Conformis Reports First Quarter 2023 Financial Results
May 08 2023 - 8:05AM
Conformis, Inc. (NASDAQ:CFMS), an orthopedic medical device company
that features personalized knee and hip replacement products,
announced today financial results for the first quarter ended
March 31, 2023.
First Quarter
2023 Summary
- Total revenue of $12.8 million, a decrease of 17%
year-over-year on a reported and constant currency basis.
- Product revenue of $12.7 million, a decrease of 15%
year-over-year on a reported basis and 14% on a constant currency
basis.
- Conformis hip system revenue of $0.8 million, an increase of 3%
year-over-year.
- Cash and cash equivalents of $37.8 million as of March 31,
2023.
|
|
Three months ended March 31, |
Increase/(decrease) |
($, in
thousands) |
|
|
2023 |
|
|
2022 |
|
$ Change |
% Change |
% Change |
|
|
|
|
|
(as reported) |
(constant currency) |
United States |
|
$ |
10,567 |
|
$ |
12,715 |
|
$ |
(2,148 |
) |
(17 |
)% |
(17 |
)% |
Rest of world |
|
|
2,124 |
|
|
2,169 |
|
|
(45 |
) |
(2 |
)% |
4 |
% |
Product
revenue |
|
|
12,691 |
|
|
14,884 |
|
|
(2,193 |
) |
(15 |
)% |
(14 |
)% |
Royalty
revenue |
|
|
146 |
|
|
667 |
|
|
(521 |
) |
(78 |
)% |
(78 |
)% |
Total
revenue |
|
$ |
12,837 |
|
$ |
15,551 |
|
$ |
(2,714 |
) |
(17 |
)% |
(17 |
)% |
|
First Quarter
2023 Highlights
Revenue
- Decrease in product revenue year-over-year was primarily due to
declines in U.S. knee orders following our business model
transition and manufacturing/supply chain challenges.
- Royalty and licensing revenue decreased year-over-year as a
result of $0.5 million in revenue recognized under the License
Agreement with Paragon 28 in the prior period.
Gross Margin
- Product gross profit margin was 39% in the first quarter of
2023, compared to 34% in the same period last year. The product
gross margin rate increased year-over-year primarily as a result of
higher selling prices on our fully personalized knees due to our
Platinum Services℠ Program, volume transition to our lower cost
Imprint™ knee system, and decreased cancelled case inventory
expense partially offset by increased labor and material costs and
lower manufacturing volumes.
- Total gross profit decreased $0.6 million to $5.1 million, or
40% of revenue, for the first quarter of 2023, compared to $5.7
million, or 37% of revenue, in the same period last year.
Operating Expenses
- Total operating expenses of $14.5 million decreased $5.9
million, a 29% reduction year-over-year, driven by cost management
efforts, lower litigation expense, and lower variable expenses as a
result of the decline in revenue.
- Sales and marketing expenses decreased $1.6 million primarily
due to lower tradeshow, commission, and personnel expenses.
- Research and development expenses decreased $2.0 million
primarily driven by lower personnel, revenue share, and project
related expenses.
- General and administrative expenses decreased $2.3 million
primarily driven by lower litigation, professional services,
personnel, and freight expenses.
Net Loss
- Net loss was $9.6 million, or $1.32 per basic and diluted
share, in the first quarter of 2023, compared to a net loss of
$16.0 million, or $2.24 per basic and diluted share, in the same
period last year.
- Foreign currency exchange transaction income was $0.5 million
in the first quarter of 2023, compared to foreign currency exchange
transaction loss of $0.8 million in the same period last year.
- Weighted average basic and diluted shares outstanding of 7.3
million for the first quarter of 2023, compared to weighted average
basic and diluted shares outstanding of 7.2 million for the same
period last year. All share and per share information has been
retroactively adjusted for all periods presented to give effect to
the 1-for-25 reverse stock split that occurred in November
2022.
Capital Structure and Liquidity
- Cash and cash equivalents totaled $37.8 million as of
March 31, 2023, compared to $48.7 million as of December 31,
2022.
Outlook
- We expect our second quarter product revenue to be in the range
of $11.0 million to $13.0 million.
Note on Non-GAAP Financial
Measures
In addition to disclosing financial measures prepared in
accordance with U.S. generally accepted accounting principles
(GAAP), the Company provides certain information regarding the
Company's financial results or projected financial results on a
non-GAAP "constant currency basis." This information estimates the
impact of changes in foreign currency rates on the translation of
the Company's current or projected future period financial results
as compared to the applicable comparable period. This impact is
derived by taking the adjusted current or projected local currency
results and translating them into U.S. dollars based upon the
foreign currency exchange rates for the applicable comparable
period. It does not include any other effect of changes in foreign
currency rates on the Company's results or business. Non-GAAP
information is not a substitute for, and is not superior to,
information presented on a GAAP basis. Company management uses
these non-GAAP measures internally to measure operational
performance.
