2 million for the year. International revenue was $3.5 million for 2016, compared to $659,000 in 2015.
Gross margin for 2016 was 75.1 percent, compared to 77.2 percent for 2015. Gross margin was impacted by product and geographic sales mix, as well as investment in expanded capacity for future growth.
Operating expenses for 2016 were $83.2 million, an increase of 31 percent compared to $63.4 million for 2015. The increase in operating expenses was primarily due to increased compensation and other employee-related expenses resulting from expansion of the company’s sales and corporate staff, the launch of new products and other corporate charges, including expenses associated with our recent senior management changes.
Net loss for the year was $28.7 million, or $1.53 per share, compared with a net loss of $18.3 million, or $1.06 per share, for 2015.
Recent Highlights and Accomplishments
- In-office revenue represented 59 percent of U.S. product revenue in the fourth quarter
- Completed an underwritten public offering in January 2017 raising net proceeds for the company of more than $45 million
- Commercially launched the Entellus Medical Shaver System and FocESS Wireless High Definition Camera System
- Received positive guidance from the National Institute for Health and Care Excellence (NICE) Medical Technologies Advisory Committee for use of the XprESS Multi-Sinus Dilation System (XprESS) for the treatment of chronic sinusitis; this guidance is exclusive to Entellus’ XprESS products
- Published the results from the pediatric clinical study in International Forum of Allergy & Rhinology demonstrating that balloon sinus dilation can be performed safely and successfully on children with chronic rhinosinusitis
2017 Financial Outlook
Entellus Medical expects full year 2017 revenue will range between $86 million and $90 million, representing growth of 14 percent to 20 percent over 2016 revenue. Gross margin is expected to be in a range of 72 percent to 74 percent for the full year 2017. Full year 2017 net loss is expected to be in a range of $24 million to $32 million.
Entellus Medical expects first quarter 2017 revenue will be in a range of $19 million to $20 million, representing growth of 12 percent to 18 percent over the first quarter of 2016. Gross margin is expected to be in a range of 72 percent to 74 percent for the first quarter of 2017. First quarter 2017 net loss is expected to be in a range of $9 million to $11 million.
Entellus Medical designs products for the minimally invasive treatment of chronic and recurrent sinusitis in both adult and pediatric patients. The Entellus Medical platform of products provides effective and easy-to-use solutions intended to help simplify everything from diagnosis and patient selection, to complex case revisions and post-operative care. Entellus Medical’s core product lines, XprESS Multi-Sinus Dilation Systems, MiniFESS Surgical Instruments, XeroGel Nasal Dressing, and FocESS Imaging & Navigation, combine to enable ENT physicians to perform a broad range of procedures in the office and simplify treatment based in the operating room. The company is based in Plymouth, Minn.