Anika Therapeutics(US:ANIK)2021-05-06 16:00Financial Performance - Revenue for the three-month period ended March 31, 2021 was $34.3 million, a decrease of $1.1 million (3%) compared to $35.4 million for the same period in 2020, primarily due to the impact of COVID-19 on procedure volumes [105]. - Gross profit for the three-month period ended March 31, 2021 was $21.0 million, representing a gross margin of 61%, which included an increase in cost of revenue by $4.1 million due to acquisitions [107]. - Adjusted EBITDA for Q1 2021 was $4.8 million, a decrease of $4.7 million from $9.5 million in Q1 2020, primarily due to lower revenues from the COVID-19 pandemic [117]. - Adjusted net income for Q1 2021 was $752,000, down from $6.5 million in Q1 2020, reflecting lower revenues and increased expenses [120]. - Adjusted diluted EPS for Q1 2021 was $0.06, a decrease of $0.39 from $0.45 in Q1 2020 [123]. Expenses - Research and development expenses for the three-month period ended March 31, 2021 were $6.4 million, an increase of $0.3 million (5%) compared to the same period in 2020, primarily due to full quarter results from acquired companies [108]. - Selling, general and administrative expenses for Q1 2021 were $18.2 million, an increase of $3.7 million compared to Q1 2020 [109]. - A non-cash goodwill impairment charge of $18.1 million was recorded in Q1 2020, with no impairment charges in Q1 2021 [110]. Cash Flow - Cash used in operating activities was $2.4 million in Q1 2021, compared to cash provided of $1.0 million in Q1 2020, mainly due to lower sales and increased accounts receivable [125]. - Cash provided by investing activities was $1.7 million in Q1 2021, a significant improvement from cash used of $92.5 million in Q1 2020, attributed to prior acquisition costs [125]. - Cash, cash equivalents, and investments totaled $94.6 million as of March 31, 2021, down from $98.3 million at the end of 2020 [124]. Market Impact - The impact of COVID-19 has caused significant volatility in quarterly results due to the cancellation or delay of elective procedures [95]. - The company’s commercial operations have been affected by the pandemic, but it does not anticipate disruption to its ability to supply products [95]. - Revenue from the Joint Pain Management product family decreased by $6.2 million (24%) to $19.3 million, while revenue from the Joint Preservation and Restoration product family increased by $4.3 million (55%) to $12.2 million [106]. Strategic Growth - The company expanded its addressable market from over $1 billion in the global OA pain management market to over $8 billion in the joint preservation market through strategic acquisitions [92]. - The company is focused on high opportunity spaces within orthopedics, including osteoarthritis pain management and regenerative solutions [90]. - The company anticipates pursuing strategic inorganic growth opportunities, including potential partnerships and acquisitions, leveraging its strong financial foundation [94]. Tax and Valuation - The effective tax rate for Q1 2021 was (133.6%), compared to 21.4% in Q1 2020, primarily due to a $1.7 million tax benefit from the decrease in fair value of contingent consideration [111]. - A net benefit of $4.8 million was recorded in Q1 2021 related to the change in fair value of contingent consideration liabilities from acquisitions [111]. Financial Obligations and Risks - There were no material changes to the company's contractual obligations reported in the 2020 Form 10-K during the three months ended March 31, 2021 [129]. - The company may need to obtain additional funds through equity or debt financings if operational funds and existing capital resources are insufficient [130]. - The company does not use special purpose entities or off-balance sheet financing techniques that could materially affect its financial condition [131]. - There have been no material changes in the company's market risks or management of such risks in the first three months of 2021 [132].