Recent Highlights
- Revenue of
$51.1 million in first quarter 2024 increased 21% over same period in 2023 - Gross margin of 80.2% in first quarter 2024
- First quarter 2024 net loss attributable to common stockholders was
($18.7) million compared to($13.5) million for same period in 2023 - Adjusted EBITDA loss improved to
($8.3) million in first quarter 2024 compared to loss of($10.0) million for same period in 2023 - Achieved full commercial availability of Micro-Lapiplasty™, SpeedPlate™ and Hammertoe technologies in first quarter 2024
- Celebrated 100,000+ Lapiplasty® 3D Bunion Correction® patient milestone and first-ever National Bunion Day, launched new “Future You” patient education and awareness campaign, and named First Medical Device Partner and Official Foot and Ankle Solution Partner for Professional Pickleball Association Tour
- Patent portfolio expands to 63 granted
U.S. patents, with an additional 20 granted patents worldwide and 83 pendingU.S. patent applications - Revises guidance range for full-year 2024, expecting revenues of
$201 million to$211 million from$220 million to$225 million
First Quarter 2024 Financial Results
Revenue for the first quarter of 2024 was
Gross profit for the first quarter of 2024 was
Total operating expenses were
First quarter 2024 net loss attributable to common stockholders was
Cash, cash equivalents, marketable securities and investment receivable totaled
Financial Outlook
The Company now expects full-year 2024 revenue of
The Company continues to expect to make significant improvement in Adjusted EBITDA for full-year 2024 and anticipates Adjusted EBITDA to improve approximately 50% compared to full-year 2023.*
* A reconciliation of adjusted EBITDA to GAAP net loss on a forward-looking basis is not available without unreasonable efforts due to the high variability, complexity and low visibility with respect to the items excluded from this non-GAAP measure.
An investor presentation for the Company’s first quarter 2024 financial results is available in the "Investors" section of Treace's website at investors.treace.com.
Webcast and Conference Call Details
Treace will host a conference call today,
Use of Non-GAAP Financial Measures
To supplement the financial results presented in accordance with GAAP, this earnings release presents Adjusted EBITDA, which the Company defines as net loss before depreciation and amortization expense, interest income, interest expense, taxes, share-based compensation expense, acquisition-related costs and debt extinguishment loss. Non-GAAP financial measures such as Adjusted EBITDA are presented in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Management uses non-GAAP financial measures to evaluate the Company’s operating performance and trends, as well as for making planning decisions. The Company believes that Adjusted EBITDA helps to identify underlying trends in the Company’s business that may otherwise be masked by the effect of the income and expenses and other items that it excludes in its calculation of Adjusted EBITDA. Accordingly, the Company believes this non-GAAP financial measure provides useful information to investors and others in understanding and evaluating the Company’s operating results, enhancing the overall understanding of its past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by the Company’s management in their financial and operational decision-making. The Company also presents this non-GAAP financial measure because it believes investors, analysts and rating agencies consider it to be a useful metric in measuring the Company’s performance against other companies and its ability to meet its debt service obligations.
There are limitations related to the use of non-GAAP financial measures such as Adjusted EBITDA because they are not prepared in accordance with GAAP, may exclude significant income and expenses required by GAAP to be recognized in the Company’s financial statements, and may not be comparable to non-GAAP financial measures used by other companies. The Company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. A reconciliation between GAAP and non-GAAP results is presented below.
