Amedica Increases Revenue for Fiscal 2014, But More Than Doubles Losses

Salt Lake City, Utah-based Amedica Corporation, which makes silicon nitride ceramics and a biomaterial platform, has released its financial results for the fourth quarter and full year ending Dec. 31, 2014.

“This past year has been remarkable for Amedica and I’m pleased to see that momentum carry into 2015,” said Sonny Bal, M.D., JD, MBA, chairman and CEO of Amedica Corporation. “We believe the recent clinical, financial, and regulatory developments position Amedica to capture additional market share, enhance our ability to demonstrate the benefits of silicon nitride and promote wider adoption of the material across a number of biomedical platforms. I’m proud of the significant achievements our dedicated team has accomplished to-date, as we seek to leverage the opportunities these achievements provide throughout the balance of this year.”

Total product revenue increased by 2 percent during 2014 to $22.8 million, as compared to $22.3 million in 2013. This was primarily attributable to a 41 percent increase, or $3.2 million, in silicon nitride ceramic product revenue over the prior-year period due to increased market adoption of the Valeo spinal interbody devices and the company’s focus on its core silicon nitride technology.

Gross profit for the full year 2014 totaled $14.9 million, compared to $15.3 million in the same period last year. Gross margin percentage for the full year 2014 was 65 percent, compared to 68 percent for the full year 2013. Excluding the impact of excess or obsolete inventory for both years, full year 2014 gross margins improved by 3 percentage points to 77 percent, as compared to the prior year period, due to production efficiencies and quality improvements.

Net loss for the full year 2014 was $32.6 million, compared to $8.3 million in the prior-year period, primarily as a result of a non-cash stock compensation expense of approximately $10.2 million, higher operating expenses, increased interest expense, a loss on the extinguishment of debt and offering costs incurred during the year.

Adjusted EBITDA, which is defined as earnings before deductions for interest, taxes, depreciation, amortization, non-cash stock compensation expense, change in fair value of our derivative liabilities, offering costs, and loss on extinguishment of debt for the full year 2014 was ($11.9) million, compared to ($7.7) million for the full year 2013.

Cash and cash equivalents totaled $18.2 million, while total principal debt obligations were $24.5 million as of Dec. 31, 2014.

Amedica maintains its previous estimates of increasing 2015 silicon nitride sales this year by 30-40 percent, thus equating to a total annual revenue range of $23-$24 million. Additionally, the company expects the impact from the previously announced financial and operational alignment actions to deliver $6-$8 million of annualized operating profit benefit, beginning in the first quarter of 2015. These changes are anticipated to reduce total cash burn, increase financial sustainability, and strengthen the balance sheet, positioning the Company to maintain compliance with all debt covenants into Q4 of this year and become operating cash flow breakeven during the second half of 2016.