2019 Q3 Form 10-Q Financial Statement

#000157056219000131 Filed on August 12, 2019

View on sec.gov

Income Statement

Concept 2019 Q3 2019 Q2 2018 Q2
Revenue $13.17M $2.311M $0.00
YoY Change
Cost Of Revenue $3.718M $660.0K $0.00
YoY Change
Gross Profit $9.449M $1.651M $0.00
YoY Change
Gross Profit Margin 71.76% 71.44%
Selling, General & Admin $30.90M $34.89M $6.248M
YoY Change 328.59% 458.45% 681.0%
% of Gross Profit 326.99% 2113.39%
Research & Development $693.0K $509.0K $1.648M
YoY Change -64.95% -69.11% 20.73%
% of Gross Profit 7.33% 30.83%
Depreciation & Amortization $1.202M $978.0K $0.00
YoY Change 39966.67% -100.0%
% of Gross Profit 12.72% 59.24%
Operating Expenses $34.59M $37.65M $16.10M
YoY Change 201.04% 133.84% 607.69%
Operating Profit -$25.14M -$36.00M -$16.10M
YoY Change 118.8% 123.58% 607.69%
Interest Expense -$2.000M -$1.800M -$320.0K
YoY Change 525.0% 462.5%
% of Operating Profit
Other Income/Expense, Net -$2.455M -$2.412M -$321.0K
YoY Change 662.42% 651.4% 32000.0%
Pretax Income -$27.13M -$37.79M -$16.42M
YoY Change 129.73% 130.16% 621.49%
Income Tax -$149.0K -$227.0K $12.00K
% Of Pretax Income
Net Earnings -$26.98M -$37.57M -$16.43M
YoY Change 128.1% 128.61% 615.72%
Net Earnings / Revenue -204.94% -1625.57%
Basic Earnings Per Share
Diluted Earnings Per Share -$982.2K -$1.371M -$693.5K
COMMON SHARES
Basic Shares Outstanding 27.42M shares 27.33M shares 23.64M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2019 Q3 2019 Q2 2018 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $74.03M $99.93M $43.60M
YoY Change -29.63% 129.19%
Cash & Equivalents $39.12M $30.29M $43.60M
Short-Term Investments $34.91M $69.64M
Other Short-Term Assets $3.900M $3.000M $1.000M
YoY Change 333.33% 200.0% 900.0%
Inventory $10.04M $11.52M
Prepaid Expenses
Receivables $7.206M $1.410M
Other Receivables $0.00 $0.00
Total Short-Term Assets $95.18M $115.8M $44.62M
YoY Change -10.28% 159.57% 44523.0%
LONG-TERM ASSETS
Property, Plant & Equipment $984.0K $290.0K $5.000K
YoY Change 98300.0% 5700.0%
Goodwill $21.21M $21.21M $21.21M
YoY Change 0.0% 0.0%
Intangibles $59.86M $59.21M $56.08M
YoY Change 6.74% 5.59%
Long-Term Investments
YoY Change
Other Assets $1.195M $1.206M $22.00K
YoY Change 5381.82% -89.0%
Total Long-Term Assets $87.48M $86.96M $77.31M
YoY Change 13.19% 12.47% -47.05%
TOTAL ASSETS
Total Short-Term Assets $95.18M $115.8M $44.62M
Total Long-Term Assets $87.48M $86.96M $77.31M
Total Assets $182.7M $202.8M $121.9M
YoY Change -0.39% 66.3% -16.54%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $6.125M $7.708M $751.0K
YoY Change 826.63% 926.36% 50.2%
Accrued Expenses $14.38M $15.40M $2.933M
YoY Change 199.6% 425.06% 877.67%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change -100.0%
Long-Term Debt Due $0.00
YoY Change
Total Short-Term Liabilities $25.97M $23.11M $3.684M
YoY Change 375.71% 527.17% -94.69%
LONG-TERM LIABILITIES
Long-Term Debt $73.18M $72.86M $16.50M
YoY Change 335.6% 341.59% -86.52%
Other Long-Term Liabilities $48.60M $47.90M $48.80M
YoY Change -4.89% -1.84%
Total Long-Term Liabilities $73.18M $72.86M $65.30M
YoY Change 7.78% 11.58% -46.65%
TOTAL LIABILITIES
Total Short-Term Liabilities $25.97M $23.11M $3.684M
Total Long-Term Liabilities $73.18M $72.86M $65.30M
Total Liabilities $165.6M $161.6M $84.00M
YoY Change 87.33% 92.38% -60.58%
SHAREHOLDERS EQUITY
Retained Earnings -$198.6M -$171.6M -$98.75M
YoY Change 79.55% 73.73%
Common Stock $1.000K $1.000K $1.000K
YoY Change 0.0% 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $17.04M $41.18M $37.93M
YoY Change
Total Liabilities & Shareholders Equity $182.7M $202.8M $121.9M
YoY Change -0.39% 66.3% -16.54%

