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Cytomedix Inc. (CMXI) Reports 2012 Fourth Quarter and Full Year Financial Results


3/19/2013 9:12:32 AM

GAITHERSBURG, MD--(Marketwire - March 18, 2013) - Cytomedix, Inc. (OTCQX: CMXI), a leading developer of biologically active regenerative therapies, today reported financial results for the three and twelve months ended December 31, 2012.

Fourth Quarter 2012 Financial Highlights (all comparisons are with the 2011 fourth quarter)

  • Product revenue of $2.0 million compared with $1.6 million, an increase of 27%.
  • Consolidated revenue of $2.1 million compared with $3.0 million, a decrease of 29%.
  • Net loss to common stockholders of $3.8 million, or $0.04 per share. This compares with a net income of $0.8 million, or $0.02 per share in the prior year.
  • Cash and cash equivalents of approximately $2.6 million at December 31, 2012. In February 2013, the Company received $9.5 million of gross proceeds at closing as part of a comprehensive financing plan.

Fiscal Year 2012 Financial Highlights

  • Consolidated revenue of $10.6 million compared with $7.2 million in 2011.
  • Product revenue increased 23% year over year to $7.2 million from $5.9 million in 2011.
  • Net loss to common stockholders for the year of $19.8 million, or ($0.24) per share, compared with $3.9 million, or ($0.08) per share in 2011.

Clinical and Corporate Highlights for the Fourth Quarter and Recent Weeks

  • Earlier today, the Company announced that the Centers for Medicare & Medicaid Services (CMS) has issued coding and reimbursement claims instructions for autologous PRP in non-healing chronic wounds.
  • On March 1st, 2012 CMS granted formal approval of the protocols for AutoloGel under Coverage with Evidence Development (CED).
  • A comprehensive 2013 financing was executed to raise a total of up to $27.5 million, including $9.5 million in initial gross proceeds, comprised of a registered equity offering, a senior secured term loan and a committed equity facility.
  • The Angel® Concentrated Platelet Rich Plasma (cPRP) System was approved for marketing in Australia.
  • CE Mark in Europe was granted for the Angel cPRP System for processing blood and bone marrow aspirate.
  • The FDA granted approval for Angel for processing bone marrow aspirate. This approval significantly expands the orthobiologic commercial opportunity for the Angel system, increasing the addressable market to include the 400,000 spinal fusion procedures performed each year in the U.S.
  • A Phase 2 clinical study, in collaboration with the NIH, was announced for ALD-301 (Bright Cells) in patients with an intermittent claudication indication associated with peripheral artery disease.

Management Discussion
"We accomplished many of our growth objectives in 2012," said Martin Rosendale, Chief Executive Officer of Cytomedix. "We were especially pleased by strong double-digit growth in Angel and AutoloGel sales. We have now placed more than 500 Angel Systems on a worldwide basis. Nearly 40,000 patients are currently being treated with the Angel System on an annualized basis."

"A significant milestone in 2012 was the announcement that CMS had agreed to reimburse AutoloGel under the CED program. We were delighted to report earlier in this month that CMS has formally approved the clinical outcomes in the protocols we had submitted in response to the National Coverage Determination (NCD) memo. This means that clinicians can now use AutoloGel to treat Medicare patients with chronic wounds and receive reimbursement. This should have a significantly positive impact on AutoloGel revenues in 2013. Finally, we announced earlier today that CMS has issued coding and reimbursement instructions to its regional contractors. Consequently, we expect to begin treating Medicare beneficiaries with AutoloGel shortly and recording revenues for AutoloGel as a covered product."

"Our Bright Cell technology pipeline continues to advance. We are enrolling patients in the RECOVER-Stroke Trial with ALD-401. This clinical trial is currently enrolling at 9 sites and we believe it's on track to complete enrollment by the end of the year. We also announced late last year the signing of an agreement with NIH to collaborate on a Phase 2 clinical study with ALD-301 in patients with intermittent claudication, caused by peripheral arterial disease (PAD), This is the first randomized clinical trial that will look at the benefits of autologous stem cell therapy in this patient population."

