InMode Reports Record Third Quarter 2020 Financial Results; Quarterly Revenues of $59.7 Million Represent 49% Year over Year Growth, GAAP and *Non-GAAP Diluted Earnings per Share of $0.57 and $0.63

YOKNEAM, Israel, Nov. 12, 2020 /PRNewswire/ -- InMode Ltd. (Nasdaq: INMD) ("InMode"), a leading global provider of innovative medical technologies, today announced consolidated financial results for its third quarter ended September 30, 2020.

InMode Logo

Third Quarter 2020 Highlights:

  • Record quarterly revenues of $59.7 million, an increase of 49% compared to the third quarter of 2019; approximately 58% of quarterly revenues derived from InMode's proprietary surgical technology platforms engaged in minimally invasive and subdermal ablative treatments, approximately 35% of quarterly revenues derived from InMode's recently introduced hands-free platforms and approximately 7% derived from InMode's traditional laser and non-invasive RF platforms
  • Record GAAP net income of $23.9 million, compared to $16.2 million in the third quarter of 2019; *non-GAAP net income of $26.6 million, compared to $16.5 million in the third quarter of 2019
  • Record GAAP diluted earnings per share of $0.57 compared to $0.42 in the third quarter of 2019; *non-GAAP diluted earnings per share of $0.63 compared to $0.42 in the third quarter of 2019
  • Total cash position of $234.3 million as of September 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)

 

Q3 2020

Q3 2019

Revenues

$59,714

$40,010

Gross Margins

84%

87%

Net Income Attributable to InMode Ltd.

$23,895

$16,186

Earnings per Diluted Share

$0.57

$0.42

*Non-GAAP Results

(U.S. dollars in thousands, except for per share data)

 

Q3 2020

Q3 2019

Gross Margins

85%

87%

Net Income Attributable to InMode Ltd.

$26,638

$16,512

Earnings per Diluted Share

$0.63

$0.42

*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.

Management Comments

"Our record third quarter revenues were driven by the success of our minimally invasive and hands-free solutions in the United States and internationally, strengthening the leading market position of our harnessed electro-surgical technologies. The steadfast sales & marketing investments we made throughout the pandemic enabled our organization to quickly meet surging demand as restrictions loosened," commented Moshe Mizrahy, InMode's CEO.

"During the quarter, we continued to focus on research & development and were excited to announce the launch of the Morpheus8 Body handpiece and Morpheus8 Platform. We understand that the uncertainties of the COVID-19 pandemic are not behind us, and we will remain committed to the health of our employees and our organization," commented Dr. Michael Kreindel, InMode's CTO and co-founder.

"We believe the steps we took over the last several months were instrumental in building interest, increased awareness and demand for InMode technologies, which translated into record sales in the third quarter. We believe we are emerging as the standard of care for minimally invasive aesthetic surgeries, as we continue to innovate and deliver versatile offerings. We expect continued underlying demand for our differentiated products heading into the fourth quarter of 2020," commented Shakil Lakhani, President of North America.

2020 Guidance

We expect that our revenues for the full year of 2020 will be between $192 million and $195 million, and we expect to maintain a *non-GAAP gross margin of 84%-86%.

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.

Third Quarter 2020 Financial Results

Total revenues for the third quarter of 2020 were $59.7 million, an increase of 49% as compared to the third quarter of 2019. The increase in revenues was driven primarily by the expansion of InMode's direct sales organization in the United States and the continued momentum of InMode's hands-free technology, as well as the recently introduced Morpheus8 Body fractional technology. Moreover, InMode continued to gain traction in international markets, with international revenues growing 109% year-over-year.

GAAP gross margin for the third quarter of 2020 was 84% compared to a gross margin of 87% in the third quarter of 2019. *Non-GAAP gross margin for the third quarter of 2020 was 85% compared to a gross margin of 87% in the third quarter of 2019. This decrease is primarily attributable to the increase of sales in international markets, mainly in countries where we operate through distributors.

GAAP operating margin for the third quarter of 2020 was 39%, compared to 40% in the third quarter of 2019. *Non-GAAP operating margin for the third quarter of 2020 was 43%, compared to 41% in the third quarter of 2019. This increase in *non-GAAP operating margin was primarily attributable to decreased marketing activities in the United States such as event and conference participation, due to restrictions caused by the COVID-19 pandemic.

InMode reported GAAP net income attributable to InMode Ltd. of $23.9 million, or $0.57 per diluted share in the third quarter of 2020 compared to $16.2 million, or $0.42 per diluted share, in the third quarter of 2019. On a *non-GAAP basis, InMode reported net income attributable to InMode Ltd. of $26.6 million, or $0.63 per diluted share in the third quarter of 2020 compared to $16.5 million, or $0.42 per diluted share, in the third quarter of 2019.

"We ended the third quarter with a strong balance sheet and record results. Our measured approach of investing for the future while maintaining flexibility during the COVID-19 pandemic has paid off this quarter," noted Yair Malca, InMode's CFO. "During the quarter, we announced a share repurchase program of up to one million of InMode's shares, which reflects our unwavering faith in InMode's success."

