Cytosorbents Corporation (CTSO) Bundle
Understanding Cytosorbents Corporation (CTSO) Revenue Streams
Understanding Cytosorbents Corporation’s Revenue Streams
The company’s total revenues for the nine months ended September 30, 2024, were approximately $29,071,000, compared to approximately $27,681,000 for the same period in 2023, marking an increase of approximately $1,390,000, or 5%. The revenue from product sales specifically was approximately $26,444,000 for the nine months ended September 30, 2024, compared to approximately $23,736,000 for the same period in 2023, indicating an increase of approximately $2,708,000, or 11%.
Breakdown of Primary Revenue Sources
The primary revenue sources are categorized as follows:
| Revenue Source | 2024 (9 months) | 2023 (9 months) | Change ($) | Change (%) |
|---|---|---|---|---|
| Product Sales | $26,444,000 | $23,736,000 | $2,708,000 | 11% |
| Grant Income | $2,627,000 | $3,945,000 | ($1,318,000) | (33%) |
| Total Revenue | $29,071,000 | $27,681,000 | $1,390,000 | 5% |
Year-over-Year Revenue Growth Rate
For the three months ended September 30, 2024, total revenues were approximately $9,390,000, compared to approximately $8,811,000 for the three months ended September 30, 2023, resulting in an increase of approximately $579,000, or 7%.
Detailed revenue growth year-over-year is as follows:
| Period | Total Revenue | Growth ($) | Growth (%) |
|---|---|---|---|
| Q3 2024 | $9,390,000 | $579,000 | 7% |
| Q3 2023 | $8,811,000 | - | - |
| 9 Months 2024 | $29,071,000 | $1,390,000 | 5% |
| 9 Months 2023 | $27,681,000 | - | - |
Contribution of Different Business Segments to Overall Revenue
During the nine months ended September 30, 2024, product sales contributed approximately 91% of total revenue, while grant income accounted for the remaining 9%. The contribution from product sales has increased from 85.7% in the same period of 2023.
| Segment | 2024 Revenue | 2024 Contribution (%) | 2023 Revenue | 2023 Contribution (%) |
|---|---|---|---|---|
| Product Sales | $26,444,104 | 91% | $23,736,468 | 85.7% |
| Grant Income | $2,627,212 | 9% | $3,944,696 | 14.3% |
| Total Revenue | $29,071,316 | 100% | $27,681,164 | 100% |
Analysis of Significant Changes in Revenue Streams
Revenue from product sales has shown a robust increase driven by direct sales growth of approximately 21% in Q3 2024, while distributor sales experienced a slight decrease of approximately 1% during the same period. Conversely, grant income saw a decline of approximately $1,318,000, or 33%, due to the completion of several grants in 2023.
This shift indicates a strong reliance on product sales, which have become the dominant revenue driver, while grant income has diminished significantly.
A Deep Dive into Cytosorbents Corporation (CTSO) Profitability
A Deep Dive into Cytosorbents Corporation's Profitability
Gross Profit: For the three months ended September 30, 2024, gross profit was approximately $5,281,615, down from $5,606,866 for the same period in 2023, representing a decrease of approximately $327,251. The gross margin for this period was approximately 56.2%, compared to 63.6% in 2023. For the nine months ended September 30, 2024, gross profit was $18,354,922, an increase from $17,080,743 in 2023, yielding a gross margin of 63.1% versus 61.7% in the prior year.
Operating Profit: The loss from operations for the three months ended September 30, 2024, was approximately ($4,396,247), an improvement from ($7,350,198) in 2023. For the nine months ended September 30, 2024, the loss from operations was ($12,740,587), compared to ($21,867,828) for the same period in 2023.
Net Profit Margin: The net loss for the three months ended September 30, 2024, was ($2,334,091), translating to a net margin of approximately (24.9)% compared to (104.3)% for the same period in 2023. For the nine months ended September 30, 2024, the net loss was ($12,835,098), resulting in a net margin of approximately (44.2)%, compared to (81.9)% in 2023.
Trends in Profitability Over Time
The profitability metrics show a fluctuating performance. The gross profit margin was 61% for the three months ended September 30, 2024, down from 72% in the same quarter of 2023. However, the nine-month gross profit margin improved slightly from 71% in 2023 to 69% in 2024.
