Annual Reports

 
Quarterly Reports

  • 10-Q (Nov 16, 2015)
  • 10-Q (Aug 10, 2015)
  • 10-Q (May 11, 2015)
  • 10-Q (Nov 10, 2014)
  • 10-Q (Aug 11, 2014)
  • 10-Q (May 12, 2014)

 
8-K

 
Other

Osiris Therapeutics 10-Q 2015

Documents found in this filing:

  1. 10-Q
  2. Ex-31.1.1
  3. Ex-31.2.1
  4. Ex-32.1
  5. Ex-32.1
osir_Current_Folio_10Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2015

 

Or

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from             to

 

Commission File Number: 001-32966

 

OSIRIS THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

Maryland

 

71-0881115

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

7015 Albert Einstein Drive, Columbia, Maryland

 

21046

(Address of principal executive offices)

 

(Zip Code)

 

443-545-1800

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  No 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer

 

Accelerated filer 

 

 

 

Non-accelerated filer

 

Smaller reporting company

(Do not check if a smaller reporting company)

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No 

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class

 

Outstanding at November 13, 2015

Common Stock, par value $0.001 per share

 

34,452,640

 

 

 

 

 

 


 

OSIRIS THERAPEUTICS, INC.

 

INDEX

 

 

 

 

 

 

 

    

 

    

Page

 

 

 

 

 

 

PART I – FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1. 

 

Financial Statements (unaudited, except for the Balance Sheet as of December 31, 2014, which was derived from audited financial statements)

 

 

 

Condensed Balance Sheets — September 30, 2015 and December 31, 2014

 

 

 

Condensed Statements of Comprehensive Income (Loss) — three and nine months ended September 30, 2015 and 2014

 

 

 

Condensed Statement of Changes in Stockholders’ Equity

 

 

 

Condensed Statements of Cash Flows — nine months ended September 30, 2015 and 2014

 

 

 

Notes to Condensed Financial Statements

 

 

 

 

 

 

Item 2. 

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

25 

 

 

 

 

 

Item 3. 

 

Quantitative and Qualitative Disclosures About Market Risk

 

32 

 

 

 

 

 

Item 4. 

 

Controls and Procedures

 

33 

 

 

 

 

 

 

PART II – OTHER INFORMATION

 

 

 

 

 

 

 

Item 1. 

 

Legal Proceedings

 

35 

Item 1A. 

 

Risk Factors

 

35 

Item 2. 

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

35 

Item 3. 

 

Defaults Upon Senior Securities

 

35 

Item 4. 

 

Mine Safety Disclosures

 

35 

Item 5. 

 

Other Information

 

35 

Item 6. 

 

Exhibits

 

35 

 

 

 

 

 

Signatures 

 

 

 

36 

 

 

 

2


 

PART I -- FINANCIAL INFORMATION

 

Item 1.Financial Statements — Unaudited

 

OSIRIS THERAPEUTICS, INC.

CONDENSED BALANCE SHEETS

(amounts in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

    

September 30, 2015

    

December 31, 2014

 

 

 

(unaudited)

 

(restated)

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash

 

$

15,799

 

$

2,208

 

Investments available for sale

 

 

24,452

 

 

37,305

 

Trading securities

 

 

3,090

 

 

10,591

 

Trade accounts receivable, net of reserves

 

 

37,857

 

 

23,235

 

Other receivables

 

 

562

 

 

9,951

 

Inventory

 

 

15,818

 

 

11,160

 

Prepaids and other current assets

 

 

1,167

 

 

650

 

Total current assets

 

 

98,745

 

 

95,100

 

Property and equipment, net

 

 

2,180

 

 

2,087

 

Other assets

 

 

95

 

 

95

 

Total assets

 

$

101,020

 

$

97,282

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

9,579

 

$

8,854

 

Capital lease obligations, current portion

 

 

45

 

 

45

 

Dividends payable

 

