InMode Reports Record Fourth Quarter and Full Year 2020 Financial Results; Quarterly Revenues of $75.2 Million Represent 60% Year over Year Growth
YOKNEAM, Israel, Feb. 10, 2021 /PRNewswire/ -- InMode Ltd. (Nasdaq: INMD) ("InMode"), a leading global provider of innovative medical technologies, today announced consolidated financial results for its fourth quarter and full year ended December 31, 2020.
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Fourth Quarter 2020 Highlights:
-- Record quarterly revenues of $75.2 million, an increase of 60% compared to the fourth quarter of 2019; 65% of quarterly revenues derived from our proprietary surgical technology platforms engaged in minimally invasive and subdermal ablative treatments, 28% from our recently introduced hands-free platforms and 7% from our traditional laser and non-invasive RF platforms -- Record GAAP net income of $36.1 million, compared to $19.0 million in the fourth quarter of 2019; *non-GAAP net income of $39.9 million, compared to $19.3 million in the fourth quarter of 2019 -- Record GAAP diluted earnings per share of $0.85, compared to $0.46 in the fourth quarter of 2019; *non-GAAP diluted earnings per share of $0.94, compared to $0.46 in the fourth quarter of 2019 -- Total cash position of $260.5 million as of December 31, 2020, including cash and cash equivalents, marketable securities and short-term bank deposits
Full Year 2020 Highlights:
-- Record full year revenues of $206.1 million, an increase of 32% as compared to 2019; 62% of revenues derived from our proprietary surgical technology platforms engaged in minimally invasive and subdermal ablative treatments, 32% from our recently introduced hands-free platforms and 6% from our traditional laser and non-invasive RF platforms -- Record GAAP net income of $75.0 million, compared to $61.1 million in 2019; *non-GAAP net income of $89.1 million, compared to $62.4 million in 2019 -- Record GAAP diluted earnings per share of $1.78, compared to $1.60 in 2019; *non-GAAP diluted earnings per share of $2.11, compared to $1.63 in 2019 -- 76% increase in international (non-U.S.) revenues as compared to 2019
U.S. GAAP Results (U.S. dollars in thousands, except for per share data) --- Q4 2020 Q4 2019 FY 2020 FY 2019 --- Revenues $75,187 $47,002 $206,107 $156,361 --- Gross Margins 86% 87% 85% 87% --- Net Income Attributable to InMode Ltd. $36,114 $19,038 $75,030 $61,145 --- Earnings per Diluted Share $0.85 $0.46 $1.78 $1.60 --- *Non-GAAP Results (U.S. dollars in thousands, except for per share data) --- Q4 2020 Q4 2019 FY 2020 FY 2019 --- Gross Margins 86% 87% 85% 87% --- Net Income Attributable to InMode Ltd. $39,850 $19,311 $89,143 $62,390 --- Earnings per Diluted Share $0.94 $0.46 $2.11 $1.63 ---
*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 included in this release. Non-GAAP results exclude share-based compensation and related tax adjustments.
Management Comments
"We reported outstanding 2020 results with record fourth quarter and full year financial performance, despite the disruptions caused by the COVID-19 pandemic. We took bold strategic steps this year to solidify our leading market position, expanding our sales & marketing efforts and increasing our headcount with the industry's top professionals," commented Moshe Mizrahy, InMode's CEO.
"Our innovative hands-free and minimally invasive technology gained significant traction this year, driven by new product launches such as Evolve, Evoke and Morpheus8," commented Dr. Michael Kreindel, InMode's CTO and co-founder. "These unique platforms offer effective full-body and facial aesthetic solutions for patients who want to avoid hospitalization and invasive procedures, which are required for traditional plastic surgery. We are being recognized across the market as a true innovator and plan to introduce our electro-surgical technologies into new medical categories such as gynecology and ophthalmology in 2021."
"We are extremely pleased with the progress achieved in 2020. The focus our sales and marketing team maintained throughout one of the most difficult times in history is a testament to the quality and dedication of our team," commented Shakil Lakhani, President of North America. "Through the investments we made this year, we developed a successful formula to create demand for our new technologies, engage physicians, and convert growing interest into sales."
Fourth Quarter 2020 Financial Results
"Total revenues for the fourth quarter of 2020 were $75.2 million, an increase of 60% as compared to the fourth quarter of 2019. The increase in revenues was primarily attributable to the expansion of our direct sales organization in the United States and the continued momentum of our hands-free technology, as well as the recently introduced Morpheus8 Body fractional technology. Moreover, we continued to gain traction in international markets, mainly in Asia-Pacific regions, with international revenues growing 102% year-over-year," commented Yair Malca, CFO.
