ThermoGenesis Holdings (THMO) Misses Q3 EPS by 27c, Revenues Miss

ThermoGenesis Holdings (NASDAQ: THMO) reported Q3 EPS of ($0.37), $0.27 worse than the analyst estimate of ($0.10). Revenue for the quarter came in at $2.4 million versus the consensus estimate of $3.88 million.

Financial Results for the Quarter Ended September 30, 2020

• Net Revenues. Consolidated net revenues for the three months ended September 30, 2020 were $2.4 million compared to $4.1 million for the three months ended September 30, 2019, a decrease of $1.7 million or 42%. The decrease was driven by lower AXP® disposable and CAR-TXpress™ sales. The COVID-19 pandemic appears to be the main driver of the decline as fewer cord blood units are being stored globally during the pandemic. The Company expects sales to increase after the pandemic is over.
• Gross Profit. The Company's gross profit was $1.5 million or 64% of net revenues for the three months ended September 30, 2020, compared to $1.9 million or 47% of net revenues for the quarter ended September 30, 2019, a decrease of $0.4 million. The decrease was driven by the decline in AXP disposable and CAR-TXpress sales, partially offset by a refund of approximately $0.8 million from ImmuneCyte for its mark-up on sales of the testing kits which were previously reserved by the Company.
• Sales and Marketing Expenses. Consolidated sales and marketing expenses were $539,000 for the three months ended September 30, 2020, as compared to $502,000 for the three months ended September 30, 2019, an increase of 7%. The increase was driven by accrued expenses related to the Company's employee short-term incentive program and for consulting expenses. These increases were partially offset by lower stock compensation expense in the quarter ended September 30, 2020.
• Research and Development Expenses. Consolidated research and development expenses were $750,000 for the three months ended September 30, 2020, compared to $584,000 for the three months ended September 30, 2019, an increase of $166,000 or 28%. The increase was driven by development expenses for the Company's COVID-19 cartridge reader.
• General and Administrative Expenses. Consolidated general and administrative expenses for the three months ended September 30, 2020 were $1.3 million, compared to $1.1 million for the three months ended September 30, 2019, an increase of $0.2 million or 15%. The primary driver of the increase was accrued expenses related to the Company's employee short-term incentive program and severance expense.
• Interest Expense. Interest expense for the three months ended September 30, 2020 was $1.5 million, compared to $1.2 million for the three months ended September 30, 2019, an increase of $0.3 million. The increase was driven by additional interest expense and amortization of the debt discount related to the Revolving Credit Agreement with Boyalife Asset Holding II, Inc.
• Net Loss. For the quarter ended September 30, 2020, the Company reported a comprehensive loss attributable to common stockholders of $2.5 million, or $(0.37) per share, based on 6,711,664 weighted average basic and diluted common shares outstanding. This compares to a comprehensive net loss of $2.3 million, or $(0.78) per share, based on 2,913,198 weighted average basic and diluted common shares outstanding for the quarter ended September 30, 2019.
• Adjusted EBITDA. In addition to the results reported under U.S. GAAP, the Company also uses a non-GAAP measure, adjusted EBITDA, to evaluate operating performance and to facilitate the comparison of its historical results and trends. The Company uses the metric to determine operational cash flow. Adjusted EBITDA for the three months ended September 30, 2020 was a loss of $672,000, compared to income of $125,000 for the three months ended September 30, 2019, a decrease of $797,000. The adjusted EBITDA decrease was driven by a reduction in gross profit as the result of lower sales, inventory reserves, accrued expenses related to the Company's employee short-term incentive program, increased research and development expenses and severance expense. These decreases were partially offset by an $0.8 million refund received from ImmuneCyte for its mark-up portion of the testing kits previously reserved by the Company. A reconciliation of adjusted EBITDA to net loss is set forth below.

For earnings history and earnings-related data on ThermoGenesis Holdings (THMO) click here.

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