Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 02, 2024 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-37799 | |
Entity Registrant Name | Tactile Systems Technology, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 41-1801204 | |
Entity Address, Address Line One | 3701 Wayzata Blvd, Suite 300 | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55416 | |
City Area Code | 612 | |
Local Phone Number | 355-5100 | |
Title of 12(b) Security | Common Stock, Par Value $0.001 Per Share | |
Trading Symbol | TCMD | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,762,164 | |
Entity Central Index Key | 0001027838 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 60,706 | $ 61,033 |
Accounts receivable | 40,491 | 43,173 |
Net investment in leases | 14,324 | 14,195 |
Inventories | 20,844 | 22,527 |
Prepaid expenses and other current assets | 4,908 | 4,366 |
Total current assets | 141,273 | 145,294 |
Non-current assets | ||
Property and equipment, net | 6,217 | 6,195 |
Right of use operating lease assets | 18,480 | 19,128 |
Intangible assets, net | 45,795 | 46,724 |
Goodwill | 31,063 | 31,063 |
Accounts receivable, non-current | 6,953 | 10,936 |
Deferred income taxes | 19,294 | 19,378 |
Other non-current assets | 2,965 | 2,720 |
Total non-current assets | 130,767 | 136,144 |
Total assets | 272,040 | 281,438 |
Current liabilities | ||
Accounts payable | 5,488 | 6,659 |
Note payable | 2,956 | 2,956 |
Accrued payroll and related taxes | 11,023 | 16,789 |
Accrued expenses | 6,866 | 5,904 |
Income taxes payable | 725 | 1,467 |
Operating lease liabilities | 2,740 | 2,807 |
Other current liabilities | 3,335 | 4,475 |
Total current liabilities | 33,133 | 41,057 |
Non-current liabilities | ||
Note payable, non-current | 25,437 | 26,176 |
Accrued warranty reserve, non-current | 1,645 | 1,681 |
Income taxes payable, non-current | 495 | 446 |
Operating lease liabilities, non-current | 17,857 | 18,436 |
Total non-current liabilities | 45,434 | 46,739 |
Total liabilities | 78,567 | 87,796 |
Commitments and Contingencies (see Note 9) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued and outstanding as of March 31, 2024 and December 31, 2023 | ||
Common stock, $0.001 par value, 300,000,000 shares authorized; 23,761,897 shares issued and outstanding as of March 31, 2024; 23,600,584 shares issued and outstanding as of December 31, 2023 | 24 | 24 |
Additional paid-in capital | 176,764 | 174,724 |
Retained earnings | 16,685 | 18,894 |
Total stockholders' equity | 193,473 | 193,642 |
Total liabilities and stockholders' equity | $ 272,040 | $ 281,438 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Condensed Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares, issued | 23,761,897 | 23,600,584 |
Common stock, shares, outstanding | 23,761,897 | 23,600,584 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Total revenue | $ 61,088 | $ 58,846 |
Total cost of revenue | 17,659 | 17,378 |
Gross profit | 43,429 | 41,468 |
Operating expenses | ||
Sales and marketing | 27,357 | 26,302 |
Research and development | 2,143 | 2,233 |
Reimbursement, general and administrative | 16,261 | 15,434 |
Intangible asset amortization and earn-out | 632 | 1,305 |
Total operating expenses | 46,393 | 45,274 |
Loss from operations | (2,964) | (3,806) |
Other expense | 155 | (993) |
Loss before income taxes | (2,809) | (4,799) |
Income tax benefit | (600) | (2,913) |
Net loss | $ (2,209) | $ (1,886) |
Net loss per common share | ||
Basic | $ (0.09) | $ (0.09) |
Diluted | $ (0.09) | $ (0.09) |
Weighted-average common shares used to compute net loss per common share | ||
Basic | 23,665,829 | 21,283,752 |
Diluted | 23,665,829 | 21,283,752 |
Sales revenue | ||
Total revenue | $ 53,307 | $ 52,791 |
Total cost of revenue | 14,944 | 14,642 |
Gross profit | 38,363 | 38,149 |
Rental revenue | ||
Total revenue | 7,781 | 6,055 |
Total cost of revenue | 2,715 | 2,736 |
Gross profit | $ 5,066 | $ 3,319 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit). | Total |
Balances at the beginning at Dec. 31, 2022 | $ 20 | $ 131,001 | $ (9,621) | $ 121,400 |
Balances at the beginning (in shares) at Dec. 31, 2022 | 20,252,677 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Stock-based compensation | 2,023 | 2,023 | ||
Exercise of common stock options and vesting of performance and restricted stock units (in shares) | 107,388 | |||
Sale of common stock from follow-on public offering, net of offering expenses | $ 3 | 34,622 | 34,625 | |
Sale of common stock from follow-on public offering, net of offering expenses (in shares) | 2,875,000 | |||
Net loss for the period | (1,886) | (1,886) | ||
Balances at the end at Mar. 31, 2023 | $ 23 | 167,646 | (11,507) | 156,162 |
Balances at the end (in shares) at Mar. 31, 2023 | 23,235,065 | |||
Balances at the beginning at Dec. 31, 2023 | $ 24 | 174,724 | 18,894 | 193,642 |
Balances at the beginning (in shares) at Dec. 31, 2023 | 23,600,584 | |||
Increase (Decrease) in Stockholders' Equity | ||||
Stock-based compensation | 2,039 | 2,039 | ||
Exercise of common stock options and vesting of performance and restricted stock units | 1 | 1 | ||
Exercise of common stock options and vesting of performance and restricted stock units (in shares) | 161,313 | |||
Net loss for the period | (2,209) | (2,209) | ||
Balances at the end at Mar. 31, 2024 | $ 24 | $ 176,764 | $ 16,685 | $ 193,473 |
Balances at the end (in shares) at Mar. 31, 2024 | 23,761,897 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities | ||
Net loss | $ (2,209) | $ (1,886) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,634 | 1,629 |
Deferred income taxes | 84 | |
Stock-based compensation expense | 2,039 | 2,023 |
Loss on disposal of property and equipment and intangibles | 3 | |
Change in fair value of earn-out liability | 660 | |
Changes in assets and liabilities, net of acquisition: | ||
Accounts receivable | 2,682 | 3,806 |
Net investment in leases | (129) | 2,349 |
Inventories | 1,683 | 3,110 |
Income taxes | (693) | (2,919) |
Prepaid expenses and other assets | (787) | (1,056) |
Right of use operating lease assets | 2 | 71 |
Accounts receivable, non-current | 3,983 | 3,078 |
Accounts payable | (1,396) | (403) |
Accrued payroll and related taxes | (5,766) | (5,636) |
Accrued expenses and other liabilities | (203) | (5,331) |
Net cash provided by (used in) operating activities | 924 | (502) |
Cash flows from investing activities | ||
Purchases of property and equipment | (482) | (241) |
Intangible assets expenditures | (20) | (50) |
Net cash used in investing activities | (502) | (291) |
Cash flows from financing activities | ||
Payments on note payable | (750) | (750) |
Proceeds from exercise of common stock options | 1 | |
Proceeds from issuance of common stock at market | 34,625 | |
Net cash (used in) provided by financing activities | (749) | 33,875 |
Net (decrease) increase in cash and cash equivalents | (327) | 33,082 |
Cash and cash equivalents - beginning of period | 61,033 | 21,929 |
Cash and cash equivalents - end of period | 60,706 | 55,011 |
Supplemental cash flow disclosure | ||
Cash paid for interest | 583 | 927 |
Cash paid for taxes | 54 | 6 |
Capital expenditures incurred but not yet paid | $ 225 | $ 10 |
Nature of Business and Operatio
Nature of Business and Operations | 3 Months Ended |
Mar. 31, 2024 | |
Nature of Business and Operations | |
Nature of Business and Operations | Note 1. Nature of Business and Operations Tactile Systems Technology, Inc. (“we,” “us,” “our,” and the “Company”) manufactures and distributes medical devices for the treatment of patients with underserved chronic diseases at home. We provide our Flexitouch® Plus and Entre™ Plus systems, which help control symptoms of lymphedema, a chronic progressive medical condition, through our direct sales force for use in the home following receipt of prescriptions from vascular, wound and lymphedema clinics throughout the United States. On September 8, 2021, we acquired the assets of the AffloVest airway clearance business (“AffloVest Acquisition”). AffloVest is a portable, wearable vest that treats patients with chronic respiratory conditions. We sell this device through home medical equipment and durable medical equipment (“DME”) providers throughout the United States. We were originally incorporated in Minnesota under the name Tactile Systems Technology, Inc. on January 30, 1995. During 2006, we established a merger corporation and subsequently, on July 21, 2006, merged with and into this merger corporation, resulting in our reincorporation as a Delaware corporation. The resulting corporation assumed the name Tactile Systems Technology, Inc. In September 2013, we began doing business as “Tactile Medical”. On August 2, 2016, we closed the initial public offering of our common stock, which resulted in the sale of 4,120,000 shares of our common stock at a public offering price of $10.00 per share. We received net proceeds from the initial public offering of approximately $35.4 million, after deducting underwriting discounts and approximately $2.9 million of transaction expenses. On February 27, 2023, we closed on a public offering of 2,875,000 shares of our common stock at a public offering price of $13.00 per share. We received net proceeds from this offering of $34.6 million after deducting underwriting discounts, commissions, and offering expenses. Our business is affected by seasonality. In the first quarter of each year, when most patients have started a new insurance year and have not yet met their annual out-of-pocket payment obligations, we experience substantially reduced demand for our products. We typically experience higher revenue in the third and fourth quarters of the year when patients have met their annual insurance deductibles, thereby reducing their out-of-pocket costs for our products, and because patients desire to exhaust their flexible spending accounts at year end. This seasonality applies only to purchases and rentals of our products by patients covered by commercial insurance and is not relevant to Medicare, Medicaid or the Veterans Administration, as those payers either do not have plans that have declining deductibles over the course of the plan year and/or do not have plans that include patient deductibles for purchases or rentals of our products. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2024 | |
