InMode Reports Second Quarter 2020 Financial Results; Quarterly Revenues of $30.8 Million, GAAP and *Non-GAAP Diluted Earnings per Share of $0.21 and $0.24
InMode Ltd. (Nasdaq: INMD) reported a 21% decline in Q2 2020 revenue, totaling $30.8 million, compared to Q2 2019. GAAP net income fell to $8.6 million ($0.21 EPS), down from $15.8 million ($0.45 EPS) year-over-year. Despite challenges posed by the COVID-19 pandemic, the company is optimistic as elective surgeries resumed, leading to improved sales in June. The company's cash position remains strong at $203.4 million. For 2020, InMode anticipates revenues between $156-$160 million with gross margins of 84%-86%.
- Resumed elective surgeries in June showed signs of recovery.
- Strong cash position of $203.4 million.
- Investment in marketing and sales organization expected to capture market share.
- Health Canada certification for Evolve Tone and clearance in China are significant milestones.
- Anticipated revenue guidance for 2020 is between $156-$160 million.
- Quarterly revenue decreased by 21% compared to Q2 2019.
- GAAP net income fell to $8.6 million from $15.8 million year-over-year.
- Non-GAAP earnings per share declined to $0.24 from $0.45 in Q2 2019.
YOKNEAM, Israel, Aug. 5, 2020 /PRNewswire/ -- InMode Ltd. (Nasdaq: INMD) ("InMode"), a leading global provider of innovative medical technologies, today announced consolidated financial results for its second quarter ended June 30, 2020.
Second Quarter 2020 Highlights:
- Quarterly revenue of
$30.8 million , a decrease of21% compared to the second quarter of 2019; approximately53% of U.S. quarterly revenues derived from our proprietary surgical technology platforms engaged in minimally invasive and subdermal ablative treatments, approximately46% of U.S. quarterly revenues derived from our recently introduced hands-free platforms and approximately1% derived from our traditional laser and non-invasive RF platforms - GAAP net income of
$8.6 million , compared to$15.8 million in the second quarter of 2019; *non-GAAP net income of$10.1 million , compared to$16.1 million in the second quarter of 2019 - GAAP diluted earnings per share of
$0.21 compared to$0.45 in the second quarter of 2019; *non-GAAP diluted earnings per share of$0.24 compared to$0.45 in the second quarter of 2019 - Total cash position of
$203.4 million as of June 30, 2020, including cash and cash equivalents, marketable securities and short-term bank deposits
U.S. GAAP Results (U.S. dollars in thousands, except for per share data) | ||
Q2 2020 | Q2 2019 | |
Revenues | ||
Gross Margins | ||
Net Income Attributable to InMode Ltd. | ||
Earnings per Diluted Share | ||
*Non-GAAP Results | ||
Q2 2020 | Q2 2019 | |
Net Income Attributable to InMode Ltd. | ||
Earnings per Diluted Share | ||
*Please refer to "Use of non-GAAP Financial Measures" below for important information about non-GAAP financial | ||
Management Comments
"The second quarter of 2020 was both challenging and encouraging. In June, after three months of global shutdowns relating to the global COVID-19 pandemic, elective surgeries began to come back throughout the United States and internationally, and aesthetic surgeons re-opened their clinics, which allowed for one month of sales and marketing operation in the quarter. Our continued commitment to the welfare of employees and customers, and our decision not to downsize our sales and marketing organization during the shutdown, unlike some of our competitors, proved to be instrumental in allowing us to act quickly and continue to capture market share," commented Moshe Mizrahy, InMode's CEO.
"During the quarter, we leveraged our InMode University platform for securing customer relationships, strengthening our brand, training our experienced sales team and physicians on InMode's hands-free technology and platforms, and ultimately generating sales as restrictions loosened. Given our commitment to the future, we continued to invest in our direct marketing and sales organization," commented Shakil Lakhani, President of North America.
