Tactile Systems Technology, Inc. (“Tactile Medical”) (Nasdaq:
TCMD), a medical technology company focused on developing medical
devices for the at-home treatment of chronic diseases, today
reported financial results for the fourth quarter and full year
ended December 31, 2020.
Fourth Quarter 2020 Summary:
- Total revenue increased 4%
year-over-year, to $59.2 million, compared to $57.1 million in
fourth quarter 2019.
- Operating income of $7.0 million,
compared to $6.0 million in fourth quarter 2019.
- Net income of $12.1 million,
compared to $4.3 million in fourth quarter 2019.
- Adjusted EBITDA of $10.8 million,
compared to $10.4 million in fourth quarter 2019.
- Cash, cash equivalents, and
marketable securities of $47.9 million at December 31, 2020,
compared to $45.2 million at December 31, 2019.
Full Year 2020 Summary:
- Total revenue decreased 1%
year-over-year, to $187.1 million, compared to $189.5 million in
2019.
- Excluding the contribution to full
year 2019 revenue related to the Company’s adoption of ASC 842,
full year 2020 revenue reflects growth of 1% year-over-year on an
operational basis.
- Operating loss of $3.6 million, compared to operating income of
$10.5 million in 2019.
- Net loss of $0.6 million, compared to net income of $11.0
million in 2019.
- Adjusted EBITDA of $16.0 million,
compared to $25.3 million in 2019.
“We were pleased to close 2020 by returning to
year-over-year growth in the fourth quarter, and ultimately
exceeding the high end of our annual revenue guidance range, in
spite of the business disruption that we experienced due to the
COVID-19 pandemic,” said Dan Reuvers, President and Chief Executive
Officer of Tactile Medical. “In the fourth quarter, the majority of
the facilities that we serve continued to operate with constraints
related to social distancing and safety protocols, and we
experienced incremental headwinds during the month of December as
the holiday wave of cases impacted clinicians, patients and our own
team. In spite of these incremental headwinds, I am proud of the
exceptional effort and dedication shown by our team during the
quarter, which enabled us to deliver strong performance by
continuing to support our existing customers while expanding our
prescriber base.”
Mr. Reuvers added, “Despite the continuation of
COVID-related headwinds as we enter 2021, we believe we are
well-positioned to emerge with an enhanced sales and field support
team in place to improve our coverage and the productivity of our
representatives, as well as an expanded pool of prescribers and an
updated approach for educating clinicians and training patients. We
are focused on expanding our leadership position in the over $5
Billion U.S. lymphedema market through a combination of continued
execution and strategic investment in our business with the goal of
returning to sustained 20%+ revenue growth and improving
profitability for the benefit of our patients, customers and
shareholders.”
Fourth Quarter 2020 Financial
Results
Total revenue in the fourth quarter of 2020
increased $2.2 million, or 4%, to $59.2 million, compared to $57.1
million in the fourth quarter of 2019. The increase in total
revenue was attributable to an increase of $2.4 million, in sales
and rentals of the Entre system, which was partially offset by a
decrease of $0.3 million, in sales and rentals of the Flexitouch
system in the quarter ended December 31, 2020. Fourth quarter
revenue continued to be negatively impacted by COVID-19, primarily
from social distancing requirements and safety protocols imposed
within clinics. These headwinds were partially offset by the
continued expansion of our commercial team, effective virtual
educational events, and an increase in the number of Medicare
patients served.
Gross profit in the fourth quarter of 2020
increased $0.8 million, or 2%, to $41.9 million, compared to $41.1
million in the fourth quarter of 2019. Gross margin was 71% of
revenue, compared to 72% of revenue in the fourth quarter of
2019.
Operating expenses in the fourth quarter of 2020
decreased $0.2 million, or 1%, to $34.9 million, compared to $35.1
million in the fourth quarter of 2019. The decrease in operating
expenses in the fourth quarter of 2020 was driven by a decrease in
sales and marketing expense of $2.6 million, or 12%, to $19.8
million, primarily due to lower patient training costs, lower sales
commissions and reduced travel and entertainment expenses. The
decrease in sales and marketing expense was nearly fully offset by
reimbursement, general and administrative expenses, which increased
$2.2 million, or 19%, to $13.7 million, compared to $11.5 million
in the fourth quarter of 2019. The increase in reimbursement,
general and administrative expenses was driven by increased
litigation defense costs and other professional fees, as well as
personnel-related expenses due to increased headcount in our
reimbursement and corporate functions.