 

6,890

 

 

 —

 

Deferred commissions payable, current portion

 

 

1,667

 

 

1,667

 

Total current liabilities

 

 

18,181

 

 

10,566

 

Other long-term liabilities

 

 

2,995

 

 

3,589

 

Total liabilities

 

 

21,176

 

 

14,155

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

Common stock, $.001 par value, 90,000 shares authorized, 34,453 shares outstanding—2015, 34,346 shares outstanding—2014

 

 

35

 

 

35

 

Additional paid-in-capital

 

 

283,964

 

 

287,525

 

Accumulated other comprehensive loss

 

 

(94)

 

 

(54)

 

Accumulated deficit

 

 

(204,061)

 

 

(204,379)

 

Total stockholders’ equity

 

 

79,844

 

 

83,127

 

Total liabilities and stockholders’ equity

 

$

101,020

 

$

97,282

 

 

The accompanying notes are an integral part of these financial statements.

3


 

OSIRIS THERAPEUTICS, INC.

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Unaudited

(amounts in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

    

2015

    

2014

    

2015

    

2014

 

Product revenues

 

$

25,331

 

$

17,204

 

$

67,277

 

$

40,548

 

Cost of product revenues

 

 

5,390

 

 

3,785

 

 

14,822

 

 

8,921

 

Gross profit

 

 

19,941

 

 

13,419

 

 

52,455

 

 

31,627

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

2,306

 

 

1,207

 

 

6,233

 

 

2,932

 

Selling, general and administrative

 

 

17,325

 

 

10,993

 

 

44,090

 

 

28,153

 

 

 

 

19,631

 

 

12,200

 

 

50,323

 

 

31,085

 

Income from operations of continuing operations

 

 

310

 

 

1,219

 

 

2,132

 

 

542

 

Other expense, net

 

 

(1,100)

 

 

(405)

 

 

(1,156)

 

 

(1,763)

 

Income (loss) from continuing operations, before income taxes

 

 

(790)

 

 

814

 

 

976

 

 

(1,221)

 

Income tax benefit (expense)

 

 

132

 

 

(104)

 

 

(354)

 

 

(104)

 

Income (loss) from continuing operations

 

 

(658)

 

 

710

 

 

622

 

 

(1,325)

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations of discontinued operations, net of income taxes of $75 and $672, for the three and nine months ended September 30, 2014, respectively

 

 

 —

 

 

(65)

 

 

 —

 

 

(1,280)

 

Loss from discontinued operations

 

 

 —

 

 

(65)

 

 

 —

 

 

(1,280)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

(658)

 

 

645

 

 

622

 

 

(2,605)

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on investments available for sale

 

 

108

 

 

(30)

 

 

(40)

 

 

75

 

Comprehensive income (loss)

 

$

(550)

 

$

615

 

$

582

 

$

(2,530)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic income (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

(0.02)

 

$

0.02

 

$

0.02

 

$

(0.04)

 

Loss from discontinued operations

 

 

 —

 

 

 —

 

 

 —

 

 

(0.04)

 

Basic income (loss) per share

 

$

(0.02)

 

$

0.02

 

$

0.02

 

$

(0.08)

 

Diluted income (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

(0.02)

 

$

0.02

 

$

0.02

 

$

(0.04)

 

Loss from discontinued operations

 

 

 —

 

 

 —

 

 

 —

 

 

(0.04)

 

Diluted income (loss) per share

 

$

(0.02)

 

$

0.02

 

$

0.02

 

$

(0.08)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares (basic)

 

 

34,444

 

 

34,314

 

 

34,404

 

 

34,243

 

Weighted average common shares (diluted)

 

 

34,444

 

 

34,662

 

 

34,900

 

 

34,243

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 

$

0.20

 

$

 —

 

$

0.20

 

$

 —

 

 

The accompanying notes are an integral part of these financial statements.

