Conformis Reports First Quarter 2022 Financial Results
First Quarter 2022 Summary
- Total revenue of
$15.6 million , an increase of 12% year-over-year on a reported basis and 13% on a constant currency basis. - Product revenue of
$14.9 million , an increase of 9% year-over-year on a reported and constant currency basis. Conformis hip system revenue up 18% year-over-year to$0.8 million .- Cash and cash equivalents of
$82.7 million as ofMarch 31, 2022 . - Recently completed the 250th Imprint procedure under the limited market release.
- New COO,
Michael Fillion startedApril 1, 2022 .
Executive Commentary –
“We had another good quarter of progress on our Imprint and Platinum Services rollouts. Surgeon interest and feedback continue to be favorable and we are positioned well to benefit as elective arthroplasty procedure recovery takes hold in hospitals and ASC’s over the coming quarters. Traction on our topline and recovery of procedural levels will benefit our gross margins, which have been under pressure the past two quarters. We are acting decisively to reverse this trend and get back to our expected gross margins.”
Three months ended |
Increase/(decrease) | |||||||||
($, in thousands) | 2022 | 2021 | $ Change | % Change | % Change | |||||
(as reported) | (constant currency) | |||||||||
$ | 12,715 | $ | 11,604 | $ | 1,111 | 10 | % | 10 | % | |
Rest of world | 2,169 | 2,107 | 62 | 3 | % | 9 | % | |||
Product revenue | 14,884 | 13,711 | 1,173 | 9 | % | 9 | % | |||
Royalty revenue | 667 | 124 | 543 | 438 | % | 438 | % | |||
Total revenue | $ | 15,551 | $ | 13,835 | $ | 1,716 | 12 | % | 13 | % |
First Quarter 2022 Highlights
Revenue
- Increase in product revenue year-over-year was primarily due to modest recovery in elective surgeries as compared to the same period last year and growth in the ambulatory surgery center channel, which is the primary target for our Imprint knee.
- Royalty and licensing revenue for the first quarter included the recognition of the final
$0.5 million payment under an existing license agreement with Paragon 28.
Gross Margin
- Total gross profit decreased
$0.4 million to$5.7 million , or 36.9% of revenue, in the first quarter of 2022, compared to$6.2 million , or 44.6% of revenue, in the first quarter of 2021. - The decline in gross margin rate year-over-year was driven by increased vendor material costs, higher labor costs and labor inefficiencies, elevated scrap, cancelled case inventory expense, and a reduction in product selling price partially offset by higher royalty and licensing revenue.
Operating Expenses
- Total operating expenses of
$20.5 million , an increase of$5.2 million year-over-year. - Sales and marketing expenses increased
$1.6 million primarily due to higher tradeshow, sales commissions, and personnel costs. - Research and development expenses increased
$0.9 million primarily driven by personnel and project-related costs for our new hip stem, cementless knee, and design software enhancements. - General and administrative expenses increased
$2.7 million primarily driven by higher customer delivery related costs and professional fees related to litigation involving our intellectual property.
Net Loss
- Net loss was
$16.0 million , or$0.09 per basic and diluted share, in the first quarter of 2022, compared to a net loss of$11.5 million , or$0.09 per basic and diluted share, in the same period last year. - Foreign currency exchange transaction loss was
$0.8 million in the first quarter of 2022, compared to foreign currency exchange transaction loss of$1.8 million in the same period last year. - Weighted average basic and diluted shares outstanding of 179.2 million for the first quarter of 2022, compared to 131.3 million for the same period last year.
Capital Structure and Liquidity
- Cash and cash equivalents totaled
$82.7 million as ofMarch 31, 2022 , compared to$100.6 million as ofDecember 31, 2021 .
Outlook
- We expect our second quarter product revenue to be in the range of
$14.5 million to$15.5 million . - The second quarter revenue range does not assume improvement in staffing shortages in medical facilities but assumes a gradual recovery in elective procedures.
- We confirm our full year product revenue expectations of
$60 million to$70 million . - For operating expenses, we reiterate our expectations of
$75 million to$81 million for the year.
Note on Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with
Conference Call and Webcast –
As previously announced,
The webcast will be live at: https://edge.media-server.com/mmc/p/unvfzkbo
To attend by telephone, please use the information below for dial-in access.
