Tenon Medical Reports Third Quarter 2024 Financial Results

~ 3Q Revenue of $0.9 Million, Consistent with Prior Quarter; Year to Date Revenue of $2.5 Million, Growth of 18.3% Compared to Prior Year ~

~ Published Interim Analysis from MAINSAIL™ Study; Post-Market Study Supports the Safety and Efficacy of the Catamaran SI Joint Fusion System® Including Radiographic Proof of Fusion ~

~ Initial Clinical Procedures Completed with New Catamaran SE Platform ~

~ Granted Issuance of Three U.S. Patents ~

~ Received Net Proceeds of ~$9.6 Million from Equity Financing Transactions ~

LOS GATOS, CA / ACCESSWIRE / November 13, 2024 / Tenon Medical, Inc. (NASDAQ:TNON) ("Tenon Medical" or the "Company"), a company transforming care for patients suffering from certain Sacroiliac Joint (SIJ) disorders, today reported financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 and Subsequent Highlights

• Revenue of $0.9 Million in the third quarter of 2024, a 1.6% decrease over the second quarter of 2024. Revenue of $2.5 million year-to-date, an 18.3% increase compared to the same year ago period.

• Gross profit of $418,000 as compared to $470,000 in the second quarter of 2024.

• Gross margin of 47% as compared to 54% in the second quarter of 2024. Gross margin of 54% year-to-date as compared to 32% in the same year ago period.

• Performed nearly 800 Catamaran System surgical procedures since commencement as of October 31, 2024.

• Strengthened balance sheet with receipt of approximately $9.6 million in net proceeds from equity financing transactions.

• Appointed Kevin Williamson as Chief Financial Officer.

• Hosted 21 physicians in targeted workshop activities and Catamaran focused training sessions.

• Published first peer reviewed interim analysis of the Catamaran SI Joint Fusion System® MAINSAIL™ study.

• Successfully completed initial clinical cases (alpha) of Tenon's new Catamaran SE SI Joint Fusion System.

• National introduction of Catamaran SE is expected in early 2025.

• Received notice of allowance and granted issuance of three additional U.S. Patents as a protection mechanism of the patent portfolio, its commitment to enhancing SI joint stabilization systems and methods, and as recognition to address the need for revision of other ineffective SI joint devices.

Steve Foster, President and Chief Executive Officer of Tenon Medical, commented, "During the third quarter of 2024, Tenon's focus was on continued operational execution and securing capital to help fund our ongoing growth initiatives, including the acceleration of our sales and marketing plan and initial clinical experience with the new Catamaran SE SI Joint Fusion System. While we experienced a slight reduction in cases during the summer months, we are pleased to have demonstrated solid performance through the third quarter in 2024 with revenue growth of 18% year-to-date compared to the prior year period. Our restructured sales operation is beginning to deliver results by driving exposure to our newly published clinical data and the new SE platform; however, we did experience unexpected reimbursement pre-authorization headwinds within the quarter that we believe to be transient in nature. We expect future coding clarity combined with our recently published clinical data will positively contribute to revenue results moving forward.

We've experienced an exciting and transformational several months. Notably, initial clinical experience with the new Catamaran SE, which extends our line of offerings with a smaller Catamaran implant and access profile, has received positive initial reviews. We will continue to collect feedback during the fourth quarter from this "alpha" period of the SE before our full commercial launch in early 2025. Additionally, the publication of our post-market clinical trial data in the Catamaran SI Joint Fusion System® MAINSAIL™ study further supports Tenon's conviction that the Catamaran procedure is safe and effective in treating patients suffering with SI joint disruption or degenerative sacroiliitis. Importantly, the data from this first publication and subsequent studies is critical empirical evidence to support insurance coverage of this important technology.

