GI DYNAMICS, INC. GI Dynamics, Inc. - ASX Announcement
Appendix 4C Quarterly Report Quarter Ended 30 June 2015GI Dynamics to Hold Conference Call and Webcast on Financial Results for Second Quarter 2015 at 9:00 a.m. AEST on 31 July 2015 (7:00 p.m. EDT on 30 July 2015)
LEXINGTON, Massachusetts, United States and SYDNEY, Australia - 30 July 2015 - GI Dynamics, Inc. (ASX: GID) (GI Dynamics or the Company), a medical device company developing innovative treatments for type 2 diabetes and obesity, today announced its financial results for the quarter ended 30 June 2015 (Quarter). The Appendix 4C, which has been prepared in U.S. dollars under U.S. GAAP, is attached and the results disclosed in the
Appendix 4C are unaudited.
The Company plans to file its Quarterly Report on Form 10-Q (Form 10-Q) with the U.S. Securities and Exchange Commission and with the Australian Securities Exchange on or before
14 August 2015. The Form 10-Q will provide financial statements for the Quarter, along with Management's Discussion and Analysis of Financial Condition and Results of Operations for the Quarter.
The Company's key financial results for the Quarter and six months ended 30 June 2015 include the following:
Revenue decreased to US$0.3 million for the Quarter compared to US$0.8 million for the same period last year, a decrease of US$0.5 million. Revenue decreased to US$0.9 million for the six months ended 30 June 2015 compared to US$1.7 million for the same period last year, a decrease of US$0.8 million. The decrease in the Company's revenue in the Quarter and six months ended 30 June 2015 compared to the same periods last year was a result of a decrease in sales across all markets.
www.gidynamics.com
US OFFICE & HEADQUARTERS: 25 Hartwell Avenue, Lexington MA 02421 T +1 (781) 357-3300 F +1 (781) 357-3301
EUROPEAN OFFICE: Prinzenallee 7, 40549 Dusseldorf, Germany T: +49 211 5239 1572
AUSTRALIAN OFFICE: Level 8, 17-19 Bridge Street, Sydney, NSW 2000 T +61 2 9325 9046
GI Dynamics, Inc., is a corporation incorporated in Delaware, USA, whose stockholders have limited liability. ARBN 151 239 388
GI Dynamics, Inc. - ASX Announcement Page 2
Cost of revenue for the Quarter was US$2.0 million compared to US$0.6 million in the same period last year, an increase of US$1.4 million. Cost of revenue for the six
months ended 30 June 2015 was US$2.9 million compared to US$1.5 million for the same period last year, an increase of US$1.4 million. The primary reason for the increase in cost of revenue for the Quarter and six-month period was a charge of US$1.4 million recorded in the Quarter for sleeve inventory in excess of the Company's currently anticipated commercial requirements. At 30 June 2015, the reserve for raw material sleeve inventory was US$3.0 million. As a result, gross loss increased by US$2.0 million for the Quarter and US$2.3 million for the six-month period.
Operating expenses decreased to US$8.5 million for the Quarter compared to US$12.9 million for the same period last year, a decrease of US$4.4 million. Operating expenses decreased to US$18.1 million for the six-month period compared to US$23.0 million for the same period last year, a decrease of US$4.9 million.
o Research and development expenses were US$4.6 million for the Quarter compared to US$7.5 million for the same period last year, a decrease of US$2.9 million. Research and development expenses were US$10.3 million for the six months ended 30 June 2015 compared to US$12.9 million, a decrease of
US$2.6 million. The decrease in research and development expenses for the Quarter and six-month period was primarily a result of decreased expenses to support the ENDO Trial as a result of the enrollment hold and a decrease in personnel related costs.
o Sales and marketing expenses were US$1.5 million for the Quarter compared to US$3.1 million for the same period last year, a decrease of US$1.6 million. Sales and marketing expenses were US$3.1 million for the six-month period compared to US$5.6 million for the same period last year, a decrease of US$2.5 million. The decrease in sales and marketing expenses for the Quarter and six- month periods compared to the same periods last year were the result of lower personnel related expenses, including stock-based compensation expense, consulting expense and spending on marketing related activities.
o General and administrative expenses were US$2.4 million for the Quarter and US$2.3 million for the same period last year. General and administrative expenses were US$4.7 million for the six months ended 30 June 2015 and US$4.6 million for the same period last year. The increase in general and administrative expenses for the Quarter and six-month period was primarily due to an increase in stock-based compensation expense.