 

4


 

 

OSIRIS THERAPEUTICS, INC.

CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

Unaudited
(amount in thousands; except for share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

Other

 

 

 

 

Total

 

 

 

Common Stock

 

Paid-in

 

Comprehensive

 

Accumulated

 

Stockholders’

 

 

    

Shares

    

Amount

    

Capital

    

(Loss) Income

    

Deficit

    

Equity

 

Balance at December 31, 2014 (restated)

 

34,345,688

 

$

35

 

$

287,525

 

$

(54)

 

$

(204,379)

 

$

83,127

 

Dividends declared

 

 —

 

 

 —

 

 

(6,890)

 

 

 —

 

 

 —

 

 

(6,890)

 

Exercise of options to purchase common stock ($.40-$16.24 per share)

 

136,065

 

 

 —

 

 

1,061

 

 

 —

 

 

 —

 

 

1,061

 

Repurchase and retirement of common stock

 

(29,113)

 

 

 —

 

 

(250)

 

 

 —

 

 

(304)

 

 

(554)

 

Share-based compensation-employees

 

 —

 

 

 —

 

 

2,381

 

 

 —

 

 

 —

 

 

2,381

 

Net income

 

 —

 

 

 —

 

 

 —

 

 

 —

 

 

622

 

 

622

 

Unrealized loss on investments available for sale

 

 —

 

 

 —

 

 

 —

 

 

(40)

 

 

 —

 

 

(40)

 

Windfall tax benefit from stock-based compensation

 

 —

 

 

 —

 

 

137

 

 

 —

 

 

 —

 

 

137

 

Balance at September 30, 2015

 

34,452,640

 

$

35

 

$

283,964

 

$

(94)

 

$

(204,061)

 

$

79,844

 

 

The accompanying notes are an integral part of these financial statements.

 

 

 

5


 

OSIRIS THERAPEUTICS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

Unaudited
(amount in thousands)

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

    

2015

    

2014

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Continuing operations

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

622

 

$

(1,325)

 

Adjustments to reconcile income (loss) from continuing operations to net cash used in operations of continuing operations:

 

 

 

 

 

 

 

Net realized and unrealized loss on trading securities

 

 

1,192

 

 

2,026

 

Net realized loss (gain) on investments available for sale

 

 

356

 

 

(120)

 

Depreciation and amortization

 

 

850

 

 

685

 

Non cash share-based payments

 

 

2,381

 

 

2,184

 

Provision for bad debts

 

 

150

 

 

250

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

 

(14,772)

 

 

(14,237)

 

Inventory

 

 

(4,658)

 

 

(6,911)

 

Other receivables

 

 

4,980

 

 

(343)

 

Prepaid expenses and other current assets

 

 

(517)

 

 

(45)

 

Accounts payable, accrued expenses, and other liabilities

 

 

165

 

 

4,434

 

Net cash used in operating activities of continuing operations

 

 

(9,251)

 

 

(13,402)

 

Discontinued operations

 

 

 

 

 

 

 

Loss from discontinued operations

 

 

 —

 

 

(1,280)

 

Adjustments to reconcile loss from discontinued operations to net cash used in operations of discontinued operations:

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable and other current assets

 

 

 —

 

 

91

 

Accounts payable and accrued expenses

 

 

 —

 

 

(57)

 

Net cash used in operations of discontinued operations

 

 

 —

 

 

(1,246)

 

Net cash used in operating activities

 

 

(9,251)

 

 

(14,648)

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(943)

 

 

(801)

 

Proceeds from sale of discontinued operations, net

 

 

 —

 

 

15,000

 

Proceeds from sale of trading securities

 

 

4,520

 

 

 —

 

Proceeds from sale of investments available for sale

 

 

142,438

 

 

10,354

 

Purchases of investments available for sale

 

 

(129,981)

 

 

(13,000)

 

Guaranteed payment related to trading securities

 

 

6,198

 

