Conformis, Inc. Reports Fourth Quarter and Year End 2020 Financial Results
Conformis reported a total revenue of $16.7 million for Q4 2020, down 16% year-over-year, attributed to a decrease in product revenue of $16.5 million. U.S. product revenue also decreased by 16%. Annual revenue reached $68.8 million, a decline of 11%, driven mainly by a 24% drop in product revenue. However, a 1,210% surge in royalty and licensing revenue, totaling $10.2 million, was noted due to a settlement with Zimmer Biomet. The company anticipates first-quarter product revenue between $13.0 million and $14.0 million amid ongoing pressures from the pandemic.
- Royalty and licensing revenue rose 1,210% to $10.2 million due to a settlement with Zimmer Biomet.
- Gross margin increased to 49%, reflecting improved profitability despite lower volume.
- Total revenue decreased by 16% in Q4 2020 compared to the previous year.
- Product revenue fell 24% year-over-year for 2020, indicating ongoing sales challenges.
- Net loss was $6.6 million in Q4 2020, consistent with previous year's loss.
BILLERICA, Mass., March 03, 2021 (GLOBE NEWSWIRE) -- Conformis, Inc. (NASDAQ:CFMS) announced today financial results for the fourth quarter and year ended December 31, 2020.
Fourth Quarter 2020 Summary
- Total revenue of
$16.7 million , a decrease of16% year-over-year on a reported basis and17% on a constant currency basis. - Product revenue of
$16.5 million , a decrease of16% year-over-year on a reported basis and17% on a constant currency basis. Product revenue increased3% over the third quarter of 2020.
- U.S. product revenue of$14.4 million , a decrease of16% year-over-year.
- Rest-of-world product revenue of$2.1 million , a decrease of16% year-over-year on a reported basis and22% on a constant currency basis. - Royalty and licensing revenue of
$0.2 million , an increase of4% year-over-year. - Gross margin of
47% , a decrease of 180 basis points year-over-year. - Total operating expenses remained flat year-over-year.
Year End 2020 Summary
- Total revenue of
$68.8 million , a decrease of11% year-over-year on a reported and constant currency basis. - Product revenue of
$58.5 million , a decrease of24% year-over-year on a reported and constant currency basis.
- U.S. product revenue of$50.7 million , a decrease of24% year-over-year
- Rest-of-world product revenue of$7.8 million , a decrease of18% year-over-year on a reported basis and19% on a constant currency basis. - Royalty and licensing revenue of
$10.2 million , an increase of 1,210% year-over-year, as a result of our$9.6 million settlement and license agreement with Zimmer Biomet in the second quarter of 2020. - Gross margin of
49% , an increase of 160 basis points year-over-year, was driven primarily by the increase in royalty and licensing revenue in 2020. - Total operating expenses decreased
5% year-over-year.
2021 Expected Product Launch Highlights
- Cordera™ Match Hip Launch Rollout
- Stryker Patient-Specific Guides Launch
- New standard knee offering launch
"Though the COVID-19 pandemic continues to create uncertainty in orthopedic procedure levels, Conformis has remained committed to the continuation of our new product development schedule. As such, we expect 2021 to be an exciting year in regards to new product offerings, especially our new total knee system. While this system can be used in the in-patient and out-patient settings, we are particularly focused on the ambulatory care setting,” said Mark Augusti, President and Chief Executive Officer. “Our recently completed
Three Months Ended December 31, | Increase/(decrease) | |||||||||||||||
($, in thousands) | 2020 | 2019 | $ Change | % Change | % Change | |||||||||||
(as reported) | (constant currency) | |||||||||||||||
United States | $ | 14,439 | $ | 17,225 | $ | (2,786 | ) | (16 | ) | % | (16 | ) | % | |||
Rest of world | 2,093 | 2,506 | (413 | ) | (16 | ) | % | (22 | ) | % | ||||||
Product revenue | 16,532 | 19,731 | (3,199 | ) | (16 | ) | % | (17 | ) | % | ||||||
Royalty and licensing revenue | 165 | 158 | 7 | 4 | % | 4 | % | |||||||||
Total revenue | $ | 16,697 | $ | 19,889 | $ | (3,192 | ) | (16 | ) | % | (17 | ) | % | |||
Fourth Quarter 2020 Financial Results
Total revenue for the three-month period ended December 31, 2020 decreased
Product revenue decreased
Total gross profit decreased
Total operating expenses remained flat year-over-year.
