Conformis Reports Third Quarter 2020 Financial Results
Conformis, Inc. (NASDAQ:CFMS) reported third quarter 2020 results with total revenue of $16.1 million, down 7% year-over-year. Product revenue also declined 7% to $16.0 million, with U.S. product revenue at $14.1 million. Despite a drop in revenue, gross margin improved to 48%, a 360 basis point increase from the prior year. Total operating expenses rose 2% to $14.8 million, leading to a net loss of $6.2 million or $0.09 per share, an improvement from last year’s loss of $8.7 million. Cash and equivalents stood at $32.9 million as of September 30, 2020.
- Gross margin increased to 48%, up 360 basis points year-over-year.
- Sales of Conformis Hip System rose 122% to $0.9 million, all in the U.S.
- Net loss improved to $6.2 million from $8.7 million in Q3 2019.
- Cash and cash equivalents increased to $32.9 million from $26.4 million at the end of 2019.
- Total revenue decreased by $1.2 million or 7% year-over-year.
- Product revenue down by $1.1 million, reflecting a 7% decrease.
- U.S. product revenue also declined by 7% year-over-year.
BILLERICA, Mass., Nov. 04, 2020 (GLOBE NEWSWIRE) -- Conformis, Inc. (NASDAQ:CFMS) announced today financial results for the third quarter ended September 30, 2020.
Third Quarter 2020 Summary
- Total revenue of
$16.1 million , a decrease of7% year-over-year on a reported and constant currency basis. - Product revenue of
$16.0 million , a decrease of7% year-over-year on a reported and constant currency basis.
o U.S. product revenue of$14.1 million , a decrease of7% year-over-year.
o Rest of world product revenue of$1.8 million , a decrease of7% year-over-year on a reported basis and10% on a constant currency basis. - Royalty revenue of
$0.1 million . - Gross margin of
48% , an increase of 360 basis points year-over-year. - Total operating expenses increased
2% year-over-year.
"We were pleased to see a continued resumption of elective primary joint replacement surgery during the third quarter,” said Mark Augusti, President and Chief Executive Officer. “Given the challenges of managing through the pandemic, I am particularly pleased to see gross margin improvement over last year. The Conformis team has continued to respond well to the challenges presented by the pandemic. We will continue to support our customers as they attempt to return to normal, progress our new product portfolio, and manage our costs appropriately."
| Three months ended September 30, | Increase/(decrease) | ||||||||||||
| ($, in thousands) | 2020 | 2019 | $ Change | % Change | % Change | ||||||||
| (as reported) | (constant currency) | ||||||||||||
| United States | $ | 14,139 | $ | 15,144 | $ | (1,005 | ) | (7 | )% | (7 | )% | ||
| Rest of world | 1,836 | 1,968 | (132 | ) | (7 | )% | (10 | )% | |||||
| Product revenue | 15,975 | 17,112 | (1,137 | ) | (7 | )% | (7 | )% | |||||
| Royalty revenue | 146 | 191 | (45 | ) | (24 | )% | (24 | )% | |||||
| Total revenue | $ | 16,121 | $ | 17,303 | $ | (1,182 | ) | (7 | )% | (7 | )% | ||
Third Quarter 2020 Financial Results
Total revenue for the three-month period ended September 30, 2020 decreased
Product revenue decreased
Total gross profit increased
Total operating expenses increased
Net loss was
Cash and cash equivalents totaled
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 p.m. Eastern Time. Management will discuss financial results and strategic matters. The webcast will be live at https://edge.media-server.com/mmc/p/dje2uzbm.