Basis of Presentation | |
Basis of Presentation | Note 2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. The results for the three months ended March 31, 2024, are not necessarily indicative of results to be expected for the year ending December 31, 2024, or for any other interim period or for any future year. The condensed consolidated interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023. Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Tactile Systems Technology, Inc. and its wholly owned subsidiary, Swelling Solutions, Inc. All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and to disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies Significant Accounting Policies There were no material changes in our significant accounting policies during the three months ended March 31, 2024. See Note 3 – “Summary of Significant Accounting Policies” to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, for information regarding our significant accounting policies. Accounting Pronouncement Not Yet Adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” which requires entities to enhance disclosures around segment reporting. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” which requires entities to enhance disclosures around income taxes. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures . |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2024 | |
Inventories | |
Inventories | Note 4. Inventories Inventories consisted of the following: (In thousands) At March 31, 2024 At December 31, 2023 Finished goods $ 7,519 $ 7,979 Component parts and work-in-process 13,325 14,548 Total inventories $ 20,844 $ 22,527 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 5. Goodwill and Intangible Assets Goodwill In the third quarter of fiscal 2021, we completed the AffloVest Acquisition. The purchase price of the AffloVest product line exceeded the net acquisition-date estimated fair value amounts of the identifiable assets acquired and the liabilities assumed by $31.1 million, which was assigned to goodwill. Intangible Assets Our patents and other intangible assets are summarized as follows: Weighted- At March 31, 2024 Average Gross Amortization Carrying Accumulated Net (In thousands) Period Amount Amortization Amount Definite-lived intangible assets: Patents 12 years $ 1,039 $ 269 $ 770 Defensive intangible assets 1 year 1,125 956 169 Customer accounts — 125 125 — Customer relationships 10 years 31,000 6,107 24,893 Developed technology 8 years 13,000 3,027 9,973 Subtotal 46,289 10,484 35,805 Unamortized intangible assets: Tradenames 9,500 — 9,500 Patents pending 490 — 490 Total intangible assets $ 56,279 $ 10,484 $ 45,795 Weighted- At December 31, 2023 Average Gross Amortization Carrying Accumulated Net (In thousands) Period Amount Amortization Amount Definite-lived intangible assets: Patents 12 years $ 1,018 $ 248 $ 770 Defensive intangible assets 1 year 1,125 920 205 Customer accounts — 125 125 — Customer relationships 11 years 31,000 5,511 25,489 Developed technology 9 years 13,000 2,731 10,269 Subtotal 46,268 9,535 36,733 Unamortized intangible assets: Tradenames 9,500 — 9,500 Patents pending 491 — 491 Total intangible assets $ 56,259 $ 9,535 $ 46,724 Amortization expense was $0.9 million and $1.0 million for the three months ended March 31, 2024 and 2023, respectively. Future amortization expenses are expected as follows: (In thousands) 2024 (April 1 - December 31) $ 2,847 2025 3,707 2026 3,642 2027 3,634 2028 3,631 Thereafter 18,344 Total $ 35,805 In the third quarter of 2023, we performed our annual goodwill impairment test utilizing both the qualitative and quantitative approach described in FASB ASU No. 2021-03, “Intangibles—Goodwill and Other (Topic 350) – Accounting Alternative for Evaluating Triggering Events.” Based on the testing using the qualitative approach, it was determined that it was not more likely than not that the fair value of the reporting unit was less than the carrying value. As a result, it was not deemed necessary to proceed to the quantitative test and no impairment was recognized. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2024 | |
Accrued Expenses | |
Accrued Expenses | Note 6. Accrued Expenses Accrued expenses consisted of the following: (In thousands) At March 31, 2024 At December 31, 2023 Warranty $ 2,191 $ 2,357 In-transit inventory 1,454 401 Travel 1,119 1,038 Legal and consulting 742 611 Clinical studies 356 363 Sales and use tax 184 183 Other 820 951 Total $ 6,866 $ 5,904 |
Warranty Reserves
Warranty Reserves | 3 Months Ended |
Mar. 31, 2024 | |
Warranty Reserves | |
Warranty Reserves | Note 7. Warranty Reserves The activity in the warranty reserve during and as of the end of the reporting periods presented was as follows: Three Months Ended March 31, (In thousands) 2024 2023 Beginning balance $ 4,038 $ 4,212 Warranty provision 840 874 Processed warranty claims (1,042) (1,086) Ending balance $ 3,836 $ 4,000 Accrued warranty reserve, current $ 2,191 $ 1,916 Accrued warranty reserve, non-current 1,645 2,084 Total accrued warranty reserve $ 3,836 $ 4,000 |
Credit Agreement
Credit Agreement | 3 Months Ended |
Mar. 31, 2024 | |
Credit Agreement | |
Credit Agreement | Note 8. Credit Agreement On April 30, 2021, we entered into an Amended and Restated Credit Agreement (the “Restated Credit Agreement”) with the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as Administrative Agent. The Restated Credit Agreement amended and restated in its entirety our prior credit agreement. On September 8, 2021, we entered into a First Amendment Agreement (the “Amendment”), which amended the Restated Credit Agreement (as amended by the Amendment, the “Credit Agreement”) with the lenders from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent. The Amendment, among other things, added a $30.0 million incremental term loan to the $25.0 million revolving credit facility provided by the Restated Credit Agreement. The term loan is reflected on our condensed consolidated financial statements as a note payable. The Credit Agreement provides that, subject to satisfaction of certain conditions, we may increase the amount of the revolving loans available under the Credit Agreement and/or add one or more term loan facilities in an amount not to exceed $25.0 million in the aggregate, such that the total aggregate principal amount of loans available under the Credit Agreement (including under the revolving credit facility) does not exceed $80.0 million. On September 8, 2021, in connection with the closing of the AffloVest Acquisition, we borrowed the $30.0 million term loan and utilized that borrowing, together with a draw of $25.0 million under the revolving credit facility and cash on hand, to fund the purchase price. On February 22, 2022, we entered into a Second Amendment Agreement (the “Second Amendment”), which further amended the Credit Agreement. The Second Amendment modified the maximum leverage ratio, the minimum fixed charge coverage ratio and the minimum consolidated EBITDA covenants under the Credit Agreement, and added a minimum liquidity covenant, through the quarter ended June 30, 2023. The Second Amendment also increased the applicable margin for LIBOR rate loans under the Credit Agreement during the period commencing on the date of the Second Amendment and ending on the last day of the fiscal quarter ending June 30, 2023. Pursuant to the Second Amendment, we made a mandatory principal prepayment of the term loan of $3.0 million on February 22, 2022. On June 21, 2023, we entered into a Third Amendment Agreement (the “Third Amendment”) that replaced the interest rate benchmark under the Credit Agreement from LIBOR to the term Secured Overnight Financing Rate (“SOFR”). All tenors of term SOFR are subject to a credit spread adjustment of 0.10% (“Adjusted Term SOFR”). Following the