InMode Reports Record Fourth Quarter and Full Year 2019 Financial Results
YOKNEAM, Israel, Feb. 18, 2020 /PRNewswire/ -- InMode Ltd. (Nasdaq: INMD) ("InMode"), a leading global provider of innovative medical technologies, today announced financial results for the fourth quarter and full year ended December 31, 2019.
Fourth Quarter 2019 Highlights:
-- Record quarterly revenue of $47 million, an increase of 63% compared to
the fourth quarter in 2018
-- GAAP net income attributable to InMode Ltd. of $19.0 million, compared
to a $0.2 million loss attributable to InMode Ltd. in the fourth quarter
in 2018; *non-GAAP net income attributable to InMode Ltd. of $19.3
million
-- GAAP and *non-GAAP fully diluted earnings per share of $0.46
-- Total cash position of $193.4 million as of December 31, 2019, including
cash and cash equivalents, marketable securities and short-term bank
deposits
Full Year 2019 Highlights:
-- Record full year revenue of $156.4 million, an increase of 56% as
compared to 2018
-- GAAP net income attributable to InMode Ltd. of $61.1 million, a 173%
increase year-over-year; *non-GAAP net income attributable to InMode
Ltd. of $62.4 million, a 95% increase year-over-year
-- GAAP fully diluted earnings per share of $1.60, an increase of 158% as
compared to 2018; *non-GAAP fully diluted earnings per share of $1.63,
an increase of 81% year-over-year
-- 68% increase in international (non-U.S.) revenue as compared to 2018
U.S. GAAP Results
(U.S. dollars in thousands, except for per share data)
---
Q4 2019
Q4 2018
FY 2019
FY 2018
---
Revenues $47,002 $28,783 $156,361 $100,162
---
Gross Margins 87% 86% 87% 85%
---
Net Income
(Loss) $19,038 $(213) $61,145 $22,371
Attributable to InMode Ltd.
---
Earnings (Loss)
per Diluted
Share $0.46 $(0.01) $1.60 $0.62
---
Non-GAAP Results
(U.S. dollars in thousands, except for per share data)
---
Q4 2019
Q4 2018
FY 2019
FY 2018
---
Net Income
Attributable
to InMode Ltd. $19,311 $7,826 $62,390 $31,916
---
Earnings per
Diluted Share $0.46 $0.22 $1.63 $0.90
---
*Please refer to "Use of non-GAAP Financial Measures" below for important information about non-GAAP financial measures. A reconciliation between U.S. GAAP and non-GAAP Statement of Income is provided following the financial statements that are part of this release. Non-GAAP results exclude stock-based compensation, legal settlements and loss contingencies related to sublicense agreement, as well as related tax adjustments.
Management Comments
In 2015, the U.S. Food and Drug Administration ("FDA") cleared InMode's new and proprietary Bipolar Radio Frequency technology, which enabled further development and marketing of Subdermal Adipose Remodeling Devices (SARD - BodyTite, FaceTite, AccuTite and Morpheus8). With this new technology, InMode introduced a new category: "Minimally Invasive and Subdermal Ablative Aesthetic Surgery", that enables physicians to provide solutions to patients that do not want to suffer from the shortcomings of full plastic surgery yet would like to obtain comparable results ("Treatment Gap patients").
The success of InMode's Subdermal Adipose Remodeling Devices (SARD) in the minimally invasive and subdermal ablative space inspired InMode to apply the same principles of facial and body reshaping to the non-invasive market in a hands-free application. As such, InMode developed two FDA-cleared distinct hands-free platforms: the Evolve for body and the Evoke for face.
The introduction of Evolve and Evoke to the market created yet another new category within the aesthetic market: "Hands-Free Aesthetic Procedures." Currently, these two proprietary and protected categories (aesthetic surgery and hands-free aesthetic procedures) are expected to be the primary growth engines for InMode in the coming years.
As for global reach - InMode continues to develop the U.S. and international markets through its network of subsidiaries and distributors. In addition, InMode continues to work on clinical and obtaining regulation approval in various countries, recently receiving ANVISA clearance from Brazil, and additional approvals in the U.S. (FDA), Canada, Taiwan and other countries in Eastern Europe.
2020 Financial Outlook
Management provided an outlook for the full year of 2020, the period ending December 31, 2020. Based on current estimates, management expects:
-- $190 million to $198 million in revenue
-- 85%-87% in Gross Margins
-- *Non-GAAP Income from Operations - $76 million to $80 million
-- *Non-GAAP Earnings per Diluted Share - $1.85 - $1.93
This outlook is not guarantee of future performance and stockholders should not place under reliance on such forward-looking statements. See "Forward-Looking Statements" for additional information.
