Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a global insulin
delivery and diabetes technology company, today reported its
financial results for the quarter ended March 31, 2024 and
increased sales guidance for the year ending December 31, 2024.
First Quarter 2024 Highlights Compared to First Quarter
2023:
- Worldwide GAAP sales increased 13 percent to $191.7 million;
worldwide non-GAAP sales increased 12 percent to $192.8
million.
- Worldwide pump shipments increased 9 percent to approximately
25,000 pumps from 23,000 pumps.
- First quarter 2024 commercial launches:
- Launched Tandem Mobi with Dexcom G6 continuous glucose
monitoring (CGM) sensor integration in the United States.
- Launched t:slim X2 integration with the Abbott Freestyle Libre
2 Plus CGM sensor in the United States.
- Initiated rolling launch of t:slim X2 with Dexcom G7 sensor
integration outside the United States.
- Received U.S. Food and Drug Administration clearance to expand
the Tandem Mobi pump indication for use in individuals two years of
age and older.
- Began enrollment for extended wear infusion set clinical
trial.
- Completed a $316.3 million senior convertible notes offering
primarily used for repurchase of existing senior convertible
notes.
“Our outperformance in the first quarter was driven by demand
for both the t:slim X2 and our newly launched Tandem Mobi,
validating our portfolio strategy that allows us to address a
greater market by meeting the needs and preferences of more people
living with diabetes,” said John Sheridan, president and chief
executive officer. “We are well-positioned to deliver on our 2024
objectives, along with longer-term growth and profitability
goals.”
First Quarter 2024 Sales Results Compared to 2023
From September 2022 through February 2024, the Company offered
the Tandem Choice Program (Tandem Choice) to eligible t:slim X2
customers to provide a pathway to ownership of its newest hardware
platform, Tandem Mobi, for a fee when available. As a result of
this program, the Company is providing select financial results for
both GAAP and non-GAAP. Additional information, including the
accounting treatment of this program and other non-GAAP measures,
can be found under Table E “Reconciliation of GAAP versus Non-GAAP
Financial Results” attached to this press release. See also
“Non-GAAP Financial Measures” below.
Three Months Ended
March 31,
2024
2023
Approximate Pump Shipments
United States
15,000
17,000
Outside United States
10,000
6,000
Total Worldwide
25,000
23,000
($ in millions)
GAAP
Non-GAAP
GAAP
Non-GAAP
Sales
United States
$
129.8
$
130.9
$
131.2
$
133.3
Outside United States
61.9
61.9
38.1
38.1
Total Worldwide
$
191.7
$
192.8
$
169.3
$
171.4
First Quarter 2024 Additional Financial Results Compared to
First Quarter 2023
- Sales: In the United States, GAAP sales included a $1.1
million deferral relating to Tandem Choice, compared to a deferral
of $2.0 million. Non-GAAP sales do not include Tandem Choice
related sales deferrals.
- Gross profit: GAAP gross profit was $94.7 million,
compared to $82.9 million. GAAP gross margin was 49 percent for
both periods Non-GAAP gross profit(1) was $95.8 million compared to
$84.9 million. Non-GAAP gross margin(1) was 50 percent for both
periods.
- Operating income (loss): GAAP operating loss totaled
$41.7 million, or negative 22 percent of sales, compared to
operating loss of $127.8 million, or negative 75 percent of sales.
Non-GAAP operating loss(1) totaled $40.5 million, or negative 21
percent of sales, compared to $44.4 million or negative 26 percent
of sales.
- Net income (loss): GAAP net loss was $42.7 million,
compared to net loss of $123.9 million. Non-GAAP net loss(1) was
$41.6 million compared to $40.4 million. Adjusted EBITDA(1) was
negative $14.4 million, or negative 7 percent of sales, compared to
negative $20.2 million, or negative 12 percent of sales.
(1) A reconciliation of non-GAAP financial
measures to their most directly comparable GAAP financial measures
and additional information can be found in Table E “Reconciliation
of GAAP versus Non-GAAP Financial Results” attached to this press
release. Also see “Non-GAAP Financial Measures” below for
additional information.
See tables for additional financial information.
2024 Financial Guidance
The Company’s non-GAAP guidance for the fiscal year ending
December 31, 2024 is set forth below. The most directly comparable
GAAP financial measures are not accessible on a forward-looking
basis due to the high degree of complexity in the accounting
treatment for the Tandem Choice program. For a description of
non-GAAP sales, non-GAAP gross margin, and Adjusted EBITDA margin,
as well as an illustration of the reconciliation from the most
directly comparable GAAP financial measures, refer to Table E
“Reconciliation of GAAP versus Non-GAAP Financial Results” attached
to this press release. Also see “Non-GAAP Financial Measures” below
for additional information.
