Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a leading insulin
delivery and diabetes technology company, today reported its
financial results for the quarter ended September 30, 2020 and
updated its sales guidance for the year ending December 31,
2020.
Third Quarter 2020 Highlights
In comparing the third quarter of 2020 to the same period of
2019:
- Worldwide pump shipments increased 23 percent to 22,021 pumps
from 17,839 pumps
- Sales increased 31 percent to $123.6 million from $94.7
million
- Operating margin improved to negative 1 percent from negative 6
percent
“Our t:slim X2 with Control-IQ technology drove record sales in
the third quarter, and we are excited to have commenced its launch
outside the United States,” said John Sheridan, president and chief
executive officer. “The third quarter was a remarkable
demonstration of our employees’ commitment to progressing our
business commercially, operationally and strategically, while
focusing on customer care and preparing for future growth.”
Third Quarter 2020 Financial Results
Domestic pump shipments increased 33 percent to 18,380 pumps in
the third quarter of 2020 from 13,814 pumps in the same period of
2019. Domestic sales were $107.5 million, or an increase of 36
percent compared to $78.8 million in the third quarter of 2019.
International pump shipments decreased 10 percent to 3,641 pumps in
the third quarter of 2020 from 4,025 pumps in the same period of
2019. International sales were $16.1 million, or an increase of 2
percent compared to $15.8 million in the third quarter of 2019.
Gross profit for the third quarter of 2020 increased 29 percent
to $65.3 million, compared to $50.7 million for the same period of
2019. Gross margin was 53 percent in the third quarter of 2020 and
54 percent in the same period of 2019. These included a non-cash
stock-based compensation charge of $2.1 million in the third
quarter of 2020 compared to $1.8 million for the same period of
2019. Royalty expense was $1.7 million in the third quarter of
2020, compared to no royalty expense in the third quarter of
2019.
For the third quarter of 2020, operating expenses totaled $66.3
million, compared to $56.7 million for the same period of 2019.
Operating expenses included a non-cash charge for stock-based
compensation of $10.7 million, compared to stock-based compensation
of $15.5 million for the same period of 2019. Operating loss
totaled $1.0 million, compared to $6.0 million for the same period
of 2019. Operating margin for the third quarter of 2020 was
negative 1 percent compared to negative 6 percent for the same
period of 2019. For the third quarter of 2020, adjusted EBITDA(1)
was $14.8 million or 12 percent of sales, compared to $12.7
million, or 13 percent of sales, for the same period of 2019.
Net loss for the third quarter of 2020 was $9.4 million, which
included a $3.6 million non-cash charge for the change in fair
value of certain outstanding warrants and $4.9 million of interest
expense related to the Company’s convertible debt offering, of
which $3.8 million is non-cash. This is compared to a net loss of
$2.9 million for the third quarter of 2019, which included a $2.3
million non-cash gain 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 September 30, 2020, the Company had $464.5 million in
cash, cash equivalents and short-term investments. This represents
a $38.2 million increase in the third quarter of 2020 and a $288.1
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 second quarter.
2020 Guidance
For the year ending December 31, 2020, the Company is updating
its sales guidance estimated to be in the range of $465 million to
$475 million, which includes international sales of approximately
$70 million to $75 million. This represents an annual sales growth
of 28 percent to 31 percent compared to 2019. The Company’s prior
sales guidance for 2020 was estimated to be in the range of $450
million to $465 million.
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 4:30 p.m. Eastern Time (1:30 p.m. 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 “8072078.”
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
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)
September 30,
December 31,
2020
2019
(Unaudited)
Assets
Current assets:
Cash and cash equivalents and short-term
investments
$
464,522
$
176,458
Accounts receivable, net
52,104
46,585
Inventories
70,644
49,073
Other current assets
5,023
4,025
Total current assets
592,293
276,141
Property and equipment, net
49,320
32,923
Operating lease right-of-use assets
21,325
15,561
Other long-term assets
10,050
1,485
Total assets
$
672,988
$
326,110
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable, accrued expenses and
employee-related liabilities
$
57,374
$
54,079
Deferred revenue
5,210
3,869
Common stock warrants
17,404
23,509
Operating lease liabilities
9,365
6,320
Other current liabilities
16,153
11,619
Total current liabilities
105,506
99,396
Convertible senior notes, net -
long-term
199,120
—
Operating lease liabilities -
long-term
17,893
14,063
Other long-term liabilities
23,925
17,672
Total liabilities
346,444
131,131
Total stockholders’ equity
326,544
194,979
Total liabilities and stockholders’
equity
$
672,988
$
326,110
TANDEM DIABETES CARE,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Sales
$
123,603
$
94,657
$
330,765
$
253,907
Cost of sales
58,290
43,974
160,801
119,967
Gross profit
65,313
50,683
169,964
133,940
Operating expenses:
Selling, general and administrative
50,228
44,649
150,385
120,173
Research and development
16,094
12,038
46,198
32,632
Total operating expenses
66,322
56,687
196,583
152,805
Operating loss
(1,009
)
(6,004
)
(26,619
)
(18,865
)
Total other income (expense), net
(8,360
)
3,175
(26,701
)
(8,468
)
Loss before income taxes
(9,369
)
(2,829
)
(53,320
)
(27,333
)
Income tax expense (benefit)
39
72
(1,938
)
72
Net loss
$
(9,408
)
$
(2,901
)
$
(51,382
)
$
(27,405
)
Net loss per share, basic
$
(0.15
)
$
(0.05
)
$
(0.85
)
$
(0.47
)
Net loss per share, diluted
$
(0.15
)
$
(0.09
)
$
(0.85
)
$
(0.47
)
Weighted average shares used to compute
basic net loss per share
61,529
58,801
60,568
58,268
Weighted average shares used to compute
diluted net loss per share
61,529
59,196
60,568
58,268
Reconciliation of GAAP versus Non-GAAP Financial
Results
(in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
GAAP net loss
$
(9,408
)
$
(2,901
)
$
(51,382
)
$
(27,405
)
Income tax expense (benefit)
39
72
(1,938
)
72
Interest income and other, net
(143
)
(854
)
(1,235
)
(2,381
)
Interest expense
4,855
—
8,030
—
Depreciation and amortization
2,989
1,484
7,024
4,430
EBITDA
(1,668
)
(2,199
)
(39,501
)
(25,284
)
Change in fair value of common stock
warrants
3,648
(2,321
)
19,906
10,849
Stock-based compensation expense
12,837
17,231
45,123
39,386
Adjusted EBITDA
$
14,817
$
12,711
$
25,528
$
24,951
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201105005847/en/
Media Contact: Steve Sabicer 714-907-6264
ssabicer@thesabicergroup.com
Investor Contact: Susan Morrison 858-366-6900 x7005
IR@tandemdiabetes.com
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