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Exhibit 99.1

 

ConforMIS Reports First Quarter 2016 Financial Results and Updates Fiscal Year 2016 Revenue Guidance; Board of Directors Initiates CEO Succession Plan

 

BEDFORD, Mass., May 12, 2016 (GLOBE NEWSWIRE) — ConforMIS, Inc. (NASDAQ:CFMS), a medical technology company that uses its proprietary iFit Image-to-Implant technology platform to develop, manufacture and sell joint replacement implants that are customized to fit each patient’s unique anatomy, announced today financial results for the first quarter ended March 31, 2016.

 

Q1 Summary:

 

·                  Total revenue of $20.3 million, up 38% year-over-year on a reported basis and up 40% year-over-year on a constant currency basis

·                  Product revenue of $20.0 million, up 36% year-over-year on a reported basis and up 39% year-over-year on a constant currency basis

·                  U.S. product revenue increased 43% year-over-year

·                  Rest of World product revenue increased 20% year-over-year on a reported basis and 28% year-over-year on a constant currency basis

 

“First quarter of 2016 showed strong revenue growth with product revenue up 36% year-over-year on a reported basis and 39% year-over-year on a constant currency basis,” said Philipp Lang, MD, MBA, President and Chief Executive Officer of ConforMIS, Inc.  “Product revenue growth in the first quarter was driven primarily by strong contributions from the limited launch of iTotal PS and benefits from improving order lead times and rescheduled cases from the second half of 2015 related to the voluntary recall.

 

Dr. Lang continued, “We are very pleased with the performance of iTotal PS in the first quarter of 2016 and have seen strong demand for this innovative product following the broad commercial launch in March 2016. We continue to anticipate strong growth and increasing contributions to product revenue from iTotal PS over the balance of the year. That said, despite the signs of a recovery in order trends for iTotal CR, iDuo and iUni, which we discussed on our fourth quarter earnings call, subsequent order trends have not improved as expected and we have adjusted our 2016 product revenue guidance to reflect our revenue expectations for iTotal CR, iDuo and iUni for the remainder of the year.”

 



 

First Quarter 2016 Financial Results

 

 

 

Three months ended
March 31,

 

Increase/decrease

 

($, in thousands)

 

2016

 

2015

 

$
Change

 

%
Change

 

%
Change

 

 

 

 

 

 

 

 

 

(as reported)

 

(constant currency)

 

United States

 

$

14,708

 

$

10,288

 

$

4,420

 

43

%

43

%

Rest of world

 

5,274

 

4,412

 

862

 

20

 

28

 

Product revenue

 

19,982

 

14,700

 

5,282

 

36

 

39

 

Royalty revenue

 

268

 

0

 

268

 

100

 

100

 

Total revenue

 

$

20,250

 

$

14,700

 

$

5,550

 

38

%

40

%

 

Total revenue increased $5.6 million to $20.3 million, or 38% year-over-year on a reported basis and 40% on a constant currency basis. Total revenue in the first quarter of 2016 includes royalty revenue of $0.3 million related to ongoing patent license royalty payments.

 

Product revenue increased $5.3 million to $20.0 million, or 36% year-over-year on a reported basis and 39% on a constant currency basis. U.S. product revenue increased $4.4 million to $14.7 million, or 43% year-over-year, and Rest of World (including Germany) product revenue increased $0.9 million to $5.3 million, or 20% year-over-year on a reported basis and 28% on a constant currency basis. Product revenue from sales of iTotal CR, iDuo and iUni increased $3.0 million to $17.6 million, or 21% year-over-year on a reported basis and 24% on a constant currency basis. Product revenue from sales of iTotal PS, for which we initiated a limited launch in February 2015 and initiated a broad commercial launch in March 2016, increased $2.2 million to $2.4 million, or 1,679% year-over-year on a reported basis and 1,684% on a constant currency basis.

 

Gross profit increased $1.7 million to $7.0 million, or 35% of revenue, in the first quarter of 2016, compared to $5.3 million, or 36% of revenue, in the first quarter of 2015. The decrease in gross margin as compared to the prior year was primarily caused by unfavorable changes in the foreign exchange rates.

