Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a global insulin
delivery and diabetes technology company, today reported its
financial results for the quarter ended September 30, 2023 and
updated its financial guidance for the year ending December 31,
2023.
Third Quarter and Recent Highlights
- Worldwide installed base increased 11 percent to approximately
444,000 in-warranty customers compared to the third quarter
2022.
- Published prospective study data demonstrating the immediate
and sustained benefit of t:slim X2 with Control-IQ technology for
one year across approximately 3,000 individuals living with type 1
diabetes.
- Commenced initial, limited release of Tandem Mobi in the United
States.
- Reached the milestone of full U.S. healthcare provider
availability of Tandem Source, our second-generation data
management application.
- $498.2 million in cash, cash equivalents & short-term
investments as of September 30, 2023.
“In this transitional year, we are focused on bringing the
benefits of our #1 rated automated insulin delivery system to more
people living with diabetes worldwide, providing customer care
excellence and advancing our scalability initiatives,” said John
Sheridan, president and chief executive officer. “There is a large
and growing opportunity for Tandem’s technology to drive greater
use of automated insulin delivery worldwide, and we are advancing
our efforts to expand this adoption through our near-term portfolio
of diabetes solutions.”
Third Quarter 2023 Financial Results Compared to 2022
In September 2022, the Company began offering the Tandem Choice
Program (Tandem Choice) to eligible t:slim X2 customers to provide
a pathway to ownership of its newest hardware platform, Tandem
Mobi, for a fee when available. As a result of this program, the
Company is providing select financial results for both GAAP and
non-GAAP. Additional information, including the accounting
treatment of this program and other non-GAAP measures, can be found
under the heading “Reconciliation of GAAP versus Non-GAAP Financial
Results” in this press release.
Three Months Ended
Nine Months Ended
September 30,
September 30,
$ in
millions
2023
2022
2023
2022
GAAP
Non-GAAP
GAAP
Non-GAAP
GAAP
Non-GAAP
GAAP
Non-GAAP
Pump Shipments
United States
16,842
N/A
20,394
N/A
52,809
N/A
59,870
N/A
Outside United States
7,989
N/A
12,113
N/A
24,571
N/A
32,846
N/A
Total Worldwide
24,831
N/A
32,507
N/A
77,380
N/A
92,716
N/A
Sales
United States
$
130.2
$
138.5
$
146.0
$
146.6
$
404.0
$
416.5
$
423.0
$
423.6
Outside United States
55.4
55.4
58.5
58.5
146.9
146.9
157.7
157.7
Total Worldwide
$
185.6
$
193.9
$
204.5
$
205.1
$
550.9
$
563.4
$
580.7
$
581.3
- Gross profit: GAAP gross profit was $89.8 million,
compared to $104.4 million. GAAP gross margin was 48 percent,
compared to 51 percent. Non-GAAP gross profit(1) was $98.0 million
compared to $105.0 million. Non-GAAP gross margin(1) was 51 percent
for both periods.
- Operating income (loss): GAAP operating loss totaled
$31.5 million, or negative 17 percent of sales, compared to
operating loss of $47.5 million, or negative 23 percent of sales.
Non-GAAP operating loss(1) totaled $23.3 million, or negative 12
percent of sales, compared to $15.9 million or negative 8 percent
of sales. Adjusted EBITDA(1) was $1.5 million, or 1 percent of
sales, compared to $9.9 million, or 5 percent of sales.
- Net income (loss): GAAP net loss(1) was $33.0 million,
compared to net loss of $49.0 million. Non-GAAP net loss(1) was
$24.7 million compared to $17.4 million.
See tables for additional financial information.
2023 Financial Guidance
“We are reaffirming our U.S. guidance, which is largely based on
strong t:slim X2 renewal purchases and supply ordering trends. Our
adjusted baseline expectations outside the U.S. factors in new
disruption reported by our distribution partners in key markets and
relates to the timing and process for new product launches,” said
Leigh Vosseller, executive vice president and chief financial
officer. “We continue to yield positive results from our cost
saving initiatives, which is reflected in our reaffirmed margin
expectations, as we focus on executing against our growth
opportunity with efficiency and discipline.”