*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, November 12, 2020, at 8:30 a.m. Eastern Time to discuss the third quarter 2020 financial results.

The Company encourages participants to pre-register for the conference call using the following link: https://dpregister.com/sreg/10148536/da3e5e2fe8. 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 November 12, 2020 at 12 p.m. Eastern Time to November 26, 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: 10148536

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

September 30,

Nine months ended

September 30,

 

2020

2019

2020

2019

REVENUES

59,714

40,010

130,920

109,359

COST OF REVENUES

9,395

5,047

20,274

14,193

GROSS PROFIT

50,319

34,963

110,646

95,166

OPERATING EXPENSES:

       

Research and development

1,959

1,329

7,207

4,112

Sales and marketing

23,758

16,726

61,293

46,721

General and administrative

1,309

927

4,745

2,693

TOTAL OPERATING EXPENSES

27,026

18,982

73,245

53,526

INCOME FROM OPERATIONS

23,293

15,981

37,401

41,640

Finance income, net

798

479

2,063

1,264

INCOME BEFORE TAXES

24,091

16,460

39,464

42,904

INCOME TAXES

207

267

509

718

NET INCOME

23,884

16,193

38,955

42,186

Add: Loss (net income) attributable to non-controlling interests

11

(7)

(39)

(79)

NET INCOME ATTRIBUTABLE TO INMODE LTD.

23,895

16,186

38,916

42,107

         

NET INCOME PER SHARE:

       

Basic

0.65

0.53

1.09

1.50

Diluted

0.57

0.42

0.93

1.15

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF NET INCOME PER SHARE

       

Basic

36,697

30,297

35,542

28,031

Diluted

42,082

39,004

41,894

36,654

 

INMODE LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. dollars in thousands, except for per share data)

(Unaudited)

 
 

September 30,

2020

December 31,

2019

Assets

   

CURRENT ASSETS:

   

Cash and cash equivalents

68,835

44,727

Marketable securities

122,046

120,144

Short-term bank deposits

43,436

28,491

Accounts receivable, net of allowance for doubtful accounts

16,164

6,628

Other receivables

4,790

3,810

Inventories

14,871

9,408

TOTAL CURRENT ASSETS

270,142

213,208

NON-CURRENT ASSETS:

   

Accounts receivable

455

374

Deferred income taxes, net

606

1,899

Operating lease right-of-use assets

1,282

1,369

Property and equipment, net

1,056

935

Other investments

600

600

TOTAL NON-CURRENT ASSETS

3,999

5,177

TOTAL ASSETS

274,141

218,385

     

Liabilities and shareholders' equity

   

CURRENT LIABILITIES:

   

Accounts payable

4,283

3,702

Contract liabilities

15,671

15,587

Other liabilities

17,572

13,205

TOTAL CURRENT LIABILITIES

37,526

32,494

NON-CURRENT LIABILITIES:

   

Contract liabilities

2,069

3,813

Other liabilities

1,969

1,494

Operating lease liabilities

519

744

Deferred income taxes, net

32

37

TOTAL NON-CURRENT LIABILITIES

4,589

6,088

TOTAL LIABILITIES

42,115

38,582

     

TOTAL SHAREHOLDERS' EQUITY

232,026

179,803

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

274,141

218,385

INMODE LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in thousands, except for per share data)

(Unaudited)

 
   

Three months ended
September 30,

Nine months ended
September 30,

 

2020

2019

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

       

Net income

23,884

16,193

38,955

42,186

Adjustments required to reconcile net income to net cash provided by operating activities:

       

Depreciation and amortization

108

77

307

214

Share-based compensation expenses

2,404

385

9,614

1,199

Allowance for doubtful accounts

-

55

466

133

Loss on marketable securities, net

11

-

2

-

Finance income, net

(279)

(86)

(11)

(395)

Deferred income taxes, net

347

(68)

1,173

(211)

Changes in operating assets and liabilities:

       

Increase in accounts receivable

(7,628)

(2,324)

(10,083)

(597)

Decrease (increase) in other receivables

537

(1,814)

(960)

(650)

Decrease (increase) in inventories

1,356

(879)

(5,463)

(1,532)

Increase in accounts payable

257

689

581

759

Increase in other liabilities

4,187

2,402

4,717

2,418

Increase (decrease) in contract liabilities

5,010

(1,115)

(1,660)

1,263

Decrease in accrued contingencies

-

-

-

(10,000)

Net cash provided by operating activities

30,194

13,515

37,638

34,787

CASH FLOWS FROM INVESTING ACTIVITIES:

       

Investment in short-term deposit

(18,090)

(17,220)

(49,699)

(34,310)

Proceeds from short-term deposit

6,720

8,500

34,810

18,500

Purchase of fixed assets

(103)

(54)

(428)

(518)

Purchase of marketable securities

(41,085)

(68,282)