Forward-Looking Statements
This press release and statements made during our earnings call contain 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. All statements other than statements of historical fact are forward-looking statements, including, but not limited to, the Company’s: revised revenue guidance and estimated revenue growth rates for full-year 2024; estimated quarterly revenue growth rates; ability to effectively respond to and mitigate the impact of challenges in the current market environment, including in response to increased competition and accelerating adoption of MIS osteotomy solutions; ability to effectively reduce costs and right size the Company’s P&L; anticipated future product launches and the timing of such product launches, including our planned 3D MIS osteotomy platforms; our ability to protect and enforce our intellectual property rights; our success in defending against infringement of our intellectual property by third parties, including our competitors; expected seasonality; anticipated pace of growth in the foot and ankle market; sufficient balance sheet strength and flexibility to continue effectively executing on its strategic investments and growth initiatives for the foreseeable future; and expectation of progress in Adjusted EBITDA for full-year 2024 and expected rate of Adjusted EBITDA improvement. Forward-looking statements are based on management’s current assumptions and expectations of future events and trends, which affect or may affect the Company’s business, strategy, operations or financial performance, and actual results and other events may differ materially from those expressed or implied in such statements due to numerous risks and uncertainties. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Factors that could cause actual results or other events to differ materially from those contemplated in this press release can be found in the Risk Factors section of Treace’s public filings with the
Internet Posting of Information
Treace routinely posts information that may be important to investors in the “Investor Relations” section of its website at www.treace.com. The Company encourages investors and potential investors to consult the Treace website regularly for important information about Treace.
About
To learn more about Treace, connect with us on LinkedIn, Twitter, Facebook and Instagram.
Contacts:
Chief Communications & Investor Relations Officer
jddewey@treace.com | 209-613-6945
Statements of Operations and Comprehensive Loss
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended | |||||||
2024 | 2023 | ||||||
Revenue | $ | 51,108 | $ | 42,195 | |||
Cost of goods sold | 10,127 | 8,039 | |||||
Gross profit | 40,981 | 34,156 | |||||
Operating expenses | |||||||
Sales and marketing | 40,328 | 33,655 | |||||
Research and development | 5,259 | 3,412 | |||||
General and administrative | 14,362 | 10,865 | |||||
Total operating expenses | 59,949 | 47,932 | |||||
Loss from operations | (18,968 | ) | (13,776 | ) | |||
Interest income | 1,535 | 1,479 | |||||
Interest expense | (1,317 | ) | (1,285 | ) | |||
Other income, net | 74 | 128 | |||||
Other non-operating income (expense), net | 292 | 322 | |||||
Net loss | $ | (18,676 | ) | $ | (13,454 | ) | |
Other comprehensive income (loss) | |||||||
Unrealized gain (loss) on marketable securities | $ | (94 | ) | $ | (29 | ) | |
Comprehensive loss | $ | (18,770 | ) | $ | (13,483 | ) | |
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.30 | ) | $ | (0.23 | ) | |
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted | 61,792,788 | 58,723,760 | |||||
Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)
2024 | 2023 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 9,334 | $ | 12,982 | ||||
Marketable securities, short-term | 100,672 | 110,216 | ||||||
Accounts receivable, net of allowance for doubtful accounts of | 30,083 | 38,063 | ||||||
Inventories | 35,860 | 29,245 | ||||||
Prepaid expenses and other current assets | 11,448 | 7,853 | ||||||
Total current assets | 187,397 | 198,359 | ||||||
Property and equipment, net | 24,517 | 22,298 | ||||||
Intangible assets, net of accumulated amortization of | 8,787 | 9,025 | ||||||
12,815 | 12,815 | |||||||
Operating lease right-of-use assets | 9,064 | 9,264 | ||||||
Other non-current assets | 146 | 146 | ||||||
