InMode Reports Record Fourth Quarter and Full Year 2019 Financial Results

YOKNEAM, Israel, Feb. 18, 2020 /PRNewswire/ -- InMode Ltd. (Nasdaq: INMD) ("InMode"), a leading global provider of innovative medical technologies, today announced financial results for the fourth quarter and full year ended December 31, 2019.

Fourth Quarter 2019 Highlights:

• Record quarterly revenue of $47 million, an increase of 63% compared to the fourth quarter in 2018
• GAAP net income attributable to InMode Ltd. of $19.0 million, compared to a $0.2 million loss attributable to InMode Ltd. in the fourth quarter in 2018; *non-GAAP net income attributable to InMode Ltd. of $19.3 million
• GAAP and *non-GAAP fully diluted earnings per share of $0.46
• Total cash position of $193.4 million as of December 31, 2019, including cash and cash equivalents, marketable securities and short-term bank deposits

Full Year 2019 Highlights:

• Record full year revenue of $156.4 million, an increase of 56% as compared to 2018
• GAAP net income attributable to InMode Ltd. of $61.1 million, a 173% increase year-over-year; *non-GAAP net income attributable to InMode Ltd. of $62.4 million, a 95% increase year-over-year
• GAAP fully diluted earnings per share of $1.60, an increase of 158% as compared to 2018; *non-GAAP fully diluted earnings per share of $1.63, an increase of 81% year-over-year
• 68% increase in international (non-U.S.) revenue as compared to 2018

*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 part of this release. Non-GAAP results exclude stock-based compensation, legal settlements and loss contingencies related to sublicense agreement, as well as related tax adjustments.

Management Comments

In 2015, the U.S. Food and Drug Administration ("FDA") cleared InMode's new and proprietary Bipolar Radio Frequency technology, which enabled further development and marketing of Subdermal Adipose Remodeling Devices (SARD – BodyTite, FaceTite, AccuTite and Morpheus8). With this new technology, InMode introduced a new category: "Minimally Invasive and Subdermal Ablative Aesthetic Surgery", that enables physicians to provide solutions to patients that do not want to suffer from the shortcomings of full plastic surgery yet would like to obtain comparable results ("Treatment Gap patients").

The success of InMode's Subdermal Adipose Remodeling Devices (SARD) in the minimally invasive and subdermal ablative space inspired InMode to apply the same principles of facial and body reshaping to the non-invasive market in a hands-free application. As such, InMode developed two FDA-cleared distinct hands-free platforms: the Evolve for body and the Evoke for face.

The introduction of Evolve and Evoke to the market created yet another new category within the aesthetic market:  "Hands-Free Aesthetic Procedures." Currently, these two proprietary and protected categories (aesthetic surgery and hands-free aesthetic procedures) are expected to be the primary growth engines for InMode in the coming years.

As for global reach - InMode continues to develop the U.S. and international markets through its network of subsidiaries and distributors. In addition, InMode continues to work on clinical and obtaining regulation approval in various countries, recently receiving ANVISA clearance from Brazil, and additional approvals in the U.S. (FDA), Canada, Taiwan and other countries in Eastern Europe.

2020 Financial Outlook

Management provided an outlook for the full year of 2020, the period ending December 31, 2020. Based on current estimates, management expects:

• $190 million to $198 million in revenue
• 85%-87% in Gross Margins
• *Non-GAAP Income from Operations - $76 million to $80 million
• *Non-GAAP Earnings per Diluted Share - $1.85 - $1.93

This outlook is not guarantee of future performance and stockholders should not place under reliance on such forward-looking statements. See "Forward-Looking Statements" for additional information.

Fourth Quarter 2019 Financial Results

Total revenues for the fourth quarter of 2019 were $47.0 million, an increase of 63% as compared to the fourth quarter in 2018. This growth was driven primarily by the continued expansion of InMode's direct sales organization in the United States. Additionally, InMode continued to gain traction in international markets, with international revenue growing 71% year-over-year.

Gross margin for the fourth quarter of 2019 was 87% compared to a gross margin of 86% in the fourth quarter of 2018.

GAAP operating margin for the fourth quarter of 2019 was 38%, compared to 5% in the fourth quarter of 2018. *Non-GAAP operating margin for the fourth quarter of 2019 was 39%, compared to 33% in the fourth quarter of 2018. This increase is primarily attributable to the increase in our gross profit exceeding the increase in our operating expenses as a result of the company's accelerated growth.

InMode reported GAAP net income attributable to InMode Ltd. of $19.0 million, or $0.46 per diluted share in the fourth quarter of 2019. This is compared with GAAP net loss attributable to InMode Ltd. of $(0.2) million, or $(0.01) per diluted share, in the fourth quarter of 2018. The loss in the fourth quarter of 2018 was due to a one-time provision for a settlement agreement InMode entered into in January 2019. On a *non-GAAP basis, InMode reported net income attributable to InMode Ltd. of $19.3 million, or $0.46 per diluted share in the fourth quarter of 2019 compared to $7.8 million, or $0.22 per diluted share, in the fourth quarter of 2018.

Full Year 2019 Financial Results

Total revenues for 2019 were $156.4 million, an increase of 56% as compared to 2018. This growth was driven primarily by the continued expansion of InMode's direct sales organization in the United States. In addition, InMode has been gaining traction in international markets, with international revenue growing 68% year-over-year.

Gross margin for 2019 was 87% compared to a gross margin of 85% in 2018.

GAAP operating margin for 2019 was 38%, compared to the operating margin of 23% in 2018. *Non-GAAP operating margin for 2019 was 39%, compared to the operating margin of 33% in the full year of 2018. InMode reported GAAP net income attributable to InMode Ltd. of $61.1 million, or $1.60 per diluted share in 2019. This is compared with GAAP net income attributable to InMode Ltd of $22.4 million, or $0.62 per diluted share, in 2018. On a *non-GAAP basis, InMode reported net income attributable to InMode Ltd. of $62.4 million, or $1.63 per diluted share, in the full year of 2019 compared to net income attributable to InMode Ltd. of $31.9 million, or $0.90 per diluted share, in the full year of 2018.

As of December 31, 2019, InMode had cash and cash equivalents, marketable securities and short-term bank deposits of $193.4 million, of which approximately $70 million in net proceeds were raised in InMode's initial public offering.

*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 part of this release. Non-GAAP results exclude stock-based compensation, legal settlements and loss contingencies related to sublicense agreement, as well as 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 fully 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. We have not provided a reconciliation of non-GAAP financial measures included in "2020 Financial Outlook" to the corresponding GAAP financial measure on a forward-looking basis due to the potential variability, limited visibility and unpredictability.

Conference Call Information

Mr. Moshe Mizrahy, Chairman and Chief Executive Officer, and Mr. Yair Malca, Chief Financial Officer, will host a conference call today, February 18, 2020, at 9 a.m. Eastern Time.

To attend the conference call, please dial one of the following teleconferencing numbers. Please begin by placing your call five 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:
9 a.m. Eastern Time
6 a.m. Pacific Time
4 p.m. Israel Time

The conference call will also be webcast live from a link on InMode's website at https://inmodemd.com/investors/. A replay of the conference call will be available from February 18, 2020 at 12 p.m. Eastern Time to March 3, 2020 at 11:59 p.m. Eastern Time. To access the replay, please dial one of the following numbers: 

Replay Dial-in 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: 10137694

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 "2020 Financial Outlook". 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) 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.

(1) The number 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 our board of directors dated July 24, 2019.

(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 our board of directors dated July 24, 2019

(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 our board of directors dated July 24, 2019

SOURCE InMode Ltd.