Alimera Sciences(ALIM) - 2024 Q2 - Quarterly Results

Executive Summary Key Second Quarter Financial Highlights Alimera Sciences reported strong financial results for Q2 2024, with significant revenue growth and improved profitability, driven by the integration of YUTIQ and increased international sales | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | Change (YoY) | | :----------------------- | :----------------- | :----------------- | :----------- | | Net Revenue | $27.0 | $17.5 | +54% | | Net Loss | $(3.3) | $(10.7) | Improved | | Adjusted EBITDA | $6.7 | $0.9 | +644% | | U.S. Net Revenue | $17.6 | $11.9 | +48% | | International Net Revenue| $9.4 | $5.7 | +65% | | Global End User Demand | 3,821 units | N/A | +6% | Second Quarter Corporate Highlights During Q2 2024, Alimera Sciences entered into a definitive merger agreement with ANI Pharmaceuticals and modified its royalty payment terms with SWK Funding LLC - Alimera entered into a definitive merger agreement with ANI Pharmaceuticals Inc. on June 21, 2024, valuing Alimera's equity at approximately $320 million upfront, with an expected closing later this year[3] - The company modified royalty payment terms with SWK Funding LLC, reducing the royalty rate to 3.125% of net revenues for products containing fluocinolone acetonide (FAc), including ILUVIEN and YUTIQ[3] Detailed Financial Performance Net Revenue Consolidated global net revenue increased significantly, driven by the acquisition of YUTIQ in the U.S. and strong sales volumes internationally, with both segments showing robust growth in Q2 2024 Consolidated Global Net Revenue Consolidated global net revenue for Q2 2024 was $27 million, a 54% increase from $17.5 million in Q2 2023, primarily due to the addition of YUTIQ in the U.S. and increased international sales | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | Change (YoY) | | :----------------------- | :----------------- | :----------------- | :----------- | | Consolidated Net Revenue | $27.0 | $17.5 | +54% | U.S. Net Revenue U.S. net revenue grew 48% to $17.6 million in Q2 2024, up from $11.9 million in Q2 2023, largely attributed to the revenue generated by YUTIQ, acquired in May 2023. U.S. end user demand also increased by 6% | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | Change (YoY) | | :----------------------- | :----------------- | :----------------- | :----------- | | U.S. Net Revenue | $17.6 | $11.9 | +48% | | U.S. End User Demand | 2,189 units | N/A | +6% | - The increase in U.S. net revenue was primarily driven by net revenue from YUTIQ, which Alimera acquired in May 2023[4] International Net Revenue International net revenue surged by 65% to $9.4 million in Q2 2024, compared to $5.7 million in Q2 2023, fueled by increased stocking by international distributors and growth in end user demand, which also rose by 6% | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | Change (YoY) | | :----------------------- | :----------------- | :----------------- | :----------- | | International Net Revenue| $9.4 | $5.7 | +65% | | International End User Demand| 1,632 units | N/A | +6% | - The increase in international net revenue was driven by both increased stocking of international distributors and growth in end user demand[4] Operating Expenses Total operating expenses increased to $23.2 million in Q2 2024, up from $16.3 million in Q2 2023, primarily due to merger-related general and administrative expenses, expanded sales and marketing infrastructure, increased amortization from the YUTIQ acquisition, and higher stock-based compensation | Metric | Q2 2024 (Millions) | Q2 2023 (Millions) | Change (YoY) | | :----------------------- | :----------------- | :----------------- | :----------- | | Total Operating Expenses | $23.2 | $16.3 | +42.3% | - Key drivers for the increase in operating expenses include: $2.2 million in G&A expenses related to the ANI merger, $1.8 million in additional sales and marketing expenses for U.S. product expansion, $1.2 million in additional amortization from the YUTIQ acquisition, and $1.2 million in additional stock-based compensation[5] Cash and Cash Equivalents Alimera's cash and cash equivalents decreased to $10.8 million as of June 30, 2024, from $14.3 million at March 31, 2024, primarily due to accrued licensor payments for YUTIQ and exit fee payments related to loan agreements | Metric | June 30, 2024 (Millions) | March 31, 2024 (Millions) | December 31, 2023 (Millions) | | :----------------------- | :----------------------- | :------------------------ | :--------------------------- | | Cash and Cash Equivalents| $10.8 | $14.3 | $12.1 | - During Q2 2024, the company made $1.9 million in accrued licensor payments for YUTIQ and $2.4 million in accrued exit fee payments due to revenue milestones[6] Company Information About Alimera Sciences, Inc. Alimera Sciences is a global pharmaceutical company dedicated to retinal health, aiming to provide invaluable solutions for patients, physicians, and partners to maintain better vision longer - Alimera Sciences is a global pharmaceutical company focused on retinal health, with a mission to be invaluable to patients, physicians, and partners in maintaining better vision longer[7] Non-GAAP Financial Measures Definition and Rationale Alimera uses Adjusted EBITDA as a non-GAAP financial measure to supplement GAAP results, believing it provides management and investors with a clearer