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Tandem Diabetes Care Announces Second Quarter 2021 Financial Results and Updated Full Year 2021 Sales Guidance

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SAN DIEGO, August 04, 2021--(BUSINESS WIRE)--Tandem Diabetes Care, Inc. (NASDAQ: TNDM), a leading insulin delivery and diabetes technology company, today reported its financial results for the quarter ended June 30, 2021 and updated its sales guidance for the year ending December 31, 2021.

Second Quarter 2021 Highlights

In comparing the second quarter of 2021 to the same period of 2020:

  • Worldwide pump shipments increased 81 percent to 33,817 pumps from 18,687 pumps

  • Sales increased 58 percent to $172.1 million from $109.2 million

  • Gross margin improved to 54 percent of sales from 50 percent of sales

  • Operating margin improved to 3 percent of sales from negative 11 percent of sales

"We achieved record-high sales in the second quarter by expanding and further penetrating the U.S. insulin pump market, and through the rapid uptake of our technology internationally where our business opportunity is still in its early stages," said John Sheridan, president and chief executive officer. "Our worldwide installed base is now nearly 270,000 people, and we are on track to achieve our goal of bringing the benefits of our technology to more than half a million customers by year-end 2024."

Second Quarter 2021 Financial Results

Domestic pump shipments increased 40 percent to 20,665 pumps in the second quarter of 2021 from 14,735 pumps in the same period of 2020. Domestic sales were $127.6 million, an increase of 43 percent compared to $89.3 million in the second quarter of 2020. International pump shipments increased 233 percent to 13,152 pumps in the second quarter of 2021 from 3,952 pumps in the same period of 2020. International sales were $44.6 million, an increase of 123 percent compared to $20.0 million in the second quarter of 2020.

Gross profit for the second quarter of 2021 increased 70 percent to $92.5 million, compared to $54.4 million for the same period of 2020. Gross margin increased to 54 percent in the second quarter of 2021 from 50 percent in the same period of 2020.

For the second quarter of 2021, operating expenses totaled $87.0 million, compared to $66.4 million for the same period of 2020. Operating income totaled $5.4 million, compared to an operating loss of $12.0 million for the same period of 2020. Operating margin for the second quarter of 2021 was 3 percent of sales compared to negative 11 percent for the same period of 2020. For the second quarter of 2021, Adjusted EBITDA(1) was $23.8 million, or 14 percent of sales, compared to $6.6 million, or 6 percent of sales, for the same period of 2020.

Net income for the second quarter of 2021 was $4.0 million, which included a $0.3 million non-cash charge for the change in fair value of certain outstanding warrants and $1.5 million of interest expense related to the Company’s convertible senior notes. This is compared to a net loss of $27.1 million for the second quarter of 2020, which included a $14.3 million non-cash charge for the change in fair value of certain warrants outstanding at that time and $3.2 million of interest expense related to the Company’s convertible senior notes.

Cash Balance and Liquidity

As of June 30, 2021, the Company had $545.3 million in cash, cash equivalents and short-term investments. This represents a $31.9 million increase in the second quarter of 2021, and a $60.4 million increase since December 31, 2020.

2021 Annual Guidance Update

For the year ending December 31, 2021, the Company is updating its financial guidance as follows:

  • Sales are estimated to be in the range of $670 million to $685 million, which represents an annual sales growth of 34 percent to 37 percent compared to 2020. The Company’s prior sales guidance for 2021 was estimated to be in the range of $625 million to $640 million.

    • Includes international sales of approximately $160 million to $165 million, which represents an annual sales growth of 92 percent to 98 percent compared to 2020. The Company’s prior international sales guidance for 2021 was estimated to be in the range of $125 million to $130 million.

  • Gross margin is estimated to be approximately 55 percent

  • Adjusted EBITDA(1) is estimated to be approximately 15 percent of sales

  • Non-cash charges included in cost of goods sold and operating expenses are estimated to be approximately $80 million, which include:

    • Approximately $65 million in non-cash, stock-based compensation expense

    • Approximately $15 million of depreciation and amortization

(1)

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, 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 at least 30 days. To listen to the conference call via phone, please dial 855-427-4396 (U.S./Canada) or 484-756-4261 (International) and use the participant code "6897987."