Operating income in the fourth quarter of 2020
increased $1.0 million, or 16%, to $7.0 million, compared to $6.0
million in the fourth quarter of 2019.
Other income in the fourth quarter of 2020
increased $1.0 million to $1.2 million, compared to $0.2 million in
the fourth quarter of 2019. The increase in other income was due to
$1.2 million received under the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act) Provider Relief Fund to provide
relief for lost revenues from the COVID-19 public health
emergency.
Income tax benefit in the fourth quarter of 2020
was $3.9 million, compared to income tax expense of $1.9 million in
the fourth quarter of 2019. The year-over-year change in income tax
benefit/expense was primarily due to changes in our effective tax
rate, which was primarily attributable to a change in taxable
income, including proportionately higher tax benefits for
stock-based compensation as compared to the same period last
year.
Net income in the fourth quarter of 2020 was
$12.1 million, or $0.61 per diluted share, compared to net income
of $4.3 million, or $0.22 per diluted share, in the fourth quarter
of 2019. Weighted average shares used to compute diluted net income
per share were 19.8 million and 19.7 million in the fourth quarters
of 2020 and 2019, respectively.
Adjusted EBITDA was $10.8 million in the fourth
quarter of 2020, compared to Adjusted EBITDA of $10.4 million in
the fourth quarter of 2019.
Full Year 2020 Financial Results:
Total revenue for the twelve months
ended December 31, 2020, decreased $2.4 million, or 1%,
to $187.1 million, compared to $189.5 million for
the twelve months ended December 31, 2019. Total revenue for
the twelve months ended December 31, 2020, increased 1% on an
operational basis, excluding the contribution to revenue in the
twelve months ended December 31, 2019 related to the Company’s
adoption of accounting standard, ASC 842. The decrease in total
revenue on a reported basis for the twelve months ended December
31, 2020, was driven by a decrease of approximately $7.4
million, in sales and rentals of the Flexitouch system, offset in
part by an increase of $5.0 million, in sales and rentals of the
Entre system. Revenue in the first two months of 2020 was ahead of
our expectations. Beginning in March 2020 and continuing through
the fourth quarter, revenue was impacted by the COVID-19 pandemic,
which limited our ability to access our clinician customers and
their patients. Specifically, we saw healthcare facilities and
clinics restricting access to their clinicians, reducing patient
consultations, or closing temporarily due to COVID-19.
Net loss for the twelve months
ended December 31, 2020 was $0.6 million, or $0.03
per diluted share, compared to net income of $11.0 million, or
$0.56 per diluted share, for the twelve months
ended December 31, 2019. Weighted average shares used to
compute diluted net loss/income per share were 19.3 million and
19.6 million for the twelve months ended December 31,
2020 and 2019, respectively.
Adjusted EBITDA was $16.0 million in the twelve
months ended December 31, 2020, compared to adjusted EBITDA of
$25.3 million in the twelve months ended December 31,
2019.
Cash Position
At December 31, 2020, cash, cash equivalents and
marketable securities were $47.9 million, compared to $45.2 million
at December 31, 2019. The Company had no outstanding borrowings on
its $10.0 million revolving credit facility at December 31,
2020.
2021 Financial Outlook
The Company expects full year 2021 total revenue
in the range of $215.3 million to $224.5 million, representing an
increase of 15% to 20% year-over-year, compared to total revenue of
$187.1 million in 2020.
Conference Call
Management will host a conference call at 5:00
p.m. Eastern Time on February 23, 2021, to discuss the results of
the quarter with a question-and-answer session. Those who would
like to participate may dial 877-407-3088 (201-389-0927 for
international callers) and provide access code 13715783. A live
webcast of the call will also be provided on the investor relations
section of the Company's website at
investors.tactilemedical.com.
For those unable to participate, a replay of the call will be
available for two weeks at 877-660-6853 (201-612-7415 for
international callers); access code 13715783. The webcast will be
archived at investors.tactilemedical.com.
