Endologix, Inc. (NASDAQ: ELGX), developer and marketer of innovative treatments for aortic disorders, today announced financial results for the three months ended March 31, 2011.
John McDermott, Endologix President and Chief Executive Officer, said, "First quarter revenue grew by 28% year-over-year, reflecting our continued momentum in the marketplace as the innovation leader in the endovascular treatment of abdominal aortic aneurysms (AAA). Our expanded sales force is successfully driving adoption of our products with existing customers and introducing the benefits of anatomical fixation to new customers. We also expect to launch our new AFX™ Endovascular AAA System during the second half of the year, which will provide another important growth opportunity. Accordingly, we are reiterating our full year 2011 revenue guidance of $78 million to $82 million."
Mr. McDermott added, "During the quarter we also continued to execute on our longer-term development and clinical initiatives. This includes the ongoing patient enrollment in our PEVAR (Percutaneous Endovascular Aneurysm Repair) clinical trial and further development of our Ventana™ and Nellix® programs. Ventanais a fenestrated-stent graft that will enable us to treat patients with more complex aortic anatomies, which represents approximately 20% of the diagnosed aneurysms. We plan to begin patient enrollment in an IDE trial in the U.S. this year and launch Ventana in Europe in 2012. The Nellix integration is going extremely well and we remain enthusiastic about our plans to launch this revolutionary new technology in Europe in 2012."
Financial Results
Total revenue in the first quarter of 2011 was $18.5 million, a 28% increase from $14.5 million in the first quarter of 2010. Domestic revenue was $15.4 million, a 28% increase compared with $12.0 million in the first quarter of 2010. International revenue was $3.2 million, a 29% increase compared with $2.5 million in the first quarter of 2010.
Gross profit was $14.2 million in the first quarter of 2011, which represents a gross margin of 76.4%. This compares with gross profit of $11.1 million and a gross margin of 76.8% in the first quarter of 2010.
Total operating expenses were $19.0 million in the first quarter of 2011, a 68% increase compared with $11.3 million in first quarter of 2010. Marketing and sales expenses increased to $10.5 million in the first quarter of 2011 from $7.0 million in the same period last year. This increase included the effect of growth in the base business, development of a direct sales organization in Europe, and a one-time payment to transition our distribution relationship in Italy. Research, development and clinical expenses increased to $4.9 million in the first quarter of 2011 from $2.3 million in the same period last year due to the Nellix development program. General and administrative expenses increased to $3.6 million in the first quarter of 2011, from $2.1 million in the same period last year due to Nellix integration costs and an increase in patent litigation expenses.
Endologix reported a net loss for the first quarter of 2011 of $4.8 million, or $(0.09) per share, compared with a net loss of $225,000, or $(0.00) per share, for the first quarter of 2010.
Total cash and cash equivalents were $34.3 million as of March 31, 2011, compared with total cash and cash equivalents of $38.2 million as of December 31, 2010.
"Our first quarter 2011 financial results were in-line with our expectations on the top and bottom lines, driven by the effective execution of our strategic growth and development initiatives," stated Endologix Chief Financial Officer Bob Krist. "We closed the quarter with more than $34 million in cash, giving us ample resources to continue investing in our base business growth, new product pipeline, and European sales force expansion."
Financial Guidance
Based on the first quarter results, the Company is reiterating its full year 2011 revenue and GAAP net loss per share guidance. The Company anticipates total revenue to be in the range of $78 million to $82 million, representing growth of 16% to 22%. In 2011, the Company expects to generate a GAAP net loss of between $0.25 to $0.30 per share due to planned investments in building a direct sales force in Europe and developing the acquired Nellix technology in anticipation of both a commercial launch in Europe and the initiation of a U.S. IDE clinical trial in 2012. The Company's 2011 loss per share guidance also includes ongoing investments in the U.S. sales force, research and development and clinical initiatives, and litigation expenses, but excludes the potential impact of adverse litigation outcomes, acquisitions, or other business development transactions.
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