 

Total operating expenses increased $2.8 million to $22.2 million, or 14% year-over-year on a reported basis. The increase in expenses was driven primarily by higher sales and marketing personnel costs as compared to the first quarter of 2015.

 

Net loss was $15.0 million, or $0.37 per basic share, in the first quarter of 2016, compared to a net loss of $14.3 million, or $3.32 per basic share, for the same period last year. Net loss per basic share calculations assume weighted-average basic shares outstanding of 41.0 million for the first quarter of 2016, compared to 4.3 million basic shares in the same period last year.

 



 

As of March 31, 2016, the Company’s cash and cash equivalents and short-term investments totaled $103.5 million, compared to $117.2 million as of December 31, 2015.

 

2016 Financial Guidance

 

For the full year 2016, the Company expects total revenue in a range of $76 million to $81 million, from previous guidance in a range of $84 million to $87 million.  The Company’s 2016 revenue guidance assumes the following:

 

·                  Product revenue in a range of $75 million to $80 million, representing year-over-year growth of 19% to 27% on a reported basis and 20% to 28% on a constant currency basis.  This is updated from previous guidance in a range of $83 million to $86 million, representing year-over-year growth of 32% to 37% on a reported basis and 33% to 38% on a constant currency basis.

·                  Royalty revenue guidance of approximately $0.8 million related to ongoing patent license royalty payments has not changed.

 

To get a better sense of our expectations for the second quarter of 2016 the Company is also providing one-time quarterly guidance of total revenue in a range of $17.7 million to $18.7 million and product revenue in a range of $17.5 million to $18.5 million, representing year-over-year product revenue growth of 11% to 17% on a reported basis and a constant currency basis.

 

ConforMIS Board of Directors Initiates Search for New CEO; Dr. Philipp Lang to Remain as CEO Until Successor is Named

 

The ConforMIS Board of Directors has retained an executive search firm to search for a new President and Chief Executive Officer to succeed Dr. Lang. The Company expects that Dr. Lang will remain the CEO until the successor has been appointed and Dr. Lang will continue to serve on the Board of Directors.

 

Constant Currency

 

The Company provides certain information regarding the Company’s financial results or projected financial results on a “constant currency basis.” This information estimates the impact of changes in foreign currency rates on the translation of the Company’s current or projected future period financial results as compared to the applicable comparable period. This impact is derived by taking the adjusted current or projected local currency results and translating them into U.S. Dollars based upon the foreign currency exchange rates for the applicable comparable period. It does not include any other effect of changes in foreign currency rates on the Company’s results or business.

 

Conference Call

 

As previously announced, ConforMIS will conduct a conference call and webcast today at 4:30 PM Eastern Time. Management will discuss financial results and strategic matters. To participate in the conference call, please call 877-809-6331 (or 615-247-0224 for international) and use conference ID number 97879952 or listen to the webcast in the investor relations section of the company’s website at ir.conformis.com. The online archive of the webcast will be available on the company’s website for 30 days.

 

About ConforMIS, Inc.

 

ConforMIS is a medical technology company that uses its proprietary iFit Image-to-Implant technology platform to develop, manufacture and sell joint replacement implants that are

 



 

individually sized and shaped, or customized, to fit each patient’s unique anatomy. ConforMIS offers a broad line of customized knee implants and pre-sterilized, single-use instruments delivered in a single package to the hospital. In recent clinical studies, ConforMIS iTotal CR demonstrated superior clinical outcomes, including better function and greater patient satisfaction, compared to traditional, off-the-shelf implants. ConforMIS owns or exclusively in-licenses approximately 500 issued patents and pending patent applications that cover customized implants and patient-specific instrumentation for all major joints.

 

For more information, visit www.conformis.com. To receive future releases in e-mail alerts, sign up at http://ir.conformis.com/.