About Tactile Systems Technology, Inc. (DBA Tactile
Medical)
Tactile Medical is a leader in developing and marketing
at-home therapy devices that treat chronic swelling conditions such
as lymphedema and chronic venous insufficiency. Tactile Medical’s
Mission is to help people suffering from chronic diseases live
better and care for themselves at home. The Company’s unique
offering includes advanced, clinically proven pneumatic compression
devices, as well as continuity of care services provided by a
national network of product specialists and trainers, reimbursement
experts, patient advocates and clinicians. This combination of
products and services ensures that tens of thousands of patients
annually receive the at-home treatment necessary to better manage
their chronic conditions. Tactile Medical takes pride in
the fact that our solutions help increase clinical efficacy, reduce
overall healthcare costs and improve the quality of life for
patients with chronic conditions.
Legal Notice Regarding Forward-Looking
Statements
This release contains forward-looking
statements. Forward-looking statements are generally identifiable
by the use of words like “may,” “will,” “should,” “could,”
“expect,” “anticipate,” “estimate,” “believe,” “intend,”
“continue,” “confident,” “outlook,” “guidance,” “project,” “goals,”
“look forward,” “poised,” “designed,” “plan,” “return,” “focused,”
“prospects” or “remain” or the negative of these words or other
variations on these words or comparable terminology. The reader is
cautioned not to put undue reliance on these forward-looking
statements, as these statements are subject to numerous factors and
uncertainties outside of the Company’s control that can make such
statements untrue, including, but not limited to, the impacts of
the COVID-19 pandemic on the Company’s business, financial
condition and results of operations; the course of the COVID-19
pandemic and its impact on general economic, business and market
conditions; the Company’s inability to execute on its plans to
respond to the COVID-19 pandemic; the adequacy of the Company’s
liquidity to pursue its business objectives; the Company’s ability
to obtain reimbursement from third party payers for its products;
loss or retirement of key executives, including prior to
identifying a successor; adverse economic conditions or intense
competition; loss of a key supplier; entry of new competitors and
products; adverse federal, state and local government regulation;
technological obsolescence of the Company’s products; technical
problems with the Company’s research and products; the Company’s
ability to expand its business through strategic acquisitions; the
Company’s ability to integrate acquisitions and related businesses;
price increases for supplies and components; the effects of current
and future U.S. and foreign trade policy and tariff actions; or the
inability to carry out research, development and commercialization
plans. In addition, other factors that could cause actual results
to differ materially are discussed in the Company’s filings with
the SEC. Investors and security holders are urged to read these
documents free of charge on the SEC’s website at
http://www.sec.gov. The Company undertakes no obligation to
publicly update or revise its forward-looking statements as a
result of new information, future events or otherwise.
Use of Non-GAAP Financial Measures
This press release includes the non-GAAP
financial measures of Adjusted EBITDA, non-GAAP revenue change and
Adjusted EBITDA margin, which differ from financial measures
calculated in accordance with U.S. generally accepted accounting
principles (“GAAP”).
Adjusted EBITDA in this release represents net
income or loss, plus interest expense, net, or less interest
income, net, less income tax benefit or plus income tax expense,
plus depreciation and amortization, plus stock-based compensation
expense, plus loss on termination of lease, plus impairment charges
and inventory write-offs, less CARES Act funding, plus litigation
defense costs and plus executive transition costs. Adjusted EBITDA
margin in this release represents net margin (net income or loss
divided by total revenue), plus or less the same items as with
Adjusted EBITDA, but on a percentage of revenue basis.
Reconciliations of Adjusted EBITDA to net income (loss), and
Adjusted EBITDA margin to net margin, are included in this press
release.
Non-GAAP revenue change in this release
represents full year 2020 revenue compared to full year 2019
revenue less operating lease revenue that was recognized in 2019 in
connection with the Company’s adoption of ASC 842. A reconciliation
of GAAP revenue change to non-GAAP revenue change is included in
this press release.
These non-GAAP financial measures are presented
because the Company believes they are useful indicators of its
operating performance. Management uses these measures principally
as measures of the Company’s operating performance and for planning
purposes, including the preparation of the Company’s annual
operating plan and financial projections. The Company believes
these measures are useful to investors as supplemental information
and because they are frequently used by analysts, investors and
other interested parties to evaluate companies in its industry. The
Company also believes these non-GAAP financial measures are useful
to its management and investors as a measure of comparative
operating performance from period to period. In addition, Adjusted
EBITDA is used as a performance metric in the Company’s
compensation program.
