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Conformis reported 1Q20 orthopedic revenue of USD $16.5 million, -20.2% vs. 1Q19. The company’s sales were trending toward a -3% decline through early March, a significant sequential improvement. As COVID-19 procedure deferrals took hold, however, Conformis’ heavy weighting toward U.S. northeast and Mid-Atlantic geographies left it particularly exposed. The company’s April sales declined approximately -95%, but leadership noted that there are signs of improvement through the early parts of May.
The downturn will cause Conformis to miss its trailing six-month revenue covenant with Innovatus and East West Bank. The company is in negotiations with Innovatus and believes that the loan can be amended without issue. In March, Conformis furloughed one-third of its workforce and substantially all of its temporary workers. A $4.7 million loan from the Paycheck Protection Program (PPP) allowed the company to reinstate nearly all furloughed workers. Assuming successful renegotiation with Innovatus, the combination of the PPP loan and Stryker milestone payments will finance Conformis through 2Q21.
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement Knees | $16.0 | $20.1 | ($4.1) | (20.4%) |
| Joint Replacement Hips | $0.4 | $0.5 | ($0.1) | (11.8%) |
| Total | $16.5 | $20.6 | ($4.2) | (20.2%) |
Geographic Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $14.0 | $17.8 | ($3.8) | (21.2%) |
| OUS | $2.5 | $2.9 | ($0.4) | (14.1%) |
| Total | $16.5 | $20.6 | ($4.2) | (20.2%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $16.5 | |
| Cost of Sales | ($9.3) | 56.2% |
| Sales and Marketing | ($6.6) | 39.8% |
| R & D | ($3.0) | 18.1% |
| General and Admin | ($5.7) | 34.8% |
| Other | ($0.0) | 0% |
| Net Earnings | ($8.1) | (49%) |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
Conformis reported 1Q20 orthopedic revenue of USD $16.5 million, -20.2% vs. 1Q19. The company’s sales were trending toward a -3% decline through early March, a significant sequential improvement. As COVID-19 procedure deferrals took hold, however, Conformis’ heavy weighting toward U.S. northeast and Mid-Atlantic geographies left it...
Conformis reported 1Q20 orthopedic revenue of USD $16.5 million, -20.2% vs. 1Q19. The company’s sales were trending toward a -3% decline through early March, a significant sequential improvement. As COVID-19 procedure deferrals took hold, however, Conformis’ heavy weighting toward U.S. northeast and Mid-Atlantic geographies left it particularly exposed. The company’s April sales declined approximately -95%, but leadership noted that there are signs of improvement through the early parts of May.
The downturn will cause Conformis to miss its trailing six-month revenue covenant with Innovatus and East West Bank. The company is in negotiations with Innovatus and believes that the loan can be amended without issue. In March, Conformis furloughed one-third of its workforce and substantially all of its temporary workers. A $4.7 million loan from the Paycheck Protection Program (PPP) allowed the company to reinstate nearly all furloughed workers. Assuming successful renegotiation with Innovatus, the combination of the PPP loan and Stryker milestone payments will finance Conformis through 2Q21.
Revenue Data
All revenue data is provided in USD millions unless otherwise noted. Sales and growth rates are estimated on an as-reported basis.
Segment Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| Joint Replacement Knees | $16.0 | $20.1 | ($4.1) | (20.4%) |
| Joint Replacement Hips | $0.4 | $0.5 | ($0.1) | (11.8%) |
| Total | $16.5 | $20.6 | ($4.2) | (20.2%) |
Geographic Sales
| 1Q20 | 1Q19 | $ Chg | % Chg | |
|---|---|---|---|---|
| US | $14.0 | $17.8 | ($3.8) | (21.2%) |
| OUS | $2.5 | $2.9 | ($0.4) | (14.1%) |
| Total | $16.5 | $20.6 | ($4.2) | (20.2%) |
Earnings
| Amt | % of Sales | |
|---|---|---|
| Sales | $16.5 | |
| Cost of Sales | ($9.3) | 56.2% |
| Sales and Marketing | ($6.6) | 39.8% |
| R & D | ($3.0) | 18.1% |
| General and Admin | ($5.7) | 34.8% |
| Other | ($0.0) | 0% |
| Net Earnings | ($8.1) | (49%) |
Mike Evers is ORTHOWORLD’s Digital Content Strategist. He can be reached by email.
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ME
Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
