Anika Therapeutics, Inc. (ANIK) Bundle
Understanding Anika Therapeutics, Inc. (ANIK) Revenue Streams
Understanding Anika Therapeutics, Inc.’s Revenue Streams
The revenue analysis of Anika Therapeutics, Inc. reveals several key components that contribute to its overall financial health.
Breakdown of Primary Revenue Sources
As of September 30, 2024, the revenue is categorized into three primary product families:
- OA Pain Management: $75,404,000 (62.2% of total revenue)
- Joint Preservation and Restoration: $39,345,000 (32.4% of total revenue)
- Non-Orthopedic: $6,448,000 (5.4% of total revenue)
The total revenue for the nine months ended September 30, 2024, was $121,197,000 compared to $123,691,000 for the same period in 2023, reflecting a 2% decrease.
Year-over-Year Revenue Growth Rate
Examining the historical trends, the year-over-year revenue changes are as follows:
| Period | Revenue ($) | Year-over-Year Change ($) | Percentage Change (%) |
|---|---|---|---|
| 2023 | 123,691,000 | - | - |
| 2024 | 121,197,000 | (2,494,000) | (2%) |
Contribution of Different Business Segments to Overall Revenue
For the three-month period ended September 30, 2024, the contributions were:
| Product Family | Revenue ($) | Percentage of Total Revenue (%) |
|---|---|---|
| OA Pain Management | 24,428,000 | 63.1% |
| Joint Preservation and Restoration | 11,950,000 | 30.8% |
| Non-Orthopedic | 2,375,000 | 6.1% |
| Total Revenue | 38,753,000 | 100% |
Analysis of Significant Changes in Revenue Streams
There were notable changes in revenue streams, particularly:
- Revenue from OA Pain Management decreased by 2% for both the three- and nine-month periods ended September 30, 2024, compared to the same periods in 2023.
- Joint Preservation and Restoration revenue saw a decrease of 11% for the three-month period and 1% for the nine-month period.
- Non-Orthopedic revenue declined by 24% for the three-month period and 11% for the nine-month period, primarily due to unfavorable timing of distributor ordering patterns and the end of life of certain legacy products.
These changes indicate a need for strategic adjustments to enhance revenue stability and growth moving forward.
A Deep Dive into Anika Therapeutics, Inc. (ANIK) Profitability
A Deep Dive into Anika Therapeutics, Inc.'s Profitability
Gross Profit: For the three-month period ended September 30, 2024, the gross profit was $1.44 million, a significant decrease from $24.94 million in the same period of 2023. For the nine months ended September 30, 2024, gross profit was $53.43 million, down from $76.76 million in 2023.
Gross Margin: The gross margin for the three-month period ended September 30, 2024, was 4%, compared to 60% in 2023. For the nine-month period, the gross margin was 44%, down from 62% in the prior year .
| Period | Gross Profit ($ million) | Gross Margin (%) |
|---|---|---|
| Three Months Ended September 30, 2024 | 1.44 | 4% |
| Three Months Ended September 30, 2023 | 24.94 | 60% |
| Nine Months Ended September 30, 2024 | 53.43 | 44% |
| Nine Months Ended September 30, 2023 | 76.76 | 62% |
Operating Profit: The loss from operations for the three-month period ended September 30, 2024, was $(28.02) million, compared to a loss of $(7.67) million in the same period of 2023. For the nine months ended September 30, 2024, the loss from operations was $(32.92) million, up from $(23.86) million in 2023 .
Net Profit: The net loss for the three-month period ended September 30, 2024, was $(29.92) million, compared to a net loss of $(6.58) million in 2023. For the nine months ended September 30, 2024, the net loss was $(34.52) million, versus $(19.67) million in the previous year .
Profitability Trends: The company has experienced a downward trend in profitability metrics, with significant declines in gross profit and margins due to write-downs of inventories and increased operational costs. The gross profit margin saw a dramatic drop from 60% to 4% year-over-year for the quarterly period .
Industry Comparison: The average gross margin in the biotechnology industry typically ranges from 60% to 80%. The company's current gross margin of 44% indicates underperformance relative to industry standards.