 

 —

 

Net cash provided by investing activities

 

 

22,232

 

 

11,553

 

Cash flows from financing activities:

 

 

 

 

 

 

 

Principal payments on capital lease obligations

 

 

(34)

 

 

(34)

 

Restricted cash

 

 

 —

 

 

147

 

Proceeds from the exercise of options to purchase common stock

 

 

1,061

 

 

1,441

 

Common stock repurchased and retired

 

 

(554)

 

 

 —

 

Windfall benefit from stock-based compensation

 

 

137

 

 

71

 

Net cash provided by financing activities

 

 

610

 

 

1,625

 

Net increase (decrease) in cash

 

 

13,591

 

 

(1,470)

 

Cash at beginning of period

 

 

2,208

 

 

2,416

 

Cash at end of period

 

$

15,799

 

$

946

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flows information:

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

2,424

 

$

 —

 

Supplemental disclosure of non cash activities:

 

 

 

 

 

 

 

Cash dividends declared

 

 

6,890

 

 

 —

 

 

The accompanying notes are an integral part of these financial statements.

 

 

6


 

Table of Contents

OSIRIS THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (continued)

NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

 

1.  Description of Business and Significant Accounting Policies

 

Description of Business

 

Osiris Therapeutics, Inc. ("we," "us," "our," or the "Company") is a Maryland corporation headquartered in Columbia, Maryland. We began operations on December 23, 1992 and were a Delaware corporation until, with approval of our stockholders, we reincorporated as a Maryland corporation on May 31, 2010. We are a leading cellular regenerative medicine company focused on researching, developing and marketing products in the wound, orthopaedic, and sports medicine markets.

 

From 2010 to 2013, we operated our business in two segments, Biosurgery and Therapeutics. We now operate only our Biosurgery business, as a result of the sale of our Therapeutics segment assets in the fourth quarter of 2013, as discussed further below. Our Biosurgery business focuses on products for wound care, orthopaedic, and sports medicine to harness the ability of cells and novel constructs to promote the body's natural healing. Until it was sold, our Therapeutics business focused on developing biologic stem cell drug candidates from a readily available and non-controversial source—adult bone marrow.

 

Our Biosurgery business has continued to grow since its inception, and we have increased our organizational focus on the development and commercialization of products in this segment. Consistent with this organizational focus, as discussed further in Note 2— Discontinued Operations below, on October 10, 2013, we entered into a Purchase Agreement to sell our Therapeutics segment, including all of our culture expanded mesenchymal stem cell business, including Prochymal® and other related assets. We eliminated the Therapeutics segment from our continuing operations as a result of the disposal transaction, and have presented the assets, liabilities, and results of the segment's operations as a discontinued operation for all periods presented. Our continuing operations now represent the portion of our business previously referred to as our Biosurgery segment.

 

Unaudited Interim Financial Statements

 

Except for the Balance Sheet as of December 31, 2014, which was derived from audited financial statements, the accompanying condensed financial statements are unaudited.  The accompanying condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, these statements include all adjustments (consisting of normal recurring adjustments) considered necessary to present a fair statement of our results of operations, financial position and cash flows. Operating results for any interim period are not necessarily indicative of the results that may be expected for the full year. This Quarterly Report on Form 10-Q should be read in conjunction with our financial statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

 

Correction of Prior Period Financial Statements

 

In connection with preparing the Company’s financial statements for the quarter ended September 30, 2015, the Company reviewed the timing of revenue recognition under contracts with its distributors.  As a result of this review, the Company determined to correct the revenue recognition for three contracts which will result in a decrease in product revenues of $1.8 million in the first quarter of 2015, a decrease in product revenue of $1.0 million in the second quarter, an increase in product revenues of $0.8 million in the third quarter of 2015 and a decrease in product revenues of $1.1 million in 2014. 

