Anika Therapeutics(ANIK) - 2024 Q4 - Annual Report

Financial Performance - Revenue for the year ended December 31, 2024 was $119.9 million, a decrease of$0.9 million, or 1%, compared to the prior year[244]. - Gross profit for the year ended December 31, 2024 was $76.0 million, with a gross margin of 63$82.5 million and 68% in 2023[248]. - The loss from operations for the year ended December 31, 2024 was $5.1 million, compared to income from operations of$0.8 million in the prior year[252]. - Net loss for the year ended December 31, 2024 was $56.4 million, a decrease of$26.3 million, or 32%, compared to a net loss of $82.7 million in 2023[242]. - Adjusted gross profit for the year ended December 31, 2024 was$76.6 million, representing 64% of revenue, down from $83.3 million or 69$15.5 million, a decrease of 8.2 million compared to 2023, primarily due to lower adjusted gross profit and higher R&D spending[261]. - Adjusted net income from continuing operations for 2024 was 2.4 million, a decrease of 10.9 million compared to 2023, driven by higher manufacturing expenses and R&D costs[264]. Revenue Breakdown - Revenue from the OEM Channel decreased by 8% to 77.8 million for the year ended December 31, 2024, primarily due to lower sales from J&J MedTech[244]. - Revenue from the Commercial Channel increased by 17% to $42.1 million for the year ended December 31, 2024, driven by international sales growth of OA Pain Management products[246]. - Revenue for the year ended December 31, 2023 was$120.8 million, an increase of $7.0 million, or 6$24.8 million of revenue was denominated in foreign currencies, primarily the Euro and UK pound sterling, for the year ended December 31, 2024[313]. Expenses - Research and development expenses increased by $3.7 million, or 17$25.5 million for the year ended December 31, 2024, primarily due to compliance with regulatory requirements[249]. - Selling, general and administrative expenses decreased by $4.4 million, or 7$55.6 million for the year ended December 31, 2024, attributed to lower headcount and reduced costs[251]. - Research and development expenses for the year ended December 31, 2023 were $21.8 million, an increase of$3.5 million, or 19%, primarily due to compliance with regulatory requirements and new product development[270]. - Selling, general and administrative expenses for the year ended December 31, 2023 were $59.9 million, an increase of$8.7 million, or 17%, mainly due to shareholder activism costs[271]. Cash Flow and Liquidity - Cash, cash equivalents, and investments totaled $55.6 million as of December 31, 2024, down from$68.7 million in 2023, with working capital decreasing from $132.3 million to$90.3 million[278]. - The company has a credit facility of up to $150.0 million, with no outstanding borrowings as of December 31, 2024 and 2023, indicating strong liquidity management[279]. - Cash provided by operating activities increased to$5.4 million in 2024 from a cash used of $(1.8) million in 2023, primarily due to a lower net loss[282]. - Cash used in investing activities rose to$8.3 million in 2024, up from $5.4 million in 2023, mainly due to increased capital expenditures for manufacturing capacity expansion[284]. - Cash used in financing activities increased significantly to$12.7 million in 2024 from $6.3 million in 2023, largely due to$10.9 million allocated for a stock repurchase program initiated in May 2024[285]. - The net decrease in cash and cash equivalents was $15.7 million in 2024, compared to a decrease of$13.5 million in 2023[280]. Future Plans and Investments - The company plans to launch the Integrity Implant System for rotator cuff repair in 2024 and is targeting FDA approval for key HA-based products like Cingal and Hyalofast[237]. - The company plans to continue investing in research and development for new products and clinical trials related to HA-based technology, funded by cash on hand and future operational cash generation[283]. - The company expects to fund future growth strategies through a combination of cash reserves and cash generated from operations[283]. Impairment and Leases - Impairment charges of $1.5 million were recorded for intangible assets related to the Arthrosurface reporting unit in 2024, following a$62.2 million impairment in 2023[309]. - The company has non-cancelable operating leases totaling $32.8 million, with$2.8 million due within one year[287]. Currency and Investment Management - The company does not engage in foreign currency hedging arrangements, exposing it to potential adverse effects from foreign currency fluctuations[313]. - The impact of currency exchange rate fluctuations related to international subsidiaries on financial statements was insignificant in 2024[313]. - The investment portfolio is managed to preserve principal, maintain liquidity, and obtain competitive returns without significantly increasing risk[312]. - The portfolio includes cash equivalents and investments in high-quality securities, such as money market funds and U.S. treasury bills[312]. - Unrealized gains or losses from the investment portfolio are reported as a separate component of accumulated other comprehensive income (loss)[312].