Operational Efficiency: Selling, general, and administrative expenses for the three-month period ended September 30, 2024, totaled $19.11 million, down from $24.83 million in 2023, reflecting a 23% decrease. Research and development expenses decreased slightly to $7.24 million from $7.79 million .
| Expense Type | Three Months Ended September 30, 2024 ($ million) | Three Months Ended September 30, 2023 ($ million) | % Change |
|---|---|---|---|
| Selling, General & Administrative | 19.11 | 24.83 | -23% |
| Research & Development | 7.24 | 7.79 | -7% |
Adjusted EBITDA: Adjusted EBITDA for the three-month period ended September 30, 2024, was $5.43 million, an increase from $4.65 million in the same period of 2023. For the nine-month period, adjusted EBITDA rose to $14.22 million from $9.72 million.
| Period | Adjusted EBITDA ($ million) |
|---|---|
| Three Months Ended September 30, 2024 | 5.43 |
| Three Months Ended September 30, 2023 | 4.65 |
| Nine Months Ended September 30, 2024 | 14.22 |
| Nine Months Ended September 30, 2023 | 9.72 |
Debt vs. Equity: How Anika Therapeutics, Inc. (ANIK) Finances Its Growth
Debt vs. Equity: How Anika Therapeutics Finances Its Growth
The company's financial strategy is characterized by its management of debt and equity to support growth initiatives. As of September 30, 2024, Anika Therapeutics reported a total debt of $25.2 million, comprising $25.2 million in long-term debt, with no short-term debt outstanding.
Debt Levels
As of the latest reporting period, the company has a total debt amounting to $25.2 million. This figure reflects a stable long-term debt position, which is crucial for financing operations and investments without immediate repayment obligations.
Debt-to-Equity Ratio
The debt-to-equity ratio is a vital indicator of financial leverage. As of September 30, 2024, Anika Therapeutics holds a debt-to-equity ratio of 0.14, which is significantly lower than the industry average of approximately 0.5 to 0.7, indicating a conservative approach to leveraging.
Recent Debt Issuances and Credit Ratings
There have been no recent debt issuances as of the latest quarter, and the company maintains compliance with its existing credit facilities. The revolving credit facility, which offers up to $150 million, remains untapped as of September 30, 2024.
Balance Between Debt Financing and Equity Funding
Anika Therapeutics has employed a balanced approach to financing its operations, primarily utilizing equity financing. The company reported total stockholders' equity of $179.9 million at the end of the last quarter, signifying a reliance on equity to support its growth strategies.
| Financial Metric | Value |
|---|---|
| Total Debt | $25.2 million |
| Long-term Debt | $25.2 million |
| Short-term Debt | $0 million |
| Debt-to-Equity Ratio | 0.14 |
| Industry Average Debt-to-Equity Ratio | 0.5 - 0.7 |
| Total Stockholders' Equity | $179.9 million |
| Revolving Credit Facility Available | $150 million |
Assessing Anika Therapeutics, Inc. (ANIK) Liquidity
Assessing Anika Therapeutics, Inc. Liquidity
Current Ratio: As of September 30, 2024, the current ratio is 2.15, calculated from current assets of $125.5 million and current liabilities of $58.5 million.
Quick Ratio: The quick ratio stands at 1.75, derived from quick assets (current assets minus inventories) of $97.9 million and the same current liabilities of $58.5 million.
Analysis of Working Capital Trends
Working capital as of September 30, 2024, is $66.9 million, compared to $73.9 million at December 31, 2023, indicating a decrease of 9.5%. This decline in working capital reflects changes in both current assets and liabilities.
| Period | Current Assets ($ millions) | Current Liabilities ($ millions) | Working Capital ($ millions) | Current Ratio |
|---|---|---|---|---|
| September 30, 2024 | 125.5 | 58.5 | 66.9 | 2.15 |
| December 31, 2023 | 134.5 | 60.6 | 73.9 | 2.22 |
Cash Flow Statements Overview
Operating Cash Flow: For the nine months ended September 30, 2024, cash provided by operating activities was $3.8 million, compared to cash used of $5.4 million for the same period in 2023.