 

 

 

7


 

Table of Contents

OSIRIS THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (continued)

NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

 

Background

 

Under US GAAP, revenue is generally recognized when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed and determinable, and collectability is probable. The Company previously recognized revenue under these three distributor contracts which was reflected in the Company’s audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2014 and its unaudited financial statements in its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015 and June 30, 2015. 

 

Upon subsequent review in connection with the Company’s review of its third quarter 2015 financial statements, the Company determined, in consultation with its independent registered public accounting firm, that the transactions did not meet certain conditions for revenue recognition in the fourth quarter of 2014, and the first and second quarters of 2015.  Specifically to the transaction in the fourth quarter of 2014, the Company determined that the persuasive evidence of an arrangement was not met until January 2015 and the price was not fixed and determinable in the quarter that the revenues were previously recognized. As a result, the Company is required to account for the contract with this distributor under the cash basis of accounting, which means that revenues are recognized when cash receipts are actually received.  Correcting this revenue recognition error in one contract will result in an increase in product revenues of approximately $0.8 million, net of cost of sales, in the third quarter of 2015 and a decrease in product revenues of approximately $1.1 million, net of cost of sales, in 2014.  The approximate $0.3 million difference between the $0.8 million increase in product revenues for the third quarter of 2015 and the $1.1 million decrease in product revenues in 2014 will not be included as an accounts receivable as of the end of the third quarter of 2015, but will be recorded as product revenue in future periods when and if such amounts are actually received.  

 

The Company also sold product to the same distributor during the first quarter of 2015. The Company is also recognizing this sale on the cash-basis of accounting. Correcting this revenue recognition error will result in a decrease in product revenues of approximately $0.8 million, net of cost of sales, in the first quarter of 2015.  The $0.8 million of accounts receivable will not be included as an accounts receivable as of the end of the first quarter of 2015, but will be recorded as product revenue in future periods when and if such amounts are actually received.

 

Also during the first quarter of 2015, the Company recognized a $0.7 million sale, net of cost of sales, to a distributor that ordered products for sale outside of the United States. During its review of all distributor contracts undertaken during the third quarter 2015 period close process, the Company also determined that revenue recognition of this first quarter 2015 transaction is appropriate in a future period when the distributor achieves full regulatory approval in the country where they will be selling the product. This determination was made because the distributor has the right to return the product if regulatory approval is not achieved.

 

During the third quarter of 2015, the Company received true-up information from another distributor which showed the average price for product sales during the year. This distributor first sold product for the Company during the first quarter 2015. The distributor has the right to sell the product at any price, as long as it sell above a set minimum price. The impact of this price adjustment was $0.3 million revenue reduction during the first quarter 2015 and $1.0 million reduction during the second quarter 2015. The revenue adjustment was offset by a reduction in costs of goods sold, commissions and fees for that revenue. This adjustment was preliminarily recorded during the third quarter of 2015 but a determination was made to adjust previous quarters to reflect the proper impact of the adjustment to previously reported periods.

 

Materiality Assessment

 

The Company evaluated the effect of the adjustment in accordance with the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 99 (SAB 99) and SEC Staff Accounting Bulletin No. 108, "Effects of Prior Year Misstatements on Current Year Financial Statements" (SAB 108) and determined the cumulative impact of the adjustment was not material to our previously issued annual audited financial statements for the year ended

8


 

Table of Contents

OSIRIS THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (continued)

NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

 

December 31, 2014 and therefore, amendments of our previously filed 2014 Form 10-K is not required. We restated previously reported results for the three months ended December 31, 2014 and the year ended December 31, 2014 in this Quarterly Report on Form 10-Q for the quarter ended September 30,2015.  The accompanying condensed financial statements as of September 30, 2015 reflect the aforementioned immaterial corrections.

