PR Newswire | Nov 4, 2020 04:02PM EST

11/04 15:01 CST

TransMedics Reports Third Quarter 2020 Financial Results ANDOVER, Mass., Nov. 4, 2020

ANDOVER, Mass., Nov. 4, 2020 /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, 2020.

Recent Highlights

* Net revenue of $7.1 million in the third quarter of 2020, representing a 2% decrease compared to the third quarter of 2019 * Completed enrollment in OCS Heart DCD U.S. clinical program * Received FDA approval for OCS Heart DCD continued access protocol

"Our sequential growth in the third quarter was driven by the ongoing recovery in transplant activities in the United States in addition to the rapid enrollment and completion of our OCS Heart DCD U.S. trial," said Waleed Hassanein, MD, President and Chief Executive Officer. "We are actively engaged with FDA to complete the review of the additional OCS Heart EXPAND CAP data and the rescheduling of our OCS Heart FDA Advisory Committee meeting. We remain confident in our ability to have all three of our OCS products approved and commercially available in the second half of 2021."

Third Quarter 2020 Financial ResultsNet revenue for the third quarter of 2020 was $7.1 million, a 2% decrease compared to $7.2 million in the third quarter of 2019. The slight decrease in revenue was predominantly a result of the lingering impact of the global COVID-19 pandemic through the third quarter.

Gross margin for the third quarter of 2020 was 71% as compared to 59% in the third quarter of 2019.

Operating expenses for the third quarter of 2020 were $9.6 million compared to $11.5 million in the third quarter of 2019. The decrease in operating expenses was due primarily to our cash preservation measures enacted earlier this year in response to the COVID-19 pandemic.

Net loss for the third quarter of 2020 was $5.1 million compared to $8.3 million in the third quarter of 2019.

Cash, cash equivalents and marketable securities were $132.7 million as of September 30, 2020.

2020 Financial OutlookAs previously announced, TransMedics is not providing annual guidance for 2020 due to the unpredictability of the duration and the magnitude of the impact of the COVID-19 pandemic.

Webcast and Conference Call DetailsThe TransMedics management team will host a conference call beginning at 4:30 p.m. ET / 1:30 p.m. PT on Wednesday, November 4, 2020. Investors interested in listening to the conference call may do so by dialing (833) 378-1026 for domestic callers or (236) 712-2344 for international callers, followed by Conference ID: 1716957. 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 StatementsThis press release contains forward-looking statements with respect to, among other things, our operations and financial performance and expected timing of regulatory approvals for our OCS products. These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business 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, uncertainties and assumptions, 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 or implied in the forward-looking statements. Some of the key factors that could cause actual results to differ include: that we continue to incur losses; our need to raise additional funding; 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 to until maturity, and our ability to obtain additional financing on favorable terms or at all; the fluctuation of our financial results from quarter to quarter; our ability to use net operating losses and research and development credit carryforwards; our dependence on the success of the OCS; the rate and degree of market acceptance of the OCS; our ability to educate patients, surgeons, transplant centers and private payors of benefits offered by the OCS; the impact of the outbreak of the novel strain of coronavirus and associated containment and remediation efforts; our ability to improve the OCS platform; our dependence on a limited number of customers for a significant portion of our net revenue; the timing of and our ability to obtain and maintain regulatory approvals or clearances for our OCS products; our ability to adequately respond to FDA follow-up inquiries in a timely manner; the performance of our third-party suppliers and manufacturers; the timing or results of 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 attract and retain key personnel; 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; our ability to obtain and maintain regulatory approvals or clearance for our OCS products; the pricing of the OCS, as well as the reimbursement coverage for the OCS in the United States and internationally; and the risks identified under the heading "Risk Factors" and elsewhere in our annual report on Form 10-K for the year ended December 28, 2019 and our quarterly report on Form 10-Q for the quarter ended June 30, 2020, which is available on the SEC's website at www.sec.gov. Additional information will be made available by our annual and quarterly reports and other filings that we make from time to time with the SEC. These forward-looking statements (except as otherwise noted) 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 it is not possible for us 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.

TransMedics Group, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

Fiscal Three Months Ended Fiscal Nine Months Ended

September 30, September 28, September 30, September 28, 2020 2019 2020 2019

Net revenue $ 7,091 $ 7,205 $ 18,012 $ 17,547

Cost of 2,053 2,989 6,205 7,425revenue

Gross profit 5,038 4,216 11,807 10,122

Gross Margin 71% 59% 66% 58%

Operatingexpenses:

Research,development 4,155 4,939 14,283 13,608and clinicaltrials

Selling,general and 5,493 6,519 18,012 17,423administrative

Totaloperating 9,648 11,458 32,295 31,031expenses

Loss from (4,610) (7,242) (20,488) (20,909)operations

Other income(expense):

Interest (971) (1,084) (3,014) (3,290)expense

Change in fairvalue ofpreferred - - - (341)stock warrantliability

Other income 499 56 1,087 200(expense), net

Total other (472) (1,028) (1,927) (3,431)expense, net

Loss before (5,082) (8,270) (22,415) (24,340)income taxes

Provision for (6) (10) (22) (30)income taxes

Net loss $ (5,088) $ (8,280) $ (22,437) $ (24,370)

Net loss pershareattributableto common $ (0.19) $ (0.39) $ (0.94) $ (2.05)stockholders,basic anddiluted

Weightedaverage commonshares 27,156,135 21,131,618 23,885,517 11,882,626outstanding,basic anddiluted

* Reconciliation of Gross to Net revenue for certain payments made to customers(in thousands)

Fiscal Three Months Ended Fiscal Nine Months Ended

September 30, September 28, September 30, September 28, 2020 2019 2020 2019

Gross revenuefrom sales to $ 7,973 $ 7,876 $ 20,139 $ 19,381customers

Less: clinicaltrial payments 882 671 2,127 1,834reducingrevenue

Total net $ 7,091 $ 7,205 $ 18,012 $ 17,547revenue

TransMedics Group, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

September 30, December 28, 2020 2019

Current assets:

Cash and cash equivalents $ 21,397 $ 20,092

Marketable securities 111,317 60,596

Accounts receivable 6,141 6,559

Inventory 12,984 11,216

Prepaid expenses and other current assets 2,287 1,538

Total current assets 154,126 100,001

Property and equipment, net 4,690 4,792

Restricted cash and other long-term assets 506 506

Total assets $ 159,322 $ 105,299

Current liabilities:

Accounts payable $ 778 $ 7,247

Accrued expenses and other current liabilities 11,474 8,332

Deferred revenue 1,347 166

Current portion of deferred rent 25 370

Total current liabilities 13,624 16,115

Long-term debt, net of discount 34,525 34,146

Deferred rent, net of current portion 1,623 389

Total liabilities 49,772 50,650

Total stockholders' equity 109,550 54,649

Total liabilities and stockholders' equity $ 159,322 $ 105,299

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SOURCE TransMedics Group, Inc.