SOURCE: Cytomedix, Inc.

Cytomedix, Inc.

March 29, 2012 16:15 ET

Cytomedix Reports 2011 Fourth Quarter and Full Year Financial Results

Fourth Quarter Results Feature Record Product Sales With Double-Digit Growth; Conference Call Begins Friday, March 30th at 10:00 a.m. Eastern Time

GAITHERSBURG, MD--(Marketwire - Mar 29, 2012) - Cytomedix, Inc. (OTCBB: CMXI) (the "Company"), a leading developer of biologically active regenerative therapies for wound care, inflammation and angiogenesis, today announced financial results for the three and 12 months ended December 31, 2011.

Financial highlights for the 2011 fourth quarter include (all comparisons are with the 2010 fourth quarter):

  • Total revenues increased 129% to $2.96 million from $1.29 million
  • Product sales up 25% to $1.61 million from $1.29 million
  • Licensing revenue of $1.35 million as partial recognition of a $2.0 million non-refundable option fee paid in connection with the potential strategic supply and distribution partnership for AutoloGel
  • Net income to common shareholders of $0.81 million or $0.02 per basic share compared with a net loss of $2.17 million or $0.05 per share

Financial highlights for the 2011 year include (all comparisons are with 2010):

  • Total revenues increased 85% to $7.25 million from $3.91 million
  • Product sales increased 56% to a record $5.90 million from $3.79 million
  • Licensing revenue of $1.35 million as described above, compared with $123,000 in royalty revenue associated with the final adjustments post November 2009 patent expiration
  • Net loss to common shareholders of $3.86 million or $0.08 per share, compared with a net loss of $9.04 million or $0.23 per share

Management Discussion

Martin P. Rosendale, Chief Executive Officer of Cytomedix, said, "2011 was an exceptional year for Cytomedix, and was one in which we significantly strengthened the Company and positioned it for future growth and business expansion. The Angel business continues to grow nicely, posting double-digit sales increases, and we have made substantial progress with the AutoloGel system both with business development and reimbursement initiatives. We significantly strengthened our balance sheet with the early retirement of the remaining debt from the Angel acquisition and the $2.0 million non-refundable option payment received from our potential strategic global pharmaceutical partner for AutoloGel. Importantly, we recently expanded our commitment to regenerative medicine with the acquisition of Aldagen in February 2012, and we are now a significantly more diversified business with both commercial products and a robust pipeline of promising regenerative technologies.

"The potential partnership of AutoloGel with a large global pharmaceutical company should provide us with the resources, both commercial and financial, to advance our strategic goals and to strengthen our leadership position in autologous regenerative biotherapies. The strategic acquisition of Aldagen provides Cytomedix with a novel patent-protected cell selection technology that fits well with our existing commercial products and strengthens our long-term growth profile. In combination, we now touch the three pillars of regenerative medicine with autologous stem cells, platelet-derived signal molecules and plasma scaffolds.

"We are confident in the continued growth prospects for our Angel product throughout 2012 and beyond as our enhanced targeted marketing efforts and planned expansion of indications into sports medicine and orthopedics should provide opportunities to significantly increase utilization. In addition, we plan to add sales and clinical support positions in key territories and have ramped up manufacturing and placement of devices to meet the expected increase in demand.

"We are very excited about the opportunities ahead for Cytomedix as we grow sales of the Angel system, finalize our potential partnership for AutoloGel and advance the clinical development of our autologous cell therapy pipeline," concluded Mr. Rosendale.

Fourth Quarter Financial Results

Total revenues for the fourth quarter of 2011 were $2.96 million, an increase of 129% compared with total revenues of $1.29 million for the fourth quarter of 2010. The increase was largely attributable to $1.35 million in revenue from the $2.0 million non-refundable option fee paid in connection with the potential agreement with a global pharmaceutical company, as well as from higher sales of the Angel System.

Sales from the Angel product line increased 26% to $1.52 million from $1.21 million in the prior year fourth quarter, representing the sixth consecutive quarter of sequential sales growth for this product. AutoloGel System sales of $89,000 increased 10% compared with the fourth quarter of 2010.

Gross profit for the fourth quarter of 2011 rose 210% to $2.23 million from $720,000 for the same period in 2010, primarily due to $1.35 million in licensing revenue that had no related cost of goods sold. Gross profit on product sales increased 23% to $0.88 million.

