Conformis Reports Third Quarter 2021 Financial Results
Third Quarter 2021 Summary
- Total revenue of
$14.3 million, a decrease of 12% year-over-year on a reported and constant currency basis.
- Product revenue of
$14.1 million, a decrease of 12% year-over-year on a reported and constant currency basis. Conformiship system revenue down 16% year-over-year to $0.7 million.
- First procedures successfully completed using Identity Imprint™ knee replacement system.
- First procedures successfully completed under the Stryker1 partnership program for the
Triathlonknee utilizing patient-specific instrumentation.
- Cash and cash equivalents of
$97.1 millionas of September 30, 2021.
Executive Commentary –
“I am pleased with the progress we made on our growth strategy over the last three months. As COVID-19’s Delta variant became more pronounced during the quarter, the impact on elective procedures and our business was greater than expected. This resulted in a number of deferred procedures, many of which have already been rescheduled. The disruption caused by the Delta variant has had minimal affect on the limited market releases of our new Identity Imprint knee offering and our manufacturing partnership with Stryker. Both are progressing and we are positioned to capitalize on the shift in procedures to the ASC in 2022 and beyond.”
|Three months ended
|($, in thousands)||2021||2020|| $
|(as reported)|| (constant
|Rest of world||1,725||1,836||(111||)||(6||)||%||(10||)||%|
Third Quarter 2021 Highlights
- Decrease in revenue year-over-year was primarily due to deferred and rescheduled elective surgeries as a result of the increase in COVID-19 cases associated with the Delta variant.
- Product revenue compared to the third quarter of 2020 was down 12%.
- Total gross profit decreased
$1.7 millionto $6.0 million, or 42% of revenue, in the third quarter of 2021, compared to $7.7 million, or 48% of revenue, in the third quarter of 2020.
- The 540 basis-point decrease in gross margin year-over-year was driven primarily by lower volume, increased material, labor, and other manufacturing costs, higher cancelled case inventory expense, and a reduction in product selling price.
- Total operating expenses of
$17.4 million, an increase of 18% year-over-year.
- Sales and marketing expenses increased
$0.7 millionprimarily due to higher tradeshow, surgeon training, and travel expenses, which were partially offset by lower commission expenses.
- Research and development expenses increased
$0.7 millionprimarily driven by personnel and project-related costs to support our new product pipeline.
- General and administrative expenses increased
$1.3 millionprimarily driven by higher planned professional fees related to the ongoing protection of our intellectual property.
- Net loss was
$13.0 million, or $0.07per basic and diluted share, in the third quarter of 2021, compared to a net loss of $6.2 million, or $0.09per basic and diluted share, in the same period last year.
- Foreign currency exchange transaction loss was
$1.0 millionin the third quarter of 2021, compared to foreign currency exchange transaction income of $1.5 millionin the same period last year.
- Weighted average basic and diluted shares outstanding of 178.5 million for the third quarter of 2021, compared to 71.2 million for the same period last year.
Capital Structure and Liquidity
- Cash and cash equivalents totaled
$97.1 millionas of September 30, 2021, compared to $28.7 millionas of December 31, 2020.
- We expect our fourth quarter product revenue to improve sequentially from the third quarter and to be in the range of
$15.0 millionto $17.0 million.
- The wider-than-usual range we are providing is due to the unpredictable recovery from the Delta variant and its potential impact on our existing scheduled fourth quarter surgeries.
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 Delta variant, 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
1 Stryker and
|Consolidated Statements of Operations|
|(in thousands, except share and per share data)|
|Three Months Ended
|Royalty and licensing||123||146|
|Cost of revenue||8,231||8,437|
|Sales and marketing||6,434||5,755|
|Research and development||3,548||2,866|
|General and administrative||7,407||6,134|
|Total operating expenses||17,389||14,755|
|Loss from operations||(11,367||)||(7,071||)|
|Other income and expenses|
|Foreign currency exchange transaction (loss) income||(996||)||1,511|
|Total other (expenses) income||(1,577||)||908|
|Loss before income taxes||(12,944||)||(6,163||)|
|Income tax provision||29||20|
|Net loss per share:|
|Basic and diluted||$||(0.07||)||$||(0.09||)|
|Weighted average common shares outstanding:|
|Basic and diluted||178,452,296||71,224,786|
|Consolidated Balance Sheets|
|(in thousands, except share and per share data)|
|Cash and cash equivalents||$||97,111||$||28,673|
|Accounts receivable, net||8,943||8,515|
|Royalty and licensing receivable||15,634||1,256|
|Prepaid expenses and other current assets||1,787||2,315|
|Total current assets||137,953||53,344|
|Property and equipment, net||10,914||12,240|
|Operating lease right-of-use assets||7,906||5,215|
|Other long-term assets||211||239|
|Liabilities and stockholder's equity|
|Operating lease liabilities||1,809||1,620|
|Advance on research and development||—||3,168|
|Total current liabilities||15,228||30,919|
|Long-term debt, less debt issuance costs||20,799||25,003|
|Operating lease liabilities||6,817||4,206|
|Commitments and contingencies|
|Authorized: 5,000,000 shares authorized at
|Authorized: 300,000,000 shares authorized at
|Additional paid-in capital||631,475||543,809|
|Accumulated other comprehensive loss||(1,900||)||(4,000||)|
|Total stockholders' equity||114,702||11,372|
|Total liabilities and stockholders' equity||$||157,546||$||71,500|
Source: Conformis, Inc.