Insulet Corporation (NASDAQ: PODD) (Insulet or the Company), the global leader in tubeless insulin pump technology with its Omnipod® brand of products, today announced financial results for the three months and full year ended December 31, 2022.
Full Year Financial Highlights:
Fourth Quarter Financial Highlights:
Recent Strategic Highlights:
“2022 was another successful year for Insulet as we delivered strong revenue growth and advanced our strategic priorities,” said Jim Hollingshead, President and Chief Executive Officer. “We entered 2023 with significant momentum and expect to further strengthen our foundation for long-term sustainable growth. We are excited about the commercial launch of Omnipod 5, which is a transformative technology offering users award-winning innovation and improved outcomes and quality of life. We are proud of all we have accomplished and the entire Insulet team is focused on building on our success and furthering our mission to improve the lives of people with diabetes.”
1 See description of non-GAAP financial measures contained in this release.
2 https://pubmed.ncbi.nlm.nih.gov/36787903/.
3 https://pubmed.ncbi.nlm.nih.gov/36763329/.
4 https://www.newsweek.com/rankings/americas-most-responsible-companies-2023.
2023 Outlook:
Revenue Guidance (in constant currency):
Gross Margin and Operating Margin Guidance:
For the year ending December 31, 2023, the Company expects gross margin of 65% to 66%.
For the year ending December 31, 2023, the Company expects operating margin of high-single digits.
Conference Call:
Insulet will host a conference call at 4:30 p.m. (Eastern Time) on February 23, 2023 to discuss the financial results and outlook. The link to the live call will be available on the Investor Relations section of the Company’s website at investors.insulet.com, “Events and Presentations,” and will be archived for future reference. The live call may also be accessed by dialing (888) 770-7129 for domestic callers or (929) 203-2109 for international callers, passcode 5904836.
About Insulet Corporation:
Insulet Corporation (NASDAQ: PODD), headquartered in Massachusetts, is an innovative medical device company dedicated to simplifying life for people with diabetes and other conditions through its Omnipod product platform. The Omnipod Insulin Management System provides a unique alternative to traditional insulin delivery methods. With its simple, wearable design, the disposable Pod provides up to three days of non-stop insulin delivery, without the need to see or handle a needle. Insulet’s latest innovation, the Omnipod® 5 Automated Insulin Delivery System, is a tubeless automated insulin delivery system, integrated with a continuous glucose monitor to manage blood sugar with no multiple daily injections, zero fingersticks, and is fully controlled by a compatible personal smartphone. Insulet also leverages the unique design of its Pod by tailoring its Omnipod technology platform for the delivery of non-insulin subcutaneous drugs across other therapeutic areas. For more information, please visit: insulet.com and omnipod.com.
Non-GAAP Measures:
The Company uses the following non-GAAP financial measures:
Insulet presents the above non-GAAP financial measures because management uses them as supplemental measures in assessing the Company’s operating performance, and the Company believes they are helpful to investors, and other interested parties as measures of comparative operating performance from period to period. They also are commonly used measures in determining business value and the Company uses them internally to report results.
These non-GAAP financial measures should be considered supplemental to, and not a substitute for, the Company’s reported financial results prepared in accordance with GAAP. Furthermore, the Company’s definition of these non-GAAP measures may differ from similarly titled measures used by others. Because non-GAAP financial measures exclude the effect of items that will increase or decrease the Company’s reported results of operations, Insulet strongly encourages investors to review the Company’s consolidated financial statements and publicly filed reports in their entirety.
Forward-Looking Statement:
This press release contains forward-looking statements regarding, among other things, future operating and financial performance, product success and efficacy, the outcome of studies and trials and the approval of products by regulatory bodies. These forward-looking statements are based on management’s current beliefs, assumptions and estimates and are not intended to be a guarantee of future events or performance. If management’s underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed or implied by the forward-looking statements.
