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Tandem Diabetes Care Announces Fourth Quarter and Full Year 2021 Financial Results and 2022 Financial Guidance

Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a leading insulin delivery and diabetes technology company, today reported its financial results for the quarter and year ended December 31, 2021 and financial guidance for the year ending December 31, 2022.

2021 FINANCIAL HIGHLIGHTS

In comparing the year ended December 31, 2021 to the same period of 2020:

  • Sales increased 41 percent to $702.8 million
  • Worldwide pump shipments increased 41 percent to 128,312 pumps
  • Gross margin improved 2 percentage points to 54 percent of sales
  • Achieved positive annual operating margin
  • Adjusted EBITDA(1) increased to 14 percent of sales

“Our fourth quarter performance was a strong finish to a record year in which we furthered our global leadership position in insulin therapy management,” said John Sheridan, president and chief executive officer. “We look to continue driving growth through innovation in 2022 and beyond by offering solutions that meet the different needs and preferences of people living with diabetes.”

“Our top financial priority is investing in product and business model innovations to deliver sustained, high revenue growth,” said Leigh Vosseller, executive vice president and chief financial officer. “We remain confident in achieving our long-term profitability objectives through global market expansion, innovation and continuous operational improvement.”

Fourth Quarter 2021 Financial Results Compared to Fourth Quarter 2020

  • Sales: Worldwide sales increased 25 percent to $210.0 million, which included sales outside the United States of $49.1 million. This is compared to worldwide sales of $168.1 million, which included sales of $28.7 million outside the United States.
  • Gross profit: Gross profit increased 26 percent to $113.7 million, compared to $90.6 million. Gross margin was 54 percent, which is the same as the fourth quarter of 2020.
  • Operating income: Operating income totaled $12.7 million, or 6 percent of sales, compared to $18.7 million, or 11 percent of sales. Adjusted EBITDA(1) was $33.4 million, compared to $35.4 million, or 16 percent and 21 percent of sales, respectively.
  • Net income: Net income was $10.8 million, compared to $17.0 million.

Full Year 2021 Financial Results Compared to Full Year 2020

  • Sales: Worldwide sales increased 41 percent to $702.8 million, which included sales outside the United States of $177.9 million. This is compared to worldwide sales of $498.8 million, which included $83.2 million outside the United States.
  • Gross profit: Gross profit increased 44 percent to $376.2 million, compared to $260.5 million. Gross margin improved to 54 percent of sales from 52 percent of sales.
  • Operating Income (loss): Operating income was $22.7 million, or 3 percent of sales, compared to an operating loss of $8.0 million, or negative 2 percent of sales. For the year ended 2021, adjusted EBITDA(1) was $97.2 million, or 14 percent of sales, compared to $60.9 million, or 12 percent of sales.
  • Net income (loss): Net income was $15.6 million, compared to a net loss of $34.4 million.

See tables for additional financial information.

2022 Financial Guidance

For the year ending December 31, 2022, the Company is providing financial guidance as follows:

  • Sales are estimated to be in the range of $845 million to $860 million, which represents an annual sales growth of 20% percent to 22% percent compared to 2021
    • Includes sales outside the United States of approximately $215 million to $220 million
  • Gross margin is estimated to be approximately 54 percent
  • Adjusted EBITDA(1) is estimated to be in the range of 14 percent to 15 percent of sales
  • Non-cash charges included in cost of goods sold and operating expenses are estimated to be approximately $90 million, which include:
    • Approximately $75 million non-cash, stock-based compensation expense
    • Approximately $15 million depreciation and amortization expense

(1) See "Non-GAAP Financial Measures" below. EBITDA is a non-GAAP financial measure defined as net income (loss) excluding income taxes, interest and other non-operating items and depreciation and amortization. Adjusted EBITDA further adjusts for the change in fair value of common stock warrants and non-cash stock-based compensation expense. This definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by the Company to evaluate operating performance, generate future operating plans and make strategic decisions for the allocation of capital. The Company presents Adjusted EBITDA to provide information that may assist investors in understanding its financial results. However, Adjusted EBITDA is not intended to be a substitute for net income (loss).

Non-GAAP Financial Measures

Certain non-GAAP financial measures are presented in this press release, including adjusted EBITDA, to provide information that may assist investors in understanding the Company’s financial results and assessing its prospects for future performance. We believe these non-GAAP financial measures are important indicators of our operating performance because they exclude items that are unrelated to, and may not be indicative of, our core operating results. These non-GAAP financial measures, as we calculate them, may not necessarily be comparable to similarly titled measures of other companies and may not be appropriate measures for comparing the performance of other companies relative to the Company. These non-GAAP financial results are not intended to represent, and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP. To the extent we utilize such non-GAAP financial measures in the future, we expect to calculate them using a consistent method from period to period. A reconciliation of each of the GAAP financial measures to the most directly comparable non-GAAP financial measures has been provided under the heading “Reconciliation of GAAP versus Non-GAAP Financial Results” in the financial statement tables attached to this press release. Consistent with SEC regulations, we have not provided a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in reliance on the “unreasonable efforts” exception set forth in the applicable regulations, because there is substantial uncertainty associated with predicting any future adjustments that we may make to our GAAP financial measures in calculating our non-GAAP financial measures.

