Tandem Diabetes Care Announces First Quarter 2023 Financial Results and Reaffirms Full Year 2023 Financial Guidance
First Quarter Highlights
- Worldwide installed base increased 22 percent to approximately 430,000 in-warranty customers compared to the first quarter 2022.
-
Publication in the
New England Journal of Medicine of study demonstrating increased time in range in young children, ages 2-5, with type 1 diabetes using the t:slim X2 Insulin Pump with Control-IQ technology. -
Presented positive Control-IQ technology data that showed immediate and sustained improvements in glycemic control, quality of life outcomes, and user-reported reduced burden of diabetes management at the 16th
International Conference on Advanced Technologies and Treatments for Diabetes . -
Substantially completed onboarding our European distributors to a distribution center in
the Netherlands . -
Completed acquisition of
AMF Medical SA , developer of the ergonomic, rechargeable Sigi™ Patch Pump that features use of pre-filled insulin cartridges. -
$519.6 million in cash, cash equivalents & short-term investments as ofMarch 31, 2023 .
“We are confident in our ability to achieve our key goals for this year, both operationally and commercially,” said
First Quarter 2023 Financial Results Compared to 2022
In
|
Three Months Ended |
|||||||||||
|
|
|||||||||||
$ in millions |
2023 |
|
2023 |
|
|
|
2022 |
|
||||
|
GAAP |
|
Non-GAAP |
|
|
GAAP |
||||||
Pump Shipments |
|
|
|
|
|
|
||||||
|
|
17,003 |
|
|
N/A |
|
|
|
|
18,658 |
||
Outside |
|
6,052 |
|
|
|
N/A |
|
|
|
|
9,437 |
|
Total Worldwide |
|
23,055 |
|
|
|
N/A |
|
|
|
|
28,095 |
|
|
|
|
|
|
|
|
||||||
Sales |
|
|
|
|
|
|
||||||
|
$ |
131.2 |
|
|
$ |
133.3 |
|
|
$ |
131.3 |
|
|
Outside |
|
38.1 |
|
|
|
38.1 |
|
|
|
|
44.6 |
|
Total Worldwide |
$ |
169.3 |
|
|
$ |
171.4 |
|
|
|
$ |
175.9 |
|
-
Gross profit: GAAP gross profit was
$82.9 million , compared to$91.1 million . GAAP gross margin was 49 percent, compared to 52 percent.
Non-GAAP gross profit(1) was$84.9 million . Non-GAAP gross margin(1) was 50 percent.
-
Operating income (loss): GAAP operating loss totaled
$127.8 million , or negative 75 percent of sales, compared to operating loss of$15.3 million , or negative 9 percent of sales.
Non-GAAP operating loss(1) totaled$44.4 million , or negative 26 percent of sales.
Adjusted EBITDA(1) was negative$20.2 million , or negative 12 percent of sales, compared to$6.4 million , or 4 percent of sales.
-
Net income (loss): GAAP net loss(1) was
$123.9 million , compared to net loss of$14.7 million .
Non-GAAP net loss(1) was$40.4 million .
See tables for additional financial information.
2023 Financial Guidance
For the year ending
-
Non-GAAP sales(1) are estimated to be in the range of
$885 million to$900 million , which represents an annual sales growth of 10 percent to 12 percent compared to 2022.-
Sales inside
the United States of approximately$650 million to$660 million . -
Sales outside
the United States of approximately$235 million to$240 million .
-
Sales inside
- Non-GAAP gross margin(1) is estimated to be approximately 52 percent.
-
Adjusted EBITDA margin(1) is estimated to be approximately 5 percent to 6 percent of sales.
- Includes approximately 3 percent from the impact of operating costs associated with the acquisitions of Capillary Biomedical and AMF Medical.
-
Non-cash charges included in cost of goods sold and operating expenses are estimated to be approximately
$115 million . This includes:-
Approximately
$95 million non-cash, stock-based compensation expense. -
Approximately
$20 million depreciation and amortization expense.
-
Approximately
(1) A reconciliation of non-GAAP financial measures to their closest GAAP equivalent and additional information can be found in Table E and under the heading “Reconciliation of GAAP versus Non-GAAP Financial Results.”
Non-GAAP Financial Measures
Certain non-GAAP financial measures are presented in this press release to provide information that may assist investors in understanding the Company’s financial results and assessing its prospects for future performance. The Company believes these non-GAAP financial measures are important operating performance indicators because they exclude items that are unrelated to, and may not be indicative of, the Company’s core operating results. These non-GAAP financial measures, as calculated, 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 the Company utilizes such non-GAAP financial measures in the future, they will be calculated 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 in Table E “Reconciliation of GAAP versus Non-GAAP Financial Results” attached to this press release.
In particular, the accounting treatment for
- Offering the program does not impact the economics associated with how or when the initial pump sale is reimbursed.