Other income (expense) for the Quarter was US$44,000 of income compared to US$0.4 million for the same period last year, a decrease of US$0.3 million. Other income (expense) for the six months ended 30 June 2015 was a loss of US$0.4 million compared to income of US$0.8 million for the same period last year, a decrease of
www.gidynamics.com
US OFFICE & HEADQUARTERS: 25 Hartwell Avenue, Lexington MA 02421 T +1 (781) 357-3300 F +1 (781) 357-3301
EUROPEAN OFFICE: Prinzenallee 7, 40549 Dusseldorf, Germany T: +49 211 5239 1572
AUSTRALIAN OFFICE: Level 8, 17-19 Bridge Street, Sydney, NSW 2000 T +61 2 9325 9046
GI Dynamics, Inc., is a corporation incorporated in Delaware, USA, whose stockholders have limited liability. ARBN 151 239 388
GI Dynamics, Inc. - ASX Announcement Page 3
US$1.2 million. The decrease in the Quarter compared to the same period last year was primarily associated with a decrease in foreign exchange gain of US$0.2 million and a decrease in interest income of US$0.1 million. The decrease in the six-month period was primarily associated with a decrease in foreign exchange gain of US$0.9 million due to the depreciation of the Australian dollar versus the U.S. dollar and a decrease in the gain on remeasurement of the warrant liability of US$0.2 million.
As a result, the Company recorded a net loss of US$10.2 million for the Quarter compared to US$12.3 million for the same period last year, a decrease of US$2.1 million. For the six months ended 30 June 2015 the Company's net loss was US$20.6 million compared to US$22.0 for the same period last year, a decrease of US$1.4 million.
The Company had cash and cash equivalents of US$32.8 million at 30 June 2015 compared to US$51.2 million at 31 December 2014, a decrease of US$18.4 million, and US$40.0 million at 31 March 2015, a decrease of US$7.2 million.
****************CONFERENCE CALL & WEBCAST INFORMATION****************
GI Dynamics, Inc. (ASX: GID) will hold a conference call to discuss the Company's financial results for the quarter ended 30 June 2015. Michael Dale, president and chief executive officer, will host the call.
Friday, 31 July 2015 at 9:00 a.m. AEST (Thursday, 30 July 2015 at 7:00 p.m. EDT) Accessing the Conference Call via Webcast:A live webcast of the call will be available on the GI Dynamics website at investor.gidynamics.com. The webcast can be directly accessed at: http://edge.media- server.com/m/p/yzjmmc7c/lan/en.
Accessing the Conference Call via Telephone:
For those preferring to listen by telephone, please dial in five minutes prior to the start of the call and provide the passcode 99472983. Regional dial-in numbers are as follows:
United States callers please dial toll free 1 (877) 280-1758
Australia callers please dial toll free 1 800 005 989
International callers please dial 1 678 562 4233
The webcast will be archived for 30 days following the call on the GI Dynamics website at investor.gidynamics.com.
Robert Solomon Vice President of Finance & Company Secretarywww.gidynamics.com
US OFFICE & HEADQUARTERS: 25 Hartwell Avenue, Lexington MA 02421 T +1 (781) 357-3300 F +1 (781) 357-3301
EUROPEAN OFFICE: Prinzenallee 7, 40549 Dusseldorf, Germany T: +49 211 5239 1572
AUSTRALIAN OFFICE: Level 8, 17-19 Bridge Street, Sydney, NSW 2000 T +61 2 9325 9046
GI Dynamics, Inc., is a corporation incorporated in Delaware, USA, whose stockholders have limited liability. ARBN 151 239 388
GI Dynamics, Inc. - ASX Announcement Page 4
About GI Dynamics
GI Dynamics, Inc. (ASX: GID) is the developer of EndoBarrier®, the first endoscopically-delivered device therapy approved for the treatment of obese type 2 diabetes with BMI ≥ 30 kg/m2, or obese patients with BMI ≥ 30 kg/m2 with ≥ 1 comorbidities, or obese patients with BMI >35 kg/m2. The liner is indicated for a maximum implant duration of 12 months. EndoBarrier is approved and commercially available in multiple countries outside the U.S. EndoBarrier is not approved for sale in the U.S.
