First Quarter 2017 Highlights
- Revenue increased 45% year-over-year, to
$19.9 million , compared to$13.7 million in first quarter 2016.
- Flexitouch® revenue increased 50% year-over-year, to$17.5 million , compared to$11.7 million in first quarter 2016.
- Revenue from sales of the Company’s Entré™ and ACTitouch® systems increased 17% year-over-year, to$2.3 million , from$2.0 million in first quarter 2016. - Operating loss of
$2.9 million , compared to an operating loss of$1.8 million in first quarter 2016. - Net loss of
$1.5 million , compared to a net loss of$1.0 million in first quarter 2016. - Adjusted EBITDA of
$(1.7) million , compared to adjusted EBITDA of$(1.5) million in first quarter 2016.
“The first quarter was a terrific start to 2017, marked by record growth in Flexitouch system sales,” said
Mr. Mattys continued: “We are updating our 2017 revenue outlook to reflect the strong first quarter results and now expect revenue growth in the range of 22% to 24% this year. For full year 2017 we also expect GAAP net income profitability and adjusted EBITDA margins in the high single digits, as we continue to focus on improving operating leverage over time.”
The following table summarizes revenues by product for the three months ended
| Three Months Ended March 31, |
Increase / Decrease |
||||||||||||||
| ($,thousands) | 2017 |
2016 |
$ Change |
% Change |
|||||||||||
| Flexitouch System | $ | 17,526 | $ | 11,709 | $ | 5,817 | 49.7 | % | |||||||
| ACTitouch & Entré Systems | 2,324 | 1,991 | 333 | 16.7 | % | ||||||||||
| Total Revenue: | $ | 19,850 | $ | 13,700 | $ | 6,150 | 44.9 | % | |||||||
First Quarter 2017 Financial Results
Revenue for the first quarter of 2017 increased
Gross profit for the first quarter of 2017 increased
Operating expenses for the first quarter of 2017 increased
Operating loss for the first quarter of 2017 increased approximately
Net loss for the first quarter of 2017 increased
Adjusted EBITDA decreased
Cash Position
At
Updated 2017 Financial Outlook
For 2017, the Company expects revenue in the range of
Conference Call
Management will host a conference call at
For those unable to participate, a replay of the call will be available for two weeks at 800-585-8367 (416-621-4642 for international callers); access code 5114431. The webcast will be archived on the investor relations section of the Company's website.
About
Tactile Medical is a leader in developing and marketing at-home therapy devices for the treatment of lymphedema and chronic venous insufficiency. Our unique offering includes advanced, clinically proven pneumatic compression devices, as well as continuity of care services provided by a national network of product specialists and trainers, reimbursement experts, patient advocates and clinicians. This combination of products and services ensures that tens of thousands of patients annually receive the at-home treatment necessary to better manage their chronic conditions. Tactile Medical takes pride in the fact that our efforts help increase clinical efficacy, reduce overall healthcare costs and improve the quality of life for patients with chronic conditions.
