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

News provided by

InMode

Nov 05, 2019, 08:00 ET

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: [email protected]

Investor Relations Contact:

Miri Segal

MS-IR LLC

Phone: (917) 607-8654

Email: [email protected]

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

Related Links

http://www.inmodemd.com

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