KORU Medical Systems Announces Record 2019 Fourth Quarter and Full Year Financial Results

Conference Call Scheduled for February 26 at 9:00 am ET

Q4 2019 Highlights

• Net sales rose 45.7% to $6.2 million
• Gross margin of 63.4%
• Net loss narrowed to $0.1 million
• Adjusted EBITDA increased 47.3% to $1.1 million

Full Year 2019 Highlights

• Net sales rose 33.5% to a record $23.2 million
• Gross margin increased to 64.1%
• Net income of $0.6 million
• Adjusted EBITDA increased 55.9% to $5.6 million
• Cash & cash equivalents increased to $5.9 million

CHESTER, N.Y.--(BUSINESS WIRE)-- Repro Med Systems, Inc. dba KORU Medical Systems (NASDAQ: KRMD) (“KORU Medical” or the “Company”) today announced financial results for the fourth quarter (“Q4 2019”) and full year ended December 31, 2019.

“2019 was a milestone year for KORU Medical,” said Don Pettigrew, President and CEO. “Four consecutive quarters of comparative net sales growth produced record annual net sales, expanded gross margins, net income of $0.6 million, and record Adjusted EBITDA of $5.6 million. We continued our participation in multiple clinical trials, accelerated our international expansion plans, strengthened our leadership team, and capped off our Nasdaq up-listing by ringing the closing bell.”

He added, “As we look ahead to 2020, our focus is on capitalizing on multiple industry tailwinds in PIDD and CIDP, which combine to represent an estimated total addressable U.S. market of $300 million. We are also growing our pharmaceutical relationships with an emphasis on new subcutaneous drugs coming to market, expanded indications beyond our primary disease states, and new geographic regions. We look forward to the U.S. launch of the HIgH-Flo Super26™ Subcutaneous Safety Needle Set in Q1 2020, with anticipated full commercialization to follow shortly after.”

Q4 2019 Overview

Net sales rose 45.7% to $6.2 million in Q4 2019 from $4.3 million in Q4 2018, with growth in all product categories (pumps, needle sets, tubing). This growth was driven by the Company’s continued success in expanding its U.S. presence in the Primary Immune Deficiency Disease (“PIDD”) and Chronic Inflammatory Demyelinating Polyneuropathy (“CIDP”) markets, higher international sales, greater clinical trial participation, and to a lesser extent price increases.

Gross profit in Q4 2019 rose to $3.9 million from $2.7 million in Q4 2018, primarily due to increased sales volume. Gross margin of 63.4% was stable compared to 63.5% in Q4 2018, reflecting the integration of new hires in production during the quarter partially offset by price increases.

Total operating expenses for Q4 2019 rose to $4.1 million from $3.2 million in Q4 2018. Selling, general & administrative expenses were $2.8 million, or 44.9% of net sales, compared to $2.7 million, or 62.8% of net sales in Q4 2018. Research and development expenses increased to $0.3 million from $0.1 million in Q4 2018, reflecting expanded product development initiatives and increased headcount. Litigation costs increased to $0.9 million from $0.3 million in Q4 2018, due to continued defense and increased legal activity against our competitor. We have had several favorable rulings in the New York and Texas courts dismissing those cases and have filed motions for court costs and attorney fees of which one fee motion has been recommended to be granted by the Magistrate Judge in New York, and the fee motion in Texas is stayed pending appeal of the case.

Net loss for Q4 2019 narrowed to less than $0.1 million, or $0.00 per diluted share, from a net loss of $0.4 million, or $0.01 per diluted share, in Q4 2018.

Q4 2019 Adjusted EBITDA rose 47.3% to $1.1 million from Adjusted EBITDA of $0.8 million in Q4 2018. Adjusted EBITDA excludes from net income: tax expense, depreciation and amortization, interest income, operating expenses associated with the Company's organizational changes prior to March 31, 2019, litigation costs, and stock option expense.

Cash and equivalents as of December 31, 2019 totaled $5.9 million. Cash flow of $2.1 million for the twelve months ended December 31, 2019 included a $1.8 million increase in accounts receivable as well as a $0.3 million increase in inventory both commensurate with sales growth. The increase also included $1.5 million in proceeds realized from the maturation of a Certificate of Deposit in Q2 2019 and $0.5 million associated with the exercise of warrants and options in 2019.

Non-GAAP Measures

This press release includes the non-GAAP financial measures of “Adjusted EBITDA” that are not in accordance with, nor an alternate to, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. They are limited in value because they exclude charges that have a material effect on our reported results and, therefore, should not be relied upon as the sole financial measures to evaluate our financial results. The non-GAAP financial measures are meant to supplement, and to be viewed in conjunction with, GAAP financial results. A reconciliation of our non-GAAP measures is included in an attachment to this press release.

Conference Call

Management will host a conference call on Wednesday, February 26, 2020 at 9:00 am ET to discuss Q4 2019 and full year 2019 results and business activities.

Interested parties may participate in the call by dialing:

• (877) 407-9753 (Domestic) or
• (201) 493-6739 (International)

Webcast registration: Click Here

Following the live call, a replay will be available for six months on the Company's website, www.korumedical.com under "Investor Relations."

About KORU Medical Systems

KORU Medical Systems manufactures and commercializes innovative and easy-to-use specialty infusion solutions that improve quality of life for patients around the world. The FREEDOM Syringe Infusion System currently includes the FREEDOM60^® and FreedomEdge^® Syringe Infusion Drivers, Precision Flow Rate Tubing^™ and HIgH-Flo Subcutaneous Safety Needle Sets^™. These devices are used for infusions administered in the home and alternate care settings. For more information about the Company, please visit www.korumedical.com.

Forward-looking Statements

This press release may contain forward-looking statements that involve risks and uncertainties. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the captions “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, as amended, and our most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, which are on file with the SEC and are available on our website at www.korumedical.com/investors and on the SEC website at www.sec.gov. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2019. All information provided in this release and in the attachments is as of February 25, 2020. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.

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