Gross margin on product sales for the three months ended December 31, 2011 decreased nominally to 55% from 56% for the comparable 2010 period.

Fourth quarter cash margin on product sales, excluding $39,000 in patent amortization and $72,000 in depreciation, was 62%. 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.

Fourth quarter 2011 operating expenses decreased 10% to $1.99 million compared with operating expenses of $2.21 million in the prior year's fourth quarter. This decline was due primarily to lower legal and accounting costs in 2011 compared with the prior year, which included costs associated with transition related costs from the April 2010 acquisition of the Angel and activAT® product lines, and lower audit fees. The Company also realized lower research and development, general and administrative, and salary expenses, partly offset by modestly higher consulting costs associated with the Aldagen acquisition.

Other income for the fourth quarter of 2011 was $0.66 million, an improvement of $1.23 million compared with other expense of $0.57 million in the fourth quarter of 2010, primarily due to a non-cash change in the fair value of derivative liabilities associated with embedded conversion options in the convertible notes from the July 2011 debt financings. Upon the anticipated conversion of these notes in 2012, the then existing derivative liability would cease to exist and the balance would transfer to stockholders' equity.

Net income to common stockholders for the fourth quarter of 2011 was $0.81 million or $0.02 per basic share ($0.01 per diluted share), compared with a net loss to common stockholders of $2.17 million or $0.05 per basic and diluted share for the fourth quarter of 2010.

2011 Financial Results

Total revenues for 2011 were $7.25 million, up 85% from total revenues of $3.91 million for 2010. The increase was largely attributable to $1.35 million in revenue from the $2.0 million non-refundable option fee discussed above, as well as from higher sales of the Angel and AutoloGel Systems, partially offset by the loss of royalty revenue due to the expiration of the underlying patent.

Total product sales for 2011 increased 56% to $5.90 million from $3.79 million for 2010, largely the result of increased Angel sales. The first quarter of 2010 had no Angel sales as the product was acquired in April 2010.

Gross profit for 2011 increased 97% to $4.52 million, primarily due to $1.35 million in licensing revenue that had no related cost of goods sold. Gross profit on product sales increased 60% to $3.18 million as a result of higher Angel sales.

Gross margin on product sales for 2011 increased nominally to 54% from 53% for 2010. Cash margin for 2011, excluding depreciation, amortization and $57,000 in certain non-recurring adjustments in the first quarter of 2011, was 62%. Cash margin is a non-GAAP financial measure as described above.

Operating expenses for 2011 increased 4% to $8.04 million from $7.70 million for 2010.

The net loss to common stockholders for 2011 was $3.86 million or $0.08 per basic and diluted share, compared with a net loss to common stockholders for 2010 of $9.04 million or $0.23 per basic and diluted share. The net loss for 2010 includes a charge of $1.95 million, which represents the amortization of a beneficial conversion feature on the Series D preferred stock issued in association with the financing conducted in conjunction with the closing of the Angel acquisition in April 2010. This was a non-recurring, non-cash charge with no net effect on total shareholders' equity.

Cash and Liquidity

Cash and cash equivalents as of December 31, 2011 were $2.25 million compared with $0.64 million as of December 31, 2010. The Company used $4.24 million to fund operating activities during 2011.

Andrew Maslan, Cytomedix's Chief Financial Officer, noted, "During 2011, we undertook a number of important initiatives to strengthen our balance sheet and improve our cash flow, with such actions allowing the removal of the 'going concern' language in our 2011 Annual Report on Form 10-K.

"In April 2011, we considerably lowered our near term debt service obligations by facilitating early retirement of the remaining $3.4 million principal balance and negotiating a $1.3 million reduction of principal under the promissory note payable to Sorin USA in connection with the acquisition of the Angel assets. In tandem we raised $2.1 million in interest-only traditional debt maturing in April 2015. In the second half of 2011, we raised $2.4 million from the issuance of convertible debt, which had $1.8 million remaining as of year-end 2011. During 2011, we also raised a total of $4.0 million through the issuance of common stock and warrant exercises.

"In addition, in October 2011, we received a $2.0 million non-refundable payment in connection with the option agreement with a top 20 global pharmaceutical company for an exclusive due diligence period for the rights to negotiate a license agreement for AutoloGel, and in February 2012 we received a further $2.5 million non-refundable payment for the right to extend the exclusive option period until June 30, 2012," added Mr. Maslan.

