BILLERICA, Mass., Nov. 01, 2017 (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 third quarter ended September
30, 2017.
Q3 Summary:
- Total revenue of $18.4 million, down 1.2% year-over-year on a reported basis and down 1.6% on a constant currency basis
- Product revenue of $18.2 million, down 1.2% year-over-year on a reported basis and down 1.6% on a constant currency basis
- U.S. product revenue increased 3.8% year-over-year
- Rest of World product revenue decreased 23.1% year-over-year on a reported basis and decreased 25.0% year-over-year on a
constant currency basis
- Gross margin of 40%, an increase of 800 basis points year-over-year
"We are pleased with our third quarter results as we saw improved commercial performance in the US and excellent
progress in our operating performance for the quarter,” said Mark Augusti, President and Chief Executive Officer of ConforMIS, Inc.
“We are especially pleased with our continued progress on gross margin realizing an 800 basis point improvement over prior
year. Consistent with what we have communicated previously, we remain on track as we enter the last quarter of the year.”
Third Quarter 2017 Financial Results
| Revenue |
Three months ended
September 30, |
Increase/decrease |
| ($, in thousands) |
|
2017 |
|
2016 |
$
Change |
%
Change |
%
Change |
| |
|
|
|
(as reported) |
(constant
currency) |
| United States |
$ |
15,519 |
$ |
14,946 |
$ |
573 |
|
3.8 |
% |
3.8 |
% |
| Rest of world |
|
2,657 |
|
3,454 |
|
(797 |
) |
-23.1 |
% |
-25.0 |
% |
| Product revenue |
|
18,176 |
|
18,400 |
|
(224 |
) |
-1.2 |
% |
-1.6 |
% |
| Royalty revenue |
|
249 |
|
243 |
|
6 |
|
2.4 |
% |
2.4 |
% |
| Total revenue |
$ |
18,425 |
$ |
18,643 |
$ |
(218 |
) |
-1.2 |
% |
-1.6 |
% |
Total revenue decreased $0.2 million to $18.4 million, or 1.2% year-over-year on a reported basis and decreased
1.6% on a constant currency basis. Total revenue in the third quarter of 2017 included royalty revenue related to patent license
agreements of $0.2 million which was consistent with the third quarter of 2016.
Product revenue decreased $0.2 million to $18.2 million, or 1.2% year-over-year on a reported basis and
decreased 1.6% on a constant currency basis. U.S. product revenue increased $0.6 million to $15.5 million, or 3.8% year-over-year,
and Rest of World product revenue decreased $0.8 million to $2.7 million, or 23.1% year-over-year on a reported basis and decreased
25% on a constant currency basis. Product revenue from sales of iTotal CR, iDuo and iUni was $13.0 million for the three months
ended September 30, 2017 compared to $14.4 million for the three months ended September 30, 2016, a decrease of $1.4 million, or
10% year-over-year on a reported and constant currency basis. Product revenue from sales of iTotal PS was $5.2 million for
the three months ended September 30, 2017 compared to $4.0 million for the three months ended September 30, 2016, an increase of
$1.2 million, or 29% year-over-year on a reported and constant currency basis.
Gross profit increased $1.3 million to $7.3 million, or 40% of revenue, in the third quarter of 2017, compared
to $6.0 million, or 32% of revenue, in the third quarter of 2016. The 800 basis point increase in gross margin year-over-year was
driven primarily by cost reductions as a result of vertical integration and manufacturing efficiencies.
Total operating expenses increased $1.3 million to $20.2 million, or 7% year-over-year. The increase in
operating expenses was driven primarily by higher general and administrative costs, partially offset by lower sales and marketing
costs.
Net loss was $12.5 million, or $0.29 per basic share, in the third quarter of 2017, compared to a net loss of
$12.8 million, or $0.31 per basic share, for the same period last year. The decrease in third quarter net loss was driven primarily
by higher gross profit and higher foreign currency exchange transaction income related to international intercompany receivables,
partially offset by an increase in operating expenses.
As of September 30, 2017, the Company’s cash and cash equivalents and investments totaled $54.5 million,
compared to $65.5 million as of December 31, 2016.
Note on Non-GAAP Financial Measures
In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting
principles (GAAP), the Company provides certain information regarding the Company's financial results or projected financial
results on a non-GAAP "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. Non-GAAP information is not a substitute for, and is not
superior to, information presented on a GAAP basis.