Third Amendment, the term loan and amounts drawn under the revolving credit facility bear interest, at our option, at a rate equal to (a) the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) Adjusted Term SOFR for a one-month tenor plus 1% (the “Base Rate”) plus an applicable margin or (b) Adjusted Term SOFR for an interest period of one, three or six months, at our option, plus the applicable margin. The applicable margin is 0.75% to 2.25% on loans bearing interest at the Base Rate and 1.75% to 3.25% on loans bearing interest at Adjusted Term SOFR, in each case depending on our consolidated total leverage ratio; except that, pursuant to the Second Amendment and the Third Amendment, during the period commencing on February 22, 2022 and ending on the last day of the fiscal quarter ending June 30, 2023, the applicable margin for LIBOR rate loans and Adjusted Term SOFR loans, as applicable, was 3.50% . On August 1, 2023, we entered into a Fourth Amendment Agreement (the “Fourth Amendment”), which further amended the Credit Agreement. The Fourth Amendment, among other things, decreased the commitment fees payable under the revolving credit facility under the Credit Agreement such that the undrawn portions of the revolving credit facility are subject to an unused line fee at a rate per annum from 0.125% to 0.200% , depending on our consolidated leverage ratio, and eliminated the language providing that the applicable margin for Adjusted Term SOFR loans was 3.50% , such that the interest rates are in effect as set forth in the above paragraph. The Fourth Amendment also eliminated the liquidity financial covenant and modified the remaining financial covenants to reflect the termination of the temporary covenant relief period that was in place until June 30, 2023 pursuant to the Second Amendment, such that the financial covenants now include a maximum consolidated total leverage ratio covenant, a minimum consolidated EBITDA covenant and a minimum fixed charge coverage ratio covenant. In addition, the Fourth Amendment provided for an additional term loan in the amount of $8.25 million, which we used for a paydown of the revolving credit facility. The Fourth Amendment also extended the maturity date of the term loans and revolving credit facility under the Credit Agreement from September 8, 2024, to August 1, 2026. On December 21, 2023, we made a payment of $16.8 million to repay in full the outstanding balance on the revolving credit facility As of March 31, 2024, we had outstanding borrowings of $28.5 million under the Credit Agreement, comprised entirely of the term loan. At March 31, 2024, all outstanding borrowings were subject to interest at a rate calculated at Adjusted Term SOFR plus an applicable margin, for an interest rate of 7.16% . The principal of the term loan is required to be repaid in quarterly installments of $750,000 . Maturities of the term loan for the next three years as of March 31, 2024, were as follows: (In thousands) Amount 2024 (April 1 - December 31) $ 2,250 2025 3,000 2026 23,250 Total 28,500 Less: Deferred financing fees (107) Net Note Payable 28,393 Less: Current portion of note payable (2,956) Non-current portion of note payable $ 25,437 Our obligations under the Credit Agreement are secured by a security interest in substantially all of our and our subsidiary’s assets and are also guaranteed by our subsidiary. As of March 31, 2024, the Credit Agreement contained a number of restrictions and covenants, including that we maintain compliance with a maximum consolidated total leverage ratio, a minimum fixed charge coverage ratio and a minimum consolidated EBITDA covenant. As of March 31, 2024, we were in compliance with all financial covenants under the Credit Agreement. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 9. Commitments and Contingencies Lease Obligations We lease property and equipment under operating leases, typically with terms greater than 12 months , and determine if an arrangement contains a lease at inception. In general, an arrangement contains a lease if there is an identified asset and we have the right to direct the use of and obtain substantially all of the economic benefit from the use of the identified asset. We record an operating lease liability at the present value of lease payments over the lease term on the commencement date. The related right of use (“ROU”) operating lease asset reflects rental escalation clauses, as well as renewal options and/or termination options. The exercise of lease renewal and/or termination options are at our discretion and are included in the determination of the lease term and lease payment obligations when it is deemed reasonably certain that the option will be exercised. When available, we use the rate implicit in the lease to discount lease payments to present value; however, certain leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. We classify our leases as buildings, vehicles or computer and office equipment and do not separate lease and non-lease components of contracts for any of the aforementioned classifications. In accordance with applicable guidance, we do not record leases with terms that are less than one year on the Condensed Consolidated Balance Sheets. None of our lease agreements contain material restrictive covenants or residual value guarantees. Buildings We lease certain office and warehouse space at various locations in the United States where we provide services. These leases are typically greater than one year with fixed, escalating rents over the noncancelable terms and, therefore, ROU operating lease assets and operating lease liabilities are recorded on the Condensed Consolidated Balance Sheets, with rent expense recognized on a straight-line basis over the term of the lease. The remaining lease terms vary from approximately one to seven years as of March 31, 2024. We entered into a lease (“initial lease”) in October 2018, for approximately 80,000 square feet of office space for our new corporate headquarters in Minneapolis, Minnesota. In December 2018, we amended the initial lease to add approximately 29,000 square feet of additional office space, which is accounted for as a separate lease (“second lease”) in accordance with ASU No. 2016-02, “Leases” (Topic 842) (“ASC 842”). In December 2019, we further amended the lease which extended the expiration date of the initial lease, extended the expiration date of and added approximately 4,000 square feet to the second lease, as well as added approximately 37,000 square feet of additional office space, accounted for as a separate lease (“third lease”) in accordance with ASC 842. The portion of the space covered under the initial lease was placed in service in September 2019. The portion of the space covered under the second lease commenced in September 2020. Finally, the portion of the space covered under the third lease commenced in September 2021. The three portions were recognized as an operating lease and included in the ROU operating lease assets and operating lease liabilities on the Condensed Consolidated Balance Sheets. Computer and Office Equipment We also have operating lease agreements for certain computer and office equipment. The remaining lease terms as of March 31, 2024, ranged from less than one year to approximately four years with fixed monthly payments that are included in the ROU operating lease assets and operating lease liabilities. The leases provide an option to purchase the related equipment at fair market value at the end of the lease. The leases will automatically renew as a month-to-month rental at the end of the lease if the equipment is not purchased or returned. Lease Position, Undiscounted Cash Flow and Supplemental Information The table below presents information related to our ROU operating lease assets and operating lease liabilities that we have recorded: (In thousands) At March 31, 2024 At December 31, 2023 Right of use operating lease assets $ 18,480 $ 19,128 Operating lease liabilities: Current $ 2,740 $ 2,807 Non-current 17,857 18,436 Total $ 20,597 $ 21,243 Operating leases: Weighted average remaining lease term 6.5 years 6.7 years Weighted average discount rate 4.3% 4.3% Three Months Ended March 31, 2024 2023 Supplemental cash flow information for our operating leases: Cash paid for operating lease liabilities $ 867 $ 860 The table below reconciles the undiscounted cash flows for the periods presented to the operating lease liabilities recorded on the Condensed Consolidated Balance Sheet for the periods presented: (In thousands) 2024 (April 1 - December 31) $ 2,667 2025 3,644 2026 3,715 2027 3,210 2028 3,185 Thereafter 6,943 Total minimum lease payments 23,364 Less: Amount of lease payments representing interest (2,767) Present value of future minimum lease payments 20,597 Less: Current obligations under operating lease liabilities (2,740) Non-current obligations under operating lease liabilities $ 17,857 Operating lease costs were $0.9 million for each of the three months ended March 31, 2024 and 2023. Major Vendors We had purchases from one vendor that