KORU Medical Systems Announces Fourth Quarter and Full Year 2024 Financial Results With Record Revenues and Gross Profit; Issues Full Year 2025 Guidance

Published: 2025-03-12 16:09:03 ET KRMD

KORU Medical Systems, Inc. (NASDAQ: KRMD) (“KORU Medical” or the “Company”), a leading medical technology company focused on development, manufacturing, and commercialization of innovative and patient-centric large volume subcutaneous infusion solutions, today reported financial results for the fourth quarter and full year ended December 31, 2024. The Company also issued guidance for the full year 2025.

Recent Highlights

“In 2024, we delivered strong performance and hit multiple key milestones,” said Linda Tharby, President and CEO of KORU Medical. “We saw double digit growth across each of our businesses as we gained market share, entered new geographies, and increased the number of collaborations in our pipeline. As a result of increased revenues, improved gross margins, and operating expense discipline we were able to generate significant operating leverage that led to positive cash flow in the fourth quarter, and a lower full-year cash burn. I’m proud of the team as we have consistently executed on our business strategy, and this momentum is being carried into a strong start to 2025.”

2024 Fourth Quarter Financial Results

Three Months Ended December 31,

Change from Prior Year

% of Net Revenues

2024

2023

2024

2023

Net Revenues

Domestic Core

6,657,182

5,565,349

1,091,833

19.6

75.3

77.4

International Core

1,504,108

1,315,036

189,073

14.4

17.0

18.3

Total Core

8,161,291

6,880,385

1,280,906

18.6

92.3

95.7

Novel Therapies

677,309

305,547

371,762

121.7

7.7

4.3

Total

8,838,600

7,185,932

1,652,668

23.0

100

Total net revenues increased $1.7 million, or 23.0%, to $8.8 million for the fourth quarter of 2024. Domestic Core growth of 19.6% was primarily driven by higher consumable and pump volumes driven by new patient starts and market share gains. International Core growth of 14.4% was primarily due to higher consumable volumes driven by new patient starts, increased penetration in established markets, and entry into new geographic markets. Novel Therapies revenues for the fourth quarter of 2024 were $0.7 million, an increase of 121.7% over the prior year period, primarily driven by an increased number of new collaborations in both non-recurring engineering services and clinical trial orders.

Gross profit increased $1.2 million, or 28.4%, to $5.6 million for the fourth quarter of 2024. Gross margin was 62.9%, an increase of 260 basis points, compared to 60.3% in the prior year period. The increase in gross margin was primarily driven by manufacturing efficiencies and favorable price driven by customer sales mix resulting in higher average selling prices.

Total operating expenses increased $0.6 million, or 9.5%, to $7.1 million for the fourth quarter of 2024 primarily driven by 2024 performance-based compensation expenses.

Net loss decreased $5.9 million to $1.6 million, or ($0.03) per diluted share for the fourth quarter of 2024, compared to a net loss of $7.5 million, or ($0.16) per diluted share, for the prior year period which included a tax valuation allowance of $6.0 million. Adjusted EBITDA for the quarter was ($0.7) million, or ($0.02) per diluted share versus ($1.0) million or ($0.02) in the prior year period. A reconciliation of adjusted EBITDA and adjusted diluted EPS to the most directly comparable GAAP measures is provided at the end of this press release

2024 Full Year Financial Results

Years Ended December 31,

Change from Prior Year

% of Net Revenues

2024

2023

2024

2023

Net Revenues

Domestic Core

25,214,613

22,446,519

2,768,094

12.3

74.9

78.7

International Core

6,043,979

4,596,097

1,447,882

31.5

18.0

16.1

Total Core

31,258,592

27,042,616

4,215,976

15.6

92.9

94.8

Novel Therapies

2,387,871

1,475,050

912,821

61.9

7.1

5.2

Total

33,646,463

28,517,666

5,128,797

18.0

100

Total net revenues increased $5.1 million, or 18.0%, to $33.6 million, for the year ended December 31, 2024. Domestic Core growth of 12.3% was primarily driven by volume growth in pumps and consumables attributed to overall SCIg market growth and new account share gains. International Core growth of 31.5% was driven by overall SCIg market growth, increased penetration in several established EU markets, and the entry into multiple new geographies. Novel Therapies net revenues increased $0.9 million, or 61.9%, driven primarily by an increase in NRE collaborations and an increase in clinical trial supply shipments compared to the prior year.