Risks and uncertainties include, but are not limited to adverse changes in general economic conditions as well as risks associated with public health crises and pandemics, such as the COVID-19 global pandemic, government actions and restrictive measures implemented in response, supply chain disruptions, delays in clinical trials, and other impacts to the business, our customers, suppliers, and employees; dependence on a principal product platform; ability to maintain and grow our customer base; ability to scale the business to support revenue growth; maintenance of an effective sales force and expansion of distribution network; ability to secure and retain adequate coverage or reimbursement from third-party payors; impact of healthcare reform laws; impact of competitive products, technological change and product innovation; ability to design, develop, manufacture and commercialize future products; inability to maintain or enter into new license or other agreements with respect to continuous glucose monitors, data management systems or other rights necessary to sell our current product and/or commercialize future products; challenges to the future development of our non-insulin drug delivery product line; international business risks, including regulatory, commercial and logistics risks; supply problems or price fluctuations with sole source or third-party suppliers on which we are dependent; failure to retain key suppliers; ability to protect our intellectual property and other proprietary rights and potential conflicts with the intellectual property of third parties; extensive government regulation applicable to medical devices as well as complex and evolving privacy and data protection laws; adverse regulatory or legal actions relating to the Omnipod System or future products; failure of our contract manufacturer or component suppliers to comply with the U.S. Food and Drug Administration’s quality system regulations; potential adverse impacts resulting from a recall, or discovery of serious safety issues, or product liability lawsuits relating to off-label use; the potential violation of anti-bribery/anti-corruption laws; breaches or failures of our product or information technology systems, including by cyberattack; unfavorable results of clinical studies, including issues with third parties conducting any studies, or future publication of articles or announcement of positions by diabetes associations or other organizations that are unfavorable; the concentration of manufacturing operations and storage of inventory in a limited number of locations; loss of employees or inability to identify and recruit new employees; ability to generate sufficient cash to service our indebtedness or raise additional funds on acceptable terms or at all; the volatility of the trading price of our common stock; risks related to the conversion of outstanding Convertible Senior Notes; and potential limitations on our ability to use net operating loss carryforwards.
