Tandem Diabetes Care Announces Second Quarter 2022 Financial Results and Updated Full Year 2022 Financial Guidance

SAN DIEGO–(BUSINESS WIRE)–$TNDM #ControlIQ–Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a global insulin delivery and diabetes technology company, today reported its financial results for the quarter ended June 30, 2022 and updated its financial guidance for the year ending December 31, 2022.

Second Quarter 2022 Financial Highlights Compared to Second Quarter 2021:

  • Worldwide installed base increased 40 percent to more than 375,000 customers.
  • Sales in the United States increased 14 percent to $145.7 million.

    • Renewal pump sales increased 40 percent.
    • Sales through direct reimbursement channels increased to 35 percent of sales from 32 percent.
  • Sales outside the United States increased 23 percent to $54.6 million.
  • Cash, cash equivalents & short-term investments increased to $635.3 million.

Recent Strategic Highlights:

  • Launched the t:slim X2 insulin pump to bolus using the t:connect mobile app on iOS and Android operating systems in the United States.
  • Completed enrollment for the first feasibility study for people living with type 2 diabetes using Control-IQ.
  • Initiated a study to expand the insulin indications for the t:slim X2 with Control-IQ technology.
  • Established the commercial and operational framework to begin distribution through a European third-party logistics provider in support of sales outside the United States.
  • Acquired infusion set developer Capillary Biomedical.

“We demonstrated record sales in the second quarter, while navigating new and increasing economic headwinds,” said John Sheridan, president and chief executive officer. “The fundamentals of our business remain strong, and we are confident that we can achieve our long-term growth and profitability objectives by continuing to provide new innovations and best-in-class customer care.”

Second Quarter 2022 Financial Results Compared to Second Quarter 2021

  • Sales: Worldwide sales increased 16 percent to $200.3 million, which included sales outside the United States of $54.6 million. This is compared to worldwide sales of $172.1 million, which included sales of $44.6 million outside the United States.
  • Gross profit: Gross profit increased 10 percent to $101.9 million, compared to $92.5 million. Gross margin was 51 percent, compared to 54 percent.
  • Operating loss: Operating loss totaled $12.2 million, or negative 6 percent of sales, compared to operating income of $5.4 million, or 3 percent of sales. Adjusted EBITDA(1) was $11.4 million, compared to $23.8 million, or 6 percent and 14 percent of sales, respectively.
  • Net loss: Net loss was $15.1 million, compared to net income of $4.0 million.

See tables for additional financial information.

2022 Annual Guidance Update

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

  • Sales are estimated to be in the range of $835 million to $845 million, which represents an annual sales growth of 19 percent to 20 percent compared to 2021. The Company’s prior sales guidance for 2022 was estimated to be in the range of $850 million to $865 million.

    • Sales inside the United States of approximately $620 million to $625 million, compared to the prior guidance of $635 million to $645 million.
    • Sales outside the United States of approximately $215 million to $220 million.
  • Gross margin is estimated to be approximately 52 percent to 53 percent, compared to the prior guidance of 54 percent.
  • Adjusted EBITDA(1) is estimated to be approximately 11 percent of sales, compared to the prior guidance 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 $100 million, an increase from the Company’s prior guidance. This includes:

    • Approximately $85 million non-cash, stock-based compensation expense, compared to the prior guidance of $80 million.
    • 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(1), 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 access the call by phone, please use this link (Registration Link) and you will be provided with dial-in details, including a personal pin.

About Tandem Diabetes Care, Inc.

Tandem Diabetes Care, Inc., a global insulin delivery and diabetes technology company based in San Diego, California, creates new possibilities for people living with diabetes, their loved ones, and healthcare providers through a positively different experience. The Company’s human-centered approach to design, development, and support delivers innovative products and services for people who use insulin. Tandem manufactures and sells the t:slim X2 insulin pump with Control-IQ technology. For more information, visit tandemdiabetes.com.

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, Quarterly Report on Form 10-Q, 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)

 

 

 

 

 

June 30,

 

December 31,

 

2022

 

2021

Assets

(Unaudited)

 

 

Current assets:

 

 

 

Cash, cash equivalents and short-term investments

$

635,331

 

$

623,811

Accounts receivable, net

 

103,763

 

 

110,725

Inventories

 

88,098

 

 

68,551

Other current assets

 

7,852

 

 

8,433

Total current assets

 

835,044

 

 

811,520

 

 

 

 

Property and equipment, net

 

58,901

 

 

50,386

Operating lease right-of-use assets

 

126,672

 

 

27,503

Other long-term assets

 

15,958

 

 

15,728

Total assets

$

1,036,575

 

$

905,137

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable, accrued expenses and employee-related liabilities

$

93,700

 

$

89,007

Operating lease liabilities

 

9,925

 

 

9,279

Deferred revenue

 

11,713

 

 

10,182

Other current liabilities

 

23,921

 

 

23,388

Total current liabilities

 

139,259

 

 

131,856

 

 

 

 

Convertible senior notes, net – long-term

 

282,345

 

 

281,467

Operating lease liabilities – long-term

 

129,802

 

 

23,922

Deferred revenue – long-term

 

18,343

 

 

16,940

Other long-term liabilities

 

17,242

 

 

17,840

Total liabilities

 

586,991

 

 

472,025

 

 

 

 

Total stockholders’ equity

 

449,584

 

 

433,112

Total liabilities and stockholders’ equity

$

1,036,575

 

$

905,137

TANDEM DIABETES CARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Table B

(in thousands, except per share data)

(Unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2022

 

2021

 

2022

 

2021

Sales

$

200,262

 

 

$

172,139

 

 

$

376,169

 

 

$

313,176

 

Cost of sales

 

98,316

 

 

 

79,685

 

 

 

183,130

 

 

 

147,435

 

Gross profit

 

101,946

 

 

 

92,454

 

 

 

193,039

 

 

 

165,741

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative

 

80,614

 

 

 

66,523

 

 

 

153,885

 

 

 

125,086

 

Research and development

 

33,571

 

 

 

20,499

 

 

 

66,731

 

 

 

38,460

 

Total operating expenses

 

114,185

 

 

 

87,022

 

 

 

220,616

 

 

 

163,546

 

Operating income (loss)

 

(12,239

)

 

 

5,432

 

 

 

(27,577

)

 

 

2,195

 

Total other expense, net

 

(711

)

 

 

(1,363

)

 

 

(1,812

)

 

 

(3,287

)

Income (loss) before income taxes

 

(12,950

)

 

 

4,069

 

 

 

(29,389

)

 

 

(1,092

)

Income tax expense (benefit)

 

2,106

 

 

 

61

 

 

 

382

 

 

 

(56

)

Net income (loss)

$

(15,056

)

 

$

4,008

 

 

$

(29,771

)

 

$

(1,036

)

 

 

 

 

 

 

 

 

Net income (loss) per share, basic

$

(0.23

)

 

$

0.06

 

 

$

(0.47

)

 

$

(0.02

)

Net income (loss) per share, diluted

$

(0.24

)

 

$

0.06

 

 

$

(0.47

)

 

$

(0.02

)

 

 

 

 

 

 

 

 

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

 

64,077

 

 

 

62,717

 

 

 

63,979

 

 

 

62,583

 

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

 

64,078

 

 

 

65,663

 

 

 

63,980

 

 

 

62,583

 

TANDEM DIABETES CARE, INC.

SALES BY GEOGRAPHY

Table C

(Unaudited)

 

 

 

 

 

 

 

 

 

 

($’s in thousands)

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

United States:

 

 

 

 

 

 

 

 

 

 

 

Pump

$

81,656

 

$

80,041

 

2

%

 

$155,153

 

$142,953

 

9

%

Infusion sets

 

43,910

 

 

32,134

 

37

%

 

83,651

 

59,526

 

41

%

Cartridges

 

19,703

 

 

15,082

 

31

%

 

37,380

 

27,847

 

34

%

Other

 

398

 

 

323

 

23

%

 

766

 

593

 

29

%

Total Sales in the United States

$

145,667

 

$

127,580

 

14

%

 

$276,950

 

$230,919

 

20

%

 

 

 

 

 

 

 

 

 

 

 

 

Outside the United States:

 

 

 

 

 

 

 

 

 

 

 

Pump

$

25,798

 

$

27,630

 

(7

)%

 

$48,130

 

$46,538

 

3

%

Infusion sets

 

20,295

 

 

12,165

 

67

%

 

35,294

 

24,899

 

42

%

Cartridges

 

8,366

 

 

4,660

 

80

%

 

15,543

 

10,609

 

47

%

Other

 

136

 

 

104

 

31

%

 

252

 

211

 

19

%

Total Sales Outside the United States

$

54,595

 

$

44,559

 

23

%

 

$99,219

 

$82,257

 

21

%

 

 

 

 

 

 

 

 

 

 

 

 

Total Worldwide Sales

$

200,262

 

$

172,139

 

16

%

 

$376,169

 

$313,176

 

20

%

TANDEM DIABETES CARE, INC.

PUMP SHIPMENTS

Table D

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

% Change

 

2022

 

2021

 

% Change

Pumps Shipped:

 

 

 

 

 

 

 

 

 

 

 

United States

20,818

 

20,665

 

1

%

 

39,476

 

37,309

 

6

%

Outside the United States

11,296

 

13,152

 

(14

)%

 

20,733

 

21,860

 

(5

)%

Total Pumps Shipped

32,114

 

33,817

 

(5

)%

 

60,209

 

59,169

 

2

%

TANDEM DIABETES CARE, INC.

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

Table E

 

 

 

 

 

 

 

 

(in thousands)

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2022

 

2021

 

2022

 

2021

GAAP net income (loss)

$

(15,056

)

 

$

4,008

 

 

$

(29,771

)

 

$

(1,036

)

Income tax expense (benefit)

 

2,106

 

 

 

61

 

 

 

382

 

 

 

(56

)

Interest income and other, net

 

(769

)

 

 

(418

)

 

 

(1,150

)

 

 

(690

)

Interest expense

 

1,537

 

 

 

1,509

 

 

 

3,053

 

 

 

3,015

 

Depreciation and amortization

 

3,553

 

 

 

3,440

 

 

 

7,181

 

 

 

6,925

 

EBITDA

 

(8,629

)

 

 

8,600

 

 

 

(20,305

)

 

 

8,158

 

Change in fair value of common stock warrants

 

(57

)

 

 

272

 

 

 

(91

)

 

 

962

 

Stock-based compensation expense

 

20,131

 

 

 

14,977

 

 

 

38,241

 

 

 

27,924

 

Adjusted EBITDA(1)

$

11,445

 

 

$

23,849

 

 

$

17,845

 

 

$

37,044

 

 

Contacts

Media Contact:
Steve Sabicer

714-907-6264

[email protected]

Investor Contact:
Susan Morrison

858-366-6900

[email protected]

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