Minerva Surgical, Inc. Third Quarter 2021 Financial Results

December 2, 2021

SANTA CLARA, Calif., Dec. 02, 2021 (GLOBE NEWSWIRE) -- Minerva Surgical, Inc. (Nasdaq: UTRS) (Minerva Surgical or the Company), a medical device company that develops therapeutic devices that treat abnormal uterine bleeding in a minimally invasive manner, today reported financial results for the third quarter ended September 30, 2021 and provided full-year 2021 revenue guidance.

Recent Business Highlights

  • Reported third quarter 2021 revenues of $12.5M, compared with revenues of $12.3M in third quarter of 2020.
  • Reported revenue of $38.5 million for the nine-month period ended September 30, 2021 representing a 58.8% increase compared to $24.2 million for the same period in 2020.
  • Successfully closed the Company’s initial public offering on October 26, 2021, with net cash proceeds to the Company of $69.8M.
  • In October 2021, refinanced its remaining outstanding debt with a new $40 million term loan facility, substantially reducing its net interest costs over the next five years. 
  • Continued the expansion of the U.S. sales team to accelerate growth in 2022.
  • Launched AUBandME.com, a patient educational website for the estimated 18 million women in the U.S. suffering from heavy menstrual bleeding.

“I’m really proud of our team’s performance in growing our account base in the third quarter, despite the challenging macro environment,” said David M. Clapper, Minerva Surgical’s Chief Executive Officer. “With our IPO proceeds in hand and our sales momentum building, we feel well-positioned to execute on driving growth as hospitals and out-patient surgery centers fully reopen for elective procedures.”

Third Quarter 2021 Financial Results

For the third quarter of 2021, Minerva Surgical generated revenue of $12.5 million, with a gross margin of 57.0% and a net loss of $3.2 million compared to revenue of $12.3 million, with a gross margin of 53.4% and a net loss of $7.3 million for the three months ended September 30, 2020. The increase in revenue was primarily attributable to the increase in volume of Genesys HTA and Symphion products, partially offset by a decrease in revenue for Minerva Surgical ES products.  The increase in gross margin was primarily due to the mix of products sold in the quarter. 

Year-to-date revenue increased by $14.2 million, or 58.8%, to $38.5 million during the nine months ended September 30, 2021, compared to $24.2 million during the nine months ended September 30, 2020. The increase was driven both by the acquisition of Boston Scientific Corporation’s intrauterine health assets in May 2020, and net account growth from cross-selling activities. 

Net loss in the third quarter of 2021 was $3.2 million, or $1.15 per share attributable to common stockholders, basic and diluted, compared to a net loss of $7.3 million, or $7.33 per share, for the same period in 2020.

As of September 30, 2021 and prior to the Company's initial public offering (IPO), cash and cash equivalents totaled to $6.1 million.

Financial Outlook for Fiscal Year 2021

Minerva Surgical expects full year 2021 revenue in the range of $51.0 to $52.0 million. 

Use of Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA Margin

To provide investors with additional information regarding the Company’s financial results, it has provided EBITDA and adjusted EBITDA. The Company calculates EBITDA as net loss excluding depreciation and amortization, interest expense and income tax benefit. The Company calculates adjusted EBITDA, a non-GAAP financial measure by further excluding non-cash items for stock-based compensation expenses, bargain purchase gain, loss on extinguishment of long-term debt and convertible promissory notes, gain on extinguishment of PPP loan, change in fair value of redeemable convertible preferred stock warrant liability, change in fair value of contingent consideration liability and change in fair value of derivative liabilities. EBITDA margin represents EBITDA as a percentage of revenue. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenue. EBITDA and Adjusted EBITDA should be viewed as measures of operating performance that are supplements to, and not substitutes for, operating (income) loss, net (income) loss and other U.S. GAAP measures of income and loss.

The Company has included adjusted EBITDA in this earnings release because it is a key measure used by the Company’s management and board of directors to evaluate and compare the Company’s financial and operational performance over multiple periods, identifying trends affecting the Company’s business, formulating business plans and making strategic decisions. In particular, the exclusion of certain expenses in calculating adjusted EBITDA facilitates operating performance comparability across reporting periods by removing the effect of non-cash expenses and certain variable charges. In addition, the Company believes that providing each of EBITDA and Adjusted EBITDA, together with a reconciliation of net loss to each such measure, helps investors make comparisons between Minerva Surgical and other companies that may have different capital structures, different tax rates, and/or different forms of employee compensation.

