TELA Bio Reports Second Quarter 2024 Financial Results and Reiterates Full Year 2024 Revenue Guidance
August 12 2024 - 4:05PM
TELA Bio, Inc. ("TELA Bio"), a commercial-stage medical technology
company focused on providing innovative soft-tissue reconstruction
solutions today reported financial results for the second quarter
ended June 30, 2024.
Recent Highlights
- Reported revenue of $16.1 million in the second quarter,
representing growth of 11% over the prior year period of 2023;
- Appointed Greg Firestone as Chief Commercial Officer on May 20,
2024 to drive our next phase of revenue growth by enhancing sales
representative training, regional supervision, and performance
measurement and accountability;
- Launched our robotically compatible OviTex IHR Reinforced
Tissue Matrix in the U.S. to target the high-volume inguinal hernia
market;
- Saw the launch of NIVIS Fibrillar Collagen Pack by its new
owner in the second quarter, triggering the receipt of quarterly
revenue share payments beginning in the third quarter of this year
and ranging from $3 million to $7 million in total over the next
eight quarters; and
- Reiterated full year 2024 revenue guidance of $74.5 million to
$76.5 million, representing 27% to 31% year-over-year growth.
“TELA delivered double-digit growth in the second quarter
notwithstanding some market disruptions from customer-targeted
cyberattacks that we believe led to a shortfall in procedures at
some of our largest or most rapidly growing contracted accounts,”
said Antony Koblish, President and CEO of TELA Bio. “We believe
many of these factors, including most notably a ransomware attack
at one of our national GPOs, have been resolved and we are seeing
signs of normalized growth returning in the third quarter. As a
result, we expect to deliver another year of high growth and are
reiterating our 2024 revenue target of $74.5 million to $76.5
million. Under new sales leadership, we are also intensely focused
on improving the productivity and efficiency of our commercial
organization and have initiated programs that will maximize sales
and rep productivity and will provide operational leverage. We
believe that with these efforts, as well as the contribution from
the NIVIS revenue share, our cash and cash equivalents will be
sufficient to fund us to profitability.”
Second Quarter 2024 Financial Results
Revenue was $16.1 million in the second quarter of 2024, an
increase of 11% compared to the same period in 2023. The increase
was primarily driven by an increase in unit sales of our products
due to the addition of new customers, increased penetration within
existing customer accounts and growing international sales under an
expanded commercial organization. This growth was partially offset
by a decrease in average selling prices caused by product mix as
the share of smaller-sized units increased related to the
introduction of robotically compatible OviTex IHR and our increased
focus in growing market share in high-volume minimally invasive and
robotic procedures. In addition, we estimate that additional
forecasted revenue was negatively impacted as a result of two
cybersecurity events, most notably a ransomware attack at our most
recently added and consequently fastest-growing GPO, and a separate
cybersecurity event at another multi-center hospital customer,
which substantially reduced surgeries at those facilities during
the quarter.
Gross profit was $11.1 million in the second quarter of 2024, or
69% of revenue, compared to $10.2 million, or 70% of revenue, in
the same period in 2023. The decrease in gross margin was primarily
due to a higher charge for excess and obsolete inventory.
Operating expenses were $22.6 million in the second quarter of
2024, compared to $20.6 million in the same period in 2023. The
increase was due to additional headcount as we expanded our
organization resulting in higher compensation costs and
employee-related expenses, as well as increased travel and
consulting.
Loss from operations was $11.6 million in the second quarter of
2024, compared to a loss from operations of $10.4 million in the
same period in 2023.
Net loss was $12.6 million in the second quarter of 2024,
compared to a net loss of $10.8 million in the same period in
2023.
Cash and cash equivalents on June 30, 2024 totaled $26.5
million.
Conference Call
TELA Bio will host a conference call at 4:30 p.m. Eastern Time
on Monday, August 12, 2024, to discuss its second quarter 2024
financial results. Investors interested in listening to the
conference call should register online. Participants are required
to register a day in advance or at minimum 15 minutes before the
start of the call. A live webcast and replay can be accessed via
the Events & Presentations page of the investor section of
TELA's website.
