TransEnterix, Inc.
Nov 9, 2016
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TransEnterix, Inc. Reports Operating Results for the Third Quarter 2016

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)-- TransEnterix, Inc. (NYSE MKT:TRXC), a medical device company that is pioneering the use of robotics to improve minimally invasive surgery, today announced its operating and financial results for the third quarter of 2016.

Recent Highlights

"We are pleased with our recent progress, which included the first sale of a Senhance system and the continued development of our commercial pipeline," said Todd M. Pope, President and Chief Executive Officer of TransEnterix. "We remain enthusiastic about the potential of Senhance, and will continue to invest in global commercial expansion, including partnering with additional influential institutions to establish clinical reference sites."

Financial Highlights

The company reported revenue of $1.5 million for the three months ended September 30, 2016, representing the sale of one Senhance system and related instruments and service, net of deferred revenue.

Total operating expenses were $14.0 million for the three months ended September 30, 2016, as compared to $13.6 million in the three months ended September 30, 2015.

Net loss was $12.9 million, or $0.11 per share, for the three months ended September 30, 2016, as compared to $13.9 million, or $0.16 per share, in the three months ended September 30, 2015.

The Company had cash, cash equivalents and restricted cash of approximately $52.9 million as of September 30, 2016. The Company expects its existing cash, cash equivalents and restricted cash to fund operations into the fourth quarter of 2017.

Conference Call

TransEnterix, Inc. will host a conference call on Wednesday, November 9, 2016 at 4:30 PM ET to discuss its third quarter 2016 operating and financial results. To listen to the conference call on your telephone, please dial (888) 455-2238 for domestic callers or (719) 325-2237 for international callers and reference TransEnterix Call approximately ten minutes prior to the start time. To access the live audio webcast or archived recording, use the following link http://ir.transenterix.com/events.cfm. The replay will be available on the Company's website.

About TransEnterix

TransEnterix is a medical device company that is pioneering the use of robotics to improve minimally invasive surgery by addressing the clinical and economic challenges associated with current laparoscopic and robotic options. The company is focused on the commercialization of the Senhance™ Surgical Robotic System, a multi-port robotic system that brings the advantages of robotic surgery to patients while enabling surgeons with innovative technology such as haptic feedback and eye sensing camera control. The company is also developing the SurgiBot™ System, a single-port, robotically enhanced laparoscopic surgical platform. The Senhance Surgical Robotic System has been granted a CE Mark but is not currently available for sale in the United States. For more information, visit the TransEnterix website at www.transenterix.com.

Forward-Looking Statements

This press release includes statements relating to our 2016 third quarter financial results, the Senhance™ Surgical Robotic System and our current regulatory and commercialization plans for this product. These statements and other statements regarding our future plans and goals constitute "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that are often difficult to predict, are beyond our control and which may cause results to differ materially from expectations, including whether and when we will prepare a 510(k) submission for the Senhance Surgical Robotic System, whether our commercialization plans and the development of our pipeline will be successful, whether we will continue to invest in global commercial expansion, including partnering with additional influential institutions to establish clinical reference sites and whether existing cash, cash equivalents and restricted cash will fund operations into the fourth quarter of 2017. For a discussion of the risks and uncertainties associated with TransEnterix's business, please review our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K filed on March 3, 2016, our other filings we make with the SEC and our Form 10-Q for the 2016 third quarter expected to be filed on or before its due date. You are cautioned not to place undue reliance on these forward looking statements, which are based on our expectations as of the date of this press release and speak only as of the origination date of this press release. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

TransEnterix, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(in thousands except per share amounts)
(Unaudited)
 
  Three Months Ended   Nine Months Ended
September 30, September 30,
2016   2015 2016   2015
Revenue $ 1,466 $ $ 1,466 $
Cost of revenue   1,031     1,031  
Gross profit   435     435  
Operating Expenses
Research and development 7,011 7,048 21,760 21,111
Sales and marketing 2,574 413 5,563 1,161
General and administrative 2,793 1,762 7,927 5,607
Amortization of intangible assets 1,709 338 5,312 589
Change in fair value of contingent consideration (100 ) 1,700
Inventory write-down related to restructuring 2,565
Restructuring and other charges 3,085
Goodwill impairment 61,784
Acquisition related costs     4,003     4,003
Total Operating Expenses   13,987   13,564   109,696   32,471
Operating Loss   (13,552 )   (13,564 )   (109,261 )   (32,471 )
Other Expense
Interest expense, net (432 ) (436 ) (1,499 ) (997 )
Other (expense) income   (30 )     65  
Total Other Expense, net   (462 )   (436 )   (1,434 )   (997 )
Loss before income taxes $ (14,014 ) $ (14,000 ) $ (110,695 ) $ (33,468 )
Income tax benefit   1,070   99   4,707   99
Net loss $ (12,944 ) $ (13,901 ) $ (105,988 ) $ (33,369 )
Other comprehensive gain (loss)
Foreign currency translation gain (loss)   689   (429 )   2,199   (429 )
Comprehensive loss $ (12,255 ) $ (14,330 ) $ (103,789 ) $ (33,798 )
Net loss per share - basic and diluted $ (0.11 ) $ (0.16 ) $ (0.95 ) $ (0.46 )
Weighted average common shares outstanding -

basic and diluted

  114,946   86,044   111,189   72,713
 
TransEnterix, Inc.
Consolidated Balance Sheets
(in thousands, except share amounts)
(Unaudited)
 