"In addition, we made progress in our clinical and regulatory processes internationally. In June, we were excited to receive the Health Canada certification for Evolve Tone, which is Canada's first and only all-in-one hands-free device consisting of three unique body remodeling technologies- Tite, Trim and Tone. Furthermore, in July, we received clearance from the China National Medical Products Administration (NMPA) for two proprietary InMode RF platforms, which we believe is a significant milestone as we continue to expand our global footprint," noted Dr. Spero Theodorou, InMode's Chief Medical Officer.
"As we continue to build out our organization in a safe and conscientious manner, we believe our unique and innovative R&D pipeline for our product portfolio will attract both physicians and patients post-crisis, as the desire for minimally invasive and hands-free alternatives is expected to move to the forefront of consumer decision-making," added Dr. Michael Kreindel, InMode's Chief Technology Officer.
2020 Guidance
We expect that our revenue for the full year of 2020 will be between
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.
Second Quarter 2020 Financial Results
Total revenues for the second quarter of 2020 were
Gross margin for the second quarter of 2020 was
GAAP operating margin for the second quarter of 2020 was
InMode reported GAAP net income attributable to InMode Ltd. of
"Our strong balance sheet, profitable business model and positive cashflow, which continued to be present throughout the COVID-19 crisis, has been one of InMode's main strengths and competitive advantages, and has allowed us to continue our growth momentum in the United States and internationally," noted Yair Malca, InMode's CFO.
*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 and related tax adjustments.
Use of Non-GAAP Financial Measures
In addition to InMode's operating results presented in accordance with GAAP, this release includes certain non-GAAP financial measures including non-GAAP net income, non-GAAP diluted earnings per share and non-GAAP operating margin. Because these measures are used in InMode's internal analysis of financial and operating performance, management believes that they provide greater transparency to investors of management's view of InMode's economic performance. Management also believes the presentation of these measures, when analyzed in conjunction with InMode's GAAP operating results, allows investors to more effectively evaluate and compare the performance of InMode to that of its peers, although InMode's presentation of its non-GAAP measures may not be comparable to other similarly-titled measures of other companies. Schedules reconciling each of these non-GAAP financial measures are provided as a supplement to this release.
Conference Call Information
Mr. Moshe Mizrahy, Chairman and 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, and Dr. Spero Theodorou, Chief Medical Officer, will host a conference call today, August 5, 2020, at 8:30 a.m. Eastern Time to discuss the second quarter 2020 financial results.
The Company encourages participants to pre-register for the conference call using the following link: http://dpregister.com/10145846. Callers will receive a unique dial-in 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 that opt out of pre-registration, please dial one of the following teleconferencing numbers. Please begin by placing your call ten minutes before the conference call commences. If you are unable to connect using the toll-free number, please try the international dial-in number.
U.S. Toll-Free Dial-in Number: 1-866-777-2509
Israel Toll- Free Dial-in Number: 1-80-921-2373
International Dial-in Number: 1-412-317-5413
At:
8:30 a.m. Eastern Time
5:30 a.m. Pacific Time
3:30 p.m. Israel 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 5, 2020 at 12 p.m. Eastern Time to August 12, 2020 at 11:59 p.m. Eastern Time. To access the replay, please dial one of the following numbers:
Replay Dial-in U.S TOLL-FREE: 1-877-344-7529
Replay Dial-in Canada TOLL-FREE: 855-669-9658
Replay Dial-in TOLL/INTERNATIONAL: 1-412-317-0088
Replay Pin Number: 10145846
A replay 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 future performance described above under the heading titled "2020 Guidance". 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, strategy 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, including with respect to the impact of the COVID-19 global outbreak. As a result, 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 F-20 filed with the Securities and Exchange Commission on February 18, 2020, risk factors relating to the COVID-19 global outbreak 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 speak only as of the date of this press release.
