News Release

Silk Road Medical Reports Second Quarter 2020 Financial Results

SUNNYVALE, Calif., Aug. 05, 2020 (GLOBE NEWSWIRE) -- Silk Road Medical, Inc. (Nasdaq: SILK), a company focused on reducing the risk of stroke and its devastating impact, today reported financial results for the three months ended June 30, 2020.

“While the second quarter posed several challenges, we are pleased with our performance and we remain unwavering in our commitment to change the standard of care in carotid artery disease. Our results are a testament to our team, our clinical outcomes and our commercial strategy, as well as reflective of the underlying demand for TCAR,” said Erica Rogers, President and Chief Executive Officer of Silk Road Medical. “As expected, procedure volumes were lowest in April, then recovered significantly in May and further in June. We have recently begun to experience more regional variability and procedure slowdowns due to the resurgence of COVID-19 cases and related restrictions, and as such, remain cautiously optimistic as we look to the second half of the year.”

Ms. Rogers continued, “Despite the challenging environment, we made meaningful progress on our strategic initiatives in the second quarter and strengthened our balance sheet with a successful follow-on offering. We are increasingly confident in our positioning as we continue with planned investments to drive durable, long term growth.”

Second Quarter 2020 Financial Results 
Revenue for the second quarter of 2020 was $15.1 million, an increase of $0.2 million or 1%, compared to the second quarter of 2019. Second quarter revenue in 2020 included the recognition of $1.3 million in deferred revenue due to a decrease in the provision for sales returns related to certain prior sales with a shorter shelf life, coupled with the downward trend in the company’s historical returns rate. Excluding the contribution of the $1.3 million, second quarter revenue declined 8% compared to the second quarter of 2019. The company does not anticipate future potential decreases in the sales return provision to materially impact subsequent quarters.

Gross profit for the second quarter of 2020 was $9.8 million compared to $11.2 million for the second quarter of 2019. Gross margin for the second quarter of 2020 declined to 65% compared to 75% in the second quarter of 2019, driven by unfavorable production variances as a result of temporarily idled manufacturing operations and lower demand, partially offset by the decrease in the provision for sales returns.

Operating expenses were $19.2 million for the second quarter of 2020, compared to $17.2 million in the corresponding prior year period, which represents an increase of 11%. The increase was driven primarily by selling, general and administrative expenses related to growth in our commercial team and marketing efforts as well as costs related to being a public company. Expense growth was modulated by cost control initiatives and the natural reduction in travel, tradeshow and other expenses due to the COVID-19 pandemic.

Net loss was $10.4 million in the second quarter of 2020, or a loss of $0.32 per share, as compared to $12.0 million, or a loss of $0.42 per share, in the corresponding period of the prior year. This metric for the second quarter of 2019 included a $5.3 million noncash charge resulting from the remeasurement of the fair value of our convertible preferred stock warrant liability.

Cash, cash equivalents, and short-term investments were $157.9 million as of June 30, 2020.

2020 Financial Guidance
Silk Road Medical is not providing annual guidance for 2020 given the uncertain scope and duration of the COVID-19 pandemic.

Conference Call
Silk Road Medical will host a conference call at 2:00 p.m. PT / 5:00 p.m. ET on Wednesday, August 5, 2020 to discuss its second quarter 2020 financial results. The call may be accessed through an operator by calling (844) 883-3861 for domestic callers and (574) 990-9820 for international callers using conference ID: 3681776. A live and archived webcast of the event will be available at https://investors.silkroadmed.com/

About Silk Road Medical 
Silk Road Medical, Inc. (NASDAQ: SILK), is a medical device company located in Sunnyvale, California, that is focused on reducing the risk of stroke and its devastating impact. The company’s flagship procedure, TransCarotid Artery Revascularization (TCAR), is clinically proven to treat blockages in the carotid artery at risk of causing a stroke. For more information on how Silk Road Medical is delivering brighter patient outcomes through brighter clinical thinking, visit www.silkroadmed.com and connect on Twitter, LinkedIn and Facebook.   

