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, 2020. In addition,
the Company provided sales guidance for the year ending December
31, 2020.
“We achieved our highest quarterly sales, successfully completed
our first acquisition, and executed multiple meaningful agreements
in support of our longer-term objectives in the second quarter,”
said John Sheridan, president and chief executive officer. “In this
challenging global environment, our business has excelled in its
commercial, operational and strategic performance.”
Second Quarter 2020 Financial Results
Worldwide sales increased 17 percent to $109.2 million in the
second quarter, compared to $93.3 million in the second quarter of
2019. Domestic pump shipments increased 15 percent to 14,735 pumps
in the second quarter of 2020 from 12,799 pumps in the same period
of 2019. Domestic sales were $89.3 million, or an increase of 27
percent compared to $70.4 million in the second quarter of 2019.
International pump shipments decreased 53 percent to 3,952 pumps in
the second quarter of 2020 from 8,459 pumps in the same period of
2019. International sales were $20.0 million, or a decrease of 13
percent compared to $22.9 million in the second quarter of 2019.
Internationally, the second quarter of 2019 benefited from
approximately $7.0 million in sales associated with the fulfillment
of an order backlog from prior periods.
Gross profit for the second quarter of 2020 increased 9 percent
to $54.4 million, compared to $49.9 million for the same period of
2019. Gross margin was 50 percent in the second quarter of 2020 and
54 percent in the same period of 2019. These included a non-cash
stock-based compensation charge of $2.2 million in the second
quarter of 2020 compared to $1.3 million for the same period of
2019. Royalty expense was $1.7 million in the second quarter of
2020, compared to no royalty expense in the second quarter of 2019.
In combination, stock-based compensation and royalty expense
represented nearly 4 percent of sales in the second quarter of
2020, and approximately 1 percent of sales for the same period of
2019.
For the second quarter of 2020, operating expenses totaled $66.4
million, compared to $51.8 million for the same period of 2019.
Operating expenses included a non-cash charge for stock-based
compensation of $14.3 million, compared to stock-based compensation
of $11.0 million for the same period of 2019. Operating loss
totaled $12.0 million, compared to $1.9 million for the same period
of 2019. Operating margin for the second quarter of 2020 was
negative 11 percent compared to negative 2 percent for the same
period of 2019. For the second quarter of 2020, adjusted EBITDA(1)
was $6.6 million or 6 percent of sales, compared to $12.0 million,
or 13 percent of sales, for the same period of 2019.
Net loss for the second quarter of 2020 was $27.1 million, which
included a $14.3 million non-cash charge for the change in fair
value of certain outstanding warrants and $3.2 million of interest
expense related to the Company’s convertible debt offering, of
which $2.5 million is non-cash. In addition, the Company realized a
$2.1 million income tax benefit associated with certain intangible
transactions in the second quarter of 2020. This is compared to a
net loss of $1.5 million for the second quarter of 2019, which
included a $0.4 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 June 30, 2020, the Company had $426.3 million in cash,
cash equivalents and short-term investments. This represents a
$266.1 million increase in the second quarter of 2020 and a $249.8
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
during the quarter.
2020 Guidance
“We are reinstating the sales guidance we set at the beginning
of 2020 based on the continued strong worldwide demand for our
t:slim X2 insulin pump,” said Leigh Vosseller, executive vice
president and chief financial officer. “While being mindful of the
unpredictable nature of the current pandemic, our confidence in the
remainder of this year is supported by the positive feedback from
users of our Control-IQ technology and its scaling international
launch, as well as UnitedHealthcare’s recent decision to include
Tandem as a network provider.”
For the year ending December 31, 2020, the Company is
reinstating its sales guidance estimated to be in the range of $450
million to $465 million, which includes international sales of
approximately $70 million to $75 million. This represents an annual
sales growth of 24 percent to 28 percent compared to 2019.
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 “1996138.”
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
anticipated scaled international launch of Control-IQ and the
Company’s ability to continue to sustain our existing business
operations 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 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 economic 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)
June 30,
December 31,
2020
2019
(Unaudited)
Assets
Current assets:
Cash and cash equivalents and short-term
investments
$
426,285
$
176,458
Accounts receivable, net
45,031
46,585
Inventories
62,263
49,073
Other current assets
6,100
4,025
Total current assets
539,679
276,141
Property and equipment, net
44,385
32,923
Operating lease right-of-use assets
21,553
15,561
Other long-term assets
10,622
1,485
Total assets
$
616,239
$
326,110
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable, accrued expenses and
employee-related liabilities
$
46,665
$
54,079
Deferred revenue
4,642
3,869
Common stock warrants
39,625
23,509
Operating lease liabilities
9,306
6,320
Other current liabilities
14,069
11,619
Total current liabilities
114,307
99,396
Convertible senior notes, net -
long-term
195,344
—
Operating lease liabilities -
long-term
17,632
14,063
Other long-term liabilities
21,252
17,672
Total liabilities
348,535
131,131
Total stockholders’ equity
267,704
194,979
Total liabilities and stockholders’
equity
$
616,239
$
326,110
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,
2020
2019
2020
2019
Sales
$
109,236
$
93,255
$
207,162
$
159,250
Cost of sales
54,846
43,351
102,511
75,993
Gross profit
54,390
49,904
104,651
83,257
Operating expenses:
Selling, general and administrative
50,440
40,565
100,157
75,524
Research and development
15,987
11,204
30,104
20,594
Total operating expenses
66,427
51,769
130,261
96,118
Operating loss
(12,037
)
(1,865
)
(25,610
)
(12,861
)
Total other income (expense), net
(17,145
)
353
(18,341
)
(11,643
)
Loss before income taxes
(29,182
)
(1,512
)
(43,951
)
(24,504
)
Income tax benefit
(2,075
)
—
(1,977
)
—
Net loss
$
(27,107
)
$
(1,512
)
$
(41,974
)
$
(24,504
)
Net loss per share, basic and diluted
$
(0.45
)
$
(0.03
)
$
(0.70
)
$
(0.42
)
Weighted average shares used to compute
basic and diluted net loss per share
60,424
58,219
60,082
57,996
Reconciliation of GAAP versus Non-GAAP
Financial Results
(in thousands)
Three Months Ended June
30,
Six Months Ended
June 30,
2020
2019
2020
2019
GAAP net loss
$
(27,107
)
$
(1,512
)
$
(41,974
)
$
(24,504
)
Income tax benefit
(2,075
)
—
(1,977
)
—
Other (income) expense, net
2,809
(778
)
2,083
(1,529
)
Depreciation and amortization
2,205
1,508
4,035
2,946
EBITDA
(24,168
)
(782
)
(37,833
)
(23,087
)
Change in fair value of common stock
warrants
14,336
424
16,258
13,170
Stock-based compensation expense
16,421
12,322
32,286
22,156
Adjusted EBITDA
$
6,589
$
11,964
$
10,711
$
12,239
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200730005917/en/
Media Contact: Steve Sabicer 714-907-6264
ssabicer@thesabicergroup.com
Investor Contact: Susan Morrison 858-366-6900 x7005
IR@tandemdiabetes.com
Tandem Diabetes Care (NASDAQ:TNDM)
Historical Stock Chart
From Aug 2024 to Sep 2024
Tandem Diabetes Care (NASDAQ:TNDM)
Historical Stock Chart
From Sep 2023 to Sep 2024