For the year ending December 31, 2023, the Company is updating
its 2023 financial guidance as follows:
- Non-GAAP sales(1) are estimated to be at least $765 million.
- Sales inside the United States of at least $575 million.
- Sales outside the United States of at least $190 million.
- Non-GAAP gross margin(1) is estimated to be approximately 51
percent.
- Adjusted EBITDA margin(1) is estimated to be at least breakeven
as a percent of sales.
- Includes approximately 3 percent from the impact of operating
costs associated with the acquisitions of Capillary Biomedical and
AMF Medical.
- Non-cash charges included in cost of goods sold and operating
expenses are estimated to be approximately $110 million. This
includes:
- Approximately $95 million non-cash, stock-based compensation
expense.
- Approximately $15 million depreciation and amortization
expense.
(1) A reconciliation of non-GAAP financial measures to their
closest GAAP equivalent and additional information can be found in
Table E and under the heading “Reconciliation of GAAP versus
Non-GAAP Financial Results.”
Non-GAAP Financial Measures
Certain non-GAAP financial measures are presented in this press
release to provide information that may assist investors in
understanding the Company’s financial results and assessing its
prospects for future performance. The Company believes these
non-GAAP financial measures are important operating performance
indicators because they exclude items that are unrelated to, and
may not be indicative of, the Company’s core operating results.
These non-GAAP financial measures, as calculated, 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 the Company uses such non-GAAP
financial measures in the future, they will be calculated 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 in Table E
“Reconciliation of GAAP versus Non-GAAP Financial Results” attached
to this press release.
In particular, the accounting treatment for Tandem Choice has a
high degree of complexity. In September 2022 when the program was
launched, the Company began deferring a portion of sales for each
eligible t:slim X2 pump shipped in the United States. Such
deferrals will be recognized on a customer-by-customer basis
following the commercial launch of the Company’s new hardware
platform, Tandem Mobi. The timing of recognition will be based on
either a) an affirmative election to participate in Tandem Choice
or b) expiration of the right to participate. Notably:
- Offering the program does not impact the economics associated
with how or when the initial pump sale is reimbursed.
- Customer eligibility is automatic and no election is necessary
to participate in Tandem Choice at the time of a t:slim X2
purchase. An affirmative election is only required when the new
hardware platform, Tandem Mobi, is commercially available, at which
time any customer fees will be received and recognized as a
sale.
- The expiration date of Tandem Choice is December 31, 2024.
Consistent with SEC regulations, the Company has 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 may be made to the
Company’s GAAP financial measures in calculating the 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
(https://register.vevent.com/register/BIef8a824a5ebe4f3fbec7ba819e215d96)
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 headquartered 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, the Tandem logo, Control-IQ, Tandem Mobi
and t:slim X2 are either registered trademarks or trademarks of
Tandem Diabetes Care, Inc. in the United States and/or other
countries.
Follow Tandem Diabetes Care on Twitter @tandemdiabetes; use
#tslimX2 and #TandemDiabetes.
