The newly reinvented Baxano Surgical Inc. (NSDQ:BAXS) failed to meet Wall Street analysts’ expectations during its latest quarter, posting adjusted per-share losses 8¢ deeper than expected. Sales grew 11.4% during the quarter and losses increased 34.9%.
Despite widening losses and a lowered full-year outlook, CEO Ken Reali said he’s "enthusiastic" about the company’s future now that Baxano’s aiming for a new, more promising market.
"This quarter, we created the new Baxano Surgical and now have a suite of spinal devices targeting the minimally invasive spine market, the most significant growth opportunity in spine," Reali said in prepared remarks. "Through the recent transition and integration we have been able to stabilize the business and are enthusiastic about now returning our full focus to driving future revenue growth."
Baxano Surgical was formed after medical device makerTranS1 (NSDQ:TSON) acquired privately held Baxano Inc. in a deal worth about $23.6 million. Reali said at the time that the merger would give the company a strategic foothold in the very alluring segment of the spinal surgery market.
Overall the company posted losses of $8.5 million, or 26¢ per share, on sales of $3.9 million during the 3 months ended June 30. That compared with losses of $6.3 million, or 23¢ per share, on sales of $3.5 million during the same period last year. Adjusted to exclude special charges, quarterly losses came to 21¢ per share, where analysts had predicted losses of 13¢ per share.
Looking forward, Baxano projected Q3 sales in the range of $5.6-$6.2 million. Full-year sales are now expected in the range of $23.5-$25.5 million, compared to the company’s previous estimates in the range of $25-$29 million.
The Raleigh, N.C.-based medical device maker recently found itself having to quell rumors that it was facing harsh layoffs after an anonymous analyst The Spine Blogger claimed that the company had let go of 20% of its workforce due to "inadequate funding and sales" and that the company was "potentially in the initially [sic] stages of a shutdown," as verified by the site’s "sources on the Street."
"We had a small reduction in our workforce, but not a major disruption in the company,"Baxano marketing vice president Amie Borgstrom told MassDevice.com. "[The layoffs] had a lot to do with looking at capital markets and the decline in med-tech venture capital. We said, ‘Let’s position ourselves to be cash-flow positive.’"
BAXS shares were down about 1% in late afternoon trading yesterday, when they were going for $1.91 as of about 2:45 p.m.