Legal Notice Regarding Forward-Looking Statements
This release contains forward-looking statements. Forward-looking statements are generally identifiable by the use of words like "may," "will," "should," "could," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties outside of the Company’s control that can make such statements untrue, including, but not limited to, the adequacy of the Company’s liquidity to pursue its complete business objectives; the Company’s ability to obtain reimbursement from third party payers for its products; loss or retirement of key executives; adverse economic conditions or intense competition; loss of a key supplier; entry of new competitors and products; adverse federal, state and local government regulation; technological obsolescence of the Company’s products; technical problems with the Company’s research and products; the Company’s ability to expand its business through strategic acquisitions; the Company’s ability to integrate acquisitions and related businesses; price increases for supplies and components; or the inability to carry out research, development and commercialization plans. In addition, other factors that could cause actual results to differ materially are discussed in the Company’s filings with the
| Tactile Systems Technology, Inc. Condensed Consolidated Balance Sheets (Unaudited) |
||||||||
| March 31, | December 31, | |||||||
| (In thousands, except share and per share data) | 2017 | 2016 | ||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 20,714 | $ | 30,701 | ||||
| Marketable securities | 20,023 | 10,994 | ||||||
| Accounts receivable, net | 11,428 | 15,003 | ||||||
| Inventories | 6,933 | 6,554 | ||||||
| Income taxes receivable | 555 | — | ||||||
| Prepaid expenses | 870 | 981 | ||||||
| Total current assets | 60,523 | 64,233 | ||||||
| Property and equipment, net | 2,273 | 1,563 | ||||||
| Other assets | ||||||||
| Patent costs, net | 2,340 | 2,394 | ||||||
| Medicare accounts receivable, long-term | 2,869 | 2,823 | ||||||
| Deferred income taxes | 2,792 | 2,785 | ||||||
| Other non-current assets | 51 | 137 | ||||||
| Total other assets | 8,052 | 8,139 | ||||||
| Total assets | $ | 70,848 | $ | 73,935 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 4,862 | $ | 5,018 | ||||
| Accrued payroll and related taxes | 4,886 | 6,692 | ||||||
| Accrued expenses | 1,318 | 1,193 | ||||||
| Future product royalties | 48 | 67 | ||||||
| Income taxes payable | — | 823 | ||||||
| Total current liabilities | 11,114 | 13,793 | ||||||
| Long-term liabilities | ||||||||
| Accrued warranty reserve, long-term | 563 | 503 | ||||||
| Total liabilities | 11,677 | 14,296 | ||||||
| Stockholders’ equity | ||||||||
| Preferred stock; $0.001 par value, 50,000,000 shares authorized and no shares issued and outstanding as of March 31, 2017 and December 31, 2016 | — | — | ||||||
| Common stock; $0.001 par value, 300,000,000 shares authorized, 16,909,154 shares issued and outstanding as of March 31, 2017, and 16,833,737 shares issued and outstanding as of December 31, 2016 | 17 | 17 | ||||||
| Additional paid-in capital | 63,449 | 62,406 | ||||||
| Accumulated deficit | (4,277 | ) | (2,773 | ) | ||||
| Accumulated other comprehensive loss | (18 | ) | (11 | ) | ||||
| Total stockholders’ equity | 59,171 | 59,639 | ||||||
| Total liabilities and stockholders’ equity | $ | 70,848 | $ | 73,935 | ||||
| Tactile Systems Technology, Inc. Condensed Consolidated Statements of Operations (Unaudited) |
||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| (In thousands, except share and per share data) | 2017 | 2016 | ||||||
| Revenues, net | $ | 19,850 | $ | 13,700 | ||||
| Cost of goods sold | 5,624 | 3,811 | ||||||
| Gross profit | 14,226 | 9,889 | ||||||
| Operating expenses | ||||||||
| Sales and marketing | 10,166 | 7,281 | ||||||
| Research and development | 1,118 | 980 | ||||||
| Reimbursement, general and administrative | 5,874 | 3,414 | ||||||
| Total operating expenses | 17,158 | 11,675 | ||||||
| Loss from operations | (2,932 | ) | (1,786 | ) | ||||
| Other income | 55 | 5 | ||||||
| Loss before income taxes | (2,877 | ) | (1,781 | ) | ||||
| Income tax benefit | (1,373 | ) | (801 | ) | ||||
| Net loss | (1,504 | ) | (980 | ) | ||||
| Convertible preferred stock dividends | — | 514 | ||||||
| Net loss attributable to common stockholders | $ | (1,504 | ) | $ | (1,494 | ) | ||
| Net loss per common share attributable to common stockholders | ||||||||
| Basic | $ | (0.09 | ) | $ | (0.45 | ) | ||
| Diluted | $ | (0.09 | ) | $ | (0.45 | ) | ||
| Weighted-average common shares used to compute net loss per common share attributable to common stockholders | ||||||||
| Basic | 16,878,443 | 3,293,326 | ||||||
| Diluted | 16,878,443 | 3,293,326 | ||||||
| Tactile Systems Technology, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) |
|||||||||
| Three Months Ended | |||||||||