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 99181599 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 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 450 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, and
potential transition at the Company 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 revenue, gross margin, expenses, revenue growth, transition and
other results of operations, 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 |
| (unaudited) |
| (in thousands, except share and per share
data) |
| |
| |
Three Months
Ended
September 30, |
Nine Months
Ended
September 30, |
| |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
| |
|
|
|
|
| Revenue |
|
|
|
|
| Product |
$ |
18,176 |
|
$ |
18,400 |
|
$ |
56,601 |
|
$ |
57,486 |
|
| Royalty |
|
249 |
|
|
243 |
|
|
763 |
|
|
740 |
|
| Total revenue |
|
18,425 |
|
|
18,643 |
|
|
57,364 |
|
|
58,226 |
|
| Cost of revenue |
|
11,111 |
|
|
12,645 |
|
|
37,307 |
|
|
39,564 |
|
| Gross profit |
|
7,314 |
|
|
5,998 |
|
|
20,057 |
|
|
18,662 |
|
| |
|
|
|
|
| Operating expenses |
|
|
|
|
| Sales and marketing |
|
8,741 |
|
|
9,301 |
|
|
28,932 |
|
|
31,063 |
|
| Research and development |
|
4,081 |
|
|
4,099 |
|
|
12,976 |
|
|
12,474 |
|
| General and administrative |
|
7,402 |
|
|
5,503 |
|
|
22,304 |
|
|
17,285 |
|
| Total operating expenses |
|
20,224 |
|
|
18,903 |
|
|
64,212 |
|
|
60,822 |
|
| Loss from operations |
|
(12,910 |
) |
|
(12,905 |
) |
|
(44,155 |
) |
|
(42,160 |
) |
| |
|
|
|
|
| Other income and expenses |
|
|
|
|
| Interest income |
|
137 |
|
|
127 |
|
|
367 |
|
|
409 |
|
| Interest expense |
|
(718 |
) |
|
(4 |
) |
|
(1,397 |
) |
|
(104 |
) |
| Foreign currency exchange transaction income |
|
1,099 |
|
|
34 |
|
|
3,606 |
|
|
34 |
|
| Total other income (expenses), net |
|
518 |
|
|
157 |
|
|
2,576 |
|
|
339 |
|
| Loss before income taxes |
|
(12,392 |
) |
|
(12,748 |
) |
|
(41,579 |
) |
|
(41,821 |
) |
| Income tax provision |
|
80 |
|
|
14 |
|
|
143 |
|
|
27 |
|
| |
|
|
|
|
| Net loss |
$ |
(12,472 |
) |
$ |
(12,762 |
) |
$ |
(41,722 |
) |
$ |
(41,848 |
) |
| |
|
|
|
|
| Net loss per share - basic and diluted |
$ |
(0.29 |
) |
$ |
(0.31 |
) |
$ |
(0.97 |
) |
$ |
(1.01 |
) |
| Weighted average common shares outstanding - basic and diluted |
|
43,468,559 |
|
|
41,682,244 |
|
|
43,182,090 |
|
|
41,332,958 |
|
| |
|
|
|
|
|
| |
| CONFORMIS, INC. AND
SUBSIDIARIES |
| Consolidated Balance Sheets |
| (in thousands, except share and per share
data) |
| |
|
|
| |
September 30,
2017 |
December 31,
2016 |
| Assets |
(unaudited) |
|
| Current Assets |
|
|
| Cash and cash equivalents |
$ |
26,547 |
|
$ |
37,257 |
|
| Investments |
|
27,951 |
|
|
28,242 |
|
| Accounts receivable, net |
|
12,599 |
|
|
14,675 |
|
| Inventories |
|
10,577 |
|
|
11,720 |
|
| Prepaid expenses and other current assets |
|
2,516 |
|
|
3,954 |
|
| Total current assets |
|
80,190 |
|
|
95,848 |
|
| Property and equipment, net |
|
16,310 |
|
|
15,084 |
|
| Other Assets |
|
|
| Restricted cash |
|
462 |
|
|
300 |
|
| Investments |
|
-- |
|
|
-- |
|
| Intangible assets, net |
|
574 |
|
|
746 |
|
| Goodwill |
|
6,731 |
|
|
753 |
|
| Other long-term assets |
|
18 |
|
|
79 |
|
| Total assets |
$ |
104,285 |
|
$ |
112,810 |
|
| |
|
|
| Liabilities and stockholder's equity |
|
|
| Current liabilities |
|
|
| Accounts payable |
$ |
4,335 |
|
$ |
5,474 |
|
| Accrued expenses |
|
8,314 |
|
|
8,492 |
|
| Deferred revenue |
|
305 |
|
|
305 |
|
| Total current liabilities |
|
12,954 |
|
|
14,271 |
|
| Other long-term liabilities |
|
652 |
|
|
164 |
|
| Deferred tax liabilities |
|
42 |
|
|
-- |
|
| Deferred revenue |
|
4,091 |
|
|
4,320 |
|
| Long-term debt,less debt issuance costs |
|
29,640 |
|
|
-- |
|
| Total liabilities |
|
47,379 |
|
|
18,755 |
|
| Commitments and contingencies |
|
-- |
|
|
-- |
|
| Stockholders' equity |
|
|
| Preferred stock, $0.00001 par value: |
|
|
Authorized: 5,000,000 shares authorized at September 30,
2017 and December 31, 2016, respectively,
no shares outstanding as of September 30, 2017 and December 31, 2016. |
|
-- |
|
|
-- |
|
| Common stock, $0.00001 par value: |
|
|
Authorized: 200,000,000 shares at September 30, 2017 and
December 31, 2016; 45,292,573 and
43,399,547 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively |
|
-- |
|
|
-- |
|
| Additional paid-in capital |
|
484,665 |
|
|
476,486 |
|
| Accumulated deficit |
|
(424,963 |
) |
|
(382,930 |
) |
| Accumulated other comprehensive (loss) income |
|
(2,796 |
) |
|
499 |
|
| Total stockholders' equity |
|
56,906 |
|
|
94,055 |
|
| Total liabilities and stockholders' equity |
$ |
104,285 |
|
$ |
112,810 |
|
