Tandem Diabetes Care Reports Fourth Quarter and Full Year 2015 Financial Results

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SAN DIEGO–(BUSINESS WIRE)–Tandem Diabetes Care®, Inc. (NASDAQ: TNDM), a medical device company and
manufacturer of the t:slim®, t:flex® and t:slim G4
Insulin Pumps, today reported its financial results for the quarter and
year ended December 31, 2015.

In comparing the fourth quarter of 2015 to the same period of 2014:

  • Sales grew 63 percent to $29.1 million from $17.9 million
  • Pump shipments grew 59 percent to 6,234 pumps from 3,929 pumps
  • Operating margin improved to negative 39 percent from negative 98
    percent

In comparing the year ended December 31, 2015 to the same period of 2014:

  • Sales grew 47 percent to $72.9 million from $49.7 million
  • Pump shipments grew 43 percent to 15,483 pumps from 10,822 pumps
  • Operating margin improved to negative 95 percent from negative 152
    percent

“2015 was a year of tremendous accomplishments. We successfully launched
two new products, delivered our third consecutive year of greater than
40 percent sales growth, and made meaningful gross and operating margin
improvement,” said Kim Blickenstaff, President and Chief Executive
Officer of Tandem Diabetes Care. “We look to continue this momentum in
2016 with our family of insulin pump products by offering superior
customer service and continued product enhancements to support people
with diabetes.”

Gross margin improved to 46 percent for the quarter ended December 31,
2015 compared to 37 percent for the same period of 2014. For the year
ended December 31, 2015, gross margin was 36 percent compared to a gross
margin of 31 percent for the same period of 2014.

For the fourth quarter of 2015, operating expenses totaled $24.7 million
compared to $24.0 million for the same period of 2014. For the year
ended December 31, 2015, operating expenses totaled $95.6 million
compared to $90.9 million for the same period of 2014.

Operating loss for the fourth quarter of 2015 was $11.2 million,
compared to $17.5 million for the same period of 2014. This included
non-cash, stock-based compensation of $3.1 million for the quarter ended
December 31, 2015 compared to $3.9 million for the comparable period of
2014. For the year ended December 31, 2015, operating loss was $69.0
million compared to $75.7 million for the same period of 2014. This
included non-cash, stock-based compensation of $13.1 million for the
year ended December 31, 2015 compared to $15.0 million for the
comparable period of 2014.

As of December 31, 2015, the Company had $73.1 million in cash, cash
equivalents and short-term investments.

For the year ending December 31, 2016, the Company is providing its
guidance as follows:

  • Sales are estimated to be in the range of $105 million to $112
    million, which represents annual sales growth of 44% to 54% compared
    to 2015.
  • Operating margin is estimated to be in the range of negative 55
    percent to negative 65 percent, which includes:

    • Approximately $13.0 million to $14.0 million in non-cash,
      stock-based compensation expense; and
    • Approximately $5.0 million to $6.0 million of depreciation and
      amortization.

Conference Call

The Company will hold a conference call and simultaneous webcast today
at 4:30pm Eastern Time (1:30pm Pacific Time). The link to the webcast
will be available by accessing the Investor Center of the Tandem
Diabetes Care website at http://investor.tandemdiabetes.com,
and will be archived for 30 days. To listen to the conference call via
phone, please dial 855-427-4396 (U.S./Canada) or 484-756-4261
(International) and use the participant code “41497472”.

Insulin Pump Use and Diabetes

Diabetes is a chronic, life-threatening disease that affects more than
29 million people in the United States, or nearly 1 in 10 Americans.
Tandem estimates that more than 3 million people in the United States
require daily administration of insulin and are candidates for pump
therapy. More than 425,000 Americans with type 1 diabetes use an insulin
pump, or approximately 27% of the type 1 diabetes population. In
addition, approximately 125,000 Americans with type 2 diabetes use an
insulin pump, a small fraction of the type 2 diabetes population.

About Tandem Diabetes Care, Inc.

Tandem Diabetes Care, Inc. (www.tandemdiabetes.com)
is a medical device company with an innovative, user-centric and
integrated approach to the design, development and commercialization of
products for people with diabetes who use insulin. The Company
manufactures and sells a family of insulin pump products, which includes
the t:slim® Insulin Pump, the slimmest and smallest durable insulin pump
currently on the market, the t:flex® Insulin Pump, the first pump
designed for people with greater insulin requirements, and the t:slim
G4™ Insulin Pump, the first CGM-enabled pump with touch-screen
simplicity. Tandem is based in San Diego, California.

t:slim, t:flex and Tandem Diabetes Care are registered trademarks, and
t:slim G4 is a trademark of Tandem Diabetes Care, Inc.

