Tandem Diabetes Care Announces Third Quarter 2020 Financial Results and Updated Full Year 2020 Sales Guidance

Nov. 5, 2020 21:05 UTC

SAN DIEGO--(BUSINESS WIRE)-- Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a leading insulin delivery and diabetes technology company, today reported its financial results for the quarter ended September 30, 2020 and updated its sales guidance for the year ending December 31, 2020.

Third Quarter 2020 Highlights

In comparing the third quarter of 2020 to the same period of 2019:

  • Worldwide pump shipments increased 23 percent to 22,021 pumps from 17,839 pumps
  • Sales increased 31 percent to $123.6 million from $94.7 million
  • Operating margin improved to negative 1 percent from negative 6 percent

“Our t:slim X2 with Control-IQ technology drove record sales in the third quarter, and we are excited to have commenced its launch outside the United States,” said John Sheridan, president and chief executive officer. “The third quarter was a remarkable demonstration of our employees’ commitment to progressing our business commercially, operationally and strategically, while focusing on customer care and preparing for future growth.”

Third Quarter 2020 Financial Results

Domestic pump shipments increased 33 percent to 18,380 pumps in the third quarter of 2020 from 13,814 pumps in the same period of 2019. Domestic sales were $107.5 million, or an increase of 36 percent compared to $78.8 million in the third quarter of 2019. International pump shipments decreased 10 percent to 3,641 pumps in the third quarter of 2020 from 4,025 pumps in the same period of 2019. International sales were $16.1 million, or an increase of 2 percent compared to $15.8 million in the third quarter of 2019.

Gross profit for the third quarter of 2020 increased 29 percent to $65.3 million, compared to $50.7 million for the same period of 2019. Gross margin was 53 percent in the third quarter of 2020 and 54 percent in the same period of 2019. These included a non-cash stock-based compensation charge of $2.1 million in the third quarter of 2020 compared to $1.8 million for the same period of 2019. Royalty expense was $1.7 million in the third quarter of 2020, compared to no royalty expense in the third quarter of 2019.

For the third quarter of 2020, operating expenses totaled $66.3 million, compared to $56.7 million for the same period of 2019. Operating expenses included a non-cash charge for stock-based compensation of $10.7 million, compared to stock-based compensation of $15.5 million for the same period of 2019. Operating loss totaled $1.0 million, compared to $6.0 million for the same period of 2019. Operating margin for the third quarter of 2020 was negative 1 percent compared to negative 6 percent for the same period of 2019. For the third quarter of 2020, adjusted EBITDA(1) was $14.8 million or 12 percent of sales, compared to $12.7 million, or 13 percent of sales, for the same period of 2019.

Net loss for the third quarter of 2020 was $9.4 million, which included a $3.6 million non-cash charge for the change in fair value of certain outstanding warrants and $4.9 million of interest expense related to the Company’s convertible debt offering, of which $3.8 million is non-cash. This is compared to a net loss of $2.9 million for the third quarter of 2019, which included a $2.3 million non-cash gain for the change in fair value of certain warrants outstanding at that time.

(1)

 

EBITDA is a non-GAAP financial measure defined as net income (loss) excluding income taxes, interest and other non-operating items and depreciation and amortization. Adjusted EBITDA further adjusts for the change in fair value of common stock warrants and non-cash stock-based compensation expense. This definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by the Company to evaluate operating performance, generate future operating plans and make strategic decisions for the allocation of capital. The Company presents Adjusted EBITDA to provide information that may assist investors in understanding its financial results. However, Adjusted EBITDA is not intended to be a substitute for net loss.

Cash Balance and Liquidity

As of September 30, 2020, the Company had $464.5 million in cash, cash equivalents and short-term investments. This represents a $38.2 million increase in the third quarter of 2020 and a $288.1 million increase since December 31, 2019. The increase in cash, cash equivalents and short-term investments includes net proceeds of $244.6 million from the Company’s convertible debt transaction during the second quarter.

2020 Guidance

For the year ending December 31, 2020, the Company is updating its sales guidance estimated to be in the range of $465 million to $475 million, which includes international sales of approximately $70 million to $75 million. This represents an annual sales growth of 28 percent to 31 percent compared to 2019. The Company’s prior sales guidance for 2020 was estimated to be in the range of $450 million to $465 million.

Non-GAAP Financial Measures

Certain non-GAAP financial measures are presented in this press release, including adjusted EBITDA, to provide information that may assist investors in understanding the Company’s financial results and assessing its prospects for future performance. We believe these non-GAAP financial measures are important indicators of our operating performance because they exclude items that are unrelated to, and may not be indicative of, our core operating results. These non-GAAP financial measures, as we calculate them, 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 we utilize such non-GAAP financial measures in the future, we expect to calculate them 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 under the heading “Reconciliation of GAAP versus Non-GAAP Financial Results” in the financial statement tables attached to this press release. Consistent with SEC regulations, we have 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 we may make to our GAAP financial measures in calculating our non-GAAP financial measures.

Conference Call

The Company will hold a conference call and simultaneous webcast today at 4:30 p.m. Eastern Time (1:30 p.m. 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 listen to the conference call via phone, please dial 855-427-4396 (U.S./Canada) or 484-756-4261 (International) and use the participant code “8072078.”