Adjusted EBITDA, non-GAAP revenue change and
Adjusted EBITDA margin are non-GAAP financial measures and should
not be considered as an alternative to, or superior to, net income
or loss, GAAP revenue change or net margin, respectively, as
measures of financial performance or cash flows from operations as
a measure of liquidity, or any other performance measure derived in
accordance with GAAP, and they should not be construed to imply
that the Company’s future results will be unaffected by unusual or
non-recurring items. In addition, Adjusted EBITDA is not intended
to be a measure of free cash flow for management’s discretionary
use, as it does not reflect certain cash requirements such as tax
payments, debt service requirements, capital expenditures and
certain other cash costs that may recur in the future. Adjusted
EBITDA contains certain other limitations, including the failure to
reflect our cash expenditures, cash requirements for working
capital needs and cash costs to replace assets being depreciated
and amortized. In evaluating non-GAAP financial measures, you
should be aware that in the future the Company may incur expenses
that are the same as or similar to some of the adjustments in this
presentation. The Company’s presentation of non-GAAP financial
measures should not be construed to imply that its future results
will be unaffected by any such adjustments. Management compensates
for these limitations by primarily relying on the Company’s GAAP
results in addition to using non-GAAP financial measures on a
supplemental basis. The Company’s definition of these non-GAAP
financial measures is not necessarily comparable to other similarly
titled captions of other companies due to different methods of
calculation.
|
|
Tactile Systems Technology, Inc. |
Consolidated Balance Sheets |
(Unaudited) |
|
|
|
December 31, |
|
December 31, |
(In thousands, except share and per share data) |
|
|
2020 |
|
2019 |
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
47,855 |
|
$ |
22,770 |
Marketable securities |
|
|
— |
|
|
22,464 |
Accounts receivable |
|
|
43,849 |
|
|
33,444 |
Net investment in leases |
|
|
10,708 |
|
|
8,147 |
Inventories |
|
|
18,563 |
|
|
19,059 |
Prepaid expenses and other current assets |
|
|
2,638 |
|
|
2,451 |
Total current assets |
|
|
123,613 |
|
|
108,335 |
Non-current
assets |
|
|
|
|
|
|
Property and equipment, net |
|
|
6,957 |
|
|
7,408 |
Right of use operating lease assets |
|
|
20,132 |
|
|
15,885 |
Intangible assets, net |
|
|
1,680 |
|
|
5,312 |
Accounts receivable, non-current |
|
|
9,433 |
|
|
4,184 |
Deferred income taxes |
|
|
10,198 |
|
|
8,970 |
Other non-current assets |
|
|
2,074 |
|
|
1,658 |
Total non-current assets |
|
|
50,474 |
|
|
43,417 |
Total assets |
|
$ |
174,087 |
|
$ |
151,752 |
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
4,197 |
|
$ |
3,843 |
Accrued payroll and related taxes |
|
|
11,588 |
|
|
10,098 |
Accrued expenses |
|
|
4,423 |
|
|
4,498 |
Income taxes payable |
|
|
2,658 |
|
|
632 |
Operating lease liabilities |
|
|
2,006 |
|
|
1,454 |
Other current liabilities |
|
|
1,842 |
|
|
903 |
Total current liabilities |
|
|
26,714 |
|
|
21,428 |
