Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a leading insulin
delivery and diabetes technology company, today reported its
financial results for the quarter ended September 30, 2019 and
updated its financial guidance for the year ending December 31,
2019.
Third Quarter 2019 Highlights
In comparing the third quarter of 2019 to the same period of
2018:
- Worldwide pump shipments increased 112 percent to 17,839 pumps
from 8,434 pumps
- Sales increased 105 percent to $94.7 million from $46.3
million
- Operating margin improved to negative 6 percent from negative
34 percent
- Adjusted EBITDA(1) improved to 13 percent of sales from
negative 10 percent of sales
“Our third quarter results once again demonstrate that
technology drives customer adoption, and that there is meaningful
long-term opportunity to continue bringing the benefits of insulin
pump therapy to people with diabetes worldwide,” said John
Sheridan, president and chief executive officer. “With approval of
the t:slim X2 insulin pump with Control-IQ technology pending,
we’re positioned for an exciting end of 2019 and beyond as we work
to continue driving growth through innovation and further our
mission to improve the lives of people with diabetes.”
Third Quarter 2019 Financial Results
Domestic pump shipments increased 87 percent to 13,814 pumps in
the third quarter of 2019 from 7,379 pumps in the same period of
2018. Domestic sales were $78.8 million, or an increase of 80
percent compared to $43.7 million in the third quarter of 2018.
International operations commenced in the third quarter of 2018.
International pump shipments increased 282 percent to 4,025 pumps
in the third quarter of 2019 from 1,055 pumps in the same period of
2018. International sales were $15.8 million, or an increase of 532
percent compared to $2.5 million in the third quarter of 2018.
Gross profit for the third quarter of 2019 increased 133 percent
to $50.7 million, compared to $21.8 million for the same period of
2018. Gross margin was 54%, compared to 47% in the same period of
2018. These included a non-cash stock-based compensation charge of
$1.8 million in the third quarter of 2019 compared to $0.8 million
for the same period of 2018, or 2 percent of sales in both
periods.
For the third quarter of 2019, operating expenses totaled $56.7
million, compared to $37.5 million for the same period of 2018.
Operating expenses included a non-cash charge for stock-based
compensation of $15.5 million, compared to stock-based compensation
of $8.8 million for the same period of 2018. Operating loss totaled
$6.0 million, compared to $15.7 million for the same period of
2018. Operating margin for the third quarter of 2019 improved to
negative 6 percent compared to negative 34 percent for the same
period of 2018. For the third quarter of 2019, adjusted EBITDA(1)
was $12.7 million, or 13 percent of sales, compared to negative
$4.7 million, or negative 10 percent of sales, for the same period
of 2018.
Net loss for the third quarter of 2019 was $2.9 million, which
included a $2.3 million non-cash gain for the change in fair value
of certain outstanding warrants. This compared to a net loss of
$34.2 million for the third quarter of 2018, which included a $12.3
million non-cash charge for the change in fair value of certain
warrants outstanding at that time.
Cash Balance and Liquidity
As of September 30, 2019, the Company had $156.9 million in
cash, cash equivalents and short-term investments. This represents
a $25.6 million increase in the third quarter of 2019 and a $27.9
million increase since December 31, 2018.
2019 Annual Guidance
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 $358 million to $365
million, which represents an annual sales growth of 95 percent to
99 percent compared to 2018. The Company’s prior sales guidance for
2019 was estimated to be in the range of $350 million to $365
million.
- Includes international sales of approximately $58 million to
$60 million.
- Gross margin is estimated to be approximately 54 percent,
compared to 49 percent in 2018.
- Adjusted EBITDA(1) is estimated to be 7 percent to 12
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
1EBITDA 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 "5578474".
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 and the
Company’s ability to drive growth through innovation. 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 approvals
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; 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)
September 30,
December 31,
2019
2018
(Unaudited)
Assets
Current assets:
Cash and cash equivalents and short-term
investments
$
156,947
$
129,027
Accounts receivable, net
45,325
35,193
Inventories, net
40,732
19,896
Other current assets
3,594
3,769
Total current assets
246,598
187,885
Property and equipment, net
28,072
17,151
Operating lease right-of-use assets
16,577
—
Other long term assets
1,400
1,258
Total assets
$
292,647
$
206,294
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable, accrued expense and
employee-related liabilities
$
52,499
$
34,784
Deferred revenue
8,187
4,600
Common stock warrants
23,283
17,926
Other current liabilities
16,297
8,978
Total current liabilities
100,266
66,288
Operating lease liabilities -
long-term
15,258
—
Other long-term liabilities
10,129
8,731
Total liabilities
125,653
75,019
Total stockholders’ equity
166,994
131,275
Total liabilities and stockholders’
equity
$
292,647
$
206,294
TANDEM DIABETES CARE,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2019
2018
2019
2018
Sales
$
94,657
$
46,264
$
253,907
$
107,667
Cost of sales
43,974
24,468
119,967
59,381
Gross profit
50,683
21,796
133,940
48,286
Operating expenses:
Selling, general and administrative
44,649
29,506
120,173
73,048
Research and development
12,038
7,999
32,632
20,430
Total operating expenses
56,687
37,505
152,805
93,478
Operating loss
(6,004
)
(15,709
)
(18,865
)
(45,192
)
Total other income (expense), net
3,175
(18,536
)
(8,468
)
(81,107
)
Loss before income taxes
(2,829
)
(34,245
)
(27,333
)
(126,299
)
Income tax expense
72
—
72
—
Net loss
$
(2,901
)
$
(34,245
)
$
(27,405
)
$
(126,299
)
Net loss per share, basic
$
(0.05
)
$
(0.62
)
$
(0.47
)
$
(2.81
)
Net loss per share, diluted
$
(0.09
)
$
(0.62
)
$
(0.47
)
$
(2.81
)
Weighted average shares used to compute
basic net loss per share
58,801
55,615
58,268
44,993
Weighted average shares used to compute
diluted net loss per share
59,196
55,615
58,268
44,993
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191104005953/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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