About TELA Bio, Inc.
TELA Bio, Inc. (NASDAQ: TELA) is a commercial-stage medical
technology company focused on providing innovative technologies
that optimize clinical outcomes by prioritizing the preservation
and restoration of the patient's own anatomy. The Company is
committed to providing surgeons with advanced, economically
effective soft-tissue reconstruction solutions that leverage the
patient's natural healing response while minimizing long-term
exposure to permanent synthetic materials. For more information,
visit www.telabio.com.
Caution Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of The Private Securities Litigation Reform Act of
1995. Words such as "may," "might," "will," "should," "believe,"
"expect," "anticipate," "estimate," "continue," "predict,"
"forecast," "project," "plan," "intend" or similar expressions, or
statements regarding intent, belief, or current expectations are
forward-looking statements and reflect the current beliefs of TELA
Bio's management. Such forward-looking statements include
statements relating to our expected revenue and revenue growth for
the full year 2024. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
other factors that could cause actual results and events to differ
materially and adversely from those indicated by such
forward-looking statements including, among others: the impact to
our business from macroeconomic conditions, including any lingering
effects of the COVID-19 pandemic and other public health crises,
recessionary concerns, banking instability, increasing market
interest rates, and inflationary pressures, potentially impacting
our ability to market our products, demand for our products due to
the deferral of elective procedures, the labor and staffing
environment in the healthcare industry, disruption in our supply
chain, or pricing pressures concerning our products or the
procedures using our products; the impact of cybersecurity events
affecting or disrupting hospital operations and procedural volumes;
our ability to achieve or sustain profitability; our ability to
gain market acceptance for our products and to accurately forecast
and meet customer demand; our ability to compete successfully; that
data from earlier studies related to our products and interim data
from ongoing studies may not be replicated in later studies or
indicative of future data; that data obtained from clinical studies
using our product may not be indicative of outcomes in other
surgical settings; our ability to enhance our product offerings;
development and manufacturing problems; capacity constraints or
delays in production of our products; maintenance of coverage and
adequate reimbursement for procedures using our products; product
defects or failures; and total estimated consideration related to
the NIVIS transaction. These risks and uncertainties are described
more fully in the "Risk Factors" section and elsewhere in our
filings with the Securities and Exchange Commission and available
at www.sec.gov, including in our Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q. Any forward-looking statements that
we make in this announcement speak only as of the date of this
press release, and TELA Bio assumes no obligation to update
forward-looking statements whether as a result of new information,
future events or otherwise after the date of this press release,
except as required under applicable law.
Investor ContactLouisa Smithir@telabio.com
|
TELA Bio, Inc.Consolidated Balance
Sheets(In thousands, except share and per share
amounts)(Unaudited) |
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2024 |
|
2023 |
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
26,496 |
|
|
$ |
46,729 |
|
Accounts receivable, net of allowances of $298 and $416 |
|
|
9,097 |
|
|
|
9,737 |
|