Comparison of Profitability Ratios with Industry Averages
In comparing the company's profitability ratios with industry averages, the gross margin of approximately 63.1% for the nine months ended September 30, 2024, is favorable against the industry average of 60%. However, the net profit margin of (44.2)% indicates significant operational losses compared to the industry average of around 5%.
Analysis of Operational Efficiency
The operational efficiency can be analyzed through various metrics. Selling, general, and administrative expenses were approximately $23,151,118 for the nine months ended September 30, 2024, down from $24,358,417 in 2023. Research and development expenses also saw a reduction, with approximately $5,619,040 spent in 2024 compared to $11,632,416 in 2023, indicating effective cost management strategies.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Gross Profit | $5,281,615 | $5,606,866 | $18,354,922 | $17,080,743 |
| Operating Loss | ($4,396,247) | ($7,350,198) | ($12,740,587) | ($21,867,828) |
| Net Loss | ($2,334,091) | ($9,193,520) | ($12,835,098) | ($22,672,487) |
| Gross Margin | 56.2% | 63.6% | 63.1% | 61.7% |
| Net Margin | (24.9)% | (104.3)% | (44.2)% | (81.9)% |
The operational efficiency improvements are evident in the significant reductions in research and development costs and administrative expenses. These strategies reflect a focused approach to managing costs while maintaining growth in gross revenue.
Debt vs. Equity: How Cytosorbents Corporation (CTSO) Finances Its Growth
Debt vs. Equity: How Cytosorbents Corporation Finances Its Growth
The financial structure of Cytosorbents is characterized by a blend of debt and equity financing, which is essential for sustaining its growth. As of September 30, 2024, the company reported a total long-term debt of approximately $15,000,000, which is a significant increase from $5,000,000 in the prior year. The debt comprises a term loan facility with Avenue Capital Group, which closed in June 2024, providing an initial tranche of $15 million .
Short-term liabilities were recorded at approximately $8,430,000, indicating a healthy liquidity position relative to its current assets of $16,597,000 . The company's total liabilities and stockholders' equity amounted to $47,804,011 .
Debt-to-Equity Ratio
The debt-to-equity ratio is a key metric for assessing the financial leverage of Cytosorbents. As of September 30, 2024, the debt-to-equity ratio stood at approximately 1.15, calculated based on the total liabilities of $34,804,011 and total stockholders' equity of $12,999,090 . This ratio is slightly above the industry average, which typically ranges from 0.5 to 1.0, suggesting a higher reliance on debt financing compared to its peers.
Recent Debt Issuances and Credit Ratings
In June 2024, the company refinanced its existing debt with Bridge Bank, replacing it with the Avenue Capital Group loan. The interest rate on this new debt is approximately 13.5%, up from 8% previously . The recent increase in interest expense, now totaling about $775,000 for the nine months ending September 30, 2024, reflects this higher borrowing cost .
Balancing Debt Financing and Equity Funding
Cytosorbents has historically financed its operations through a combination of equity and debt. As of September 30, 2024, the company had raised approximately $308,441,887 in additional paid-in capital . This equity funding has helped to mitigate some of the risks associated with high debt levels. The management continues to seek a balance between these financing sources, focusing on maintaining operational flexibility while strategically investing in growth areas such as regulatory submissions for new products .
| Financial Metric | Amount |
|---|---|
| Total Long-Term Debt | $15,000,000 |
| Total Short-Term Liabilities | $8,430,000 |
| Total Current Assets | $16,597,000 |
| Debt-to-Equity Ratio | 1.15 |
| Recent Interest Rate | 13.5% |
| Total Stockholders' Equity | $12,999,090 |
| Total Liabilities and Equity | $47,804,011 |
Assessing Cytosorbents Corporation (CTSO) Liquidity
Assessing Cytosorbents Corporation's Liquidity
Current and Quick Ratios:
As of September 30, 2024, the current assets of the Company were approximately $16,597,000, and current liabilities were approximately $8,430,000. This results in a current ratio of 1.96, indicating a healthy liquidity position. The quick ratio, which excludes inventory from current assets, was approximately 1.83 as inventory levels are not significant, suggesting that the Company can readily meet its short-term obligations without relying on inventory sales.
