Avinger Inc (NASDAQ:AVGR) Shares Drop on Revenue Concerns

Avinger Inc (NASDAQ:AVGR) Stock Tanks As Q2 Revenue Drops 47%

Avinger Inc (NASDAQ:AVGR) stock plunged 11.28% after the company reported second quarter financial results that fell short of Wall Street expectations. The company reported a net loss of $11.3 million, a disappointment compounded by a 47% decline in total revenue.

Wednesday’s sell-off of Avinger stock pushed it to near all-time lows as it continues to trade in a strong downtrend. Avinger stock continues to trade in a tight $0.40-$0.45 trading range and closing in on its 52-week lows of $0.35 a share.

Avinger stock, one-month price chart:

Avinger Inc (NASDAQ:AVGR)
One month chart for Avinger stock

Avinger Inc (NASDAQ:AVGR) is medical stage company that manufactures and sells image-guided and catheter-based systems for use in the treatment of peripheral arterial disease. The company also owns a proprietary lumivascular platform that integrates optical coherence tomography with catheters to provide real-time imaging during treatment.

Jeff Soinski, CEO, says they have made significant progress on the development of the next generation Pantheris Catheters. The next generation devices are expected to expand the company’s target market starting in 2018.

“Following our strategic reorganization in April, I’m pleased with how our more focused commercial organization has come together to drive utilization within our installed base of Lumivascular accounts,” said Mr. Soinski.

Avinger’s Disappointing Q2 Results

Total revenue in the second quarter came in at $2.5 million down by 47% compared to the second quarter of 2016. Gross margin dropped to -59% from 22% as of last year. Avinger Inc (NASDAQ:AVGR) attributes the decline to a $2.3 million charge for excesses and obsolete inventories.

In line with ongoing plans to reduce cash burn, Avinger Inc. successfully reduced its operating expenses to $9.8 million compared to $13.3 million as of Q2 2016. The decline was because of a decrease in sales and marketing expenditure this year compared to last year.

Avinger Inc (NASDAQ:AVGR) exited the second quarter with cash and cash equivalents of $14 million compared to $23 million as of March 31, 2017. Thanks to ongoing organizational restructuring, the company expects cash utilization to drop to $7 million per quarter compared to an average of 13.4 million per quarter as of last year.

Class Action Lawsuit

Separately, Avinger Inc (NASDAQ:AVGR) is the subject of a class-action lawsuit over claims its executives violated federal securities laws. Complaints allege that the Registration Statement and Prospectus filed for Avinger’s stock IPO contained false and misleading statements.

Law firms allege that Avinger failed to disclose that it did not have adequate marketing personnel for its lumivascular platform – a deficiency that has led to lackluster sales.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Avinger Inc (NASDAQ:AVGR) Reports $3.5 Million In Q1 Revenue

Avinger Inc (NASDAQ:AVGR)

Avinger Inc (NASDAQ:AVGR) has announced its financial results for the three months ended March 31, 2017. Avinger Inc is nano-cap biotechnology firm that develops innovative treatments for peripheral artery disease.

Avinger Inc (NASDAQ:AVGR) announced some cost-cutting changes to its organizational structure resulting in a 48% reduction of the company’s current costs. During the quarter, the company signed an additional five Lumivascular™ accounts bringing the platform to 161 accounts. The company also reported positive data from its two-year clinical VISION study for its Lumivascular technology.

In a statement, president and CEO of Avinger Inc (NASDAQ:AVGR), Jeff Soinski, said the company has responded positively to the recent restructuring adding that they are making remarkable progress in the company’s strategic programs.

Avinger Inc (NASDAQ:AVGR) reported $3.5 million in total sales during the quarter. This represents a 23% decrease from the same period the previous financial year and 25% drop from what the company reported in the last quarter. The company reported $2.9 million in revenue from its disposable devices during the first quarter. This represents a 12% decrease from Q12016 and 22% from Q42016. The company’s Lightbox imaging consoles generated $0.6 million in revenue which represent a 50% drop from what was reported in Q12016 and 40% drop from what was reported in Q42016.

During the quarter, gross margin stood at 17% a drop from 26% that was reported in Q12016 and from 21% that was reported in Q42016. The drop in gross margin is as a result of $2.1 million worth of charge for extra, scrapped and obsolete inventories. Without these one-time expenses, the company would have reported a gross margin of around 44%.

Avinger Inc (NASDAQ:AVGR) reported $13.2 million in operating expenses during the first quarter of 2016. This is compared to the $16.2 million that was reported during the same period of the previous financial year. The drop was a result of increased sales and marketing expenses that were incurred in 2016 due to the company’s move to expand its commercial organization plus the launch of Pantheris.

Avinger Inc (NASDAQ:AVGR) reported $13.8 million in loss from its operations in Q12017 compared to $15 million that was reported in Q12016. Net loss stood at (-$15.3) million or (-$0.64) per share in Q12017 compared to (-$16.2) million or (-$1.28) per share reported in Q12016. The drop is as a result of the issuance of 9.9 million shares in a public offering.

Avinger Inc (NASDAQ:AVGR) gained 20.27% in the previous trading session to close at $0.445 on a volume of 2.82 million shares.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.

Avinger Inc (NASDAQ:AVGR) Provides Strategic Update

Avinger Inc (NASDAQ:AVGR)

Avinger Inc (NASDAQ:AVGR), a major developer of treatments for peripheral artery disease, recently announced an update on several items of business. Among the updates are provisional results from the first quarter of the 2017 financial year. The company also announced an organizational rearrangement as well as ongoing progress on development of its products together with clinical programs.

Additionally, the company said it has been reviewing a number of strategic options that are focused on optimizing shareholder value. Among the options that the company is exploring and evaluating as part of the review are raising more capital from investors, aligning with strategic partners for distribution of products outside the United States, and a merger or sale of the company.

In a statement, the company said it had made significant progress in launching the Pantheris OCT-guided atherectomy into the market. This increased the company’s base of installed Lumivascular accounts and offered two years of data from the company’s VISION study. However, the company says it encountered a number of challenges concerning the reliability of the product as well as the marketing and commercialization of the Lumivascular technology. As a result, the company made changes in its business as it prepares to unveil the next generation Pantheris and Below-the-Knee products later in 2017 or early 2018.

Going by the provisional unaudited financial results the company is anticipating revenue of around $3.5 million for the 2017 first quarter. This represents a drop of 22% from the same period last year and a drop of 26% from the fourth quarter of last year. In the same quarter, the company is expecting revenue from disposable devices of $2.9 million, a drop of 12% from the fourth quarter of 2016 and a 22% drop from the fourth quarter of 2016.

The company expects revenue from Lightbox imaging consoles to be at $0.6 million representing a 50% drop compared to same period last year and a 40% decrease compared to the last quarter of 2016. In the first quarter, the Lumivascular accounts went up by five and closed the quarter at 161 accounts. The company reported a total of $23.0 million in cash and cash equivalents at the end of the last quarter. This is in comparison to the $36.1 million reported at the end of last year.

The company’s top priority for this year is to complete the Pantheris projects which it hopes will improve the reliability of the products as well as their usability in addition to expanding market opportunities.

Ticker AVGR
Market Cap $15.80M
EPS (ttm) -$3.65
Shares Outstanding 26.33
Shares Float 22.13
Insider Ownership 1.80%
Float Short 8.01%
Short Ratio 3.19
Performance (Quarter) -81.54%
Performance (Year) -95.03%
Performance (YTD) -83.78%
Average Volume 556.21K
Price $0.6
Volume 7,356,100
Target Price $6.06

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.