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 and the
ability to achieve other operational and commercial goals for this
year, including the launch of multiple new products. 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; products marketed
and sold or under development by competitors; the Company’s ability
to establish and sustain operations to support international sales,
including expanding 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; risks associated with the regulatory approval process
for new products; the potential that newer products, or other
technological breakthroughs for the monitoring, treatment or
prevention of diabetes, may render the Company’s products obsolete,
less desirable; or may otherwise negatively impact the purchasing
trends of customers; 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)
(Unaudited)
September 30,
December 31,
2023
2022
Assets
Current assets:
Cash, cash equivalents and short-term
investments
$
498,158
$
616,901
Accounts receivable, net
100,318
114,717
Inventories
143,492
111,117
Other current assets
16,176
7,241
Total current assets
758,144
849,976
Property and equipment, net
75,760
68,552
Operating lease right-of-use assets
89,434
110,626
Other long-term assets
16,571
23,631
Total assets
$
939,909
$
1,052,785
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable, accrued expenses and
employee-related liabilities
$
103,950
$
104,007
Operating lease liabilities
17,618
13,121
Deferred revenue
31,610
18,837
Other current liabilities
33,932
29,325
Total current liabilities
187,110
165,290
Convertible senior notes, net -
long-term
284,580
283,232
Operating lease liabilities -
long-term
116,012
123,524
Deferred revenue - long-term
14,089
16,874
Other long-term liabilities
24,118
23,918
Total liabilities
625,909
612,838
Total stockholders’ equity
314,000
439,947
Total liabilities and stockholders’
equity
$
939,909
$
1,052,785
TANDEM DIABETES CARE,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
Table B
(in thousands, except per
share data)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
Sales
$
185,622
$
204,547
$
550,922
$
580,716
Cost of sales
95,869
100,122
276,527
283,252
Gross profit
89,753
104,425
274,395
297,464
Operating expenses:
Selling, general and administrative
79,328
84,104
266,752
237,989
Research and development
41,970
36,798
127,063
103,529
Acquired in-process research and
development expenses
—
31,016
78,750
31,016
Total operating expenses
121,298
151,918
472,565
372,534
Operating loss
(31,545
)
(47,493
)
(198,170
)
(75,070
)
Total other income (expense), net
816
144
9,226
(1,668
)
Loss before income taxes
(30,729
)
(47,349
)
(188,944
)
(76,738
)
Income tax expense
2,232
1,621
3,665
2,003
Net loss
$
(32,961
)
$
(48,970
)
$
(192,609
)
$
(78,741
)
Net loss per share - basic
$
(0.51
)
$
(0.76
)
$
(2.97
)
$
(1.23
)
Net loss per share - diluted
$
(0.51
)
$
(0.76
)
$
(2.97
)
$
(1.23
)
Weighted average shares used to compute
basic and net loss per share
65,117
64,236
64,834
64,066
Weighted average shares used to compute
diluted net loss per share
65,117
64,237
64,834
64,067
TANDEM DIABETES CARE,
INC.
SALES BY GEOGRAPHY
Table C(1)
(Unaudited)
($'s in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
% Change
2023
2022
% Change
United States:
Pump
$
66,365
$
81,295
(18
)%
$
207,180
$
236,448
(12
)%
Supplies and other
72,093
65,339
10
%
209,352
187,136
12
%
Deferral for Tandem Choice
(8,236
)
(599
)
1,275
%
(12,568
)
(599
)
1,998
%
Total GAAP Sales in the United States
$
130,222
$
146,035
(11
)%
$
403,964
$
422,985
(4
)%
Adjustment for Tandem Choice
8,236
599
1,275
%
12,568
599
1,998
%
Total Non-GAAP Sales in the United
States
$
138,458
$
146,634
(6
)%
$
416,532
$
423,584
(2
)%
Outside the United States:
Pump
$
21,672
$
27,385
(21
)%
$
67,235
$
75,515
(11
)%
Supplies and other
33,728
31,127
8
%
79,723
82,216
(3
)%
Total Sales Outside the United States
$
55,400
$
58,512
(5
)%
$
146,958
$
157,731
(7
)%
Total GAAP Worldwide Sales
$
185,622
$
204,547
(9
)%
$
550,922
$
580,716
(5
)%
Adjustment for Tandem Choice
8,236
599
1,275
%
12,568
599
1,998
%
Total Non-GAAP Worldwide Sales
$
193,858
$
205,146
(6
)%
$
563,490
$
581,315
(3
)%
(1)
A reconciliation of non-GAAP financial measures to their closest
GAAP equivalent and additional information can be found in Table E
and under the heading “Reconciliation of GAAP versus Non-GAAP
Financial Results.”
TANDEM DIABETES CARE,
INC.
