Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a leading insulin
delivery and diabetes technology company, today reported its
financial results for the quarter ended June 30, 2019 and updated
its financial guidance for the year ending December 31, 2019.
Second Quarter 2019 Highlights
In comparing the second quarter of 2019 to the same period of
2018:
- Worldwide pump shipments increased 290 percent to 21,258 pumps
from 5,447 pumps
- Sales increased 173 percent to $93.3 million from $34.1
million
- Operating margin improved to negative 2 percent from negative
41 percent
- Adjusted EBITDA(1) improved to 13 percent of sales from
negative 29 percent of sales
“We shipped more pumps in the first half of this year than we
shipped in all of 2018,” said John Sheridan, president and chief
executive officer. “Approximately half of our new customers report
being new to pump therapy, demonstrating that user-friendly
technology drives adoption and that we are making progress in our
longer-term goal to bring the benefits of pump therapy to more
people with diabetes.”
Second Quarter 2019 Financial Results
Domestic pump shipments increased 135 percent to 12,799 pumps in
the second quarter of 2019 from 5,447 pumps in the same period of
2018. Domestic sales were $70.4 million, or an increase of 106
percent compared to $34.1 million in the second quarter of 2018.
International pump shipments were 8,459 in the second quarter of
2019 and sales were $22.9 million. International operations
commenced in the third quarter of 2018. Therefore, there were no
sales or shipments in the comparable quarter of 2018.
Gross profit for the second quarter of 2019 increased 231
percent to $49.9 million, compared to $15.1 million for the same
period of 2018. Gross margin was 54 percent, compared to 44 percent
in the same period of 2018. These included a non-cash stock-based
compensation charge of $1.3 million in the second quarter of 2019
compared to $0.2 million for the same period of 2018, or 1 percent
of sales in both periods.
For the second quarter of 2019, operating expenses totaled $51.8
million, compared to $29.1 million for the same period of 2018.
Operating expenses included a non-cash charge for stock-based
compensation of $11.0 million, compared to stock-based compensation
of $2.5 million for the same period of 2018. Operating loss totaled
$1.9 million, compared to $14.0 million for the same period of
2018. Operating margin for the second quarter of 2019 improved to
negative 2 percent compared to negative 41 percent for the same
period of 2018. For the second quarter of 2019, adjusted EBITDA(1)
was $12.0 million, or 13 percent of sales, compared to negative
$9.9 million, or negative 29 percent of sales, for the same period
of 2018.
Net loss for the second quarter of 2019 was $1.5 million, which
included a $0.4 million non-cash charge for the change in fair
value of certain outstanding warrants. This compared to a net loss
of $59.4 million for the second quarter of 2018, which included a
$42.5 million non-cash charge for the change in fair value of
certain warrants outstanding at that time.
Cash Balance and Liquidity
As of June 30, 2019, the Company had $131.4 million in cash,
cash equivalents and short-term investments. This represents a $5.8
million increase in the second quarter of 2019 and a $2.4 million
increase since December 31, 2018.
2019 Annual Guidance
“The record growth we achieved in the second quarter has
continued to exceed our expectations,” said Leigh Vosseller,
executive vice president and chief financial officer. “The
acceleration of our sales growth drivers in recent quarters
suggests that the longer-term goals we laid out a year ago may be
attainable more quickly than originally anticipated, particularly
with the strength of our near-term product pipeline, scaling
renewal opportunity and expanding international launch.”
For the year ending December 31, 2019, the Company is updating
its financial guidance as follows:
- Sales are estimated to be in the range of $350 million to $365
million, which represents an annual sales growth of 90 percent to
99 percent compared to 2018. The Company’s prior sales guidance for
2019 was estimated to be in the range of $300 million to $315
million.
- Includes international sales of approximately $55 million to
$60 million. The Company’s prior international sales guidance for
2019 was estimated to be in the range of $45 million to $50
million.
- Gross margin is estimated to be approximately 54 percent,
compared to 49 percent in 2018. The Company’s prior gross margin
guidance for 2019 was estimated to be 52 percent.
- Adjusted EBITDA(1) is estimated to be 5 percent to 10
percent
- Non-cash charges included in cost of goods sold and operating
expenses are estimated to be approximately $60 million, which
include:
- Approximately $53 million in non-cash, stock-based compensation
expense
- Approximately $7 million of depreciation and amortization
(1)
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 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
loss.
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 and information regarding the use of non-GAAP financial
measures will be available by accessing 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 "7178666".
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 and Basal-IQ are a registered trademarks
and t:slim X2 is a trademark of Tandem Diabetes Care, Inc.
Follow Tandem Diabetes Care on Twitter @tandemdiabetes; use
#tslimX2, #tconnect, 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 Statement
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 ability to scale its business operations, expand
internationally, and advance its product pipeline and the Company’s
ability to achieve its long-term financial goals more quickly than
originally anticipated. 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, including
its sales and profitability goals, will be impacted by the
Company’s ability to obtain regulatory approval for new products
and products under development and the timing of any such
approvals; 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; the Company’s ability to meet
increasing operational and infrastructure requirements from higher
customer interest and a larger base of existing customers; 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; and the
potential that the process of purchasing the Company’s products,
including insurance verification approval for individual customers,
may delay or prevent the sale of the products. Other risks and
uncertainties include the Company’s ability to manufacture products
at quantities at higher volumes at an acceptable cost and in
accordance with quality requirements; the Company’s ability to
contract with third-party payors for reimbursement of the Company’s
products; uncertainty associated with the development and approval
of new products generally; possible future actions of the FDA or
any other regulatory body or governmental authority; and other
risks identified in the Company’s most recent Annual Report on Form
10-K, Quarterly Report on Form 10-Q, 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)
June 30,
December 31,
2019
2018
(Unaudited)
Assets
Current assets:
Cash and cash equivalents and short-term
investments
$
131,388
$
129,027
Accounts receivable, net
48,438
35,193
Inventories, net
27,341
19,896
Other current assets
5,989
3,769
Total current assets
213,156
187,885
Property and equipment, net
22,750
17,151
Operating lease right-of-use assets
17,665
—
Other long term assets
1,510
1,258
Total assets
$
255,081
$
206,294
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable, accrued expense and
employee-related liabilities
$
38,950
$
34,784
Deferred revenue
7,139
4,600
Common stock warrants
25,616
17,926
Other current liabilities
12,509
8,978
Total current liabilities
84,214
66,288
Operating lease liabilities -
long-term
16,608
—
Other long-term liabilities
8,914
8,731
Total liabilities
109,736
75,019
Total stockholders’ equity
145,345
131,275
Total liabilities and stockholders’
equity
$
255,081
$
206,294
TANDEM DIABETES CARE,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Sales
$
93,255
$
34,126
$
159,250
$
61,402
Cost of sales
43,351
19,039
75,993
34,912
Gross profit
49,904
15,087
83,257
26,490
Operating expenses:
Selling, general and administrative
40,565
22,628
75,524
43,541
Research and development
11,204
6,456
20,594
12,431
Total operating expenses
51,769
29,084
96,118
55,972
Operating loss
(1,865
)
(13,997
)
(12,861
)
(29,482
)
Total other income (expense), net
353
(45,362
)
(11,643
)
(62,571
)
Net loss
$
(1,512
)
$
(59,359
)
$
(24,504
)
$
(92,053
)
Net loss per share, basic and diluted
$
(0.03
)
$
(1.17
)
$
(0.42
)
$
(2.32
)
Weighted average shares used to compute
basic and diluted net loss per share
58,219
50,948
57,996
39,594
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190801005941/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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