INMD - InMode Reports Third Quarter 2019 Record Revenue of $40 Million; Reflects Growth of 57% Year-Over-Year; Net Income Increased 87% to $16.2 Million
YOKNEAM, Israel, Nov. 5, 2019 /PRNewswire/ -- InMode Ltd. (Nasdaq: INMD) ("InMode"), a leading global provider of innovative medical technologies, today announced financial results for the third quarter ended September 30, 2019.
Third Quarter 2019 Highlights:
- Record quarterly revenue of $40 million, an increase of 57% as compared to the third quarter in 2018
- Net income of $16.2 million, 87% increase year-over-year
- Fully diluted earnings per share of $0.42, an increase of 62% as compared to the third quarter in 2018
- 88% increase in international revenue as compared to the third quarter in 2018, driven primarily by European and Asian sales
- Total cash position of $166.3 million as of September 30, 2019, including cash and cash equivalents, marketable securities and deposits
GAAP Results (U.S. dollars in thousands, except for per share data) |
Q3 2019 |
Q3 2018 |
Revenues |
$40,010 |
$25,418 |
Gross Margins |
87% |
86% |
Net Income |
$16,193 |
$8,638 |
Earnings per Diluted Share |
$0.42 |
$0.26 |
Management Comments
"We went public during the third quarter and we are happy to report continuous solid growth in revenues and profitability," commented Moshe Mizrahy, Chief Executive Officer and Chairman of the Board. "The demand for our unique, minimally invasive technology in the United States and abroad is increasing and we plan to penetrate new international markets while maintaining profitable growth. InMode's proprietary bipolar RF technologies fill the treatment gap in face and body aesthetic surgery by offering outpatient alternatives that address the shortcomings of traditional surgery with less downtime, lower costs and comparable results. We believe our strong cash position will enable us to maintain our growth efforts and will support the ongoing launch of new and innovative platforms," Mizrahy added.
Third Quarter 2019 Financial Results
Total revenues for the third quarter of 2019 were $40.0 million, an increase of 57% as compared to the third quarter in 2018. This growth was driven primarily by the continued expansion of InMode's direct sales organization in the U.S. In addition, InMode is gaining traction in the international markets, with international revenue growing 88% year-over-year.
Gross margin for the third quarter of 2019 was 87% compared to a gross margin of 86% in the third quarter of 2018.
Operating margin for the third quarter of 2019 was 40%, compared to the operating margin of 33% in the third quarter of 2018.
InMode reported net income of $16.2 million, or $0.42 per diluted share in the third quarter of 2019. This is compared with net income of $8.6 million, or $0.26 per diluted share, in the third quarter of 2018.
As of September 30, 2019, InMode had cash and cash equivalents, marketable securities and deposits of $166.3 million, out of which, approximately $70 million in net proceeds were raised in our initial public offering.
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. 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. 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 contained in our prospectus (included in the Registration Statement on Form F-1, filed with the Securities and Exchange Commission (File No. 333-232615), as amended). 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 |
Nine months ended |
September 30 |
September 30 |
2019 |
2018 |
2019 |
2018 |
REVENUES |
40,010 |
25,418 |
109,359 |
71,379 |
COST OF REVENUES |
5,047 |
3,669 |
14,193 |
11,118 |
GROSS PROFIT |
34,963 |
21,749 |
95,166 |
60,261 |
OPERATING EXPENSES: |
Research and development |
1,329 |
1,005 |
4,112 |
2,826 |
Sales and marketing |
16,726 |
11,106 |
46,721 |
32,101 |
General and administrative |
927 |
1,244 |
2,693 |
3,158 |
TOTAL OPERATING EXPENSES |
18,982 |
13,355 |
53,526 |
38,085 |
INCOME FROM OPERATIONS |
15,981 |
8,394 |
41,640 |
22,176 |
Finance income, net |
479 |
415 |
1,264 |
623 |
INCOME BEFORE TAXES |
16,460 |
8,809 |
42,904 |
22,799 |
INCOME TAX |
267 |
171 |
718 |
215 |
NET INCOME |
16,193 |
8,638 |
42,186 |
22,584 |
Less: Net income attributable to non-controlling interests |
7 |
- |
79 |
- |
NET INCOME ATTRIBUTABLE TO INMODE LTD. SHAREHOLDERS' |
16,186 |
8,638 |
42,107 |
22,584 |
NET INCOME PER SHARE (1): |
Basic |
0.53 |
0.34 |
1.50 |
0.83 |
Diluted |
0.42 |
0.26 |
1.15 |
0.63 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING USED IN COMPUTATION OF NET INCOME PER SHARE (1) |
Basic |
30,297 |
26,647 |
28,031 |
26,591 |
Diluted |
39,004 |
35,030 |
36,654 |
34,982 |
