EX-99.1 3 exhibit_99-1.htm EXHIBIT 99.1

Exhibit 99.1

InMode Reports Record Third Quarter 2020 Financial Results;
Quarterly Revenues of $59.7 Million Represent 49% Year over Year Growth,
GAAP and *Non-GAAP Diluted Earnings per Share of $0.57 and $0.63

YOKNEAM, Israel, November 12, 2020/ PRNewswire/ InMode Ltd. (Nasdaq: INMD) (“InMode”), a leading global provider of innovative medical technologies, today announced consolidated financial results for its third quarter ended September 30, 2020.
 
Third Quarter 2020 Highlights:
 
Record quarterly revenues of $59.7 million, an increase of 49% compared to the third quarter of 2019; approximately 58% of quarterly revenues derived from InMode’s proprietary surgical technology platforms engaged in minimally invasive and subdermal ablative treatments, approximately 35% of quarterly revenues derived from InMode’s recently introduced hands-free platforms and approximately 7% derived from InMode’s traditional laser and non-invasive RF platforms
Record GAAP net income of $23.9 million, compared to $16.2 million in the third quarter of 2019; *non-GAAP net income of $26.6 million, compared to $16.5 million in the third quarter of 2019
Record GAAP diluted earnings per share of $0.57 compared to $0.42 in the third quarter of 2019; *non-GAAP diluted earnings per share of $0.63 compared to $0.42 in the third quarter of 2019
Total cash position of $234.3 million as of September 30, 2020, including cash and cash equivalents, marketable securities and short-term bank deposits

U.S. GAAP Results
(U.S. dollars in thousands, except for per share data)
 
         Q3 2020
Q3 2019
Revenues
           $59,714
$40,010
Gross Margins
              84%
87%
Net Income Attributable to InMode Ltd.
$23,895
$16,186
Earnings per Diluted Share
$0.57
$0.42
*Non-GAAP Results
(U.S. dollars in thousands, except for per share data)
 
         Q3 2020
Q3 2019
Gross Margins
    85%
    87%
Net Income Attributable to InMode Ltd.
$26,638
$16,512
Earnings per Diluted Share
$0.63
$0.42

*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
 
“Our record third quarter revenues were driven by the success of our minimally invasive and hands-free solutions in the United States and internationally, strengthening the leading market position of our harnessed electro-surgical technologies. The steadfast sales & marketing investments we made throughout the pandemic enabled our organization to quickly meet surging demand as restrictions loosened,” commented Moshe Mizrahy, InMode’s CEO.


“During the quarter, we continued to focus on research & development and were excited to announce the launch of the Morpheus8 Body handpiece and Morpheus8 Platform. We understand that the uncertainties of the COVID-19 pandemic are not behind us, and we will remain committed to the health of our employees and our organization,” commented Dr. Michael Kreindel, InMode’s CTO and co-founder.

“We believe the steps we took over the last several months were instrumental in building interest, increased awareness and demand for InMode technologies, which translated into record sales in the third quarter. We believe we are emerging as the standard of care for minimally invasive aesthetic surgeries, as we continue to innovate and deliver versatile offerings. We expect continued underlying demand for our differentiated products heading into the fourth quarter of 2020,” commented Shakil Lakhani, President of North America.
 
2020 Guidance
 
We expect that our revenues for the full year of 2020 will be between $192 million and $195 million, and we expect to maintain a *non-GAAP gross margin of 84%-86%.
 
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.
 
Third Quarter 2020 Financial Results
 
Total revenues for the third quarter of 2020 were $59.7 million, an increase of 49% as compared to the third quarter of 2019. The increase in revenues was driven primarily by the expansion of InMode’s direct sales organization in the United States and the continued momentum of InMode’s hands-free technology, as well as the recently introduced Morpheus8 Body fractional technology. Moreover, InMode continued to gain traction in international markets, with international revenues growing 109% year-over-year.
 
GAAP gross margin for the third quarter of 2020 was 84% compared to a gross margin of 87% in the third quarter of 2019. *Non-GAAP gross margin for the third quarter of 2020 was 85% compared to a gross margin of 87% in the third quarter of 2019. This decrease is primarily attributable to the increase of sales in international markets, mainly in countries where we operate through distributors.
 
GAAP operating margin for the third quarter of 2020 was 39%, compared to 40% in the third quarter of 2019. *Non-GAAP operating margin for the third quarter of 2020 was 43%, compared to 41% in the third quarter 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 $23.9 million, or $0.57 per diluted share in the third quarter of 2020 compared to $16.2 million, or $0.42 per diluted share, in the third quarter of 2019. On a *non-GAAP basis, InMode reported net income attributable to InMode Ltd. of $26.6 million, or $0.63 per diluted share in the third quarter of 2020 compared to $16.5 million, or $0.42 per diluted share, in the third quarter of 2019.
 