accounted for 23% of our total purchases for the three months ended March 31, 2024 and purchases from one vendor that accounted for 29% of our total purchases for the three months ended March 31, 2023. Purchase Commitments We issued purchase orders prior to March 31, 2024, totaling $25.7 million for goods that we expect to receive within the next year. Retirement Plan We maintain a 401(k) retirement plan for our employees in which eligible employees can contribute a percentage of their pre-tax compensation. We recorded an expense related to our discretionary contributions to the 401(k) plan of $0.7 million and $0.4 million for the three months ended March 31, 2024 and 2023, respectively. Legal Proceedings F rom time to time, we are subject to various claims and legal proceedings arising in the ordinary course of business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. On May 24, 2022, a stockholder derivative lawsuit was filed in the United States District Court for the District of Minnesota, purportedly on behalf of the Company against certain of our present and former officers and directors and the Company (as a nominal defendant), captioned Jack Weaver v. Moen, et al., File No. 0:22-cv-01403-NEB-BRT (the “Weaver Lawsuit”). The Weaver Lawsuit generally arises out of the same subject matter as a previously settled securities class action captioned Brian Mart v. Tactile Sys. Tech., Inc., et al., File No. 0:20-cv-02074-NEB-BRT (D. Minn.) (the “Mart Lawsuit”), which alleged, inter alia, that we and eight of our former officers and directors made materially false or misleading statements about our business, operational and compliance policies. The Weaver Lawsuit alleges the following claims under the Exchange Act and common law: (1) that the director defendants made materially false or misleading public statements in proxy statements in violation of Section 14(a) of the Exchange Act; (2) that the director defendants’ stock and option awards should be rescinded under Section 29(b) of the Exchange Act; (3) that the officer defendants’ employment contract compensation should be rescinded under Section 29(b) of the Exchange Act; (4) that certain officer defendants are liable for contribution arising out of any liability incurred in the Mart Lawsuit, under Sections 10(b) and 21D of the Exchange Act; (5) that the individual defendants breached their fiduciary duties; and (6) that the individual defendants were unjustly enriched. The lawsuit seeks unspecified damages. In August 2022, the matter was transferred to the United States District Court for the District of Delaware by order granting the Parties Stipulation to Transfer. On February 10, 2023, we filed a motion to dismiss the action. The plaintiff filed an Amended Complaint on March 3, 2023. On March 31, 2023, we filed a motion to dismiss the Amended Complaint, which is pending. On July 31, 2023, the plaintiff filed a Joint Notice of Preliminary Settlement indicating that the parties have reached a non-binding settlement-in-principal on most of the material terms that would resolve all claims between the parties and requested that the Court temporarily stay all deadlines, hearings, and conferences while the parties continue to finalize settlement. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2024 | |
Stockholders' Equity | |
Stockholders' Equity | Note 10. Stockholders' Equity Stock-Based Compensation Our 2016 Equity Incentive Plan (the “2016 Plan”) authorizes us to grant stock options, stock appreciation rights, restricted stock, stock units and other stock-based awards to employees, non-employee directors and certain consultants and advisors. There were up to 4,800,000 shares of our common stock initially reserved for issuance pursuant to the 2016 Plan. The 2016 Plan provides that the number of shares reserved and available for issuance under the 2016 Plan will automatically increase annually on January 1 of each calendar year, commencing in 2017 and ending on and including January 1, 2026, by an amount equal to the lesser of: (a) 5% of the number of common shares of stock outstanding as of December 31 of the immediately preceding calendar year, or (b) 2,500,000 shares; provided, however, that our Board of Directors may determine that any annual increase be a lesser number. In addition, all awards granted under our 2007 Omnibus Stock Plan and our 2003 Stock Option Plan that were outstanding when the 2016 Plan became effective and that are forfeited, expired, cancelled, settled for cash or otherwise not issued, will become available for issuance under the 2016 Plan. Pursuant to the automatic increase feature of the 2016 Plan, 1,180,019 shares were added as available for issuance thereunder on January 1, 2024. Our Board of Directors exercised its prerogative to forego the automatic increase on January 1, 2023. As of March 31, 2024, 6,451,155 shares were available for future grant pursuant to the 2016 Plan. Upon adoption and approval of the 2016 Plan, all of our previous equity incentive compensation plans were terminated. However, existing awards under those plans continue to vest in accordance with the original vesting schedules and will expire at the end of their original terms. We recorded stock-based compensation expense of $2.0 million for each of the three months ended March 31, 2024 and 2023. This expense was allocated as follows: Three Months Ended March 31, (In thousands) 2024 2023 Cost of revenue $ 83 $ 103 Sales and marketing expenses 738 752 Research and development expenses 33 49 Reimbursement, general and administrative expenses 1,185 1,119 Total stock-based compensation expense $ 2,039 $ 2,023 Stock Options Stock options issued to participants other than non-employees typically vest over three or four years and typically have a contractual term of seven or ten years . Stock-based compensation expense included in the Condensed Consolidated Statements of Operations for stock options was $0.1 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively. At March 31, 2024, there was approximately $0.1 million of total unrecognized pre-tax stock option expense under our equity compensation plans, which is expected to be recognized on a straight-line basis over a weighted-average period of 1.0 years. Our stock option activity for the three months ended March 31, 2024, was as follows: Weighted- Weighted- Average Average Aggregate Options Exercise Price Remaining Intrinsic (In thousands except options and per share data) Outstanding Per Share (1) Contractual Life Value (2) Balance at December 31, 2023 429,960 $ 40.74 3.8 years $ 223 Exercised (354) $ 1.35 $ 5 Forfeited — $ — Cancelled/Expired (6,849) $ 44.62 Balance at March 31, 2024 422,757 $ 40.71 3.6 years $ 289 Options exercisable at March 31, 2024 395,952 $ 41.94 3.5 years $ 160 (1) The exercise price of each option granted during the period shown was equal to the market price of the underlying stock on the date of grant. (2) The aggregate intrinsic value of options exercised represents the difference between the exercise price of the option and the closing stock price of our common stock on the date of exercise. The aggregate intrinsic value of options outstanding represents the difference between the exercise price of the option and the closing stock price of our common stock on the last trading day of the period. Options exercisable of 479,622 as of March 31, 2023, had a weighted-average exercise price of $44.60 per share. Time-Based Restricted Stock Units We have granted time-based restricted stock units to certain participants under the 2016 Plan that are stock-settled with common shares. Time-based restricted stock units granted under the 2016 Plan vest over one to three years . Stock-based compensation expense included in the Condensed Consolidated Statements of Operations for time-based restricted stock units was $1.4 million and $1.3 million for the three months ended March 31, 2024 and 2023, respectively. At March 31, 2024, there was approximately $9.9 million of total unrecognized pre-tax compensation expense related to outstanding time-based restricted stock units that is expected to be recognized over a weighted-average period of 2.2 years. Our time-based restricted stock unit activity for the three months ended March 31, 2024, was as follows: Weighted- Average Grant Aggregate Units Date Fair Value Intrinsic (In thousands except unit and per unit data) Outstanding Per Unit Value (1) Balance at December 31, 2023 589,142 $ 16.35 $ 8,425 Granted 367,036 $ 13.88 Vested (133,324) $ 17.60 Cancelled (9,252) $ 18.20 Balance at March 31, 2024 813,602 $ 15.01 $ 13,221 (1) The aggregate intrinsic value of restricted stock units outstanding was based on our closing stock price on the last trading day of the period. Performance-Based Restricted Stock Units We have granted performance-based restricted stock units (“PSUs”) to certain participants under the 2016 Plan. These PSUs have both performance-based and time-based vesting features. The PSUs granted in 2023 have three separate performance periods, and one-third of each grant