Tenon Medical, Inc. (NASDAQ:TNON) (“Tenon Medical” or the “Company”), a company that has transformative care for patients suffering with certain sacroiliac disorders, today reported financial results for the first quarter ended March 31, 2023.
~ Surgical Procedures Increase 489% for the Quarter ~
~ First Quarter 2023 Revenue Increased 510% Year-Over-Year ~
~ Significant Improvement in Gross Margin, Provides Gross Margin Guidance for 2Q 2023 ~
LOS GATOS, CA / ACCESSWIRE / May 9, 2023 / Tenon Medical, Inc. (NASDAQ:TNON) (“Tenon Medical” or the “Company”), a company that has transformative care for patients suffering with certain sacroiliac disorders, today reported financial results for the first quarter ended March 31, 2023.
First Quarter 2023 Highlights
- Revenue of $433,000 in the first quarter of 2023, a 510% increase over the prior year quarter, and up 56% on a sequential basis compared to the fourth quarter 2022
- 34 physicians have completed a Catamaran workshop during Q1 2023
- CMS final rule effective January 1, 2023, for code 27279 increases 2023 Medicare facility fee by approximately 26% for SI joint fusion procedures performed in ASCs and 33% for these procedures done in hospital outpatient settings
“The first quarter of 2023 was highlighted by ongoing revenue growth from a significant increase in surgical procedures in which the Catamaran System was used,” said Steve Foster, CEO and President of Tenon Medical. “We remain highly focused on continuing to build our commercial infrastructure and sales management team, which produced 510% growth year over year, and 56% growth sequentially, in the first quarter. Our go-to-market strategy is delivering these results by targeting physicians who have been trained on SI procedures or have significant experience with SI surgical technologies utilizing area sales managers, clinical specialists, and independent distributors, and conducting local training workshop programs. During Q1 we hosted 34 physicians in Catamaran workshops to learn more about how the implant transfixes and stabilizes the SI joint, as well as why the inferior-posterior approach is an optimal entry point.
“In summary, we began 2023 well-positioned to build revenue and growth with the Catamaran which is FDA cleared and reimbursement secured. We are now beginning to see the revenue ramp from our commercialization to a large market with accelerating recognition in the physician community. We are also reinforcing our commitment to validating and differentiating patient outcomes and radiographic assessment with the Catamaran System with ongoing post market clinical studies. Looking ahead, we believe we can continue our momentum with a diligent focus on sales and outreach through education and workshop events, and building long-term value for our shareholders,” concluded Foster.
First Quarter 2023 Financial Results
Revenue was $433,000 in the first quarter of 2023, an increase of 510%, compared to $71,000 in the comparable year ago period. The increase in revenue in the first quarter was primarily due to an increase of 489% in the number of surgical procedures in which the Catamaran System was used.
Gross loss in the three months ended March 31, 2023, was $(47,000) compared to a gross loss of ($204,000) in the comparable year ago quarter. Gross margin percentage was (11)% in the first quarter of 2023 and (287)% in the quarter ended March 31, 2022. Gross margin percentage improved due to higher revenue associated with the increase in the number of surgical procedures.
Operating losses totaled $4.9 million for the first quarter of 2023, compared to a loss of $2.1 million in the first quarter 2022. Increases 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 $4.8 million for the first quarter of 2023, compared to a loss of $2.4 million in the same period of 2022. The Company expects to incur additional losses in the future.
As of March 31, 2023, cash and cash equivalents and short-term investments totaled $4.9 million, as compared to $8.6 million as of December 31, 2022. As of March 31, 2023, we had no outstanding debt.
Second Quarter Outlook
Based on the first quarter 2023 results, the Company expects to produce a positive gross margin for second quarter 2023.
Q1 2023 Earnings Conference Call
Management will host an investor conference call at 4:30 p.m. ET (1:30 PT) today, Tuesday, May 9, 2023, to discuss Tenon’s first 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, May 9, 2023 |
| Time: | 4:30 p.m. Eastern time |
| Dial-in: | 1-888-886-7786 |
| International Dial-in: | 1-416-764-8658 |
| 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 23, 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 90925891.