For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item 1A - Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, which we may update in Part II, Item 1A - Risk Factors in Quarterly Reports on Form 10-Q we have filed or will file hereafter. Any forward-looking statement made in this release speaks only as of the date of this release. Insulet does not undertake to update any forward-looking statement, other than as required by law.
©2023 Insulet Corporation. Omnipod, Omnipod DASH and Omnipod 5 are registered trademarks of Insulet Corporation.
INSULET CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||||
| Three Months Ended December 31, |
| Years Ended December 31, | ||||||||||||
(dollars in millions, except per share data) |
| 2022 |
|
|
| 2021 |
|
|
| 2022 |
|
|
| 2021 |
|
Revenue | $ | 369.7 |
|
| $ | 307.7 |
|
| $ | 1,305.3 |
|
| $ | 1,098.8 |
|
Cost of revenue |
| 152.4 |
|
|
| 94.5 |
|
|
| 499.7 |
|
|
| 346.7 |
|
Gross profit |
| 217.3 |
|
|
| 213.2 |
|
|
| 805.6 |
|
|
| 752.1 |
|
Research and development expenses |
| 49.5 |
|
|
| 41.8 |
|
|
| 180.2 |
|
|
| 160.1 |
|
Selling, general and administrative expenses |
| 144.3 |
|
|
| 121.7 |
|
|
| 587.8 |
|
|
| 466.0 |
|
Operating income |
| 23.5 |
|
|
| 49.7 |
|
|
| 37.6 |
|
|
| 126.0 |
|
Interest expense, net |
| (2.7 | ) |
|
| (15.1 | ) |
|
| (26.7 | ) |
|
| (61.2 | ) |
Loss on extinguishment of debt |
| — |
|
|
| (0.8 | ) |
|
| — |
|
|
| (42.4 | ) |
Other expense, net |
| 1.5 |
|
|
| (0.4 | ) |
|
| (1.1 | ) |
|
| (1.9 | ) |
Income before income taxes |
| 22.3 |
|
|
| 33.4 |
|
|
| 9.8 |
|
|
| 20.5 |
|
Income tax expense |
| (5.3 | ) |
|
| (4.2 | ) |
|
| (5.2 | ) |
|
| (3.7 | ) |
Net income | $ | 17.0 |
|
| $ | 29.2 |
|
| $ | 4.6 |
|
| $ | 16.8 |
|
|
|
|
|
|
|
|
| ||||||||
Net income per share: |
|
|
|
|
|
|
| ||||||||
Basic | $ | 0.25 |
|
| $ | 0.42 |
|
| $ | 0.07 |
|
| $ | 0.25 |
|
Diluted | $ | 0.24 |
|
| $ | 0.42 |
|
| $ | 0.07 |
|
| $ | 0.24 |
|
Weighted-average number of common shares outstanding (in thousands): |
|
|
|
|
|
|
| ||||||||
Basic |
| 69,472 |
|
|
| 69,070 |
|
|
| 69,375 |
|
|
| 67,698 |
|
Diluted |
| 70,020 |
|
|
| 69,814 |
|
|
| 69,910 |
|
|
| 68,579 |
|
INSULET CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||
| As of December 31, | ||||
(dollars in millions) |
| 2022 |
|
| 2021 |
ASSETS |
|
|
| ||
Cash and cash equivalents | $ | 674.7 |
| $ | 791.6 |
Accounts receivable, net |
| 205.6 |
|
| 161.0 |
Inventories |
| 346.8 |
|
| 303.2 |
Prepaid expenses and other current assets |
| 86.9 |
|
| 74.0 |
Total current assets |
| 1,314.0 |
|
| 1,329.8 |
Property, plant and equipment, net |
| 599.9 |
|
| 536.5 |
Goodwill and other intangible assets, net |
| 127.2 |
|
| 76.4 |
Other assets |
| 210.0 |
|
| 106.1 |
Total assets | $ | 2,251.1 |
| $ | 2,048.8 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
| ||
Accounts payable | $ | 30.8 |
| $ | 37.7 |
Accrued expenses and other current liabilities |
| 306.4 |
|
| 166.0 |
Current portion of long-term debt |
| 27.5 |
|
| 25.1 |
Total current liabilities |
| 364.7 |
|
| 228.8 |
Long-term debt, net |
| 1,374.3 |