Gross profit increased $4.6 million, or 27.7%, to $21.3 million, for the year ended December 31, 2024. Gross margin was 63.4%, an increase of 480 basis points, compared to 58.6% in the prior year. The increase in gross margin was primarily driven by increased manufacturing productivity, improved margin on product revenue mix, and marginal increases in average selling prices versus the prior year.

Total operating expenses increased $0.8 million, or 3.0%, to $27.8 million for the year ended December 31, 2024 driven primarily by 2024 performance-based compensation expenses.

Net loss decreased $7.7 million to $6.1 million, or ($0.13) per diluted share for the year ended December 31, 2024, compared to a net loss of $13.7 million, or ($0.30) per diluted share in the prior year. Net loss improvement was primarily driven by lower net operating losses of $3.8 million as a result of our gross profit improvement of 27.7%, against an operating expense increase of 3.0%. In the prior year we established an allowance for the non-realization of deferred tax assets which reversed a tax benefit of $4.0 million, partially offsetting in the current year was lower interest income of $0.1 million driven by a lower cash balance coupled with lower yields. Adjusted EBITDA for the full year was ($2.5) million, or ($0.06) per diluted share versus ($6.0) million, or ($0.13) in the prior year period. A reconciliation of adjusted EBITDA and adjusted diluted EPS to the most directly comparable GAAP measures is provided at the end of this press release.

Cash and cash equivalents were $9.6 million as of December 31, 2024, reflecting cash usage of $1.9 million for the full year 2024.

2025 Guidance

KORU Medical expects:

Novel Therapies Business to be Renamed as Pharma Services and Clinical Trials (PST)

Effective with the first quarter of 2025, the Novel Therapies business will be renamed “Pharma Services and Clinical Trials” to better reflect the non-recurring nature of this revenue. Pharma Services and Clinical Trials refers to revenue generated via collaborations prior to a drug’s clearance for use on the KORU Freedom Infusion System. Once a drug is cleared via 510(k) for use with the KORU Freedom Infusion System and becomes “on-label”, any revenue generated is recorded as part of Domestic and/or International Core. The name change will have no impact on the composition of revenue recorded in each of our businesses, on the preparation or disclosure of financial information by business, or on previously reported financial statements.

Conference Call and Webcast Details

The Company will host a live conference call and webcast to discuss these results and provide a corporate update on Wednesday, March 12, 2025, at 4:30 PM ET.

To participate in the call, please dial (877) 407-0784 (domestic) or (201) 689-8560 (international). The live webcast will be available on the IR Calendar on the News/Events page of the Investors section of KORU Medical’s website.

Non-GAAP Measures

This press release includes the non-GAAP financial measures “adjusted diluted EPS” and “adjusted EBITDA” that are not in accordance with, nor an alternate to, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. These non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP financial measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. They are limited in value because they exclude charges that have a material effect on KORU Medical’s reported results and, therefore, should not be relied upon as the sole financial measures to evaluate the Company’s financial results. Non-GAAP financial measures are meant to supplement, and to be viewed in conjunction with, GAAP financial results. Reconciliations of the Company’s non-GAAP measures are included at the end of this press release.

About KORU Medical Systems

KORU Medical develops, manufactures, and commercializes innovative and patient-centric large volume subcutaneous infusion solutions that improve quality of life for patients around the world. The Freedom Syringe Infusion System (“the Freedom System”) currently includes the FREEDOM60® and FreedomEdge® Syringe Infusion Drivers, Precision Flow Rate Tubing™ and HIgH-Flo Subcutaneous Safety Needle Sets™. The Freedom System, which received its first FDA clearance in 1994, is used for self-administration in the home by the patient and/or delivery in an ambulatory infusion center by a healthcare professional. Through its Novel Therapies business, KORU Medical provides products for use by biopharmaceutical companies in feasibility/clinical trials during the drug development process and, as needed, is capable of customizing the Freedom System for clinical and commercial use across multiple drug categories. For more information, please visit www.korumedical.com.

Forward-looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. All statements that are not historical fact are forward-looking statements, including, but not limited to, financial guidance and expected operating performance for fiscal 2025. Forward-looking statements discuss the Company’s current expectations and projections relating to its financial position, results of operations, plans, objectives, future performance, and business. Forward-looking statements can be identified by words such as “guidance”, “expect”, “plan”, “believe” and “will”. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, uncertainties associated with SCIg market growth, prefilled syringe penetration, plasma supply, clinical trial activity and success, approval and commercialization of new drug indications, the shift to increased healthcare delivery in the home, new patient diagnoses, customer ordering patterns, global health crises, innovation and competition, labor and supply price increases, inflationary impacts, labor supply, and those risks and uncertainties included under the captions “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which is on file with the SEC and available on our website at www.korumedical.com/investors and on the SEC website at www.sec.gov. All information provided in this release and in the attachments is as of March 12, 2025. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.