 

The following tables present the effects of the corrections on the Company’s financial statements for December 31, 2014:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As Previously Reported

 

 

Q1 2014

 

Q2 2014

 

Q3 2014

 

Q4 2014

 

2014

 

Product revenues

$

10,054

 

$

13,290

 

$

17,204

 

$

19,319

 

$

59,867

 

Cost of product revenue

 

2,212

 

 

2,924

 

 

3,785

 

 

4,250

 

 

13,171

 

Gross profit

 

7,842

 

 

10,366

 

 

13,419

 

 

15,069

 

 

46,696

 

Income (loss) from continuing operations

 

(611)

 

 

(1,428)

 

 

710

 

 

1,083

 

 

(246)

 

Net income (loss)

 

(1,365)

 

 

(1,885)

 

 

645

 

 

816

 

 

(1,789)

 

Diluted income (loss) per share

$

(0.04)

 

$

(0.05)

 

$

0.02

 

$

0.02

 

$

(0.05)

 

Trade accounts receivable, net

 

 

 

 

 

 

 

 

 

 

 

 

$

24,307

 

Inventory

 

 

 

 

 

 

 

 

 

 

 

 

$

10,924

 

Total stockholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

$

83,963

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments

 

 

Q1 2014

 

Q2 2014

 

Q3 2014

 

Q4 2014

 

2014

 

Product revenues

$

 —

 

$

 —

 

$

 —

 

$

(1,072)

 

$

(1,072)

 

Cost of product revenue

 

 —

 

 

 —

 

 

 —

 

 

(236)

 

 

(236)

 

Gross profit

 

 —

 

 

 —

 

 

 —

 

 

(836)

 

 

(836)

 

Income (loss) from continuing operations

 

 —

 

 

 —

 

 

 —

 

 

(836)

 

 

(836)

 

Net income (loss)

 

 —

 

 

 —

 

 

 —

 

 

(836)

 

 

(836)

 

Diluted income (loss) per share

$

 —

 

$

 —

 

$

 —

 

$

(0.02)

 

$

(0.02)

 

Trade accounts receivable, net

 

 

 

 

 

 

 

 

 

$

(1,072)

 

$

(1,072)

 

Inventory

 

 

 

 

 

 

 

 

 

$

236

 

$

236

 

Total stockholders' equity

 

 

 

 

 

 

 

 

 

$

(836)

 

$

(836)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restated

 

 

Q1 2014

 

Q2 2014

 

Q3 2014

 

Q4 2014

 

2014

 

Product revenues

$

10,054

 

$

13,290

 

$

17,204

 

$

18,247

 

$

58,795

 

Cost of product revenue

 

2,212

 

 

2,924

 

 

3,785

 

 

4,014

 

 

12,935

 

Gross profit

 

7,842

 

 

10,366

 

 

13,419

 

 

14,233

 

 

45,860

 

Income (loss) from continuing operations

 

(611)

 

 

(1,428)

 

 

710

 

 

247

 

 

(1,082)

 

Net income (loss)

 

(1,365)

 

 

(1,885)

 

 

645

 

 

(20)

 

 

(2,625)

 

Diluted income (loss) per share

$

(0.04)

 

$

(0.05)

 

$

0.02

 

$

(0.00)

 

$

(0.07)

 

Trade accounts receivable, net

 

 

 

 

 

 

 

 

 

 

 

 

$

23,235

 

Inventory

 

 

 

 

 

 

 

 

 

 

 

 

$

11,160

 

Total stockholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

$

83,127

 

 

 

9


 

Table of Contents

OSIRIS THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (continued)

NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percentage Change

 

 

Q1 2014

 

Q2 2014

 

Q3 2014

 

Q4 2014

 

2014

 

Product revenues

0.00

%

 

0.00

%

 

0.00

%

 

(5.55)

%

 

(1.79)

%

Cost of product revenue

0.00

%

 

0.00

%

 

0.00

%

 

(5.55)

%

 

(1.79)

%

Gross profit

0.00

%

 

0.00

%

 

0.00

%

 

