Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a leading insulin
delivery and diabetes technology company, today reported its
financial results for the quarter and year ended December 31, 2020
and financial guidance for the year ending December 31, 2021.
Fourth Quarter and Full Year 2020 Highlights
In comparing the fourth quarter of 2020 to the same period of
2019:
- Worldwide pump shipments increased 67 percent to 32,685
pumps
- Sales increased 55 percent to $168.1 million
- Adjusted EBITDA(1) remained consistent at 21 percent of
sales
- Operating margin improved to 11 percent
In comparing the year ended December 31, 2020 to the same period
of 2019:
- Worldwide pump shipments increased 24 percent to 90,771
pumps
- Sales increased 38 percent to $498.8 million
- Adjusted EBITDA(1) was 12 percent of sales compared to 13
percent in 2019
- Operating margin improved to negative 2 percent
“In 2020, we launched our best-in-class Control-IQ technology,
surpassed the milestone of having more than 200,000 customers in
our worldwide installed base, and made meaningful internal product
development and operational progress, all under the constraints of
the global pandemic,” said John Sheridan, president and chief
executive officer. “In the year ahead, we remain focused on
executing through operational excellence, delivering sustainable
growth through our robust commercial offerings and product
pipeline, and providing people worldwide a positively different
experience in diabetes care.”
Fourth Quarter 2020 Financial Results
Worldwide pump shipments increased 67 percent to 32,685 pumps
from 19,602 pumps. Worldwide sales increased 55 percent to $168.1
million from $108.4 million. Domestic pump shipments increased 41
percent to 24,552 pumps in the fourth quarter of 2020 from 17,453
pumps in the same period of 2019. Domestic sales were $139.3
million, or an increase of 42 percent compared to $98.2 million in
the fourth quarter of 2019. International pump shipments increased
278 percent to 8,133 pumps in the fourth quarter of 2020 from 2,149
pumps in the same period of 2019. International sales were $28.7
million, or an increase of 182 percent compared to $10.2 million in
the fourth quarter of 2019.
Gross profit for the fourth quarter of 2020 increased 50 percent
to $90.6 million, compared to $60.3 million for the same period of
2019. Gross margin was 54 percent in the fourth quarter of 2020 and
56 percent in the same period of 2019. These included a non-cash
stock-based compensation charge of $1.7 million in the fourth
quarter of 2020 compared to $2.2 million for the same period of
2019. Royalty expense was $2.0 million in the fourth quarter of
2020, with no comparable expense in 2019.
For the fourth quarter of 2020, operating expenses totaled $71.9
million, compared to $58.1 million for the same period of 2019.
Operating expenses included a non-cash charge for stock-based
compensation of $11.6 million, compared to stock-based compensation
of $16.4 million for the same period of 2019. Operating income
totaled $18.7 million, compared to $2.1 million for the same period
of 2019. Operating margin for the fourth quarter of 2020 was 11
percent compared to 2 percent for the same period of 2019. For the
fourth quarter of 2020, adjusted EBITDA(1) was $35.4 million,
compared to $22.5 million, or 21 percent of sales for both
periods.
Net income for the fourth quarter of 2020 was $17.0 million,
which included a $2.8 million non-cash gain for the change in fair
value of certain outstanding warrants and $4.8 million of interest
expense related to the Company’s May 2020 convertible debt
offering, of which $3.9 million is non-cash. This is compared to
net income of $2.7 million for the fourth quarter of 2019, which
included a $0.2 million non-cash charge for the change in fair
value of certain warrants outstanding at that time.
Full Year 2020 Financial Results
Worldwide pump shipments increased 24 percent to 90,771 pumps
from 73,431 pumps. Worldwide sales increased 38 percent to $498.8
million from $362.3 million. Domestic pump shipments increased 32
percent to 70,825 pumps for the year ended 2020 from 53,735 pumps
in the same period of 2019. Domestic sales were $415.7 million, or
an increase of 38 percent compared to $302.1 million for the year
ended 2019. International pump shipments increased 1 percent to
19,946 pumps in 2020 from 19,696 pumps in 2019. International sales
were $83.2 million, or an increase of 38 percent compared to $60.2
million in 2019.
Gross profit for the year ended 2020 increased 34 percent to
$260.5 million, compared to $194.2 million for the same period of
2019. Gross margin was 52 percent in 2020, compared to 54 percent
in the same period of 2019. These included a non-cash charge of
$8.2 million for stock-based compensation for the year ended 2020,
compared to $6.4 million for the comparable period of 2019. Royalty
expense was $6.7 million for the year ended 2020, with no
comparable expense in 2019.
For the year ended 2020, operating expenses totaled $268.5
million compared to $210.9 million for the same period of 2019.
Operating expenses included a non-cash charge for stock-based
compensation of $50.2 million, compared to stock-based compensation
of $51.7 million for the same period of 2019. Operating loss
totaled $8.0 million compared to $16.7 million for the same period
of 2019. Operating margin for the year ended 2020 improved to
negative 2 percent compared to negative 5 percent for the same
period of 2019. For the year ended 2020, adjusted EBITDA(1) was
$60.9 million, or 12 percent of sales, compared to $47.4 million,
or 13 percent of sales, for the same period of 2019.