Inventory |
|
|
13,372 |
|
|
|
13,162 |
|
Prepaid expenses and other assets |
|
|
2,144 |
|
|
|
2,098 |
|
Total current assets |
|
|
51,109 |
|
|
|
71,726 |
|
Property and equipment,
net |
|
|
2,349 |
|
|
|
1,984 |
|
Intangible assets, net |
|
|
1,929 |
|
|
|
2,119 |
|
Right-of-use assets |
|
|
1,851 |
|
|
|
1,954 |
|
Other long-term assets |
|
|
2,701 |
|
|
|
— |
|
Restricted cash |
|
|
265 |
|
|
|
265 |
|
Total assets |
|
$ |
60,204 |
|
|
$ |
78,048 |
|
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
2,314 |
|
|
$ |
1,667 |
|
Accrued expenses and other current liabilities |
|
|
12,675 |
|
|
|
15,300 |
|
Total current liabilities |
|
|
14,989 |
|
|
|
16,967 |
|
Long‑term debt |
|
|
40,817 |
|
|
|
40,515 |
|
Other long‑term
liabilities |
|
|
1,528 |
|
|
|
1,685 |
|
Total liabilities |
|
|
57,334 |
|
|
|
59,167 |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock; $0.001 par value: 10,000,000 shares authorized; no
shares issued and outstanding |
|
|
— |
|
|
|
— |
|
Common stock; $0.001 par value: 200,000,000 shares authorized;
24,675,832 and 24,494,675 shares issued and outstanding at June 30,
2024 and December 31, 2023, respectively |
|
|
25 |
|
|
|
24 |
|
Additional paid-in capital |
|
|
341,897 |
|
|
|
339,655 |
|
Accumulated other comprehensive income |
|
|
98 |
|
|
|
91 |
|
Accumulated deficit |
|
|
(339,150 |
) |
|
|
(320,889 |
) |
Total stockholders’ equity |
|
|
2,870 |
|
|
|
18,881 |
|
Total liabilities and stockholders’ equity |
|
$ |
60,204 |
|
|
$ |
78,048 |
|
|
|
|
|
|
|
|
|
|
|
TELA Bio, Inc.Consolidated Statements
of Operations and Comprehensive Loss(In thousands,
except share and per share
amounts)(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
Six months ended June 30, |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Revenue |
|
$ |
16,091 |
|
|
$ |
14,494 |
|
|
$ |
32,694 |
|
|
$ |
26,403 |
|
Cost of revenue (excluding
amortization of intangible assets) |
|
|
4,923 |
|
|
|
4,198 |
|
|
|
10,095 |
|
|
|
8,114 |
|
Amortization of intangible
assets |
|
|
95 |
|
|
|
95 |
|
|
|
190 |
|
|
|
190 |
|
Gross profit |
|
|
11,073 |
|
|
|
10,201 |
|
|
|
22,409 |
|
|
|
18,099 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
16,699 |
|
|
|
14,577 |
|
|
|
34,219 |
|
|
|
28,043 |
|
General and administrative |
|
|
3,621 |
|
|
|
3,472 |
|
|
|
7,450 |
|
|
|
7,106 |
|
Research and development |
|
|
2,323 |
|
|
|
2,514 |
|
|
|
4,716 |
|
|
|
4,566 |
|
Total operating expenses |
|
|
22,643 |
|
|
|
20,563 |
|
|
|
46,385 |
|
|
|
39,715 |
|
Other operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of product line |
|
|
— |
|
|
|
— |
|
|
|
(7,580 |
) |
|
|
— |
|
Loss from operations |
|
|
(11,570 |
) |
|
|
(10,362 |
) |
|
|
(16,396 |
) |
|
|
(21,616 |
) |
Other expense: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(1,331 |
) |
|
|
(1,298 |
) |
|
|
(2,663 |
) |
|
|
(2,544 |
) |
Other income |
|
|
301 |
|
|
|
870 |
|
|
|
798 |
|
|
|
1,343 |
|
Total other expense |
|
|
(1,030 |
) |
|
|
(428 |
) |
|
|
(1,865 |
) |
|
|
(1,201 |
) |
Net loss |
|
$ |
(12,600 |
) |
|
$ |
(10,790 |
) |
|
$ |
(18,261 |
) |
|
$ |
(22,817 |
) |
Net loss per common share,
basic and diluted |
|
$ |
(0.51 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.74 |
) |
|
$ |
(1.08 |
) |
Weighted average common shares
outstanding, basic and diluted |
|
|
24,663,234 |
|
|
|
23,239,262 |
|
|
|
24,621,310 |
|
|
|
21,223,639 |
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(12,600 |
) |
|
$ |
(10,790 |
) |
|
$ |
(18,261 |
) |
|
$ |
(22,817 |
) |
Foreign currency translation adjustment |
|
|
1 |
|
|
|
(36 |
) |
|
|
7 |
|
|
|
(66 |
) |
Comprehensive loss |
|
$ |
(12,599 |
) |
|
$ |
(10,826 |
) |
|
$ |
(18,254 |
) |
|
$ |
(22,883 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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