Forward-Looking Statements
This press release contains 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 the Private Securities Litigation Reform Act of 1995. These statements include statements regarding the impact of COVID-19 on our business, financial guidance, progress made on achieving our corporate goals, and the overall strength of our business and culture. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include risks described in the section entitled Risk Factors and elsewhere in our filing made with the Securities and Exchange Commission in Silk Road’s Quarterly Report on Form 10-Q filing made with the Securities and Exchange Commission on May 15, 2020. These forward-looking statements speak only as of the date hereof and should not be unduly relied upon. Silk Road Medical disclaims any obligation to update these forward-looking statements.

Investors:
Lynn Lewis or Caroline Paul
Gilmartin Group
investors@silkroadmed.com

Media:
Michael Fanucchi
Silk Road Medical
mfanucchi@silkroadmed.com


SILK ROAD MEDICAL, INC.
Statements of Operations Data
(Unaudited, in thousands, except share and per share data)

              Three Months Ended June 30,   Six Months Ended June 30,
                2020       2019       2020       2019  
                           
                           
Revenue     $ 15,094     $ 14,928     $ 34,027     $ 27,694  
Cost of goods sold   5,336       3,697       10,586       7,035  
          Gross profit   9,758       11,231       23,441       20,659  
Operating expenses:              
  Research and development   3,393       3,113       6,522       5,820  
  Selling, general and administrative   15,758       14,135       35,450       28,001  
          Total operating expenses   19,151       17,248       41,972       33,821  
          Loss from operations   (9,393 )     (6,017 )     (18,531 )     (13,162 )
Interest income   299       598       702       650  
Interest expense   (1,203 )     (1,207 )     (2,406 )     (2,560 )
Remeasurement of warrant liability and other income (expense), net   (56 )     (5,333 )     (59 )     (21,045 )
                           
          Net loss   (10,353 )     (11,959 )     (20,294 )     (36,117 )
Other comprehensive loss:              
  Unrealized gain (loss) on investments, net   (126 )     -       314       -  
Net change in other comprehensive loss   (126 )     -       314       -  
                           
Net loss and comprehensive loss $ (10,479 )   $ (11,959 )   $ (19,980 )   $ (36,117 )
Net loss per share, basic and diluted $ (0.32 )   $ (0.42 )   $ (0.63 )   $ (2.42 )
Weighted average common shares used to compute net loss per share, basic and diluted   32,682,360       28,458,793       32,010,335       14,905,052  
                           


SILK ROAD MEDICAL, INC.
Balance Sheets Data
(Unaudited, in thousands)

            June 30, 2020   December 31, 2019
                 
Assets          
Current assets      
  Cash and cash equivalents $ 73,442     $ 39,181  
  Short-term investments   84,416       51,508  
  Accounts receivable, net   7,753       8,601  
  Inventories   11,621       10,322  
  Prepaid expenses and other current assets   3,863       2,878  
          Total current assets   181,095       112,490  
  Long-term investments   -       18,224  
  Property and equipment, net   2,885       2,734  
  Restricted cash   310       310  
  Other non-current assets   3,233       3,644  
          Total assets $ 187,523     $ 137,402  
Liabilities and stockholders' equity      
Current liabilities      
  Accounts payable $ 2,542     $ 1,898  
  Accrued liabilities   9,142       15,034  
          Total current liabilities   11,684       16,932  
  Long-term debt   45,066       44,879  
  Other liabilities   3,693       3,700  
          Total liabilities   60,443       65,511  
Stockholders' equity      
  Preferred stock, $0.001 par value   -       -  
  Common stock, $0.001 par value   34       31  
Additional paid-in capital   338,550       263,384  
Accumulated other comprehensive income   316       2  
Accumulated deficit   (211,820 )     (191,526 )
          Total stockholders' equity   127,080       71,891  
          Total liabilities and stockholders' equity $ 187,523     $ 137,402  
                 

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Source: Silk Road Medical