0001305773-20-000087.txt : 20200805 0001305773-20-000087.hdr.sgml : 20200805 20200805162700 ACCESSION NUMBER: 0001305773-20-000087 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20200805 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20200805 DATE AS OF CHANGE: 20200805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Conformis Inc CENTRAL INDEX KEY: 0001305773 STANDARD INDUSTRIAL CLASSIFICATION: ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-37474 FILM NUMBER: 201077744 BUSINESS ADDRESS: STREET 1: 600 TECHNOLOGY DRIVE CITY: BILLERICA STATE: MA ZIP: 01821 BUSINESS PHONE: (781) 345-9001 MAIL ADDRESS: STREET 1: 600 TECHNOLOGY DRIVE CITY: BILLERICA STATE: MA ZIP: 01821 FORMER COMPANY: FORMER CONFORMED NAME: ConforMIS Inc DATE OF NAME CHANGE: 20041013 8-K 1 form_8-kxq2x06302020.htm 8-K Document


 


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): August 5, 2020
Conformis, Inc.
(Exact Name of Company as Specified in Charter)
 
Delaware
 
001-37474
 
56-2463152
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)

600 Technology Park Drive
Billerica, MA 01821
(Address of Principal Executive Offices) (Zip Code)

Company’s telephone number, including area code: (781) 345-9001

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, $0.00001 par value per share
CFMS
The Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
þ
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
þ






 


Item 2.02
Results of Operations and Financial Condition.


On August 5, 2020, Conformis, Inc. issued a press release announcing its selected preliminary unaudited financial results for the quarter ended June 30, 2020. A copy of such press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference in its entirety.

The information furnished under this Item 2.02, including the press release attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as otherwise expressly stated in such filing. 

Item 9.01
Financial Statements and Exhibits.
 
(d)
Exhibits.


*Furnished herewith



 






 




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
 
 
 
 
 
 
 
 
CONFORMIS, INC.
 
 
 
 
Date: August 5, 2020
 
 
 
By:
 
/s/ Robert S. Howe
 
 
 
 
 
 
Robert S. Howe
 
 
 
 
 
 
Chief Financial Officer



 EX-99.1 2 ex-991_cfmsx063020earnings.htm EXHIBIT 99.1 Exhibit


Conformis Reports Second Quarter 2020 Financial Results and Announces Planned Portfolio Expansion Targeted at Ambulatory Surgical Centers

BILLERICA, Mass., August 5, 2020 (GLOBE NEWSWIRE) - Conformis, Inc. (NASDAQ:CFMS) announced today financial results for the second quarter ended June 30, 2020.

Second Quarter 2020 Summary

•
Total revenue of $19.5 million, a decrease of 1% year-over-year on a reported and constant currency basis.
•
Product revenue of $9.7 million, a decrease of 50% year-over-year on a reported and constant currency basis.
–
U.S. product revenue of $8.3 million, a decrease of 52% year-over-year.
–
Rest of World product revenue of $1.4 million, a decrease of 34% year-over-year on a reported basis and 33% on a constant currency basis.
•
Royalty revenue of $9.7 million, including $9.6 million from the previously disclosed settlement and license agreement with Zimmer Biomet.
•
Gross margin of 57%, an increase of 750 basis points year-over-year, including the impact from the Zimmer Biomet settlement and license agreement.
•
Total operating expenses decreased 14% year-over-year.

"We are excited to announce today the launch of a new program aimed at developing a knee replacement offering targeted at hospital outpatient and ambulatory surgery centers (ASCs),” said Mark Augusti, President and Chief Executive Officer. “As we have stated previously, during the COVID-19 pandemic, we have maintained our focus on new product development and our commitment to revenue growth through portfolio expansion. Achieving hip growth of 12% during arguably one of the toughest commercial environments ever in orthopedics demonstrates the importance of new product vitality."

Conformis will provide more information about planned changes to its product portfolio and longer-term financial targets during the webcast scheduled for today at 4:30 p.m. Eastern Time.