Company Contact: Yair Malca Chief Financial Officer Phone: (949) 305-0108 Email: Yair.Malca@inmodemd.com | Investor Relations Contact: Miri Segal MS-IR LLC Phone: (917) 607-8654 Email: ir@inmodemd.com |
INMODE LTD. | ||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||
(U.S. dollars in thousands, except for per share data) | ||||
(Unaudited) | ||||
Three months ended June 30, | Six months ended June 30, | |||
2020 | 2019 | 2020 | 2019 | |
REVENUES | 30,765 | 38,797 | 71,206 | 69,349 |
COST OF REVENUES | 4,695 | 4,875 | 10,879 | 9,146 |
GROSS PROFIT | 26,070 | 33,922 | 60,327 | 60,203 |
OPERATING EXPENSES: | ||||
Research and development | 1,816 | 1,584 | 5,248 | 2,783 |
Sales and marketing | 14,536 | 15,898 | 37,535 | 29,995 |
General and administrative | 1,613 | 713 | 3,436 | 1,766 |
TOTAL OPERATING EXPENSES | 17,965 | 18,195 | 46,219 | 34,544 |
INCOME FROM OPERATIONS | 8,105 | 15,727 | 14,108 | 25,659 |
Finance income, net | 636 | 382 | 1,265 | 785 |
INCOME BEFORE TAXES | 8,741 | 16,109 | 15,373 | 26,444 |
INCOME TAXES | 161 | 274 | 302 | 451 |
NET INCOME | 8,580 | 15,835 | 15,071 | 25,993 |
Add: Loss (net income) attributable to non-controlling interests | 8 | (38) | (50) | (72) |
NET INCOME ATTRIBUTABLE TO INMODE LTD. | 8,588 | 15,797 | 15,021 | 25,921 |
NET INCOME PER SHARE (1): | ||||
Basic | 0.24 | 0.58 | 0.43 | 0.96 |
Diluted | 0.21 | 0.45 | 0.36 | 0.73 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | ||||
Basic | 35,943 | 26,963 | 34,956 | 26,891 |
Diluted | 41,733 | 35,344 | 41,709 | 35,334 |
(1) The number shares have been adjusted retroactively for a 1-for-1.789 stock split of InMode shares by way of an | ||||
INMODE LTD. | ||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
(U.S. dollars in thousands, except for per share data) | ||
(Unaudited) | ||
June 30, 2020 | December 31, 2019 | |
Assets | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | 64,767 | 44,727 |
Marketable securities | 106,668 | 120,144 |
Short-term bank deposits | 31,971 | 28,491 |
Accounts receivable, net of allowance for doubtful accounts | 8,608 | 6,628 |
Other receivables | 5,327 | 3,810 |
Inventories | 16,227 | 9,408 |
TOTAL CURRENT ASSETS | 233,568 | 213,208 |
NON-CURRENT ASSETS: | ||
Accounts receivable | 383 | 374 |
Deferred income taxes, net | 993 | 1,899 |
Operating lease right-of-use assets | 1,413 | 1,369 |
Property and equipment, net | 1,061 | 935 |
Other investments | 600 | 600 |
TOTAL NON-CURRENT ASSETS | 4,450 | 5,177 |
TOTAL ASSETS | 238,018 | 218,385 |
Liabilities and shareholders' equity | ||
CURRENT LIABILITIES: | ||
Accounts payable | 4,026 | 3,702 |
Contract liabilities | 10,283 | 15,587 |
Other liabilities | 13,503 | 13,205 |
TOTAL CURRENT LIABILITIES | 27,812 | 32,494 |
NON-CURRENT LIABILITIES: | ||
Contract liabilities | 2,447 | 3,813 |
Other liabilities | 1,836 | 1,494 |
Operating lease liabilities | 660 | 744 |
Deferred income taxes, net | 107 | 37 |
TOTAL NON-CURRENT LIABILITIES | 5,050 | 6,088 |
TOTAL LIABILITIES | 32,862 | 38,582 |
TOTAL SHAREHOLDERS' EQUITY | 205,156 | 179,803 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 238,018 | 218,385 |
