×

ConforMIS Reports Third Quarter 2016 Financial Results

BEDFORD, Mass., Nov. 03, 2016 (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, 2016.

Q3 Summary:

  • Total revenue of $18.6 million, up 34% year-over-year on a reported basis and up 35% year-over-year on a constant currency basis.
  • Product revenue of $18.4 million, up 36% year-over-year on a reported basis and up 37% year-over-year on a constant currency basis
    • U.S. product revenue increased 43% year-over-year
    • Rest of World product revenue increased 14% year-over-year on a reported basis and 18% year-over-year on a constant currency basis

“We had a solid third quarter of 2016,” said Philipp Lang, MD, MBA, President and Chief Executive Officer of ConforMIS, Inc. “We saw double digit growth in our base business year-over-year with iTotal CR and our partial knee systems. The revenue growth for our newest product, iTotal PS, has been impressive. This innovative product approximately triples the addressable market for ConforMIS and is rapidly becoming our flagship product for new surgeon acquisition.”

Dr. Lang continued, “We have completed enrollment in our single timepoint study comparing iTotal CR to leading off-the-shelf implants in over 800 patients. The results to-date show that patients that received an iTotal CR implant were significantly faster at completing three functional tests of daily living, including walking, than patients with an off-the-shelf implant. We believe that this and other direct comparative studies will help us increase the utilization of our implants with current and new surgeons.”

Third Quarter 2016 Financial Results

Three months ended September 30,Increase/decrease
($, in thousands) 2016 2015 $
Change
%
Change
%
Change
(as reported) (constant currency)
United States$14,954 $10,466 $4,488 43% 43%
Rest of world 3,446 3,024 421 14% 18%
Product revenue 18,400 13,490 4,910 36% 37%
Royalty revenue 243 404 (161) -40% -40%
Total revenue$18,643 $13,894 $4,749 34% 35%

Total revenue increased $4.7 million to $18.6 million, or 34% year-over-year on a reported basis and 35% year-over-year on a constant currency basis, as compared to the third quarter of 2015, which was affected by our product recall. Total revenue in the third quarter of 2016 included royalty revenue of $0.2 million as compared to $0.4 million in the third quarter of 2015.

Product revenue increased $4.9 million to $18.4 million, or 36% year-over-year on a reported basis and 37% year-over-year on a constant currency basis. U.S. product revenue increased $4.5 million to $15.0 million, or 43% year-over-year, and Rest of World product revenue increased $0.4 million to $3.4 million, or 14% year-over-year on a reported basis and 18% on a constant currency basis. Product revenue from sales of iTotal CR, iDuo and iUni increased $1.7 million to $14.4 million, or 13% year-over-year on a reported basis and 14% year-over-year on a constant currency basis. Product revenue from sales of iTotal PS increased $3.2 million to $4.0 million, or 401% year-over-year on a reported basis and 403% year-over-year on a constant currency basis.

Gross profit increased $3.2 million to $6.0 million, or 32% of revenue, which included $1.3 million in unused product, in the third quarter of 2016, compared to $2.8 million, or 20% of revenue, which included $0.8 million in unused product, in the third quarter of 2015. This increase in gross profit was driven primarily by higher product revenue in 2016 compared to 2015.

Total operating expenses decreased $0.1 million to $18.9 million, or 0.4% year-over-year. The decrease in expenses was driven primarily by lower sales and marketing costs and lower general and administrative costs, offset by slightly higher research and development costs compared to the third quarter of 2015.

Net loss was $12.8 million, or $0.31 per basic share, in the third quarter of 2016, compared to a net loss of $17.1 million, or $0.45 per basic share, for the same period last year. This decrease in net loss was driven primarily by higher product revenue in 2016 compared to 2015.

As of September 30, 2016, the Company’s cash and cash equivalents and short and long-term investments totaled $75.8 million, compared to $117.2 million as of December 31, 2015.

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 5481072 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 500 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, operating trends, the potential impact and advantages of using customized implants, 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 sales, expenses, and other results of operations, growth in our customer base, the impact of the CJR program, contracting trends, the impact of our voluntary recall on financial results 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.

CONFORMIS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except share and per share data)
Three Months Ended September 30,Nine Months Ended September 30,
2016 2015 2016 2015
Revenue
Product $18,400 $13,490 $57,486 $43,953
Royalty 243 404 740 3,863
Total revenue 18,643 13,894 58,226 47,816
Cost of revenue 12,645 11,132 39,564 32,371
Gross profit 5,998 2,762 18,662 15,445
Operating expenses
Sales and marketing 9,301 9,433 31,063 27,584
Research and development 4,099 3,885 12,474 12,218
General and administrative 5,503 5,656 17,285 16,790
Total operating expenses 18,903 18,974 60,822 56,592
Loss from operations (12,905) (16,212) (42,160) (41,147)
Other income and expenses
Interest income 127 24 409 92
Interest expense (4) (911) (104) (1,380)
Other income (expense) 34 - 34 208
Total other expenses 157 (887) 339 (1,080)
Loss before income taxes (12,748) (17,099) (41,821) (42,227)
Income tax provision 14 8 27 29
Net loss $(12,762)$(17,107)$(41,848)$(42,256)
Net loss per share - basic and diluted$(0.31)$(0.45)$(1.01)$(2.69)
Weighted average common shares outstanding - basic and diluted 41,682,244 37,933,069 41,332,958 15,688,686


CONFORMIS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share data)
September 30, 2016 December 31, 2015
Assets (unaudited)
Current Assets
Cash and cash equivalents$34,986 $117,185
Investments 38,337 -
Accounts receivable, net 13,839 14,867
Inventories 11,755 11,520
Prepaid expenses and other current assets 2,242 2,451
Total current assets 101,159 146,023
Property and equipment, net 14,985 10,966
Other Assets
Restricted cash 300 600
Investments 2,497 -
Intangible assets, net 808 995
Goodwill 753 753
Other long-term assets 29 32
Total assets$120,531 $159,369
Liabilities and stockholder's equity
Current liabilities
Accounts payable$4,392 $4,718
Accrued expenses 6,246 7,811
Deferred revenue 305 305
Current portion of long-term debt 257 295
Total current liabilities 11,200 13,129
Other long-term liabilities 166 220
Deferred revenue 4,396 4,625
Long-term debt - 183
Total liabilities 15,762 18,157
Stockholders' equity
Preferred stock, $0.00001 par value:
Authorized: 5,000,000 and zero shares authorized at September 30, 2016 and
December 31, 2015; no shares issued and outstanding as of September 30, 2016 and December 31, 2015 - -
Common stock, $0.00001 par value:
Authorized: 200,000,000 shares at September 30, 2016 and December 31, 2015;
42,758,693 and 41,110,127 shares issued and outstanding at September, 2016 and December 31, 2015, respectively - -
Additional paid-in capital 472,778 467,075
Accumulated deficit (367,190) (325,342)
Accumulated other comprehensive loss (819) (521)
Total stockholders’ equity 104,769 141,212
Total liabilities and stockholders’ equity$120,531 $159,369

CONTACT: Investor contact Oksana Bradley ir@conformis.com (781) 374-5598

Source:ConforMIS, Inc