(1) The number of shares have been adjusted retroactively for a 1-for-1.789 stock split of InMode shares by way of an issuance of bonus shares, that occurred pursuant to a resolution of InMode's board of directors dated July 24, 2019. |
INMODE LTD. CONDENSED CONSOLIDATED BALANCE SHEETS (U.S. dollars in thousands, except for per share data) (Unaudited) |
September 30, |
December 31, |
2019 |
2018 |
Assets |
CURRENT ASSETS: |
Cash and cash equivalents |
48,705 |
24,721 |
Marketable securities |
91,613 |
26,532 |
Short-term bank deposits |
25,935 |
10,045 |
Accounts receivable, net of allowance for doubtful accounts |
7,615 |
7,008 |
Other receivables |
3,142 |
2,495 |
Inventories |
8,495 |
6,963 |
TOTAL CURRENT ASSETS |
185,505 |
77,764 |
NON-CURRENT ASSETS: |
Accounts receivable |
378 |
544 |
Deferred offering costs |
- |
895 |
Deferred income taxes, net |
1,516 |
1,309 |
Property and equipment, net |
848 |
544 |
Operating lease right-of-use assets |
1,518 |
- |
TOTAL NON-CURRENT ASSETS |
4,260 |
3,292 |
TOTAL ASSETS |
189,765 |
81,056 |
Liabilities and shareholders' equity |
CURRENT LIABILITIES: |
Accounts payable |
5,660 |
4,509 |
Contract liabilities |
7,260 |
5,755 |
Other liabilities |
10,783 |
9,165 |
Accrued contingencies |
- |
10,000 |
TOTAL CURRENT LIABILITIES |
23,703 |
29,429 |
NON-CURRENT LIABILITIES: |
Contract liabilities |
3,740 |
3,982 |
Other liabilities |
918 |
771 |
Operating lease liabilities |
922 |
- |
Deferred income taxes |
47 |
11 |
TOTAL NON-CURRENT LIABILITIES |
5,627 |
4,764 |
TOTAL LIABILITIES |
29,330 |
34,193 |
REDEEMABLE NON-CONTROLLING INTEREST |
- |
2,187 |
TOTAL SHAREHOLDERS' EQUITY |
160,435 |
44,676 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
189,765 |
81,056 |
INMODE LTD. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. dollars in thousands, except for per share data) (Unaudited) |
Three months ended |
Nine months ended |
September 30 |
September 30 |
2019 |
2018 |
2019 |
2018 |
CASH FLOWS FROM OPERATING ACTIVITIES: |
Net income |
16,193 |
8,638 |
42,186 |
22,584 |
Adjustments required to reconcile net income to net cash provided by operating activities: |
Depreciation and amortization |
77 |
53 |
214 |
131 |
Stock-based compensation expense |
385 |
42 |
1,199 |
1,766 |
Allowance for doubtful accounts |
55 |
(14) |
133 |
(43) |
Gains on marketable securities, net |
- |
(68) |
- |
(122) |
Changes in fair value of marketable securities, net |
- |
(177) |
- |
(213) |
Finance income, net |
(86) |
- |
(395) |
- |
Provision for deferred income taxes, net |
(68) |
(41) |
(211) |
(168) |
Changes in operating assets and liabilities: |
Increase in accounts receivable |
(2,324) |
(2,124) |
(597) |
(380) |
Increase in other receivables |
(1,814) |
(526) |
(650) |
(71) |
Decrease (increase) in inventories |
(879) |
213 |
(1,532) |
(539) |
Increase in accounts payable |
689 |
755 |
759 |
520 |
Increase (decrease) in other liabilities |
2,402 |
1,390 |
2,418 |
(267) |
Increase (decrease) in contract liabilities |
(1,115) |
(915) |
1,263 |
4,227 |
Decrease in accrued contingencies |
- |
- |
(10,000) |
- |
Net cash provided by operating activities |
13,515 |
7,226 |
34,787 |
27,425 |
CASH FLOWS FROM INVESTING ACTIVITIES: |
Investment in short-term deposits |
(17,220) |
(5,000) |
(34,310) |
(5,000) |
Proceeds from short-term deposits |
8,500 |
- |
18,500 |
- |
Purchase of fixed assets |
(54) |
(82) |
(518) |
(293) |
Purchase of marketable securities |
(68,282) |
(15,369) |
(82,621) |
(22,546) |
Proceeds from sale of marketable securities |
13,500 |
857 |
18,103 |
3,412 |
Net cash (used in) investing activities |
(63,556) |
(19,594) |
(80,846) |
(24,427) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
Proceeds from initial public offering of ordinary shares, net of issuance costs |
69,784 |
- |
69,784 |
- |
Exercise of options |
178 |
19 |
315 |
176 |
Net cash provided by financing activities |
69,962 |
19 |
70,099 |
176 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH |
(93) |
(23) |
(56) |
(141) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
19,828 |
(12,372) |
23,984 |
3,033 |
CASH AND CASH EQUIVALENTS AT |
28,877 |
32,998 |
24,721 |
17,593 |
BEGINNING OF PERIOD |
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
48,705 |
20,626 |
48,705 |
20,626 |
INMODE LTD. CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS (U.S. dollars in thousands, except for per share data) (Unaudited) |
Three months ended |
Nine months ended |
September 30 |
September 30 |
2019 |
2018 |
2019 |
2018 |
Revenues by Geography: |
United States |
31,007 |
20,633 |
87,813 |
58,498 |
International (OUS) |
9,003 |
4,785 |
21,546 |
12,881 |
Total Net Revenue |
40,010 |
25,418 |
109,359 |
71,379 |
United States as percentage of total revenue |
77% |
81% |
80% |
82% |
SOURCE InMode