- When prompted on dial-in, please utilize conference ID: 9056628
- Participant conference numbers: (877) 809-6331 (
U.S. /Canada ) and (615) 247- 0224 (International). - Please dial in at least 10 minutes before the call to ensure timely participation.
The online archive of the webcast will be available on the company’s website at ir.conformis.com for 30 days.
Annual Shareholder Meeting –
As previously announced, the Company will hold its annual shareholder meeting this afternoon,
Stockholders will be able to listen, vote, and submit questions by logging in at: www.virtualshareholdermeeting.com/CFMS2022
About
For more information, visit www.conformis.com. To receive future releases in e-mail alerts, sign up at ir.conformis.com.
Cautionary Statement Regarding Forward-Looking Statements
Statements in this press release about our future expectations, plans and prospects, the anticipated timing of our product launches, 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
CONTACT:
Investor Relations
ir@conformis.com
(781) 374-5598
Consolidated Statements of Operations | |||||||
(unaudited) | |||||||
(in thousands, except share and per share data) | |||||||
Three Months Ended |
|||||||
2022 | 2021 | ||||||
Revenue | |||||||
Product | $ | 14,884 | $ | 13,711 | |||
Royalty and licensing | 667 | 124 | |||||
Total revenue | 15,551 | 13,835 | |||||
Cost of revenue | 9,810 | 7,662 | |||||
Gross profit | 5,741 | 6,173 | |||||
Operating expenses | |||||||
Sales and marketing | 6,665 | 5,113 | |||||
Research and development | 4,479 | 3,540 | |||||
General and administrative | 9,333 | 6,666 | |||||
Total operating expenses | 20,477 | 15,319 | |||||
Loss from operations | (14,736 | ) | (9,146 | ) | |||
Other income and expenses | |||||||
Interest income | 17 | 18 | |||||
Interest expense | (451 | ) | (594 | ) | |||
Foreign currency exchange transaction loss | (827 | ) | (1,761 | ) | |||
Total other expenses | (1,261 | ) | (2,337 | ) | |||
Loss before income taxes | (15,997 | ) | (11,483 | ) | |||
Income tax provision | 34 | 23 | |||||
Net loss | $ | (16,031 | ) | $ | (11,506 | ) | |
Net loss per share: | |||||||
Basic and diluted | $ | (0.09 | ) | $ | (0.09 | ) | |
Weighted average common shares outstanding: | |||||||
Basic and diluted | 179,179,263 | 131,300,157 | |||||
Consolidated Balance Sheets | |||||||
(in thousands, except share and per share data) | |||||||
Assets | (unaudited) | ||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 82,717 | $ | 100,556 | |||
Accounts receivable, net | 10,139 | 9,079 | |||||
Royalty and licensing receivable | 652 | 280 | |||||
Inventories, net | 15,651 | 15,204 | |||||
Prepaid expenses and other current assets | 1,885 | 1,764 | |||||
Total current assets | 111,044 | 126,883 | |||||
Property and equipment, net | 9,853 | 10,268 | |||||
Operating lease right-of-use assets | 7,231 | 7,536 | |||||
Other Assets | |||||||
Restricted cash | 562 | 562 | |||||
Other long-term assets | 91 | 92 | |||||
Total assets | $ | 128,781 | $ | 145,341 | |||
Liabilities and stockholder's equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 5,157 | $ | 6,557 | |||
Accrued expenses | 9,206 | 9,576 | |||||
Operating lease liabilities | 1,883 | 1,830 | |||||
Total current liabilities | 16,246 | 17,963 | |||||
Long-term debt, less debt issuance costs | 20,397 | 20,355 | |||||
Operating lease liabilities | 6,144 | 6,471 | |||||
Total liabilities | 42,787 | 44,789 | |||||
Commitments and contingencies | |||||||
Stockholders' equity | |||||||
Preferred stock, |
|||||||
Authorized: 5,000,000 shares authorized at |
— | — | |||||
Common stock, |
|||||||
Authorized: 300,000,000 shares authorized at |
2 | 2 | |||||
Additional paid-in capital | 633,249 | 632,513 | |||||
Accumulated deficit | (546,882 | ) | (530,851 | ) | |||
Accumulated other comprehensive loss | (375 | ) | (1,112 | ) | |||
Total stockholders' equity | 85,994 | 100,552 | |||||
Total liabilities and stockholders' equity | $ | 128,781 | $ | 145,341 |

Source: Conformis, Inc.