will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA margin are achieved in each of 2023 and 2024 (ranging from 25% to 175% of target), and one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2025 (ranging from 25% to 175% of target). The PSUs granted in 2024 have three separate performance periods, and one-third of each grant will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA margin are achieved in 2024 (ranging from 25% to 175% of target), one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2025 (ranging from 25% to 175% of target), and one-third will be earned if and to the extent performance goals to be established are achieved in 2026. All earned and vested PSUs will be settled in shares of common stock. Stock-based compensation expense recognized for PSUs was $0.4 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively. At March 31, 2024, there was approximately $3.1 million of total unrecognized pre-tax compensation expense related to outstanding PSUs that is expected to be recognized over a weighted average period of 2.5 years. Our PSU activity for the three months ended March 31, 2024, was as follows: Weighted- Average Grant Aggregate PSUs Date Fair Value Intrinsic (In thousands except unit and per unit data) Outstanding Per Unit Value (1) Balance at December 31, 2023 198,232 $ 18.93 $ 2,785 Granted 160,659 $ 13.88 Vested (38,842) $ 29.02 Cancelled — $ — Balance at March 31, 2024 320,049 $ 15.17 $ 5,201 (1) The aggregate intrinsic value of PSUs outstanding was based on our closing stock price on the last trading day of the period. Employee Stock Purchase Plan Our employee stock purchase plan (“ESPP”), which was approved by our Board of Directors on April 27, 2016, and by our stockholders on June 20, 2016, allows participating employees to purchase shares of our common stock at a discount through payroll deductions. The ESPP is available to all of our employees and employees of participating subsidiaries. Participating employees may purchase common stock, on a voluntary after-tax basis, at a price equal to 85% of the lower of the closing market price per share of our common stock on the first or last trading day of each stock purchase period. The ESPP provides for six-month purchase periods, beginning on May 16 and November 16 of each calendar year. A total of 1,600,000 shares of common stock was initially reserved for issuance under the ESPP. This share reserve will automatically be supplemented each January 1, commencing in 2017 and ending on and including January 1, 2026, by an amount equal to the least of (a) 1% of the shares of our common stock outstanding on the immediately preceding December 31, (b) 500,000 shares or (c) such lesser amount as our Board of Directors may determine. Pursuant to the automatic increase feature of the ESPP, 236,003 shares were added as available for issuance thereunder on January 1, 2024. Our Board of Directors exercised its prerogative to forego the automatic increase on January 1, 2023. As of March 31, 2024, 1,605,871 shares were available for future issuance under the ESPP. We recognized stock-based compensation expense associated with the ESPP of $0.1 million and $0.2 million for the three months ended March 31, 2024 and 2023, respectively. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue | |
Revenue | Note 11. Revenue We derive our revenue from the sale and rental of our products to our customers in the United States. The following table presents our revenue, inclusive of sales and rental revenue, disaggregated by product line : Three Months Ended March 31, (In thousands) 2024 2023 Revenue Lymphedema products $ 52,313 $ 49,752 Airway clearance products 8,775 9,094 Total $ 61,088 $ 58,846 Percentage of total revenue Lymphedema products 86% 85% Airway clearance products 14% 15% Total 100% 100% Our revenue by channel, inclusive of sales and rental revenue, for the three months ended March 31, 2024 and 2023, are summarized in the following table: Three Months Ended March 31, (In thousands) 2024 2023 Private insurers and other payers $ 31,277 $ 25,425 Veterans Administration 6,826 5,823 Medicare 14,210 18,504 Durable medical equipment distributors 8,775 9,094 Total $ 61,088 $ 58,846 Our rental revenue is derived from rent-to-purchase arrangements that typically range from three to ten months . As title transfers to the patient, with whom we have the contract, upon the termination of the lease term and because collectability is probable, under ASC 842, these are recognized as sales-type leases. Each rental agreement contains two components, the controller and related garments, both of which are interdependent and recognized as one lease component. The revenue and associated cost of revenue of sales-type leases are recognized on the lease commencement date and a net investment in leases is recorded on the Condensed Consolidated Balance Sheets. We bill the patients’ insurance payers monthly over the duration of the rental term. We record the net investment in leases and recognize revenue upon commencement of the lease in the amount of the expected consideration to be received through the monthly payments. Similar to our sales revenue, the transaction price is impacted by multiple factors, including the terms and conditions contracted by third-party payers. As the rental contract resides with the patients, we have elected the portfolio approach, at the payer level, to determine the expected consideration, which considers the impact of early terminations. While the contract is with the patient, in certain circumstances, the third-party payer elects an initial rental period with an option to extend. We assess the likelihood of extending the lease at the onset of the lease to determine if the option is reasonably certain to be exercised. As the lease is short-term in nature, we anticipate collection of substantially all of the net investment within the first year of the lease agreement. Completion of these payments represents the fair market value of the equipment, and as such, interest income is not applicable. Rental revenue for the three months ended March 31, 2024 and 2023, was primarily from private insurers. Sales-type lease revenue and the associated cost of revenue for the three months ended March 31, 2024 and 2023, was: Three Months Ended March 31, (In thousands) 2024 2023 Sales-type lease revenue $ 7,781 $ 6,055 Cost of sales-type lease revenue 2,715 2,736 Gross profit $ 5,066 $ 3,319 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Taxes | |
Income Taxes | Note 12. Income Taxes We record our interim provision for income taxes by applying our estimated annual effective tax rate to our year-to-date pre-tax income (loss) and adjusting for discrete tax items recorded in the period. Deferred income taxes result from temporary differences between the reporting of amounts for financial statement purposes and income tax purposes. These differences relate primarily to different methods used for income tax reporting purposes, including for depreciation and amortization, warranty and vacation accruals, and deductions related to allowances for doubtful accounts receivable and inventory reserves. Our provision for income taxes includes current federal and state income tax expense, as well as deferred federal and state income tax expense. The effective tax rate for the three months ended March 31, 2024, was a benefit of 21.4% , compared to a benefit of 60.7% for the three months ended March 31, 2023. The primary driver of the change in our effective tax rate was attributable to the fact that we did not have a full valuation allowance on our deferred tax assets for the current year period, while the prior year period reported a full valuation allowance. We recorded an income tax benefit of $0.6 million and an income tax benefit of $2.9 million for the three months ended March 31, 2024 and 2023, respectively. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority is more-likely-than-not to sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the condensed consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company currently is not under examination in any jurisdictions. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Net Loss Per Share | |
Net Loss Per Share | Note 13. Net Loss Per Share The following table sets forth the computation of our basic and diluted net loss per share: Three Months Ended March 31, (In thousands, except share and per share data) 2024 2023 Net loss $ (2,209) $ (1,886) Weighted-average shares outstanding 23,665,829 21,283,752 Weighted-average shares used to compute diluted net loss per share 23,665,829 21,283,752 Net loss per share - Basic $ (0.09) $ (0.09) Net loss per share - Diluted $ (0.09) $ (0.09) The following common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive: Three Months Ended March 31, 2024 2023 Restricted stock units 813,602 736,942 Common stock options 422,757 586,212 Performance stock units 320,049 233,798 Employee stock purchase plan 84,891 125,775 Total 1,641,299 1,682,727 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Measurements | |