and is limited by federal law to investigational use only in the United States. Founded in 2003, GI Dynamics is headquartered in
Lexington, Massachusetts. For more information, please visit www.gidynamics.com.
Forward-Looking Statements
This announcement contains forward-looking statements concerning: our development and commercialization plans; our potential revenues and revenue growth, costs, excess inventory, profitability and financial performance; our ability to obtain reimbursement for our products; our clinical trials, and associated regulatory submissions and approvals; the number and location of commercial centres offering the EndoBarrier®; and our intellectual property position. These forward-looking statements are based on the current estimates and expectations of future events by the management of GI Dynamics, Inc. as of the date of this announcement and are subject to a number of risks and uncertainties that could cause actual results to differ materially and adversely from those indicated in or implied by such forward-looking statements. These risks and uncertainties
include, but are not limited to: risks associated with the consequences of terminating the ENDO Trial and the possibility that future clinical trials will not be successful or confirm earlier results; risks associated with obtaining funding from third parties; risks relating to the timing and costs of clinical trials, the timing of regulatory submissions, the timing, receipt and maintenance of regulatory approvals, the timing and amount of other expenses, and the timing and extent of third-party reimbursement; risks associated with commercial product sales, including product performance; competition; risks related to market acceptance of products; intellectual property risks; risks related to excess inventory; risks related to assumptions regarding the size of the available market, benefits of our products, product pricing, timing of product launches, future financial results and other factors including those described in our filings with the U.S. Securities and Exchange Commission. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We do not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.
Investor Enquiries: Media Enquiries:
United States
Michael Dale, President & CEO
+1 (781) 357-3310
United States/Europe/Australia:
Bill Berry, Berry & Company Public Relations LLC
+1 (212) 253-8881
Australia
David Allen or John Granger
Hawkesbury Partners Pty Limited
+61 2 9325 9046
www.gidynamics.com
US OFFICE & HEADQUARTERS: 25 Hartwell Avenue, Lexington MA 02421 T +1 (781) 357-3300 F +1 (781) 357-3301
EUROPEAN OFFICE: Prinzenallee 7, 40549 Dusseldorf, Germany T: +49 211 5239 1572
AUSTRALIAN OFFICE: Level 8, 17-19 Bridge Street, Sydney, NSW 2000 T +61 2 9325 9046
GI Dynamics, Inc., is a corporation incorporated in Delaware, USA, whose stockholders have limited liability. ARBN 151 239 388
Appendix 4C Quarterly report for entities
admitted on the basis of commitments
Appendix 4C Quarterly report for entities admitted on the basis of commitmentsIntroduced 31/03/00 Amended 30/09/01, 24/10/05, 17/12/10
Name of entity
GI Dynamics, Inc.
Rule 4.7B
ABN Quarter ended ("current quarter")
151 239 388 30 June 2015
Consolidated statement of cash flowsCash flows related to operating activities
1.1 Receipts from customers
1.2 Payments for (a) staff costs
(b) advertising and marketing
(c) research and development
(d) leased assets
(e) other working capital
1.3 Dividends received
1.4 Interest and other items of a similar nature received
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other (provide details if material)
Net operating cash flows
+ See chapter 19 for defined terms.
