Full Press Release Details
TELA Bio Reports Second Quarter 2024 Financial
Results and Reiterates Full Year 2024 Revenue Guidance
PA, August 12, 2024 -- TELA Bio, Inc. ("TELA Bio"),
a commercial-stage medical technology company focused on providing innovative soft-tissue reconstruction solutions today reported financial
results for the second quarter ended June 30, 2024.
| Reported revenue of $16.1 million in the second quarter, representing growth of 11% over the prior year period of 2023; | ||
| Appointed Greg Firestone as Chief Commercial Officer on May 20, 2024 to drive our next phase of revenue growth by enhancing sales representative training, regional supervision, and performance measurement and accountability; | ||
| Launched our robotically compatible OviTex IHR Reinforced Tissue Matrix in the U.S. to target the high-volume inguinal hernia market; | ||
| Saw the launch of NIVIS Fibrillar Collagen Pack by its new owner in the second quarter, triggering the receipt of quarterly revenue share payments beginning in the third quarter of this year and ranging from $3 million to $7 million in total over the next eight quarters; and | ||
| Reiterated full year 2024 revenue guidance of $74.5 million to $76.5 million, representing 27% to 31% year-over-year growth. |
"TELA delivered double-digit growth
in the second quarter notwithstanding some market disruptions from customer-targeted cyberattacks that we believe led to a shortfall in
procedures at some of our largest or most rapidly growing contracted accounts," said Antony Koblish, President and CEO of TELA Bio.
"We believe many of these factors, including most notably a ransomware attack at one of our national GPOs, have been resolved and
we are seeing signs of normalized growth returning in the third quarter. As a result, we expect to deliver another year of high growth
and are reiterating our 2024 revenue target of $74.5 million to $76.5 million. Under new sales leadership, we are also intensely focused
on improving the productivity and efficiency of our commercial organization and have initiated programs that will maximize sales and rep
productivity and will provide operational leverage. We believe that with these efforts, as well as the contribution from the NIVIS revenue
share, our cash and cash equivalents will be sufficient to fund us to profitability."
Second Quarter 2024 Financial Results
Revenue was $16.1 million in the second quarter
of 2024, an increase of 11% compared to the same period in 2023. The increase was primarily driven by an increase in unit sales of our
products due to the addition of new customers, increased penetration within existing customer accounts and growing international sales
under an expanded commercial organization. This growth was partially offset by a decrease in average selling prices caused by product
mix as the share of smaller-sized units increased related to the introduction of robotically compatible OviTex IHR and our increased focus
in growing market share in high-volume minimally invasive and robotic procedures. In addition, we estimate that additional forecasted
revenue was negatively impacted as a result of two cybersecurity events, most notably a ransomware attack at our most recently added and
consequently fastest-growing GPO, and a separate cybersecurity event at another multi-center hospital customer, which substantially reduced
surgeries at those facilities during the quarter.
Gross profit was $11.1 million in the second
quarter of 2024, or 69% of revenue, compared to $10.2 million, or 70% of revenue, in the same period in 2023. The decrease in gross margin
was primarily due to a higher charge for excess and obsolete inventory.
Operating expenses were $22.6 million in the
second quarter of 2024, compared to $20.6 million in the same period in 2023. The increase was due to additional headcount as we expanded
our organization resulting in higher compensation costs and employee-related expenses, as well as increased travel and consulting.
Loss from operations was $11.6 million in
the second quarter of 2024, compared to a loss from operations of $10.4 million in the same period in 2023.
Net loss was $12.6 million in the second quarter
of 2024, compared to a net loss of $10.8 million in the same period in 2023.
Cash and cash equivalents on June 30,
2024 totaled $26.5 million.
Bio will host a conference call at 4:30 p.m. Eastern Time on Monday, August 12, 2024, to discuss its second quarter 2024 financial
results. Investors interested in listening to the conference call should
register online. Participants are required to register a day in advance
or at minimum 15 minutes before the start of the call. A live webcast and replay can be accessed via the Events & Presentations
page of the investor section of TELA's website.
About TELA Bio, Inc.
TELA Bio, Inc. (NASDAQ: TELA) is a commercial-stage medical technology
company focused on providing innovative technologies that optimize clinical outcomes by prioritizing the preservation and restoration
of the patient's own anatomy. The Company is committed to providing surgeons with advanced, economically effective soft-tissue reconstruction
solutions that leverage the patient's natural healing response while minimizing long-term exposure to permanent synthetic materials.
For more information, visit www.telabio.com.
