ConforMIS Earnings Slide on Slumping Guidance

ConforMIS Inc. (NASDAQ: CFMS) reported its first-quarter financial results after the markets closed on Thursday. The company said it had a net loss of $0.37 per share on $20.3 million in revenue, compared to consensus estimates from Thomson Reuters of a net loss of $0.38 per share on $19.23 million in revenue.

During this quarter total revenue increased by 38% from the same period of last year. This was made up of U.S. product revenue increasing 43% and Rest of the World product revenue increasing 20%.

In terms of guidance for the 2016 full year, ConforMIS expects to have revenues in the range of $76 million to $81 million, down from the previous guidance of $84 million to $87 million. Consensus estimates call for a net loss of $1.36 per share on $85.75 million in revenue for the 2016 full year.

Separately, the second quarter guidance calls for revenue in the range of $17.7 million to $18.7 million, compared to the consensus estimate of $20.24 million in revenue.
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On the books, cash, cash equivalents and investments totaled $103.52 million at the end of the quarter, compared to $117.19 million at the end of 2015.

Philipp Lang, M.D., MBA, president and CEO of ConforMIS, commented:

First quarter of 2016 showed strong revenue growth with product revenue up 36% year-over-year on a reported basis and 39% year-over-year on a constant currency basis. Product revenue growth in the first quarter was driven primarily by strong contributions from the limited launch of iTotal PS and benefits from improving order lead times and rescheduled cases from the second half of 2015 related to the voluntary recall.

The ConforMIS board of directors has retained an executive search firm to search for a new president and chief executive to succeed Dr. Lang. The company expects that he will remain the CEO until the successor has been appointed and will continue to serve on the board of directors.

Shares of ConforMIS traded down 50% at $5.05 early Friday, with a consensus analyst price target of $19.80 and a previous 52-week trading range of $7.56 to $26.93.