understanding of ongoing operations and financial performance by excluding certain non-recurring or non-operational items - Alimera defines "Adjusted EBITDA" as earnings before interest, taxes, depreciation, amortization, stock-based compensation expenses, net unrealized gains and losses from foreign currency exchange transactions, gains on extinguishment of debt, preferred stock dividends, severance expenses, expenses incurred with Merger Agreement, and change in fair value of warrant asset[8] - The company uses Adjusted EBITDA to supplement GAAP financial information, believing it helps management understand ongoing operations and provides meaningful supplemental information to investors by excluding items not indicative of its core business[8][9] Limitations The company acknowledges that Adjusted EBITDA may not be comparable to similarly titled measures from other companies and should not be considered in isolation from or as a substitute for GAAP measures, as it excludes significant GAAP-required elements and involves management judgments - Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies due to varying calculation methods[9] - The presentation of this non-GAAP measure is not intended to be considered in isolation from or as a substitute for GAAP financial performance measures and should be read only in conjunction with GAAP information[10] - A principal limitation is that it excludes significant elements required by GAAP to be recorded in financial statements and reflects management's judgments[11] Legal and Disclosures Forward-Looking Statements This section contains forward-looking statements regarding Alimera's future expectations, business strategy, and financial position, which are subject to inherent risks and uncertainties detailed in SEC filings. Investors are cautioned not to rely on these statements as predictions of future events - The press release includes forward-looking statements concerning growth opportunities, product demand, business strategy, future operations, financial position, revenues, costs, prospects, plans, and objectives[12] - These statements are based on current expectations and involve inherent risks and uncertainties, including factors discussed in Alimera's SEC filings (10-K, 10-Q)[12] - Investors are cautioned not to rely on forward-looking statements as predictions of future events, and Alimera undertakes no obligation to publicly update or revise them, except as required by law[13] Additional Information and Where to Find It Alimera intends to file a proxy statement regarding the merger with ANI, and investors are urged to review all relevant documents filed with the SEC for important information about the transaction. These materials will be available free of charge on the SEC's website and the companies' respective websites - Alimera intends to file a preliminary and definitive proxy statement with the SEC in connection with the merger, which will be delivered to stockholders[14] - Investors and security holders are urged to read the definitive proxy statement and other relevant documents carefully when they become available, as they will contain important information about the merger[14] - Materials filed by ANI and Alimera can be obtained free of charge at the SEC's website (www.sec.gov) and their respective company websites (www.anipharmaceuticals.com and www.alimerasciences.com)[14](index=14&type=chunk) Unaudited Consolidated Financial Statements Consolidated Balance Sheets As of June 30, 2024, Alimera's total assets were $150.4 million, a slight decrease from $153.5 million at December 31, 2023. Total liabilities increased to $111.6 million, while total stockholders' equity decreased to $38.8 million | Metric (In thousands) | June 30, 2024 | December 31, 2023 | | :-------------------- | :------------ | :---------------- | | Total Assets | $150,377 | $153,524 | | Total Liabilities | $111,589 | $107,354 | | Total Stockholders' Equity| $38,788 | $46,170 | | Cash and Cash Equivalents| $10,828 | $12,058 | | Accounts Receivable, net| $37,079 | $34,545 | | Inventory | $3,455 | $1,879 | | Notes Payable, net | $69,731 | $64,489 | Consolidated Statements of Operations For Q2 2024, Alimera reported net revenue of $27.0 million, leading to a gross profit of $23.2 million. The company significantly reduced its net loss to $(3.3) million compared to $(10.0) million in Q2 2023, and net loss per share improved to $(0.06) | Metric (In thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | | Net Revenue | $27,000 | $17,538 | | Gross Profit | $23,169 | $15,113 | | Total Operating Expenses| $23,246 | $16,321 | | Loss from Operations | $(77) | $(1,208) | | Net Loss | $(3,311) | $(10,029) | | Net Loss per Share | $(0.06) | $(1.32) | Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA Alimera's Non-GAAP Adjusted EBITDA for Q2 2024 was $6.7 million, a substantial increase from $0.9 million in Q2 2023, reflecting adjustments for interest expense, merger-related expenses, depreciation, amortization, and stock-based compensation, among other items | Metric (In thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | | U.S. GAAP Net Loss | $(3,311) | $(10,029) | | Interest expense and other, net| $3,153 | $1,694 | | Expenses incurred with Merger Agreement| $2,226 | — | | Depreciation and amortization| $3,093 | $1,866 | | Stock-based compensation| $1,457 | $217 | | Non-GAAP Adjusted EBITDA| $6,714 | $875 |