The online 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 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 | |||||||
| (unaudited) | |||||||
| (in thousands, except share and per share data) | |||||||
| Three Months Ended September 30, | |||||||
| 2020 | 2019 | ||||||
| Revenue | |||||||
| Product | $ | 15,975 | $ | 17,112 | |||
| Royalty and licensing | 146 | 191 | |||||
| Total revenue | 16,121 | 17,303 | |||||
| Cost of revenue | 8,437 | 9,675 | |||||
| Gross profit | 7,684 | 7,628 | |||||
| Operating expenses | |||||||
| Sales and marketing | 5,755 | 6,153 | |||||
| Research and development | 2,866 | 3,162 | |||||
| General and administrative | 6,134 | 5,165 | |||||
| Total operating expenses | 14,755 | 14,480 | |||||
| Loss from operations | (7,071 | ) | (6,852 | ) | |||
| Other income and expenses | |||||||
| Interest income | 8 | 58 | |||||
| Interest expense | (611 | ) | (573 | ) | |||
| Foreign currency exchange transaction income (loss) | 1,511 | (1,313 | ) | ||||
| Total other income (expenses) | 908 | (1,828 | ) | ||||
| Loss before income taxes | (6,163 | ) | (8,680 | ) | |||
| Income tax provision | 20 | 21 | |||||
| Net loss | $ | (6,183 | ) | $ | (8,701 | ) | |
| Net loss per share | |||||||
| Basic and diluted | $ | (0.09 | ) | $ | (0.13 | ) | |
| Weighted average common shares outstanding | |||||||
| Basic and diluted | 71,224,786 | 64,750,275 | |||||
| CONFORMIS, INC. AND SUBSIDIARIES | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| (in thousands, except share and per share data) | |||||||||||
| September 30, 2020 | December 31, 2019 | ||||||||||
| Assets | (unaudited) | ||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 32,888 | $ | 26,394 | |||||||
| Accounts receivable, net | 8,980 | 11,066 | |||||||||
| Royalty and licensing receivable | 3,751 | 165 | |||||||||
| Inventories, net | 12,909 | 12,074 | |||||||||
| Prepaid expenses and other current assets | 2,800 | 2,815 | |||||||||
| Total current assets | 61,328 | 52,514 | |||||||||
| Property and equipment, net | 13,065 | 13,356 | |||||||||
| Operating lease right-of-use assets | 4,977 | 5,853 | |||||||||
| Other Assets | |||||||||||
| Restricted cash | 462 | 462 | |||||||||
| Other long-term assets | 179 | 211 | |||||||||
| Total assets | $ | 80,011 | $ | 72,396 | |||||||
| Liabilities and stockholder's equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 5,414 | $ | 6,920 | |||||||
| Accrued expenses | 7,722 | 7,135 | |||||||||
| Operating lease liabilities | 1,498 | 1,469 | |||||||||
| Advance on research and development | 3,636 | 2,331 | |||||||||
| Contract liability | 14,000 | — | |||||||||
| Total current liabilities | 32,270 | 17,855 | |||||||||
| Other long-term liabilities | — | 1,500 | |||||||||
| Contract liability | — | 12,000 | |||||||||
| Long-term debt, less debt issuance costs | 24,833 | 19,623 | |||||||||
| Operating lease liabilities | 4,103 | 5,071 | |||||||||
| Total liabilities | 61,206 | 56,049 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders' equity | |||||||||||
| Preferred stock, | |||||||||||
| Authorized: 5,000,000 shares authorized at September 30, 2020 and December 31, 2019; no shares issued and outstanding as of September 30, 2020 and December 31, 2019 | — | — | |||||||||
| Common stock, | |||||||||||
| Authorized: 200,000,000 shares authorized at September 30, 2020 and December 31, 2019; 86,173,070 and 70,427,400 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 1 | 1 | |||||||||
| Additional paid-in capital | 542,986 | 521,356 | |||||||||
| Accumulated deficit | (521,816 | ) | (504,145 | ) | |||||||
| Accumulated other comprehensive loss | (2,366 | ) | (865 | ) | |||||||
| Total stockholders' equity | 18,805 | 16,347 | |||||||||
| Total liabilities and stockholders' equity | $ | 80,011 | $ | 72,396 | |||||||
FAQ
What were Conformis' total revenues for Q3 2020?
How did Conformis' product revenue change in Q3 2020?
What was the net loss reported by Conformis for Q3 2020?
How much cash and cash equivalents did Conformis have as of September 30, 2020?
What improvements did Conformis report regarding gross margin?