Fourth Quarter 2019 Financial Results
Total revenues for the fourth quarter of 2019 were $47.0 million, an increase of 63% as compared to the fourth quarter in 2018. This growth was driven primarily by the continued expansion of InMode's direct sales organization in the United States. Additionally, InMode continued to gain traction in international markets, with international revenue growing 71% year-over-year.
Gross margin for the fourth quarter of 2019 was 87% compared to a gross margin of 86% in the fourth quarter of 2018.
GAAP operating margin for the fourth quarter of 2019 was 38%, compared to 5% in the fourth quarter of 2018. *Non-GAAP operating margin for the fourth quarter of 2019 was 39%, compared to 33% in the fourth quarter of 2018. This increase is primarily attributable to the increase in our gross profit exceeding the increase in our operating expenses as a result of the company's accelerated growth.
InMode reported GAAP net income attributable to InMode Ltd. of $19.0 million, or $0.46 per diluted share in the fourth quarter of 2019. This is compared with GAAP net loss attributable to InMode Ltd. of $(0.2) million, or $(0.01) per diluted share, in the fourth quarter of 2018. The loss in the fourth quarter of 2018 was due to a one-time provision for a settlement agreement InMode entered into in January 2019. On a *non-GAAP basis, InMode reported net income attributable to InMode Ltd. of $19.3 million, or $0.46 per diluted share in the fourth quarter of 2019 compared to $7.8 million, or $0.22 per diluted share, in the fourth quarter of 2018.
Full Year 2019 Financial Results
Total revenues for 2019 were $156.4 million, an increase of 56% as compared to 2018. This growth was driven primarily by the continued expansion of InMode's direct sales organization in the United States. In addition, InMode has been gaining traction in international markets, with international revenue growing 68% year-over-year.
Gross margin for 2019 was 87% compared to a gross margin of 85% in 2018.
GAAP operating margin for 2019 was 38%, compared to the operating margin of 23% in 2018. *Non-GAAP operating margin for 2019 was 39%, compared to the operating margin of 33% in the full year of 2018. InMode reported GAAP net income attributable to InMode Ltd. of $61.1 million, or $1.60 per diluted share in 2019. This is compared with GAAP net income attributable to InMode Ltd of $22.4 million, or $0.62 per diluted share, in 2018. On a *non-GAAP basis, InMode reported net income attributable to InMode Ltd. of $62.4 million, or $1.63 per diluted share, in the full year of 2019 compared to net income attributable to InMode Ltd. of $31.9 million, or $0.90 per diluted share, in the full year of 2018.
As of December 31, 2019, InMode had cash and cash equivalents, marketable securities and short-term bank deposits of $193.4 million, of which approximately $70 million in net proceeds were raised in InMode's initial public offering.
*Please refer to "Use of non-GAAP Financial Measures" below for important information about non-GAAP financial measures. A reconciliation between U.S. GAAP and non-GAAP Statement of Income is provided following the financial statements that are part of this release. Non-GAAP results exclude stock-based compensation, legal settlements and loss contingencies related to sublicense agreement, as well as related tax adjustments.
Use of Non-GAAP Financial Measures
In addition to InMode's operating results presented in accordance with GAAP, this release includes certain non-GAAP financial measures including non-GAAP net income, non-GAAP fully diluted earnings per share and non-GAAP operating margin. Because these measures are used in InMode's internal analysis of financial and operating performance, management believes that they provide greater transparency to investors of management's view of InMode's economic performance. Management also believes the presentation of these measures, when analyzed in conjunction with InMode's GAAP operating results, allows investors to more effectively evaluate and compare the performance of InMode to that of its peers, although InMode's presentation of its non-GAAP measures may not be comparable to other similarly-titled measures of other companies. Schedules reconciling each of these non-GAAP financial measures are provided as a supplement to this release. We have not provided a reconciliation of non-GAAP financial measures included in "2020 Financial Outlook" to the corresponding GAAP financial measure on a forward-looking basis due to the potential variability, limited visibility and unpredictability.
Conference Call Information
Mr. Moshe Mizrahy, Chairman and Chief Executive Officer, and Mr. Yair Malca, Chief Financial Officer, will host a conference call today, February 18, 2020, at 9 a.m. Eastern Time.
