Tactile Systems Technology, Inc. Reports Preliminary First Quarter 2020 Revenue Results, Withdraws Full Year 2020 Financial Outlook and Provides COVID-19 Business Update
First Quarter 2020 Preliminary Revenue Summary:
- First quarter 2020 preliminary total revenue is expected to be in the range of
$43.0million to $44.0 million, representing growth of approximately 14% to 17% year-over-year. First quarter 2020 total revenue was negatively impacted by the COVID-19 pandemic beginning in the month of March.
-- Excluding the contribution to first quarter 2019 revenue related to the Company’s adoption of ASC 842, the first quarter 2020 expected revenue range reflects year-over-year growth of approximately 24% to 27% on an operational basis
- First quarter 2020 preliminary revenue is expected to be comprised of:
-- Flexitouch system revenue in the range of
$38.0million to $39.0 million, representing growth of approximately 11% to 14% year-over-year
-- Other revenue in the range of
$5.0 millionto $5.1 million, representing growth of approximately 43% to 45% year-over-year
Full Year 2020 Financial Outlook:
- Due to the rapidly evolving environment and continued uncertainties associated with COVID-19, the Company is withdrawing its full year 2020 financial outlook. The Company intends to provide additional information on the impact of COVID-19, to the extent practicable, during its first quarter earnings call scheduled for
Monday, May 4, 2020.
December 31, 2019, the Company had approximately $45.2 millionof cash, cash equivalents and marketable securities. As of April 6, 2020, the Company had no outstanding borrowings on its $10.0 millionrevolving credit facility.
“We are grateful to the healthcare professionals who are tirelessly caring for patients on the front lines of this pandemic, and our thoughts go out to all who have been impacted,” said
Health & Safety:
Tactile Medical’s goal is the safety of its employees, clinicians and patients. To meet this goal and the needs of our customers, we are taking important actions to help mitigate potential risks created by COVID-19, including:
- Adjusting work and operations to keep employees safe while continuing to serve our clinicians and patients. As an essential business under federal guidelines,
Tactile Medicalcontinues to manufacture product and has implemented multiple, smaller rotational shifts and other best practices to protect the health and safety of our workforce.
- Implementing remote and flexible work arrangements for employees wherever possible, including real-time, on-line training of our new sales reps.
- Initiating employee travel and contact restrictions to reduce exposure.
- Collaborating with payers to modify coverage requirements by serving patients virtually.
- Postponing large medical education programs and conducting virtual meetings whenever possible, including virtual patient demonstrations and trainings.
- When in-person visits are required,
Tactile Medicalis supporting customers and patients by using rigorous infection control practices.
The financial information in this release is preliminary and subject to completion of the Company’s financial reporting processes and review.
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,” “continue,” “confident,” “outlook,” “guidance,” “project,” “goals,” “look forward,” “poised,” “designed” or “remain” 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 impacts of the COVID-19 pandemic on the Company’s financial condition and operations; the course of the COVID-19 pandemic and its impact on general economic, business and market conditions; the Company’s inability to execute on its plans to respond to the COVID-19 pandemic; the adequacy of the Company’s liquidity to pursue its business objectives; the Company’s ability to obtain reimbursement from third party payers for its products; loss or retirement of key executives, including prior to identifying a successor; the Company’s Chief Executive Officer transition, including disruptions and uncertainties related thereto, the Company’s ability to appoint a successor with the desired level of experience and expertise in a timely manner, the potential impact on the Company’s business and future strategic direction resulting from the transition to a new Chief Executive Officer and the Company’s ability to retain other key members of senior management; 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; the effects of current and future
Use of Non-GAAP Financial Measures
This press release includes the non-GAAP financial measure of preliminary non-GAAP revenue growth, which differs from financial measures calculated in accordance with
Preliminary non-GAAP revenue growth is presented because the Company believes it is a useful indicator of its operating performance. The operating lease revenue excluded from first quarter 2019 revenue in the adjustment was related to rental agreements commencing prior to
Preliminary non-GAAP revenue growth is a non-GAAP financial measure and should not be considered as an alternative to, or superior to, preliminary GAAP revenue growth, 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. Management primarily relies on the Company’s GAAP results in addition to using non-GAAP financial measures on a supplemental basis. The Company’s definition of non-GAAP revenue is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation.
|Reconciliation of Expected First Quarter 2020 Revenue to Expected First Quarter 2020 Non-GAAP Revenue Growth Rates(1)
|Three Months Ended||Expected Three Months Ended|
|(Dollars in millions)||Increase|
|Less: Operating lease revenue(2)||(2.8||)||N/A||N/A||9||%||9||%|
|Total non-GAAP revenue||$||34.8||$||43.0||$||44.0||24||%||27||%|
- Growth rates may not foot due to rounding
- The operating lease revenue excluded from first quarter 2019 revenue in the adjustment was related to rental agreements commencing prior to
December 31, 2018, which were recognized as month-to-month operating leases in the first quarter of 2019 and do not contribute to the Company’s revenue results in 2020.
Mike Piccinino, CFA Managing Director Westwicke Partners443-213-0500 email@example.com
Source: Tactile Systems Technology, Inc.