Commenting on the Company's strategic acquisition of Aldagen, Mr. Maslan said, "The Aldagen acquisition provided Cytomedix with a strategic, value-enhancing asset at an attractive valuation. The all-stock transaction, with 60% of the total consideration tied to the successful attainment of future clinical milestones, significantly mitigates our financial risk. In addition, certain Aldagen shareholders provided $5 million of new capital and certain Cytomedix shareholders agreed to exercise $3.0 million of warrants, which provides us with the capital to advance the new clinical program toward important clinical milestones."

For additional information, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission on March 29, 2012.

Conference Call

Cytomedix management will hold a conference call to discuss these results and answer questions beginning at 10:00 a.m. Eastern time on Friday, March 30, 2012. Shareholders and other interested parties may participate in the call by dialing 888-679-8034 (domestic) or 617-213-4847 (international) and entering passcode 23291244. The call will also be broadcast live on the Internet at www.streetevents.com, www.fulldisclosure.com and www.cytomedix.com.

A replay of the conference call will be available beginning two hours after its completion through April 6, 2012 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and entering passcode 78509324. The call will also be archived for 90 days at www.streetevents.com, www.fulldisclosure.com and www.cytomedix.com.

About Cytomedix, Inc.

Cytomedix, Inc. develops, sells and licenses regenerative biological therapies primarily for wound care, inflammation and angiogenesis. The Company markets the AutoloGel™ System, a device for the production of autologous platelet rich plasma ("PRP") gel for use on a variety of exuding wounds; the Angel® Whole Blood Separation System, a blood processing device and disposable products used for the separation of whole blood into red cells, platelet poor plasma ("PPP") and PRP in surgical settings; and the activAT® Autologous Thrombin Processing Kit, which produces autologous thrombin serum from PPP. The activAT® kit is sold exclusively in Europe and Canada, where it provides a completely autologous, safe alternative to bovine-derived products. On February 8, 2012 Cytomedix closed the acquisition of Aldagen, a biopharmaceutical company developing regenerative cell therapies based on its proprietary ALDH bright cell ("ALDHbr") technology, currently in a Phase 2 trial for the treatment of ischemic stroke. For additional information please visit www.cytomedix.com

Non-GAAP financial measures

The non-GAAP financial measures discussed in the text of this press release and accompanying non-GAAP supplemental information are financial measures used by our management to evaluate our operating performance and to calculate our cash profitability. These non-GAAP measures are not in accordance with, or an alternative for, U.S. generally accepted accounting principles ("GAAP") 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 and management exercises judgment in determining which items should be excluded in the calculation of non-GAAP measures. While we believe that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP, we believe that non-GAAP measures are valuable in analyzing our cash profitability. Management analyzes current and future results on a GAAP basis as well as a non-GAAP basis and also provides GAAP and non-GAAP measures in our earnings release. The presentation of non-GAAP financial information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. The non-GAAP financial measures are meant to supplement, and be viewed in conjunction with, GAAP financial measures. We believe that the presentation of non-GAAP measures, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to our financial condition and results of operations. Investors are advised to carefully review and consider this information as well as the GAAP financial results that are disclosed in our SEC filings.

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 integrate the Aldagen acquisition, 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, 2011 and other subsequent filings. These filings are available at www.sec.gov.

