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.

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.

Contacts

Media Contact:
Steve Sabicer

714-907-6264

ssabicer@thesabicergroup.com

Investor Contact:
Susan Morrison

858-366-6900

IR@tandemdiabetes.com