|
| 1,248.8 |
Other liabilities |
| 35.7 |
|
| 14.9 |
Total liabilities |
| 1,774.7 |
|
| 1,492.5 |
Stockholders’ equity |
| 476.4 |
|
| 556.3 |
Total liabilities and stockholders’ equity | $ | 2,251.1 |
| $ | 2,048.8 |
INSULET CORPORATION NON-GAAP RECONCILIATIONS (UNAUDITED) CONSTANT CURRENCY REVENUE GROWTH | ||||||||||||||
| Three Months Ended December 31, |
|
|
|
|
|
| |||||||
(dollars in millions) |
| 2022 |
|
| 2021 |
| Percent Change |
| Currency Impact |
| Constant Currency | |||
Revenue: |
|
|
|
|
|
|
|
|
| |||||
U.S. Omnipod | $ | 276.2 |
| $ | 190.5 |
| 45.0 | % |
| — | % |
| 45.0 | % |
International Omnipod |
| 90.2 |
|
| 85.3 |
| 5.7 | % |
| (12.9) | % |
| 18.6 | % |
Total Omnipod |
| 366.4 |
|
| 275.8 |
| 32.8 | % |
| (4.0) | % |
| 36.8 | % |
Drug Delivery |
| 3.3 |
|
| 31.9 |
| (89.7) | % |
| — | % |
| (89.7) | % |
Total | $ | 369.7 |
| $ | 307.7 |
| 20.1 | % |
| (3.6) | % |
| 23.7 | % |
| Years Ended December 31, |
|
|
|
|
|
| |||||||
(dollars in millions) |
| 2022 |
|
| 2021 |
| Percent Change |
| Currency Impact |
| Constant Currency | |||
Revenue: |
|
|
|
|
|
|
|
|
| |||||
U.S. Omnipod | $ | 884.8 |
| $ | 651.5 |
| 35.8 | % |
| — | % |
| 35.8 | % |
International Omnipod |
| 363.0 |
|
| 359.9 |
| 0.9 | % |
| (11.2) | % |
| 12.1 | % |
Total Omnipod |
| 1,247.8 |
|
| 1,011.4 |
| 23.4 | % |
| (4.0) | % |
| 27.4 | % |
Drug Delivery |
| 57.5 |
|
| 87.4 |
| (34.2) | % |
| — | % |
| (34.2) | % |
Total | $ | 1,305.3 |
| $ | 1,098.8 |
| 18.8 | % |
| (3.7) | % |
| 22.5 | % |
INSULET CORPORATION NON-GAAP RECONCILIATIONS CONTINUED (UNAUDITED) ADJUSTED GROSS MARGIN, OPERATING MARGIN, NET INCOME AND DILUTED EPS | ||||||||||||||||||||
| Three Months Ended December 31, 2022 | |||||||||||||||||||
(in millions) | Gross Profit |
| Percent of Revenue |
| Operating Income |
| Percent of Revenue |
| Net Income(4) |
| Diluted Earnings per Share | |||||||||
GAAP | $ | 217.3 |
| 58.8 | % |
| $ | 23.5 |
|
| 6.4 | % |
| $ | 17.0 |
|
| $ | 0.24 |
|
Voluntary MDCs(1) |
| 21.1 |
|
|
|
| 21.1 |
|
|
|
|
| 21.1 |
|
|
| 0.30 |
| ||
Legal costs(2) |
| — |
|
|
|
| (2.1 | ) |
|
|
|
| (2.1 | ) |
|
| (0.03 | ) | ||
Non-GAAP | $ | 238.4 |
| 64.5 | % |
| $ | 42.5 |
|
| 11.5 | % |
| $ | 36.0 |
|
| $ | 0.52 |
|
| Year Ended December 31, 2022 | ||||||||||||||||
(in millions) | Gross Profit |
| Percent of Revenue |
| Operating Income |
| Percent of Revenue |
| Net Income(4) |
| Diluted Earnings per Share | ||||||
GAAP | $ | 805.6 |
| 61.7 | % |
| $ | 37.6 |
| 2.9 | % |
| $ | 4.6 |
| $ | 0.07 |
Voluntary MDCs(1) |
| 57.9 |
|
|
|
| 57.9 |
|
|
|
| 57.9 |
|
| 0.83 | ||
Legal costs(2) |
| — |
|
|
|
| 25.2 |
|
|
|
| 25.2 |
|
| 0.36 | ||
CEO transition costs(3) |
| — |
|
|
|
| 3.4 |
|
|
|
| 3.4 |
|
| 0.05 | ||
Non-GAAP | $ | 863.5 |
| 66.2 | % |
| $ | 124.1 |
| 9.5 | % |
| $ | 91.1 |
| $ | 1.30 |
| Three Months Ended December 31, 2021 |
| Year Ended December 31, 2021 | ||||||||
(in millions) | Net Income(4) |
| Diluted Earnings per Share |
| Net Income(4) |
| Diluted Earnings per Share | ||||
GAAP | $ | 29.2 |
| $ | 0.42 |
