Lattice Biologics Ltd. (TSXV: LBL) is engaged in the manufacturing and marketing of a variety of biologic products worldwide. Shares soared 150% through early trading on Tuesday, January 29, 2019. Over the past three months, Lattice has seen an average daily volume of 78,784 shares. However, through Tuesday morning, already 2.16 million shares have traded hands, equating to C$53,890 in dollar volume.
Shares surged Tuesday morning after Lattice released their financial results for the 2018 fiscal year and revenue projections for Q1 2019. Notably, Lattice saw an increase in gross profit margin from 20.8% in 2017 to 46.9% in 2018. In addition, Lattice “incurred a net loss of USD$1.2 million (USD$0.01 per share) for the year ended September 30, 2018 compared to USD$1.5 million (USD$0.02 per share) for the same period in the previous year, which included a USD$2.1 million gain on Flow Capital debt restructuring, which was an extraordinary onetime event.” Lattice estimates its revenues “to be USD$2-2.2 million for 2019, an increase of approximately 100% over the prior year.” Guy Cook, CEO of Lattice, commented, “I am pleased to announce that the Company has had three quarters of successive growth culminating in the first quarter 2019 sales estimate of USD$450,000 – $475.000.” Here is the full press release detailing Lattice’s 2018 financial results and preliminary revenues for 2019:
Lattice Biologics Ltd. Press Release:
BELGRADE, Mont.—Lattice Biologics Ltd. (TSX-V: LBL) (OTCBB: LBLTF) (“Lattice Biologics” or the “Company”) announces financial results for the fiscal year end 2018 and preliminary revenues for Q1 2019.
Sales and Product Offerings
Successfully relocated processing facility to Belgrade, Montana, resulting in reduced overhead and increased operational efficiencies.
Extended AATB licensure until September 2019.
Launched new products into a higher margin dental market.
Gross profit margin was 46.9% for the year ended September 30, 2018 compared to 20.8% for the year ended September 30, 2017.
Cash from operations was $.3 million for the year ended September 30, 2018 compared to a deficit of 0.7 million for the year ended September 30, 2017.
Sales have increased quarter over quarter for three successive quarters with estimated revenues of $450,000 – $475,000 for the first 3 months ended Dec. 31, 2018.
Successfully relocated operations to Belgrade, Montana from Scottsdale, Arizona, resulting in operational efficiencies of over $145,000 per month, year over year.
Gross profit of $541,154 on sales of $1,155,041 for the year ended September 30, 2018 compared to the same period in the previous year gross profit of $571,110 on $2,739,376 of sales.
Incurred a net loss of $1.2 million ($0.01 per share) for the year ended September 30, 2018 compared to $1.5 million ($0.02 per share) for the same period in the previous year, which included a $2.1 million gain on Flow Capital debt restructuring, which was an extraordinary onetime event.
Further efforts to improve the working capital condition of the Company include the conversion of $0.8 million of liabilities to equity in the year ended September 30, 2017.
Research and Development
Patent pending for AmnioBoost product.
Developed next generation AmnioBoost to super concentrate stem cells and cytokines.
Re-formulated DBM putty to incorporate superior handling properties.
Developed DBM fiber boats and strips to compete in spinal fusion market.
Validated products to compete in new dental markets.
2018 Business Update:
“I am pleased to announce that the Company has had three quarters of successive growth culminating in the first quarter 2019 sales estimate of $450,000 – $475.000,” said Guy Cook, CEO of Lattice Biologics Ltd.
We estimate revenues to be $ 2-2.2 million for 2019, an increase of approximately 100% over the prior year.
With strong distribution partners and an enhanced product line intended for dental indications, we expect sales to continue to grow throughout 2019. Operationally, the company is much more efficient and has lowered its operating and overhead costs to effectively compete in the dental market space.
As we continue to focus to a higher margin product line, and to re-position the AmnioBoost line for dental indications, we are confident we have turned the corner and positioned the company for profitable and continued growth.