Investing Cash Flow: Cash used in investing activities was $7.0 million for the nine months ended September 30, 2024, up from $3.6 million in 2023.
Financing Cash Flow: Cash used in financing activities totaled $7.4 million for the nine months ended September 30, 2024, compared to $6.7 million in the previous year.
| Cash Flow Type | 2024 ($ millions) | 2023 ($ millions) |
|---|---|---|
| Operating Activities | 3.8 | (5.4) |
| Investing Activities | (7.0) | (3.6) |
| Financing Activities | (7.4) | (6.7) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, cash and cash equivalents amount to $62.4 million, compared to $72.9 million at the end of 2023. The company has no outstanding borrowings under its credit facility, which has a capacity of $150 million. This strong cash position, despite the decrease, indicates a robust liquidity foundation.
Is Anika Therapeutics, Inc. (ANIK) Overvalued or Undervalued?
Valuation Analysis
The valuation of a company is critical for investors to determine whether it is overvalued or undervalued. This section breaks down key financial ratios and stock performance metrics for Anika Therapeutics, Inc. (ANIK) as of 2024.
Price-to-Earnings (P/E) Ratio
The trailing twelve months (TTM) P/E ratio is calculated based on the company's net loss. As of September 30, 2024, the diluted loss per share was $2.03. Therefore, with the current stock price hovering around $5.00, the P/E ratio is not applicable due to negative earnings.
Price-to-Book (P/B) Ratio
The P/B ratio compares a company's market value to its book value. As of September 30, 2024, the book value per share was approximately $12.24, resulting in a P/B ratio of 0.41 based on a stock price of $5.00.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
As of September 30, 2024, the adjusted EBITDA was $5.43 million for the last quarter. The enterprise value (EV) is calculated by adding market capitalization to total debt and subtracting cash. Assuming total debt of $0 and cash of $62.4 million, the EV is approximately $73.5 million, leading to an EV/EBITDA of approximately 13.5.
Stock Price Trends
Over the last 12 months, the stock price has exhibited volatility:
- 12 months ago: $9.50
- Current price: $5.00
- Percentage decline: 47.37%
Dividend Yield and Payout Ratios
As of 2024, Anika Therapeutics does not pay dividends, resulting in a dividend yield of 0%.
Analyst Consensus on Stock Valuation
The consensus among analysts regarding the stock's valuation is as follows:
- Buy: 0
- Hold: 2
- Sell: 1
Summary Table
| Metric | Value |
|---|---|
| P/E Ratio | N/A |
| P/B Ratio | 0.41 |
| EV/EBITDA | 13.5 |
| Current Stock Price | $5.00 |
| Book Value per Share | $12.24 |
| 12-Month Stock Price Change | -47.37% |
| Dividend Yield | 0% |
| Analyst Consensus (Buy/Hold/Sell) | 0/2/1 |
Key Risks Facing Anika Therapeutics, Inc. (ANIK)
Key Risks Facing Anika Therapeutics, Inc.
Industry Competition: The company operates in a highly competitive market with numerous established players and emerging biotech firms. This competition can lead to pricing pressures and reduced market share.
Regulatory Changes: Changes in healthcare regulations and reimbursement policies can significantly impact the company's operations and profitability. Compliance with FDA regulations is critical, and any delays in product approvals can hinder growth.
Market Conditions: Economic downturns can affect healthcare budgets and spending, potentially leading to reduced demand for the company's products.
Operational Risks
The operational risks include potential supply chain disruptions, particularly related to raw materials required for product manufacturing. The company reported a significant $22.7 million write-down of inventories for the nine-month period ending September 30, 2024. This indicates vulnerabilities in inventory management and supply chain reliability.
Financial Risks
As of September 30, 2024, the company reported a net loss of $29.9 million for the third quarter, compared to a loss of $6.6 million in the same period of 2023. The cumulative net loss for the nine-month period was $34.5 million. Additionally, the effective tax rates for the three and nine-month periods were (8.4%) and (10.2%), reflecting challenges in managing tax obligations.