Non-current
liabilities |
|
|
|
|
|
|
Accrued warranty reserve, non-current |
|
|
3,235 |
|
|
2,541 |
Income taxes, non-current |
|
|
— |
|
|
54 |
Operating lease liabilities, non-current |
|
|
19,388 |
|
|
15,134 |
Total non-current liabilities |
|
|
22,623 |
|
|
17,729 |
Total liabilities |
|
|
49,337 |
|
|
39,157 |
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
|
Preferred stock, $0.001 par value, 50,000,000 shares authorized;
none issued and outstanding as of December 31, 2020 and December
31, 2019 |
|
|
— |
|
|
— |
Common stock, $0.001 par value, 300,000,000 shares authorized;
19,492,718 shares issued and outstanding as of December 31, 2020;
19,152,715 shares issued and outstanding as of December 31,
2019 |
|
|
19 |
|
|
19 |
Additional paid-in capital |
|
|
104,675 |
|
|
91,874 |
Retained earnings |
|
|
20,056 |
|
|
20,676 |
Accumulated other comprehensive income |
|
|
— |
|
|
26 |
Total stockholders’ equity |
|
|
124,750 |
|
|
112,595 |
Total liabilities and stockholders’ equity |
|
$ |
174,087 |
|
$ |
151,752 |
|
|
|
|
|
|
|
Tactile Systems Technology, Inc. |
Consolidated Statements of Operations |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
(In thousands, except share and per share data) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Sales revenue |
|
$ |
51,784 |
|
|
$ |
50,401 |
|
$ |
161,497 |
|
|
$ |
162,904 |
Rental revenue |
|
|
7,458 |
|
|
|
6,662 |
|
|
25,633 |
|
|
|
26,588 |
Total revenue |
|
|
59,242 |
|
|
|
57,063 |
|
|
187,130 |
|
|
|
189,492 |
Cost of
revenue |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales revenue |
|
|
14,441 |
|
|
|
13,803 |
|
|
45,309 |
|
|
|
47,034 |
Cost of rental revenue |
|
|
2,948 |
|
|
|
2,160 |
|
|
9,011 |
|
|
|
8,222 |
Total cost of revenue |
|
|
17,389 |
|
|
|
15,963 |
|
|
54,320 |
|
|
|
55,256 |
Gross
profit |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit - sales revenue |
|
|
37,343 |
|
|
|
36,598 |
|
|
116,188 |
|
|
|
115,870 |
Gross profit - rental revenue |
|
|
4,510 |
|
|
|
4,502 |
|
|
16,622 |
|
|
|
18,366 |
Gross profit |
|
|
41,853 |
|
|
|
41,100 |
|
|
132,810 |
|
|
|
134,236 |
Operating
expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
19,777 |
|
|
|
22,374 |
|
|
79,634 |
|
|
|
78,920 |
Research and development |
|
|
1,373 |
|
|
|
1,192 |
|
|
5,264 |
|
|
|
5,174 |
Reimbursement, general and administrative |
|
|
13,712 |
|
|
|
11,485 |
|
|
51,540 |
|
|
|
39,644 |
Total operating expenses |
|
|
34,862 |
|
|
|
35,051 |
|
|
136,438 |
|
|
|
123,738 |
Income (loss) from
operations |
|
|
6,991 |
|
|
|
6,049 |
|
|
(3,628 |
) |
|
|
10,498 |
Other income |
|
|
1,187 |
|
|
|
151 |
|
|
1,367 |
|
|
|
631 |
Income (loss) before
income taxes |
|
|
8,178 |
|
|
|
6,200 |
|
|
(2,261 |
) |
|
|
11,129 |
Income tax (benefit)
expense |
|
|
(3,935 |
) |
|
|
1,917 |
|
|
(1,641 |
) |
|
|
158 |
Net income
(loss) |
|
$ |
12,113 |
|
|
$ |
4,283 |
|
$ |
(620 |
) |
|
$ |
10,971 |
Net income (loss) per common
share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.62 |
|
|
$ |
0.22 |
|
$ |
(0.03 |
) |
|
$ |
0.58 |
Diluted |
|
$ |
0.61 |
|
|
$ |
0.22 |
|
$ |
(0.03 |
) |
|
$ |
0.56 |
Weighted-average common shares