Each of EBITDA and Adjusted EBITDA is used by the Company’s management team as an additional measure of Company performance for purposes of business decision-making, including managing expenditures, and evaluating potential acquisitions. Period-to-period comparisons of EBITDA and Adjusted EBITDA help the Company’s management identify additional trends in our financial results that may not be shown solely by period-to-period comparisons of net income or income from continuing operations. Each of EBITDA and Adjusted EBITDA has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on management’s current assumptions and expectations of future events and trends, which affect or may affect the Company’s business, strategy, operations or financial performance, and actual results may differ materially from those expressed or implied in such statements due to numerous risks and uncertainties. Forward-looking statements may include information concerning the impact of the COVID-19 pandemic on the Company and its operations, a recovery in the number of procedures performed, and the Company’s possible or assumed future results of operations, including descriptions of the Company’s revenues, gross margin, profitability, guidance for full year 2021, commercial momentum, and overall business strategy. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Factors that could cause actual results to differ materially from those contemplated in this press release can be found in the Risk Factors section of Minerva Surgical’ s Quarterly Report on Form 10-Q filing made with the U.S. Securities and Exchange Commission (SEC) on or about December 2, 2021, which will be available at www.sec.gov. Because forward-looking statements are inherently subject to risks and uncertainties, you should not rely on these forward-looking statements as predictions of future events. All statements other than statements of historical fact are forward-looking statements. Except to the extent required by law, the Company undertakes no obligation to update or review any estimate, projection, or forward-looking statement. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in the Company’s business.

About Minerva Surgical, Inc.

Minerva Surgical, Inc. is a commercial-stage medical technology company focused on developing, manufacturing, and commercializing minimally invasive solutions to meet the distinct uterine healthcare needs of women. Minerva Surgical, Inc. has established a broad product line of commercially available, minimally invasive alternatives to hysterectomy, which are designed to address the most common causes of abnormal uterine bleeding (AUB) in most uterine anatomies. The Company’s solutions can be used in a variety of medical treatment settings and aim to address the drawbacks associated with alternative treatment methods and to preserve the uterus by avoiding unnecessary hysterectomies.

Contact:

Media/Press: Mike Clapper– mike.clapper@minervasurgical.com

Investors: Caroline Corner- caroline.corner@westwicke.com

Minerva Surgical, Inc.
 Condensed Balance Sheets (unaudited)
(In thousands, except share and per share amounts) September 30,
December 31,
  2021
2020
Assets   
Current assets:   
Cash and cash equivalents$ 6,128 $ 17,359 
Restricted cash, current  7,283   7,203 
Accounts receivable, net  6,758   8,379 
Inventory  14,960   10,201 
Prepaid expenses and other current assets  4,740   2,279 
Total current assets  39,869   45,421 
Restricted cash, net of current portion   524    604 
Intangible assets, net   37,005    43,141 
Property and equipment, net  3,791   2,880 
Total assets$ 81,189  $ 92,046  
Liabilities, redeemable convertible preferred stock and stockholders’ deficit   
Current Liabilities:   
Accounts payable$ 8,451 $ 3,506 
Accrued compensation  2,859   2,889 
Accrued liabilities  11,377   10,204 
Contingent consideration liability, current  15,919    — 
Delayed cash purchase consideration   15,000    15,000 
Current portion of long-term debt   12,659    1,668 
Total current liabilities  66,265   33,267 
Redeemable convertible preferred stock warrant liability  577   42 
Long-term debt  18,222   29,423 
Convertible notes (includes $62.5 million at September 30, 2021 and $46.5 million at December 31, 2020, respectively, attributable to related parties)  88,960   66,196 
Derivative liabilities (includes $14.4 million at September 30, 2021 and $23.6 million at December 31, 2020, respectively, attributable to related parties)  22,764   38,007 
Contingent consideration liability, net of current portion   8,528   23,667 
Total liabilities  205,316   190,602 
Commitments and contingencies (Note 8)   
Redeemable convertible preferred stock, $0.001 par value, 121,732,397 shares authorized as of September 30, 2021 and December 31, 2020; 12,397,838 shares issued and outstanding as of September 30, 2021 and December 31, 2020; liquidation value of $136,168 as of September 30, 2021 and December 31, 2020 123,255  123,255 
Stockholders’ deficit:   
Common stock, $0.001 par value, 144,406,928 shares authorized as of September 30, 2021 and December 31, 2020; 3,149,777 and 1,192,299 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively 3  1 
Additional paid-in capital 12,968  6,269 
Accumulated other comprehensive income 11  11 
Accumulated deficit  (260,364)  (228,092)
Total stockholders’ deficit  (247,382)  (221,811)
Total liabilities, redeemable convertible preferred stock, and stockholders’ deficit$ 81,189  $ 92,046  


