Strategic new surgeon partnerships and new product line diversification drive company success.
NOT FOR DISSEMINATION IN THE US OR THROUGH US NEWSWIRE SERVICES
May 26, 2016 – Scottsdale, AZ – Lattice Biologics Ltd. (TSX-V: LBL) (“Lattice Biologics” or the “Company”) announces financial results for the second quarter ended March 31, 2016:
Second Quarter Financial Results (all figures denoted in USD):
With 50 new surgeons added to the Company’s user base during the first two quarters of 2016, the Company is rapidly expanding into new markets and with cutting edge new products. Lattice Biologics’ revenue was $1,006,975 at 27% gross margin in the three months ended March 31, 2016 compared to $1,065,920 at 18% gross margin in the three months ended March 31, 2015. The Company expects gross margins to continue to increase as it shifts the sales mix across the new, significantly higher-margin product lines.
Also during the first two quarters of 2016, Lattice Biologics increased its total number of direct hospital approvals from 18 to 27, with another approximate 200 hospital approvals currently pending.
The Company continues to make significant improvements on the balance sheet, including an upsurge in cash from $50,000 to $518,000, a 90% increase. The previously disclosed commitments to convert $1,400,000 of debt to equity have been increased to $1,733,000 of debt, which is expected to be converted to equity (at a weighted average price of CDN $0.23/share). This is in addition to the initial $500,000 (at a weighted average price of CDN $0.21/share) converted at the time of going public, for a total of $2,233,000 of debt committed to be converted to equity during the first two quarters of 2016. The $1,733,000 being converted represents 42% of the Company’s long term debt as of March 31, 2016.
Lattice Biologics maintains its commitment to honoring the gift of donation by implementing a stronger quality control environment for the recovery and processing of donors. As the Company’s revenues are still largely concentrated in the musculoskeletal market (representing 84% of the Company’s sales mix in the three months ended March 31, 2016 compared to 90% in the three months ended March 31, 2015), revenue is highly dependent on the number of donors the Company is able to recover, and, in turn, process.
As indicated above, the Company continues efforts to diversify the sales mix across the new product lines added in 2015: Lattice Biologics’ Acellular Dermal Matrix scaffold (AdMatrix) and Demineralized Bone Matrix putty. As at March 31, 2016, the Company had built adequate inventory levels of the new product lines in preparation for the growth in sales. 68% of the Company’s $2,232,390 inventory is comprised of both finished and unfinished goods for the new product lines.
2016 Business Outlook:
The Company remains focused on raising additional capital to: assist with its working capital constraint; fulfill open purchase orders; launch of the Company’s new product lines; and support R&D efforts. Appropriate working capital conditions will allow the Company to expand current operations by accepting and processing a greater number of donors each month and also to launch new high-margin product lines. If Lattice Biologics is successful in its financing efforts, the Company expects to be cash flow positive by the end of fiscal 2016.
Furthermore, Lattice Biologics is proactively working to complete all additions to its Scientific Advisory Boards (SABs) which are comprised of strategic Key Opinion Leaders (KOLs) in each of the Company’s targeted surgical specialties. These professionals play a significant role in influencing industry perception and opinion and can be instrumental in the recruitment of new surgeon partners and generation of critical clinical data.
“I am extremely pleased with our efforts to build out our SAB team as well as our M&A and R&D efforts to further our growth trajectory,” states CEO Guy Cook. “EBITDA will be a key indicator of our positive growth position while key surgeon recruitment will help make Lattice a leader in delivering top-notch care in precision medicine.”
Lattice Biologics Ltd.
Chief Executive Officer
Telephone No: (480) 563-0800
About Lattice Biologics Ltd.:
Lattice Biologics recently completed its RTO, becoming a publically traded company on January 4, 2016 and 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. Lattice’s products are used in a variety of surgical applications.
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.
This news release may include forward-looking statements that are subject to risks and uncertainties. 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 “continuing”, “intends” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to 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 by such forward-looking statements or forward-looking information. Although Lattice believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, continued availability of capital and financing, and general economic, market or business conditions. There can be no assurances that such statements will prove accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. We do not assume any obligation to update any forward-looking statements except as required under the applicable laws.
Follow us on Twitter: @LatticeBio
Media Contact: Melanie Battista, Public Relations, Lattice Biologics Ltd., (TSX-V: LBL) (OTCBB: BLVKF) 16701 N 90th Street, Suite #101, Scottsdale, AZ 85260, 480-563-0800 Office, News@LatticeBiologics.com | www.LatticeBiologics.com