| March 31, | |||||||||
| (In thousands) | 2017 | 2016 | |||||||
| Cash flows from operating activities | |||||||||
| Net loss | $ | (1,504 | ) | $ | (980 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
| Depreciation and amortization | 298 | 211 | |||||||
| Deferred income taxes | — | (801 | ) | ||||||
| Stock-based compensation expense | 957 | 75 | |||||||
| Change in allowance for doubtful accounts | (330 | ) | — | ||||||
| Changes in assets and liabilities | |||||||||
| Accounts receivable | 3,905 | 2,493 | |||||||
| Inventories | (379 | ) | 553 | ||||||
| Prepaid expenses and other assets | (358 | ) | 66 | ||||||
| Medicare accounts receivable – long-term | (46 | ) | 228 | ||||||
| Accounts payable | (394 | ) | (331 | ) | |||||
| Accrued payroll and related taxes | (1,806 | ) | (1,534 | ) | |||||
| Accrued expenses and income taxes payable | (640 | ) | (588 | ) | |||||
| Future product royalties | (19 | ) | (248 | ) | |||||
| Net cash used in operating activities | (316 | ) | (856 | ) | |||||
| Cash flows from investing activities | |||||||||
| Purchases of marketable securities | (9,049 | ) | — | ||||||
| Purchases of property and equipment | (700 | ) | (112 | ) | |||||
| Patent costs | (8 | ) | — | ||||||
| Net cash used in investing activities | (9,757 | ) | (112 | ) | |||||
| Cash flows from financing activities | |||||||||
| Proceeds from exercise of common stock options and warrants | 100 | 128 | |||||||
| Taxes paid for net share settlement of restricted stock units | (14 | ) | — | ||||||
| Fees paid for IPO | — | (433 | ) | ||||||
| Net cash provided by (used in) financing activities | 86 | (305 | ) | ||||||
| Net change in cash and cash equivalents | (9,987 | ) | (1,273 | ) | |||||
| Cash and cash equivalents – beginning of period | 30,701 | 7,060 | |||||||
| Cash and cash equivalents – end of period | $ | 20,714 | $ | 5,787 | |||||
| Supplemental cash flow disclosure | |||||||||
| Cash paid for interest | $ | — | $ | — | |||||
| Cash paid for taxes | $ | 5 | $ | 951 | |||||
| Non-cash investing activities | |||||||||
| Acquisition of assets included in accounts payable | $ | 238 | $ | 53 | |||||
Use of Non-GAAP Financial Measures
This press release includes the non-GAAP financial measure of Adjusted EBITDA, which differs from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Adjusted EBITDA in this release represents net loss less interest income, net, plus income tax benefit, depreciation and amortization and stock-based compensation expense. Adjusted EBITDA is presented because the Company believes it is a useful indicator of its operating performance. Management uses the measure principally as a measure of the Company's operating performance and for planning purposes, including the preparation of the Company’s annual operating budget and financial projections. The Company believes this measure is useful to investors as supplemental information because it is frequently used by analysts, investors and other interested parties to evaluate companies in its industry. The Company believes Adjusted EBITDA is useful to its management and investors as a measure of comparative operating performance from period to period.
Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to, or superior to, net income or loss as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP, and it should not be construed to imply that the Company's future results will be unaffected by unusual or non-recurring items. In addition, the measure is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect certain cash requirements such as tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future. Adjusted EBITDA contains certain other limitations, including the failure to reflect our cash expenditures, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. In evaluating Adjusted EBITDA, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments in this presentation. The Company's presentation of Adjusted EBITDA should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on the Company’s GAAP results in addition to using Adjusted EBITDA on a supplemental basis. The Company's definition of this measure is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation.
The following table contains a reconciliation of Adjusted EBITDA to Net Loss.
| Tactile Systems Technology, Inc. Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA (Unaudited) |
|||||||||
| ($, thousands) | Three Months Ended March 31, | ||||||||
| 2017 | 2016 | ||||||||
| Net Loss | $ | (1,504 | ) | $ | (980 | ) | |||
| Interest (income)/expense, net | (62 | ) | (5 | ) | |||||
| Income tax benefit | (1,373 | ) | (801 | ) | |||||
| Depreciation and amortization | 298 | 211 | |||||||
| Stock-based compensation | 957 | 75 | |||||||
| Adjusted EBITDA | $ | (1,684 | ) | $ | (1,500 | ) | |||
Investor Inquiries:Mike Piccinino , CFA Managing DirectorWestwicke Partners 443-213-0500 [email protected]