Full Year 2017 Revenue of $463.8 Million, Up
26%, and Gross Margin Up 230 Basis Points
Full Year 2018 Expected Revenue Growth of 21%
to 25%
Insulet Corporation (NASDAQ: PODD) (Insulet or the Company), the
leader in tubeless insulin pump technology with its Omnipod®
Insulin Management System (Omnipod System), today announced
financial results for the three months and full year ended December
31, 2017.
This press release features multimedia. View
the full release here:
http://www.businesswire.com/news/home/20180221006057/en/
Fourth Quarter Financial Highlights:
- Fourth quarter revenue of $130.5
million, up 26%, exceeds guidance of $123 to $126 million
- U.S. Omnipod revenue of $76.5 million,
an increase of 21%
- International Omnipod revenue of $35.7
million, an increase of 72%
- Drug Delivery revenue of $18.3 million,
a decrease of 7%
- Gross margin of 60.9%, up 210 basis
points
Full Year Financial Highlights:
- Full Year 2017 revenue of $463.8
million, up 26%, exceeds guidance of $456 to $459 million
- U.S. Omnipod revenue of $271.6 million,
an increase of 18%
- International Omnipod revenue of $120.0
million, an increase of 67%
- Drug Delivery revenue of $72.2 million,
an increase of 11%
- Gross margin of 59.8%, up 230 basis
points
Strategic Highlights:
- Received Medicare coverage eligibility
under prescription drug benefit, providing access pathway to
additional one-third of the U.S. market
- Submitted Omnipod DASH™, Insulet's
next-generation mobile platform, for FDA clearance
- Established European headquarters and
local leadership team to assume direct distribution and commercial
support for Omnipod in Europe on July 1, 2018
- Broke ground on new state-of-the-art
U.S. manufacturing facility
- Ranked #4 on Forbes 2017 list of
World's Most Innovative Growth Companies
"Insulet had a very successful 2017 and our strong momentum this
year gives us confidence for further improved performance in 2018,"
said Patrick Sullivan, Chairman and Chief Executive Officer. "Our
focus on commercial execution and operational excellence drove
revenue growth of 26% and more than a 200-basis point gross margin
improvement in 2017. We also achieved several key strategic
milestones, including gaining Medicare coverage for Omnipod and
submitting a 510(k) to the FDA for our next-generation Omnipod DASH
System in early 2018."
Mr. Sullivan continued, "I am incredibly proud of the
performance of our team across our business. We are on a strong,
sustainable growth trajectory and are well on our way to achieving
our 2021 targets of $1 billion in revenue, approaching 70% gross
margin, and above-market profitability. While we are pleased with
our progress to date, we remain as driven and focused as ever on
delivering differentiated technology to our customers."
Fourth Quarter 2017 Financial Results:
Fourth quarter 2017 revenue increased 26% to $130.5 million,
compared to $103.6 million in the fourth quarter of 2016.
Operating loss for the fourth quarter of 2017 was $0.8 million,
compared to an operating loss of $4.1 million in the fourth quarter
of 2016.
Net loss for the fourth quarter of 2017 was $6.9 million, or
$0.12 per share, compared with a net loss from continuing
operations of $9.2 million, or $0.16 per share, in the fourth
quarter of 2016.
Full Year 2017 Financial Results:
For the year ended December 31, 2017, revenue increased 26% to
$463.8 million, compared to revenue of $367.0 million in 2016.
Operating loss for the year ended December 31, 2017 was $7.4
million, compared with an operating loss of $10.7 million in
2016.
Net loss for the year ended December 31, 2017 was $26.8 million,
or $0.46 per share, compared with a net loss from continuing
operations of $27.2 million, or $0.48 per share, in 2016.
Guidance1:
- For the year ending December 31,
2018, the Company expects revenue in the range of $560 to $580
million, compared to 2017 revenue of $463.8 million, representing
growth of approximately 21% to 25%. This guidance includes
approximately $5 million of incremental revenue from adopting ASC
606.
- For the quarter ending March 31, 2018,
the Company expects revenue in the range of $119 to $123 million,
compared to first quarter 2017 revenue of $101.7 million,
representing growth of approximately 17% to 21%. This guidance
includes approximately $2 million of incremental revenue from
adopting ASC 606.
Future results may be affected by changes in ongoing assumptions
and judgments, and may also be affected by non-recurring, unusual
or unanticipated charges, expenses or gains.
1 On January 1, 2018, the Company adopted Accounting Standards
Codification (ASC) 606, which changes the way public companies
recognize revenue, as well as certain related costs and expenses.
