INMD InMode Ltd

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13In a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2024

INMODE LTD.

(Exact name of registrant as specified in its charter)

Tavor Building, Sha’ar Yokneam

P.O. Box 533

Yokneam 2069206 Israel

 

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Results of Operations and Financial Condition

Share Repurchase Plan

On May 1, 2024, the Board authorized the repurchase of the Company’s outstanding ordinary shares, par value NIS 0.01 per ordinary share (“Ordinary Shares”), in accordance with the terms of Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended, or pursuant to an accelerated share repurchase program. The Company’s Chief Executive Officer and Chief Financial Officer were authorized by the Board to cause the Company to repurchase, from time to time, on the open market or otherwise, Ordinary Shares in quantities, at such prices, in such manner and on such terms and conditions as determined to be in the best interests of the Company; provided; however, that the Ordinary Shares repurchased shall not exceed an aggregate volume of 8.37 million, to be repurchased by September 30, 2024 (the “Repurchase Plan”).

As of July 31, 2024, the Company completed the repurchase of its Ordinary Shares pursuant to the Repurchase Plan. The Company repurchased 8.37 million shares at an average price paid per share of $17.974.

Legal Proceedings

From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. On February 14, 2024, a purported shareholder of the Company filed a putative shareholder class action (the “Securities Class Action”) in the United States District Court for the Central District of California, captioned Cement Masons and Plasterers Local No. 502 Pension Fund v. InMode Ltd. et al., Case No. 2:24-cv-01219, against the Company and certain of its officers and directors. The lawsuit is purportedly brought on behalf of purchasers of the Company’s common stock between June 4, 2021 and October 12, 2023, inclusive. The complaint alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly false or misleading statements related to the Company’s business, operations, sales practices and financial outlook. The lawsuit seeks unspecified damages and other relief. On April 16, 2024, multiple shareholders moved to be appointed lead plaintiff. The Court has not yet ruled on those motions. The Securities Class Action is in the preliminary stages, and the Company has not yet responded to the complaint. As of the date of this filing, the Company is unable to estimate a range of loss, if any, that could result were there to be an adverse final decision in the Securities Class Action, and an estimated liability has not been recorded in the Company’s financial statements. The defendants intend to deny the allegations of wrongdoing and vigorously defend against the claims in the Securities Class Action.

Following the filing of the Securities Class Action, in February 2024, another purported shareholder of the Company filed a discovery claim to the District Court of Nazareth, Israel (the “Discovery Claim”). The Discovery Claim seeks for the court to instruct the Company to provide the plaintiff with certain documents and information in its possession, in accordance with Section 198(a) to the Companies Law, as an initial step towards a potential derivative claim to be filed by the plaintiff, and is based on the allegations made against the Company and certain of its Executive Officers as part of the Securities Class Action. On April 30, 2024, following a joint motion filed by plaintiff and the Company, the court ruled to stay the proceedings in the Discovery Claim until final ruling in the Securities Class Action.

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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InMode Reports Second Quarter 2024 Financial Results; Quarterly Revenue of $86.4M

Represents 36.5% Year-Over-Year Decrease; Pro Forma Revenue (including new platform pre-

orders not yet delivered) of $102.6M

 

Second Quarter 2024 Highlights:

*Please refer to “Use of non-GAAP Financial Measures” below for important information about non-GAAP financial measures. A reconciliation between U.S. GAAP and non-GAAP Statement of Income is provided following the financial statements that are included in this release. Non-GAAP results exclude share-based compensation adjustments.

 

 

Management Comments

 

"The second quarter was challenging for InMode and for the aesthetics industry in general,” said Moshe Mizrahy, Chief Executive Officer. “The quarter was impacted mainly by macroeconomic factors and longer production time of new and complex platforms. However, we are encouraged by the level of interest and orders of our new platforms, Ignite and Optimus Max, and we believe that these advanced platforms will be growth catalysts.

“In addition, as the leading company in the industry, we continue to invest in research and development, and our innovation pipeline is strong. As we offer unique platforms and technologies that require adjustments to the production lines, I would like to recognize the commitment and dedication of our employees who work tirelessly to expedite the production and fulfill orders during these times,” Mizrahy concluded.

Second Quarter 2024 Financial Results

 

Total GAAP revenues for the second quarter of 2024 reached $86.4 million, a decrease of 36.5% compared to $136.1 million in second quarter of 2023. Pro-forma revenue reached $102.6 million.

“During the second quarter, we began delivering the new platforms and we are on track to complete all deliveries within the next several months,” said Yair Malca, Chief Financial Officer. “Additionally, we are pleased to report that by the end of July 2024 we have successfully completed our third share repurchase program, acquiring 8.37 million shares for the amount of $150 million.”

GAAP gross margin for the second quarter of 2024 was 80% compared to a gross margin of 84% for the Second quarter of 2023. *Non-GAAP gross margin for the second quarter of 2024 was 81% compared to a gross margin of 84% for the second quarter of 2023.

GAAP operating margin for the second quarter of 2024 was 21%, compared to an operating margin of 42% in the Second quarter of 2023. *Non-GAAP operating margin for the second quarter of 2024 was 27% compared to 47% for the Second quarter of 2023. **Pro-forma non-GAAP operating margin for the second quarter of 2024 was 34%. This decrease was primarily attributable to the decrease in systems sales in North America.