For the year ending December 31, 2024, the Company is updating
its 2024 financial guidance as follows:
- Non-GAAP sales are estimated to be approximately $868 million
for the full year and $205 million in the second quarter.
- Sales in the United States of approximately $634 million for
the full year and $150 million in the second quarter.
- Sales outside the United States of approximately $234 million
for the full year and $55 million in the second quarter.
- Non-GAAP gross margin is estimated to be approximately 51
percent for the full year and approximately and 50 percent in the
second quarter.
- Adjusted EBITDA margin is estimated to be breakeven as a
percent of sales for the full year and approximately negative 5
percent in the second quarter.
- Non-cash charges included in cost of goods sold and operating
expenses are estimated to be approximately $120 million. This
includes:
- Approximately $100 million non-cash, stock-based compensation
expense.
- Approximately $20 million depreciation and amortization
expense.
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 uses 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 historical GAAP financial measures to the most directly
comparable historical non-GAAP financial measures has been provided
in Table E “Reconciliation of GAAP versus Non-GAAP Financial
Results” attached to this press release.
The Company has 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 may be made to the Company’s GAAP financial
measures in calculating the non-GAAP financial measures.
In particular, the accounting treatment for Tandem Choice has a
high degree of complexity. In September 2022 when the program was
launched, the Company began deferring a portion of sales for each
eligible t:slim X2 pump shipped in the United States. The total
Tandem Choice deferral was $31.5 million as of March 31, 2024. If a
customer elects to participate in Tandem Choice, the Company will
recognize the existing deferral, incremental fees received and the
associated costs of providing the new insulin pump at the time of
fulfillment. The timing of recognition will be based on either a)
an affirmative election to participate in Tandem Choice or b)
expiration of the right to participate at program expiration.
Notably:
- Offering the program does not impact the economics associated
with how or when the initial pump sale is reimbursed.
- Customer eligibility was automatic and no election was
necessary to participate in Tandem Choice at the time of a t:slim
X2 purchase. Customer eligibility ended in February 2024 with the
commercial availability of the new hardware platform, Tandem
Mobi.
- An affirmative election is required for the customer to
participate in Tandem Choice, at which time any customer fees will
be received and recognized as a sale. Any remaining deferrals will
be recognized at program expiration.
- The expiration date of Tandem Choice is December 31, 2024.
Conference Call
The Company will hold a conference call and simultaneous webcast
today at 4:30pm Eastern Time (1:30pm 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 access the call by phone, please use this
link
(https://register.vevent.com/register/BI12c72cd6ea054b01881ba78dd494dcc0)
and you will be provided with dial-in details, including a personal
pin.
About Tandem Diabetes Care, Inc.
Tandem Diabetes Care, a global insulin delivery and diabetes
technology company, manufactures and sells advanced automated
insulin delivery systems that reduce the burden of diabetes
management, while creating new possibilities for patients, their
loved ones, and healthcare providers. The Company’s pump portfolio
features the Tandem Mobi system and the t:slim X2 insulin pump,
both of which feature Control-IQ advanced hybrid closed-loop
technology. Tandem Diabetes Care is based in San Diego, California.
For more information, visit tandemdiabetes.com.
Tandem Diabetes Care, the Tandem logo, Control-IQ, Tandem Mobi
and t:slim X2 are either registered trademarks or trademarks of
Tandem Diabetes Care, Inc. in the United States and/or other
countries.
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,
including longer term growth and profitability. 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
products; products marketed and sold or under development by
competitors; the Company’s ability to establish and sustain
operations to support international sales, including expanding 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 successfully commercialize its products; the
Company’s ability to develop and launch new products; risks
associated with the regulatory approval process outside the United
States 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, or may otherwise negatively impact the
purchasing trends of customers; 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
Table A
(in thousands)
March 31,
December 31,
2024
2023
Assets
(Unaudited)
Current assets:
Cash, cash equivalents and short-term
investments
$
467,810
$
467,912
Accounts receivable, net
92,965
105,555
Inventories
153,893
157,937
Other current assets
20,525
16,585
Total current assets
735,193
747,989
Property and equipment, net
77,530
76,542
Operating lease right-of-use assets
88,286
87,791
Other long-term assets
40,036
40,336
Total assets
$
941,045
$
952,658
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable, accrued expenses and
employee-related liabilities
$
100,751
$
105,742
Operating lease liabilities
17,320
17,060
Deferred revenue
44,562
43,994
Other current liabilities
30,338
28,462
Total current liabilities
192,971
195,258
Convertible senior notes, net -
long-term
347,497
285,035
Operating lease liabilities -
long-term
112,732
113,572
Deferred revenue - long-term
12,299
13,331
Other long-term liabilities
32,482
31,830
Total liabilities
697,981
639,026
Total stockholders’ equity
243,064
313,632
Total liabilities and stockholders’
equity
$
941,045
$
952,658
TANDEM DIABETES CARE,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
Table B
(in thousands, except per
share data)
(Unaudited)
Three Months Ended March
31,
2024
2023
Sales
$
191,674
$
169,383
Cost of sales
97,002
86,476
Gross profit
94,672
82,907
Operating expenses:
Selling, general and administrative
90,106
89,814
Research and development
46,244
42,160
Acquired in-process research and
development expenses
—
78,750
Total operating expenses
136,350
210,724
Operating loss
(41,678
)
(127,817
)
Total other income (expense), net
2,149
4,231
Loss before income taxes
(39,529
)
(123,586
)
Income tax expense
3,186
287
Net loss
$
(42,715
)
$
(123,873
)
Net loss per share - basic and diluted
$
(0.65
)
$
(1.92
)
Weighted average shares used to compute
basic and diluted net loss per share
65,326
64,549
TANDEM DIABETES CARE,
INC.
