Tenon Medical Reports First Quarter 2024 Financial Results
~ Revenue Increased 66% Year-Over-Year ~
~ Surgical Procedures Increased 42% Year-Over-Year ~
~ Gross Margin Stabilized at 65% Sequentially ~
~ Catamaran® SI Joint Fusion System Received Positive Fusion Results from Post-Market Study ~
LOS GATOS, CA / ACCESSWIRE / May 14, 2024 / Tenon Medical, Inc. (NASDAQ:TNON) ("Tenon Medical" or the "Company"), a company transforming care for patients suffering with certain sacroiliac joint (SI Joint) disorders, today reported financial results for the first quarter ended March 31, 2024.
First Quarter 2024 Highlights
- Revenue of $719,000 in the first quarter of 2024, a 66% increase over the prior year quarter.
- Gross profit of $470,000 as compared to a gross loss of ($47,000) in the first quarter of 2023.
- Consistent quarterly gross profit margin of 65% in the first quarter of 2024, and a notable increase as compared to (11)% in the same year ago period.
- Announced positive fusion results in first patients reaching 12-month follow up in an IRB approved, multi-centered, post-market study utilizing the Catamaran® SI Joint Fusion System.
- Received Notice of Allowance for its U.S. Patent Application of Tenon's Catamaran® SI Joint implant, further fortifying the Company's patent portfolio of the innovative technologies associated with system.
- 42% increase in the number of surgical procedures in which the Catamaran System was used compared to the prior year.
- Received proceeds of $2.6 million and retired $1.25 million in secured debt through a Series A Preferred Stock financing.
- Expanded the Company's Board of Directors with the appointment of Kristine Jacques which deepened the bench with robust commercialization expertise.
Steve Foster, President and Chief Executive Officer of Tenon Medical, commented, "Our first quarter of 2024 reflected Tenon's continued progress with a 66% increase in revenue year-over-year driven by a 42% rise in surgical procedures utilizing The Catamaran System. We are encouraged by our fourth consecutive quarter of positive gross profit and stable gross margin of 65%, framing a solid path forward as we begin our second year of commercialization.
During the first quarter, we were pleased to report positive interim results from our ongoing post-market, multi-center, IRB approved clinical trial. The first patients are now hitting their 12-month milestone which includes a CT scan to assess bone healing. In addition to seeing marked improvements in widely used pain measures through VAS and ODI scores, we are seeing radiographic proof of bridging bone in these 12-month CT scans as assessed by an independent radiologist. To reinforce this positive data and progress, Tenon participated in the ISASS Conference in April featuring Dr. Matthew Davies to discuss his practical use of Catamaran in his SI treatment plan. Dr. Davies presented conclusive evidence from three Catamaran treated patients that delivered robust fusion results at the 12-month milestone. Taken together, this is further indication that Catamaran delivers on its promises."
Mr. Foster continued, "Additionally, in March, we welcomed Kristine Jacques to our Board of Directors bringing her significant experience in the medical devices field and successful go-to-market strategies of spinal-related technological innovation. We are honored to receive veteran counsel on the go-forward commercialization strategy for Tenon's Catamaran System combined with the post-market data to refine our sales and marketing approaches. In the first quarter, we hosted 12 physicians in targeted workshop activities and Catamaran focused training sessions.
Our first quarter performance demonstrated a successful first year of commercialization of The Catamaran's surgical procedure. We've achieved step change revenue growth, a stable and attractive gross margin and empirical evidence of the effectiveness of our SI implant and approach through our post-market study. As we develop our longer-term plan to further commercialize and expand our product portfolio to address SI Revision with our innovative patent protected technology, our commitment remains on delivering long-term value to all stakeholders," concluded Foster.
First Quarter 2024 Financial Results
Revenue was $719,000 in the first quarter of 2024, an increase of 66%, compared to $433,000 in the comparable year ago period. The increase in revenue for the first quarter, as compared to the same year ago period in 2023, was primarily due to an increase of 42% in the number of Catamaran System surgical procedures.
Gross profit in the first quarter of 2024, was $470,000, or 65% of revenues, compared to a gross loss of ($47,000), or (11)% of revenues, in the comparable year ago quarter. Gross profit and gross margin percentage improved due to higher revenue associated with the increase in the number of surgical procedures and realizing the operating leverage from the benefit of stable surgical costs.
Operating losses totaled $3.5 million for the first quarter of 2024, compared to a loss of $4.9 million in the first quarter of 2023. Decreases in operating expenses were primarily a result of a decline in research and development expenses and a reduction of partnership related sales and marketing expenses.
Net loss was $3.6 million for the first quarter of 2024, compared to a loss of $4.8 million in the same period of 2023. The Company expects to incur additional losses in the future.
As of March 31, 2024, cash and cash equivalents totaled $4.4 million, as compared to $2.4 million as of December 31, 2023. As of March 31, 2024, the Company had no outstanding debt due to full repayment of a secured note during the first quarter of 2024.
Q1 2024 Earnings Conference Call
Management will host an investor conference call at 4:30 p.m. ET (1:30 p.m. PT) today, Tuesday, May 14, 2024, to discuss Tenon's first quarter 2024 financial results, provide a corporate update, and conclude with Q&A with the Company's covering analysts. To participate, please use the following information:
| Date: | Tuesday, May 14, 2024 |
| Time: | 4:30 p.m. Eastern time |
| Dial-in: | 1-877-407-0792 |
| International Dial-in: | 1-201-689-8263 |
| Webcast: | TNON Conference Call |
Please dial in at least 10 minutes before the start of the call to ensure timely participation.
