ENTL Entellus Medical, Inc. (delisted)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 7, 2015

 

 

ENTELLUS MEDICAL, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		0001-36814		20-4627978
(State or other jurisdiction of incorporation or organization)		(Commission File Number)		(I.R.S. Employer Identification No.)

3600 Holly Lane North, Suite 40

Plymouth, Minnesota 55447

(Address of principal executive offices) (Zip Code)

(763) 463-1595

(Registrant’s telephone number, include area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 2.02. Results of Operations and Financial Condition.

On May 7, 2015, Entellus Medical, Inc. announced its financial results for the three months ended March 31, 2015. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly provided by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

 

Exhibit No.		Description
99.1		Press Release issued on May 7, 2015

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

				ENTELLUS MEDICAL, INC.
Date: May 7, 2015
				By:		/s/ Thomas E. Griffin
						Thomas E. Griffin
						Chief Financial Officer

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EXHIBIT INDEX

 

Exhibit No.		Description
99.1		Press Release issued on May 7, 2015

Exhibit 99.1

Contact: Leigh Salvo

415-513-1281

ir@entellusmedical.com

 

ENTELLUS MEDICAL ANNOUNCES FIRST QUARTER 2015 FINANCIAL RESULTS

UPDATES 2015 FINANCIAL OUTLOOK

PLYMOUTH, MN. (May 7, 2015) – Entellus Medical, Inc. (“Entellus Medical” or the “Company”) (NASDAQ: ENTL), a medical technology company focused on the design, development and commercialization of products for the minimally invasive treatment of chronic and recurrent sinusitis patients in the physician office setting or operating room, today reported its financial results for the three months ended March 31, 2015.

Recent Highlights and Accomplishments

 

•

Achieved revenue of $13.5 million in the first quarter of 2015, an increase of 33% versus the first quarter of 2014

 

•

Commercially launched XprESS™ Ultra Multi-Sinus Dilation System with positive clinician response

 

•

Expanded field sales organization to 110 as of March 31, 2015

“Our first quarter results saw growth balanced across the operating room and office-based settings. We are off to a promising start in 2015 and remain well positioned to expand the market for office-based treatment of patients suffering from sinusitis and to provide our highly efficacious solution that reduces costs to the healthcare system and to patients. Physician reception to our release of the XprESS Ultra Multi-Sinus Dilation System has been strong as broad awareness and utilization of our XprESS family of products continues to grow,” said Robert White, President and Chief Executive Officer.

First Quarter 2015 Financial Results

Revenue for the three months ended March 31, 2015 increased 33% to $13.5 million from $10.2 million during the same period of the prior year. The growth in revenue was primarily attributable to an increase of approximately $3.2 million in sales of the XprESS family of products.

Gross margin for the first quarter of 2015 increased to 78.2%, compared to 77.4% for the same period in 2014. Operating expenses for the first quarter of 2015 were $14.0 million, an increase of 40% compared to $10.0 million for the same period of the prior year. The increase in gross margin was primarily due to an increase in revenue per procedure and increased unit sales. The increase in operating expenses was primarily due to compensation and other employee-related expenses resulting from increased headcount in our sales, finance, and IT staff as well as the cost of being a public company.

Net loss for the three months ended March 31, 2015 was $4.3 million, or $0.35 per diluted share, compared with net loss of $2.5 million, or $1.80 per diluted share, for the three months ended March 31, 2014.

Entellus Medical ended the first quarter of 2015 with $78.4 million in cash, cash equivalents and short-term investments.

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2015 Financial Outlook

Entellus Medical estimates that second quarter 2015 revenue will range from approximately $14.8 million to $15.3 million, which would represent growth of approximately 18% to 22% versus the second quarter of 2014. The Company expects that gross margin for the second quarter of 2015 will range from 77.5% to 78.5% compared to 78.3% in the second quarter of 2014. Second quarter operating expenses are expected to be in the range of $14.3 million to $15.3 million, with the increase primarily due to sales and marketing expenses related to the expansion of the U.S. sales organization, and from general and administrative expenses associated with the expense of operating as a public company. Second quarter net loss is estimated to range from approximately $2.8 million to $4.3 million, or an estimated net loss of $0.15 to $0.23 per share. The estimated net loss for the second quarter includes estimated non-cash stock-based compensation of $0.7 million to $0.8 million. The number of weighted average shares outstanding used to calculate estimated earnings per share for the second quarter is currently expected to range from approximately 18.7 million to 18.8 million.

Entellus Medical continues to expect full year 2015 revenue will be in a range of $58.5 million to $61.0 million, representing growth of 20% to 25% annually and that gross margin will be in a range of 77% to 78% for 2015. The Company now expects operating expenses to be in a range of $59 million to $62 million, including estimated charges for stock-based compensation expenses of $2.5 million to $2.7 million. This compares to the Company’s previous operating expense expectation for 2015 of $60 million to $63 million. Full year 2015 net loss is now expected to be in a range of $14.0 million to $19.0 million, or a net loss of $0.80 to $1.10 per share. This compares to the Company’s previous expectations for net loss in the range of $14.6 million to $20.0 million, or a net loss of $0.84 to $1.17 per share. This expected net loss per share assumes approximately 17.2 million to 17.4 million weighted average shares outstanding for the year.