used to compute net income (loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
19,458,865 |
|
|
|
19,062,584 |
|
|
19,346,929 |
|
|
|
18,919,007 |
Diluted |
|
|
19,830,970 |
|
|
|
19,700,882 |
|
|
19,346,929 |
|
|
|
19,641,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tactile Systems Technology, Inc. |
Consolidated Statements of Cash Flows |
(Unaudited) |
|
|
|
|
Year Ended December 31, |
(In thousands) |
|
|
2020 |
|
|
2019 |
Cash flows from
operating activities |
|
|
|
|
|
|
Net (loss) income |
|
$ |
(620 |
) |
|
$ |
10,971 |
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
2,794 |
|
|
|
3,538 |
|
Net amortization of premiums and discounts on securities
available-for-sale |
|
|
(91 |
) |
|
|
(307 |
) |
Deferred income taxes |
|
|
(1,233 |
) |
|
|
(146 |
) |
Stock-based compensation expense |
|
|
10,689 |
|
|
|
9,824 |
|
Gain on other investments and maturities of marketable
securities |
|
|
(11 |
) |
|
|
7 |
|
Impairment losses |
|
|
4,025 |
|
|
|
— |
|
Loss on termination of lease |
|
|
— |
|
|
|
1,148 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
(10,405 |
) |
|
|
(9,112 |
) |
Net investment in leases |
|
|
(2,561 |
) |
|
|
(8,147 |
) |
Inventories |
|
|
318 |
|
|
|
(7,870 |
) |
Income taxes |
|
|
1,972 |
|
|
|
2,428 |
|
Prepaid expenses and other assets |
|
|
(528 |
) |
|
|
(1,166 |
) |
Right of use operating lease assets |
|
|
559 |
|
|
|
625 |
|
Medicare accounts receivable, non-current |
|
|
(5,249 |
) |
|
|
(2,300 |
) |
Accounts payable |
|
|
337 |
|
|
|
(1,389 |
) |
Accrued payroll and related taxes |
|
|
1,490 |
|
|
|
2,677 |
|
Accrued expenses and other liabilities |
|
|
1,308 |
|
|
|
1,729 |
|
Net cash provided by operating activities |
|
|
2,794 |
|
|
|
2,510 |
|
Cash flows from
investing activities |
|
|
|
|
|
|
Proceeds from sales of securities available-for-sale |
|
|
— |
|
|
|
1,493 |
|
Proceeds from maturities of securities available-for-sale |
|
|
22,500 |
|
|
|
25,000 |
|
Purchases of securities available-for-sale |
|
|
— |
|
|
|
(22,840 |
) |
Purchases of property and equipment |
|
|
(2,059 |
) |
|
|
(5,446 |
) |
Intangible assets costs |
|
|
(232 |
) |
|
|
(542 |
) |
Other investments |
|
|
(30 |
) |
|
|
— |
|
Net cash provided by (used in) investing
activities |
|
|
20,179 |
|
|
|
(2,335 |
) |
Cash flows from
financing activities |
|
|
|
|
|
|
Taxes paid for net share settlement of restricted stock units |
|
|
(1,854 |
) |
|
|
(3,391 |
) |
Proceeds from exercise of common stock options |
|
|
1,068 |
|
|
|
2,834 |
|
Proceeds from the issuance of common stock from the employee stock
purchase plan |
|
|
2,898 |
|
|
|
3,053 |
|
Net cash provided by financing activities |
|
|
2,112 |
|
|
|
2,496 |
|
Net increase in cash
and cash equivalents |
|
|
25,085 |
|
|
|
2,671 |
|
Cash and cash equivalents –
beginning of period |
|
|
22,770 |
|
|
|
20,099 |
|
Cash and cash equivalents –
end of period |
|
$ |
47,855 |
|
|
$ |
22,770 |
|
|
|
|
|
|
|
|
Supplemental cash flow
disclosure |
|
|
|
|
|
|
Cash paid for interest |
|
$ |
— |
|
|
$ |
— |
|
Cash paid for taxes |
|
$ |
543 |
|
|
$ |
344 |
|
Capital expenditures incurred but not yet paid |
|
$ |
17 |
|
|
$ |
122 |
|
|
|
|
|
|
|
|
|
|
