IRVINE, Calif.–(BUSINESS WIRE)–Endologix, Inc. (NASDAQ:ELGX), a developer and marketer of innovative treatments for aortic disorders, today announced financial results for the second quarter ended June 30, 2017.
“While we are pleased with the overall results in the second quarter, the recovery in AFX®2 sales in the U.S. has been slower than expected. Ovation® continues to perform nicely and is currently the fastest growing endovascular AAA device in the U.S. market. Enrollment in the ELEVATE clinical study with Ovation Alto™ is on schedule, and we recently filed our clinical study design with the FDA for the Nellix® confirmatory IDE,” commented John McDermott, Endologix’s Chief Executive Officer. “Looking toward the remainder of the year, we will continue our investment in innovative aortic technologies, while also focusing on increasing revenue and our operating efficiencies.”
Financial Results
Global revenue in the second quarter of 2017 was $48.6 million, a 4.7% decrease from $51.0 million in the second quarter of 2016. U.S. revenue in the second quarter of 2017 was $31.9 million, a 12.1% decrease from U.S. revenue of $36.3 million in the second quarter of 2016. International revenue was $16.7 million, a 13.3% increase from International revenue of $14.7 million in the second quarter of 2016. On a constant currency basis, second quarter 2017 International revenue increased 14.8%.
Gross profit was $32.2 million in the second quarter of 2017, which represents a gross margin of 66.4%. This compares to a gross profit of $29.5 million, or a gross margin of 57.8%, in the second quarter of 2016.
Total operating expenses were $40.1 million in the second quarter of 2017, compared to $52.7 million in the second quarter of 2016. Second quarter 2016 operating expenses included $1.9 million of expenses related to the TriVascular merger. Excluding these items, operating expenses in the second quarter of 2017 were $10.7 million lower than in the prior-year period, representing a decline of 20.9%, which was driven primarily by cost synergies related to the TriVascular merger.
Net loss for the second quarter of 2017 was $16.3 million, or $(0.20) per share, compared to a net loss of $66.8 million, or $(0.81) per share, a year ago. Adjusted Net Loss (non-GAAP, defined below) totaled $8.0 million, compared to an Adjusted Net Loss of $16.7 million for the second quarter of 2016. Endologix reported a negative Adjusted EBITDA (non-GAAP, defined below) of $2.3 million for the second quarter of 2017, compared to a negative Adjusted EBITDA of $10.4 million for the second quarter of 2016.
Total cash, cash equivalents, restricted cash, and marketable securities were $94.5 million as of June 30, 2017. On April 3, 2017, the Company entered into an agreement for $170 million in funding through a $120 million six-year secured term loan and a $50 million three-year secured asset-based revolving line of credit. The Company drew the entire principal amount of the term loan on April 3, 2017 and used a portion of the proceeds to repurchase approximately $68 million aggregate principal amount of outstanding 2.25% Convertible Senior Notes due 2018, plus the accrued but unpaid interest thereon, from the holders thereof in privately negotiated transactions. Subsequently, on June 23, 2017, the Company drew $25 million under the aforementioned revolver.