The Company continues to make significant improvements on the balance sheet, and is working with creditors to convert certain balances to equity for working capital purposes.
Lattice Biologics maintains its commitment to honoring the gift of donation by implementing a strong quality control environment for the recovery and processing of donors. The Company has significantly increased its processing efficiencies, and has substantial inventory reserves to meet customer demand.
As indicated below, the Company continues efforts to diversify the sales mix across the new higher margin product lines added in prior years.
Year End Financial Results (all figures denoted in USD):
The product launches in dental have been well received by our clients and the Company continues to replace unprofitable legacy contracts and focus on the newer higher margin products. Lattice Biologics’ total revenue was $1,155,041 in the year ended September 30, 2018 compared to $2,739,376 for the year ended September 30, 2017, a decrease of 57.8%.
Certain adjustments have been made to the quarterly information for the first three quarters of the fiscal year ended September 30, 2016, as compared to data contained in the quarterly filings for such quarters. These changes relate to certain adjustments for cost of sales and operating costs that were not recognized until the fourth quarter of such fiscal year.
About Lattice Biologics Ltd.:
Lattice Biologics is traded on the TSX-V under the symbol: LBL. The Company is an emerging personalized/precision medicine leader in the field of cellular therapies and tissue engineering, with a focus on bone, skin, and cartilage regeneration.
Lattice Biologics develops and manufactures biologic products to domestic and international markets. The Company’s products are used in a variety of surgical applications.
Lattice Biologics maintains its headquarters, laboratory and manufacturing facilities in Belgrade, Montana. The facility includes ISO Class 1000 clean rooms, and specialized equipment capable of crafting traditional allografts and precision specialty allografts for various clinical applications. The Lattice Biologics team includes highly trained tissue bank specialists, surgical technicians, certified sterile processing and distribution technicians, and CNC operators who maintain the highest standards of aseptic technique throughout each step of the manufacturing process. From donor acceptance to the final packaging and distribution of finished allograft, Lattice is committed to maintaining the highest standards of allograft quality, innovation, and customer satisfaction.
Lattice Biologics maintains all necessary licensures to process and sell its tissue engineered products within the U.S. and internationally. This includes Certificates to Foreign Governments from the U.S. Food and Drug Administration (FDA) and registrations for 29 countries, which allow the export of bone, tendon, meniscus, ligament, soft tissue, and cartilage products outside of the U.S.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Statement on Forward-Looking Information:
Certain information contained in this news release constitutes “forward-looking statements” within the meaning of the ‘safe harbour’ provisions of Canadian securities laws. All statements herein, other than statements of historical fact, are to be considered forward looking. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “planned”, “potential”, “future”, “expected”, “could”, “possible”, “goal”, “intends”, “will” or similar expressions. Forward-looking statements in this news release include, without limitation: information pertaining to the Company’s strategy, plans, or future financial performance, such as statements with respect to the Transaction, and other statements that express management’s expectations or estimates of future performance. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Lattice to be materially different from those expressed or implied by such forward-looking statements.
Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by management as of the date such statements are made, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The factors and assumptions that could prove to be incorrect, include, but are not limited to: that market prices will be consistent with expectations, the continued availability of capital and financing, and that general economic, market and business conditions will be consistent with expectations. The forward-looking statements are not guarantees of future performance. We disclaim any obligation to update or revise any forward-looking statements, except as required by law. Readers are cautioned not to put undue reliance on these forward-looking statements.
United States Advisory: The securities referred to herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), and may not be offered, sold, or resold in the United States or to, or for the account of or benefit of, a U.S. Person (as such term is defined in Regulation S under the U.S. Securities Act) unless an exemption from the registration requirements of the U.S. Securities Act is available. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in the state in the United States in which such offer, solicitation or sale would be unlawful.
Article By: Andrew Rego