"We announced last month a $27.5 million comprehensive financing, which includes an equity raise, a tranched senior secured term loan facility, and a committed equity facility. We received approximately $9.5 million in initial gross proceeds with commitments for up to an additional $18 million. This capital infusion provides us with the necessary capital to fund our priority activities in 2013 which include the launch of AutoloGel under CED, sales expansion for the Angel cPRP System, business development and partnering activities, and completion of the RECOVER-Stroke phase 2 study."

Financial Results
Three-Month Period Ended December 31, 2012
Consolidated revenue of $2.1 million was comprised of product sales of $2.0 million and $0.1 million from licensing and royalty fees. This compares with $3.0 million in consolidated revenue recorded in the same period of 2011. The difference year over year was due to lower license fees in 2012, partly offset by higher product sales.

Gross margin on product sales declined to 47% in 4Q12 from 55% in the 4Q11, primarily due to mix shift to lower margin machines and disposables sold to distributors in Europe, the Middle East, and Australia. Gross margin on product sales was up sequentially from 42% in 3Q12.

Fourth quarter cash margins on product sales were 56%. Cash margins on disposable products in the quarter were 61%. Cash margin is a non-GAAP financial measure, most directly comparable to gross margin, and should not be considered as an alternative thereto. Cytomedix defines cash margin as gross margin exclusive of patent amortization and depreciation expense, and it is a significant performance metric used by management to indicate cash profitability on product sales.

Operating expenses in the fourth quarter were $4.6 million, a $2.6 million increase from the same period in 2011, primarily resulting from $1.5 million of legacy Aldagen business operating expense, salary increases (associated with new sales, marketing, operations, and administration positions), additional R&D expenses, stock compensation and general expenses associated with expanded commercial operations.

Total research and development expenses were $0.9 million in the fourth quarter of 2012, compared to no expense in the same period of 2011. Selling, general and administrative expenses were $3.7 million in the fourth quarter of 2012, compared to $2.0 million in the same period of 2011.

The Company recorded a net loss of ($3.8) million, or ($0.04) per share in the three-month period ended December 31, 2012, compared to a net income of $0.8 million, or $0.02 per share in the comparable period in 2011.

Twelve-Month Period Ended December 31, 2012
Consolidated revenue of $10.6 million was comprised of product sales of $7.2 million and $3.3 million from licensing and royalty fees. This represents a 46% increase from the $7.2 million in consolidated revenue recorded in the same period of 2011, which was comprised of product sales of $5.9 million and $1.3 million from licensing fees.

The $7.2 million in product revenues in 2012 included AutoloGel sales of $0.6 million and Angel sales of $6.6 million. Product sales growth of 23% over prior year was mainly driven by continuing commercial efforts to increase Angel sales. The 20% growth in Angel sales was driven by 8% growth domestically and 212% internationally.

Gross margin on product sales for the year decreased to 46% from 54% in 2011. The decrease was primarily due to shift to lower margin machines and disposables sold to distributors in Europe, the Middle East, and Australia.

Total research and development expenses were $3.4 million in 2012, as compared to $0.1 million in 2011. Selling, general, and administrative expenses were $16.2 million, which included non-cash charges of $2.3 million, compared to $7.9 million in 2011, which included non-cash charges of $0.5 million.

The Company recorded a net loss to common stockholders of ($19.8) million, or ($0.24) per basic and diluted share in the twelve-month period ended December 31, 2012, compared to a net loss of ($3.9) million, or ($0.08) per basic and diluted share in 2011.

Cash and Liquidity
Cash and cash equivalents were approximately $2.6 million as of December 31, 2012. In February 2013, the Company announced financing for up to $27.5 million overall, which included a tranched $7.5 million senior secured term loan facility, a $5 million equity raise, and a $15 million committed equity facility. Approximately $9.5 million of gross proceeds was received upon closing with commitments for up to an additional $18 million.