The Company does not expect the adoption of this standard will have
a material impact on its financial trends. The Company's 2018
guidance reflects the adoption of this standard on a prospective
basis and it anticipates the most significant impact relates to the
timing of revenue recognition within its drug delivery product
line.
Conference Call:
Insulet will host a conference call at 4:30 p.m. (Eastern Time)
on February 21, 2018 to discuss the financial results and outlook.
The link to the live call will be available on the Investor
Relations section of the Company's website at
http://investors.insulet.com, "Events and Presentations", and will
be archived for future reference. The call may also be accessed by
dialing (844) 831-3022 for domestic callers or (315) 625-6887 for
international callers, passcode 3671056.
About Insulet Corporation:
Insulet Corporation (NASDAQ: PODD), headquartered in
Massachusetts, is an innovative medical device company dedicated to
making the lives of people with diabetes and other conditions
easier through the use of its Omnipod product platform. The Omnipod
Insulin Management System provides a unique alternative to
traditional insulin delivery methods. With its simple, wearable
design, the disposable Pod provides up to three days of non-stop
insulin delivery, without the need to see or handle a needle.
Insulet also leverages the unique design of its Pod, by tailoring
its Omnipod technology platform for the delivery of non-insulin
subcutaneous drugs across multiple therapeutic areas. Founded in
2000, more than 140,000 users across the globe rely on Insulet’s
Omnipod Insulin Management System to bring simplicity and freedom
to their lives. For more information, please visit:
www.insulet.com, www.myomnipod.com and www.omnipodeurope.com*.
*Starting July 1, 2018, Insulet will assume direct distribution
of its Omnipod Insulin Management System in Europe, including
sales, marketing, training and customer support activities. This
will allow Insulet to be closer to the diabetes community and
identify opportunities to support European customer needs over the
long-term, as it already does in the United States and Canada.
Forward-Looking Statement:
The 2017 financial results contained in this news release are
subject to finalization in connection with the preparation of the
Company's Form 10-K for the year ended December 31, 2017. This
press release contains forward-looking statements concerning
Insulet's expectations, anticipations, intentions, beliefs or
strategies regarding the future. These forward-looking statements
are based on its current expectations and beliefs concerning future
developments and their potential effects on Insulet. There can be
no assurance that future developments affecting Insulet will be
those that it has anticipated.
These forward-looking statements involve a number of risks,
uncertainties (some of which are beyond Insulet’s control) or other
assumptions that may cause actual results or performance to be
materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include,
but are not limited to: risks associated with the Company's
dependence on its principal product platform, the Omnipod System;
risks associated with the Company’s ability to design, develop,
manufacture and commercialize future products; Insulet's ability to
reduce production costs and increase customer orders and
manufacturing volumes ; adverse changes in general economic
conditions; impact of healthcare reform laws; Insulet's ability to
raise additional funds in the future on acceptable terms or at all;
potential supply problems or price fluctuations with sole source or
third-party suppliers on which Insulet is dependent; the potential
establishment of a competitive bid program for conventional insulin
pumps; failure by Insulet to retain supplier pricing discounts and
achieve satisfactory gross margins; failure by Insulet to retain
key supplier and payor partners; international business risks;
Insulet’s inability to effectively assume the distribution and
commercial support for the Omnipod System and to operate the
Company’s business in Europe following the expiration of its
distribution agreement with its European distributor on June 30,
2018; Insulet's inability to secure and retain adequate coverage or
reimbursement from third-party payors for the Omnipod System or
future products and potential adverse changes in reimbursement
rates or policies relating to the Omnipod System or future
products; failure to retain key payor partners and their members;
potential adverse effects resulting from competition; technological
change and product innovation adversely affecting the Company's
business; potential changes to or termination of Insulet's license
to incorporate a blood glucose meter into the Omnipod System or its
inability to enter into new license or other agreements with
respect to the Omnipod System's current or future features;
challenges to the future development of our non-insulin drug
delivery business; Insulet's ability to protect its intellectual
property and other proprietary rights; conflicts with the
intellectual property of third parties, including claims that
Insulet's current or future products infringe or misappropriate the
proprietary rights of others; adverse regulatory or legal actions
relating to the Omnipod System or future products; failure of
Insulet's contract manufacturers or component suppliers to comply
with FDA's quality system regulations; the potential violation of
international, federal or state laws prohibiting "kickbacks" or
protecting the confidentiality of patient health information or
other protected personal information, or any challenge to or
investigation into Insulet's practices under these laws; product
liability lawsuits that may be brought against Insulet; reduced
retention rates of our customer base; unfavorable results of
clinical studies relating to the Omnipod System or future products,
or the products of Insulet's competitors; potential future
publication of articles or announcement of positions by diabetes
associations or other organizations that are unfavorable to the
Omnipod System; the concentration of substantially all of Insulet's
manufacturing operations at a single location in China and
substantially all of Insulet's inventory at a single location in
Massachusetts; Insulet's ability to attract and retain personnel;
Insulet's ability to manage its growth; fluctuations in quarterly
results of operations; risks associated with potential future
acquisitions or investments in new businesses; Insulet's ability to
generate sufficient cash to service all of its indebtedness; the
expansion of Insulet's distribution network; Insulet's ability to
successfully maintain effective internal control over financial
reporting; the volatility of the trading price of Insulet's common
stock; risks related to future sales of its common stock or the
conversion of any of the Convertible Senior Notes; potential
limitations on Insulet's ability to use its net operating loss
carryforwards; anti-takeover provisions in its organizational
documents; and other risks and uncertainties described in its
Annual Report on Form 10-K, which was filed with the Securities and
Exchange Commission on February 28, 2017 in the section
entitled "Risk Factors," and in its other filings from time to time
with the Securities and Exchange Commission. Should one or more of
these risks or uncertainties materialize, or should any of its
assumptions prove incorrect, actual results may vary in material
respects from those projected in these forward-looking statements.
