Conformis Reports First Quarter 2021 Financial Results
First Quarter 2021 Summary
- Total revenue of
$13.8 million, a decrease of 16% year-over-year on a reported basis and 17% on a constant currency basis.
- Product revenue of
$13.7 million, a decrease of 16% year-over-year on a reported basis and 17% on a constant currency basis.
- Conformis Hip System revenue up 49% year-over-year to
- Gross margin of 45%, an increase of 80 basis points year-over-year.
- Total operating expenses remained flat year-over-year.
- Closed on an
$85 millionstock offering.
- 510(k) application for Conformis’ new standard knee submitted to the FDA for review.
- Subsequent to quarter-end, received FDA 510(k) clearance for patient-specific instrumentation associated with the Stryker development agreement.
Executive Commentary –
"The year is off to a good start. We met our expectations for business activity in the quarter as COVID-19 headwinds impacted elective procedures to the degree we anticipated. Despite these continuing headwinds for our industry, we are pleased with the progress of vaccine adoption nationwide and, as a result, remain cautiously optimistic that we will see procedure levels get back to normal in the second half of 2021. This anticipated acceleration in activity is timed well for our planned product introductions, which remain on track. We are in a great financial position, especially in light of the
|Three months ended
|($, in thousands)||2021||2020||$ Change||% Change||% Change|
|(as reported)||(constant currency)|
|Rest of world||2,107||2,463||(356||)||(14||)%||(22||)%|
First Quarter 2021 Highlights
- Decrease in revenue year-over-year was driven primarily by lower volume due to the impact of the COVID-19 pandemic on elective procedures.
- Conformis Hip System revenue for the first quarter of 2021, which were all in
the United States, were up 49% to $0.7 million.
- Total gross profit decreased
$1.0 millionto $6.2 million, or 45% of revenue, in the first quarter of 2021, compared to $7.2 million, or 44% of revenue, in the first quarter of 2020.
- The 80 basis point increase in gross margin year-over-year was driven primarily by lower cancelled case inventory expense, partially offset by manufacturing variances as a result of lower production volume.
- Total operating expenses of
$15.3 millionwere flat year-over-year.
- Sales and marketing expenses declined
$1.5 milliondue to lower marketing event, program, and advertising expenses, sales commissions, and travel expenses.
- Research and development expenses increased
$0.6 millionprimarily driven by personnel costs to support our new product pipeline.
- General and administrative expenses increased
$0.9 millionprimarily driven by higher professional fees related to the protection of our intellectual property.
- Net loss was
$11.5 million, or $0.09per basic and diluted share, in the first quarter of 2021, compared to a net loss of $9.4 million, or $0.14per basic and diluted share, in the same period last year.
- Foreign currency exchange loss was
$1.8 millionin the first quarter of 2021, compared to $0.7 millionin the same period last year.
- Weighted average basic and diluted shares outstanding of 131.3 million for the first quarter of 2021, compared to 67.3 million for the same period last year.
Capital Structure and Liquidity
- Cash and cash equivalents totaled
$104.6 millionas of March 31, 2021, compared to $28.7 millionas of December 31, 2020.
- As previously announced on
February 12, 2021, the Company generated gross proceeds of approximately $85 millionin an underwritten public offering of 80,952,381 shares of common stock at $1.05per share. Net proceeds were approximately $79.6 million.
- We expect our second quarter product revenue to improve sequentially from the first quarter and to be in the range of
$14.0 millionto $14.5 million.
- We believe elective procedure volumes will improve in the third quarter and approach 2019 levels in the fourth quarter as vaccines become more widely available.
Note on Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with
As previously announced,
The online archive of the webcast will be available on the Company's website for 30 days.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this press release about our future expectations, plans and prospects, including statements about the impact of the novel coronavirus (COVID-19) pandemic and the actions we are taking and planning in response, our planned launch of a new program aimed at developing a knee replacement offering targeted at hospital outpatient and ambulatory surgery centers, the anticipated timing of our product launches, whether or when restrictions on elective surgeries will be relaxed and demand for procedures will increase, and our financial position and results, total revenue, product revenue, gross margin, operations and growth, 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" or the negative of these terms or other and similar expressions are intended to identify forward-looking statements within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995, although not all forward-looking statements contain these identifying words. 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 the novel coronavirus pandemic and the response to the pandemic; whether our cash resources will be sufficient to fund our continuing operations for the periods anticipated; risks related to our estimates and expectations regarding our revenue, gross margin, expenses, revenue growth and other results of operations, and the other risks and uncertainties described in the "Risk Factors" sections of our Annual Report on Form 10-K for the fiscal year ended
|Consolidated Statements of Operations|
|(in thousands, except share and per share data)|
|Three Months Ended
|Royalty and licensing||124||185|
|Cost of revenue||7,662||9,261|
|Sales and marketing||5,113||6,563|
|Research and development||3,540||2,990|
|General and administrative||6,666||5,736|
|Total operating expenses||15,319||15,289|
|Loss from operations||(9,146||)||(8,075||)|
|Other income and expenses|
|Foreign currency exchange transaction loss||(1,761||)||(714||)|
|Total other expenses||(2,337||)||(1,253||)|
|Loss before income taxes||(11,483||)||(9,328||)|
|Income tax provision||23||25|
|Net loss per share|
|Basic and diluted||$||(0.09||)||$||(0.14||)|
|Weighted average common shares outstanding|
|Basic and diluted||131,300,157||67,274,391|
|Consolidated Balance Sheets|
|(in thousands, except share and per share data)|
|Cash and cash equivalents||$||104,597||$||28,673|
|Accounts receivable, net||8,223||8,515|
|Royalty and licensing receivable||131||1,256|
|Prepaid expenses and other current assets||2,587||2,315|
|Total current assets||128,879||53,344|
|Property and equipment, net||11,547||12,240|
|Operating lease right-of-use assets||4,903||5,215|
|Other long-term assets||229||239|
|Liabilities and stockholder's equity|
|Operating lease liabilities||1,658||1,620|
|Advance on research and development||2,651||3,168|
|Total current liabilities||29,671||30,919|
|Long-term debt, less debt issuance costs||25,172||25,003|
|Operating lease liabilities||3,852||4,206|
|Commitments and contingencies|
|Authorized: 5,000,000 shares authorized at
|Authorized: 200,000,000 shares authorized at
|Additional paid-in capital||629,622||543,809|
|Accumulated other comprehensive loss||(2,355||)||(4,000||)|
|Total stockholders' equity||87,325||11,372|
|Total liabilities and stockholders' equity||$||146,020||$||71,500|
CONTACT: Investor Relations firstname.lastname@example.org (781) 374-5598
Source: Conformis, Inc.