Second Quarter 2020 Sales Guidance Provided,
Annual Guidance Withdrawn
Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a leading insulin
delivery and diabetes technology company, today reported its
financial results for the quarter ended March 31, 2020. In
addition, due to the unknown depth and duration of the COVID-19
pandemic, the Company provided sales guidance for the second
quarter 2020 and has withdrawn its financial guidance for the year
ending December 31, 2020.
First Quarter 2020 Highlights
In comparing the first quarter of 2020 to the same period of
2019:
- Worldwide pump shipments increased 18 percent to 17,378 pumps
from 14,732 pumps
- Sales increased 48 percent to $97.9 million from $66.0
million
- Gross margin for both periods was 51 percent
- Adjusted EBITDA(1) improved to 4 percent of sales from less
than 1 percent of sales
“In the face of the current pandemic, our employees have
demonstrated incredible flexibility and adaptability to prioritize
the well-being of the diabetes community,” said John Sheridan,
president and chief executive officer. “We delivered robust
financial results in the first quarter and continue to support the
needs of our customers and their healthcare providers through our
products, systems and services, which were designed with modern
features that provide even greater benefit in this
environment.”
First Quarter 2020 Financial Results
Domestic pump shipments increased 36 percent to 13,158 pumps in
the first quarter of 2020 from 9,669 pumps in the same period of
2019. Domestic sales were $79.5 million, or an increase of 46
percent compared to $54.7 million in the first quarter of 2019.
International pump shipments decreased 17 percent to 4,220 pumps in
the first quarter of 2020 from 5,063 pumps in the same period of
2019. International sales were $18.4 million, or an increase of 62
percent compared to $11.3 million in the first quarter of 2019.
Gross profit for the first quarter of 2020 increased 51 percent
to $50.3 million, compared to $33.4 million for the same period of
2019. Gross margin was 51 percent for both periods. These included
a non-cash stock-based compensation charge of $2.2 million in the
first quarter of 2020 compared to $1.1 million for the same period
of 2019, or 2 percent of sales in both periods.
For the first quarter of 2020, operating expenses totaled $63.8
million, compared to $44.4 million for the same period of 2019.
Operating expenses included a non-cash charge for stock-based
compensation of $13.7 million, compared to stock-based compensation
of $8.7 million for the same period of 2019. Operating loss totaled
$13.6 million, compared to $11.0 million for the same period of
2019. Operating margin for the first quarter of 2020 improved to
negative 14 percent compared to negative 17 percent for the same
period of 2019. For the first quarter of 2020, adjusted EBITDA(1)
was $4.1 million, or 4 percent of sales, compared to $0.3 million,
or less than 1 percent of sales, for the same period of 2019.
Net loss for the first quarter of 2020 was $14.9 million, which
included a $1.9 million non-cash charge for the change in fair
value of certain outstanding warrants. This compared to a net loss
of $23.0 million for the first quarter of 2019, which included a
$12.7 million non-cash charge for the change in fair value of
certain warrants outstanding at that time.
(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 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 loss.
Cash Balance and Liquidity
As of March 31, 2020, the Company had $160.2 million in cash,
cash equivalents and short-term investments. This represents a
$16.3 million decrease in the first quarter of 2020.
2020 Guidance
“Even in this challenging environment, we still anticipate
domestic growth compared to the second quarter of last year based
on the overwhelmingly positive customer feedback on our t:slim X2
with Control-IQ technology,” said Leigh Vosseller, executive vice
president and chief financial officer. “We feel it is prudent to
focus our guidance on the near term taking into consideration the
unpredictable impact of the current pandemic on our business
operations.”
For the quarter ending June 30, 2020, sales are estimated to be
at least $85 million, including international sales of
approximately $10 million. For the year ending December 31, 2020,
the Company has withdrawn its financial guidance.
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 “2116108.”
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 and the
Company’s ability to continue to support the needs of our customers
and their healthcare providers, sustain our existing business
operations and deliver domestic sales growth during the COVID-19
pandemic. 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 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 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 economics conditions; 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)
March 31,
December 31,
2020
2019
(Unaudited)
Assets
Current assets:
Cash and cash equivalents and short-term
investments
$
160,208
$
176,458
Accounts receivable, net
53,962
46,585
Inventories
60,469
49,073
Other current assets
6,234
4,025
Total current assets
280,873
276,141
Property and equipment, net
37,626
32,923
Operating lease right-of-use assets
23,014
15,561
Other long-term assets
1,814
1,485
Total assets
$
343,327
$
326,110
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable, accrued expenses and
employee-related liabilities
49,738
54,079
Deferred revenue
4,377
3,869
Common stock warrants
25,290
23,509
Operating lease liabilities
8,320
6,320
Other current liabilities
11,922
11,619
Total current liabilities
99,647
99,396
Operating lease liabilities -
long-term
19,547
14,063
Other long-term liabilities
16,957
17,672
Total liabilities
136,151
131,131
Total stockholders’ equity
207,176
194,979
Total liabilities and stockholders’
equity
$
343,327
$
326,110
TANDEM DIABETES CARE,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
(Unaudited)
Three Months Ended March
31,
2020
2019
Sales
$
97,926
$
65,995
Cost of sales
47,665
32,642
Gross profit
50,261
33,353
Operating expenses:
Selling, general and administrative
49,717
34,961
Research and development
14,117
9,389
Total operating expenses
63,834
44,350
Operating loss
(13,573
)
(10,997
)
Total other expense, net
(1,196
)
(11,995
)
Loss before income taxes
(14,769
)
(22,992
)
Income tax expense
98
—
Net loss
$
(14,867
)
$
(22,992
)
Net loss per share, basic and diluted
$
(0.25
)
$
(0.40
)
Weighted average shares used to compute
basic and diluted net loss per share
59,740
57,771
Reconciliation of GAAP versus Non-GAAP
Financial Results
(in thousands)
Three Months Ended March
31,
2020
2019
GAAP net loss
$
(14,867
)
$
(22,992
)
Income tax expense
98
—
Other income, net
(726
)
(751
)
Depreciation and amortization
1,830
1,438
EBITDA
(13,665
)
(22,305
)
Change in fair value of common stock
warrants
1,922
12,746
Stock-based compensation expense
15,865
9,834
Adjusted EBITDA
$
4,122
$
275
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200430005760/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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