PUMP SHIPMENTS
Table D
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
% Change
2023
2022
% Change
Pumps Shipped:
United States
16,842
20,394
(17
)%
52,809
59,870
(12
)%
Outside the United States
7,989
12,113
(34
)%
24,571
32,846
(25
)%
Total Pumps Shipped
24,831
32,507
(24
)%
77,380
92,716
(17
)%
TANDEM DIABETES CARE,
INC.
Reconciliation of GAAP versus
Non-GAAP Financial Results (Unaudited)
Table E
($'s in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
GAAP sales
$
185,622
$
204,547
$
550,922
$
580,716
Adjustment for Tandem Choice (1)
8,236
599
12,568
599
Non-GAAP sales
$
193,858
$
205,146
$
563,490
$
581,315
GAAP gross profit
$
89,753
$
104,425
$
274,395
$
297,464
Adjustment for Tandem Choice(1)
8,236
599
12,568
599
Non-GAAP gross profit
$
97,989
$
105,024
$
286,963
$
298,063
Non-GAAP gross margin(2)
51
%
51
%
51
%
51
%
GAAP operating loss
$
(31,545
)
$
(47,493
)
$
(198,170
)
$
(75,070
)
Acquired in-process research and
development(3)
—
31,016
78,750
31,016
Non-recurring facility consolidation
costs(4)
—
—
14,099
—
Severance costs - cash and noncash
—
—
2,680
—
Adjustment for Tandem Choice(1)
8,236
599
12,568
599
Non-GAAP operating loss
$
(23,309
)
$
(15,878
)
$
(90,073
)
$
(43,455
)
Non-GAAP operating margin(2)
(12
)%
(8
)%
(16
)%
(7
)%
GAAP net loss
$
(32,961
)
$
(48,970
)
$
(192,609
)
$
(78,741
)
Income tax expense
2,232
1,621
3,665
2,003
Interest income and other, net
(5,656
)
(1,720
)
(17,305
)
(2,961
)
Interest expense
4,840
1,576
8,079
4,629
Depreciation and amortization
4,023
3,508
11,684
10,689
Stock-based compensation expense
20,741
22,236
64,946
60,477
Acquired in-process research and
development(3)
—
31,016
78,750
31,016
Non-recurring facility consolidation
costs(4)
—
—
14,099
—
Severance costs - cash and noncash
—
—
2,680
—
Adjustment for Tandem Choice(1)
8,236
599
12,568
599
Adjusted EBITDA
$
1,455
$
9,866
$
(13,443
)
$
27,711
Adjusted EBITDA margin(2)
1
%
5
%
(2
)%
5
%
GAAP net loss
$
(32,961
)
$
(48,970
)
$
(192,609
)
$
(78,741
)
Acquired in-process research and
development(3)
—
31,016
78,750
31,016
Non-recurring facility consolidation
costs(4)
—
—
14,099
—
Severance costs - cash and noncash
—
—
2,680
—
Adjustment for Tandem Choice(1)
8,236
599
12,568
599
Non-GAAP net loss
$
(24,725
)
$
(17,355
)
$
(84,512
)
$
(47,126
)
(1)
The accounting treatment for Tandem Choice
has a high degree of complexity. Additional information can be
found under the heading “Non-GAAP Financial Measures.”
(2)
Non-GAAP margins including non-GAAP gross
margin, non-GAAP operating margin, and adjusted EBITDA margin are
calculated using non-GAAP sales.
(3)
Acquired in-process research and
development charges representing the value of acquired in-process
research and development assets with no alternative future use and
acquisition related expenses recorded in connection with the
acquisitions of AMF Medical SA in 2023, and Capillary BioMedical,
Inc. in 2022.
(4)
The Company recorded $14.1 million of
facility consolidation costs related to our Vista Sorrento lease in
San Diego, California.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101228219/en/
Media Contact: 858-255-6388 media@tandemdiabetes.com
Investor Contact: 858-366-6900 IR@tandemdiabetes.com
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