Cash used in operations was $4.2 million in the fourth quarter and $11.4 million for the year. There were approximately 94 million shares of common stock issued and outstanding as of December 31, 2012.

Conference Call & Webcast

Tuesday, March 19, 2013 @ 8:30am Eastern/5:30am Pacific

Domestic: 866-700-0161
International: 617-213-8832
Passcode: 42664770
Webcast: www.cytomedix.com

Replays - Available through March 26, 2013
Domestic: 888-286-8010
International: 617-801-6888
Passcode: 23856984

About Cytomedix, Inc.

Cytomedix, Inc. is a fully integrated regenerative medicine company commercializing and developing innovative platelet and adult stem cell separation products that enhance the body's natural healing processes. The Company's advanced autologous technologies offer clinicians a new treatment paradigm for wound and tissue repair. The Company's patient-derived PRP systems are marketed by Cytomedix in the U.S. and distributed internationally. Our commercial products include the AutoloGel™ System, cleared by the FDA for wound care and the Angel® Whole Blood Separation System. The Company is developing novel regenerative therapies using our proprietary ALDH Bright Cell ("Lahr") technology to isolate a unique, biologically active population of a patient's own stem cells. A Phase 2 trial evaluating the use of ALDHbr for the treatment of ischemic stroke is underway. For additional information please visit www.cytomedix.com.

Safe Harbor Statement - Statements contained in this press release not relating to historical facts are forward-looking statements that are intended to fall within the safe harbor rule for such statements under the Private Securities Litigation Reform Act of 1995. The information contained in the forward-looking statements is inherently uncertain, and Cytomedix' actual results may differ materially due to a number of factors, many of which are beyond Cytomedix' ability to predict or control, including among many others, risks and uncertainties related to the Company's ability to successfully execute its Angel and AutoloGel sales strategies, to achieve AutoloGel expected reimbursement rates in 2013, to meet its stroke trial enrollment rates, the Company's ability to successfully integrate the Aldagen acquisition, the Company's ability to expand patient populations as contemplated, its ability to provide Medicare patients with access as expected, the Company's expectations of favorable future dialogue with potential strategic partners, and its ability to successfully manage contemplated clinical trials, to manage and address the capital needs, human resource, management, compliance and other challenges of a larger, more complex and integrated business enterprise, viability and effectiveness of the Company's sales approach and overall marketing strategies, commercial success or acceptance by the medical community, competitive responses, the Company's ability to raise additional capital and to continue as a going concern, and Cytomedix's ability to execute on its strategy to market the AutoloGel™ System as contemplated. To the extent that any statements made here are not historical, these statements are essentially forward-looking. The Company uses words and phrases such as "believes", "forecasted," "projects," "is expected," "remain confident," "will" and/or similar expressions to identify forward-looking statements in this press release. Undue reliance should not be placed on forward-looking information. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual events to differ from the forward-looking statements. More information about some of these risks and uncertainties may be found in the reports filed with the Securities and Exchange Commission by Cytomedix, Inc. Cytomedix operates in a highly competitive and rapidly changing business and regulatory environment, thus new or unforeseen risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. Except as is expressly required by the federal securities laws, Cytomedix undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason. Additional risks that could affect our future operating results are more fully described in our U.S. Securities and Exchange Commission filings, including our Annual Report for the year ended December 31, 2012, as amended to date, and other subsequent filings. These filings are available at www.sec.gov.