Net loss was
Twelve Months Ended December 31, | Increase/(decrease) | |||||||||||||||
($, in thousands) | 2020 | 2019 | $ Change | % Change | % Change | |||||||||||
(as reported) | (constant currency) | |||||||||||||||
United States | $ | 50,736 | $ | 67,151 | $ | (16,415 | ) | (24 | ) | % | (24 | ) | % | |||
Rest of world | 7,804 | 9,498 | (1,694 | ) | (18 | ) | % | (19 | ) | % | ||||||
Product revenue | 58,540 | 76,649 | (18,109 | ) | (24 | ) | % | (24 | ) | % | ||||||
Royalty and licensing revenue | 10,221 | 780 | 9,441 | 1,210 | % | 1,210 | % | |||||||||
Total revenue | $ | 68,761 | $ | 77,429 | $ | (8,668 | ) | (11 | ) | % | (11 | ) | % | |||
Fiscal Year 2020 Financial Results
Total revenue for the year ended December 31, 2020 decreased
Product revenue decreased
Total gross profit decreased
Total operating expenses decreased
Net loss was
As of December 31, 2020, cash and cash equivalents totaled
Outlook
Historically, we see a drop in first quarter revenue compared to the preceding fourth quarter as many health plans reset on January 1. In addition, we have continued to experience pressure on our business from reduced elective procedures into 2021. Accordingly, we expect our first quarter product revenue to be in the range of
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.
Webcast
As previously announced, Conformis will conduct a webcast today at 4:30 PM Eastern Time. Management will discuss financial results and strategic matters. The webcast will be live at https://edge.media-server.com/mmc/p/z2dhee2u.
The archive of the webcast will be available on the Company's website for 30 days.
About Conformis, Inc.
Conformis is a medical technology company that uses its proprietary iFit® Image-to-Implant® technology platform to develop, manufacture, and sell joint replacement implants and instruments that are individually sized and shaped, which we refer to as personalized, individualized, or sometimes as customized, to fit each patient's unique anatomy. Conformis offers a broad line of sterile, personalized knee and hip implants and single-use instruments delivered to hospitals and ambulatory surgical centers. In clinical studies, the Conformis iTotal CR knee replacement system demonstrated superior clinical outcomes, including better function and greater patient satisfaction, compared to traditional, off-the-shelf implants. 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 http://ir.conformis.com/.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this press release about our future expectations, plans and prospects, including statements about the impact of the novel coronavirus (COVID-19) pandemic and the actions we are taking and planning in response, our planned launch of a new program aimed at developing a knee replacement offering targeted at hospital outpatient and ambulatory surgery centers, the anticipated timing of our product launches, whether or when restrictions on elective surgeries will be relaxed and demand for procedures will increase, 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 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.
