Amedica reported lower total product revenue for the second quarter, down 18 percent as compared to the same period last year.
Here are 10 things to know about the company's second quarter financial report:
1. The total product revenue hit $1.1 million, an 18 percent decrease year-over-year. The decrease was primarily due to a 23 percent drop in non-silicon nitride products for the three month's end as a result of a few key surgeons declining their activity level. The company is also focusing marketing efforts on the silicon nitride products.
2. Silicon nitride sales decreased by $300,000 — 13 percent over the same period last year. The decline was primarily attributed to the loss of a few key surgeons during the quarter, offset partially by increased recruiting efforts for the sales organization. There are now new surgeons using silicon nitride products, and Amedica expects the new surgeon participation to outweigh the year-to-date declines for the second half of the year.
3. The cost of revenue for the quarter decreased by $200,000, or 15 percent compared to the second quarter last year, primarily as a result of reduced sales.
4. The gross margin was 78 percent of total sales, compared with 80 percent last year. Although product costs reduced through production efficiencies and lower overhead costs, the decline in gross margins was due to private label sales during the second quarter of 2015, which have lower gross margins due to lower selling prices.
5. The operating expenses for the second quarter were down 60 percent from the same period last year, reaching $6 million. The decline is due to the company's efforts to simplify the organization and align financial objectives earlier in the year as well as lower costs. There was a $6.6 million reduction in stock-based compensation expense during the second quarter.
6. Amedica reported a net loss of $5.9 million in the second quarter, compared with $13.2 million in the prior-year period.
7. The cash and cash equivalents totaled $12.4 million. Total principal debt obligations were $23.4 million.
8. The company maintained previous estimates for total annual revenue in the $19 million to $20 million range, with silicon nitride sales growing 15 percent to 20 percent on the year.
9. The company expects to deliver $5 million to $7 million of annualized operating profit benefit from the financial and operational alignment initiatives.
10. The company is taking steps to maintain compliance with debt covenants in the fourth quarter of this year and become operating cash flow breakeven during the second half of 2016. The company also maintained previous guidance of four OEM or private label partners to be announced this year.