Net loss for the year ended 2020 was $34.4 million, which
included a $17.1 million non-cash charge for the change in fair
value of certain outstanding warrants and $12.8 million of interest
expense related to the Company’s May 2020 convertible debt
offering, of which $10.1 million is non-cash. This is compared to a
net loss of $24.8 million for the year ended 2019, which included
an $11.1 million non-cash charge for the change in fair value of
certain outstanding warrants at that time.
Cash Balance and Liquidity
As of December 31, 2020, the Company had $484.9 million in cash,
cash equivalents and short-term investments. This represents a
$20.4 million increase in the fourth quarter of 2020 and a $308.5
million increase since December 31, 2019. The increase in cash,
cash equivalents and short-term investments includes net proceeds
of $244.6 million from the Company’s convertible debt transaction
in May 2020.
2021 Financial Guidance
For the year ending December 31, 2021, the Company is providing
its financial guidance as follows:
- Sales are estimated to be in the range of $600 million to $615
million, which represents an annual sales growth of 20 percent to
23 percent compared to 2020
- Includes international sales of approximately $105 million to
$110 million
- Gross margin is estimated to be approximately 55 percent
- Adjusted EBITDA(1) is estimated to be 14 percent to 15 percent
of sales
- Non-cash charges included in cost of goods sold and operating
expenses are estimated to be approximately $80 million, which
include:
- Approximately $65 million in non-cash, stock-based compensation
expense
- Approximately $15 million of depreciation and amortization
(1)
See "Non-GAAP Financial Measures" below.
EBITDA is a non-GAAP financial measure defined as net income (loss)
excluding income taxes, interest and other non-operating items and
depreciation and amortization. Adjusted EBITDA further adjusts
for the change in fair value of common stock warrants and non-cash
stock-based compensation expense. This definition of Adjusted
EBITDA may differ from similar measures used by other companies,
even when similar terms are used to identify such measures.
Adjusted EBITDA is a key measure used by the Company to evaluate
operating performance, generate future operating plans and make
strategic decisions for the allocation of capital. The Company
presents Adjusted EBITDA to provide information that may assist
investors in understanding its financial results. However, Adjusted
EBITDA is not intended to be a substitute for net income
(loss).
Non-GAAP Financial Measures
Certain non-GAAP financial measures are presented in this press
release, including adjusted EBITDA, to provide information that may
assist investors in understanding the Company’s financial results
and assessing its prospects for future performance. We believe
these non-GAAP financial measures are important indicators of our
operating performance because they exclude items that are unrelated
to, and may not be indicative of, our core operating results. These
non-GAAP financial measures, as we calculate them, may not
necessarily be comparable to similarly titled measures of other
companies and may not be appropriate measures for comparing the
performance of other companies relative to the Company. These
non-GAAP financial results are not intended to represent, and
should not be considered to be more meaningful measures than, or
alternatives to, measures of operating performance as determined in
accordance with GAAP. To the extent we utilize such non-GAAP
financial measures in the future, we expect to calculate them using
a consistent method from period to period. A reconciliation of each
of the GAAP financial measures to the most directly comparable
non-GAAP financial measures has been provided under the heading
“Reconciliation of GAAP versus Non-GAAP Financial Results” in the
financial statement tables attached to this press release.
Consistent with SEC regulations, we have not provided a
reconciliation of forward-looking non-GAAP financial measures to
the most directly comparable GAAP financial measures in reliance on
the “unreasonable efforts” exception set forth in the applicable
regulations, because there is substantial uncertainty associated
with predicting any future adjustments that we may make to our GAAP
financial measures in calculating our non-GAAP financial
measures.
Conference Call
The Company will hold a conference call and simultaneous webcast
today at 4:30pm Eastern Time (1:30pm Pacific Time). The link to the
webcast will be available by accessing the Events &
Presentations tab in the Investor Center of the Tandem Diabetes
Care website at http://investor.tandemdiabetes.com, and will be
archived for 30 days. To listen to the conference call via phone,
please dial 855-427-4396 (U.S./Canada) or 484-756-4261
(International) and use the participant code “7178576.”
About Tandem Diabetes Care, Inc.
Tandem Diabetes Care, Inc. (www.tandemdiabetes.com) is a medical device
company dedicated to improving the lives of people with diabetes
through relentless innovation and revolutionary customer
experience. The Company takes an innovative, user-centric approach
to the design, development and commercialization of products for
people with diabetes who use insulin. Tandem’s flagship product,
the t:slim X2 insulin pump, is capable of remote software updates
using a personal computer and features integrated continuous
glucose monitoring. Tandem is based in San Diego, California.
Tandem Diabetes Care is a registered trademark and t:slim X2 and
Control-IQ are trademarks of Tandem Diabetes Care, Inc.
Follow Tandem Diabetes Care on Twitter @tandemdiabetes; use
#tslimX2 and $TNDM. Follow Tandem Diabetes Care on Facebook at
www.facebook.com/TandemDiabetes.