CONFORMIS, INC. AND SUBSIDIARIES | |||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||
(in thousands, except share and per share data) | |||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||
Revenue | |||||||||||||||||
Product | $ | 16,532 | $ | 19,731 | $ | 58,540 | $ | 76,649 | |||||||||
Royalty and licensing | 165 | 158 | 10,221 | 780 | |||||||||||||
Total revenue | 16,697 | 19,889 | 68,761 | 77,429 | |||||||||||||
Cost of revenue | 8,898 | 10,233 | 35,046 | 40,692 | |||||||||||||
Gross profit | 7,799 | 9,656 | 33,715 | 36,737 | |||||||||||||
Operating expenses | |||||||||||||||||
Sales and marketing | 6,226 | 7,283 | 22,646 | 28,514 | |||||||||||||
Research and development | 3,345 | 3,055 | 11,939 | 12,457 | |||||||||||||
General and administrative | 5,900 | 5,112 | 24,244 | 20,895 | |||||||||||||
Total operating expenses | 15,471 | 15,450 | 58,829 | 61,866 | |||||||||||||
Loss from operations | (7,672 | ) | (5,794 | ) | (25,114 | ) | (25,129 | ) | |||||||||
Other income and expenses | |||||||||||||||||
Interest income | 10 | 74 | 76 | 330 | |||||||||||||
Interest expense | (604 | ) | (579 | ) | (2,373 | ) | (2,942 | ) | |||||||||
Foreign currency exchange transaction income (loss) | 1,669 | 876 | 3,160 | (692 | ) | ||||||||||||
Total other income (expenses) | 1,075 | 371 | 863 | (3,304 | ) | ||||||||||||
Loss before income taxes | (6,597 | ) | (5,423 | ) | (24,251 | ) | (28,433 | ) | |||||||||
Income tax provision | 25 | 10 | 42 | 45 | |||||||||||||
Net loss | $ | (6,622 | ) | $ | (5,433 | ) | $ | (24,293 | ) | $ | (28,478 | ) | |||||
Net loss per share | |||||||||||||||||
Basic and diluted | $ | (0.08 | ) | $ | (0.08 | ) | $ | (0.34 | ) | $ | (0.44 | ) | |||||
Weighted average common shares outstanding | |||||||||||||||||
Basic and diluted | 79,972,586 | 65,520,222 | 71,699,615 | 64,122,455 |
CONFORMIS, INC. AND SUBSIDIARIES | |||||||
Consolidated Balance Sheets | |||||||
(in thousands, except share and per share data) | |||||||
December 31, 2020 | December 31, 2019 | ||||||
Assets | (unaudited) | ||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 28,673 | $ | 26,394 | |||
Accounts receivable, net | 8,515 | 11,066 | |||||
Royalty and licensing receivable | 1,256 | 165 | |||||
Inventories | 12,585 | 12,074 | |||||
Prepaid expenses and other current assets | 2,315 | 2,815 | |||||
Total current assets | 53,344 | 52,514 | |||||
Property and equipment, net | 12,240 | 13,356 | |||||
Operating lease right-of-use assets | 5,215 | 5,853 | |||||
Other Assets | |||||||
Restricted cash | 462 | 462 | |||||
Other long-term assets | 239 | 211 | |||||
Total assets | $ | 71,500 | $ | 72,396 | |||
Liabilities and stockholder's equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 4,918 | $ | 6,920 | |||
Accrued expenses | 7,213 | 7,135 | |||||
Operating lease liabilities | 1,620 | 1,469 | |||||
Advance on research and development | 3,168 | 2,331 | |||||
Contract liability | 14,000 | — | |||||
Total current liabilities | 30,919 | 17,855 | |||||
Other long-term liabilities | — | 1,500 | |||||
Contract liability | — | 12,000 | |||||
Long-term debt, less debt issuance costs | 25,003 | 19,623 | |||||
Operating lease liabilities | 4,206 | 5,071 | |||||
Total liabilities | 60,128 | 56,049 | |||||
Commitments and contingencies | |||||||
Stockholders' equity | |||||||
Preferred stock, | |||||||
Authorized: 5,000,000 shares authorized at December 31, 2020 and December 31, 2019; no shares issued and outstanding as of December 31, 2020 and December 31, 2019 | — | — | |||||
Common stock, | |||||||
Authorized: 200,000,000 shares authorized at December 31, 2020 and December 31, 2019; 95,546,577 and 70,427,400 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively | 1 | 1 | |||||
Additional paid-in capital | 543,809 | 521,356 | |||||
Accumulated deficit | (528,438 | ) | (504,145 | ) | |||
Accumulated other comprehensive loss | (4,000 | ) | (865 | ) | |||
Total stockholders' equity | 11,372 | 16,347 | |||||
Total liabilities and stockholders' equity | $ | 71,500 | $ | 72,396 | |||
FAQ
What were Conformis' Q4 2020 financial results?
How did royalty revenue change for Conformis in 2020?
What is Conformis' outlook for Q1 2021?
What was the net loss for Conformis in 2020?