Surgical Procedures Increase 469%
Revenue Increased 450% Year-Over-Year to $743,000
Achieved Positive Gross Profit
LOS GATOS, CA / ACCESSWIRE / August 8, 2023 / Tenon Medical, Inc. (NASDAQ:TNON) ("Tenon Medical" or the "Company"), a company that has developed transformative care for patients suffering with certain sacroiliac disorders, today reported financial results for the second quarter ended June 30, 2023.
Second Quarter 2023 Highlights
- Revenue of $743,000, a 450% increase over the prior year quarter, and up 72% on a sequential basis compared to Q1 2023.
- 469% increase in the number of surgical procedures in which The Catamaran System was used compared to the prior year quarter.
- Company achieved positive gross profit of 26%.
- 43 physicians completed a Catamaran workshop compared to 34 for Q1 2023.
- Closed a $5.6 million public offering to be used for sales and marketing activities and general corporate purposes, including working capital.
"Our second quarter of 2023 was highlighted by triple digit revenue growth of 450% year over year, and 72% sequentially, as we continued to ramp adoption of The Catamaran System," said Steve Foster, CEO and President of Tenon Medical. "Following our significant revenue acceleration, gross profit turned positive in the quarter at $194,000, or 26% of revenue, marking a milestone for the Company.
"To reach our sales goals, we continued to execute our go-to-market strategy during the second quarter, hosting 43 physicians in Catamaran workshops to learn more about the effectiveness and ease of use of our product, as well as why the inferior-posterior approach is the optimized approach to the anatomy. This distinct implant system addresses a significant unmet market opportunity and is designed to produce broad and demonstrable advantages over market competitors. With an increase of 469% in the second quarter 2023 in the number of surgical procedures, we expect this number to continue to grow rapidly as our sales team broadens our aggressive marketing and promotion of the Catamaran System.
"Looking ahead, our recent $5.6 million capital raise, positions Tenon to accelerate our momentum in the second half of 2023. We are focused on sales and outreach through education and workshop events. We continue to reinforce our commitment to validating and differentiating patient outcomes and radiographic assessment with ongoing post market clinical studies. We expect to expand the application of our distinct product offering to address SI Revision, Adjunct to Multi-Level Fusion and SI procedures utilizing navigation software and imaging. This expansion will commence with select sites in September utilizing our next generation instrument set. This refinement promises improved graft handling, smaller access profile and enhanced access stabilization. We look forward to additional updates in the months to come as we build our sales infrastructure and execute on our growth objectives," concluded Foster.
Second Quarter 2023 Financial Results
Revenue was $743,000 in the second quarter of 2023, an increase of 450%, compared to $135,000 in the comparable year ago period. Revenue for the six months ended June 30, 2023, was $1.2 million, an increase of 471%, compared to $206,000 in six months ended June 30, 2022. The increase in revenue for the three and six months ended June 30, 2023, as compared to the same periods in 2022 was primarily due to increases of 469% and 476%, respectively, in the number of surgical procedures in which The Catamaran System was used.
Gross profit in the three months ended June 30, 2023, was $194,000, or 26% of revenues, compared to a gross loss of $136,000, or (101)% of revenues, in the comparable year ago quarter. For the six months ended June 30, 2023 gross profit was $147,000, or 13% of revenues, compared to a gross loss of $340,000, or (165)% of revenue, for the six months ended June 30, 2022. Gross margin percentage improved due to higher revenue associated with the increase in the number of surgical procedures.
Operating losses totaled $4.3 million for the second quarter of 2023, compared to a loss of $5.5 million in the second quarter 2022. The decrease in operating expenses were a result of the arbitration settlement and other consulting expenses in Q2 2022 offset by an increase in stock-based compensation, increases in sales and marketing and general expenses. For the six months ended June 30, 2023, operating losses totaled $9.2 million compared to $7.5 million in the prior year period. The increase in operating expenses were a result of an increase in stock-based compensation, increases in sales and marketing and general expenses as the Company builds its sales function and infrastructure to support future growth.
Net loss was $4.3 million for the second quarter of 2023, compared to a loss of $5.5 million in the same period of 2022. For the six months ended June 30, 2023, Net loss was $9.1 million compared to $7.8 million in the previous year period. The Company expects to incur additional losses in the future.
As of June 30, 2023, cash and cash equivalents and short-term investments totaled $6.3 million, as compared to $8.6 million as of December 31, 2022. As of June 30, 2023, the Company had no outstanding debt.
Q2 2023 Earnings Conference Call
Management will host an investor conference call at 4:30 p.m. ET (1:30 PT) today, Tuesday, August 8, 2023, to discuss Tenon's second quarter 2023 financial results, provide corporate update, and conclude with a Q&A with covering analysts. To participate, please use the following information:
| Date: | Tuesday, August 8, 2023 |
| Time: | 4:30 p.m. Eastern time |
| Dial-in: | 1-800-830-9649 |
| International Dial-in: | 1-213-992-4624 |
| 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 August 22, 2023, on Tenon's Investor Relations website at https://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 11152989.