-
Customer eligibility is automatic and no election is necessary to participate in
Tandem Choice at the time of a t:slim X2 purchase. An affirmative election is only required when the new hardware platform is commercially available, at which time any customer fees will be received and recognized as a sale. -
The expiration date of
Tandem Choice isDecember 31, 2024 .
Consistent with
Conference Call
The Company will hold a conference call and simultaneous webcast today at
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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 and the ability to achieve other operational and commercial goals for this year, including the launch of multiple new products. 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 of new products when anticipated; risks associated with the regulatory approval process for new products; 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 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
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
Table A |
|||||||
(in thousands) |
|||||||
|
(Unaudited) |
|
|
||||
|
|
|
|
||||
|
|
2023 |
|
|
|
2022 |
|
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash, cash equivalents and short-term investments |
$ |
519,588 |
|
$ |
616,901 |
||
Accounts receivable, net |
|
91,393 |
|
|
|
114,717 |
|
Inventories |
|
131,557 |
|
|
|
111,117 |
|
Other current assets |
|
15,381 |
|
|
|
7,241 |
|
Total current assets |
|
757,919 |
|
|
|
849,976 |
|
|
|
|
|
||||
Property and equipment, net |
|
74,578 |
|
|
|
68,552 |
|
Operating lease right-of-use assets |
|
104,743 |
|
|
|
110,626 |
|
Other long-term assets |
|
16,905 |
|
|
|
23,631 |
|
Total assets |
$ |
954,145 |
|
|
$ |
1,052,785 |
|
|
|
|
|
||||
Liabilities and Stockholders’ Equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable, accrued expenses and employee-related liabilities |
$ |
104,405 |
|
|
$ |
104,007 |
|
Operating lease liabilities |
|
15,849 |
|
|
|
13,121 |
|
Deferred revenue |
|
20,764 |
|
|
|
18,837 |
|
Other current liabilities |
|
30,139 |
|
|
|
29,325 |
|
Total current liabilities |
|
171,157 |
|
|
|
165,290 |
|
|
|
|
|
||||
Convertible senior notes, net - long-term |
|
283,679 |
|
|
|
283,232 |
|
Operating lease liabilities - long-term |
|
120,867 |
|
|
|
123,524 |
|
Deferred revenue - long-term |
|
15,886 |
|
|
|
16,874 |
|
Other long-term liabilities |
|
23,803 |
|
|
|
23,918 |
|
Total liabilities |
|
615,392 |
|
|
|
612,838 |
|
|
|
|
|
||||
Total stockholders’ equity |
|
338,753 |
|
|
|
439,947 |
|
Total liabilities and stockholders’ equity |
$ |
954,145 |
|
|
$ |
1,052,785 |
|
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
Table B |
|||||||
(in thousands, except per share data) |
|||||||
|
|||||||
|
(Unaudited)
Three Months Ended |
||||||
|
|
2023 |
|
|
|
2022 |
|
Sales |
$ |
169,383 |
|
|
$ |
175,907 |
|
Cost of sales |
|
86,476 |
|
|
|
84,814 |
|
Gross profit |
|
82,907 |
|
|
|
91,093 |
|
|
|
|
|
||||
Operating expenses: |
|
|
|
||||
Selling, general and administrative |
|
89,814 |
|
|
|
73,271 |
|
Research and development |
|
42,160 |
|
|
|
33,160 |
|
Acquired in-process research and development expenses |
|
78,750 |
|
|
|
— |
|
Total operating expenses |
|
210,724 |
|
|
|
106,431 |
|
Operating loss |
|
(127,817 |
) |
|
|
(15,338 |
) |
Total other income (expense), net |
|
4,231 |
|
|
|
(1,101 |
) |
Loss before income taxes |
|
(123,586 |
) |
|
|
(16,439 |
) |
Income tax expense (benefit) |
|
287 |
|
|
|
(1,724 |
) |
Net loss |
$ |
(123,873 |
) |
|
$ |
(14,715 |
) |
|
|
|
|
||||
Net loss per share - basic and diluted |
$ |
(1.92 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
||||
Weighted average shares used to compute basic and diluted net loss per share |
|
64,549 |
|
63,880 |
|
||
|
||||||||||
SALES BY GEOGRAPHY |
||||||||||
Table C(1) |
||||||||||
|
|
|
|
|
|
|||||
|
(Unaudited) |
|
|
|||||||
($'s in thousands) |
Three Months Ended |
|
|
|||||||
|
|
2023 |
|
|
|
2022 |
|
|
% Change |
|
|
|
|
|
|
|
|||||
Pump |
$ |
66,456 |
|
|
$ |
73,497 |
|
(10 |
)% |
|
Supplies and other |
|
66,809 |
|
|
|
57,786 |
|
|
16 |
% |
Deferral for |
|
(2,023 |
) |
|
|
— |
|
|
— |
% |
Total GAAP Sales in |
$ |
131,242 |
|
|
$ |
131,283 |
|
|
— |
% |
Adjustment for |
|
2,023 |
|
|
|
— |
|
|
— |
% |
Total Non-GAAP Sales in |
$ |
133,265 |
|
|
$ |
131,283 |
|
|
2 |
% |
|
|
|
|
|
|
|||||
Outside |
|
|
|
|
|
|||||
Pump |
$ |
18,246 |
|
|
$ |
22,332 |
|
|
(18 |
)% |
Supplies and other |
|
19,895 |
|
|
|
22,292 |
|
|
(11 |
)% |
Total Sales Outside the United States |
$ |
38,141 |
|
|
$ |
44,624 |
|
|
(15 |
)% |
|
|
|
|
|
|
|||||
Total GAAP Worldwide Sales |
$ |
169,383 |
|
|
$ |
175,907 |
|
|
(4 |
)% |
Adjustment for |
|
2,023 |
|
|
|
— |
|
|
— |
% |
Total Non-GAAP Worldwide Sales |
$ |
171,406 |
|
|
$ |
175,907 |
|
|
(3 |
)% |
(1) A reconciliation of non-GAAP financial measures to their closest GAAP equivalent and additional information can be found in Table E and under the heading “Reconciliation of GAAP versus Non-GAAP Financial Results.”