An audio playback of the call will be available through May 28, 2024, on Tenon's Investor Relations website at http://ir.tenonmed.com/ or via telephone replay by dialing 1-844-512-2921 (USA) or 1-412-317-6671 (International). The access code will be 13745886.
About Tenon Medical, Inc.
Tenon Medical, Inc., a medical device company formed in 2012, has developed The Catamaran™ SI Joint Fusion System that offers a novel, less invasive approach to the SI joint using a single, robust titanium implant. The system features the Catamaran™ Fixation Device which passes through both the axial and sagittal planes of the ilium and sacrum, stabilizing and transfixing the SI joint along its longitudinal axis. The angle and trajectory of the Catamaran surgical approach is also designed to provide a pathway away from critical neural and vascular structures and into the strongest cortical bone. Tenon is underway with a national launch of this system to address the greatly underserved market opportunity that exists in this space. For more information, please visit www.tenonmed.com.
The Tenon Medical logo and Tenon Medical, are registered trademarks of Tenon Medical, Inc. Catamaran is a trademark of Tenon Medical, Inc.
Safe Harbor
This press release contains "forward-looking statements," which are statements related to events, results, activities or developments that Tenon expects, believes or anticipates will or may occur in the future. Forward-looking often contain words such as "intends," "estimates," "anticipates," "hopes," "projects," "plans," "expects," "seek," "believes," "see," "should," "will," "would," "target," and similar expressions and the negative versions thereof. Such statements are based on Tenon's experience and perception of current conditions, trends, expected future developments and other factors it believes are appropriate under the circumstances, and speak only as of the date made. Forward-looking statements are inherently uncertain and actual results may differ materially from assumptions, estimates or expectations reflected or contained in the forward-looking statements as a result of various factors. For details on the uncertainties that may cause our actual results to be materially different than those expressed in our forward-looking statements, please review our Annual Report on Form 10-K on file with the Securities and Exchange Commission at www.sec.gov, particularly the information contained in the section entitled "Risk Factors". We undertake no obligation to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise unless required by law.
Investor Contact
Shannon Devine
MZ North America
203-741-8811
[email protected]
Tenon Medical, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
(In thousands, except per share data)
Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
Revenue | $ | 719 | $ | 433 | ||||
Cost of revenue | 249 | 480 | ||||||
Gross Profit (Loss) | 470 | (47 | ) | |||||
Operating Expenses | ||||||||
Research and development | 669 | 834 | ||||||
Sales and marketing | 1,381 | 2,026 | ||||||
General and administrative | 1,926 | 1,979 | ||||||
Total Operating Expenses | 3,976 | 4,839 | ||||||
Loss from Operations | (3,506 | ) | (4,886 | ) | ||||
Other Income (Expense) | ||||||||
Gain on investments | 27 | 56 | ||||||
Interest expense | (34 | ) | - | |||||
Other income (expense) | (63 | ) | - | |||||
Total Other Income (Expense), net | (70 | ) | 56 | |||||
Net Loss | $ | (3,576 | ) | $ | (4,830 | ) | ||
Net Loss Per Share of Common Stock | ||||||||
Basic and diluted | $ | (1.25 | ) | $ | (4.30 | ) | ||
Weighted Average Shares of Common Stock Outstanding | ||||||||
Basic and diluted | 2,853 | 1,124 | ||||||
Consolidated Statements of Comprehensive Loss: | ||||||||
Net loss | $ | (3,576 | ) | $ | (4,830 | ) | ||
Unrealized gain on investments | - | 13 | ||||||
Foreign currency translation adjustment | 46 | (1 | ) | |||||
Total Comprehensive Loss | $ | (3,530 | ) | $ | (4,818 | ) | ||
Tenon Medical, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share data)
| March 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 4,388 | $ | 2,428 | ||||
Accounts receivable | 571 | 518 | ||||||
Inventory | 632 | 554 | ||||||
Prepaid expenses | 360 | 389 | ||||||
Total current assets | 5,951 | 3,889 | ||||||
Fixed assets, net | 993 | 961 | ||||||
Deposits | 51 | 51 | ||||||
Operating lease right-of-use asset | 586 | 646 | ||||||
Deferred offering costs | 439 | 798 | ||||||
TOTAL ASSETS | $ | 8,020 | $ | 6,345 | ||||
Liabilities and Stockholders' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 266 | $ | 433 | ||||
Accrued expenses | 941 | 808 | ||||||
Current portion of accrued commissions | 792 | 470 | ||||||
Current portion of operating lease liability | 263 | 256 | ||||||
Convertible notes payable and accrued interest, net of debt discount of $0 and $77 at March 31, 2024 and December 31, 2023, respectively | - | 1,173 | ||||||
Total current liabilities | 2,262 | 3,140 | ||||||
Accrued commissions, net of current portion | 1,774 | 1,999 | ||||||
Operating lease liability, net of current portion | 360 | 428 | ||||||
Total liabilities | 4,396 | 5,567 | ||||||
Commitments and contingencies (Note 8) | ||||||||
Stockholders' equity: | ||||||||
Series A convertible preferred stock, $0.001 par value; 4,500,000 shares authorized at March 31, 2024 and December 31, 2023; 256,968 and 0 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 3,300 | - | ||||||
Common stock, $0.001 par value; 130,000,000 shares authorized at March 31, 2024 and December 31, 2023; 3,726,974 and 2,600,311 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 4 | 3 | ||||||
Additional paid-in capital | 58,969 | 55,894 | ||||||
Accumulated deficit | (58,649 | ) | (55,073 | ) | ||||
Accumulated other comprehensive loss | - | (46 | ) | |||||
Total stockholders' equity | 3,624 | 778 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 8,020 | $ | 6,345 | ||||
SOURCE: Tenon Medical, Inc.
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