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 Inferior-Posterior 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, transfixing the SI joint along its longitudinal axis. With an entry that mimics SI joint injection, the surgical approach is direct to the joint and inferior to the wide and variable dorsal recess. The angle and trajectory of the Inferior-Posterior approach is designed to provide a pathway away from critical neural and vascular structures and into the strongest cortical bone. Tenon is preparing 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
tenon@mzgroup.us
Tenon Medical, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
(In thousands, except per share data)
| | Three Months Ended March 31, | |||||||
| | 2023 | 2022 | ||||||
| Revenue | $ | 433 | $ | 71 | ||||
| Cost of sales | 480 | 275 | ||||||
| Gross Loss | (47 | ) | (204 | ) | ||||
| Operating Expenses | ||||||||
| Research and development | 834 | 562 | ||||||
| Sales and marketing | 2,026 | 276 | ||||||
| General and administrative | 1,979 | 1,037 | ||||||
| Total Operating Expenses | 4,839 | 1,875 | ||||||
| Loss from Operations | (4,886 | ) | (2,079 | ) | ||||
| Other Income (Expense) | ||||||||
| Gain on investments | 56 | 1 | ||||||
| Interest expense | - | (274 | ) | |||||
| Other income (expense) | - | (1 | ) | |||||
| Total Other Income (Expense), net | 56 | (274 | ) | |||||
| Net Loss | $ | (4,830 | ) | $ | (2,353 | ) | ||
| Net Loss Per Share of Common Stock | ||||||||
| Basic and diluted | $ | (0.43 | ) | $ | (2.38 | ) | ||
| | ||||||||
| Weighted-Average Shares of Common Stock Outstanding | ||||||||
| Basic and diluted | 11,242 | 990 | ||||||
| | ||||||||
| Consolidated Statements of Comprehensive Loss: | ||||||||
| Net loss | $ | (4,830 | ) | $ | (2,353 | ) | ||
| Unrealized gain on investments | 13 | - | ||||||
| Foreign currency translation adjustment | (1 | ) | - | |||||
| Total Comprehensive Loss | $ | (4,818 | ) | $ | (2,353 | ) | ||
Tenon Medical, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share data)
| | March 31, | December 31, | ||||||
| | 2023 | 2022 | ||||||
| | (Unaudited) | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,179 | $ | 2,129 | ||||
| Short-term investments | 1,737 | 6,441 | ||||||
| Accounts receivable | 316 | 228 | ||||||
| Inventory | 416 | 415 | ||||||
| Prepaid expenses | 193 | 134 | ||||||
| Total current assets | 5,841 | 9,347 | ||||||
| Fixed assets, net | 852 | 793 | ||||||
| Deposits | 51 | 51 | ||||||
| Operating lease right-of-use asset | 818 | 873 | ||||||
| Deferred offering costs | 67 | 25 | ||||||
| TOTAL ASSETS | $ | 7,629 | $ | 11,089 | ||||
| | ||||||||
| Liabilities and Stockholders’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 928 | $ | 550 | ||||
| Accrued expenses | 530 | 717 | ||||||
| Current portion of accrued commissions | 1,059 | 1,035 | ||||||
| Current portion of operating lease liability | 235 | 228 | ||||||
| Total current liabilities | 2,752 | 2,530 | ||||||
| Accrued commissions, net of current portion | 1,781 | 1,624 | ||||||
| Operating lease liability, net of current portion | 622 | 683 | ||||||
| Total liabilities | 5,155 | 4,837 | ||||||
| | ||||||||
| Commitments and contingencies (Note 8) | ||||||||
| Stockholders’ equity (deficit): | ||||||||
| Common stock, $0.001 par value; 130,000,000 shares authorized at March 31, 2023 and December 31, 2022; 11,251,299 and 11,236,801 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 11 | 11 | ||||||
| Additional paid-in capital | 46,873 | 45,833 | ||||||
| Accumulated deficit | (44,322 | ) | (39,492 | ) | ||||
| Accumulated other comprehensive income loss | (88 | ) | (100 | ) | ||||
| Total stockholders’ equity | 2,474 | 6,252 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 7,629 | $ | 11,089 | ||||
SOURCE: Tenon Medical, Inc.
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