“We ended the third quarter with a strong balance sheet and record results. Our measured approach of investing for the future while maintaining flexibility during the COVID-19 pandemic has paid off this quarter,” noted Yair Malca, InMode’s CFO. “During the quarter, we announced a share repurchase program of up to one million of InMode’s shares, which reflects our unwavering faith in InMode’s success.”
 
*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 MizrahyChairman 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, November 12, 2020, at 8:30 a.m. Eastern Time to discuss the third quarter 2020 financial results.
 
The Company encourages participants to pre-register for the conference call using the following link: https://dpregister.com/sreg/10148536/da3e5e2fe8. 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 ten 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:
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 November 12, 2020 at 12 p.m. Eastern Time to November 26, 2020 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: 10148536

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 “2020 Guidance.” 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 F-20 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:
Yair Malca
Chief Financial Officer
Phone: (949) 305-0108
Email: Yair.Malca@inmodemd.com
Investor Relations Contact:
Miri Segal
MS-IR LLC
Phone: (917) 607-8654
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
September 30,
   
Nine months ended
September 30,
 
   
2020
   
2019
   
2020
   
2019
 
REVENUES
   
59,714
     
40,010
     
130,920
     
109,359
 
COST OF REVENUES
   
9,395
     
5,047
     
20,274
     
14,193
 
GROSS PROFIT
   
50,319
     
34,963
     
110,646
     
95,166
 
OPERATING EXPENSES:
                               
Research and development
   
1,959
     
1,329
     
7,207
     
4,112
 
Sales and marketing
   
23,758
     
16,726
     
61,293
     
46,721
 
General and administrative
   
1,309
     
927
     
4,745
     
2,693
 
TOTAL OPERATING EXPENSES
   
27,026
     
18,982
     
73,245
     
53,526
 
INCOME FROM OPERATIONS
   
23,293
     
15,981
     
37,401
     
41,640
 
Finance income, net
   
798
     
479
     
2,063
     
1,264
 
INCOME BEFORE TAXES
   
24,091
     
16,460
     
39,464
     
42,904
 
INCOME TAXES
   
207
     
267
     
509
     
718
 
NET INCOME
   
23,884
     
16,193
     
38,955
     
42,186
 
Add: Loss (net income) attributable to non-controlling interests
   
11
     
(7
)
   
(39
)
   
(79
)
NET INCOME ATTRIBUTABLE TO INMODE LTD.
   
23,895
     
16,186
     
38,916
     
42,107
 
                                 
NET INCOME PER SHARE:
                               
Basic
   
0.65
     
0.53
     
1.09
     
1.50
 
Diluted
   
0.57
     
0.42
     
0.93
     
1.15
 
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF NET INCOME PER SHARE
                               
Basic
   
36,697
     
30,297
     
35,542
     
28,031
 
Diluted
   
42,082
     
39,004
     
41,894
     
36,654
 



INMODE LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands, except for per share data)
(Unaudited)

   
September 30,
2020
   
December 31,
2019
 
Assets
           
CURRENT ASSETS:
           
Cash and cash equivalents
   
68,835
     
44,727
 
Marketable securities
   
122,046
     
120,144
 
Short-term bank deposits
   
43,436
     
28,491
 
Accounts receivable, net of allowance for doubtful accounts
   
16,164
     
6,628
 
Other receivables
   
4,790
     
3,810
 
Inventories
   
14,871
     
9,408
 
TOTAL CURRENT ASSETS
   
270,142
     
213,208
 
NON-CURRENT ASSETS:
               
Accounts receivable
   
455
     
374
 
Deferred income taxes, net
   
606
     
1,899
 
Operating lease right-of-use assets
   
1,282
     
1,369
 
Property and equipment, net
   
1,056
     
935
 
Other investments
   
600
     
600
 
TOTAL NON-CURRENT ASSETS
   
3,999
     
5,177
 
TOTAL ASSETS
   
274,141
     
218,385
 
                 
Liabilities and shareholders’ equity
               
CURRENT LIABILITIES:
               
Accounts payable
   
4,283
     
3,702
 
Contract liabilities
   
15,671
     
15,587
 
Other liabilities
   
17,572
     
13,205
 
TOTAL CURRENT LIABILITIES
   
37,526
     
32,494
 
NON-CURRENT LIABILITIES:
               