CYTOMEDIX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2011 2010
ASSETS
Current assets
Cash $ 2,246,050 $ 638,868
Short-term investments, restricted 52,840 52,817
Accounts and royalties receivable, net 1,480,463 1,207,027
Inventory 548,159 627,984
Prepaid expenses and other current assets 695,567 610,409
Deferred costs, current portion 136,436 357,412
Total current assets 5,159,515 3,494,517
Property and equipment, net 978,893 1,324,996
Deferred costs 317,219 191,153
Intangible assets, net 2,916,042 3,182,875
Goodwill 706,823 706,823
Total assets $ 10,078,492 $ 8,900,364
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued expenses $ 1,849,133 $ 3,558,161
Deferred revenues, current portion 654,721 --
Note payable, current portion -- 1,520,947
Dividends payable on preferred stock 105,533 92,853
Derivative liabilities, current portion 528,467 --
Total current liabilities 3,137,854 5,171,961
Note payable 2,100,000 1,981,208
Derivative and other liabilities 1,559,055 1,826,447
Total liabilities 6,796,909 8,979,616
Commitments and contingencies
Stockholders' equity (deficit)
Series A Convertible preferred stock; $.0001 par value, authorized 5,000,000 shares; 2011 and 2010 issued and outstanding - 97,663 shares, liquidation preference of $97,663 10 10
Series B Convertible preferred stock; $.0001 par value, authorized 5,000,000 shares; 2011 and 2010 issued and outstanding - 65,784 shares, liquidation preference of $65,784 7 7
Series D Convertible preferred stock; $.0001 par value, authorized 2,000,000 shares; 2011 issued and outstanding - 3,300 shares; 2010 issued and outstanding - 3,315 shares; 2011 liquidation preference of $3,300,000; 2010 liquidation preference of $3,315,000 -- --
Common stock; $.0001 par value, authorized 100,000,000 shares; 2011 issued and outstanding - 55,536,292 shares; 2010 issued and outstanding - 44,103,743 shares 5,554 4,410
Additional paid-in capital 54,458,170 47,587,964
Accumulated deficit (51,182,158 ) (47,671,643 )
Total stockholders' equity (deficit) 3,281,583 (79,252 )
Total liabilities and stockholders' equity (deficit) $ 10,078,492 $ 8,900,364
CYTOMEDIX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Year Ended
December 31, December 31,
2011 2010 2011 2010
(UNAUDITED) (UNAUDITED)
Revenues
Product Sales $ 1,609,835 $ 1,287,455 $ 5,902,120 $ 3,787,935
License Fees 1,345,279 -- 1,345,279 --
Royalties -- 178 -- 123,098
Total revenues 2,955,114 1,287,633 7,247,399 3,911,033
Cost of revenues
Cost of sales 725,710 567,666 2,727,156 1,799,352
Cost of royalties -- -- -- (186,402 )
Total cost of revenues 725,710 567,666 2,727,156 1,612,950
Gross profit 2,229,404 719,967 4,520,243 2,298,083
Operating expenses
Salaries and wages 674,563 712,409 2,852,327 2,750,014
Consulting expenses 400,570 388,811 1,348,499 793,591
Professional fees 199,818 236,032 786,424 1,106,626
Research, development, trials and studies (7,968 ) 103,471 98,148 415,633
General and administrative expenses 723,809 770,530 2,949,164 2,635,145
Total operating expenses 1,990,792 2,211,253 8,034,562 7,701,009
Loss from operations 238,612 (1,491,286 ) (3,514,319 ) (5,402,926 )
Other income (expense)
Interest, net (291,017 ) (249,252 ) (1,048,474 ) (798,671 )
Change in fair value of derivative liabilities 872,579 (333,737 ) 470,466 (572,313 )
Gain on debt restructuring -- -- 576,677 --
Other 81,245 11,870 23,135 (28,841 )
Total other income (expenses) 662,807 (571,119 ) 21,804 (1,399,825 )
Loss before provision for income taxes 901,419 (2,062,405 ) (3,492,515 ) (6,802,751 )
Income tax provision 4,000 14,000 18,000 14,000
Net loss 897,419 (2,076,405 ) (3,510,515 ) (6,816,751 )
Preferred dividends:
Series A preferred stock 2,334 2,158 9,064 8,379
Series B preferred stock 1,589 1,590 6,168 5,698
Series D preferred stock 82,499 86,491 331,004 260,991
Amortization of beneficial conversion feature on Series D preferred stock -- -- -- 1,948,155
Net loss to common stockholders $ 810,997 $ (2,166,644 ) $ (3,856,751 ) $ (9,039,974 )
Loss per common share --
Basic $ 0.02 $ (0.05 ) $ (0.08 ) $ (0.23 )
Diluted $ 0.01 $ (0.05 ) $ (0.08 ) $ (0.23 )
Weighted average shares outstanding --
Basic 53,639,257 42,161,102 50,665,986 38,668,698
Diluted 61,636,578 42,161,102 50,665,986 38,668,698

Contact Information

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

    Investor Inquiries
    Anne Marie Fields
    LHA
    afields@lhai.com
    (212) 838-3777

    Bruce Voss
    LHA
    bvoss@lhai.com
    (310) 691-7100
    @LHA_IR_PR

    Media Inquiries
    Michelle Linn
    Linnden Communications
    linnmich@comcast.net
    (508) 362-3087