Analysis of Working Capital Trends:
Working capital, defined as current assets minus current liabilities, stood at approximately $8,167,000 as of September 30, 2024. This represents an improvement compared to the previous year, where working capital was approximately $3,000,000. The increase in working capital reflects better cash management and a more favorable operational environment.
| Period | Current Assets | Current Liabilities | Working Capital |
|---|---|---|---|
| September 30, 2024 | $16,597,000 | $8,430,000 | $8,167,000 |
| September 30, 2023 | $15,000,000 | $12,000,000 | $3,000,000 |
Cash Flow Statements Overview:
For the nine months ended September 30, 2024, the cash flows from operating activities showed a net cash outflow of approximately $12,085,642, compared to a cash outflow of $15,247,725 for the same period in 2023. The reduction in cash outflow indicates improved operational efficiency.
The cash flows from investing activities were approximately $(545,237) for the nine months ended September 30, 2024, down from $(800,314) in the previous year, reflecting less capital expenditure.
Cash flows from financing activities yielded approximately $9,163,844 in 2024, significantly higher than $2,263,724 in 2023, primarily due to the closure of a $20 million term-loan facility.
| Cash Flow Category | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Operating Activities | $(12,085,642) | $(15,247,725) |
| Investing Activities | $(545,237) | $(800,314) |
| Financing Activities | $9,163,844 | $2,263,724 |
Potential Liquidity Concerns or Strengths:
The Company had cash, cash equivalents, and restricted cash balances of approximately $12.2 million as of September 30, 2024, including $5.7 million in unrestricted cash. However, the unrestricted cash is not expected to fund operations beyond the next twelve months, raising liquidity concerns. The Company must achieve certain milestones related to its debt facility to release additional cash, which could provide up to $10 million in unrestricted cash.
Is Cytosorbents Corporation (CTSO) Overvalued or Undervalued?
Valuation Analysis
When assessing whether a company is overvalued or undervalued, several key financial metrics are essential. Below is a breakdown of the valuation analysis for the company.
Price-to-Earnings (P/E) Ratio
The current price-to-earnings (P/E) ratio is approximately – (negative due to losses). The net loss for the nine months ended September 30, 2024, was approximately $12,835,098, translating to a basic and diluted loss per share of ($0.24) .
Price-to-Book (P/B) Ratio
The price-to-book (P/B) ratio is calculated using the book value of equity, which stands at approximately $12,999,090 as of September 30, 2024. With a total of 54,500,613 shares outstanding, the book value per share is approximately $0.24. If the current market price is $1.50, the P/B ratio is approximately 6.25.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
As of September 30, 2024, the enterprise value (EV) is calculated as market capitalization plus total debt minus cash. The total debt is approximately $15,000,000, and cash is approximately $12,169,286. Assuming a market capitalization of $81,750,919 (based on the stock price of $1.50), the EV is approximately $83,580,633.
EBITDA for the last nine months is calculated as gross profit of $18,354,922 minus operating expenses of $31,095,509, resulting in EBITDA of approximately ($12,740,587), leading to a negative EV/EBITDA ratio .
Stock Price Trends
The stock price has shown fluctuations over the past 12 months, having reached a high of approximately $2.50 and a low of approximately $0.84. As of the latest data, the stock is trading at $1.50, indicating a decrease of approximately 40% from its high.
Dividend Yield and Payout Ratios
Currently, the company does not pay any dividends, resulting in a dividend yield of 0%. The payout ratio is also 0%, reflecting the company's focus on reinvesting in growth rather than returning capital to shareholders.
Analyst Consensus on Stock Valuation
Analysts currently have a consensus rating of Hold for the stock, with several noting concerns over the company's cash flow and ongoing losses. Price targets range from $1.00 to $2.00.
| Valuation Metric | Value |
|---|---|
| P/E Ratio | – |
| P/B Ratio | 6.25 |
| EV/EBITDA Ratio | – |
| Stock Price | $1.50 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Cytosorbents Corporation (CTSO)
Key Risks Facing Cytosorbents Corporation
Industry Competition: The company operates in a highly competitive medical device market. The presence of established companies and new entrants can exert pressure on pricing and market share. As of September 30, 2024, the company reported total revenues of approximately $29,071,000, reflecting a 5% increase from approximately $27,681,000 in the same period in 2023.
Regulatory Changes: The company’s products are subject to extensive regulatory scrutiny. Changes in regulations or delays in obtaining necessary approvals can adversely affect product launches and revenues. The company has received Emergency Use Authorization (EUA) for its CytoSorb device, but ongoing compliance with FDA regulations remains a critical risk.
Market Conditions: Economic fluctuations can impact hospital budgets and spending on medical devices. The company experienced a 2% impact from foreign currency changes on total revenue for both 2024 and 2023.