  September 30,   December 31,
2016 2015
 
Assets
Current Assets
Cash and cash equivalents $ 42,518 $ 38,449
Accounts receivable, net 616 76
Inventories 2,250 3,923
Interest receivable 15 6
Other current assets   8,149   6,689
Total Current Assets   53,548   49,143
Restricted cash 10,353
Accounts receivable, net of current portion 274
Inventories, net of current portion 709
Property and equipment, net 4,614 4,408
Intellectual property, net 41,260 46,898
In-process research and development 16,972 16,511
Goodwill 69,948 130,869
Other long term assets   63   64
Total Assets $ 197,032 $ 248,602
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 2,596 $ 4,450
Accrued expenses 7,246 7,395
Contingent consideration - current portion 11,325 12,500
Notes payable - current portion   7,826   6,727
Total Current Liabilities 28,993 31,072
Long Term Liabilities
Contingent consideration - less current portion 13,875 11,000
Net deferred tax liabilities 11,971 16,263
Notes payable - less current portion, net of debt discount   7,059   12,990
Total Liabilities 61,898 71,325
Commitments and Contingencies
Stockholders' Equity
Common stock $0.001 par value, 750,000,000 shares authorized at September 30, 2016

and December 31, 2015; 115,086,256 and 100,180,872 shares issued at September 30,

2016 and December 31, 2015, respectively; and 115,014,711 and 100,149,453

shares outstanding at September 30, 2016 and December 31, 2015, respectively

115 100
Additional paid-in capital 425,041 363,280
Accumulated deficit (288,852 ) (182,864 )
Treasury stock at cost, 71,545 and 31,419 shares at September 30, 2016 and

December 31, 2015, respectively

(203 ) (73 )
Accumulated other comprehensive loss   (967 )   (3,166 )
Total Stockholders' Equity   135,134   177,277
Total Liabilities and Stockholders' Equity $ 197,032 $ 248,602
 
TransEnterix, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
 
  Nine Months Ended
September 30,
2016   2015
Operating Activities
Net loss $ (105,988 ) $ (33,369 )
Adjustments to reconcile net loss to net cash and cash equivalents used in

operating activities:

Depreciation 1,498 802
Amortization of intangible assets 5,312 589
Amortization of debt discount and debt issuance costs 140 89
Stock-based compensation 3,858 2,388
Common stock issued for services 116
Inventory write-down related to restructuring 2,565
Loss on disposal of property 34
Non-cash restructuring and other charges 2,551
Goodwill impairment 61,784
Deferred tax benefit (4,725 ) (99 )
Change in fair value of contingent consideration 1,700
Changes in operating assets and liabilities, net of effect of acquisition:
Accounts receivable (809 ) 133
Interest receivable (9 ) (5 )
Inventories (1,883 ) (250 )
Other current and long term assets (1,290 ) (248 )
Accounts payable (1,917 ) 984
Accrued expenses (168 ) 4,127
Restricted cash   (10,353 )   250
Net cash and cash equivalents used in operating activities   (47,618 )   (24,575 )
Investing Activities
Payment for acquisition (25,000 )
Purchase of property and equipment   (878 )   (728 )
Net cash and cash equivalents used in investing activities   (878 )   (25,728 )
Financing Activities
Payment of debt (4,972 )
Proceeds from issuance of common stock, net of issuance costs 57,637 58,295
Proceeds from issuance of debt, net of debt discount 9,886
Taxes paid related to net share settlement of vesting of restricted stock units (130 ) (3 )
Proceeds from exercise of stock options and warrants   163   252
Net cash and cash equivalents provided by financing activities   52,698   68,430
Effect of exchange rate changes on cash and cash equivalents   (133 )  
Net increase in cash and cash equivalents 4,069 18,127
Cash and cash equivalents, beginning of period   38,449   34,766
Cash and cash equivalents, end of period $ 42,518 $ 52,893
Supplemental Disclosure for Cash Flow Information
Interest paid $ 1,019 $ 598
Supplemental Schedule of Noncash Investing Activities
Transfer of inventory to property and equipment $ 1,866
Issuance of common stock warrants $ 96
Contingent consideration related to acquisition $ 24,300
Issuance of common stock related to acquisition $ 43,677
 

For TransEnterix, Inc.
Investor Contact:
Mark Klausner, +1 443-213-0501
invest@transenterix.com
Or
Media Contact:
(For EU) Conrad Harrington, +44 (0)20 3178 8914
(For US) Hannah Dunning, +1 415-618-8750
TransEnterix-SVC@sardverb.com

Source: TransEnterix, Inc.

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