Conference Call and Webcast – May 8, 2023 – 8:30 am
ET
As previously announced, Mark Augusti, CEO, and Bob Howe, CFO,
will host a webcast and conference call, Monday, May 8, 2023, at
8:30 a.m. Eastern Time to discuss this business update.
The webcast of the earnings call will be live
at: https://edge.media-server.com/mmc/p/eynkc88d
To attend by telephone, please use the
information below for dial-in access.
- Date and Time: May 8, 2023 – 8:30 a.m. Eastern
Time
- Please register for the call. You can register any time.
- Link to
register: https://register.vevent.com/register/BIb34ef43bea74440b91bc4a0181caa0ef
- Registration in advance is encouraged. You can then choose to
be provided with the dial-in and PIN or to use the new “Call Me”
feature.
The webcast will be live
at: https://edge.media-server.com/mmc/p/eynkc88dTo attend by
telephone, please use the information below for dial-in access.
- When prompted on dial-in, please utilize conference ID:
9056628
- Participant conference numbers: (877) 809-6331 (U.S./Canada)
and (615) 247- 0224 (International).
- Please dial in at least 10 minutes before the call to ensure
timely participation.
The online archive of the webcast will be available on the
company’s website at ir.conformis.com for 30 days.
About Conformis, Inc.
Conformis is a medical technology company focused on advancing
orthopedic patient care and creating a world without joint pain.
Its product portfolio is designed to maximize surgeon and patient
choice by offering fully personalized solutions through its
Image-to-Implant® Platinum Services℠ Program as well as
data-informed, standardized solutions that combine many benefits of
personalization with the convenience and flexibility of an
off-the-shelf system. Conformis’ sterile, just-in-time,
Surgery-in-a-Box™ delivery system is available with all of its
implants and personalized, single-use instruments. Conformis owns
or exclusively in-licenses issued patents and pending patent
applications that cover personalized implants and patient-specific
instrumentation for all major joints.
For more information, visit www.conformis.com. To receive
future releases in e-mail alerts, sign up at ir.conformis.com.
Cautionary Statement Regarding Forward-Looking
Statements
Statements in this press release about our future expectations,
plans and prospects, the anticipated timing of our product
launches, and our financial position and results, total revenue,
product revenue, gross margin, operations and growth, as well as
other statements containing the words "anticipate," "believe,"
"continue," "could," "estimate," "expect," "intend," "may,"
"might," "plan," "potential," "predict," "project," "should,"
"target," "will," or "would" or the negative of these terms or
other and similar expressions are intended to identify
forward-looking statements within the meaning of the safe harbor
provisions of The Private Securities Litigation Reform Act of 1995,
although not all forward-looking statements contain these
identifying words. We may not actually achieve the plans,
intentions or expectations disclosed in our forward-looking
statements, and you should not place undue reliance on our
forward-looking statements. Actual results or events could differ
materially from the plans, intentions and expectations disclosed in
the forward-looking statements we make as a result of a variety of
risks and uncertainties, including risks related to the novel
coronavirus pandemic and the response to the pandemic; whether our
cash resources will be sufficient to fund our continuing operations
for the periods anticipated; risks related to our estimates and
expectations regarding our revenue, gross margin, expenses, revenue
growth and other results of operations, and the other risks and
uncertainties described in the "Risk Factors" sections of our
Annual Report on Form 10-K for the fiscal year ended December 31,
2022, Quarterly Report on Form 10-Q for the fiscal quarters ended
March 31, 2023, and other public filings with the U.S. Securities
and Exchange Commission. In addition, the forward-looking
statements included in this press release represent our views as of
the date hereof. We anticipate that subsequent events and
developments may cause our views to change. However, while we may
elect to update these forward-looking statements at some point in
the future, we specifically disclaim any obligation to do so. These
forward-looking statements should not be relied upon as
representing our views as of any date subsequent to the date
hereof.