GAAP gross margin for the fourth quarter of 2020 was 86%, compared to a gross margin of 87% in the fourth quarter of 2019. *Non-GAAP gross margin for the fourth quarter of 2020 was 86%, compared to a gross margin of 87% in the fourth quarter of 2019. This decrease was primarily attributable to the increase of sales in international markets, mainly in countries where we operate through distributors.
GAAP operating margin for the fourth quarter of 2020 was 47%, compared to 38% in the fourth quarter of 2019. *Non-GAAP operating margin for the fourth quarter of 2020 was 51%, compared to 39% in the fourth quarter of 2019. This increase in operating margin was primarily attributable to economies of scale derived from the Company's accelerated growth, as well as a decrease in marketing activities in the United States such as event and conference participation, due to restrictions caused by the COVID-19 pandemic.
InMode reported GAAP net income attributable to InMode Ltd of $36.1 million, or $0.85 per diluted share, in the fourth quarter of 2020 compared to $19.0 million, or $0.46 per diluted share, in the fourth quarter of 2019. On a *non-GAAP basis, InMode reported net income attributable to InMode Ltd of $39.9 million, or $0.94 per diluted share, in the fourth quarter of 2020, compared to $19.3 million, or $0.46 per diluted share, in the fourth quarter of 2019.
Full Year 2020 Financial Results
Total revenues for 2020 were $206.1 million, an increase of 32% as compared to 2019. This increase was primarily attributable to strong demand for our hands-free platforms, which contributed $65.3 million to total 2020 revenues. In addition, InMode gained traction in international markets, with international revenues growing 76% year-over-year.
GAAP gross margin for 2020 was 85%, compared to a gross margin of 87% in 2019. *Non-GAAP gross margin for 2020 was 85%, compared to a gross margin of 87% in 2019. This decrease was primarily attributable to the increase of sales in international markets, mainly in countries where we operate through distributors.
GAAP operating margin for 2020 was 35%, compared to the operating margin of 38% in 2019. *Non-GAAP operating margin for 2020 was 42%, compared to the operating margin of 39% in the full year of 2019. This increase in *non-GAAP operating margin was primarily attributable to decreased marketing activities in the United States such as event and conference participation, due to restrictions caused by the COVID-19 pandemic.
InMode reported GAAP net income attributable to InMode Ltd. of $75.0 million, or $1.78 per diluted share, in 2020. This is compared with GAAP net income attributable to InMode Ltd of $61.1 million, or $1.60 per diluted share, in 2019. On a *non-GAAP basis, InMode reported net income attributable to InMode Ltd. of $89.1 million, or $2.11 per diluted share, in the full year of 2020, compared to net income attributable to InMode Ltd. of $62.4 million, or $1.63 per diluted share, in the full year of 2019.
As of December 31, 2020, InMode had cash and cash equivalents, marketable securities and short-term bank deposits of $260.5 million.
2021 Financial Outlook
Management provided an outlook for the full year of 2021, the period ending December 31, 2021. Based on current estimates, management expects:
-- Revenues between $250 million to $260 million -- *Non-GAAP gross margin between 84% to 86% -- *Non-GAAP income from operations between $100 million to $104 million -- *Non-GAAP earnings per diluted share between $2.34 to $2.45
This outlook is not a guarantee of future performance and stockholders should not rely on such forward-looking statements. See "Forward-Looking Statements" for additional information.
*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 included in this release. Non-GAAP results exclude share-based compensation and 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 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.
Conference Call Information
Mr. Moshe Mizrahy, Chairman and Chief Executive Officer, Dr. Michael Kreindel, co-founder and Chief Technology Officer, Mr. Yair Malca, Chief Financial Officer, Mr. Shakil Lakhani, President of North America, and Dr. Spero Theodorou, Chief Medical Officer, will host a conference call today, February 10, 2021, at 8:30 a.m. Eastern Time to discuss the fourth quarter and full year 2020 financial results.
The Company encourages participants to pre-register for the conference call using the following link: https://dpregister.com/sreg/10151158/e064a3345e. Callers will receive a unique dial-in upon registration, which enables immediate access to the call. Participants may pre-register at any time, including up to and after the call start time.
For callers that opt out of pre-registration, please dial one of the following teleconferencing numbers. Please begin by placing your call 10 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: 1-833-316-0562
Israel Toll- Free Dial-in Number: 1-80-921-2373
International Dial-in Number: 1-412-317-5736
At:
8:30 a.m. Eastern Time
5:30 a.m. Pacific Time
3:30 p.m. Israel Time
The conference call will also be webcast live from a link on InMode's website at https://inmodemd.com/investors/events-presentations/. A replay of the conference call will be available from February 10, 2021 at 12 p.m. Eastern Time to February 24, 2021 at 11:59 p.m. Eastern Time. To access the replay, please dial one of the following numbers:
Replay Dial-in U.S 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: 10151158
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 above under the heading titled "2021 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, including with respect to the impact of the COVID-19 global outbreak. 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 included in InMode's Annual Report on Form 20-F filed with the Securities and Exchange Commission on February 18, 2020, risk factors relating to the COVID-19 global outbreak 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.
