Apollo Endosurgery, Inc. (“Apollo”) (NASDAQ: APEN), a leader in less invasive medical devices for bariatric and gastrointestinal procedures, today announced certain preliminary unaudited financial expectations for the three months ended June 30, 2017, including preliminary revenue and operating loss estimates and expected cash balance.

Preliminary Unaudited Second Quarter 2017 Financial Expectations

  • Total GAAP revenue is estimated to be in the range of $16.9 million to $17.1 million for the three months ended June 30, 2017, compared to total GAAP revenue of $17.3 million in the same period in 2016, representing a decrease of 1% to 2%. Total GAAP revenue included $0.3 million of U.S. Orbera starter kit sales in the quarter ended June 30, 2017, compared to $1.1 million in starter kit sales in the same period in 2016, which was a very active quarter for U.S. physician training for Orbera following the product’s August 2015 FDA approval. After adjusting for sales of U.S. Orbera starter kits, total non-GAAP revenue is estimated to be in the range of $16.6 million to $16.8 million for the three months ended June 30, 2017 compared to $16.2 million in the same period in 2016, representing an increase of 2% to 4%.
  • Total GAAP Endo-Bariatric product sales is estimated to be in the range of $9.4 million to $9.5 million for the three months ended June 30, 2017, compared to $8.4 million in the same period in 2016, representing an increase of 12% to 13%. Total GAAP Endo-Bariatric product sales for the three months ended June 30, 2017 and June 30, 2016 includes U.S. Orbera starter kit sales of $0.3 million and $1.1 million, respectively. Excluding these starter kit sales, total Adjusted Endo-Bariatric product sales increased 25% to 26% over the same period in 2016.
  • Total GAAP surgical product sales is estimated to be in the range of $7.3 million to $7.4 million for the three months ended June 30, 2017, compared to $8.8 million in the same period in 2016, representing a decrease of 16% to 17%.
  • Total GAAP operating loss is estimated to be in the range of $5.5 million to $6.0 million for the three months ended June 30, 2017, compared to $6.3 million in the same period in 2016, including depreciation and amortization expenses of $2.5 million and $2.3 million, respectively.
  • Total cash, cash equivalents and restricted cash is estimated to be $6.2 million as of June 30, 2017.

Non-GAAP Financial Measures

To supplement Apollo’s preliminary financial estimates presented on a GAAP basis, Apollo provides certain non-GAAP financial measures, including Non-GAAP revenue and Adjusted Endo-Bariatric product sales. Non-GAAP revenue and Adjusted Endo-Bariatric product sales are supplemental measures of Apollo’s performance that are not required by, and are not determined in accordance with, GAAP. Non-GAAP revenue is defined as total GAAP revenue excluding one-time U.S. Orbera starter kit sales associated with the U.S. Orbera physician training program. Adjusted Endo-Bariatric product sales is defined as GAAP product sales of Orbera and Overstitch excluding one-time U.S. Orbera starter kit sales associated with the U.S. Orbera physician training program. Apollo believes that the non-GAAP financial measures included herein are helpful in understanding Apollo’s past financial performance and evaluating Apollo’s future results. A reconciliation for each non-GAAP financial measure to its most directly comparable GAAP financial measure follows.

Reconciliation of GAAP to Non-GAAP Financial Expectations:
Three Months Ended
June 30, 2017
(Estimated)
Three Months Ended
June 30, 2016
(Actual)
(in millions)
Total GAAP Revenue$16.9 – 17.1$17.3
Orbera starter kits(0.3)(1.1)
Total Non-GAAP Revenue$16.6 – 16.8$16.2
Three Months Ended
June 30, 2017
(Estimated)
Three Months Ended
June 30, 2016
(Actual)
(in millions)
Total GAAP Endo-Bariatric product sales$9.4 – 9.5$8.4
Orbera starter kits(0.3)(1.1)
Adjusted Endo-Bariatric product sales$9.1 – 9.2$7.3