TearLab (TEAR) Prelim. Q1 Revenue Tops Views

TearLab Corporation (NASDAQ: TEAR) announced certain preliminarily unaudited financial estimates for the first quarter of 2016.

TearLab estimates that total revenue for the quarter ended March 31, 2016 will be approximately $6.8 million, reflecting an increase of 25% from the first quarter of 2015. In addition, TearLab estimates that a net total of 257 TearLab Osmolarity® Systems were added in the first quarter of 2016, of which 167 were under the Company’s new Flex program and 61 were purchased outside of the United States.

*** The Street consensus sees Q1 revenue of $6.4 million

The following table sets out the estimated annualized revenue per U.S. device and account analysis for the first quarter ended March 31, 2016:

The Company’s strong sales performance was driven by its U.S. business, which experienced both year-over-year as well as sequential growth, resulting primarily from continued utilization and new device placement in its Flex accounts.

The Company estimates its available cash balance at March 31, 2016 to be $7.2 million. The Q1-2016 cash burn was negatively impacted by large seasonal payments related to annual audit expenses, full year insurance payments, expenses related to the Company’s public offering in February and severance payments related to the Company’s previously announced strategic restructuring.

These figures are preliminary and actual results may differ. The Company currently expects to report final first quarter financial results on May 4, 2016 after the market close.

“We are especially pleased with these results given the high level of disruption experienced throughout the quarter due to our financing efforts and strategic restructuring of the business. To see increases in our total device placements, account footprint and average revenues within our Flex customers are all positive signs of our ability to maintain our momentum with a smaller more efficient sales force and drive growth going forward. In addition to the strategic restructuring, we have also completed the OcuHub divestment. Both will result in a significant decrease in our cash burn beginning in the second quarter,” commented Seph Jensen, TearLab’s Chief Executive Officer.

Business Outlook

TearLab continues to expect annual revenue growth of 15% - 20% for the full year 2016. In addition, the Company completed its previously announced strategic restructuring in the first quarter of 2016 and finalized the divestment of its OcuHub subsidiary on April 8, 2016. As a result, the Company believes it will start realizing the full impact of an annualized operating expense reduction of $12.9 million ($9.4 million from the strategic restructuring and $3.5 million from the OcuHub divestment), beginning in the second quarter of 2016. As a result, the Company expects its cash burn under its new operating model for the remainder of 2016 to be in the range of $7.5 million to $8.5 million.

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