Apollo Endosurgery, Inc (APEN) saw its loss widen to $8.22 million, or $0.77 a share for the quarter ended Mar. 31, 2017. In the previous year period, the company reported a loss of $6 million, or $25.44 a share. Revenue during the quarter dropped 10.17 percent to $14.62 million from $16.28 million in the previous year period. Gross margin for the quarter contracted 469 basis points over the previous year period to 65.15 percent. Operating margin for the quarter stood at negative 46.58 percent as compared to a negative 18.56 percent for the previous year period.
Operating loss for the quarter was $6.81 million, compared with an operating loss of $3.02 million in the previous year period.
Todd Newton, Chief executive officer of Apollo, said, “We were very satisfied with our first quarter sales. First, we continued to build momentum for our endo-bariatric products. In the first quarter of 2016, we were very actively engaged in the launch of ORBERA in the U.S. and, last year’s endo-bariatric sales included $2.1 million of first-time starter kit sales to physicians as they completed training on the product. In the first quarter of 2017, U.S. starter kit sales were $0.3 million, reflecting our intentional transition to focus on ORBERA utilization in existing accounts. Total U.S. endo-bariatric sales in the first quarter of 2017 were $3.5 million, a decrease of 23% compared to $4.5 million in the first quarter of 2016, however, excluding these one-time U.S. ORBERA starter kit sales, adjusted U.S. endo-bariatric product sales were $3.2 million in the first quarter 2017, an increase of 31% compared to adjusted U.S. endo-bariatric product sales of $2.4 million in the first quarter 2016 reflecting both a solid ORBERA reorder rate and OverStitch™ sales growth. Second, the decline rate of our worldwide surgical business slowed in the first quarter. In the U.S., the rate of surgical sales decline in the first quarter was half that which we experienced in the year 2016 and surgical product sales outside the United States in the first quarter of 2017 increased 5% compared to the first quarter of last year.”
Operating cash flow remains negative
Apollo Endosurgery, Inc has spent $3.45 million cash to meet operating activities during the quarter as against cash outgo of $4.75 million in the last year period. The company has spent $0.43 million cash to meet investing activities during the quarter as against cash outgo of $0.79 million in the last year period.
The company has spent $6.98 million cash to carry out financing activities during the quarter as against cash inflow of $0.04 million in the last year period.
Cash and cash equivalents stood at $8.30 million as on Mar. 31, 2017, down 51.45 percent or $8.79 million from $17.10 million on Mar. 31, 2016.
Working capital increases sharply
Apollo Endosurgery, Inc. has recorded an increase in the working capital over the last year. It stood at $10.92 million as at Mar. 31, 2017, up 70.80 percent or $4.53 million from $6.39 million on Mar. 31, 2016. Current ratio was at 1.51 as on Mar. 31, 2017, down from 8.06 on Mar. 31, 2016.
At the same time, days payable outstanding went up to 60 days for the quarter from 7 for the same period last year.
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