To attend the conference call, please dial one of the following teleconferencing numbers. Please begin by placing your call five minutes before the conference call commences. If you are unable to connect using the toll-free number, please try the international dial-in number.
U.S. Toll-Free Dial-in Number: 1-866-777-2509
Israel Toll- Free Dial-in Number: 1-80-921-2373
International Dial-in Number: 1-412-317-5413
At:
9 a.m. Eastern Time
6 a.m. Pacific Time
4 p.m. Israel Time
The conference call will also be webcast live from a link on InMode's website at https://inmodemd.com/investors/. A replay of the conference call will be available from February 18, 2020 at 12 p.m. Eastern Time to March 3, 2020 at 11:59 p.m. Eastern Time. To access the replay, please dial one of the following numbers:
Replay Dial-in TOLL-FREE: 1-877-344-7529
Replay Dial-in Canada TOLL-FREE: 855-669-9658
Replay Dial-in TOLL/INTERNATIONAL: 1-412-317-0088
Replay Pin Number: 10137694
A replay will also be available for 90 days on InMode's website at https://inmodemd.com/investors/.
About InMode
InMode is a leading global provider of innovative medical technologies. InMode develops, manufactures, and markets devices harnessing novel radio-frequency ("RF") technology. InMode strives to enable new emerging surgical procedures as well as improve existing treatments. InMode has leveraged its medically-accepted minimally-invasive RF technologies to offer a comprehensive line of products across several categories for plastic surgery, gynecology, dermatology, otolaryngology, and ophthalmology. For more information about InMode, please visit www.inmodemd.com.
Forward-Looking Statements
The information in this press release includes forward-looking statements within the meaning of the federal securities laws. These statements generally relate to future events or InMode's future financial or operating performance, including the future performance described "2020 Financial Outlook". Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. In some cases, you can identify these statements because they contain words such as "anticipate," "believe," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "would" and similar expressions that concern our expectations, strategy plans or intentions. Forward-looking statements are based on management's current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements contained in our prospectus (included in the Registration Statement on Form F-1, filed with the Securities and Exchange Commission (File No. 333-232615), as amended) and our future public filings. InMode undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
INMODE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in thousands, except for per share data)
(Unaudited)
Three months
ended Year Ended
December 31, December 31,
---
2019 2018 2019 2018
---
REVENUES 47,002 28,783 156,361 100,162
COST OF REVENUES 6,045 3,939 20,238 15,057
---
GROSS PROFIT 40,957 24,844 136,123 85,105
OPERATING EXPENSES:
Research and development 1,587 1,354 5,699 4,180
Sales and marketing 20,127 12,521 66,848 44,622
General and
administrative 1,265 1,656 3,958 4,814
Legal settlements and
loss contingencies 8,000 8,000
TOTAL OPERATING EXPENSES 22,979 23,531 76,505 61,616
---
INCOME FROM OPERATIONS 17,978 1,313 59,618 23,489
Finance income
(expenses), net 1,159 (487) 2,423 136
---
INCOME BEFORE TAXES 19,137 826 62,041 23,625
INCOME TAXES 165 1,045 883 1,260
---
NET INCOME 18,972 (219) 61,158 22,365
Less: Net income (loss)
attributable to non-
controlling interests (66) (6) 13 (6)
---
NET INCOME (LOSS)
ATTRIBUTABLE TO INMODE
LTD. 19,038 (213) 61,145 22,371
---
NET INCOME (LOSS) PER SHARE (1):
Basic 0.58 (0.01) 2.09 0.82
---
Diluted 0.46 (0.01) 1.60 0.62
---
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
USED IN COMPUTATION OF NET INCOME PER SHARE (1)
Basic 32,781 26,682 29,232 26,614
---
Diluted 41,639 35,052 38,059 35,007
---
(1) The number shares have been adjusted retroactively for a 1-for-1.789 stock split of InMode shares by way of an issuance of bonus shares, that occurred pursuant to a resolution of our board of directors dated July 24, 2019.