                                                                            
                           Three Months Ended             Year Ended        
                              December 31,               December 31,       
                        ------------------------  ------------------------- 
                            2012         2011         2012          2011    
                        -----------  -----------  ------------  ----------- 
                                                                            
Revenues                                                                    
  Product Sales         $ 2,037,717  $ 1,609,835  $  7,241,392  $ 5,902,120 
  License Fees                   --    1,345,279     3,154,722    1,345,279 
  Royalties                  65,085           --       168,106           -- 
                        -----------  -----------  ------------  ----------- 
Total revenues            2,102,802    2,955,114    10,564,220    7,247,399 
                        -----------  -----------  ------------  ----------- 
                                                                            
Cost of revenues                                                            
  Cost of sales           1,082,539      725,710     3,898,162    2,727,156 
  Cost of royalties           5,606           --        16,380           -- 
                        -----------  -----------  ------------  ----------- 
Total cost of revenues    1,088,145      725,710     3,914,542    2,727,156 
                        -----------  -----------  ------------  ----------- 
Gross profit              1,014,657    2,229,404     6,649,678    4,520,243 
                        -----------  -----------  ------------  ----------- 
                                                                            
Operating expenses                                                          
  Salaries and wages      1,520,163      674,563     7,106,906    2,852,327 
  Consulting expenses       491,504      400,570     2,275,905    1,348,499 
  Professional fees         186,787      199,818     1,189,734      786,424 
  Research,                                                                 
   development, trials                                                      
   and studies              931,824       (7,968)    3,386,439       98,148 
  General and                                                               
   administrative                                                           
   expenses               1,503,019      723,809     5,585,419    2,949,164 
                        -----------  -----------  ------------  ----------- 
Total operating                                                             
 expenses                 4,633,297    1,990,792    19,544,403    8,034,562 
                        -----------  -----------  ------------  ----------- 
Loss from operations     (3,618,640)     238,612   (12,894,725)  (3,514,319)
                        -----------  -----------  ------------  ----------- 
                                                                            
Other income (expense)                                                      
  Interest, net            (244,393)    (291,017)   (1,041,533)  (1,048,474)
  Change in fair value                                                      
   of derivative                                                            
   liabilities               49,568      872,579       492,311      470,466 
  Change in fair value                                                      
   of contingent                                                            
   consideration                 --           --    (4,334,932)          -- 
  Gain on debt                                                              
   restructuring                 --           --            --      576,677 
  Inducement expense             --           --    (1,513,371)          -- 
  Settlement of                                                             
   contingency                   --           --      (471,250)          -- 
  Other                     (16,029)      81,245       (16,558)      23,135 
                        -----------  -----------  ------------  ----------- 
Total other income                                                          
 (expenses)                (210,854)     662,807    (6,885,333)      21,804 
                        -----------  -----------  ------------  ----------- 
Loss before provision                                                       
 for income taxes        (3,829,494)     901,419   (19,780,058)  (3,492,515)
Income tax provision          4,173        4,000        18,000       18,000 
                        -----------  -----------  ------------  ----------- 
Net loss                 (3,833,667)     897,419   (19,798,058)  (3,510,515)
                                                                            
Preferred dividends:                                                        
  Series A preferred                                                        
   stock                         --        2,334            --        9,064 
  Series B preferred                                                        
   stock                         --        1,589            --        6,168 
  Series D preferred                                                        
   stock                         --       82,499        13,562      331,004 
                        -----------  -----------  ------------  ----------- 
Net loss to common                                                          
 stockholders           $(3,833,667) $   810,997  $(19,811,620) $(3,856,751)
                        ===========  ===========  ============  =========== 
                                                                            
Loss per common share                                                       
 --                                                                         
  Basic and diluted     $     (0.04) $      0.02  $      (0.24) $     (0.08)
                        ===========  ===========  ============  =========== 
  Diluted                       n/a  $      0.01           n/a          n/a 
                        ===========  ===========  ============  =========== 
                                                                            
Weighted average shares                                                     
 outstanding --                                                             
  Basic and diluted      92,133,522   53,639,257    81,859,343   50,665,986 
                        ===========  ===========  ============  =========== 
  Diluted                       n/a   61,636,578           n/a          n/a 
                        ===========  ===========  ============  =========== 
                                                                            