KORU MEDICAL SYSTEMS, INC. BALANCE SHEETS

December 31,

2024

2023

ASSETS

CURRENT ASSETS

Cash and cash equivalents

9,580,947

11,482,240

Accounts receivable, net

5,720,750

4,045,211

Inventory

2,803,669

3,481,301

Other receivables

277,193

28,889

Prepaid expenses and other current assets

749,851

1,218,288

TOTAL CURRENT ASSETS

19,132,410

20,255,929

Property and equipment, net

4,290,515

3,837,657

Intangible assets, net of accumulated amortization of $458,538 and $390,341 at December 31, 2024 and December 31, 2023, respectively

730,279

754,361

Operating lease right-of-use assets

2,966,341

3,514,055

Other assets

98,970

TOTAL ASSETS

27,218,515

28,460,972

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

Accounts payable

1,649,969

975,193

Accrued expenses

3,924,184

1,711,427

Note payable

271,152

314,344

Other liabilities

29,269

512,520

Accrued payroll and related taxes

811,401

462,941

Finance lease liability – current

115,587

109,540

Operating lease liability – current

400,258

368,313

TOTAL CURRENT LIABILITIES

7,201,820

4,454,278

Finance lease liability, net current portion

202,613

316,623

Operating lease liability, net of current portion

3,000,403

3,336,300

TOTAL LIABILITIES

10,404,836

8,107,201

Commitments and contingencies (Refer to Note 8)

STOCKHOLDERS’ EQUITY

Common stock, $0.01 par value, 75,000,000 shares authorized, 49,377,617 and 49,089,864 shares issued; 45,957,115 and 45,669,362 shares outstanding at December 31, 2024, and December 31, 2023, respectively

493,776

490,899

Additional paid-in capital

49,581,303

47,018,707

Treasury stock, 3,438,526 and 3,420,502 shares at December 31, 2024 and December 31, 2023, respectively, at cost

(3,882,494

)

(3,843,562

)

Accumulated Deficit

(29,378,906

)

(23,312,273

)

TOTAL STOCKHOLDERS’ EQUITY

16,813,679

20,353,771

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

27,218,515

28,460,972

KORU MEDICAL SYSTEMS, INC. STATEMENTS OF OPERATIONS

For the Years Ended December 31,

2024

2023

NET REVENUES

33,646,463

28,517,666

Cost of goods sold

12,314,605

11,809,384

Gross Profit

21,331,858

16,708,282

OPERATING EXPENSES

Selling, general and administrative

21,631,674

20,365,617

Research and development

5,257,942

5,742,254

Depreciation and amortization

888,473

870,390

Total Operating Expenses

27,778,089

26,978,261

Net Operating Loss

(6,446,231

)

(10,269,979

)

Non-Operating Income, net

Loss on foreign currency exchange

(45,991

)

(5,124

)

Loss on disposal of fixed assets

(16,160

)

(59,807

)

Interest income, net

444,642

561,328

TOTAL OTHER INCOME

382,491

496,397

LOSS BEFORE TAXES

(6,063,740

)

(9,773,582

)

Income tax expense

(2,893

)

(3,967,480

)

NET LOSS

(6,066,633

)

(13,741,062

)

NET LOSS PER SHARE

Basic

(0.13

)

(0.30

)

Diluted

(0.13

)

(0.30

)

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

Basic

45,802,701

45,601,346

Diluted

45,802,701

45,601,346

KORU MEDICAL SYSTEMS, INC. STATEMENTS OF CASH FLOWS

For the Years Ended December 31,

2024

2023

CASH FLOWS FROM OPERATING ACTIVITIES

Net Loss

(6,066,633

)

(13,741,062

)

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation expense and warrant expense

2,623,920

2,768,870

Depreciation and amortization

888,473

870,390

Loss on disposal of fixed assets

16,160

59,807

Deferred income taxes, net of allowance for non-realization of deferred tax asset

—

3,967,480

Non-cash leasing charges

243,394

(21,988

)

Changes in operating assets and liabilities:

Increase in accounts receivable

(1,675,540

)