Fair Value Measurements | Note 14. Fair Value Measurements We determine the fair value of our assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We use a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1). The next highest priority is based on quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in non-active markets or other observable inputs (Level 2). The lowest priority is given to unobservable inputs (Level 3). As of March 31, 2024, our obligations under the AffloVest Acquisition earn-out arrangements had been paid in full. Prior to the determination of the actual amount of the earn-out, the earn-out liability was valued by employing a Monte Carlo Simulation model in a risk-neutral framework, which is a Level 3 input. The underlying simulated variable included recognized revenue. The recognized revenue volatility estimate was based on a study of historical asset volatility for a set of comparable public companies. The model included other assumptions including the market price of risk, which was calculated as the weighted average cost of capital less the long-term risk-free rate. The earn-out liability was adjusted to fair value at each reporting date until the end of the earn-out period, which was September 30, 2023. Changes in fair value were included in intangible asset amortization and earn-out expenses in our Condensed Consolidated Statements of Operations. Changes in the earn-out liability measured at fair value using Level 3 inputs were as follows: (In thousands) Earn-out liability at December 31, 2022 $ 13,050 Payment on earn-out — Fair value adjustments 660 Earn-out liability at March 31, 2023 $ 13,710 On May 25, 2023, the Company paid $5.0 million, plus an imputed interest payment of $250,000 , relating to the initial earn-out. Subsequent to September 30, 2023, it was determined that the calculated amount of the second earn-out payment was $5.6 million, which was paid by the Company on November 28, 2023. The carrying amounts of financial instruments such as cash equivalents, accounts receivable, other assets, accounts payable, accrued expenses and other liabilities approximate their related fair values due to the short-term maturities of these items. Non-financial assets, such as equipment and leasehold improvements, and intangible assets are subject to non-recurring fair value measurements if they are deemed impaired. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. The results for the three months ended March 31, 2024, are not necessarily indicative of results to be expected for the year ending December 31, 2024, or for any other interim period or for any future year. The condensed consolidated interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023. |
Principles of Consolidation | Principles of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Tactile Systems Technology, Inc. and its wholly owned subsidiary, Swelling Solutions, Inc. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and to disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Accounting Pronouncement Not Yet Adopted | Accounting Pronouncement Not Yet Adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” which requires entities to enhance disclosures around segment reporting. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” which requires entities to enhance disclosures around income taxes. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures . |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventories | |
Schedule of inventories | (In thousands) At March 31, 2024 At December 31, 2023 Finished goods $ 7,519 $ 7,979 Component parts and work-in-process 13,325 14,548 Total inventories $ 20,844 $ 22,527 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets | |
Schedule of finite lived intangible assets | Weighted- At March 31, 2024 Average Gross Amortization Carrying Accumulated Net (In thousands) Period Amount Amortization Amount Definite-lived intangible assets: Patents 12 years $ 1,039 $ 269 $ 770 Defensive intangible assets 1 year 1,125 956 169 Customer accounts — 125 125 — Customer relationships 10 years 31,000 6,107 24,893 Developed technology 8 years 13,000 3,027 9,973 Subtotal 46,289 10,484 35,805 Unamortized intangible assets: Tradenames 9,500 — 9,500 Patents pending 490 — 490 Total intangible assets $ 56,279 $ 10,484 $ 45,795 Weighted- At December 31, 2023 Average Gross Amortization Carrying Accumulated Net (In thousands) Period Amount Amortization Amount Definite-lived intangible assets: Patents 12 years $ 1,018 $ 248 $ 770 Defensive intangible assets 1 year 1,125 920 205 Customer accounts — 125 125 — Customer relationships 11 years 31,000 5,511 25,489 Developed technology 9 years 13,000 2,731 10,269 Subtotal 46,268 9,535 36,733 Unamortized intangible assets: Tradenames 9,500 — 9,500 Patents pending 491 — 491 Total intangible assets $ 56,259 $ 9,535 $ 46,724 |
Schedule of future amortization expense | (In thousands) 2024 (April 1 - December 31) $ 2,847 2025 3,707 2026 3,642 2027 3,634 2028 3,631 Thereafter 18,344 Total $ 35,805 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accrued Expenses | |
Schedule of Accrued Expenses | (In thousands) At March 31, 2024 At December 31, 2023 Warranty $ 2,191 $ 2,357 In-transit inventory 1,454 401 Travel 1,119 1,038 Legal and consulting 742 611 Clinical studies 356 363 Sales and use tax 184 183 Other 820 951 Total $ 6,866 $ 5,904 |
Warranty Reserves (Tables)
Warranty Reserves (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Warranty Reserves | |
Schedule of warranty reserves | Three Months Ended March 31, (In thousands) 2024 2023 Beginning balance $ 4,038 $ 4,212 Warranty provision 840 874 Processed warranty claims (1,042) (1,086) Ending balance $ 3,836 $ 4,000 Accrued warranty reserve, current $ 2,191 $ 1,916 Accrued warranty reserve, non-current 1,645 2,084 Total accrued warranty reserve $ 3,836 $ 4,000 |
Credit Agreement (Tables)
Credit Agreement (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Credit Agreement | |
Schedule of maturities of the term note payable | (In thousands) Amount 2024 (April 1 - December 31) $ 2,250 2025 3,000 2026 23,250 Total 28,500 Less: Deferred financing fees (107) Net Note Payable 28,393 Less: Current portion of note payable (2,956) Non-current portion of note payable $ 25,437 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies | |
Summary of lease-related assets and liabilities | (In thousands) At March 31, 2024 At December 31, 2023 Right of use operating lease assets $ 18,480 $ 19,128 Operating lease liabilities: Current $ 2,740 $ 2,807 Non-current 17,857 18,436 Total $ 20,597 $ 21,243 Operating leases: Weighted average remaining lease term 6.5 years 6.7 years Weighted average discount rate 4.3% 4.3% Three Months Ended March 31, 2024 2023 Supplemental cash flow information for our operating leases: Cash paid for operating lease liabilities $ 867 $ 860 |
Summary of undiscounted cash flows | (In thousands) 2024 (April 1 - December 31) $ 2,667 2025 3,644 2026 3,715 2027 3,210 2028 3,185 Thereafter 6,943 Total minimum lease payments 23,364 Less: Amount of lease payments representing interest (2,767) Present value of future minimum lease payments 20,597 Less: Current obligations under operating lease liabilities (2,740) Non-current obligations under operating lease liabilities $ 17,857 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Schedule of allocation of total stock-based compensation expense | Three Months Ended March 31, (In thousands) 2024 2023 Cost of revenue $ 83 $ 103 Sales and marketing expenses 738 752 Research and development expenses 33 49 Reimbursement, general and administrative expenses 1,185 1,119 Total stock-based compensation expense $ 2,039 $ 2,023 |
Schedule of stock option activity | Weighted- Weighted- Average Average Aggregate Options Exercise Price Remaining Intrinsic (In thousands except options and per share data) Outstanding Per Share (1) Contractual Life Value (2) Balance at December 31, 2023 429,960 $ 40.74 3.8 years $ 223 Exercised (354) $ 1.35 $ 5 Forfeited — $ — Cancelled/Expired (6,849) $ 44.62 Balance at March 31, 2024 422,757 $ 40.71 3.6 years $ 289 Options exercisable at March 31, 2024 395,952 $ 41.94 3.5 years $ 160 (1) The exercise price of each option granted during the period shown was equal to the market price of the underlying stock on the date of grant. (2) The aggregate intrinsic value of options exercised represents the difference between the exercise price of the option and the closing stock price of our common stock on the date of exercise. The aggregate intrinsic value of options outstanding represents the difference between the exercise price of the option and the closing stock price of our common stock on the last trading day of the period. |
Time-Based Restricted Stock Units | |
Schedule of stock-settled restricted stock unit activity | Weighted- Average Grant Aggregate Units Date Fair Value Intrinsic (In thousands except unit and per unit data) Outstanding Per Unit Value (1) Balance at December 31, 2023 589,142 $ 16.35 $ 8,425 Granted 367,036 $ 13.88 Vested (133,324) $ 17.60 Cancelled (9,252) $ 18.20 Balance at March 31, 2024 813,602 $ 15.01 $ 13,221 (1) The aggregate intrinsic value of restricted stock units outstanding was based on our closing stock price on the last trading day of the period. |