Contract liabilities
   
2,069
     
3,813
 
Other liabilities
   
1,969
     
1,494
 
Operating lease liabilities
   
519
     
744
 
Deferred income taxes, net
   
32
     
37
 
TOTAL NON-CURRENT LIABILITIES
   
4,589
     
6,088
 
TOTAL LIABILITIES
   
42,115
     
38,582
 
                 
TOTAL SHAREHOLDERS’ EQUITY
   
232,026
     
179,803
 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   
274,141
     
218,385
 



INMODE LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands, except for per share data)
(Unaudited)

   
Three months ended
September 30,
   
Nine months ended
September 30,
 
   
2020
   
2019
   
2020
   
2019
 
CASH FLOWS FROM OPERATING ACTIVITIES:
                       
Net income
   
23,884
     
16,193
     
38,955
     
42,186
 
Adjustments required to reconcile net income to net cash provided by operating activities:
                               
Depreciation and amortization
   
108
     
77
     
307
     
214
 
Share-based compensation expenses
   
2,404
     
385
     
9,614
     
1,199
 
Allowance for doubtful accounts
   
-
     
55
     
466
     
133
 
Loss on marketable securities, net
   
11
     
-
     
2
     
-
 
Finance income, net
   
(279
)
   
(86
)
   
(11
)
   
(395
)
Deferred income taxes, net
   
347
     
(68
)
   
1,173
     
(211
)
Changes in operating assets and liabilities:
                               
Increase in accounts receivable
   
(7,628
)
   
(2,324
)
   
(10,083
)
   
(597
)
Decrease (increase) in other receivables
   
537
     
(1,814
)
   
(960
)
   
(650
)
Decrease (increase) in inventories
   
1,356
     
(879
)
   
(5,463
)
   
(1,532
)
Increase in accounts payable
   
257
     
689
     
581
     
759
 
Increase in other liabilities
   
4,187
     
2,402
     
4,717
     
2,418
 
Increase (decrease) in contract liabilities
   
5,010
     
(1,115
)
   
(1,660
)
   
1,263
 
Decrease in accrued contingencies
   
-
     
-
     
-
     
(10,000
)
Net cash provided by operating activities
   
30,194
     
13,515
     
37,638
     
34,787
 
CASH FLOWS FROM INVESTING ACTIVITIES:
                               
Investment in short-term deposit
   
(18,090
)
   
(17,220
)
   
(49,699
)
   
(34,310
)
Proceeds from short-term deposit
   
6,720
     
8,500
     
34,810
     
18,500
 
Purchase of fixed assets
   
(103
)
   
(54
)
   
(428
)
   
(518
)
Purchase of marketable securities
   
(41,085
)
   
(68,282
)
   
(119,394
)
   
(82,621
)
Proceeds from sale of marketable securities
   
25,500
     
13,500
     
117,786
     
18,103
 
Net cash (used in) investing activities
   
(27,058
)
   
(63,556
)
   
(16,925
)
   
(80,846
)
CASH FLOWS FROM FINANCING ACTIVITIES:
                               
Proceeds from initial public offering of ordinary shares, net of offering costs
   
-
     
69,784
     
-
     
69,784
 
Exercise of options
   
698
     
178
     
3,248
     
315
 
Net cash provided by financing activities
   
698
     
69,962
     
3,248
     
70,099
 
EFFECT OF EXCHANGE RATE CHANGES ON CASH
   
234
     
(93
)
   
147
     
(56
)
NET INCREASE IN CASH AND CASH EQUIVALENTS
   
4,068
     
19,828
     
24,108
     
23,984
 
                                 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
   
64,767
     
28,877
     
44,727
     
24,721
 
CASH AND CASH EQUIVALENTS AT END OF PERIOD
   
68,835
     
48,705
     
68,835
     
48,705
 



INMODE LTD.
CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS
(U.S. dollars in thousands, except for per share data)
(Unaudited)

 
Three months ended
September 30,
   
Nine months ended
September 30,
 
   
2020
   
2019
   
2020
   
2019
 
Revenues by Geography:
                       
United States
   
40,880
     
31,007
     
95,763
     
87,813
 
International
   
18,834
     
9,003
     
35,157
     
21,546
 
Total Net Revenue
   
59,714
     
40,010
     
130,920
     
109,359
 
U.S. as percentage of total revenue
   
68
%
   
77
%
   
73
%
   
80
%



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 September 30, 2020
   
Three months ended September 30, 2019
 
   
GAAP
   
Share Based
Compensation
   
Non-GAAP
   
GAAP
   
Share Based
Compensation
   
Non-GAAP
 
REVENUES
   
59,714
     
-
     
59,714
     
40,010
     
-
     
40,010
 
COST OF REVENUES
   
9,395
     
(155
)
   