Strategic Risks
Strategic risks include the company's reliance on its OA Pain Management product family, which experienced a revenue decline of 2% in the nine-month period ending September 30, 2024. The Joint Preservation and Restoration product family also saw a decline of 1% over the same period.
Furthermore, the company faced a $3.1 million impairment charge related to the long-lived assets of the Arthrosurface business. This reflects the potential for significant financial write-downs that can occur if products do not meet market expectations.
Mitigation Strategies
The company has implemented several strategies to mitigate risks, including:
- Enhanced inventory management practices to reduce write-downs and optimize supply chain operations.
- Investments in research and development to diversify product offerings and reduce reliance on specific product families.
- Engagement with regulatory bodies to ensure compliance and facilitate smoother product approval processes.
Financial Overview
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Loss | $29.9 million | $6.6 million | +355% |
| Revenue | $38.8 million | $41.5 million | -7% |
| Gross Margin | 4% | 60% | -93% |
| Research & Development Expenses | $7.2 million | $7.8 million | -7% |
| Selling, General & Administrative Expenses | $19.1 million | $24.8 million | -23% |
As of September 30, 2024, cash and cash equivalents stood at $62.4 million, down from $72.9 million at the end of 2023.
Future Growth Prospects for Anika Therapeutics, Inc. (ANIK)
Future Growth Prospects for Anika Therapeutics, Inc.
1. Key Growth Drivers
Product innovations are a significant growth driver for the company. The recent launch of new products, particularly in the OA Pain Management and Joint Preservation categories, is expected to enhance market share. Revenue from OA Pain Management for the nine months ended September 30, 2024, was $75.4 million, a slight decrease of 2% compared to $76.9 million in the same period of 2023 .
Market expansions into international territories are also on the horizon. The company is actively pursuing opportunities in Europe and Asia, where the demand for orthopedic therapies is rising. The global orthopedic market is projected to grow at a CAGR of 5.5% through 2030, indicating a lucrative opportunity for expansion.
2. Future Revenue Growth Projections
Analysts forecast a revenue growth of 8% annually for the next five years, primarily driven by the introduction of innovative products and expansion into new markets. For the fiscal year 2024, total revenue is projected to be approximately $162 million, a slight decrease from $165 million in 2023.
| Fiscal Year | Projected Revenue (in millions) | Growth Rate (%) |
|---|---|---|
| 2024 | $162 | -2% |
| 2025 | $175 | 8% |
| 2026 | $189 | 8% |
| 2027 | $204 | 8% |
| 2028 | $220 | 8% |
3. Strategic Initiatives and Partnerships
Strategic partnerships with healthcare providers and research institutions are crucial for driving future growth. Collaborations aimed at clinical trials for new products have begun, which are expected to yield results by mid-2025. Additionally, the company is focusing on securing distribution agreements in emerging markets, which could boost sales significantly.
4. Competitive Advantages
The company's established reputation in the orthopedic market provides a competitive edge. With $62.4 million in cash and cash equivalents as of September 30, 2024, the company has sufficient liquidity to invest in research and development. Furthermore, a strong intellectual property portfolio, including over 50 patents, protects its innovations and enhances its market position.
Research and development expenses for the nine months ended September 30, 2024, stood at $22.8 million, reflecting the company’s commitment to innovation .
5. Summary of Financial Health Indicators
As of September 30, 2024, the company reported a net loss of $34.5 million, which is an increase from $19.7 million in the same period of 2023. Adjusted EBITDA for the nine months ended September 30, 2024, was $14.2 million, an increase of $4.5 million compared to the prior year.
| Financial Metric | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Net Loss (in millions) | $34.5 | $19.7 |
| Adjusted EBITDA (in millions) | $14.2 | $9.7 |
| Cash and Cash Equivalents (in millions) | $62.4 | $70.7 |
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Resources:
- Anika Therapeutics, Inc. (ANIK) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Anika Therapeutics, Inc. (ANIK)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Anika Therapeutics, Inc. (ANIK)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.