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Transmedics Group Inc

TransMedics Reports Third Quarter 2024 Financial Results

ANDOVER, Mass. , Oct. 28, 2024 /PRNewswire/ -- TransMedics Group, Inc. ("TransMedics") (Nasdaq: TMDX), a medical technology company that is transforming organ transplant therapy for patients with end-stage lung, heart, and liver failure, today reported financial results for the quarter ended September 30, 2024.

Recent Highlights

  • Total revenue of $108.8 million in the third quarter of 2024, a 64% increase compared to the third quarter of 2023
  • Generated net income of $4.2 million or $0.12 per diluted share in the third quarter of 2024
  • Owned 18 total aircraft as of September 30, 2024

"We are proud of our performance year to date and look forward to ending 2024 on a strong note," said Waleed Hassanein, MD, President and Chief Executive Officer. "We continued to make meaningful progress across each of our growth initiatives through the third quarter and maintain our conviction in our growth runway for 2025 and beyond. Overall, we remain well on track to reach our stated target of achieving 10,000 OCS transplant cases per year in the U.S. by 2028."

Third Quarter 2024 Financial Results
Total revenue for the third quarter of 2024 was $108.8 million, a 64% increase compared to $66.4 million in the third quarter of 2023. The increase was driven primarily by the increase in utilization of the Organ Care System ("OCS™") across all three organs through the National OCS Program ("NOP™") as well as additional revenue generated by TransMedics logistics services.

Gross margin for the third quarter of 2024 was 56%, compared to 61% in the third quarter of 2023. The change from prior year is a result of a higher proportion of service revenue compared to product revenue, which carries a higher margin, in 2024.  In addition, we made investments in our NOP network to prepare for future growth.

Operating expenses for the third quarter of 2024 were $56.9 million, compared to $69.0 million in the third quarter of 2023. The third quarter of 2023 included $27.2 million of non-recurring in-process research and development.  Increases in operating expense were driven primarily by increased research and development investment as well as investment throughout the organization to support the growth of the company. Third quarter operating expenses in 2024 included $7.6 million of stock compensation expense compared to $5.1 million of stock compensation expense in the third quarter of 2023.

Net income for the third quarter of 2024 was $4.2 million, or 3.9% of revenue, compared to a net loss of $25.4 million in the third quarter of 2023.

Cash was $330.1 million as of September 30, 2024 compared to $362.8 million as of June 30, 2024.

2024 Financial Outlook
 TransMedics continues to expect revenue for the full year 2024 to be in the range of $425 million to $445 million, which represents 76% to 84% growth compared to the company's prior year revenue. 

Webcast and Conference Call Details
The TransMedics management team will host a conference call beginning at 4:30 p.m. ET / 1:30 p.m. PT on October 28, 2024. A live and archived webcast of the event will be available on the "Investors" section of the TransMedics website at www.transmedics.com.

About TransMedics Group, Inc.
 TransMedics is the world's leader in portable extracorporeal warm perfusion and assessment of donor organs for transplantation. Headquartered in Andover, Massachusetts, the company was founded to address the unmet need for more and better organs for transplantation and has developed technologies to preserve organ quality, assess organ viability prior to transplant, and potentially increase the utilization of donor organs for the treatment of end-stage heart, lung, and liver failure.