Company Contact: Investor Relations Contact: Yair Malca Miri Segal Chief Financial Officer MS-IR LLC Phone: (949) 305-0108 Phone: (917) 607-8654 Email: Yair.Malca@inmodemd.com Email: ir@inmodemd.com
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, 2020 2019 2020 2019 REVENUES 75,187 47,002 206,107 156,361 COST OF REVENUES 10,575 6,045 30,849 20,238 GROSS PROFIT 64,612 40,957 175,258 136,123 OPERATING EXPENSES: Research and development 2,260 1,587 9,467 5,699 Sales and marketing 25,239 20,127 86,532 66,848 General and administrative 1,673 1,265 6,418 3,958 TOTAL OPERATING EXPENSES 29,172 22,979 102,417 76,505 INCOME FROM OPERATIONS 35,440 17,978 72,841 59,618 Finance income, net 1,228 1,159 3,291 2,423 INCOME BEFORE TAXES 36,668 19,137 76,132 62,041 INCOME TAXES 598 165 1,107 883 NET INCOME 36,070 18,972 75,025 61,158 Add: Loss (net income) attributable to non- controlling interests 44 66 5 (13) NET INCOME ATTRIBUTABLE TO INMODE LTD. 36,114 19,038 75,030 61,145 NET INCOME PER SHARE: Basic 0.96 0.58 2.08 2.09 Diluted 0.85 0.46 1.78 1.60 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF NET INCOME PER SHARE (in thousands) Basic 37,593 32,781 36,057 29,232 Diluted 42,389 41,639 42,092 38,059
INMODE LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except for per share data)
(Unaudited)
December 31, 2020 December 31, 2019 Assets CURRENT ASSETS: Cash and cash equivalents 68,938 44,727 Marketable securities) amortized cost of $141,544 and $119,983, respectively) 142,007 120,144 Short-term bank deposits 49,589 28,491 Accounts receivable, net of allowance for doubtful accounts of $672 and $432, respectively 10,499 6,628 Other receivables 3,575 3,810 Inventories 14,983 9,408 TOTAL CURRENT ASSETS 289,591 213,208 NON-CURRENT ASSETS: Accounts receivable 477 374 Other receivables 2,894 Deferred income taxes, net 64 1,899 Operating lease right-of-use assets 1,153 1,369 Property and equipment, net 982 935 Other investments 600 600 TOTAL NON-CURRENT ASSETS 6,170 5,177 TOTAL ASSETS 295,761 218,385 Liabilities and shareholders' equity CURRENT LIABILITIES: Accounts payable 6,410 3,702 Contract liabilities 11,900 15,587 Other liabilities 16,720 13,205 TOTAL CURRENT LIABILITIES 35,030 32,494 NON-CURRENT LIABILITIES: Contract liabilities 1,988 3,813 Other liabilities 2,910 1,494 Operating lease liabilities 358 744 Deferred income taxes, net 37 TOTAL NON-CURRENT LIABILITIES 5,256 6,088 TOTAL LIABILITIES 40,286 38,582 TOTAL SHAREHOLDERS' EQUITY 255,475 179,803 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 295,761 218,385
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, 2020 2019 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net income 36,070 18,972 75,025 61,158 Adjustments required to reconcile net income to net cash provided by operating activities: Depreciation and amortization 109 88 416 302 Share-based compensation expenses 3,231 358 12,845 1,557 Allowance for doubtful accounts (24) (55) 442 78 Loss on marketable securities, net 3 3 5 3 Finance income, net (614) (440) (625) (835) Deferred income taxes, net 556 (383) 1,729 (594) Changes in operating assets and liabilities: Decrease (increase) in accounts receivable 5,667 1,046 (4,416) 449 Increase in other receivables (1,687) (666) (2,647) (1,316) Increase in inventories (112) (913) (5,575) (2,445) Increase (decrease) in accounts payable 2,127 (667) 2,708 92 Increase in other liabilities 113 1,676 4,830 4,094 Increase (decrease) in contract liabilities (3,852) 8,400 (5,512) 9,663 Decrease in accrued contingencies (10,000) Net cash provided by operating activities 41,587 27,419 79,225 62,206 CASH FLOWS FROM INVESTING ACTIVITIES: Investment in short-term deposit (6,000) (13,500) (55,699) (47,810) Proceeds from short-term deposit 11,000 