Mr. Trent Northcutt reports

AURORA SPINE CORPORATION ANNOUNCES THIRD QUARTER FISCAL 2023 FINANCIAL RESULTS

Aurora Spine Corp. has released the financial results for its third quarter fiscal 2023 ended Sept. 30, 2023. All figures are in U.S. dollars.

Highlights during the period:

• Growing sales: Q3 sales of $3.9-million compared with $3.6-million in same quarter last year, up 7.7 per cent;
• Product mix: gross margin percentage increased to 59.7 per cent in Q3 2023 compared with 53.2 per cent in Q3 2022; a change in product mix led by growth in its pain division has resulted in an overall higher gross margin and higher gross margin as a percentage of sales;
• Full release of SiLO TFX: with the release of over 35 instrument sets to the sales team, SiLO TFX sales increased 51 per cent quarter over quarter, making up 30.5 per cent of sales in Q3 2023; total SI joint product sales in 2023 were 24.8 per cent of sales compared with 20.4 per cent in the comparable period; the company is very pleased with these results as throughout the latter half of 2022 and early 2023, its SiLO bone dowel SI joint product was negatively affected by changes in coding and reimbursement allowances to physicians and surgery centres using these allograft (bone) products and procedures;
• Positive EBITDAC (earnings before interest, tax, depreciation, amortization and stock based compensation): the company had positive EBITDAC of $120,796 in Q3 2023 compared with ($163,660), ($378,871) and ($358,311) in the three previous quarters.
• Hired more sales staff: the company hired two new sales associates in Q3 with a focus in the southeast and the southwest; these hires are expected to help drive sales growth in 2024; the company expects to hire two more sales associates in fourth quarter.

Management commentary

Trent Northcutt, president and chief executive officer of Aurora Spine, stated: "We are pleased with our third quarter's results. Our success in the third quarter is attributed to our laser-focused execution across all facets of Aurora Spine and pain. We are well positioned for continued growth with plans to expand our presence across the [United States] in both the hospital and ambulatory surgery centre settings. We expect to finish 2023 strong and look forward to carrying our success and momentum into 2024."

Financial results

Total revenues for the third quarter of 2023 were $3.95-million, an increase of 8.2 per cent when compared with $3.65-million in the same quarter one year ago. The increase is due to gains with pain doctors and interventional radiologists offset by decreases in the ortho/neuro side of its business. The decrease in the ortho/neuro revenue is due to lower sales of lumbar screws, cervical cages and cervical plates due to several factors, including delays in securing cervical plate tool sets and inventory from its European supplier, resulting in a loss of surgeries and necessitating sourcing onshore production.

Gross margin on total revenues was 59.7 per cent for the third quarter of 2023, compared with 53.2 per cent in second quarter of 2022. The year-over-year change in gross margins was attributable to the product mix in the quarter with increased sales of higher-margin products, like Zip and SiLO TFX.

Total operating expenses were $2,607,000 for the third quarter of 2023, compared with $2,058,000 in the third quarter of 2022. Operating expenses increased during the third quarter primarily due to increased marketing and training and expenses incurred from the hiring of new sales personnel.

EBITDAC (a non-generally accepted accounting principle figure and a non-international financial reporting standard measure) was $121,000 for the third quarter of 2023, compared with $151,000 in the third quarter of 2022.

Net loss was ($250,000) for the third quarter of 2023, compared with the third quarter of 2022 with a loss of ($116,000). Basic and diluted net (loss) income per share was nil per share in the third quarter of 2023 and nil per share for the third quarter of 2022.

Full financial statements can be found on SEDAR+.

Third quarter fiscal year 2023 conference call details

Date and time: Wednesday, Nov. 15, 2023, at 11 a.m. ET/8 a.m. PT

Call-in information: Interested parties can listen to the conference call by dialling 844-861-5497 or 412-317-5794.

Webcast: Interested parties can listen to the conference call through a live webcast, which is available in the investor relations section of the company's website.

Replay: A teleconference replay of the call will be available until Nov. 22, 2023, at 877-344-7529 or 412-317-0088, replay access code 8439397. Additionally, a replay of the webcast will be available in the investor relations section of the company's website for 90 days.

About Aurora Spine Corp.

Aurora Spine is focused on bringing new solutions to the spinal and SI joint implant market through a series of innovative, minimally invasive, regenerative spinal implant technologies. Aurora Spine's goal is to improve patients' quality of life by developing and distributing implants using its proprietary technologies to relieve back pain and preserve spinal bone structure and anatomy. The company's fully developed product portfolio primarily addresses the market need for minimally invasive spinal and SI joint surgical devices.

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