Lastly, as we announced in August, we are pleased to have Kevin Williamson join Tenon as Chief Financial Officer. Kevin's focus on strategic finance to bolster our balance sheet has helped to position the company for the long term. With the support of our recent capital raise, we are confident that we have the cash runway to advance Tenon into our next phase of growth with upcoming catalysts, including the full enrollment of our post-market clinical trial for the Catamaran SI Joint Fusion System and the next release of the study's interim analysis, which remains imminent," concluded Foster.

Third Quarter 2024 Financial Results

Revenue was $0.9 million in the third quarter of 2024, a decrease of 6%, compared to $0.9 million in the comparable year ago period. Revenue for the nine months ended September 30, 2024, was $2.5 million, an increase of 18%, compared to $2.1 million in nine months ended September 30, 2023. The fluctuations in revenue for the three and nine months ended September 30, 2024, as compared to the same period in 2023, was primarily due to a decrease of 15% and an increase of 5%, respectively, in the number of surgical procedures in which the Catamaran System was used. The number of procedures in the third quarter was impacted by the longer timeline of implementation, training and development of our restructured sales operation, as well as unexpected reimbursement pre-authorization impacts, leading to fewer surgeries performed during the quarter.

Gross profit in the third quarter of 2024 was $0.4 million, or 47% of revenues, compared to $0.5 million, or 57% of revenues in the comparable year ago quarter. For the nine months ended September 30, 2024, gross profit was $1.4 million, or 54% of revenues, compared to a gross profit of $0.7 million, or 32% of revenue, for the nine months ended September 30, 2023. Gross margin percentage has sustained a healthy level due to the absorption of more production overhead costs into our standard cost and operating leverage created due to lower relative fixed costs.

Operating expenses totaled $3.6 million for the third quarter of 2024, as compared to expenses of $3.9 million in the third quarter of 2023. For the nine months ended September 30, 2024, operating expenses totaled $12.0 million compared to $13.3 million in the prior year period. Operating expenses decreased due to the restructuring of our sales operations that reduced sales and marketing expenses and a decline in research and development. With a continued investment in growth, expanding the sales force is a priority and increases in sales and marketing are expected in future quarters.

Net loss was $3.2 million for the third quarter of 2024, an improvement from a loss of $3.3 million in the same period of 2023. For the nine months ended September 30, 2024, net loss was $10.6 million compared to $12.5 million in the previous year period. The Company expects to incur additional losses in the future.

As of September 30, 2024, cash and cash equivalents totaled $9.2 million, as compared to $2.4 million as of December 31, 2023. On September 17, 2024, the Company closed a public offering and received gross proceeds of approximately $4.5 million while receiving a total of $9.6 million in aggregate in net proceeds from equity financing transactions in September. As of September 30, 2024, the Company had no outstanding debt.

Q3 2024 Earnings Conference Call

Management will host an investor conference call at 4:30 p.m. ET (1:30 p.m. PT) today, Wednesday, November 13, 2024, to discuss Tenon's third 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:

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 November 21, 2024 by dialing 1-844-512-2921 (USA) or 1-412-317-6671 (International). The access code will be 1171684. In addition, a webcast replay will be available on Tenon's Investor Relations website at http://ir.tenonmed.com/.

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. Since the national launch of the Catamaran SI Joint Fusion System in October 2022 Tenon is focused on two commercial opportunities with its System in the SI Joint market which includes: 1) Primary SI Joint procedures, and 2) Revision procedures of failed SI Joint implants. For more information, please visit www.tenonmed.com.

The Tenon Medical logo shown above, and Catamaran®, PiSIF®, CAT PiSIF®, ETAD®, Posterior Inferior Sacroiliac Fusion®, CAT SIJ Fusion System®, Catamaran SIJ Fusion System®, Catamaran Inferior Posterior Fusion System®, Catamaran Transfixation Fusion System®, and Catamaran Transfixation Fusion Device® are registered trademarks of Tenon Medical, Inc. MAINSAIL^TM is also 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.

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Tenon Medical, Inc.

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SOURCE: Tenon Medical, Inc.