INMODE LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except for per share data)
(Unaudited)
December 31, December 31,
2019 2018
---
Assets
CURRENT ASSETS:
Cash and cash equivalents 44,727 24,721
Marketable securities 120,144 26,532
Short-term bank deposits 28,491 10,045
Accounts receivable, net of
allowance for doubtful
accounts 6,628 7,008
Other receivables 3,810 2,495
Inventories 9,408 6,963
TOTAL CURRENT ASSETS 213,208 77,764
NON-CURRENT ASSETS:
Accounts receivable 374 544
Deferred offering costs - 895
Deferred income taxes, net 1,899 1,309
Operating lease right-of-
use assets 1,369 -
Property and equipment, net 935 544
Other investments 600 -
TOTAL NON-CURRENT ASSETS 5,177 3,292
TOTAL ASSETS 218,385 81,056
Liabilities and shareholders' equity
CURRENT LIABILITIES:
Accounts payable 3,702 4,509
Contract liabilities 15,587 5,755
Other liabilities 13,205 9,165
Accrued contingencies - 10,000
---
TOTAL CURRENT LIABILITIES 32,494 29,429
NON-CURRENT LIABILITIES:
Contract liabilities 3,813 3,982
Other liabilities 1,494 771
Operating lease liabilities 744 -
Deferred income taxes, net 37 11
TOTAL NON-CURRENT
LIABILITIES 6,088 4,764
TOTAL LIABILITIES 38,582 34,193
REDEEMABLE NON-CONTROLLING
INTEREST - 2,187
---
TOTAL SHAREHOLDERS' EQUITY 179,803 44,676
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY 218,385 81,056
INMODE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands, except for per share data)
(Unaudited)
Three months ended Year Ended
December 31, December 31,
---
2019 2018 2019 2018
---
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) 18,972 (219) 61,158 22,365
Adjustments required to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 88 53 302 184
Share-based compensation
expenses 358 181 1,557 1,947
Allowance for doubtful
accounts (55) 10 78 (33)
Loss (gains) on marketable
securities, net 3 101 3 (21)
Changes in fair value of
marketable 504 291
securities, net
Finance income, net (440) (45) (835) (45)
Deferred income taxes, net (383) (424) (594) (592)
Changes in operating assets and liabilities:
Decrease (increase) in
accounts receivable 1,046 (191) 449 (571)
Increase in other receivables (666) (1,100) (1,316) (1,171)
Increase in inventories (913) (1,352) (2,445) (1,891)
Increase (decrease) in
accounts payable (667) 21 92 541
Increase in other liabilities 1,676 2,898 4,094 2,631
Increase in contract
liabilities 8,400 1,024 9,663 5,251
Increase (decrease) in accrued 8,000 (10,000) 8,000
contingencies
Net cash provided by operating
activities 27,419 9,461 62,206 36,886
---
CASH FLOWS FROM INVESTING
ACTIVITIES:
Investment in short-term
deposit (13,500) (5,000) (47,810) (10,000)
Proceeds from short-term
deposit 11,000 29,500 -
Purchase of fixed assets (175) (88) (693) (381)
Other investments (600) (600) -
Purchase of marketable
securities (82,802) (15,800) (165,423) (38,346)
Proceeds from sale of
marketable securities 54,471 15,576 72,574 18,988
---
Net cash (used in) investing
activities (31,606) (5,312) (112,452) (29,739)
---
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from initial public
offering of 69,784 -
ordinary shares, net of offering costs
Exercise of options 74 10 389 186
---
Net cash provided by financing
activities 74 10 70,173 186
EFFECT OF EXCHANGE RATE 135 (64) 79 (205)
CHANGES ON CASH
---
NET INCREASE (DECREASE) IN
CASH (3,978) 4,095 20,006 7,128
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT 48,705 20,626 24,721 17,593
BEGINNING OF PERIOD
---
CASH AND CASH EQUIVALENTS AT 44,727 24,721 44,727 24,721
END OF PERIOD
---
INMODE LTD.
CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS
(U.S. dollars in thousands, except for per share data)
(Unaudited)
Three months ended Year Ended
December 31, December 31,
---
2019 2018 2019 2018
---
Revenues by Geography:
United States 36,386 22,565 124,199 81,063
International 10,616 6,218 32,162 19,099
---
Total Net Revenue 47,002 28,783 156,361 100,162
---
U.S. as
percentage of
total revenue 77% 78% 79% 81%
INMODE LTD.
RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF
INCOME TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in thousands, except for per share data)
(Unaudited)
Three months ended
Three months ended
December 31, 2019 December 31, 2018
---
GAAP
Stock Based Non-GAAP GAAP
Stock Based Legal settlements Non-GAAP
Compensation Compensation and loss
contingencies
--- ---
REVENUES 47,002 47,002 28,783 28,783
COST OF REVENUES 6,045 (32) 6,013 3,939 (2) 3,937
---
GROSS PROFIT 40,957 32 40,989 24,844 2 24,846
OPERATING EXPENSES:
Research and development 1,587 (13) 1,574 1,354 (52) 1,302
Sales and marketing 20,127 (271) 19,856 12,521 (114) 12,407
General and
administrative 1,265 (42) 1,223 1,656 (13) 1,643
Legal settlements and
loss 8,000 (8,000) -
contingencies
TOTAL OPERATING 22,979 (326) 22,653 23,531 (179) (8,000) 15,352
EXPENSES
---
INCOME FROM OPERATIONS 17,978 358 18,336 1,313 181 8,000 9,494
Finance income
(expenses), 1,159 1,159 (487) (487)
net
---
INCOME BEFORE TAXES 19,137 358 19,495 826 181 8,000 9,007
---
INCOME TAXES 165 85 250 1,045 142 1,187
---
NET INCOME (LOSS) 18,972 273 19,245 (219) 39 8,000 7,820
Less: Net income (loss) (66) (66) (6) (6)
attributable to non-controlling
interests
---
NET INCOME (LOSS) 19,038 273 19,311 (213) 39 8,000 7,826
ATTRIBUTABLE TO
INMODE LTD.
---
NET INCOME (LOSS) PER
SHARE (1):
Basic 0.58 0.59 (0.01) 0.29
---
Diluted 0.46 0.46 (0.01) 0.22
---
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING USED IN
COMPUTATION OF NET
INCOME PER SHARE (1)
Basic 32,781 32,781 26,682 22,682
---
Diluted 41,639 41,657 35,052 35,080
---
(1) The number of shares have been adjusted retroactively for a 1-for-1.789 stock split of InMode shares by way of
an issuance of bonus shares, that occurred pursuant to a resolution of our board of directors dated July 24, 2019
INMODE LTD.
RECONCILIATION OF GAAP CONDENSED CONSOLIDATED STATEMENTS OF
INCOME TO NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(U.S. dollars in thousands, except for per share data)
(Unaudited)
Year Ended December 31, 2019
Year Ended December 31, 2018
---
GAAP
Stock Based Non-GAAP GAAP
Stock Based
Legal Non-GAAP
Compensation Compensation settlements
and loss
contingencies
--- ---
REVENUES 156,361 156,361 100,162 100,162
COST OF REVENUES 20,238 (94) 20,144 15,057 (25) 15,032
---
GROSS PROFIT 136,123 94 136,217 85,105 25 85,130
OPERATING EXPENSES:
Research and development 5,699 (179) 5,520 4,180 (63) 4,117
Sales and marketing 66,848 (1,158) 65,690 44,622 (1,817) 42,805
General and
administrative 3,958 (126) 3,832 4,814 (42) 4,772
Legal settlements and
loss - 8,000 (8,000)
contingencies
---
TOTAL OPERATING 76,505 (1,463) 75,042 61,616 (1,922) (8,000) 51,694
EXPENSES
---
INCOME FROM OPERATIONS 59,618 1,557 61,175 23,489 1,947 8,000 33,436
Finance income, net 2,423 2,423 136 136
---
INCOME BEFORE TAXES 62,041 1,557 63,598 23,625 1,947 8,000 33,572
---
INCOME TAXES 883 312 1,195 1,260 402 1,662
---
NET INCOME 61,158 1,245 62,403 22,365 1,545 8,000 31,910
Less: Net income (loss) 13 13 (6) (6)
attributable to non-controlling
interests
---
NET INCOME ATTRIBUTABLE 61,145 1,245 62,390 22,371 1,545 8,000 31,916
TO INMODE LTD.
---
NET INCOME PER
SHARE (1):
Basic 2.09 2.13 0.82 1.18
---
Diluted 1.60 1.63 0.62 0.90
---
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING USED IN
COMPUTATION OF NET
INCOME PER SHARE (1)
Basic 29,232 29,232 26,614 26,614
---
Diluted 38,059 38,085 35,007 35,058
---
(1) The number of shares have been adjusted retroactively for a 1-for-1.789 stock split of InMode shares by way of
an issuance of bonus shares, that occurred pursuant to a resolution of our board of directors dated July 24, 2019
Company Contact:
Investor Relations Contact:
Yair Malca
Miri Segal
Chief Financial Officer
MS-IR LLC
Phone: +1(949) 305-0108
Phone: +1(917) 607-8654
Email: Yair.Malca@inmodemd.com
Email: ir@inmodemd.com
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SOURCE InMode Ltd.