Performance-based stock-settled restricted stock units | |
Schedule of stock-settled restricted stock unit activity | Weighted- Average Grant Aggregate PSUs Date Fair Value Intrinsic (In thousands except unit and per unit data) Outstanding Per Unit Value (1) Balance at December 31, 2023 198,232 $ 18.93 $ 2,785 Granted 160,659 $ 13.88 Vested (38,842) $ 29.02 Cancelled — $ — Balance at March 31, 2024 320,049 $ 15.17 $ 5,201 (1) The aggregate intrinsic value of PSUs outstanding was based on our closing stock price on the last trading day of the period. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue | |
Summary of revenue disaggregated by product | Three Months Ended March 31, (In thousands) 2024 2023 Revenue Lymphedema products $ 52,313 $ 49,752 Airway clearance products 8,775 9,094 Total $ 61,088 $ 58,846 Percentage of total revenue Lymphedema products 86% 85% Airway clearance products 14% 15% Total 100% 100% |
Summary of revenue by channel | Three Months Ended March 31, (In thousands) 2024 2023 Private insurers and other payers $ 31,277 $ 25,425 Veterans Administration 6,826 5,823 Medicare 14,210 18,504 Durable medical equipment distributors 8,775 9,094 Total $ 61,088 $ 58,846 |
Sales-type lease revenue and the associated cost of goods sold | Three Months Ended March 31, (In thousands) 2024 2023 Sales-type lease revenue $ 7,781 $ 6,055 Cost of sales-type lease revenue 2,715 2,736 Gross profit $ 5,066 $ 3,319 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Net Loss Per Share | |
Schedule of computation of the basic and diluted net income (loss) per share | Three Months Ended March 31, (In thousands, except share and per share data) 2024 2023 Net loss $ (2,209) $ (1,886) Weighted-average shares outstanding 23,665,829 21,283,752 Weighted-average shares used to compute diluted net loss per share 23,665,829 21,283,752 Net loss per share - Basic $ (0.09) $ (0.09) Net loss per share - Diluted $ (0.09) $ (0.09) |
Schedule of potentially dilutive securities outstanding | Three Months Ended March 31, 2024 2023 Restricted stock units 813,602 736,942 Common stock options 422,757 586,212 Performance stock units 320,049 233,798 Employee stock purchase plan 84,891 125,775 Total 1,641,299 1,682,727 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Measurements | |
Schedule of changes in the earn-out liability | (In thousands) Earn-out liability at December 31, 2022 $ 13,050 Payment on earn-out — Fair value adjustments 660 Earn-out liability at March 31, 2023 $ 13,710 |
Nature of Business and Operat_2
Nature of Business and Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Feb. 27, 2023 | Aug. 02, 2016 | Mar. 31, 2023 | |
Nature of Business and Operations | |||
Proceeds from Issuance of Common Stock | $ 34,625 | ||
IPO | |||
Nature of Business and Operations | |||
Number of shares of common stock sold | 4,120,000 | ||
IPO price per share (in dollars per share) | $ 10 | ||
Net proceeds from the initial public offering | $ 35,400 | ||
Expense Relating To Initial Public Offering | $ 2,900 | ||
Follow-On Public Offering | |||
Nature of Business and Operations | |||
Number of shares of common stock sold | 2,875,000 | ||
Stock price | $ 13 | ||
Proceeds from Issuance of Common Stock | $ 34,600 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Inventories | ||
Finished goods | $ 7,519 | $ 7,979 |
Component parts and work-in-process | 13,325 | 14,548 |
Total inventories | $ 20,844 | $ 22,527 |
Goodwill And Intangible Asset_2
Goodwill And Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2024 | Sep. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2023 | Sep. 30, 2021 | |
Goodwill and Intangible Assets | |||||
Goodwill | $ 31,063 | $ 31,063 | |||
Impairment recognized | $ 0 | ||||
Definite-lived intangible assets: | |||||
Gross Carrying Amount | 46,289 | 46,268 | |||
Accumulated Amortization | 10,484 | 9,535 | |||
Total | 35,805 | 36,733 | |||
Unamortized intangible assets: | |||||
Total intangible assets (Gross) | 56,279 | 56,259 | |||
Total intangible assets (Net) | 45,795 | 46,724 | |||
Amortization expense | 900 | $ 1,000 | |||
Future Amortization | |||||
2024 (April 1 - December 31) | 2,847 | ||||
2025 | 3,707 | ||||
2026 | 3,642 | ||||
2027 | 3,634 | ||||
2028 | 3,631 | ||||
Thereafter | 18,344 | ||||
Total | 35,805 | 36,733 | |||
Tradenames | |||||
Unamortized intangible assets: | |||||
Gross Carrying Amount, Indefinite | 9,500 | 9,500 | |||
Patents pending | |||||
Unamortized intangible assets: | |||||
Gross Carrying Amount, Indefinite | $ 490 | $ 491 | |||
Patents pending | |||||
Definite-lived intangible assets: | |||||
Weighted Average Amortization Period | 12 years | 12 years | |||
Gross Carrying Amount | $ 1,039 | $ 1,018 | |||
Accumulated Amortization | 269 | 248 | |||
Total | 770 | 770 | |||
Future Amortization | |||||
Total | $ 770 | $ 770 | |||
Defensive intangible assets | |||||
Definite-lived intangible assets: | |||||
Weighted Average Amortization Period | 1 year | 1 year | |||
Gross Carrying Amount | $ 1,125 | $ 1,125 | |||
Accumulated Amortization | 956 | 920 | |||
Total | 169 | 205 | |||
Future Amortization | |||||
Total | 169 | 205 | |||
Customer accounts | |||||
Definite-lived intangible assets: | |||||
Gross Carrying Amount | 125 | 125 | |||
Accumulated Amortization | $ 125 | $ 125 | |||
Customer relationships | |||||
Definite-lived intangible assets: | |||||
Weighted Average Amortization Period | 10 years | 11 years | |||
Gross Carrying Amount | $ 31,000 | $ 31,000 | |||
Accumulated Amortization | 6,107 | 5,511 | |||
Total | 24,893 | 25,489 | |||
Future Amortization | |||||
Total | $ 24,893 | $ 25,489 | |||
Developed technology | |||||
Definite-lived intangible assets: | |||||
Weighted Average Amortization Period | 8 years | 9 years | |||
Gross Carrying Amount | $ 13,000 | $ 13,000 | |||
Accumulated Amortization | 3,027 | 2,731 | |||
Total | 9,973 | 10,269 | |||
Future Amortization | |||||
Total | $ 9,973 | $ 10,269 | |||
AffloVest APA | |||||
Goodwill and Intangible Assets | |||||
Goodwill | $ 31,100 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Accrued Expenses | |||
Warranty | $ 2,191 | $ 2,357 | $ 1,916 |
In-transit inventory | 1,454 | 401 | |
Travel | 1,119 | 1,038 | |
Legal and consulting | 742 | 611 | |
Clinical studies | 356 | 363 | |
Sales and use tax | 184 | 183 | |
Other | 820 | 951 | |
Total | $ 6,866 | $ 5,904 |
Warranty Reserves (Details)
Warranty Reserves (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Beginning balance | $ 4,038 | $ 4,212 | |
Warranty provision | 840 | 874 | |
Processed warranty claims | (1,042) | (1,086) | |
Ending balance | 3,836 | 4,000 | |
Accrued warranty reserve, current | 2,191 | 1,916 | $ 2,357 |
Accrued warranty reserve, non-current | 1,645 | 2,084 | $ 1,681 |
Total accrued warranty reserve | $ 3,836 | $ 4,000 |
Credit Agreement (Details)
Credit Agreement (Details) - USD ($) | 3 Months Ended | |||||
Dec. 31, 2023 | Aug. 01, 2023 | Jun. 21, 2023 | Feb. 22, 2022 | Sep. 08, 2021 | Mar. 31, 2024 | |
Credit Agreement | ||||||
Basis spread (as a percent) | 0.10% | |||||
Credit facility outstanding amount | $ 25,000,000 | |||||
Line of credit, threshold contingent increase in borrowing capacity | 25,000,000 | |||||
Credit agreement, total aggregate principal amount | 80,000,000 | |||||
Long-term debt | $ 28,500,000 | |||||
SOFR | ||||||
Credit Agreement | ||||||
Basis spread (as a percent) | 3.50% | |||||
Revolving credit facility | ||||||
Credit Agreement | ||||||
Line of credit | 25,000,000 | |||||
Debt instrument periodic payment | $ 16,800,000 | |||||
Revolving credit facility | Federal Funds | ||||||
Credit Agreement | ||||||
Basis spread (as a percent) | 0.50% | |||||
Revolving credit facility | Base Rate | ||||||
Credit Agreement | ||||||
Basis spread (as a percent) | 1% | |||||
Revolving credit facility | SOFR | ||||||
Credit Agreement | ||||||
Basis spread (as a percent) | 3.50% | 7.16% | ||||
Revolving credit facility | Maximum | ||||||
Credit Agreement | ||||||
Unused line fee (as a percent) | 0.20% | |||||
Revolving credit facility | Maximum | Base Rate | ||||||
Credit Agreement | ||||||
Basis spread (as a percent) | 2.25% | |||||
Revolving credit facility | Maximum | SOFR | ||||||
Credit Agreement | ||||||
Basis spread (as a percent) | 3.25% | |||||
Revolving credit facility | Minimum | ||||||
Credit Agreement | ||||||
Unused line fee (as a percent) | 0.125% | |||||
Revolving credit facility | Minimum | Base Rate | ||||||
Credit Agreement | ||||||
Basis spread (as a percent) | 0.75% | |||||
Revolving credit facility | Minimum | SOFR | ||||||
Credit Agreement | ||||||
Basis spread (as a percent) | 1.75% | |||||
Term Loan | ||||||
Credit Agreement | ||||||
Increase in term debt | $ 8,250,000 | |||||
Debt instrument face amount | 30,000,000 | |||||
Long-term debt | $ 30,000,000 | $ 28,393,000 | ||||
Debt instrument periodic payment | $ 750,000 | |||||
Debt instrument frequency of periodic payment | quarterly | |||||