(119,394)

(82,621)

Proceeds from sale of marketable securities

25,500

13,500

117,786

18,103

Net cash (used in) investing activities

(27,058)

(63,556)

(16,925)

(80,846)

CASH FLOWS FROM FINANCING ACTIVITIES:

       

Proceeds from initial public offering of ordinary shares, net of offering costs

-

69,784

-

69,784

Exercise of options

698

178

3,248

315

Net cash provided by financing activities

698

69,962

3,248

70,099

EFFECT OF EXCHANGE RATE CHANGES ON CASH

234

(93)

147

(56)

NET INCREASE IN CASH AND CASH EQUIVALENTS

4,068

19,828

24,108

23,984

         

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

64,767

28,877

44,727

24,721

CASH AND CASH EQUIVALENTS AT END OF PERIOD

68,835

48,705

68,835

48,705

INMODE LTD.

CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS

(U.S. dollars in thousands, except for per share data)

(Unaudited)

 
 

Three months ended
September 30,

Nine months ended
September 30,

2020

2019

2020

2019

Revenues by Geography:

       

United States

40,880

31,007

95,763

87,813

International

18,834

9,003

35,157

21,546

Total Net Revenue

59,714

40,010

130,920

109,359

U.S. as percentage of total revenue

68%

77%

73%

80%

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 September 30, 2020

Three months ended September 30, 2019

 

GAAP

Share Based
Compensation

Non-GAAP

GAAP

Share Based
Compensation

Non-GAAP

REVENUES

59,714

-

59,714

40,010

-

40,010

COST OF REVENUES

9,395

(155)

9,240

5,047

(21)

5,026

GROSS PROFIT

50,319

155

50,474

34,963

21

34,984

OPERATING EXPENSES:

           

Research and development

1,959

(124)

1,835

1,329

(58)

1,271

Sales and marketing

23,758

(1,974)

21,784

16,726

(270)

16,456

General and administrative

1,309

(151)

1,158

927

(36)

891

TOTAL OPERATING
EXPENSES

27,026

(2,249)

24,777

18,982

(364)

18,618

INCOME FROM OPERATIONS

23,293

2,404

25,697

15,981

385

16,366

Finance income, net

798

-

798

479

-

479

INCOME BEFORE TAXES

24,091

2,404

26,495

16,460

385

16,845

INCOME TAXES (TAX BENEFIT)

207

(339)

(132)

267

59

326

NET INCOME

23,884

2,743

26,627

16,193

326

16,519

Add: Loss (net income) attributable to non-controlling interests

11

-

11

(7)

-

(7)

NET INCOME ATTRIBUTABLE TO INMODE LTD.

23,895

2,743

26,638

16,186

326

16,512

             

NET INCOME PER
SHARE:

           

Basic

0.65

 

0.73

0.53

 

0.55

Diluted

0.57

 

0.63

0.42

 

0.42

WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING USED IN
COMPUTATION OF NET
INCOME PER SHARE

           

Basic

36,697

 

36,697

30,297

 

30,297

Diluted

42,082

 

42,289

39,004

 

39,047

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)

 
 

Nine months ended September 30, 2020

Nine months ended September 30, 2019

GAAP

Share Based
Compensation

Non-GAAP

GAAP

Share Based
Compensation

Non-GAAP

REVENUES

130,920

-

130,920

109,359

-

109,359

COST OF REVENUES

20,274

(380)

19,894

14,193

(62)

14,131

GROSS PROFIT

110,646

380

111,026

95,166

62

95,228

OPERATING EXPENSES:

           

Research and development

7,207

(2,132)

5,075

4,112

(166)

3,946

Sales and marketing

61,293

(6,569)

54,724

46,721

(887)

45,834

General and administrative

4,745

(533)

4,212

2,693

(84)

2,609

TOTAL OPERATING
EXPENSES

73,245

(9,234)

64,011

53,526

(1,137)

52,389

INCOME FROM OPERATIONS

37,401

9,614

47,015

41,640

1,199

42,839

Finance income, net

2,063

-

2,063

1,264

-

1,264

INCOME BEFORE TAXES

39,464

9,614

49,078

42,904

1,199

44,103

INCOME TAXES (TAX BENEFIT)

509

(763)

(254)

718

227

945

NET INCOME

38,955

10,377

49,332

42,186

972

43,158

Add: Loss (net income) attributable to non-controlling interests

(39)

-

(39)

(79)

-

(79)

NET INCOME ATTRIBUTABLE TO INMODE LTD.

38,916

10,377

49,293

42,107

972

43,079

             

NET INCOME PER
SHARE:

           

Basic

1.09

 

1.39

1.50

 

1.53

Diluted

0.93

 

1.17

1.15

 

1.17

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF NET INCOME PER SHARE

           

Basic

35,542

 

35,542

28,031

 

28,031

Diluted

41,894

 

42,061

36,654

 

36,707

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SOURCE InMode Ltd.


Company Codes: NASDAQ-NMS:INMD

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