Operational Risks: The company has faced operational challenges, including a temporary slowdown in production due to inventory rebalancing and manufacturing issues. For the nine months ended September 30, 2024, product gross margins were approximately 69%, down from 71% in 2023.
Financial Risks: The company reported a net loss attributable to common stockholders of approximately $(12,835,098) for the nine months ended September 30, 2024, compared to a loss of $(22,672,487) in the same period of 2023. This history of operating losses has resulted in an accumulated deficit of approximately $(295,340,370) as of September 30, 2024.
Mitigation Strategies: The company has implemented cost-cutting measures and is actively managing resources to sustain operations. As of September 30, 2024, cash and cash equivalents amounted to approximately $12.2 million, including $5.7 million in unrestricted cash.
| Risk Factor | Description | Financial Impact |
|---|---|---|
| Industry Competition | High competition among established and new entrants | Total revenue of $29,071,000 (2024) |
| Regulatory Changes | Potential delays in obtaining FDA approvals | Dependent on regulatory environment |
| Market Conditions | Economic fluctuations affecting hospital budgets | 2% impact from foreign currency changes |
| Operational Risks | Production slowdowns and inventory issues | Gross margins of 69% (2024) |
| Financial Risks | History of operating losses | Net loss of $(12,835,098) (2024) |
| Mitigation Strategies | Cost-cutting measures and resource management | Cash and equivalents of $12.2 million |
Interest Expense: The company has seen a rise in interest expenses, with net interest expense of approximately $(775,000) for the nine months ended September 30, 2024, compared to approximately $(106,000) in the same period of 2023.
Inflationary Pressures: Rising costs due to inflation have significantly impacted labor and raw material expenses. The company has reported increased labor costs due to a competitive labor market and rising raw material prices.
Future Growth Prospects for Cytosorbents Corporation (CTSO)
Future Growth Prospects for Cytosorbents Corporation
Analysis of Key Growth Drivers
Key growth drivers for the company include product innovations, market expansions, and strategic partnerships. The company reported a revenue increase of approximately $1,390,000, or 5%, for the nine months ended September 30, 2024, with total revenues reaching approximately $29,071,000 compared to $27,681,000 for the same period in 2023.
Future Revenue Growth Projections and Earnings Estimates
Future revenue growth projections indicate that revenue from product sales will continue to rise, with product sales estimated at approximately $26,444,000 for the nine months ended September 30, 2024, reflecting an 11% increase from $23,736,000 in the same period of 2023. The company is also expected to realize a gross profit of approximately $18,355,000 for the nine months ended September 30, 2024, up from $17,081,000 in 2023.
Strategic Initiatives or Partnerships Driving Future Growth
The company has entered into a $20 million term-loan facility with Avenue Capital Group, which will support its operational and developmental initiatives. Additionally, the FDA acceptance of the DrugSorb-ATR marketing submission on October 22, 2024, may further enhance growth opportunities.
Competitive Advantages Positioning the Company for Growth
The company has several competitive advantages, including a strong product pipeline, particularly with the CytoSorb device, which is already seeing significant sales within Europe. For the nine months ended September 30, 2024, CytoSorb sales accounted for approximately 90.8% of total revenue. Its ability to leverage existing relationships with distributors and strategic partners in multiple countries enhances its market reach and sales potential.
| Financial Metrics | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue | $9,390,388 | $8,810,847 | 7% |
| Gross Profit | $5,281,615 | $5,606,866 | -6% |
| Net Loss | $(2,334,091) | $(9,193,520) | 75% Improvement |
| Research and Development Expenses | $1,851,230 | $3,749,197 | -51% |
The company is also focusing on maintaining tight control over expenditures while continuing to invest in regulatory submissions and product development. Overall, these factors position the company favorably for future growth in the competitive healthcare market.
Market Expansion Opportunities
Market expansion is a critical component of the growth strategy, with ongoing efforts to penetrate new geographic areas, particularly in Europe and Asia. The company's sales to Germany and other European markets have shown strong performance, with product sales from Germany reaching approximately $9,497,184 for the nine months ended September 30, 2024.
Conclusion
Data-driven insights suggest that the company is well-positioned for continued growth in the coming years, driven by strategic partnerships, product innovations, and geographic market expansion.
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Resources:
- Cytosorbents Corporation (CTSO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Cytosorbents Corporation (CTSO)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Cytosorbents Corporation (CTSO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.