The following table summarizes revenue by product for the three and
twelve months ended December 31, 2020 and 2019: |
|
Tactile Systems Technology, Inc. |
Supplemental Financial Information |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Year Ended |
|
|
|
|
December 31, |
|
Change |
|
December 31, |
|
Change |
(Dollars in thousands) |
|
2020 |
|
2019 |
|
$ |
|
% |
|
2020 |
|
2019 |
|
$ |
|
% |
Flexitouch System |
|
$ |
51,293 |
|
$ |
51,556 |
|
$ |
(263 |
) |
|
(1 |
) |
% |
|
$ |
163,914 |
|
$ |
171,323 |
|
$ |
(7,409 |
) |
|
(4 |
) |
% |
Other products(1) |
|
|
7,949 |
|
|
5,507 |
|
|
2,442 |
|
|
44 |
|
% |
|
|
23,216 |
|
|
18,169 |
|
|
5,047 |
|
|
28 |
|
% |
Total Revenue |
|
$ |
59,242 |
|
$ |
57,063 |
|
$ |
2,179 |
|
|
4 |
|
% |
|
$ |
187,130 |
|
$ |
189,492 |
|
$ |
(2,362 |
) |
|
(1 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The “other products” line primarily includes revenue from our
Entre system. The Actitouch system and Airwear wrap contributed
immaterial amounts of revenue for the years ended December 31, 2020
and 2019. |
The following
table contains a reconciliation of the revenue change rate to the
non-GAAP revenue change rate for the year ended December 31, 2020
compared to the year ended December 31, 2019: |
|
Tactile Systems Technology, Inc. |
Reconciliation of Revenue Change Rate to Non-GAAP Revenue
Change Rate |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
Year Ended |
|
Change Rate |
(Dollars in thousands) |
|
December 31, 2020 |
|
December 31, 2019 |
|
% Change |
Total revenue |
|
$ |
187,130 |
|
$ |
189,492 |
|
|
(1 |
) |
% |
Less: Operating lease revenue(1) |
|
|
N/A |
|
|
(5,018 |
) |
|
2 |
|
% |
Total non-GAAP
revenue |
|
$ |
187,130 |
|
$ |
184,474 |
|
|
1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
(1) The operating lease revenue excluded from revenue for the
year ended December 31, 2019, in the adjustment was related to
rental agreements commencing prior to December 31, 2018, which were
recognized as month-to-month operating leases for the year ended
December 31, 2019, and did not contribute to the Company’s revenue
results in 2020. |
The following
table contains a reconciliation of net income (loss) to Adjusted
EBITDA for the three and twelve months ended December 31, 2020 and
2019, as well as the dollar and percentage change between the
comparable periods: |
|
Tactile Systems Technology, Inc. |
Reconciliation of Net Income (Loss) to Non-GAAP Adjusted
EBITDA |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Increase |
|
Year Ended |
|
Increase |
|
|
December 31, |
|
(Decrease) |
|
December 31, |
|
(Decrease) |
(Dollars in thousands) |
|
2020 |
|
|
2019 |
|
|
$ |
|
% |
|
2020 |
|
|
2019 |
|
|
$ |
|
% |
Net income (loss) |
|
$ |
12,113 |
|
|
$ |
4,283 |
|
|
$ |
7,830 |
|
|
183 |
|
% |
|
$ |
(620 |
) |
|
$ |
10,971 |
|
|
$ |
(11,591 |
) |
|
(106 |
) |
% |
Interest expense (income), net |
|
|
(14 |
) |
|
|
(81 |
) |
|
|
67 |
|
|
(83 |
) |
% |
|
|
(75 |
) |
|
|
(343 |
) |
|
|
268 |
|
|
(78 |
) |
% |
Income tax expense (benefit) |
|
|
(3,935 |
) |
|
|
1,917 |
|
|
|
(5,852 |
) |
|
N.M. |
|
% |
|
|
(1,641 |
) |
|
|
158 |
|
|
|
(1,799 |
) |
|
N.M. |
|
% |
Depreciation and amortization |