Conference Call

The Company will hold a conference call and simultaneous webcast today at 4:30pm Eastern Time (1:30pm Pacific Time). The link to the webcast will be available by accessing the Events & Presentations tab in the Investor Center of the Tandem Diabetes Care website at http://investor.tandemdiabetes.com, and will be archived for 30 days. To listen to the conference call via phone, please dial 855-427-4396 (U.S./Canada) or 484-756-4261 (International) and use the participant code “1529844.”

About Tandem Diabetes Care, Inc.

Tandem Diabetes Care, Inc. (www.tandemdiabetes.com) is a medical device company dedicated to improving the lives of people with diabetes through relentless innovation and revolutionary customer experience. The Company takes an innovative, user-centric approach to the design, development and commercialization of products for people with diabetes who use insulin. Tandem’s flagship product, the t:slim X2 insulin pump, is capable of remote software updates using a personal computer and features integrated continuous glucose monitoring. Tandem is based in San Diego, California.

Tandem Diabetes Care is a registered trademark and t:slim X2 and Control-IQ are trademarks of Tandem Diabetes Care, Inc.

Follow Tandem Diabetes Care on Twitter @tandemdiabetes; use #tslimX2 and $TNDM.

Follow Tandem Diabetes Care on Facebook at www.facebook.com/TandemDiabetes.

Follow Tandem Diabetes Care on LinkedIn at https://www.linkedin.com/company/tandemdiabetes.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that concern matters that involve risks and uncertainties that could cause actual results to differ materially from those anticipated or projected in the forward-looking statements. These forward-looking statements include statements regarding, among other things, the Company’s projected financial results. The Company’s actual results may differ materially from those indicated in these forward-looking statements due to numerous risks and uncertainties. For instance, the Company’s ability to achieve projected financial results will be impacted by market acceptance of the Company’s existing products and products under development by physicians and people with diabetes; the Company’s ability to establish and sustain operations to support international sales, including expansion into additional geographies; changes in reimbursement rates or insurance coverage for the Company’s products; the Company’s ability to meet increasing operational and infrastructure requirements from higher customer interest and a larger base of existing customers; the Company’s ability to complete the development and launch of new products when anticipated; the potential that newer products, or other technological breakthroughs for the monitoring, treatment or prevention of diabetes, may render the Company’s products obsolete or less desirable; the depth and duration of the evolving COVID-19 pandemic, and the global response thereto; reliance on third-party relationships, such as outsourcing and supplier arrangements; global economic conditions; and other risks identified in the Company’s most recent Annual Report on Form 10-K and other documents that the Company files with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Tandem undertakes no obligation to update or review any forward-looking statement in this press release because of new information, future events or other factors.

TANDEM DIABETES CARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Table A

(in thousands)

 

 

 

December 31,

 

December 31,

 

2021

 

2020

Assets

 

 

 

Current assets:

 

 

 

Cash, cash equivalents and short-term investments

$

623,811

 

$

484,936

Accounts receivable, net

 

110,725

 

 

82,195

Inventories

 

68,551

 

 

63,721

Other current assets

 

8,433

 

 

6,383

Total current assets

 

811,520

 

 

637,235

 

 

 

 

Property and equipment, net

 

50,386

 

 

50,022

Operating lease right-of-use assets

 

27,503

 

 

19,773

Other long-term assets

 

15,728

 

 

9,385

Total assets

$

905,137

 

$

716,415

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable, accrued expenses and employee-related liabilities

$

89,007

 

$

56,747

Deferred revenue

 

10,182

 

 

6,082

Common stock warrants

 

147

 

 

14,261

Operating lease liabilities

 

9,279

 

 

9,421

Other current liabilities

 

23,241

 

 

17,341

Total current liabilities

 

131,856

 

 

103,852

 

 

 

 

Convertible senior notes, net - long-term

 

281,467

 

 

202,984

Operating lease liabilities - long-term

 

23,922

 

 

15,914

Other long-term liabilities

 

34,780

 

 

27,360

Total liabilities

 

472,025

 

 

350,110

 

 

 

 

Total stockholders’ equity

 

433,112

 

 

366,305

Total liabilities and stockholders’ equity

$

905,137

 

$

716,415

TANDEM DIABETES CARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Table B

(in thousands, except per share data)

 

(Unaudited)

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2021

 

2020

 

2021

 

2020

Sales

$

209,996

 

 

$

168,065

 

 

$

702,799

 

 

$

498,830

 

Cost of sales

 

96,267

 

 

 

77,509

 

 

 

326,584

 

 

 

238,310

 

Gross profit

 

113,729

 

 

 

90,556

 

 

 

376,215

 

 

 

260,520

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative

 

71,498

 

 

 

54,518

 

 

 

261,508

 

 

 

204,903

 

Research and development

 

29,493

 

 

 

17,376

 

 

 

92,054

 

 

 

63,574

 