(486,327

)

Decrease in inventory

677,632

2,923,566

Decrease in other receivables

—

943,507

Decrease in prepaid expenses and other assets

220,133

242,599

Increase in accounts payable

674,776

(1,416,606

)

Increase in accrued payroll and related taxes

348,460

(79,458

)

Decrease in other liabilities

(483,250

)

255,183

Increase in accrued expenses

2,212,757

(1,178,514

)

NET CASH USED IN OPERATING ACTIVITIES

(319,718

)

(4,892,553

)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchases of property and equipment

(1,297,427

)

(782,949

)

Proceeds on disposals of property and equipment

8,500

—

Purchases of intangible assets

(44,115

)

(31,648

)

NET CASH USED IN INVESTING ACTIVITIES

(1,333,042

)

(814,597

)

CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings from insurance finance indebtedness

487,516

565,172

Payments on insurance finance indebtedness

(530,707

)

(684,123

)

Payments for taxes related to net share settlement of equity awards

(97,379

)

—

Payments on finance lease liability

(107,963

)

(99,916

)

NET CASH USED IN FINANCING ACTIVITIES

(248,533

)

(218,867

)

NET DECREASE IN CASH AND CASH EQUIVALENTS

(1,901,293

)

(5,926,017

)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

11,482,240

17,408,257

CASH AND CASH EQUIVALENTS, END OF YEAR

9,580,947

11,482,240

Supplemental Information

Cash paid during the years for:

Interest

71,934

50,832

Income taxes

—

3,160

KORU MEDICAL SYSTEMS, INC. SUPPLEMENTAL INFORMATION (UNAUDITED)

Three Months Ended

Twelve Months Ended

Reconciliation of GAAP Net (Loss)

December 31,

to Non-GAAP Adjusted EBITDA:

2024

2023

2024

2023

GAAP Net Loss

(1,558,249

)

(7,466,029

)

(6,066,632

)

(13,741,062

)

Tax Benefit

(185,542

)

(557,654

)

(1,078,066

)

(2,035,297

)

Allowance for Tax Benefit

185,542

6,002,777

1,078,066

6,002,777

Reorganization Charges

329,869

496,255

329,869

Depreciation and Amortization

211,454

228,340

888,473

870,390

Interest Income, Net

(80,459

)

(169,230

)

(444,642

)

(561,328

)

Product Discontinuance

280,000

Manufacturing Initiative Expense

—

55,361

Stock-based Compensation Expense

699,789

389,256

2,623,920

2,768,869

Non-GAAP Adjusted EBITDA

(727,465

)

(962,671

)

(2,502,626

)

(6,030,421

)

Weighted average number of common shares

45,907,001

45,669,691

45,802,701

45,601,346

Three Months Ended

Twelve Months Ended

Reconciliation of Reported Diluted EPS

December 31,

to Non-GAAP Adjusted Diluted EPS:

2024

2023

2024

2023

Reported Diluted Earnings Per Share

(0.03

)

(0.16

)

(0.13

)

(0.30

)

Tax Benefit

(0.01

)

(0.04

)

Allowance for Tax Benefit

0.13

Reorganization Charges

0.01

Depreciation and Amortization

—

0.02

Interest Income, Net

—

(0.01

)

(0.01

)

Manufacturing Initiative Expense

—

Stock-based Compensation Expense

0.01

0.06

Non-GAAP Adjusted Diluted Earnings Per Share

(0.02

)

(0.02

)

(0.06

)

(0.13

Numbers presented are rounded to the nearest whole cent

Allowance for nonrealization of deferred tax assets (DTA). We have excluded the effect of recording a full valuation allowance on our deferred tax assets in the fourth quarter ended 2024 in the amount of $0.2 million and $6 million in the fourth quarter ended 2023.

Reorganization Charges. We have excluded the effect of reorganization charges in calculating our non-GAAP measures. In 2024 we incurred severance expenses related to the reorganization of the leadership team, which we would not have otherwise incurred in periods presented as part of continuing operations.

Stock-based Compensation Expense. We have excluded the effect of stock-based compensation expense in calculating our non-GAAP measures. We record non-cash compensation expenses related to grants of equity-based awards for executives, employees, consultants, and directors. Depending upon the size, timing and the terms of the grants, the non-cash compensation expense may vary significantly but is expected to recur in future periods.

Product Discontinuation. We have excluded the effect of disposing of a non-launched inventoried product that has no value in our Core business product portfolio.

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