KORU Medical Systems(US:KRMD)2023-11-08 21:06Financial Performance - The company reported net revenues of $7.0 million for Q3 2023, a decrease of 9.8% compared to $7.8 million in Q3 2022, primarily due to a $0.6 million decline in novel therapies revenues [83]. - Domestic core revenues decreased by 2.1% to $5.77 million, while international core revenues fell by 2.8% to $1.07 million, driven by lower consumable volumes and a prior year tender order [85]. - The company reported a net loss of $1.37 million for Q3 2023, an increase of 11.6% from a net loss of $1.23 million in Q3 2022, attributed to decreased revenues and increased operating expenses [91]. - For the nine months ended September 30, 2023, total net revenues increased by 3.8% to $21.33 million, driven by a 6.2% increase in domestic core revenues [93]. - The net loss decreased by $409,382, or 6.1%, to $6,275,033 for the nine months ended September 30, 2023, primarily due to an increase in net revenues of $0.8 million [100]. Gross Profit and Margins - Gross profit for Q3 2023 was $4.34 million, flat compared to $4.32 million in Q3 2022, with gross margin increasing to 62.0% from 55.7% due to production efficiencies [86]. - Gross profit for the nine months ended September 30, 2023, was $12.38 million, a 9.6% increase from $11.29 million in the same period last year, with gross margin at 58.0% [94]. Operating Expenses - Operating expenses rose to $6.1 million in Q3 2023, up from $5.9 million in the same period last year, primarily due to a $0.4 million increase in research and development expenses [84]. - Selling, general and administrative expenses decreased by 3.1% to $15.35 million for the nine months ended September 30, 2023, primarily due to prior year restructuring costs [96]. - Research and development expenses increased by 34.4% to $4.45 million for the nine months ended September 30, 2023, reflecting support for innovation efforts [96]. - Research and development expenses increased by $1.1 million, or 34.4%, for the nine months ended September 30, 2023, compared to the same period last year [98]. - Depreciation and amortization expense rose by 60.7% to $642,050 for the nine months ended September 30, 2023, compared to $399,479 in the same period of 2022 [99]. Cash Flow and Liquidity - Cash and cash equivalents on hand were $10.8 million as of September 30, 2023, serving as the principal source of liquidity [102]. - Net cash used in operating activities was $5.99 million for the nine months ended September 30, 2023, primarily due to the net loss and changes in working capital [107]. - Net cash used in investing activities was $606,209 for the nine months ended September 30, 2023, primarily for capital expenditures related to research and development [110]. - Net cash used in financing activities was $40,512 for the nine months ended September 30, 2023, reflecting payments on note payable and finance leases [111]. - The company anticipates that cash on hand and cash flows from operations will be sufficient to meet requirements for at least the next twelve months [106]. Future Outlook - The company anticipates continued challenges in novel therapies revenues due to the timing of clinical trial orders and market conditions [79]. - A tax benefit of $1.5 million was recorded during the nine months ended September 30, 2023, resulting from the net loss [101]. - Inventory position decreased by $1.7 million to $4.7 million as of September 30, 2023, compared to December 31, 2022 [103].