34,810 29,500 Purchase of fixed assets (35) (175) (463) (693) Other investments (600) (600) Purchase of marketable securities (50,295) (82,802) (169,689) (165,423) Proceeds from sale of marketable securities 29,950 54,471 147,736 72,574 Net cash (used in) investing activities (26,380) (31,606) (43,305) (112,452) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from initial public offering of ordinary shares, net of offering costs 69,784 Repurchase of ordinary shares (17,218) (17,218) Exercise of options 1,528 74 4,776 389 Net cash provided by (used in) financing activities (15,690) 74 (12,442) 70,173 EFFECT OF EXCHANGE RATE CHANGES ON CASH 586 135 733 79 NET INCREASE IN CASH AND CASH EQUIVALENTS 103 (3,978) 24,211 20,006 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 68,835 48,705 44,727 24,721 CASH AND CASH EQUIVALENTS AT END OF PERIOD 68,938 44,727 68,938 44,727
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, 2020 2019 2020 2019 Revenues by Geography: United States 53,725 36,386 149,488 124,199 International 21,462 10,616 56,619 32,162 Total Net Revenue 75,187 47,002 206,107 156,361 U.S. as percentage of total revenue 71% 77% 73% 79%
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 December 31, 2020 Three months ended December 31, 2019 GAAP Share Based Non-GAAP GAAP Share Based Non-GAAP Compensation Compensation --- REVENUES 75,187 75,187 47,002 47,002 COST OF REVENUES 10,575 (140) 10,435 6,045 (32) 6,013 GROSS PROFIT 64,612 140 64,752 40,957 32 40,989 OPERATING EXPENSES: Research and development 2,260 (132) 2,128 1,587 (13) 1,574 Sales and marketing 25,239 (2,829) 22,410 20,127 (271) 19,856 General and administrative 1,673 (130) 1,543 1,265 (42) 1,223 TOTAL OPERATING 29,172 (3,091) 26,081 22,979 (326) 22,653 EXPENSES INCOME FROM OPERATIONS 35,440 3,231 38,671 17,978 358 18,336 Finance income, net 1,228 1,228 1,159 1,159 INCOME BEFORE TAXES 36,668 3,231 39,899 19,137 358 19,495 INCOME TAXES (TAX BENEFIT) 598 (505) 93 165 85 250 NET INCOME 36,070 3,736 39,806 18,972 273 19,245 Add: Loss attributable to non-controlling interests 44 44 66 66 NET INCOME ATTRIBUTABLE TO INMODE LTD. 36,114 3,736 39,850 19,038 273 19,311 NET INCOME PER SHARE: Basic 0.96 1.06 0.58 0.59 Diluted 0.85 0.94 0.46 0.46 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF NET INCOME PER SHARE (in thousands) Basic 37,593 37,593 32,781 32,781 Diluted 42,389 42,490 41,639 41,657
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 , 2020 Year Ended December 31, 2019 GAAP Share Based Non-GAAP GAAP Share Based Non-GAAP Compensation Compensation --- REVENUES 206,107 206,107 156,361 156,361 COST OF REVENUES 30,849 (520) 30,329 20,238 (94) 20,144 GROSS PROFIT 175,258 520 175,778 136,123 94 136,217 OPERATING EXPENSES: Research and development 9,467 (2,264) 7,203 5,699 (179) 5,520 Sales and marketing 86,532 (9,398) 77,134 66,848 (1,158) 65,690 General and administrative 6,418 (663) 5,755 3,958 (126) 3,832 TOTAL OPERATING 102,417 (12,325) 90,092 76,505 (1,463) 75,042 EXPENSES INCOME FROM OPERATIONS 72,841 12,845 85,686 59,618 1,557 61,175 Finance income, net 3,291 3,291 2,423 2,423 INCOME BEFORE TAXES 76,132 12,845 88,977 62,041 1,557 63,598 INCOME TAXES (TAX BENEFIT) 1,107 (1,268) (161) 883 312 1,195 NET INCOME 75,025 14,113 89,138 61,158 1,245 62,403 Add: Loss (net income) attributable to non-controlling interests 5 5 (13) (13) NET INCOME ATTRIBUTABLE TO INMODE LTD. 75,030 14,113 89,143 61,145 1,245 62,390 NET INCOME PER SHARE: Basic 2.08 2.47 2.09 2.13 Diluted 1.78 2.11 1.60 1.63 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF NET INCOME PER SHARE (in thousands) Basic 36,057 36,057 29,232 29,232 Diluted 42,092 42,201 38,059 38,085
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SOURCE InMode Ltd.