|
||||||||
PUMP SHIPMENTS |
||||||||
Table D |
||||||||
|
|
|
|
|
|
|||
|
Three Months Ended |
|
|
|||||
|
2023 |
|
2022 |
|
% Change |
|||
Pumps Shipped: |
|
|
|
|
|
|||
|
17,003 |
|
18,658 |
|
(9 |
)% |
||
Outside |
6,052 |
|
|
9,437 |
|
|
(36 |
)% |
Total Pumps Shipped |
23,055 |
|
|
28,095 |
|
|
(18 |
)% |
|
|||||||
Reconciliation of GAAP versus Non-GAAP Financial Results (Unaudited) |
|||||||
Table E |
|||||||
|
|
|
|
||||
($'s in thousands) |
Three Months Ended |
||||||
|
|
2023 |
|
|
|
2022 |
|
GAAP sales |
$ |
169,383 |
|
|
$ |
175,907 |
|
Adjustment for |
|
2,023 |
|
|
|
— |
|
Non-GAAP sales |
$ |
171,406 |
|
|
$ |
175,907 |
|
|
|
|
|
||||
GAAP gross profit |
$ |
82,907 |
|
|
$ |
91,093 |
|
Adjustment for |
|
2,023 |
|
|
|
— |
|
Non-GAAP gross profit |
$ |
84,930 |
|
|
$ |
91,093 |
|
Non-GAAP gross margin(3) |
|
50 |
% |
|
|
52 |
% |
|
|
|
|
||||
GAAP operating loss |
$ |
(127,817 |
) |
|
$ |
(15,338 |
) |
Acquired in-process research and development(2) |
|
78,750 |
|
|
|
— |
|
Severance costs - cash and noncash |
|
2,680 |
|
|
|
— |
|
Adjustment for |
|
2,023 |
|
|
|
— |
|
Non-GAAP operating loss |
$ |
(44,364 |
) |
|
$ |
(15,338 |
) |
Non-GAAP operating margin(3) |
|
(26 |
) % |
|
|
(9 |
) % |
|
|
|
|
||||
GAAP net loss |
$ |
(123,873 |
) |
|
$ |
(14,715 |
) |
Income tax expense (benefit) |
|
287 |
|
|
|
(1,724 |
) |
Interest income and other, net |
|
(5,865 |
) |
|
|
(381 |
) |
Interest expense |
|
1,634 |
|
|
|
1,516 |
|
Depreciation and amortization |
|
3,396 |
|
|
|
3,628 |
|
EBITDA |
$ |
(124,421 |
) |
|
$ |
(11,676 |
) |
Change in fair value of common stock warrants |
|
— |
|
|
|
(34 |
) |
Stock-based compensation expense |
|
20,805 |
|
|
|
18,110 |
|
Acquired in-process research and development(2) |
|
78,750 |
|
|
|
— |
|
Severance costs - cash and noncash |
|
2,680 |
|
|
|
— |
|
Adjustment for |
|
2,023 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
(20,163 |
) |
|
$ |
6,400 |
|
Adjusted EBITDA margin(3) |
|
(12 |
) % |
|
|
4 |
% |
|
|
|
|
||||
GAAP net loss |
$ |
(123,873 |
) |
|
$ |
(14,715 |
) |
Acquired in-process research and development(2) |
|
78,750 |
|
|
|
— |
|
Severance costs - cash and noncash |
|
2,680 |
|
|
|
— |
|
Adjustment for |
|
2,023 |
|
|
|
— |
|
Non-GAAP net loss |
$ |
(40,420 |
) |
|
$ |
(14,715 |
) |
(1) The accounting treatment for
(2) The Company recorded a
(3) Non-GAAP margins including non-GAAP gross margin, non-GAAP operating margin, and adjusted EBITDA margin are calculated using non-GAAP sales.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230503005443/en/
Media Contact:
858-255-6388
media@tandemdiabetes.com
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858-366-6900
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