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, 2023 and
reaffirmed its financial guidance for the year ending December 31,
2023.
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 of March 31, 2023.
“We are confident in our ability to achieve our key goals for
this year, both operationally and commercially,” said John
Sheridan, president and chief executive officer. “Delivering on
innovation is what drove Tandem to its leadership position in
insulin therapy management, and we are well-positioned to continue
building on the momentum of our #1 rated t:slim X2 with Control-IQ
technology, as we prepare for the launch of multiple new products
in 2023.”
First Quarter 2023 Financial Results Compared to 2022
In September 2022, the Company began offering the Tandem Choice
Program (Tandem Choice) to eligible t:slim X2 customers to provide
a pathway to ownership of its newest hardware platform when
available. As a result of this program, and as previously
announced, the Company is providing select financial results on
both a GAAP and non-GAAP basis. Additional information, including
the accounting treatment of this program and other non-GAAP
measures, can be found under the heading “Reconciliation of GAAP
versus Non-GAAP Financial Results” in this press release.
Three Months Ended
March 31,
$ in
millions
2023
2023
2022
GAAP
Non-GAAP
GAAP
Pump Shipments
United States
17,003
N/A
18,658
Outside United States
6,052
N/A
9,437
Total Worldwide
23,055
N/A
28,095
Sales
United States
$
131.2
$
133.3
$
131.3
Outside United States
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 December 31, 2023, the Company is
reaffirming 2023 financial guidance as follows:
- 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.
- 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.
(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 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. Such
deferrals will be recognized on a customer-by-customer basis
following the commercial launch of the Company’s new hardware
platform. 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. Notably:
- 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 is December 31, 2024.
Consistent with SEC regulations, 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.
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/BI21343b3e346b4b66923ccc4e1bd048e5)
and you will be provided with dial-in details, including a personal
pin.
About Tandem Diabetes Care, Inc.
Tandem Diabetes Care, Inc., a global insulin delivery and
diabetes technology company headquartered in San Diego, California,
creates new possibilities for people living with diabetes, their
loved ones, and healthcare providers through a positively different
experience. The Company’s human-centered approach to design,
development, and support delivers innovative products and services
for people who use insulin. Tandem manufactures and sells the
t:slim X2 insulin pump with Control-IQ technology. For more
information, visit tandemdiabetes.com.
Tandem Diabetes Care and Control-IQ are trademarks registered in
the U.S. and/or other countries and t:slim X2 is a trademark of
Tandem Diabetes Care, Inc.
Follow Tandem Diabetes Care on Twitter @tandemdiabetes; use
#tslimX2 and #TandemDiabetes. Follow Tandem Diabetes Care on
Facebook at www.facebook.com/TandemDiabetes. Follow Tandem Diabetes
Care on LinkedIn at
https://www.linkedin.com/company/tandemdiabetes.
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 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)
(Unaudited)
March 31,
December 31,
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
TANDEM DIABETES CARE,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
Table B
(in thousands, except per
share data)
(Unaudited)
Three Months Ended
March 31,
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
TANDEM DIABETES CARE,
INC.
SALES BY GEOGRAPHY
Table C(1)
(Unaudited)
($'s in thousands)
Three Months Ended March
31,
2023
2022
% Change
United States:
Pump
$
66,456
$
73,497
(10
)%
Supplies and other
66,809
57,786
16
%
Deferral for Tandem Choice
(2,023
)
—
—
%
Total GAAP Sales in the United States
$
131,242
$
131,283
—
%
Adjustment for Tandem Choice
2,023
—
—
%
Total Non-GAAP Sales in the United
States
$
133,265
$
131,283
2
%
Outside the United States:
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 Tandem Choice
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.”
TANDEM DIABETES CARE,
INC.
PUMP SHIPMENTS
Table D
Three Months Ended March
31,
2023
2022
% Change
Pumps Shipped:
United States
17,003
18,658
(9
)%
Outside the United States
6,052
9,437
(36
)%
Total Pumps Shipped
23,055
28,095
(18
)%
TANDEM DIABETES CARE,
INC.
Reconciliation of GAAP versus
Non-GAAP Financial Results (Unaudited)
Table E
($'s in thousands)
Three Months Ended March
31,
2023
2022
GAAP sales
$
169,383
$
175,907
Adjustment for Tandem Choice (1)
2,023
—
Non-GAAP sales
$
171,406
$
175,907
GAAP gross profit
$
82,907
$
91,093
Adjustment for Tandem Choice(1)
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 Tandem Choice(1)
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 Tandem Choice(1)
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 Tandem Choice(1)
2,023
—
Non-GAAP net loss
$
(40,420
)
$
(14,715
)
(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) The Company recorded a $78.8 million charge representing the
value of acquired in-process research and development assets with
no alternative future use, and acquisition related expenses.
(3) Non-GAAP margins including non-GAAP gross margin, non-GAAP
operating margin, and adjusted EBITDA margin are calculated using
non-GAAP sales.
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Media Contact: 858-255-6388 media@tandemdiabetes.com
Investor Contact: 858-366-6900 IR@tandemdiabetes.com
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