Follow Tandem Diabetes Care:
Twitter @tandemdiabetes, use #tslim,
#tflex, #tslimG4, #tconnect and $TNDM.
Facebook at www.facebook.com/TandemDiabetes
LinkedIn
at https://www.linkedin.com/company/tandemdiabetes

Forward Looking Statement

This press release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, that
concern matters that involve risks and uncertainties that could cause
actual results to differ materially from those anticipated or projected
in the forward-looking statements. These forward-looking statements
relate to the Company’s projected financial results, including the
Company’s ability to make additional gross margin and operating margin
improvement and sustain sales momentum for 2016, and the Company’s
ability to offer superior customer service and future product
enhancements. The Company’s actual results may differ materially from
those indicated in these forward-looking statements due to numerous
risks and uncertainties. For instance, successful commercialization of
the Company’s products may be negatively impacted by lack of market
acceptance by physicians and people with diabetes; the potential that
newer products that compete with the Company’s products, or other
technological breakthroughs for the monitoring, treatment or prevention
of diabetes, including new products offered by Dexcom, may render the
Company’s products obsolete or less desirable; and the potential that
the pump purchasing process, including insurance verification approval
for individual customers may take longer than it has historically. Other
risks and uncertainties include the Company’s inability to manufacture
products in commercial quantities at an acceptable cost and in
accordance with quality requirements; the Company’s inability to
contract with additional third-party payors for reimbursement of the
Company’s products; possible future actions of the U.S. Food and Drug
Administration or any other regulatory body or governmental authority;
and other risks identified in the Company’s most recent Annual Report on
Form 10-K, as well as other documents that the Company files with the
Securities and Exchange Commission. Investors are cautioned not to place
undue reliance on these forward-looking statements, which speak only as
of the date of this release. Tandem undertakes no obligation to update
or review any forward-looking statement in this press release because of
new information, future events or other factors.

 

TANDEM DIABETES CARE, INC.

CONDENSED BALANCE SHEETS
(in thousands)
     
December 31,
2015 2014
Assets
Current assets:
Cash and cash equivalents and short-term investments $ 71,106 $ 67,282
Restricted cash 2,000 2,000
Accounts receivable, net 14,055 7,652
Inventory 17,543 11,913
Other current assets   2,280   1,904
Total current assets 106,984 90,751
Property and equipment, net 15,526 12,581
Other long term assets   2,609   3,132
Total assets $ 125,119 $ 106,464
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable, accrued expense, and employee-related liabilities $ 19,116 $ 14,591
Deferred revenue 1,822 840
Other current liabilities   5,582   2,663
Total current liabilities 26,520 18,094
 
Notes payable—long-term 29,669 29,440
Other long-term liabilities   5,462   4,358
Total liabilities 61,651 51,892
 
Total stockholders’ equity   63,468   54,572
Total liabilities and stockholders’ equity $ 125,119 $ 106,464
 
 
TANDEM DIABETES CARE, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
       
Three Months Ended Year Ended
December 31, December 31,
2015 2014 2015 2014
Sales $ 29,120 $ 17,889 $ 72,850 $ 49,722
Cost of sales   15,662   11,352   46,270   34,474
Gross profit 13,458 6,537 26,580 15,248
Operating expenses:
Selling, general and administrative 20,557 20,117 78,621 75,121
Research and development   4,121   3,922   16,963   15,791
Total operating expenses   24,678   24,039   95,584   90,912
Operating loss   (11,220 )   (17,502 )   (69,004 )   (75,664 )
Total other expense, net   (862 )   (892 )   (3,404 )   (3,789 )
Loss before taxes (12,082 ) (18,394 ) (72,408 ) (79,453 )
Provision for income tax expense   10   71   10   71
Net loss $ (12,092 ) $ (18,465 ) $ (72,418 ) $ (79,524 )
               
Net loss per share, basic and diluted $ (0.40 ) $ (0.78 ) $ (2.50 ) $ (3.42 )
 
Weighted average shares used to compute basic and diluted net loss
per share
  30,168   23,571   28,923   23,272

Contacts

for Tandem Diabetes Care®, Inc.
Media Contact:
Steve
Sabicer, 714-907-6264
ssabicer@thesabicergroup.com
or
Investor
Contact:

Susan Morrison, 858-366-6900 x7005
smorrison@tandemdiabetes.com