Insulet undertakes no obligation to publicly update or revise any
forward-looking statements.
INSULET CORPORATIONCONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended December 31,
Years Ended December 31,
2017 2016 2017 2016
(Unaudited)(In thousands, except
share and per share data)
Revenue $ 130,524 $ 103,575 $ 463,768 $ 366,989 Cost of revenue
51,016 42,638 186,599 155,903 Gross
profit 79,508 60,937 277,169 211,086 Operating expenses: Research
and development 18,782 16,034 74,452 55,710 Sales and marketing
35,329 25,364 121,617 94,483 General and administrative 26,165
23,674 88,487 71,597 Total operating
expenses 80,276 65,072 284,556 221,790
Operating loss
(768 ) (4,135 ) (7,387 ) (10,704 )
Interest expense and other, net
(6,153 ) (4,821 ) (19,187 ) (16,114 ) Loss from continuing
operations before income taxes (6,921 ) (8,956 ) (26,574 ) (26,818
) Income tax (benefit) expense (61 ) 197 257 392
Net loss from continuing operations $ (6,860 ) $ (9,153 ) $
(26,831 ) $ (27,210 ) Income (loss) from discontinued operations,
net of tax — 34 — (1,669 ) Net loss $ (6,860 )
$ (9,119 ) $ (26,831 ) $ (28,879 ) Net loss per share basic and
diluted: Net loss from continuing operations per share $ (0.12 ) $
(0.16 ) $ (0.46 ) $ (0.48 ) Net loss from discontinued operations
per share $ — $ — $ — $ (0.03 ) Weighted-average number of shares
outstanding 58,236,415 57,435,894 58,003,434 57,251,377
INSULET CORPORATIONCONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)(In thousands, except
per share data)
December 31, 2017
December 31, 2016
ASSETS Current Assets Cash, cash equivalents and
short-term investments $ 440,056 $ 298,570 Accounts receivable, net
53,373 28,803
Inventories
33,793 35,514 Prepaid expenses and other current assets 9,949
7,073 Total current assets 537,171 369,960 Long-term
investments 125,549 — Property and equipment, net 107,864 44,753
Intangible assets, net 4,351 2,041 Goodwill 39,840 39,677 Other
assets 1,969 216 Total assets $ 816,744 $
456,647
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities Accounts payable $ 24,413 $ 13,160
Accrued expenses and other current liabilities 59,256 41,228
Deferred revenue 2,356 1,309 Total current
liabilities 86,025 55,697 Long-term debt, net 566,173 332,768 Other
long-term liabilities 6,030 5,032 Total liabilities
658,228 393,497
Stockholders’ Equity Preferred stock, $.001
par value — — Common stock, $.001 par value 58 57 Additional
paid-in capital 866,206 744,243 Accumulated other comprehensive
loss (493 ) (726 ) Accumulated deficit (707,255 ) (680,424 ) Total
stockholders’ equity 158,516 63,150 Total liabilities
and stockholders’ equity $ 816,744 $ 456,647
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180221006057/en/
Insulet CorporationInvestor Relations and Media
Contact:Deborah R. Gordon, 978-600-7717Vice President, Investor
Relations and Corporate Communicationsdgordon@insulet.com
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