Webcast and Conference Call Information

The Company’s management team will host a corresponding conference call beginning today at 1:30pm PT/4:30pm ET to discuss the financial results and recent business developments. Individuals interested in listening to the conference call may do so by dialing (877) 930-5751 for domestic callers or (253) 336-7277 for international callers, using Conference ID: 22992710. To listen to a live webcast, please visit the investor relations section of the Entellus Medical website at: www.entellusmedical.com.

A replay of the call will be available beginning May 7, 2015 at 4:30pm PT/7:30pm ET through midnight on May 8, 2015. To access the replay, dial (855) 859-2056 or (404) 537-3406 and reference Conference ID: 22992710. The webcast will also be available on the Entellus website for one month following the completion of the call.

About Entellus Medical, Inc.

Entellus Medical is a medical technology company focused on the design, development and commercialization of products for the minimally invasive treatment of chronic and recurrent sinusitis patients in the physician office setting or operating room. Its XprESS family of products is used by ENT physicians to open narrowed or obstructed sinus drainage pathways using balloon sinus dilation. When used as a stand-alone therapy, Entellus Medical’s balloon sinus dilation products are the only devices proven in a sufficiently powered prospective, multicenter, randomized, controlled trial to be as effective as functional endoscopic sinus surgery, or FESS. Patients treated with Entellus Medical’s products in this trial in the ENT physician office also experienced faster recovery, less bleeding at discharge, less use of prescription pain medication and fewer post-procedure debridements than patients receiving FESS. Entellus Medical currently markets its products in the United States and Canada and sells its products through a direct sales force in the United States.

Forward-Looking Statements

All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding the Company’s financial outlook and

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are based on management’s current expectations and involve known and unknown risks and uncertainties that may cause Entellus Medical’s actual financial results, performance or achievements to be materially different from any estimated or forecasted future financial results, performance or achievements expressed or implied by the forward looking statements. Such risks and uncertainties include, among others, the Company’s significant operating expenses incurred since inception and expected to incur in the future; its dependence on a limited number of products, including the XprESS family of multi-sinus products; physicians’ willingness to change current practices and continue to adopt office-based balloon sinus dilation procedures; inability to maintain adequate levels of coverage and reimbursement for the procedures using the Company’s products; the impact of competition within the industry; the Company’s dependence on a key license agreement; and the Company’s ability to establish and maintain intellectual property protection for its products. Other factors that could cause actual results to differ materially from those contemplated by the forward looking statements in the Company’s comments today can be found under the caption “Risk Factors” in the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission, or SEC, and its other reports filed with the SEC. Entellus Medical undertakes no obligation to update or revise any forward looking statements, even if subsequent events cause our views to change.

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Entellus Medical, Inc.

Condensed Statement of Operations

(in thousands, except per share data)

(unaudited)

 

		Three Months Ended
		March 31,
		2015				2014
Revenue		$	13,502			$	10,175
Cost of goods sold			2,949				2,298
Gross profit			10,553				7,877
Gross margin			78.2	%			77.4	%
Operating expenses:
Selling and marketing			9,887				7,722
Research and development			1,300				1,116
General and administrative			2,816				1,158
Total operating expenses			14,003				9,996
Loss from operations			(3,450	)			(2,119	)
Other expense, net			(898	)			(416	)
Net loss		$	(4,348	)		$	(2,535	)
Net loss per share, basic and diluted		$	(0.35	)		$	(1.80	)
Weighted average common shares used to compute net loss per share, basic and diluted			12,542				1,412

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Entellus Medical, Inc.

Condensed Balance Sheet

(in thousands)

(unaudited)

 

		March 31, 2015				December 31, 2014
Assets
Current Assets
Cash and cash equivalents		$	19,732			$	3,484
Short-term investments			58,653				—
Accrued interest income			248				—
Accounts receivable, net			8,424				8,746
Inventories			2,596				2,439
Prepaid expenses and other current assets			1,203				883
Total current assets			90,856				15,552
Property and equipment, net			2,097				1,730
Other non-current assets			4,199				1,954
Total assets		$	97,152			$	19,236
Liabilities and stockholders’ equity (deficit)
Current liabilities
Accounts payable		$	2,042			$	2,414
Current portion of long-term debt			1,002				—
Preferred stock warrant liability			—				291
Accrued expenses			5,677				5,084
Total current liabilities			8,721				7,789
Long-term liabilities
Long-term debt			18,998				20,000
Other non-current liabilities			325				247
Total liabilities			28,044				28,036
Convertible preferred stock			—				91,554
Total stockholders’ equity (deficit)			69,108				(100,354	)
Total liabilities and stockholders’ equity (deficit)		$	97,152			$	19,236