Coronavirus Pandemic Triggers Significant Q1 Revenue Decrease at Conformis

The novel coronavirus took quite a large a bite out of Conformis Inc.’s bottom line in the first quarter, ended March 31.  
 
“The first quarter, as expected, was impacted by the coronavirus (COVID-19) pandemic, said Mark Augusti, president and CEO. “As previously announced, we took actions to mitigate the financial impact, as well as to ensure our employees’ safety. In addition, and as recently announced, we were able to return substantially all of our furloughed employees to work due to the financial support made available by the federal government. Though we expect the second quarter will also be impacted by the pandemic primarily due to the reduction of elective surgeries, we are pleased to see growing activity from our customers indicating the re-starting of hip and knee procedures. We look forward to getting back to business.”
 
Total revenue for the three-month period ended March 31 decreased $4.2 million to $16.5 million, or 20 percent year-over-year on a reported and constant currency basis. Total revenue in each of the first quarter of 2020 and 2019 includes royalty revenue of $0.2 million.
 
Product revenue decreased $4.2 million to $16.3 million, or 20 percent year-over-year on a reported and constant currency basis. U.S. product revenue decreased $3.8 million to $13.8 million, or 21 percent year-over-year, and Rest of World product revenue decreased $0.4 million to $2.5 million, or 14 percent year-over-year on a reported basis and 13 percent on a constant currency basis. Conformis Hip System sales in the first quarter of 2020 were $0.4 million, which were all in the United States.
 
Total gross profit decreased $2.6 million to $7.2 million, or 44 percent of revenue, in the first quarter of 2020, compared to $9.8 million, or 48 percent of revenue, in the first quarter of 2019.
 
Total operating expenses decreased $1.1 million to $15.3 million, or 7 percent year-over-year, primarily due to lower variable expenses as a result of the decline in revenue.

Net loss was $9.4 million, or $0.14 per basic and diluted share, in the first quarter of 2020, compared to a net loss of $7.6 million, or $0.12 per basic and diluted share, in the same period last year. Net loss in each of the first quarter of 2020 and 2019 included foreign currency exchange expense of $0.7 million. Net loss per basic and diluted share calculations assume weighted average basic and diluted shares outstanding of 67.3 million for the first quarter of 2020, compared to 62.8 million for the same period last year.
 
Cash and cash equivalents totaled $21.5 million as of March 31, compared to $26.4 million as of Dec. 31, 2019.