Total assets | $ | 242,726 | $ | 251,907 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 21,149 | $ | 11,835 | ||||
Accrued liabilities | 15,155 | 10,458 | ||||||
Accrued commissions | 5,527 | 10,759 | ||||||
Accrued compensation | 4,196 | 7,549 | ||||||
Other liabilities | 1,022 | 4,432 | ||||||
Total current liabilities | 47,049 | 45,033 | ||||||
Long-term debt, net of discount of | 53,083 | 53,008 | ||||||
Operating lease liabilities, net of current portion | 16,166 | 15,891 | ||||||
Other long-term liabilities | 37 | 37 | ||||||
Total liabilities | 116,335 | 113,969 | ||||||
Commitments and contingencies (Note 7) | ||||||||
Stockholders’ equity | ||||||||
Preferred stock, | — | — | ||||||
Common stock, | 62 | 62 | ||||||
Additional paid-in capital | 279,433 | 271,973 | ||||||
Accumulated deficit | (152,923 | ) | (134,247 | ) | ||||
Accumulated other comprehensive (loss) income | 69 | 163 | ||||||
(250 | ) | (13 | ) | |||||
Total stockholders’ equity | 126,391 | 137,938 | ||||||
Total liabilities and stockholders’ equity | $ | 242,726 | $ | 251,907 | ||||
Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (18,676 | ) | $ | (13,454 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Depreciation and amortization expense | 1,909 | 924 | ||||||
Provision for allowance for doubtful accounts | 159 | 38 | ||||||
Share-based compensation expense | 7,408 | 2,692 | ||||||
Non-cash lease expense | 592 | 626 | ||||||
Amortization of debt issuance costs | 75 | 74 | ||||||
Recovery of loss reserve for surgical instruments | — | (23 | ) | |||||
Accretion (amortization) of discount (premium) on marketable securities, net | (335 | ) | (297 | ) | ||||
Other, net | 90 | — | ||||||
Net changes in operating assets and liabilities, net of acquisitions | ||||||||
Accounts receivable | 7,821 | 3,793 | ||||||
Inventory | (6,615 | ) | (3,189 | ) | ||||
Prepaid expenses and other assets | (1,495 | ) | (963 | ) | ||||
Other non-current assets | — | (69 | ) | |||||
Payable to broker for unsettled marketable security purchases | — | 710 | ||||||
Operating lease liabilities | (657 | ) | (478 | ) | ||||
Accounts payable | 9,314 | (3,592 | ) | |||||
Accrued liabilities | (6,918 | ) | (4,076 | ) | ||||
Other, net | 107 | 25 | ||||||
Net cash used in operating activities | (7,221 | ) | (17,259 | ) | ||||
Cash flows from investing activities | ||||||||
Purchases of available-for-sale marketable securities | (28,711 | ) | (99,550 | ) | ||||
Sales and maturities of available-for-sale marketable securities | 36,396 | 20,548 | ||||||
Purchases of property and equipment | (3,927 | ) | (1,478 | ) | ||||
Net cash provided by (used in) investing activities | 3,758 | (80,480 | ) | |||||
Cash flows from financing activities | ||||||||
Proceeds from issuance of common stock from public offering, net of issuance costs and underwriting discount of | — | 107,527 | ||||||
Proceeds from exercise of employee stock options | 52 | 352 | ||||||
Taxes from withheld shares | (237 | ) | — | |||||
Net cash provided by (used in) financing activities | (185 | ) | 107,879 | |||||
Net increase (decrease) in cash and cash equivalents | (3,648 | ) | 10,140 | |||||
Cash and cash equivalents at beginning of period | 12,982 | 19,473 | ||||||
Cash and cash equivalents at end of period | $ | 9,334 | $ | 29,613 | ||||
Supplemental disclosure of cash flow information | ||||||||
Cash paid for interest | $ | 1,317 | $ | 1,285 | ||||
Operating lease right-of-use asset and lease liability adjustment due to lease incentive | $ | — | $ | (35 | ) | |||
Noncash investing activities | ||||||||
Unrealized (gains) losses, net on marketable securities | $ | 94 | $ | 29 | ||||
Unsettled matured marketable security and receivable from broker | $ | 2,100 | $ | — | ||||
Reconciliation of GAAP Net Loss to EBITDA & Adjusted EBITDA
(in thousands)
(unaudited)
Three Months Ended | |||||||
2024 | 2023 | ||||||
Net loss | $ | (18,676 | ) | $ | (13,454 | ) | |
Adjustments: | |||||||
Interest income | (1,535 | ) | (1,479 | ) | |||
Interest expense | 1,317 | 1,285 | |||||
Taxes | — | — | |||||
Depreciation & Amortization | 1,909 | 924 | |||||
EBITDA | $ | (16,985 | ) | $ | (12,724 | ) | |
Share-based compensation expense | 7,408 | 2,692 | |||||
Acquisition-related costs | 1,317 | — | |||||
Adjusted EBITDA | $ | (8,260 | ) | $ | (10,032 | ) |
Source:
2024 GlobeNewswire, Inc., source