CONTACT: Investor Relationsir@conformis.com(781) 374-5598
|
CONFORMIS, INC. AND SUBSIDIARIES |
Consolidated Statements of Operations |
(unaudited) |
(in thousands, except share and per share
data) |
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
Revenue |
|
|
|
|
Product |
|
$ |
12,691 |
|
|
$ |
14,884 |
|
Royalty and licensing |
|
|
146 |
|
|
|
667 |
|
Total revenue |
|
|
12,837 |
|
|
|
15,551 |
|
Cost of revenue |
|
|
7,734 |
|
|
|
9,810 |
|
Gross profit |
|
|
5,103 |
|
|
|
5,741 |
|
|
|
|
|
|
Operating expenses |
|
|
|
|
Sales and marketing |
|
|
5,051 |
|
|
|
6,665 |
|
Research and development |
|
|
2,458 |
|
|
|
4,479 |
|
General and administrative |
|
|
7,023 |
|
|
|
9,333 |
|
Total operating expenses |
|
|
14,532 |
|
|
|
20,477 |
|
Loss from operations |
|
|
(9,429 |
) |
|
|
(14,736 |
) |
|
|
|
|
|
Other income and expenses |
|
|
|
|
Interest income |
|
|
9 |
|
|
|
17 |
|
Interest expense |
|
|
(637 |
) |
|
|
(451 |
) |
Foreign currency exchange transaction income (loss) |
|
|
468 |
|
|
|
(827 |
) |
Total other expenses |
|
|
(160 |
) |
|
|
(1,261 |
) |
Loss before income taxes |
|
|
(9,589 |
) |
|
|
(15,997 |
) |
Income tax (benefit) provision |
|
|
(18 |
) |
|
|
34 |
|
|
|
|
|
|
Net loss |
|
$ |
(9,571 |
) |
|
$ |
(16,031 |
) |
|
|
|
|
|
Net loss per share: |
|
|
|
|
Basic and diluted* |
|
$ |
(1.32 |
) |
|
$ |
(2.24 |
) |
Weighted average common shares
outstanding: |
|
|
|
|
Basic and diluted* |
|
|
7,253,645 |
|
|
|
7,167,171 |
|
*Adjusted for the 1-for-25 reverse stock split
CONFORMIS, INC. AND SUBSIDIARIES |
Consolidated Balance Sheets |
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
March 31, 2023 |
|
December 31, 2022 |
Assets |
|
(unaudited) |
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
37,786 |
|
|
$ |
48,667 |
|
Accounts receivable, net |
|
|
8,552 |
|
|
|
9,773 |
|
Royalty and licensing receivable |
|
|
120 |
|
|
|
134 |
|
Inventories, net |
|
|
19,490 |
|
|
|
18,910 |
|
Prepaid expenses and other current assets |
|
|
1,671 |
|
|
|
1,785 |
|
Total current assets |
|
|
67,619 |
|
|
|
79,269 |
|
Property and equipment, net |
|
|
8,060 |
|
|
|
8,154 |
|
Operating lease right-of-use assets |
|
|
5,696 |
|
|
|
6,078 |
|
Other Assets |
|
|
|
|
Restricted cash |
|
|
462 |
|
|
|
462 |
|
Other long-term assets |
|
|
86 |
|
|
|
85 |
|
Total assets |
|
$ |
81,923 |
|
|
$ |
94,048 |
|
|
|
|
|
|
Liabilities and stockholder's
equity |
|
|
|
|
Current liabilities |
|
|
|
|
Accounts payable |
|
$ |
4,164 |
|
|
$ |
4,163 |
|
Accrued expenses |
|
|
5,726 |
|
|
|
7,978 |
|
Operating lease liabilities |
|
|
1,952 |
|
|
|
1,932 |
|
Total current liabilities |
|
|
11,842 |
|
|
|
14,073 |
|
Other long-term liabilities |
|
|
283 |
|
|
|
230 |
|
Long-term debt, less debt issuance costs |
|
|
20,601 |
|
|
|
20,563 |
|
Operating lease liabilities |
|
|
4,572 |
|
|
|
5,003 |
|
Total liabilities |
|
|
37,298 |
|
|
|
39,869 |
|
Commitments and
contingencies |
|
|
|
|
Stockholders' equity |
|
|
|
|
Preferred stock, $0.00001 par value: |
|
|
|
|
Authorized: 5,000,000 shares authorized at March 31, 2023 and
December 31, 2022; no shares issued and outstanding as of March 31,
2023 and December 31, 2022 |
|
|
— |
|
|
|
— |
|
Common stock, $0.00001 par value: |
|
|
|
|
Authorized: 20,000,000 shares authorized at March 31, 2023 and
December 31, 2022; 7,497,138 and 7,502,462 shares issued and
outstanding at March 31, 2023 and December 31, 2022,
respectively |
|
|
— |
|
|
|
— |
|
Additional paid-in
capital |
|
|
635,268 |
|
|
|
634,647 |
|
Accumulated deficit |
|
|
(590,895 |
) |
|
|
(581,324 |
) |
Accumulated other
comprehensive income |
|
|
252 |
|
|
|
856 |
|
Total stockholders' equity |
|
|
44,625 |
|
|
|
54,179 |
|
Total liabilities and stockholders' equity |
|
$ |
81,923 |
|
|
$ |
94,048 |
|
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