 
Three months ended June 30,
Increase/(decrease)
($, in thousands)
2020
2019
 $ Change
% Change
% Change
 
 
 
 
 (as reported)
 (constant currency)
  United States
$
8,331

$
17,194

$
(8,863
)
(52
)%
(52
)%
  Rest of world
1,412

2,143

(731
)
(34
)%
(33
)%
Product revenue
9,743

19,337

(9,594
)
(50
)%
(50
)%
Royalty revenue
9,725

256

9,469

3,699
 %
3,699
 %
Total revenue
$
19,468

$
19,593

$
(125
)
(1
)%
(1
)%

Second Quarter 2020 Financial Results

Total revenue for the three-month period ended June 30, 2020 decreased $0.1 million to $19.5 million, or 1% year-over-year on a reported and constant currency basis. Total revenue in each of the second quarter




of 2020 and 2019 includes royalty and licensing revenue of $9.7 million and $0.3 million, respectively, related to patent license agreements. The increase in royalty revenue in the second quarter of 2020 compared to the same quarter in the prior year is primarily due to the patent license settlement of $9.6 million due from Zimmer Biomet.

Product revenue decreased $9.6 million to $9.7 million, or 50% year-over-year on a reported and constant currency basis. U.S. product revenue decreased $8.9 million to $8.3 million, or 52% year-over-year, and Rest of World product revenue decreased $0.7 million to $1.4 million, or 34% year-over-year on a reported basis and 33% on a constant currency basis. Conformis Hip System sales in the second quarter of 2020 were up 12.0% to $0.6 million, which were all in the United States.

Total gross profit increased $1.4 million to $11.0 million, or 57% of revenue, in the second quarter of 2020, compared to $9.6 million, or 49% of revenue, in the second quarter of 2019. This 750 basis point increase in gross margin year-over-year was driven primarily by the $9.6 million Zimmer Biomet patent license settlement.

Total operating expenses decreased $2.2 million to $13.3 million, or 14% year-over-year, primarily due to lower variable expenses as a result of the decline in revenue.

Net loss was $2.1 million, or $0.03 per basic and diluted share, in the second quarter of 2020, compared to a net loss of $6.8 million, or $0.11 per basic and diluted share, in the same period last year. Net loss in the second quarter of 2020 included foreign currency exchange income of $0.7 million, compared to foreign currency exchange income of $0.4 million in the same period last year. Net loss per basic and diluted share calculations assume weighted average basic and diluted shares outstanding of 68.2 million for the second quarter of 2020, compared to 63.3 million for the same period last year.

Cash and cash equivalents totaled $18.2 million as of June 30, 2020, compared to $26.4 million as of December 31, 2019.
 
Note on Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company provides certain information regarding the Company's financial results or projected financial results on a non-GAAP "constant currency basis." This information estimates the impact of changes in foreign currency rates on the translation of the Company's current or projected future period financial results as compared to the applicable comparable period. This impact is derived by taking the adjusted current or projected local currency results and translating them into U.S. dollars based upon the foreign currency exchange rates for the applicable comparable period. It does not include any other effect of changes in foreign currency rates on the Company's results or business. Non-GAAP information is not a substitute for, and is not superior to, information presented on a GAAP basis. Company management uses these non-GAAP measures internally to measure operational performance.

Webcast

As previously announced, Conformis will conduct a webcast today at 4:30 p.m. Eastern Time. Management will discuss financial results and strategic matters. The webcast will be live at https://edge.media-server.com/mmc/p/phu3zyop.

The online archive of the webcast will be available on the Company's website for 30 days.





About Conformis, Inc.

Conformis is a medical technology company that uses its proprietary iFit Image-to-Implant technology platform to develop, manufacture and sell joint replacement implants and instruments that are individually sized and shaped, which we refer to as personalized, individualized, or sometimes as customized, to fit each patient's unique anatomy. Conformis offers a broad line of sterile, personalized knee and hip implants and single-use instruments delivered to hospitals and ambulatory surgical centers. In clinical studies, Conformis iTotal CR knee replacement system demonstrated superior clinical outcomes, including better function and greater patient satisfaction, compared to traditional, off-the-shelf implants.  Conformis owns or exclusively in-licenses issued patents and pending patent applications that cover personalized implants and patient-specific instrumentation for all major joints.

For more information, visit www.conformis.com. To receive future releases in e-mail alerts, sign up at ir.conformis.com.