(5.55)

%

 

(1.79)

%

Income (loss) from continuing operations

0.00

%

 

0.00

%

 

0.00

%

 

(77.19)

%

 

339.84

%

Net income (loss)

0.00

%

 

0.00

%

 

0.00

%

 

(102.45)

%

 

46.73

%

Diluted income (loss) per share

0.00

%

 

0.00

%

 

0.00

%

 

(120.73)

%

 

48.80

%

Trade accounts receivable, net

 

 

 

 

 

 

 

 

 

 

 

 

(4.41)

%

Inventory

 

 

 

 

 

 

 

 

 

 

 

 

2.16

%

Total stockholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

(1.00)

%

 

The following tables present the effects of the corrections on the Company’s financial statements for each quarter during 2015:

 

 

 

 

 

 

 

 

 

 

 

As Previously Reported

 

Q1 2015

 

Q2 2015

 

2015

Product revenues

$

21,003

 

$

23,688

 

$

44,691

Cost of product revenue

 

4,609

 

 

5,142

 

 

9,751

Gross profit

 

16,394

 

 

18,546

 

 

34,940

Selling, general, and administrative expenses

 

12,911

 

 

14,526

 

 

27,437

Income taxes expense

 

612

 

 

367

 

 

979

Income (loss) from continuing operations

 

1,377

 

 

1,164

 

 

2,541

Net income (loss)

 

1,377

 

 

1,164

 

 

2,541

Diluted income (loss) per share

$

0.04

 

$

0.03

 

$

0.07

Trade accounts receivable, net

$

32,022

 

$

38,598

 

 

 

Inventory

$

11,939

 

$

13,348

 

 

 

Total liabilities

$

15,128

 

$

14,185

 

 

 

Total stockholders' equity

$

86,484

 

$

88,822

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments

 

Q1 2015

 

Q2 2015

 

2015

Product revenues

$

(1,788)

 

$

(957)

 

$

(2,745)

Cost of product revenue

 

(319)

 

 

 —

 

 

(319)

Gross profit

 

(1,469)

 

 

(957)

 

 

(2,426)

Selling, general, and administrative expenses

 

(175)

 

 

(497)

 

 

(672)

Income taxes expense

 

(402)

 

 

(91)

 

 

(493)

Income (loss) from continuing operations

 

(892)

 

 

(369)

 

 

(1,261)

Net income (loss)

 

(892)

 

 

(369)

 

 

(1,261)

Diluted income (loss) per share

$

(0.02)

 

$

(0.01)

 

$

(0.03)

Trade accounts receivable, net

$

(2,860)

 

$

(3,817)

 

 

 

Inventory

$

555

 

$

555

 

 

 

Total liabilities

$

(630)

 

$

(1,350)

 

 

 

Total stockholders' equity

$

(2,305)

 

$

(3,262)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10


 

Table of Contents

OSIRIS THERAPEUTICS, INC.

NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS (continued)

NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

 

 

Restated

 

Q1 2015

 

Q2 2015

 

2015

Product revenues

$

19,215

 

$

22,731

 

$

41,946

Cost of product revenue

 

4,290

 

 

5,142

 

 

9,432

Gross profit

 

14,925

 

 

17,589

 

 

32,514

Selling, general, and administrative expenses

 

12,736

 

 

14,029

 

 

26,765

Income taxes expense

 

210

 

 

276

 

 

486

Income (loss) from continuing operations

 

485

 

 

795

 

 

1,280

Net income (loss)

 

485

 

 

795

 

 

1,280

Diluted income (loss) per share

$

0.02

 

$

0.02

 

$

0.04

Trade accounts receivable, net

$

29,162

 

$

34,781

 

 

 

Inventory

$

12,494

 

$

13,903

 

 

 

Total liabilities

$

14,498

 

$

12,835

 

 

 

Total stockholders' equity

$

84,179

 

$

85,560