|
|
692 |
|
|
|
730 |
|
|
|
(38 |
) |
|
(5 |
) |
% |
|
|
2,794 |
|
|
|
3,538 |
|
|
|
(744 |
) |
|
(21 |
) |
% |
Stock-based compensation |
|
|
2,401 |
|
|
|
2,437 |
|
|
|
(36 |
) |
|
(1 |
) |
% |
|
|
10,689 |
|
|
|
9,824 |
|
|
|
865 |
|
|
9 |
|
% |
Loss on termination of lease |
|
|
— |
|
|
|
1,148 |
|
|
|
(1,148 |
) |
|
(100 |
) |
% |
|
|
— |
|
|
|
1,148 |
|
|
|
(1,148 |
) |
|
(100 |
) |
% |
Impairment charges and inventory write-offs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
% |
|
|
4,025 |
|
|
|
— |
|
|
|
4,025 |
|
|
— |
|
% |
CARES Act Funding |
|
|
(1,176 |
) |
|
|
— |
|
|
|
(1,176 |
) |
|
— |
|
% |
|
|
(1,176 |
) |
|
|
— |
|
|
|
(1,176 |
) |
|
— |
|
% |
Litigation defense costs |
|
|
599 |
|
|
|
— |
|
|
|
599 |
|
|
— |
|
% |
|
|
1,030 |
|
|
|
— |
|
|
|
1,030 |
|
|
— |
|
% |
Executive transition costs |
|
|
105 |
|
|
|
— |
|
|
|
106 |
|
|
— |
|
% |
|
|
981 |
|
|
|
— |
|
|
|
981 |
|
|
— |
|
% |
Adjusted
EBITDA |
|
$ |
10,785 |
|
|
$ |
10,434 |
|
|
$ |
352 |
|
|
3 |
|
% |
|
$ |
16,007 |
|
|
$ |
25,296 |
|
|
$ |
(9,289 |
) |
|
(37 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
table contains a reconciliation of net margin to Adjusted EBITDA
margin for the three and twelve months ended December 31, 2020 and
2019, as well as the basis point change between the comparable
periods: |
Tactile Systems Technology, Inc. |
Reconciliation of Net Margin to Adjusted EBITDA
Margin |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
Year Ended |
|
|
|
|
|
December 31, |
|
Increase |
|
December 31, |
|
Increase |
(As a
percentage of revenue) |
|
2020 |
|
2019 |
|
(Decrease) |
|
2020 |
|
2019 |
|
(Decrease) |
Net margin |
|
20.4 |
|
% |
|
7.5 |
|
% |
|
1,290 |
|
bps |
|
(0.3 |
) |
% |
|
5.8 |
|
% |
|
(610 |
) |
bps |
Interest expense (income), net |
|
0.0 |
|
% |
|
(0.1 |
) |
% |
|
10 |
|
bps |
|
0.0 |
|
% |
|
(0.2 |
) |
% |
|
20 |
|
bps |
Income tax expense (benefit) |
|
(6.6 |
) |
% |
|
3.4 |
|
% |
|
(1,000 |
) |
bps |
|
(0.9 |
) |
% |
|
0.1 |
|
% |
|
(100 |
) |
bps |
Depreciation and amortization |
|
1.2 |
|
% |
|
1.3 |
|
% |
|
(10 |
) |
bps |
|
1.5 |
|
% |
|
1.9 |
|
% |
|
(40 |
) |
bps |
Stock-based compensation |
|
4.1 |
|
% |
|
4.3 |
|
% |
|
(20 |
) |
bps |
|
5.7 |
|
% |
|
5.2 |
|
% |
|
50 |
|
bps |
Loss on termination of lease |
|
0.0 |
|
% |
|
1.9 |
|
% |
|
(190 |
) |
bps |
|
0.0 |
|
% |
|
0.5 |
|
% |
|
(50 |
) |
bps |
Impairment charges and inventory write-offs |
|
0.0 |
|
% |
|
0.0 |
|
% |
|
— |
|
bps |
|
2.2 |
|
% |
|
0.0 |
|
% |
|
220 |
|
bps |
CARES Act Funding |
|
(2.0 |
) |
% |
|
0.0 |
|
% |
|
(200 |
) |
bps |
|
(0.6 |
) |
% |
|
0.0 |
|
% |
|
(60 |
) |
bps |
Litigation defense costs |
|
0.9 |
|
% |
|
0.0 |
|
% |
|
90 |
|
bps |
|
0.6 |
|
% |
|
0.0 |
|
% |
|
60 |
|
bps |
Executive transition costs |
|
0.2 |
|
% |
|
0.0 |
|
% |
|
20 |
|
bps |
|
0.4 |
|
% |
|
0.0 |
|
% |
|
40 |
|
bps |
Adjusted EBITDA
margin |
|
18.2 |
|
% |
|
18.3 |
|
% |
|
(10 |
) |
bps |
|
8.6 |
|
% |
|
13.3 |
|
% |
|
(470 |
) |
bps |
Investor Inquiries:
Mike Piccinino, CFA
Managing Director
Westwicke Partners
443-213-0500
investorrelations@tactilemedical.com
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