17/12/2010 Appendix 4C Page 1
Appendix 4C
Quarterly report for entities
admitted on the basis of commitments
Current quarter (Q2) $'000 USD | Year to date (6 months) $'000 USD | |
1.8 Net operating cash flows (carried forward) | (7,181) | (17,740) |
Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non‐current assets (e) other non‐current assets 1.10 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non‐current assets (e) other non‐current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other (provide details if material) Net investing cash flows 1.14 Total operating and investing cash flows | - - - (44) - - - - - - - - - | - - - (169) - - - - - - - - - |
Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non‐current assets (e) other non‐current assets 1.10 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non‐current assets (e) other non‐current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other (provide details if material) Net investing cash flows 1.14 Total operating and investing cash flows | (44) | (169) |
Cash flows related to investing activities 1.9 Payment for acquisition of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non‐current assets (e) other non‐current assets 1.10 Proceeds from disposal of: (a) businesses (item 5) (b) equity investments (c) intellectual property (d) physical non‐current assets (e) other non‐current assets 1.11 Loans to other entities 1.12 Loans repaid by other entities 1.13 Other (provide details if material) Net investing cash flows 1.14 Total operating and investing cash flows | (7,225) | (17,909) |
Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1.20 Other (share capital raising cost) Net financing cash flows | - - - - - - | 2 - - - - - |
Cash flows related to financing activities 1.15 Proceeds from issues of shares, options, etc. 1.16 Proceeds from sale of forfeited shares 1.17 Proceeds from borrowings 1.18 Repayment of borrowings 1.19 Dividends paid 1.20 Other (share capital raising cost) Net financing cash flows | - | 2 |
Net increase (decrease) in cash held 1.21 Cash at beginning of quarter/year to date 1.22 Exchange rate adjustments to item 1.20 1.23 Cash at end of quarter | (7,225) 40,016 28 | (17,907) 51,191 (465) |
Net increase (decrease) in cash held 1.21 Cash at beginning of quarter/year to date 1.22 Exchange rate adjustments to item 1.20 1.23 Cash at end of quarter | 32,819 | 32,819 |
+ See chapter 19 for defined terms.
Appendix 4C Page 2 17/12/2010
Appendix 4C Quarterly report for entities
admitted on the basis of commitments
Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entitiesCurrent quarter
(Q2)
$'000 USD
1.24 Aggregate amount of payments to the parties included in item 1.2 208
1.25 Aggregate amount of loans to the parties included in item 1.11 -
1.26 Explanation necessary for an understanding of the transactions
Payments represent wages paid to an executive director for services provided during the second quarter of 2015 ($116) and directors' fees paid to non‐executive directors ($92) for services provided during the second quarter of 2015.
Non‐cash financing and investing activities2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
The Company entered into a capital lease ($8) for office equipment in the first quarter of 2015.
2.2 Details of outlays made by other entities to establish or increase their share in businesses in which the reporting entity has an interest
N/A
Financing facilities availableAdd notes as necessary for an understanding of the position.
3.1 Loan facilities
3.2 Credit standby arrangements
+ See chapter 19 for defined terms.
17/12/2010 Appendix 4C Page 3
Appendix 4C
Quarterly report for entities
admitted on the basis of commitments
Reconciliation of cashReconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.
Acquisitions and disposals of business entities5.1 Name of entity
5.2 Place of incorporation or registration
5.3 Consideration for acquisition or disposal
5.4 Total net assets
5.5 Nature of business
Compliance statement1 This statement has been prepared under
accounting
policies
which comply with
accounting standards as
defined in the Corporations Act (except
to the extent that
information is not required because of note 2) or other standards acceptable to ASX.
2 This statement does give a true and fair view of the matters disclosed.
Sign here: ..
.
(Company secretary)
........
Date: 30 July 2015
Print name: Robert Solomon
+ See chapter 19 for defined terms.
Appendix 4C Page 4
17/12/2010
NotesAppendix 4C Quarterly report for entities
admitted on the basis of commitments
1. The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
2. The definitions in, and provisions of, AASB 107: Statement of Cash Flows apply to this report except for any additional disclosure requirements requested by AASB 107 that are not already itemised in this report.
3. Accounting Standards. ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.
+ See chapter 19 for defined terms.
17/12/2010 Appendix 4C Page 5
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