About Tandem Diabetes Care, Inc.

Tandem Diabetes Care, Inc. (www.tandemdiabetes.com) is a medical device company dedicated to improving the lives of people with diabetes through relentless innovation and revolutionary customer experience. The Company takes an innovative, user-centric approach to the design, development and commercialization of products for people with diabetes who use insulin. Tandem’s flagship product, the t:slim X2 insulin pump, is capable of remote software updates using a personal computer and features integrated continuous glucose monitoring. Tandem is based in San Diego, California.

Tandem Diabetes Care is a registered trademark and t:slim X2 and Control-IQ are trademarks of Tandem Diabetes Care, Inc.

Follow Tandem Diabetes Care on Twitter @tandemdiabetes; use #tslimX2 and $TNDM.
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. 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 new products when anticipated; 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 evolving 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

(in thousands)

       
 

September 30,

 

December 31,

 

2020

 

2019

 

(Unaudited)

   

Assets

     

Current assets:

     

Cash and cash equivalents and short-term investments

$

464,522

 

$

176,458

Accounts receivable, net

52,104

 

46,585

Inventories

70,644

 

49,073

Other current assets

5,023

 

4,025

Total current assets

592,293

 

276,141

       

Property and equipment, net

49,320

 

32,923

Operating lease right-of-use assets

21,325

 

15,561

Other long-term assets

10,050

 

1,485

Total assets

$

672,988

 

$

326,110

Liabilities and Stockholders’ Equity

     

Current liabilities:

     

Accounts payable, accrued expenses and employee-related liabilities

$

57,374

 

$

54,079

Deferred revenue

5,210

 

3,869

Common stock warrants

17,404

 

23,509

Operating lease liabilities

9,365

 

6,320

Other current liabilities

16,153

 

11,619

Total current liabilities

105,506

 

99,396

       

Convertible senior notes, net - long-term

199,120

 

Operating lease liabilities - long-term

17,893

 

14,063

Other long-term liabilities

23,925

 

17,672

Total liabilities

346,444

 

131,131

       

Total stockholders’ equity

326,544

 

194,979

Total liabilities and stockholders’ equity

$

672,988

 

$

326,110

TANDEM DIABETES CARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)

 
 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

Sales

$

123,603

   

$

94,657

   

$

330,765

   

$

253,907

 

Cost of sales

58,290

   

43,974

   

160,801

   

119,967

 

Gross profit

65,313

   

50,683

   

169,964

   

133,940

 

Operating expenses:

             

Selling, general and administrative

50,228

   

44,649

   

150,385

   

120,173

 

Research and development

16,094

   

12,038

   

46,198

   

32,632

 

Total operating expenses

66,322

   

56,687

   

196,583

   

152,805

 

Operating loss

(1,009

)

 

(6,004

)

 

(26,619

)

 

(18,865

)

Total other income (expense), net

(8,360

)

 

3,175

   

(26,701

)

 

(8,468

)

Loss before income taxes

(9,369

)

 

(2,829

)

 

(53,320

)

 

(27,333

)

Income tax expense (benefit)

39

   

72

   

(1,938

)

 

72

 

Net loss

$

(9,408

)

 

$

(2,901

)

 

$

(51,382

)

 

$

(27,405

)

               

Net loss per share, basic

$

(0.15

)

 

$

(0.05

)

 

$

(0.85

)

 

$

(0.47

)

Net loss per share, diluted

$

(0.15

)

 

$

(0.09

)

 

$

(0.85

)

 

$

(0.47

)

               

Weighted average shares used to compute basic net loss per share

61,529

   

58,801

   

60,568

   

58,268

 

Weighted average shares used to compute diluted net loss per share

61,529

   

59,196

   

60,568

   

58,268

 

Reconciliation of GAAP versus Non-GAAP Financial Results

(in thousands)

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2020

 

2019

 

2020

 

2019

GAAP net loss

$

(9,408

)

 

$

(2,901

)

 

$

(51,382

)

 

$

(27,405

)

Income tax expense (benefit)

39

   

72

   

(1,938

)

 

72

 

Interest income and other, net

(143

)

 

(854

)

 

(1,235

)

 

(2,381

)

Interest expense

4,855

   

   

8,030

   

 

Depreciation and amortization

2,989

   

1,484

   

7,024

   

4,430

 

EBITDA

(1,668

)

 

(2,199

)

 

(39,501

)

 

(25,284

)

Change in fair value of common stock warrants

3,648

   

(2,321

)

 

19,906

   

10,849

 

Stock-based compensation expense

12,837

   

17,231

   

45,123

   

39,386

 

Adjusted EBITDA

$

14,817

   

$

12,711

   

$

25,528

   

$

24,951

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20201105005847/en/

Contacts

Media Contact:
Steve Sabicer
714-907-6264
ssabicer@thesabicergroup.com

Investor Contact:
Susan Morrison
858-366-6900 x7005
IR@tandemdiabetes.com

 

Source: Tandem Diabetes Care, Inc.

Back to news