Caution Regarding Forward-Looking Statements
press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Words such
as "may," "might," "will," "should," "believe," "expect," "anticipate,"
"estimate," "continue," "predict," "forecast," "project," "plan," "intend"
or similar expressions, or statements regarding intent, belief, or current expectations are forward-looking statements and reflect the
current beliefs of TELA Bio's management. Such forward-looking statements include statements relating to our expected revenue and revenue
growth for the full year 2024. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and other factors that could cause actual results and events to differ materially
and adversely from those indicated by such forward-looking statements including, among others: the impact to our business from
macroeconomic conditions, including any lingering effects of the COVID-19 pandemic and other public health crises, recessionary concerns,
banking instability, increasing market interest rates, and inflationary pressures, potentially impacting our ability to market our products,
demand for our products due to the deferral of elective procedures, the labor and staffing environment in the healthcare industry, disruption
in our supply chain, or pricing pressures concerning our products or the procedures using our products; the impact of cybersecurity events
affecting or disrupting hospital operations and procedural volumes; our ability to achieve or sustain profitability; our ability to gain
market acceptance for our products and to accurately forecast and meet customer demand; our ability to compete successfully; that data
from earlier studies related to our products and interim data from ongoing studies may not be replicated in later studies or indicative
of future data; that data obtained from clinical studies using our product may not be indicative of outcomes in other surgical settings;
our ability to enhance our product offerings; development and manufacturing problems; capacity constraints or delays in production of
our products; maintenance of coverage and adequate reimbursement for procedures using our products; product defects or failures; and
total estimated consideration related to the NIVIS transaction. These risks and uncertainties are described more fully in the "Risk
Factors" section and elsewhere in our filings with the Securities and Exchange Commission and available at www.sec.gov,
including in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Any forward-looking statements that
we make in this announcement speak only as of the date of this press release, and TELA Bio assumes no obligation to update forward-looking
statements whether as a result of new information, future events or otherwise after the date of this press release, except as required
under applicable law.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
| June 30, | December 31, | ||||||
| 2024 | 2023 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 26,496 | $ | 46,729 | |||
| Accounts receivable, net of allowances of $298 and $416 | 9,097 | 9,737 | |||||
| Inventory | 13,372 | 13,162 | |||||
| Prepaid expenses and other assets | 2,144 | 2,098 | |||||
| Total current assets | 51,109 | 71,726 | |||||
| Property and equipment, net | 2,349 | 1,984 | |||||
| Intangible assets, net | 1,929 | 2,119 | |||||
| Right-of-use assets | 1,851 | 1,954 | |||||
| Other long-term assets | 2,701 | - | |||||
| Restricted cash | 265 | 265 | |||||
| Total assets | $ | 60,204 | $ | 78,048 | |||
| Liabilities and stockholders' equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 2,314 | $ | 1,667 | |||
| Accrued expenses and other current liabilities | 12,675 | 15,300 | |||||
| Total current liabilities | 14,989 | 16,967 | |||||
| Long-term debt | 40,817 | 40,515 | |||||
| Other long-term liabilities | 1,528 | 1,685 | |||||
| Total liabilities | 57,334 | 59,167 | |||||
| Stockholders' equity: | |||||||
| Preferred stock; $0.001 par value: 10,000,000 shares authorized; no shares issued and outstanding | - | - | |||||
| Common stock; $0.001 par value: 200,000,000 shares authorized; 24,675,832 and 24,494,675 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively | 25 | 24 | |||||
| Additional paid-in capital | 341,897 | 339,655 | |||||
| Accumulated other comprehensive income | 98 | 91 | |||||
| Accumulated deficit | (339,150 | ) | (320,889 | ) | |||
| Total stockholders' equity | 2,870 | 18,881 | |||||
| Total liabilities and stockholders' equity | $ | 60,204 | $ | 78,048 |
Consolidated Statements of Operations and Comprehensive
(In thousands, except share and per share amounts)
| Three months ended June 30, | Six months ended June 30, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||
| Revenue | $ | 16,091 | $ | 14,494 | $ | 32,694 | $ | 26,403 | |||||
| Cost of revenue (excluding amortization of intangible assets) | 4,923 | 4,198 | 10,095 | 8,114 | |||||||||
| Amortization of intangible assets | 95 | 95 | 190 | 190 | |||||||||
| Gross profit | 11,073 | 10,201 | 22,409 | 18,099 | |||||||||
| Operating expenses: | |||||||||||||
| Sales and marketing | 16,699 | 14,577 | 34,219 | 28,043 | |||||||||
| General and administrative | 3,621 | 3,472 | 7,450 | 7,106 | |||||||||
| Research and development | 2,323 | 2,514 | 4,716 | 4,566 | |||||||||
| Total operating expenses | 22,643 | 20,563 | 46,385 | 39,715 | |||||||||
| Other operating income: | |||||||||||||
| Gain on sale of product line | - | - | (7,580 | ) | - | ||||||||
| Loss from operations | (11,570 | ) | (10,362 | ) | (16,396 | ) | (21,616 | ) | |||||
| Other expense: | |||||||||||||
| Interest expense | (1,331 | ) | (1,298 | ) | (2,663 | ) | (2,544 | ) | |||||
| Other income | 301 | 870 | 798 | 1,343 | |||||||||
| Total other expense | (1,030 | ) | (428 | ) | (1,865 | ) | (1,201 | ) | |||||
| Net loss | $ | (12,600 | ) | $ | (10,790 | ) | $ | (18,261 | ) | $ | (22,817 | ) | |
| Net loss per common share, basic and diluted | $ | (0.51 | ) | $ | (0.46 | ) | $ | (0.74 | ) | $ | (1.08 | ) | |
| Weighted average common shares outstanding, basic and diluted | 24,663,234 | 23,239,262 | 24,621,310 | 21,223,639 | |||||||||
| Comprehensive loss: | |||||||||||||
| Net loss | $ | (12,600 | ) | $ | (10,790 | ) | $ | (18,261 | ) | $ | (22,817 | ) | |
| Foreign currency translation adjustment | 1 | (36 | ) | 7 | (66 | ) | |||||||
| Comprehensive loss | $ | (12,599 | ) | $ | (10,826 | ) | $ | (18,254 | ) | $ | (22,883 | ) |