Total operating expenses

 

100,991

 

 

 

71,894

 

 

 

353,562

 

 

 

268,477

 

Operating income (loss)

 

12,738

 

 

 

18,662

 

 

 

22,653

 

 

 

(7,957

)

Total other expense, net

 

(1,593

)

 

 

(1,624

)

 

 

(6,752

)

 

 

(28,325

)

Income (loss) before income taxes

 

11,145

 

 

 

17,038

 

 

 

15,901

 

 

 

(36,282

)

Income tax expense (benefit)

 

337

 

 

 

38

 

 

 

335

 

 

 

(1,900

)

Net income (loss)

$

10,808

 

 

$

17,000

 

 

$

15,566

 

 

$

(34,382

)

 

 

 

 

 

 

 

 

Net income (loss) per share, basic

$

0.17

 

 

$

0.27

 

 

$

0.25

 

 

$

(0.56

)

Net income (loss) per share, diluted

$

0.16

 

 

$

0.22

 

 

$

0.24

 

 

$

(0.56

)

 

 

 

 

 

 

 

 

Weighted average shares used to compute basic net income (loss) per share

 

63,650

 

 

 

62,249

 

 

 

63,000

 

 

 

60,990

 

Weighted average shares used to compute diluted net income (loss) per share

 

65,927

 

 

 

65,677

 

 

 

64,349

 

 

 

60,990

 

TANDEM DIABETES CARE, INC.

SALES BY GEOGRAPHY

Table C

 

($'s in thousands)

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended December 31,

 

 

 

Year Ended December 31,

 

 

 

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

Domestic:

 

 

 

 

 

 

 

 

 

 

 

Pump

$

98,174

 

$

94,306

 

4

%

 

$

319,898

 

$

269,856

 

19

%

Infusion sets

 

43,136

 

 

30,860

 

40

%

 

 

140,387

 

 

99,743

 

41

%

Cartridges

 

19,239

 

 

13,924

 

38

%

 

 

63,375

 

 

45,342

 

40

%

Other

 

333

 

 

250

 

33

%

 

 

1,247

 

 

739

 

69

%

Total Domestic Sales

$

160,882

 

$

139,340

 

15

%

 

$

524,907

 

$

415,680

 

26

%

 

 

 

 

 

 

 

 

 

 

 

 

International:

 

 

 

 

 

 

 

 

 

 

 

Pump

$

26,158

 

$

16,866

 

55

%

 

$

96,458

 

$

44,851

 

115

%

Infusion sets

 

15,989

 

 

9,222

 

73

%

 

 

57,063

 

$

28,016

 

104

%

Cartridges

 

6,631

 

 

2,569

 

158

%

 

 

23,509

 

$

9,884

 

138

%

Other

 

336

 

 

68

 

394

%

 

 

862

 

$

399

 

116

%

Total International Sales

$

49,114

 

$

28,725

 

71

%

 

$

177,892

 

$

83,150

 

114

%

 

 

 

 

 

 

 

 

 

 

 

 

Total Worldwide Sales

$

209,996

 

$

168,065

 

25

%

 

$

702,799

 

$

498,830

 

41

%

TANDEM DIABETES CARE, INC.

PUMP SHIPMENTS

Table D

 

 

Three Months Ended December 31,

 

 

 

Year Ended December 31,

 

 

 

2021

 

2020

 

% Change

 

2021

 

2020

 

% Change

Pumps Shipped:

 

 

 

 

 

 

 

 

 

 

 

Domestic

25,712

 

24,552

 

5

%

 

83,317

 

70,825

 

18

%

International

11,873

 

8,133

 

46

%

 

44,995

 

19,946

 

126

%

Total Pumps Shipped

37,585

 

32,685

 

15

%

 

128,312

 

90,771

 

41

%

TANDEM DIABETES CARE, INC.

Reconciliation of GAAP versus Non-GAAP Financial Results (Unaudited)

Table E

 

(in thousands)

Three Months Ended December 31,

 

Year Ended December 31,

 

2021

 

2020

 

2021

 

2020

GAAP net income (loss)

$

10,808

 

$

17,000

 

 

$

15,566

 

 

$

(34,382

)

Income tax expense (benefit)

 

337

 

 

38

 

 

 

335

 

 

 

(1,900

)

Interest income and other, net

 

47

 

 

(332

)

 

 

(674

)

 

 

(1,567

)

Interest expense

 

1,514

 

 

4,775

 

 

 

6,040

 

 

 

12,805

 

Depreciation and amortization

 

3,520

 

 

3,427

 

 

 

13,845

 

 

 

10,451

 

EBITDA

 

16,226

 

 

24,908

 

 

 

35,112

 

 

 

(14,593

)

Change in fair value of common stock warrants

 

32

 

 

(2,819

)

 

 

1,386

 

 

 

17,087

 

Stock-based compensation expense

 

17,099

 

 

13,308

 

 

 

60,752

 

 

 

58,431

 

Adjusted EBITDA

$

33,357

 

$

35,397

 

 

$

97,250

 

 

$

60,925

 

 

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