 Increased Total Revenue 1 Year-over-Year to 30.7 Million Accelerated the Commercial Integration of Parcus Medical and Arthrosurface Organizations Launching Seven FDA-Cleared Orthopedic and Sports Medicine Products Through Q3 2020BEDFORD, Mass., July 30, 2020 GLOBE NEWSWIRE -- Anika Therapeutics, Inc. NASDAQ: ANIK, a global, integrated joint preservation, restoration and regenerative solutions company with products across the orthopedic early intervention continuum of care, today reported financial results for the second quarter ended June 30, 2020, and provided an update on its business progress in the period.Anikas recent strategic transformation has provided commercial diversity and generated top-line revenue growth year-over-year for the quarter, despite the COVID-19 pandemic impact, said Cheryl R. Blanchard, Ph.D., President and Chief Executive Officer of Anika Therapeutics. The Company also made continued progress as a customer-centric company focused on the early intervention orthopedic continuum of care, including forming a new leadership team and a consolidated commercial structure as part of the integration of Parcus Medical and Arthrosurface. We are expanding our product portfolio with several innovations that address the needs of orthopedic and sports medicine surgeons with seven new product launches through the third quarter of 2020. The health and safety of our employees, the customers we serve and all of the patients they treat around the world remains our top priority, while we continue to take actions to control our costs and maintain our strong balance sheet during the COVID-19 pandemic.Second Quarter Financial Results Total revenue for the second quarter of 2020 increased 1 year-over-year to 30.7 million, compared to 30.4 million for the second quarter of 2019. The increase in total revenue was due primarily to new Orthopedic Joint Preservation and Restoration revenue, which resulted from the acquisitions of Parcus Medical and Arthrosurface in the first quarter of 2020, partially off-set by lower Joint Pain Management revenue as a result of the COVID environment. Cost of product revenue, research and development expenses and selling, general and administrative expenses for the second quarter of 2020 were 36.0 million, compared to 18.5 million for the second quarter of 2019. The increase was due primarily to higher cost of product revenue, selling and marketing expenses related to the Companys newly acquired sales infrastructure, acquisition related amortization expenses and product rationalization charges associated with certain non-core legacy products. Acquisition related non-cash expenses and product rationalization non-cash charges during the quarter totaled 6.9 million. Included in total operating expenses for the second quarter of 2020 was a 4.2 million increase in fair value related to acquisition contingent consideration liabilities, recorded as a non-cash expense, as a result of the estimated improved performance of the recently acquired companies following the easing of COVID restrictions in the U.S. Net loss for the second quarter of 2020 was 7.7 million, or 0.54 loss per diluted share, compared to net income of 9.4 million, or 0.67 per diluted share, for the second quarter of 2019. Adjusted net income see description below for the second quarter of 2020 was 1.2 million, or 0.09 per diluted share. Adjusted EBITDA see description below for the second quarter of 2020 was 5.6 million, compared to 14.8 million for the second quarter of 2019. The year-over-year decrease was due primarily to increases in cost of product revenue and related revenue mix and selling and marketing expenses. Cash, cash equivalents and investments were 144.4 million as of June 30, 2020, compared to 184.9 million as of December 31, 2019. The decrease in cash, cash equivalents and investments was due to 93.0 million of upfront payments for the acquisitions of Parcus Medical and Arthrosurface, offset by the 50.0 million drawdown on the Companys existing credit facility. Recent Business Highlights Augmented the leadership team to maximize talent utilization and efficiency, as well as drive performance, including the appointments of: Bart Bracy, former Senior Vice President and Co-Founder of Parcus Medical, as Vice President of Sales and Marketing for the Americas region; Steven Ek, former President and Chief Executive Officer of Arthrosurface, as Vice President of Research and Development; Mark Brunsvold, former President and Co-Founder of Parcus Medical, as President of Sports Medicine; and James Chase as Senior Vice President of International Sales and Marketing, with expanded responsibility for Anikas operations in Padua, Italy. Completed the integration of the Companys U.S. commercial organization, which includes 35 sales professionals in addition to shared sales operations and marketing functions. Expanded the TACTOSET franchise, Anikas surgically delivered regenerative therapy for bone repair procedures focused on treating insufficiency fractures, to include a small bone cannula set enabling improved and more accurate access in small joints and extremities. Completed prelaunch activities for six sports medicine surgical devices and instruments, which recently received U.S. Food and Drug Administration clearance. The new products are used in procedures ranging from rotator cuff repair to arthroscopic knee repairs and the treatment of arthritis damage in the hand and wrist. The products will be commercialized through Anikas recently expanded sales and marketing team through the third quarter of 2020. Continued international expansion of the Companys joint pain management business through the launch and first sales of CINGAL in Australia, as well as the receipt of visocsupplement product approvals in Finland and Serbia.Non-GAAP Information Adjusted EBITDATo supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles GAAP, the Company reports adjusted EBITDA, which is a non-GAAP financial measure and should not be considered an alternative to net income or other measurements under GAAP. The Company believes that adjusted EBITDA provides additional useful information to investors in their assessment of its operating performance as it is a metric routinely used by management to evaluate the Companys performance. Adjusted EBITDA is not calculated identically by all companies, and therefore the Companys measurements of adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. In 2020, adjusted EBITDA is defined by the Company as GAAP net income excluding depreciation and amortization, interest and other income expense, income taxes, stock-based compensation expense, acquisition related costs, non-cash charges related to goodwill impairment and changes in the fair value of contingent consideration associated with the Companys recent acquisitions as a result of the COVID-19 pandemic, and product rationalization charges associated with certain non-core legacy products. Acquisition related expenses are those that the Company would not have incurred except as a direct result of acquisition transactions. Acquisition related expenses consist of investment banking, legal, accounting, and other professional and related expenses associated with acquisition transactions, as well as amortization of inventory step-up and identified assets associated with purchase accounting for the transactions. Acquisition related expenses are being reported and utilized in the Companys calculation of adjusted EBITDA in order to facilitate comparison to the Companys past performance. As a result of the impact of COVID-19, the Company is also excluding the impacts of goodwill impairment charges and changes in the fair value in contingent consideration associated with the recent acquisition transactions. Product rationalization charges being excluded relate to certain non-core legacy assets as result of managing the Companys financial position in light of its recent acquisitions, the impact of COVID-19 and changing regulatory requirements. These non-cash charges are related to current product inventory and fixed and intangible assets. The Company is reporting this financial measure to the Board of Directors in order to facilitate an appropriate assessment of the Companys performance and the impact of the COVID-19 pandemic. A reconciliation of adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with GAAP, is shown in the table below for the three- and six-month periods ended June 30, 2020 and 2019. Anika Therapeutics, Inc. 