INMODE LTD. | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(U.S. dollars in thousands, except for per share data) | |||||
(Unaudited) | |||||
Three months ended June 30, | Six months ended June 30, | ||||
2020 | 2019 | 2020 | 2019 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
Net income | 8,580 | 15,835 | 15,071 | 25,993 | |
Adjustments required to reconcile net income to net cash | |||||
Depreciation and amortization | 105 | 74 | 199 | 137 | |
Share-based compensation expenses | 1,160 | 412 | 7,210 | 814 | |
Allowance for doubtful accounts | 160 | 19 | 466 | 78 | |
Gains on marketable securities, net | (3) | - | (9) | - | |
Finance expenses (income), net | 79 | (126) | 268 | (309) | |
Deferred income taxes, net | 458 | (77) | 826 | (143) | |
Changes in operating assets and liabilities: | |||||
Decrease (increase) in accounts receivable | (3,045) | 1,580 | (2,455) | 1,727 | |
Decrease (increase) in other receivables | 63 | 291 | (1,497) | 1,164 | |
Increase in inventories | (4,141) | (524) | (6,819) | (653) | |
Increase (decrease) in accounts payable | (690) | 1,085 | 324 | 70 | |
Increase in other liabilities | 2,323 | 465 | 530 | 16 | |
Increase (decrease) in contract liabilities | (3,725) | (533) | (6,670) | 2,378 | |
Decrease in accrued contingencies | - | - | - | (10,000) | |
Net cash provided by operating activities | 1,324 | 18,501 | 7,444 | 21,272 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
Investment in short-term deposit | (15,090) | (6,090) | (31,609) | (17,090) | |
Proceeds from short-term deposit | 13,590 | 5,000 | 28,090 | 10,000 | |
Purchase of fixed assets | (226) | (86) | (325) | (464) | |
Purchase of marketable securities | (34,376) | (9,421) | (78,309) | (14,339) | |
Proceeds from sale of marketable securities | 53,712 | 2,000 | 92,286 | 4,603 | |
Net cash provided by (used in) investing activities | 17,610 | (8,597) | 10,133 | (17,290) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
Exercise of options | 549 | 15 | 2,550 | 137 | |
Net cash provided by financing activities | 549 | 15 | 2,550 | 137 | |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 146 | 7 | (87) | 37 | |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 19,629 | 9,926 | 20,040 | 4,156 | |
CASH AND CASH EQUIVALENTS AT BEGINNING OF | 45,138 | 18,951 | 44,727 | 24,721 | |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 64,767 | 28,877 | 64,767 | 28,877 | |
INMODE LTD. | ||||
CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||
(U.S. dollars in thousands, except for per share data) | ||||
(Unaudited) | ||||
Three months ended June 30, | Six months ended June 30, | |||
2020 | 2019 | 2020 | 2019 | |
Revenues by Geography: | ||||
United States | 24,060 | 32,721 | 54,883 | 56,806 |
International | 6,705 | 6,076 | 16,323 | 12,543 |
Total Net Revenue | 30,765 | 38,797 | 71,206 | 69,349 |
U.S. as percentage of total revenue | ||||
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) | ||||||
Three months ended June 30, 2020 | Three months ended June 30, 2019 | |||||
