NeuroMetrix, Inc. (Nasdaq: NURO), a health care company transforming patient care through neurotechnology, today announced its financial results for the three months and year ended December 31, 2009.
“We see an opportunity to reinvigorate and expand our installed base of customers”
Total revenues for the fourth quarter of 2009 were $6.2 million, compared with $7.2 million for the fourth quarter of 2008. Revenues in the quarter were comprised of 9% medical equipment sales and 91% consumables sales in comparison with 14% and 86%, respectively, for the fourth quarter of 2008. Medical equipment sales consist of nerve conduction testing devices (ADVANCE™ and NC-stat®) and related modules, and service agreement revenues. Consumables sales include single use nerve-specific electrodes, EMG needles, and other accessories. Gross margin in the fourth quarter of 2009 was 70.5% of total revenues compared with 67.8% for the fourth quarter of 2008. Net income for the fourth quarter of 2009 was $0.4 million, or $0.02 per share, and included a gain of $2.2 million, or $0.10 per share, relating to the revaluation of warrants issued in the Company’s September 2009 financing. In comparison, net loss for the fourth quarter of 2008 was $4.1 million, or $(0.30) per share.
For the year ended December 31, 2009, total revenues were $26.1 million, compared with $31.1 million in 2008. Revenues for 2009 were comprised of 10% medical equipment sales and 90% consumables sales in comparison with 9% and 91%, respectively, for the year ended December 31, 2008. Gross margin for 2009 was 71.2% of total revenues compared with 71.0% for 2008. Net loss for 2009 was $11.9 million, or $(0.71) per share and included a net charge of $5.2 million, or $0.31 per share, for the revaluation of warrants issued in the September 2009 financing. In comparison, net loss for 2008 was $27.7 million, or $(2.02) per share.
During the fourth quarter of 2009, the Centers for Medicare and Medicaid Services (“CMS”) published a new Category I CPT code in the 2010 Physician’s Fee Schedule for nerve conduction studies performed with preconfigured electrode arrays, such as those utilized with the NC-stat System. The Company believes that this CPT code may streamline Medicare reimbursement for medically appropriate nerve conduction studies performed using the NC-stat System, and could also be a positive influence on reimbursement by commercial insurers.
The Company has recently undertaken a number of initiatives to address market opportunities, including the following:
- Organizing North America Sales into a Physician’s Office sales group supporting primary care, internal medicine, endocrinology, and rheumatology, and a Neurointerventional sales group supporting neurology, physical medicine and rehabilitation and orthopedics.
- Initiating a field clinical education group to supplement the Physician’s Office sales force and provide direct clinical support to customers.
- Redirecting Physician’s Office sales representatives to focus primarily on new account acquisition.
- Merging the corporate customer service and account management groups into a single customer support organization.
- Adding an employee on-site in the United Kingdom to manage European sales, as well as extending customer service hours to support European customers.
- Developing several clinical outcomes studies relating to use of pre-configured electrode arrays, which the Company anticipates will be launched in 2010.
“We see an opportunity to reinvigorate and expand our installed base of customers,” said Shai N. Gozani, M.D., Ph.D., NeuroMetrix President & CEO. “Publication of the new Category I CPT code was a positive development that should help our business in the long term. Physician reimbursement under the CPT code is lower than under the prior codes, which will necessitate some changes in our business model that will put downward pressure on revenues and margins in the near term. However, we have taken steps that we believe may lead to an increase in the number of physicians using our products and an increase in electrode utilization within accounts. The range of issues our customers face, which include changes in reimbursement, decreased patient visits, and uncertainty arising from the national debate on health care reform, make 2010 a difficult year to predict. We are working to position ourselves to rebuild demand and, over time, return the Company to a growth track.”
Company to Host Live Conference Call and Webcast
NeuroMetrix management will host a conference call today, February 10, 2010 at 8:00 a.m., Eastern time, to discuss the Company's financial results, business and financial developments, as well as other forward-looking information about the Company’s business. To access the call, dial 800-659-1942 (domestic), or 617-614-2710 (international). The confirmation code is 65018804. The call will also be webcast and will be accessible from the Company's website at http://www.neurometrix.com under the "Investor Relations" tab. A replay of the conference call will be available for three months starting two hours after the call by dialing 888-286-8010 (domestic) or 617-801-6888 (international), and the confirmation code is 74951707.