 

InMode reported GAAP net income of $23.8 million, or $0.28 per diluted share, in the second quarter of 2024, compared to $55.7 million, or $0.65 per diluted share, in the second quarter of 2023. On a *non-GAAP basis, InMode reported net income of $29.0 million, or $0.34 per diluted share, in the second quarter of 2024, compared to $62.2 million, or $0.72 per diluted share, in the second quarter of 2023. **Pro-forma non-GAAP net income of $39.8 million, or $0.46 per diluted share, in the second quarter of 2024.

 

2024 Financial Outlook

 

Management provided an outlook for the full year of 2024 ending December 31, 2024. Based on our current estimates, management expects:

●	Full Year 2024 revenue to be $430 to $440 million compared to prior guidance of $485 million to $495 million

 

 

 

This outlook is not a guarantee of future performance, and stockholders should not rely on such forward-looking statements. See “Forward-Looking Statements” for additional information.

 

*Please refer to “Use of non-GAAP Financial Measures” below for important information about non-GAAP financial measures. A reconciliation between U.S. GAAP and non-GAAP Statement of Income is provided following the financial statements that are included in this release. Non-GAAP results exclude share-based compensation adjustments.

 

 

Based on our 2024 Financial Outlook, it is not expected that there should be any difference between our Pro-forma non-GAAP results and our non-GAAP results for the full year 2024.

 

The Current Situation in Israel

 

Regarding the current situation in Israel, management would like to assure investors that the Company is prioritizing the safety and well-being of its employees, and all its team are safe. However, an inability to promptly receive needed supplies and materials due to the ongoing and unpredictable nature of the conflict in Israel and the surrounding region may adversely impact our ability to commercialize and manufacture our product candidates and products in a timely manner. This could cause several delays and/or issues for our operations, which in turn would have a material adverse impact on our ability to commercialize our product candidates and our financial condition.

Use of Non-GAAP Financial Measures

 

Mr. Moshe Mizrahy, Chief Executive Officer, Dr. Michael Kreindel, Co-Founder and Chief Technology Officer, Mr. Yair Malca, Chief Financial Officer, Mr. Shakil Lakhani, President of North America, will host a conference call today, August 1, 2024, at 8:30 a.m. Eastern Time to discuss the second 2024 financial results.

 

The Company encourages participants to pre-register for the conference call using the following link:  

Callers will receive a unique dial-in number upon registration, which enables immediate access to the call. Participants may pre-register at any time, including up to and after the call start time.

For callers who opt out of pre-registration, please dial one of the following teleconferencing numbers. Please begin by placing your call 10 minutes before the conference call commences. If you are unable to connect using the toll-free number, please try the international dial-in number.

Webcast URL: https://event.choruscall.com/mediaframe/webcast.html?webcastid=GpRhmBhV

At:

8:30 a.m. Eastern Time

5:30 a.m. Pacific Time

The conference call will also be webcast live from a link on InMode's website at https://inmodemd.com/investors/events-presentations/. A replay of the conference call will be available from August 1, 2024, at 12 p.m. Eastern Time to August 15, 2024, at 11:59 p.m. Eastern Time. To access the replay, please dial one of the following numbers: 

To access the replay using an international dial-in number, please select the link below:

A replay of the conference call will also be available for 90 days on InMode's website at https://inmodemd.com/investors/.

About InMode

InMode is a leading global provider of innovative medical technologies. InMode develops, manufactures, and markets devices harnessing novel radio frequency (“RF”) technology. InMode strives to enable new emerging surgical procedures as well as improve existing treatments. InMode has leveraged its medically accepted minimally invasive RF technologies to offer a comprehensive line of products across several categories for plastic surgery, gynecology, dermatology, otolaryngology, and ophthalmology. For more information about InMode, please visit www.inmodemd.com.

Forward-Looking Statements

The information in this press release includes forward-looking statements within the meaning of the federal securities laws. These statements generally relate to future events or InMode's future financial or operating performance, including the 2024 revenue projection described above. Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. In some cases, you can identify these statements because they contain words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "would" and similar expressions that concern our expectations, strategic plans or intentions. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Consequently, actual results could differ materially from those indicated in these forward-looking statements. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements included in InMode's Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 13, 2024, and our future public filings. InMode undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which pertain only as of the date of this press release.

 

INMODE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(U.S. dollars in thousands, except for per share data)

(Unaudited)

INMODE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except for per share data)

(Unaudited)

INMODE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands, except for per share data)

(Unaudited)

Revision of prior period financial information

The Company revised certain items within the investing activities with no impact on the net cash used in investing activities. The items impacted were “Investment in short-term deposits” and “Proceeds from short-term deposits” which were decreased by $75,000 and $78,000 for the three months and six months ended June 30,2023 respectively and “Purchase of marketable securities” and “Proceeds from maturity of marketable securities” which were decreased by $0, and $40,423 for the three months and six months ended June 30, 2023.

These changes have no impact on our previously reported consolidated total cash flows from operating activities, financing activities and investing activities in the periods stated above as well as net income and net change in cash and cash equivalents.

The Company evaluated the materiality of the adjustments, individually and in the aggregate, considering both qualitative and quantitative factors, and concluded that it was immaterial to the Company’s prior periods' consolidated financial information. Since the revision was not material to any prior interim period or annual consolidated financial statements, no amendments to previously filed interim or annual periodic financial information was required. Consequently, the Company has revised the historical consolidated financial information presented herein for the impact of the above.

INMODE LTD.

CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS

(U.S. dollars in thousands, except for per share data)

(Unaudited)

INMODE LTD.

RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF

 INCOME TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(U.S. dollars in thousands, except for per share data)

(Unaudited)

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