 

Cautionary Statement Regarding Forward-Looking Statements

 

Any statements in this press release about our future expectations, plans and prospects, including statements about our strategy, future operations, future financial position and results, market growth, total revenue and revenue mix by product and geography, gross margin, operating trends, the potential impact and advantages of using customized implants, the impact of our voluntary recall, as well as other statements containing the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” and similar expressions, constitute forward-looking statements within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make as a result of a variety of risks and uncertainties, including risks related to our estimates regarding the potential market opportunity for our current and future products, our expectations regarding our sales, expenses, gross margins and other results of operations, employee transition, retention and hiring plans, the impact of our voluntary recall on financial results and the other risks and uncertainties described in the “Risk Factors” sections of our public filings with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent our views as of the date hereof. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date hereof.

 

CONTACT: Investor contact

Oksana Bradley

ir@conformis.com

(781) 374-5598

 



 

CONFORMIS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except share and per share data)

 

 

 

Three Months Ended March 31,

 

 

 

2016

 

2015

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

Product

 

$

19,982

 

$

14,700

 

Royalty

 

268

 

 

Total revenue

 

20,250

 

14,700

 

Cost of revenue

 

13,215

 

9,388

 

Gross profit

 

7,035

 

5,312

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

Sales and marketing

 

11,486

 

9,579

 

Research and development

 

4,398

 

4,016

 

General and administrative

 

6,295

 

5,780

 

 

 

 

 

 

 

Total operating expenses

 

22,179

 

19,375

 

Loss from operations

 

(15,144

)

(14,063

)

 

 

 

 

 

 

Other income and expenses

 

 

 

 

 

Interest income

 

139

 

39

 

Interest expense

 

(25

)

(223

)

Total other expenses

 

114

 

(184

)

Loss before income taxes

 

(15,030

)

(14,247

)

Income tax provision

 

4

 

10

 

 

 

 

 

 

 

Net loss

 

$

(15,034

)

$

(14,257

)

 

 

 

 

 

 

Net loss per share - basic and diluted

 

$

(0.37

)

$

(3.32

)

Weighted average common shares outstanding basic and diluted

 

40,993,485

 

4,296,613

 

 



 

CONFORMIS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except share and per share data)

 

 

 

March 31,
2016

 

December 31,
2015

 

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

 

$

76,583

 

$

117,185

 

Investments

 

26,939

 

 

Accounts receivable, net

 

13,535

 

14,867

 

Inventories

 

11,919

 

11,520

 

Prepaid expenses and other current assets

 

1,899

 

2,451

 

Total current assets

 

130,875

 

146,023

 

Property and equipment, net

 

13,592

 

10,966

 

Other Assets

 

 

 

 

 

Restricted cash

 

600

 

600

 

Intangible assets, net

 

932

 

995

 

Goodwill

 

753

 

753

 

Other long-term assets

 

29

 

32

 

Total assets

 

$

146,781

 

$

159,369

 

 

 

 

 

 

 

Liabilities and stockholder’s equity

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

 

$

5,728

 

$

4,718

 

Accrued expenses

 

7,495

 

7,811

 

Deferred revenue

 

305

 

305

 

Current portion of long-term debt

 

301

 

295

 

Total current liabilities

 

13,829

 

13,129

 

Other long-term liabilities

 

200

 

220

 

Deferred revenue

 

4,549

 

4,625

 

Long-term debt

 

105

 

183

 

Total liabilities

 

18,683

 

18,157

 

Stockholders’ equity

 

 

 

 

 

Preferred stock, $0.00001 par value:

 

 

 

 

 

Authorized: 5,000,000 and zero shares authorized at March 31, 2016 and
December 31, 2015; no shares issued and outstanding as of March 31, 2016 and December 31, 2015

 

 

 

 

 

Common stock, $0.00001 par value:

 

 

 

 

 

Authorized: 200,000,000 shares at March 31, 2016 and December 31, 2015;
41,753,306 and 41,110,127 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively

 

 

 

Additional paid-in capital

 

468,844

 

467,075

 

Accumulated deficit

 

(340,376

)

(325,342

)

Accumulated other comprehensive loss

 

(370

)

(521

)

Total stockholders’ equity

 

128,098

 

141,212

 

Total liabilities and stockholders’ equity

 

$

146,781

 

$

159,369