Cashflow Statement

Concept 2019 Q3 2019 Q2 2018 Q2
OPERATING ACTIVITIES
Net Income -$26.98M -$37.57M -$16.43M
YoY Change 128.1% 128.61% 615.72%
Depreciation, Depletion And Amortization $1.202M $978.0K $0.00
YoY Change 39966.67% -100.0%
Cash From Operating Activities -$25.10M -$33.16M -$5.660M
YoY Change 332.76% 485.87% 76.32%
INVESTING ACTIVITIES
Capital Expenditures -$640.0K -$1.970M -$10.00K
YoY Change 19600.0%
Acquisitions
YoY Change
Other Investing Activities $35.03M $10.19M
YoY Change
Cash From Investing Activities $34.39M $8.230M -$10.00K
YoY Change -82400.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -460.0K 850.0K -310.0K
YoY Change -100.68% -374.19% -109.63%
NET CHANGE
Cash From Operating Activities -25.10M -33.16M -5.660M
Cash From Investing Activities 34.39M 8.230M -10.00K
Cash From Financing Activities -460.0K 850.0K -310.0K
Net Change In Cash 8.830M -24.08M -5.980M
YoY Change -85.66% 302.68% -59900.0%
FREE CASH FLOW
Cash From Operating Activities -$25.10M -$33.16M -$5.660M
Capital Expenditures -$640.0K -$1.970M -$10.00K
Free Cash Flow -$24.46M -$31.19M -$5.650M
YoY Change 321.72% 452.04% 76.01%

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ConcentrationRiskCreditRisk
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:13px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;font-style:italic;font-weight:bold;">Risk and Uncertainties</font></div><div style="line-height:120%;padding-bottom:13px;text-align:left;padding-left:0px;text-indent:0px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">The Company received regulatory approval from the FDA and Health Canada to commercialize Jeuveau</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">. The Company commercially launched Jeuveau</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"> in the United States in May 2019 and, as such, has a limited history of sales. Jeuveau</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"> also requires regulatory approval from the European Medicines Agency (&#8220;EMA&#8221;) and other similar regulatory authorities prior to commercial sales in the related jurisdictions. If any previously granted approval is retracted or the Company is denied approval or approval is delayed by any other regulators, it may have a material adverse impact on the Company&#8217;s business and its financial statements.</font></div><div style="line-height:120%;padding-bottom:13px;text-align:left;padding-left:0px;text-indent:0px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">The Company is subject to risks common to early stage companies in the pharmaceutical industry including, but not limited to, dependency on the clinical and commercial success of Jeuveau</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"> and any future product candidates, ability to obtain and maintain regulatory approval of Jeuveau</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"> and any future product candidates in the jurisdictions where approval is sought, the need for substantial additional financing to achieve its goals, uncertainty of broad adoption of its approved products, if any, by physicians and patients, significant competition and untested manufacturing capabilities.</font></div><div style="line-height:120%;padding-bottom:13px;text-align:left;padding-left:0px;text-indent:0px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">In 2013, Evolus and Daewoong Pharmaceuticals Co., Ltd. (&#8220;Daewoong&#8221;) entered into an agreement (the &#8220;Daewoong Agreement&#8221;), pursuant to which, the Company has an exclusive distribution license to Jeuveau</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"> from Daewoong for aesthetic indications in the United States, European Union, Canada, Australia, Russia, Commonwealth of Independent States, and South Africa, as well as co-exclusive distribution rights with Daewoong in Japan. Jeuveau</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"> is manufactured by Daewoong in a facility in South Korea. The Company also has the option to negotiate first with Daewoong to secure a distribution license for any product that Daewoong directly or indirectly develops or commercializes that is classified as an injectable botulinum toxin (other than Jeuveau&#174;) in a territory covered by the Daewoong Agreement. The Company relies on Daewoong, its exclusive and sole supplier, to manufacture Jeuveau</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">. Any termination or loss of significant rights, including exclusivity, under the Daewoong Agreement would materially and adversely affect the Company&#8217;s commercialization of Jeuveau</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">. The Daewoong Agreement, and Daewoong&#8217;s rights relating to Jeuveau</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"><sup style="vertical-align:top;line-height:120%;font-size:7pt">&#174;</sup></font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">, are subject to litigation. See </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">Note 8</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">. </font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;font-style:italic;">Commitments and Contingencies</font><font style="font-family:Times New Roman;font-size:10pt;color:#000000;"> for additional information regarding such litigation.</font></div></div>
us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:13px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;font-style:italic;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;padding-bottom:13px;padding-top:0px;text-align:left;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#231f20;font-style:normal;font-weight:normal;">The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes. Actual results could materially differ from those estimates, judgments, and assumptions. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates</font><font style="font-family:Times New Roman;font-size:10pt;color:#231f20;font-style:italic;font-weight:bold;">.</font></div><div style="line-height:120%;padding-bottom:13px;text-align:left;padding-left:0px;text-indent:0px;font-size:10pt;"><font style="font-family:Times New Roman;font-size:10pt;color:#000000;">On an ongoing basis, the Company evaluates the most significant estimates, including those related to net revenue, allowance for doubtful accounts, the fair values of financial instruments, intangible assets and goodwill, useful lives of intangible assets, inventory valuation, lease liabilities, and royalty obligations, among others. Although the Company bases these estimates on historical experience, knowledge of current events and actions it may undertake in the future, and on various other assumptions that are believed to be reasonable, this process may result in actual results differing materially from those estimated amounts used in the preparation of the financial statements.</font></div></div>

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