Forward-Looking Statements
This press release contains forward-looking statements with respect to, among other things, our full-year guidance, our growth initiatives and runway, and statements about our operations, financial position, and business plans and our target of achieving 10,000 OCS transplant cases per year in the U.S. by 2028. For this purpose, all statements other than statements of historical facts are forward-looking statements. The words "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "could," "target," "predict," "seek" and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties. Our management cannot predict all risks, nor can we assess the impact of all factors or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in or implied by any forward-looking statements we may make. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially and adversely from those anticipated in or implied by the forward-looking statements. Some of the key factors that could cause actual results to differ include: our ability to maintain profitability on a sustained basis; our ability to attract, train and retain key personnel; our existing and any future indebtedness, including our ability to comply with affirmative and negative covenants under our credit agreement to which we will remain subject until maturity; the fluctuation of our financial results from quarter to quarter; our need to raise additional funding and our ability to obtain it on favorable terms, or at all; our ability to use net operating losses and research and development credit carryforwards; our dependence on the success of the Organ Care System or OCS; our ability to expand access to the OCS through our National OCS Program or NOP; our ability to scale our manufacturing and sterilization capabilities to meet increasing demand for our products; the rate and degree of market acceptance of the OCS; our ability to educate patients, surgeons, transplant centers and private and public payors on the benefits offered by the OCS; our ability to improve the OCS platform and develop the next generation of the OCS products; our dependence on a limited number of customers for a significant portion of our revenue; our ability to maintain regulatory approvals or clearances for our OCS products in the United States, the European Union, and other select jurisdictions worldwide; our ability to adequately respond to the Food and Drug Administration or FDA, or other competent authorities, follow-up inquiries in a timely manner; the performance of our third-party suppliers and manufacturers; our use of third parties to transport donor organs and medical personnel for our NOP and our ability to maintain and grow our logistics capabilities to support our NOP and reduce dependence on third party transportation, including by means of attracting, training and retaining pilots, and the acquisition, maintenance or replacement of fixed-wing aircraft for our aviation transportation services or other acquisitions, joint ventures or strategic investments; our ability to maintain Federal Aviation Administration or FAA or other regulatory licenses or approvals for our aircraft transportation services; price increases of the components of our products and maintenance, parts and fuel for our aircraft; the timing or results of post-approval studies and any clinical trials for the OCS; our manufacturing, sales, marketing and clinical support capabilities and strategy; attacks against our information technology infrastructure; the economic, political and other risks associated with our foreign operations; our ability to protect, defend, maintain and enforce our intellectual property rights relating to the OCS and avoid allegations that our products infringe, misappropriate or otherwise violate the intellectual property rights of third parties; the pricing of the OCS, as well as the reimbursement coverage for the OCS in the United States and internationally; regulatory developments in the United States, European Union and other jurisdictions; the extent and success of competing products or procedures that are or may become available; our ability to service our 1.50% convertible senior notes, due 2028; the impact of any product recalls or improper use of our products; our estimates regarding revenues, expenses and needs for additional financing; and other factors that may be described in our filings with the Securities and Exchange Commission (the "SEC"). Additional information will be made available in our annual and quarterly reports and other filings that we make with the SEC. The forward-looking statements in this press release speak only as of the date of this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and we are not able to predict all of them. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable law.

Investor Contact:
 Brian Johnston
Laine Morgan
Gilmartin Group
332-895-3222
Investors@transmedics.com

TransMedics Group, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)




Three Months Ended September 30,


Nine Months Ended September 30,



2024


2023


2024


2023

Revenue:









Net product revenue


$65,861


$47,740


$198,918


$124,195

Service revenue


42,900


18,690


120,998


36,254

Total revenue


108,761


66,430


319,916


160,449

Cost of revenue:









Cost of net product revenue


13,246


11,086


41,800


26,950

Cost of service revenue


34,670


14,682


88,048


27,330

Total cost of revenue


47,916


25,768


129,848


54,280

Gross profit


60,845


40,662


190,068


106,169










Gross margin


56 %


61 %


59 %


66 %










Operating expenses:









Research, development and clinical trials


14,266


11,132


39,504


25,294

Acquired in-process research and development expenses


—


27,212


—


27,212

Selling, general and administrative


42,656


30,653


121,712


84,993

Total operating expenses


56,922


68,997


161,216


137,499

Income (loss) from operations


3,923


(28,335)


28,852


(31,330)

Other income (expense):









Interest expense


(3,617)


(3,590)


(10,838)


(7,186)

Interest income and other income (expense)


3,939


4,996


10,777


7,982

          Total other income (expense), net


322


1,406


(61)


796

Income (loss) before income taxes


4,245


(26,929)


28,791


(30,534)

(Provision) benefit for income taxes


(29)


1,507


(184)


1,475

Net income (loss)


$4,216


$(25,422)


$28,607


$(29,059)

Net income (loss) per share:









Basic


$0.13


$(0.78)


$0.86


$(0.89)

Diluted


$0.12


$(0.78)


$0.81


$(0.89)

Weighted average common shares outstanding:









Basic


33,441,394


32,614,059


33,108,253


32,474,522

Diluted


35,683,952


32,614,059


35,218,756


32,474,522

 

TransMedics Group, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)




September 30, 2024


December 31, 2023

Assets




Current assets:




Cash


$330,094


$394,812

Accounts receivable


90,128


63,576

Inventory


52,152


44,235

Prepaid expenses and other current assets


20,101


8,031

           Total current assets


492,475


510,654

Property, plant and equipment, net


271,739


173,941

Operating lease right-of-use assets


6,943


6,546

Restricted cash


500


500

Goodwill


11,549


11,990

Acquired intangible assets, net


2,202


2,354

Other non-current assets


163


62

           Total assets


$785,571


$706,047

Liabilities and Stockholders' Equity




Current liabilities:




Accounts payable


$13,134


$12,717

Accrued expenses and other current liabilities


42,187


38,221

Deferred revenue


2,184


1,961

Operating lease liabilities


2,543


2,035

Total current liabilities


60,048


54,934

Convertible senior notes, net


449,237


447,140

Long-term debt, net


59,294


59,064

Operating lease liabilities, net of current portion


7,072


7,707

Total liabilities


575,651


568,845

    Total stockholders' equity


209,920


137,202

    Total liabilities and stockholders' equity


$785,571


$706,047

 

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SOURCE TransMedics Group, Inc.