Tandem Diabetes Care Announces Third Quarter 2019 Financial Results and Updated 2019 Financial Guidance
Posted on November 05, 2019 by Medtech[y] Staff
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, 2019 and updated its financial guidance for the year ending December 31, 2019.
Third Quarter 2019 Highlights
In comparing the third quarter of 2019 to the same period of 2018:
- Worldwide pump shipments increased 112 percent to 17,839 pumps from 8,434 pumps
- Sales increased 105 percent to $94.7 million from $46.3 million
- Operating margin improved to negative 6 percent from negative 34 percent
- Adjusted EBITDA(1) improved to 13 percent of sales from negative 10 percent of sales
“Our third quarter results once again demonstrate that technology drives customer adoption, and that there is meaningful long-term opportunity to continue bringing the benefits of insulin pump therapy to people with diabetes worldwide,” said John Sheridan, president and chief executive officer. “With approval of the t:slim X2 insulin pump with Control-IQ technology pending, we’re positioned for an exciting end of 2019 and beyond as we work to continue driving growth through innovation and further our mission to improve the lives of people with diabetes.”
Third Quarter 2019 Financial Results
Domestic pump shipments increased 87 percent to 13,814 pumps in the third quarter of 2019 from 7,379 pumps in the same period of 2018. Domestic sales were $78.8 million, or an increase of 80 percent compared to $43.7 million in the third quarter of 2018. International operations commenced in the third quarter of 2018. International pump shipments increased 282 percent to 4,025 pumps in the third quarter of 2019 from 1,055 pumps in the same period of 2018. International sales were $15.8 million, or an increase of 532 percent compared to $2.5 million in the third quarter of 2018.
Gross profit for the third quarter of 2019 increased 133 percent to $50.7 million, compared to $21.8 million for the same period of 2018. Gross margin was 54%, compared to 47% in the same period of 2018. These included a non-cash stock-based compensation charge of $1.8 million in the third quarter of 2019 compared to $0.8 million for the same period of 2018, or 2 percent of sales in both periods.
For the third quarter of 2019, operating expenses totaled $56.7 million, compared to $37.5 million for the same period of 2018. Operating expenses included a non-cash charge for stock-based compensation of $15.5 million, compared to stock-based compensation of $8.8 million for the same period of 2018. Operating loss totaled $6.0 million, compared to $15.7 million for the same period of 2018. Operating margin for the third quarter of 2019 improved to negative 6 percent compared to negative 34 percent for the same period of 2018. For the third quarter of 2019, adjusted EBITDA(1) was $12.7 million, or 13 percent of sales, compared to negative $4.7 million, or negative 10 percent of sales, for the same period of 2018.
Net loss for the third quarter of 2019 was $2.9 million, which included a $2.3 million non-cash gain for the change in fair value of certain outstanding warrants. This compared to a net loss of $34.2 million for the third quarter of 2018, which included a $12.3 million non-cash charge for the change in fair value of certain warrants outstanding at that time.
Cash Balance and Liquidity
As of September 30, 2019, the Company had $156.9 million in cash, cash equivalents and short-term investments. This represents a $25.6 million increase in the third quarter of 2019 and a $27.9 million increase since December 31, 2018.
2019 Annual Guidance
For the year ending December 31, 2019, the Company is updating its financial guidance as follows:
- Sales are estimated to be in the range of $358 million to $365 million, which represents an annual sales growth of 95 percent to 99 percent compared to 2018. The Company’s prior sales guidance for 2019 was estimated to be in the range of $350 million to $365 million.
- Includes international sales of approximately $58 million to $60 million.
- Gross margin is estimated to be approximately 54 percent, compared to 49 percent in 2018.
- Adjusted EBITDA(1) is estimated to be 7 percent to 12 percent.
- Non-cash charges included in cost of goods sold and operating expenses are estimated to be approximately $60 million, which include:
- Approximately $53 million in non-cash, stock-based compensation expense
- Approximately $7 million of depreciation and amortization
1EBITDA 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 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.
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 and information regarding the use of non-GAAP financial measures will be available by accessing 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 "5578474".
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 and Basal-IQ are a registered trademarks and t:slim X2 is a trademark of Tandem Diabetes Care, Inc.
Follow Tandem Diabetes Care on Twitter @tandemdiabetes; use #tslimX2, #tconnect, 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.