About Tandem Diabetes Care, Inc.

Tandem Diabetes Care, Inc. (www.tandemdiabetes.com) is a medical device company dedicated to improving the lives of people with diabetes worldwide through relentless innovation and revolutionary customer experience. The Company takes an innovative, user-centric approach to the design, development and commercialization of products for people with diabetes who use insulin. Tandem’s flagship product, the t:slim X2 insulin pump, is capable of remote software updates using a personal computer and features integrated continuous glucose monitoring. Tandem is based in San Diego, California.

Tandem Diabetes Care, Inc., 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, and the factors impacting the Company’s business momentum. 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

(in thousands)

June 30,

December 31,

2021

2020

(Unaudited)

Assets

Current assets:

Cash, cash equivalents and short-term investments

$

545,302

$

484,936

Accounts receivable, net

80,212

82,195

Inventories

66,705

63,721

Other current assets

6,066

6,383

Total current assets

698,285

637,235

Property and equipment, net

48,890

50,022

Operating lease right-of-use assets

31,499

19,773

Other long-term assets

16,576

9,385

Total assets

$

795,250

$

716,415

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable, accrued expenses and employee-related liabilities

$

70,385

$

56,747

Deferred revenue

7,953

6,082

Common stock warrants

2,789

14,261

Operating lease liabilities

9,260

9,421

Other current liabilities

18,336

17,341

Total current liabilities

108,723

103,852

Convertible senior notes, net - long-term

280,599

202,984

Operating lease liabilities - long-term

27,376

15,914

Other long-term liabilities

32,467

27,360

Total liabilities

449,165

350,110

Total stockholders’ equity

346,085

366,305

Total liabilities and stockholders’ equity

$

795,250

$

716,415

TANDEM DIABETES CARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Sales

$

172,139

$

109,236

$

313,176

$

207,162

Cost of sales

79,685

54,846

147,435

102,511

Gross profit

92,454

54,390

165,741

104,651

Operating expenses:

Selling, general and administrative

66,523

50,440

125,086

100,157

Research and development

20,499

15,987

38,460

30,104

Total operating expenses

87,022

66,427

163,546

130,261

Operating income (loss)

5,432

(12,037

)

2,195

(25,610

)

Total other expense, net

(1,363

)

(17,145

)

(3,287

)

(18,341

)

Income (loss) before income taxes

4,069

(29,182

)

(1,092

)

(43,951

)

Income tax expense (benefit)

61

(2,075

)

(56

)

(1,977

)

Net income (loss)

$

4,008

$

(27,107

)

$

(1,036

)

$

(41,974

)

Net income (loss) per share, basic

$

0.06

$

(0.45

)

$

(0.02

)

$

(0.70

)

Net income (loss) per share, diluted

$

0.06

$

(0.45

)

$

(0.02

)

$

(0.70

)

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

62,717

60,424

62,583

60,082

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

65,663

60,424

62,583

60,082

Reconciliation of GAAP versus Non-GAAP Financial Results

(in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

GAAP net income (loss)

$

4,008

$

(27,107

)

$

(1,036

)

$

(41,974

)

Income tax expense (benefit)

61

(2,075

)

(56

)

(1,977

)

Interest income and other, net

(418

)

(366

)

(690

)

(1,092

)

Interest expense

1,509

3,175

3,015

3,175

Depreciation and amortization

3,440

2,205

6,925

4,035

EBITDA

8,600

(24,168

)

8,158

(37,833

)

Change in fair value of common stock warrants

272

14,336

962

16,258

Stock-based compensation expense

14,977

16,421

27,924

32,286

Adjusted EBITDA

$

23,849

$

6,589

$

37,044

$

10,711

View source version on businesswire.com: https://www.businesswire.com/news/home/20210804005403/en/

Contacts

Media Contact:
Steve Sabicer
714-907-6264
ssabicer@thesabicergroup.com

Investor Contact:
Susan Morrison
858-366-6900
IR@tandemdiabetes.com