Tactile Systems Technology (TCMD) 8-K Tactile Systems Technology, Inc. Reports First Quarter 2019 Financial Results; Updates 2019 Outlook

Exhibit 99.2

TACTILE SYSTEMS TECHNOLOGY, INC.

May 6, 2019

As a result of our adoption of Accounting Standards Update No. 2016-02, “Leases” (Topic 842), beginning with the three months ended March 31, 2019, rental revenue, cost of rental revenue and gross profit - rental revenue are presented as line items separate from sales revenue, cost of sales revenue and gross profit - sales revenue, respectively, in our consolidated financial statements.  Our adoption of ASC 842 under the modified retrospective transition approach did not require restatement of previous periods, but in order to provide comparable information regarding the components of these line items in prior periods, the following supplemental financial information details the composition of our previously-reported total revenue, total cost of revenue and gross profit results into revenue from sales and revenue from rentals, the corresponding cost of revenue for sales and rentals and the resulting gross profit for sales and rentals, respectively, in each quarter and the full year of fiscal years 2018 and 2017.

In addition, in periods prior to 2019 and as reflected in the amounts presented below, the amount of revenue associated with garments was included in sales revenue. Due to the adoption of ASC 842, garment revenue is now included in rental revenue, and as comparable prior period financial information is presented in future issuances of our financial statements, garment revenue in prior periods will be reclassified from sales to rental revenue. To aid in comparison with our go-forward reporting convention, we have also set forth below the amount of garment revenue and garment cost of revenue that will be reclassified, in future financial statement issuances, from sales revenue and cost of sales revenue to rental revenue and cost of rental revenue, respectively, for the periods presented.

Tactile Systems Technology, Inc.
Supplemental Financial Information and
Garment Revenue Reclassification
(Unaudited)
	2018
(Dollars in thousands)	Q1		Q2		Q3		Q4		Total
Revenue
Sales revenue	$	23,889	$	30,873	$	32,969	$	42,460	$	130,191
Rental revenue		2,959		3,260		3,353		3,988		13,560
Total revenue		26,848		34,133		36,322		46,448		143,751
Cost of revenue
Cost of sales revenue		6,478		8,644		9,153		13,108		37,383
Cost of rental revenue		831		966		988		1,325		4,110
Total cost of revenue		7,309		9,610		10,141		14,433		41,493
Gross profit
Gross profit - sales revenue		17,411		22,229		23,816		29,352		92,808
Gross profit - rental revenue		2,128		2,294		2,365		2,663		9,450
Total gross profit	$	19,539	$	24,523	$	26,181	$	32,015	$	102,258
Gross margin % - sales		73%		72%		72%		69%		71%
Gross margin % - rental		72%		70%		71%		67%		70%
Gross margin % - total		73%		72%		72%		69%		71%
Garment revenue to be reclassified	$	242	$	301	$	447	$	415	$	1,405
Garment cost of revenue to be reclassified	$	69	$	87	$	126	$	132	$	414

Exhibit 99.2

Tactile Systems Technology, Inc.
Supplemental Financial Information and
Garment Revenue Reclassification
(Unaudited)
	2017
(Dollars in thousands)	Q1		Q2		Q3		Q4		Total
Revenue
Sales revenue	$	18,081	$	23,966	$	25,555	$	31,568	$	99,170
Rental revenue		1,769		2,298		2,728		3,318		10,113
Total revenue		19,850		26,264		28,283		34,886		109,283
Cost of revenue
Cost of sales revenue		5,075		6,372		6,772		7,922		26,141
Cost of rental revenue		549		662		756		907		2,874
Total cost of revenue		5,624		7,034		7,528		8,829		29,015
Gross profit
Gross profit - sales revenue		13,006		17,594		18,783		23,646		73,029
Gross profit - rental revenue		1,220		1,636		1,972		2,411		7,239
Total gross profit	$	14,226	$	19,230	$	20,755	$	26,057	$	80,268
Gross margin % - sales		72%		73%		74%		75%		74%
Gross margin % - rental		69%		71%		72%		73%		72%
Gross margin % - total		72%		73%		73%		75%		73%
Garment revenue to be reclassified	$	467	$	432	$	353	$	275	$	1,527
Garment cost of revenue to be reclassified	$	127	$	112	$	91	$	74	$	404