Mauna Kea Technologies Reports Full Year 2018 Financial Results
Mauna Kea Technologies (Paris:MKEA) (OTCQX:MKEAY) will host a conference call today at 6:30 PM (CET / Paris time) / 1:30 PM (ET / New York time) to discuss the Company’s full year 2018 financial results and to provide a business update. The conference call will be hosted by Robert L. Gershon, CEO, and Christophe Lamboeuf, CFO. To access the conference call, please use one of the following dial-in numbers at least 5 minutes prior to the scheduled start time and follow the instructions: USA: +1 646-722-4916 / UK: +44 (0)20 7194 3759 / FR: +33 (0)1 72 72 74 03. The passcode for the conference call is: 90573902#. Following the conclusion of the live call, a replay will be available for 90 days. To access the replay, please dial one of the following numbers: USA: +1 (646) 722-4969 / UK: +44 (0)20 3364 5147 / FR: +33 (0)1 70 71 01 60. The passcode for the replay is: 418839209#.
Mauna Kea Technologies (Euronext: MKEA) inventor of Cellvizio, the multidisciplinary probe and needle-based confocal laser endomicroscopy (pCLE/nCLE) platform, today announced its financial results for the full year ended December 31, 2018.
“We are encouraged by our performance in 2018, particularly in the second half of the year, and the improving growth trends represent continued validation of our strategy to transition the business model in the U.S. GI market,” stated Robert L. Gershon, Chief Executive Officer of Mauna Kea Technologies. “The team has executed well in 2018 and the strong adoption of our Cellvizio systems by customers that see the value in our pay-per-use program give us confidence in our future growth potential. Importantly, these system adoptions are driving solid growth in sales of consumables – the key indicator of recurring revenue – which increased 17% year-over-year in total year 2018.”
Mr. Gershon continued: “As we look out to 2019, we are focused on driving solid growth in sales of consumables to the many Cellvizio users in the U.S. GI market, while also continuing to introduce our Cellvizio system to new clinicians in the estimated 3,000 high-volume upper-GI hospitals and ASCs in the U.S. While there is a significant market opportunity for Mauna Kea to penetrate the U.S. GI market, we also look forward to identifying the Company’s next clinical indication for commercial focus. Accordingly, we are undertaking a formal process of evaluating the potential commercial opportunity for our Cellvizio system in the interventional pulmonology market. With the recent 510(k) clearance of our Cellvizio AQ-Flex 19 Confocal Miniprobe, we believe we are well-positioned to unlock a new era in interventional pulmonology, a market with more than 240,000 annual lung biopsy procedures in the U.S. alone.”
Full Year 2018 Financial Summary
- As previously reported, total sales for the full year 2018 were €6.8 million, up 1% year-over-year
- The Company placed 55 new Cellvizio systems under its PPU program in 2018, up 323% year-over-year
- New system placements in 2018 drove a 37% increase in pay-per-use consumables sales
- Gross margin of 69.6% compared to 68.2% in 2017
- Operating loss was €12 million, compared to operating loss of €9.7 million in 2017
- Net loss was €12.8 million, compared to net loss of €10.2 million in 2017
- Cash and cash equivalents were €8.6 million as of December 31, 2018
Fourth Quarter and Full Year 2018 Revenue
Total sales for the fourth quarter of 2018 were €2.1 million, up 37% year-over-year. Fourth quarter sales growth was driven by a 34% increase in system sales, a 65% increase in services revenue and a 27% increase in sales of consumables. The year-over-year increase in total consumables sales in the fourth quarter of 2018 was driven by sales to customers in our pay-per-use program, which represented approximately 41% of total consumables sales in the fourth quarter of 2018, compared to 25% in the prior year period.
Total sales for the full year 2018 were €6.8 million, up 1% year-over-year. Full year 2018 sales growth was driven primarily by a 17% increase in consumables sales and a 6% increase in services revenue, which offset a 13% decrease in systems sales in the period. The year-over-year decrease in system sales was driven by the Company’s strategic shift to a consignment model where units are placed, compared to the prior selling model based on outright sales of systems in the prior year period. The Company placed 55 new Cellvizio systems under its PPU program in 2018, up 323% year-over-year. New system placements in 2018 drove a 37% increase in pay-per-use consumables sales.
Total clinical sales for the fourth quarter of 2018 were €2.0 million, up 74% year-over-year, driven by a 98% increase in sales in the U.S. & Canada regions and a 289% increase in sales in the EMEA region which offset a 10% decrease in sales in the Asia-Pacific region and an 89% decrease in sales in the LATAM region.
Total clinical sales for the full year 2018 period were €5.6 million, up 3% year-over-year, driven by a 14% increase in sales in the Asia-Pacific region and a 23% increase in sales in the EMEA region which offset an 88% decrease in sales in the LATAM region.
The year-over-year decrease in pre-clinical sales was driven by the Company’s strategic focus on clinical sales opportunities and, as stated in prior quarters, are less recurring than clinical sales which presents difficult comparisons from one period to another.
Total pre-clinical sales were €158k and €1.1 million in the fourth quarter and full year 2018 periods, respectively, representing 7% of total sales and 17% of total sales, compared to 27% of total sales and 18% of total sales, respectively, in the prior period.
Full Year 2018 Consolidated Financial Results
|(in € thousands) – IFRS||
(December 31, 2018)
(December 31, 2017)
|% Change Y/Y|
|Cost of Sales||(2,058)||(2,129)||(3%)|
|Gross Margin (%)||69.6%||68.2%||+141 bps|
|Research & Development||(4,653)||(4,265)||9%|
|Sales & Marketing||(9,097)||(7,586)||20%|
|Total Operating Expenses||(19,899)||(17,541)||13%|
|Operating Profit (Loss)||(11,998)||(9,710)||(24)%|
|Net Profit (Loss)||(12,785)||(10,245)||(25%)|
Gross margin in the full year 2018 period was 69.6%, compared to gross margin of 68.2% in full year 2017 period. The primary driver of the increase in gross margin was a better margin mix with the increase of consumables and services.