9,240
     
5,047
     
(21
)
   
5,026
 
GROSS PROFIT
   
50,319
     
155
     
50,474
     
34,963
     
21
     
34,984
 
OPERATING EXPENSES:
                                               
Research and development
   
1,959
     
(124
)
   
1,835
     
1,329
     
(58
)
   
1,271
 
Sales and marketing
   
23,758
     
(1,974
)
   
21,784
     
16,726
     
(270
)
   
16,456
 
General and administrative
   
1,309
     
(151
)
   
1,158
     
927
     
(36
)
   
891
 
TOTAL OPERATING EXPENSES
   
27,026
     
(2,249
)
   
24,777
     
18,982
     
(364
)
   
18,618
 
INCOME FROM OPERATIONS
   
23,293
     
2,404
     
25,697
     
15,981
     
385
     
16,366
 
Finance income, net
   
798
     
-
     
798
     
479
     
-
     
479
 
INCOME BEFORE TAXES
   
24,091
     
2,404
     
26,495
     
16,460
     
385
     
16,845
 
INCOME TAXES (TAX BENEFIT)
   
207
     
(339
)
   
(132
)
   
267
     
59
     
326
 
NET INCOME
   
23,884
     
2,743
     
26,627
     
16,193
     
326
     
16,519
 
Add: Loss (net income) attributable to non-controlling interests
   
11
     
-
     
11
     
(7
)
   
-
     
(7
)
NET INCOME ATTRIBUTABLE TO INMODE LTD.
   
23,895
     
2,743
     
26,638
     
16,186
     
326
     
16,512
 
                                                 
NET INCOME PER SHARE:
                                               
Basic
   
0.65
             
0.73
     
0.53
             
0.55
 
Diluted
   
0.57
             
0.63
     
0.42
             
0.42
 
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF NET INCOME PER SHARE
                                               
Basic
   
36,697
             
36,697
     
30,297
             
30,297
 
Diluted
   
42,082
             
42,289
     
39,004
             
39,047
 



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)

 
Nine months ended September 30, 2020
   
Nine months ended September 30, 2019
 
   
GAAP
   
Share Based
Compensation
   
Non-GAAP
   
GAAP
   
Share Based
Compensation
   
Non-GAAP
 
REVENUES
   
130,920
     
-
     
130,920
     
109,359
     
-
     
109,359
 
COST OF REVENUES
   
20,274
     
(380
)
   
19,894
     
14,193
     
(62
)
   
14,131
 
GROSS PROFIT
   
110,646
     
380
     
111,026
     
95,166
     
62
     
95,228
 
OPERATING EXPENSES:
                                               
Research and development
   
7,207
     
(2,132
)
   
5,075
     
4,112
     
(166
)
   
3,946
 
Sales and marketing
   
61,293
     
(6,569
)
   
54,724
     
46,721
     
(887
)
   
45,834
 
General and administrative
   
4,745
     
(533
)
   
4,212
     
2,693
     
(84
)
   
2,609
 
TOTAL OPERATING
EXPENSES
   
73,245
     
(9,234
)
   
64,011
     
53,526
     
(1,137
)
   
52,389
 
INCOME FROM OPERATIONS
   
37,401
     
9,614
     
47,015
     
41,640
     
1,199
     
42,839
 
Finance income, net
   
2,063
     
-
     
2,063
     
1,264
     
-
     
1,264
 
INCOME BEFORE TAXES
   
39,464
     
9,614
     
49,078
     
42,904
     
1,199
     
44,103
 
INCOME TAXES (TAX BENEFIT)
   
509
     
(763
)
   
(254
)
   
718
     
227
     
945
 
NET INCOME
   
38,955
     
10,377
     
49,332
     
42,186
     
972
     
43,158
 
Add: Loss (net income) attributable to non-controlling interests
   
(39
)
   
-
     
(39
)
   
(79
)
   
-
     
(79
)
NET INCOME ATTRIBUTABLE TO INMODE LTD.
   
38,916
     
10,377
     
49,293
     
42,107
     
972
     
43,079
 
                                                 
NET INCOME PER SHARE:
                                               
Basic
   
1.09
             
1.39
     
1.50
             
1.53
 
Diluted
   
0.93
             
1.17
     
1.15
             
1.17
 
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF NET INCOME PER SHARE
                                               
Basic
   
35,542
             
35,542
     
28,031
             
28,031
 
Diluted
   
41,894
             
42,061
     
36,654
             
36,707