                                                                            
                                                                            
                                                December 31,   December 31, 
                                                    2012           2011     
                                               -------------  ------------- 
                                                                            
                    ASSETS                                                  
                                                                            
Current assets                                                              
  Cash (including $1.5 million of cash in 2012                              
   dedicated for clinical trials and related                                
   matters)                                    $   2,615,805  $   2,246,050 
  Short-term investments, restricted                  53,248         52,840 
  Accounts and other receivable, net               1,733,742      1,480,463 
  Inventory                                        1,170,097        548,159 
  Prepaid expenses and other current assets          737,445        695,567 
  Deferred costs, current portion                    136,436        136,436 
                                               -------------  ------------- 
Total current assets                               6,446,773      5,159,515 
                                                                            
Property and equipment, net                        2,440,081        978,893 
Deferred costs                                       180,783        317,219 
Intangible assets, net                            34,135,287      2,916,042 
Goodwill                                           1,128,517        706,823 
                                               -------------  ------------- 
Total assets                                   $  44,331,441  $  10,078,492 
                                               =============  ============= 
                                                                            
     LIABILITIES AND STOCKHOLDERS' EQUITY                                   
                                                                            
Current liabilities                                                         
  Accounts payable and accrued expenses        $   2,812,371  $   1,849,133 
  Deferred revenues, current portion                      --        654,721 
  Dividends payable on preferred stock                    --        105,533 
  Derivative liabilities, current portion                 --        528,467 
                                               -------------  ------------- 
Total current liabilities                          2,812,371      3,137,854 
                                                                            
Note payable                                       2,100,000      2,100,000 
Derivative and other liabilities                   1,415,159      1,559,055 
                                               -------------  ------------- 
Total liabilities                                  6,327,530      6,796,909 
                                               -------------  ------------- 
                                                                            
Commitments and contingencies                                               
                                                                            
Stockholders' equity                                                        
  Series A Convertible preferred stock; $.0001                              
   par value, authorized 5,000,000 shares;                                  
    2012 issued and outstanding - 0 shares;                                 
    2011 issued and outstanding - 97,663                                    
     shares;                                                                
    2012 liquidation preference of $0;                                      
    2011 liquidation preference of $97,663                --             10 
  Series B Convertible preferred stock; $.0001                              
   par value, authorized 5,000,000 shares;                                  
    2012 issued and outstanding - 0 shares;                                 
    2011 issued and outstanding - 65,784                                    
     shares;                                                                
    2012 liquidation preference of $0;                                      
    2011 liquidation preference of $65,784                --              7 
  Series D Convertible preferred stock; $.0001                              
   par value, authorized 2,000,000 shares;                                  
    2012 issued and outstanding - 0 shares;                                 
    2011 issued and outstanding - 3,300                                     
     shares;                                                                
    2012 liquidation preference of $0;                                      
    2011 liquidation preference of $3,300,000             --             -- 
  Common stock; $.0001 par value, authorized                                
   160,000,000 shares;                                                      
    2012 issued and outstanding - 93,808,386                                
     shares;                                                                
    2011 issued and outstanding - 55,536,292                                
     shares                                            9,381          5,554 
  Common stock issuable                              489,100             -- 
  Additional paid-in capital                     108,485,646     54,458,170 
  Accumulated deficit                            (70,980,216)   (51,182,158)
                                               -------------  ------------- 
Total stockholders' equity                        38,003,911      3,281,583 
                                               -------------  ------------- 
Total liabilities and stockholders' equity     $  44,331,441  $  10,078,492 
                                               =============  ============= 

Contacts:
Cytomedix, Inc.
Martin Rosendale
Chief Executive Officer
Andrew Maslan
Chief Financial Officer
David Jorden
Executive Chairman
(240) 499-2680

Investors
Michael Rice
LifeSci Advisors, LLC
mrice@lifesciadvisors.com
(646) 597-6979


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