SALES BY GEOGRAPHY
Table C(1)
(Unaudited)
($'s in thousands)
Three Months Ended March
31,
2024
2023
United States:
Pump
$
61,720
$
66,457
Supplies and other
69,187
66,808
Deferral for Tandem Choice
(1,146
)
(2,023
)
Total GAAP Sales in the United States
$
129,761
$
131,242
Adjustment for Tandem Choice
1,146
2,023
Total Non-GAAP Sales in the United
States
$
130,907
$
133,265
Outside the United States:
Pump
$
25,567
$
18,247
Supplies and other
36,346
19,894
Total Sales Outside the United States
$
61,913
$
38,141
Total GAAP Worldwide Sales
$
191,674
$
169,383
Adjustment for Tandem Choice
1,146
2,023
Total Non-GAAP Worldwide Sales
$
192,820
$
171,406
(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.”
TANDEM DIABETES CARE,
INC.
PUMP SHIPMENTS
(Unaudited)
Table D
Three Months Ended March
31,
2024
2023
Pumps Shipped:
United States
15,000
17,000
Outside the United States
10,000
6,000
Total Pumps Shipped
25,000
23,000
TANDEM DIABETES CARE,
INC.
Reconciliation of GAAP versus
Non-GAAP Financial Results (Unaudited)
Table E
($'s in thousands)
Three Months Ended March
31,
2024
2023
GAAP sales
$
191,674
$
169,383
Adjustment for Tandem Choice (1)
1,146
2,023
Non-GAAP sales
$
192,820
$
171,406
GAAP gross profit
$
94,672
$
82,907
Adjustment for Tandem Choice(1)
1,146
2,023
Non-GAAP gross profit
$
95,818
$
84,930
GAAP gross margin(2)
49
%
49
%
Non-GAAP gross margin(3)
50
%
50
%
GAAP operating loss
$
(41,678
)
$
(127,817
)
Acquired in-process research and
development(4)
—
78,750
Severance costs - cash and noncash
—
2,680
Adjustment for Tandem Choice(1)
1,146
2,023
Non-GAAP operating loss
$
(40,532
)
$
(44,364
)
GAAP operating margin(2)
(22
)%
(75
)%
Non-GAAP operating margin(3)
(21
)%
(26
)%
GAAP net loss
$
(42,715
)
$
(123,873
)
Income tax expense (benefit)
3,186
287
Interest income, interest expense and
other, net
(2,149
)
(4,231
)
Depreciation and amortization
4,043
3,396
Stock-based compensation expense
22,039
20,805
Acquired in-process research and
development(4)
—
78,750
Severance costs - cash and noncash
—
2,680
Adjustment for Tandem Choice(1)
1,146
2,023
Adjusted EBITDA
$
(14,450
)
$
(20,163
)
Adjusted EBITDA margin(3)
(7
)%
(12
)%
GAAP net loss
$
(42,715
)
$
(123,873
)
Acquired in-process research and
development(4)
—
78,750
Severance costs - cash and noncash
—
2,680
Adjustment for Tandem Choice(1)
1,146
2,023
Non-GAAP net loss
$
(41,569
)
$
(40,420
)
(1) The accounting treatment for Tandem
Choice has a high degree of complexity. Additional information can
be found under the heading “Non-GAAP Financial Measures.”
(2) GAAP margins including GAAP gross
margin and GAAP operating margin are calculated using GAAP
sales.
(3) Non-GAAP margins including non-GAAP
gross margin, non-GAAP operating margin, and adjusted EBITDA margin
are calculated using non-GAAP sales.
(4) Acquired in-process research and
development charges representing the value of acquired in-process
research and development assets with no alternative future use and
acquisition related expenses recorded in connection with the
acquisitions of AMF Medical SA in 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240502565186/en/
Media Contact: 858-366-6900 media@tandemdiabetes.com
Investor Contact: 858-366-6900 IR@tandemdiabetes.com
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