| $ | 16.8 |
| $ | 0.24 |
Loss on extinguishment of debt(5) |
| 0.8 |
|
| 0.01 |
|
| 42.4 |
|
| 0.62 |
Non-GAAP | $ | 30.0 |
| $ | 0.43 |
| $ | 59.2 |
| $ | 0.86 |
ADJUSTED EBITDA | ||||||||||||||||||||||||
| Three Months Ended December 31, |
| Years Ended December 31, | |||||||||||||||||||||
(dollars in millions) |
| 2022 |
|
| Percent of Revenue |
|
| 2021 |
| Percent of Revenue |
|
| 2022 |
| Percent of Revenue |
|
| 2021 |
| Percent of Revenue | ||||
Net income | $ | 17.0 |
|
| 4.6 | % |
| $ | 29.2 |
| 9.5 | % |
| $ | 4.6 |
| 0.4 | % |
| $ | 16.8 |
| 1.5 | % |
Interest expense, net |
| 2.7 |
|
|
|
|
| 15.1 |
|
|
|
| 26.7 |
|
|
|
| 61.2 |
|
| ||||
Income tax expense |
| 5.3 |
|
|
|
|
| 4.2 |
|
|
|
| 5.2 |
|
|
|
| 3.7 |
|
| ||||
Depreciation and amortization |
| 16.2 |
|
|
|
|
| 14.9 |
|
|
|
| 63.2 |
|
|
|
| 57.4 |
|
| ||||
Stock-based compensation expense |
| 11.2 |
|
|
|
|
| 8.6 |
|
|
|
| 38.6 |
|
|
|
| 34.4 |
|
| ||||
Voluntary MDCs(1) |
| 21.1 |
|
|
|
|
| — |
|
|
|
| 57.9 |
|
|
|
| — |
|
| ||||
Legal costs(2) |
| (2.1 | ) |
|
|
|
| — |
|
|
|
| 25.2 |
|
|
|
| — |
|
| ||||
CEO transition costs(3) |
| — |
|
|
|
|
| — |
|
|
|
| 3.4 |
|
|
|
| — |
|
| ||||
Loss on extinguishment of debt(5) |
| — |
|
|
|
|
| 0.8 |
|
|
|
| — |
|
|
|
| 42.4 |
|
| ||||
Adjusted EBITDA | $ | 71.4 |
|
| 19.3 | % |
| $ | 72.8 |
| 23.7 | % |
| $ | 224.8 |
| 17.2 | % |
| $ | 215.9 |
| 19.6 | % |
(1) Represents estimated costs associated with the voluntary MDC notices, which are included in cost of revenue. |
(2) Includes a $20.0 million charge to settle patent infringement litigation, associated legal fees, and a charge to settle a contract dispute. |
(3) Represents costs associated with the retirement and advisory services of the former chief executive officer, including $2.3 million of accelerated stock-based compensation expense. |
(4) The tax effect on non-GAAP adjustments is calculated based on the statutory tax rate. Due to valuation allowances, the statutory tax rate is 0%. |
(5) Relates to the repurchase and conversion of the Company’s 1.375% Notes. |
INSULET CORPORATION REVENUE GUIDANCE RECONCILIATIONS (UNAUDITED) | ||||||
| Year Ending December 31, 2023 | |||||
| Revenue Growth GAAP |
| Currency Impact |
| Constant Currency | |
U.S. Omnipod | 21% - 26% |
| —% |
| 21% - 26% | |
International Omnipod | 7% - 11% |
| 1% |
| 6% - 10% | |
Total Omnipod | 17% - 22% |
| —% |
| 17% - 22% | |
Drug Delivery | (55)% - (45)% |
| —% |
| (55)% - (45)% | |
Total | 14% - 19% |
| —% |
| 14% - 19% |
| Three Months Ending March 31, 2023 | |||||
| Revenue Growth GAAP |
| Currency Impact |
| Constant Currency | |
U.S. Omnipod | 33% - 36% |
| —% |
| 33% - 36% | |
International Omnipod | (2)% - 1% |
| (6)% |
| 4% - 7% | |
Total Omnipod | 20% - 23% |
| (2)% |
| 22% - 25% | |
Drug Delivery | (100)% - (95)% |
| —% |
| (100)% - (95)% | |
Total | 9% - 12% |
| (2)% |
| 11% - 14% |
Last Trade: | US$214.75 |
Daily Change: | -1.36 -0.63 |
Daily Volume: | 548,060 |
Market Cap: | US$15.060B |
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