Follow Tandem Diabetes Care on LinkedIn at https://www.linkedin.com/company/tandemdiabetes.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, that concern matters that involve risks and uncertainties
that could cause actual results to differ materially from those
anticipated or projected in the forward-looking statements. These
forward-looking statements include statements regarding, among
other things, the Company’s projected financial results. The
Company’s actual results may differ materially from those indicated
in these forward-looking statements due to numerous risks and
uncertainties. For instance, the Company’s ability to achieve
projected financial results will be impacted by market acceptance
of the Company’s existing products and products under development
by physicians and people with diabetes; the Company’s ability to
establish and sustain operations to support international sales,
including expansion into additional geographies; changes in
reimbursement rates or insurance coverage for the Company’s
products; the Company’s ability to meet increasing operational and
infrastructure requirements from higher customer interest and a
larger base of existing customers; the Company’s ability to
complete the development and launch of new products when
anticipated; the potential that newer products, or other
technological breakthroughs for the monitoring, treatment or
prevention of diabetes, may render the Company’s products obsolete
or less desirable; the depth and duration of the evolving COVID-19
pandemic, and the global response thereto; reliance on third-party
relationships, such as outsourcing and supplier arrangements;
global economic conditions; and other risks identified in the
Company’s most recent Annual Report on Form 10-K and other
documents that the Company files with the Securities and Exchange
Commission. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this release. Tandem undertakes no obligation to update or
review any forward-looking statement in this press release because
of new information, future events or other factors.
TANDEM DIABETES CARE,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
December 31,
December 31,
2020
2019
Assets
Current assets:
Cash and cash equivalents and short-term
investments
$
484,936
$
176,458
Accounts receivable, net
82,195
46,585
Inventories
63,721
49,073
Other current assets
6,383
4,025
Total current assets
637,235
276,141
Property and equipment, net
50,022
32,923
Operating lease right-of-use assets
19,773
15,561
Other long-term assets
9,385
1,485
Total assets
$
716,415
$
326,110
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable, accrued expenses and
employee-related liabilities
$
56,747
$
54,079
Deferred revenue
6,082
3,869
Common stock warrants
14,261
23,509
Operating lease liabilities
9,421
6,320
Other current liabilities
17,341
11,619
Total current liabilities
103,852
99,396
Convertible senior notes, net -
long-term
202,984
—
Operating lease liabilities -
long-term
15,914
14,063
Other long-term liabilities
27,360
17,672
Total liabilities
350,110
131,131
Total stockholders’ equity
366,305
194,979
Total liabilities and stockholders’
equity
$
716,415
$
326,110
TANDEM DIABETES CARE,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
(Unaudited)
Three Months Ended December
31,
Year Ended December
31,
2020
2019
2020
2019
Sales
$
168,065
$
108,398
$
498,830
$
362,305
Cost of sales
77,509
48,126
238,310
168,093
Gross profit
90,556
60,272
260,520
194,212
Operating expenses:
Selling, general and administrative
54,518
45,561
204,903
165,735
Research and development
17,376
12,567
63,574
45,199
Total operating expenses
71,894
58,128
268,477
210,934
Operating income (loss)
18,662
2,144
(7,957
)
(16,722
)
Total other income (expense), net
(1,624
)
585
(28,325
)
(7,882
)
Income (loss) before income taxes
17,038
2,729
(36,282
)
(24,604
)
Income tax expense (benefit)
38
77
(1,900
)
149
Net income (loss)
$
17,000
$
2,652
$
(34,382
)
$
(24,753
)
Net income (loss) per share, basic
$
0.27
$
0.04
$
(0.56
)
$
(0.42
)
Net income (loss) per share, diluted
$
0.22
$
0.04
$
(0.56
)
$
(0.42
)
Weighted average shares used to compute
basic net income (loss) per share
62,249
59,219
60,990
58,507
Weighted average shares used to compute
diluted net income (loss) per share
65,677
62,883
60,990
58,507
Reconciliation of GAAP versus Non-GAAP Financial
Results
(in thousands)
Three Months Ended December
31,
Year Ended December
31,
2020
2019
2020
2019
GAAP net income (loss)
$
17,000
$
2,652
$
(34,382
)
$
(24,753
)
Income tax expense (benefit)
38
77
(1,900
)
149
Interest income and other, net
(332
)
(812
)
(1,567
)
(3,193
)
Interest expense
4,775
—
12,805
—
Depreciation and amortization
3,427
1,642
10,451
6,072
EBITDA
24,908
3,559
(14,593
)
(21,725
)
Change in fair value of common stock
warrants
(2,819
)
226
17,087
11,075
Stock-based compensation expense
13,308
18,684
58,431
58,071
Adjusted EBITDA
$
35,397
$
22,469
$
60,925
$
47,421
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210224005364/en/
Media Contact: Steve Sabicer 714-907-6264
ssabicer@thesabicergroup.com
Investor Contact: Susan Morrison 858-366-6900 x7005
IR@tandemdiabetes.com
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