GAAP | Share Based Compensation | Non-GAAP | GAAP | Share Based Compensation | Non-GAAP | |
REVENUES | 30,765 | - | 30,765 | 38,797 | - | 38,797 |
COST OF REVENUES | 4,695 | (149) | 4,546 | 4,875 | (22) | 4,853 |
GROSS PROFIT | 26,070 | 149 | 26,219 | 33,922 | 22 | 33,944 |
OPERATING EXPENSES: | ||||||
Research and development | 1,816 | (122) | 1,694 | 1,584 | (56) | 1,528 |
Sales and marketing | 14,536 | (757) | 13,779 | 15,898 | (309) | 15,589 |
General and administrative | 1,613 | (132) | 1,481 | 713 | (25) | 688 |
TOTAL OPERATING EXPENSES | 17,965 | (1,011) | 16,954 | 18,195 | (390) | 17,805 |
INCOME FROM | 8,105 | 1,160 | 9,265 | 15,727 | 412 | 16,139 |
Finance income, net | 636 | - | 636 | 382 | - | 382 |
INCOME BEFORE TAXES | 8,741 | 1,160 | 9,901 | 16,109 | 412 | 16,521 |
INCOME TAXES (TAX | 161 | (348) | (187) | 274 | 128 | 402 |
NET INCOME | 8,580 | 1,508 | 10,088 | 15,835 | 284 | 16,119 |
Add: Loss (net income) | 8 | - | 8 | (38) | - | (38) |
NET INCOME | 8,588 | 1,508 | 10,096 | 15,797 | 284 | 16,081 |
NET INCOME PER SHARE (1): | ||||||
Basic | 0.24 | 0.28 | 0.58 | 0.59 | ||
Diluted | 0.21 | 0.24 | 0.45 | 0.45 | ||
WEIGHTED AVERAGE | ||||||
Basic | 35,943 | 35,943 | 26,963 | 26,963 | ||
Diluted | 41,733 | 42,009 | 35,344 | 35,429 | ||
(1) The number of shares have been adjusted retroactively for a 1-for-1.789 stock split of InMode shares by way of | ||||||
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) | ||||||
Six months ended June 30, 2020 | Six months ended June 30, 2019 | |||||
GAAP | Share Based Compensation | Non-GAAP | GAAP | Share Based Compensation | Non-GAAP | |
REVENUES | 71,206 | - | 71,206 | 69,349 | - | 69,349 |
COST OF REVENUES | 10,879 | (225) | 10,654 | 9,146 | (41) | 9,105 |
GROSS PROFIT | 60,327 | 225 | 60,552 | 60,203 | 41 | 60,244 |
OPERATING EXPENSES: | ||||||
Research and development | 5,248 | (2,008) | 3,240 | 2,783 | (108) | 2,675 |
Sales and marketing | 37,535 | (4,595) | 32,940 | 29,995 | (617) | 29,378 |
General and administrative | 3,436 | (382) | 3,054 | 1,766 | (48) | 1,718 |
TOTAL OPERATING EXPENSES | 46,219 | (6,985) | 39,234 | 34,544 | (773) | 33,771 |
INCOME FROM | 14,108 | 7,210 | 21,318 | 25,659 | 814 | 26,473 |
Finance income, net | 1,265 | - | 1,265 | 785 | - | 785 |
INCOME BEFORE TAXES | 15,373 | 7,210 | 22,583 | 26,444 | 814 | 27,258 |
INCOME TAXES (TAX | 302 | (424) | (122) | 451 | 168 | 619 |
NET INCOME | 15,071 | 7,634 | 22,705 | 25,993 | 646 | 26,639 |
Add: Loss (net income) | (50) | - | (50) | (72) | - | (72) |
NET INCOME | 15,021 | 7,634 | 22,655 | 25,921 | 646 | 26,567 |
NET INCOME PER SHARE (1): | ||||||
Basic | 0.43 | 0.65 | 0.96 | 0.98 | ||
Diluted | 0.36 | 0.54 | 0.73 | 0.75 | ||
WEIGHTED AVERAGE | ||||||
Basic | 34,956 | 34,956 | 26,891 | 26,891 | ||
Diluted | 41,709 | 41,922 | 35,334 | 35,423 | ||
(1) The number of shares have been adjusted retroactively for a 1-for-1.789 stock split of InMode shares by way of an issuance of bonus shares, that occurred pursuant to a resolution of our board of directors dated July 24, 2019 | ||||||
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