     Minerva Surgical, Inc.
         Condensed Statements of Operations (unaudited)
(In thousands, except share and per share amounts) Three months ended
September 30,
      Nine months ended
September 30,
   2021   2020   2021   2020 
Revenues $12,506  $12,280  $38,458  $24,219 
Cost of goods sold  5,373   5,725   15,760   13,284 
Gross profit  7,133   6,555   22,698   10,935 
Operating expenses            
Sales and marketing  7,919   6,722   22,883   16,205 
General and administrative  3,987   1,804   18,115   5,888 
Research and development  1,367   1,200   4,191   2,151 
Total operating expenses  13,273   9,726   45,189   24,244 
Loss from operations (6,140
)   (3,171)  (22,491)  (13,309)
Interest income           80 
Interest expense (includes $1.3 million to related parties in three months ended September 30, 2021 and 2020 and $4.2 million and $3.2 million to related parties in nine months ended September 30, 2021 and 2020, respectively)  (3,611)  (3,293)  (10,663)  (8,714)
Change in fair value of derivative liabilities  23,383   (859)  15,243   9,201 
Bargain purchase gain           643 
Loss on extinguishment of convertible notes  (16,853)     (16,853)   
Gain on extinguishment of PPP loan        3,036    
Other income (expense), net  (4)  (1)  (544)  75 
Net loss before income taxes  (3,225)  (7,324)  (32,272)  (12,024)
Income tax benefit           132 
Net Loss $(3,225) $(7,324) $(32,272) $(11,892)
Net loss per share attributable to common stockholders, basic and diluted $(1.15) $(7.33) $(15.04) $(12.56)
Weighted-average shares used in computing net loss per share, basic and diluted  2,798,146   999,091   2,145,733   946,576 

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA Margin: The following table presents reconciliation of net loss to adjusted EBITDA for each of the periods indicated.

  Three months ended
September 30,
  Nine months ended
September 30,
(in thousands, except percentage figures) 2021   2020   2021   2020 
  (unaudited)  (unaudited)
Net Loss$(3,225) $(7,324) $(32,272) $(11,892)
Depreciation and amortization 2,614   2,554   7,948   4,415 
Interest (income) expense 3,611   3,293   10,663   8,634 
Income tax benefit   —     —     —   (132)
EBITDA$3,000  $(1,477) $(13,661) $1,025 
EBITDA margin 24.0%   (12.0%)  (35.5%)  4.2% 
Net loss margin (25.8%)  (59.6%)  (83.9%)  (49.1%)
Adjustments:           
Bargain purchase gain   —     —     —   (643)
Loss on extinguishment of convertible notes 16,853     —   16,853     — 
Gain on extinguishment of PPP loan   —     —   (3,036)    — 
Stock-based compensation expense 1,075   205   5,684   754 
Change in fair value of redeemable convertible preferred stock warrant liability 3   (1)  535   (34)
Change in fair value of contingent consideration liability (137)    —   780     — 
Change in fair value of derivative liabilities (23,383)  859   (15,243)  (9,201)
Adjusted EBITDA$(2,589) $(414) $(8,088) $(8,099)
Adjusted EBITDA margin (20.7%)  (3.4%)  (21.0%)  (33.4%)

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