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 Registration Statement on Form S-1 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 June 30, | Six Months Ended June 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenue | $ | 743 | $ | 135 | $ | 1,176 | $ | 206 | ||||||||
Cost of sales | 549 | 271 | 1,029 | 546 | ||||||||||||
Gross (Loss) Profit | 194 | (136 | ) | 147 | (340 | ) | ||||||||||
Operating Expenses | ||||||||||||||||
Research and development | 901 | 657 | 1,735 | 1,219 | ||||||||||||
Sales and marketing | 1,883 | 1,943 | 3,909 | 2,219 | ||||||||||||
General and administrative | 1,732 | 2,720 | 3,711 | 3,757 | ||||||||||||
Total Operating Expenses | 4,516 | 5,320 | 9,355 | 7,195 | ||||||||||||
Loss from Operations | (4,322 | ) | (5,456 | ) | (9,208 | ) | (7,535 | ) | ||||||||
Other Income (Expense) | ||||||||||||||||
Gain on investments | 37 | 35 | 93 | 36 | ||||||||||||
Interest expense | - | (88 | ) | - | (362 | ) | ||||||||||
Other income (expense) | - | 21 | - | 20 | ||||||||||||
Total Other Income (Expense), net | 37 | (32 | ) | 93 | (306 | ) | ||||||||||
Net Loss | $ | (4,285 | ) | $ | (5,488 | ) | $ | (9,115 | ) | $ | (7,841 | ) | ||||
Net Loss Per Share of Common Stock | ||||||||||||||||
Basic and diluted | $ | (0.33 | ) | $ | (0.65 | ) | $ | (0.75 | ) | $ | (1.66 | ) | ||||
Weighted-Average Shares of Common Stock Outstanding | ||||||||||||||||
Basic and diluted | 13,051 | 8,422 | 12,151 | 4,726 | ||||||||||||
Consolidated Statements of Comprehensive Loss: | ||||||||||||||||
Net loss | $ | (4,285 | ) | $ | (5,488 | ) | $ | (9,115 | ) | $ | (7,841 | ) | ||||
Unrealized gain (loss) on investments | 3 | (27 | 16 | (27 | ) | |||||||||||
Foreign currency translation adjustment | 13 | (21 | 12 | (21 | ) | |||||||||||
Total comprehensive loss | $ | (4,269 | ) | $ | (5,536 | ) | $ | (9,087 | ) | $ | (7,889 | ) | ||||
Tenon Medical, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share data)
| June 30, | December 31, | |||||||||
| 2023 | 2022 | |||||||||
| (Unaudited) | ||||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 5,852 | $ | 2,129 | ||||||
Short-term investments | 493 | 6,441 | ||||||||
Accounts receivable | 601 | 228 | ||||||||
Inventory | 570 | 415 | ||||||||
Prepaid expenses | 413 | 134 | ||||||||
Total current assets | 7,929 | 9,347 | ||||||||
Fixed assets, net | 945 | 793 | ||||||||
Deposits | 51 | 51 | ||||||||
Operating lease right-of-use asset | 762 | 873 | ||||||||
Deferred offering costs | 168 | 25 | ||||||||
TOTAL ASSETS | $ | 9,855 | $ | 11,089 | ||||||
| Liabilities and Stockholders' EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 912 | $ | 550 | ||||||
Accrued expenses | 1,130 | 717 | ||||||||
Current portion of accrued commissions | 1,418 | 1,035 | ||||||||
Current portion of operating lease liability | 242 | 228 | ||||||||
Warrant liability | 3,164 | - | ||||||||
Total current liabilities | 6,866 | 2,530 | ||||||||
Accrued commissions, net of current portion | 1,526 | 1,624 | ||||||||
Operating lease liability, net of current portion | 560 | 683 | ||||||||
Total liabilities | 8,952 | 4,837 | ||||||||
Commitments and contingencies (Note 8) | ||||||||||
Stockholders' equity (deficit): | ||||||||||
Common stock, $0.001 par value; 130,000,000 shares authorized at June 30, 2023 and December 31, 2022; 21,623,769 and 11,236,801 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 22 | 11 | ||||||||
Additional paid-in capital | 49,560 | 45,833 | ||||||||
Accumulated deficit | (48,607 | ) | (39,492 | ) | ||||||
Accumulated other comprehensive loss | (72 | ) | (100 | ) | ||||||
Total stockholders' equity | 903 | 6,252 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 9,855 | $ | 11,089 | ||||||
SOURCE: Tenon Medical, Inc.