Cautionary Statement Regarding Forward-Looking Statements

Statements in this press release about our future expectations, plans and prospects, including statements about the impact of the novel coronavirus (COVID-19) pandemic and the actions we are taking and planning in response, our planned launch of a new program aimed at developing a knee replacement offering targeted at hospital outpatient and ambulatory surgery centers, the anticipated timing of our product launches, whether or when restrictions on elective surgeries will be relaxed and demand for procedures will increase and our financial position and results, total revenue, product revenue, gross margin, operations and growth, as well as other statements containing the words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "project," "should," "target," "will," or "would" and similar expressions, constitute forward-looking statements within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. We may not actually achieve the forecasts disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual financial results could differ materially from the projections disclosed in the forward-looking statements we make as a result of a variety of risks and uncertainties, including risks related to the novel coronavirus pandemic and the response to the pandemic; whether our cash resources will be sufficient to fund our continuing operations for the periods anticipated; risks related to our estimates and expectations regarding our revenue, gross margin, expenses, revenue growth and other results of operations, and the other risks and uncertainties described in the "Risk Factors" sections of our public filings with the U.S. Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent our views as of the date hereof. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date hereof.


CONTACT:
Investor contact
ir@conformis.com
(781) 374-5598




CONFORMIS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share data)
 
 
Three Months Ended June 30,
 
 
2020
 
2019
 
 
 
 
 
 
Revenue
 
 
 
 
Product
$
9,743

 
$
19,337

 
Royalty and licensing
9,725

 
256

 
Total revenue
19,468

 
19,593

 
Cost of revenue
8,450

 
9,971

 
Gross profit
11,018

 
9,622

 
 
 
 
 
 
Operating expenses
 
 
 
 
Sales and marketing
4,102

 
6,897

 
Research and development
2,738

 
3,328

 
General and administrative
6,474

 
5,289

 
Total operating expenses
13,314

 
15,514

 
Loss from operations
(2,296
)
 
(5,892
)
 
 
 
 
 
 
Other income and expenses
 
 
 
 
Interest income
23

 
91

 
Interest expense
(584
)
 
(1,337
)
 
Foreign currency exchange transaction income
694

 
398

 
Total other income (expenses)
133

 
(848
)
 
Loss before income taxes
(2,163
)
 
(6,740
)
 
Income tax provision
(28
)
 
23

 
 
 
 
 
 
Net loss
$
(2,135
)
 
$
(6,763
)
 
 
 
 
 
 
Net loss per share
 
 
 
 
Basic and diluted
$
(0.03
)
 
$
(0.11
)
 
Weighted average common shares outstanding
 
 
 
 
Basic and diluted
68,187,128

 
63,333,737

 




CONFORMIS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share data)
 
 
 
 
 
June 30, 2020
 
December 31, 2019
Assets
 (unaudited) 
 
 
Current Assets
 
 
 
Cash and cash equivalents
$
18,168

 
$
26,394

Accounts receivable, net
8,186

 
11,066

Royalty and licensing receivable
6,197

 
165

Inventories, net
13,181

 
12,074

Prepaid expenses and other current assets
2,223

 
2,815

Total current assets
47,955

 
52,514

Property and equipment, net
13,755

 
13,356

Operating lease right-of-use assets
5,274

 
5,853

Other Assets
 
 
 

Restricted cash
462

 
462

Other long-term assets
189

 
211

Total assets
$
67,635

 
$
72,396

 
 
 
 

Liabilities and stockholder's equity
 
 
 

Current liabilities
 
 
 

Accounts payable
$
6,443

 
$
6,920

Accrued expenses
7,014

 
7,135

Operating lease liabilities
1,489

 
1,469

Advance on research and development
3,149

 
2,331

Contract liability
12,000

 
—

Total current liabilities
30,095

 
17,855

Other long-term liabilities
—

 
1,500

Contract liability
—

 
12,000

Long-term debt, less debt issuance costs
24,664

 
19,623

Operating lease liabilities
4,433

 
5,071

Total liabilities
59,192

 
56,049

Commitments and contingencies


 


Stockholders' equity
 

 
 

Preferred stock, $0.00001 par value:
 

 
 

Authorized: 5,000,000 shares authorized at June 30, 2020 and December 31, 2019; no shares issued and outstanding as of June 30, 2020 and December 31, 2019
—

 
—

Common stock, $0.00001 par value:
 

 
 

Authorized: 200,000,000 shares authorized at June 30, 2020 and December 31, 2019; 76,103,605 and 70,427,400 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
1

 
1

Additional paid-in capital
524,991

 
521,356

Accumulated deficit
(515,633
)
 
(504,145
)
Accumulated other comprehensive loss
(916
)
 
(865
)
Total stockholders' equity
8,443

 
16,347

Total liabilities and stockholders' equity
$
67,635

 
$
72,396