Principal prepayment of term loan | $ 3,000,000 |
Credit Agreement - Maturities o
Credit Agreement - Maturities of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Sep. 08, 2021 |
Maturities of notes payable | ||
Net Notes Payable | $ 28,500 | |
Term Loan | ||
Maturities of notes payable | ||
2024 | 2,250 | |
2025 | 3,000 | |
2026 | 23,250 | |
Total | 28,500 | |
Less: Deferred financing fees | (107) | |
Net Notes Payable | 28,393 | $ 30,000 |
Less: Current portion of notes payable | (2,956) | |
Non-current portion of notes payable | $ 25,437 |
Commitments and Contingencies -
Commitments and Contingencies - Lease Obligations (Details) - ft² | 3 Months Ended | |||
Mar. 31, 2024 | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 31, 2018 | |
Minimum | ||||
Commitments and Contingencies | ||||
Lease terms | 12 months | |||
Building | Minimum | ||||
Commitments and Contingencies | ||||
Lease terms | 1 year | |||
Building | Maximum | ||||
Commitments and Contingencies | ||||
Lease terms | 7 years | |||
Equipment | ||||
Commitments and Contingencies | ||||
Option to renew | true | |||
Equipment | Minimum | ||||
Commitments and Contingencies | ||||
Lease terms | 1 year | |||
Equipment | Maximum | ||||
Commitments and Contingencies | ||||
Lease terms | 4 years | |||
Initial lease | ||||
Commitments and Contingencies | ||||
Area of office space | 80,000 | |||
Second lease | ||||
Commitments and Contingencies | ||||
Area of office space | 29,000 | |||
Additional office space added to the lease | 4,000 | |||
Third lease | ||||
Commitments and Contingencies | ||||
Additional office space added to the lease | 37,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Lease related assets and liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Lease-related assets and liabilities | |||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Right of use operating lease assets | Right of use operating lease assets | |
Right of use operating lease assets | $ 18,480 | $ 19,128 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Operating lease liabilities, Current | Operating lease liabilities, Current | |
Operating lease liabilities, Current | $ 2,740 | $ 2,807 | |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Operating lease liabilities, non-current | Operating lease liabilities, non-current | |
Operating lease liabilities, non-current | $ 17,857 | $ 18,436 | |
Present value of future minimum lease payments | $ 20,597 | $ 21,243 | |
Weighted average remaining lease term | 6 years 6 months | 6 years 8 months 12 days | |
Weighted average discount rate | 4.30% | 4.30% | |
Cash paid for operating lease liabilities | $ 867 | $ 860 |
Commitments and Contingencies_3
Commitments and Contingencies - Undiscounted cash flows (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Undiscounted cash flows | ||
2024 (April 1 - December 31) | $ 2,667 | |
2025 | 3,644 | |
2026 | 3,715 | |
2027 | 3,210 | |
2028 | 3,185 | |
Thereafter | 6,943 | |
Total minimum lease payments | 23,364 | |
Less: Amount of lease payments representing interest | (2,767) | |
Present value of future minimum lease payments | 20,597 | $ 21,243 |
Less: Current obligations under operating lease liabilities | (2,740) | (2,807) |
Non-current obligations under operating lease liabilities | $ 17,857 | $ 18,436 |
Commitments and Contingencies_4
Commitments and Contingencies - Lease commitments and operating lease cost (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Commitments and Contingencies | ||
Operating lease cost | $ 0.9 | $ 0.9 |
Commitments and Contingencies_5
Commitments and Contingencies - Major Vendors (Details) - Vendor One - item | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Commitments and Contingencies | ||
Number of vendors | 1 | 1 |
Purchases | Vendor | ||
Commitments and Contingencies | ||
Total purchases (in percentage) | 23% | 29% |
Commitments and Contingencies_6
Commitments and Contingencies - Purchase Commitments (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Purchase commitments | |
Purchase orders issued | $ 25.7 |
Commitments and Contingencies_7
Commitments and Contingencies - Retirement Plan (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
401(k) | ||
Retirement Plan | ||
Discretionary contributions | $ 0.7 | $ 0.4 |
Commitments and Contingencies_8
Commitments and Contingencies - Legal Proceedings (Details) | May 24, 2022 item |
The "Weaver Lawsuit" | |
Loss Contingencies [Line Items] | |
Number of former officers and directors | 8 |
Stockholders' Equity - Stock-Ba
Stockholders' Equity - Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 01, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Stock-based compensation | |||
Compensation expense | $ 2,039 | $ 2,023 | |
Cost of revenue. | |||
Stock-based compensation | |||
Compensation expense | 83 | 103 | |
Sales and marketing expenses | |||
Stock-based compensation | |||
Compensation expense | 738 | 752 | |
Research and development expenses | |||
Stock-based compensation | |||
Compensation expense | 33 | 49 | |
Reimbursement, general and administrative expenses | |||
Stock-based compensation | |||
Compensation expense | $ 1,185 | $ 1,119 | |
2016 Plan | |||
Stock-based compensation | |||
Number of shares authorized | 4,800,000 | ||
Automatic annual increase to the number of shares reserved and available for issuance as a percentage of outstanding common stock (as a percent) | 5% | ||
Automatic annual increase to the number of shares reserved and available for issuance | 2,500,000 | ||
Increase in number of shares reserved and available for issuance | 1,180,019 | ||
Shares available for future issuance | 6,451,155 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options and Restricted Stock (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 USD ($) item $ / shares shares | Mar. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | |
Stock-based compensation, general disclosures. | |||
Stock-based compensation expense | $ | $ 2,039 | $ 2,023 | |
Employee Stock Option | |||
Stock-based compensation, general disclosures. | |||
Stock-based compensation expense | $ | 100 | $ 300 | |
Total unrecognized pre-tax compensation expense related to nonvested stock option awards | $ | $ 100 | ||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 1 year | ||
Options Outstanding | |||
Outstanding at beginning of period | shares | 429,960 | ||
Exercised | shares | (354) | ||
Cancelled/Expired | shares | (6,849) | ||
Outstanding at end of period | shares | 422,757 | 429,960 | |
Weighted Average Exercise Price Per Share | |||
Outstanding at beginning of period | $ / shares | $ 40.74 | ||
Exercised | $ / shares | 1.35 | ||
Cancelled/Expired | $ / shares | 44.62 | ||
Outstanding at end of period | $ / shares | $ 40.71 | $ 40.74 | |
Other information | |||
Options exercisable number of shares exercisable | shares | 395,952 | 479,622 | |
Options exercisable, weighted-average exercise price | $ / shares | $ 41.94 | $ 44.60 | |
Weighted average remaining contractual life (in years) | 3 years 7 months 6 days | 3 years 9 months 18 days | |
Options exercisable, weighted-average remaining contractual life | 3 years 6 months | ||
Aggregate Intrinsic Value, Options outstanding | $ | $ 289 | $ 223 | |
Aggregate Intrinsic Value, Exercised | $ | 5 | ||
Aggregate Intrinsic Value, Options exercisable | $ | $ 160 | ||
Employee Stock Option | Minimum | |||
Stock-based compensation, general disclosures. | |||
Vesting period (in years) | 3 years | ||
Term (in years) | 7 years | ||
Employee Stock Option | Maximum | |||
Stock-based compensation, general disclosures. | |||
Vesting period (in years) | 4 years | ||
Term (in years) | 10 years | ||
2016 Plan | Time-Based Restricted Stock Units | |||
Stock-based compensation, general disclosures. | |||
Stock-based compensation expense | $ | $ 1,400 | $ 1,300 | |
Total unrecognized pre-tax compensation expense related to awards | $ | $ 9,900 | ||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 2 years 2 months 12 days | ||
Units Outstanding | |||
Restricted stock unit awards outstanding at the beginning of the period (in shares) | shares | 589,142 | ||
Granted (in shares) | shares | 367,036 | ||
Vested (in shares) | shares | (133,324) | ||
Cancelled (in shares) | shares | (9,252) | ||
Restricted stock unit awards outstanding at the end of the period (in shares) | shares | 813,602 | 589,142 | |
Weighted Average Grant Date Fair Value Per Unit | |||
Restricted stock unit awards outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 16.35 | ||
Granted (in dollars per share) | $ / shares | 13.88 | ||
Vested (in dollars per share) | $ / shares | 17.60 | ||
Cancelled (in dollars per share) | $ / shares | 18.20 | ||
Restricted stock unit awards outstanding at the end of the period (in dollars per share) | $ / shares | $ 15.01 | $ 16.35 | |
Aggregate Intrinsic Value | |||
Restricted stock unit awards, Average Intrinsic Value | $ | $ 13,221 | $ 8,425 | |
2016 Plan | Time-Based Restricted Stock Units | Minimum | |||
Stock-based compensation, general disclosures. | |||
Vesting period (in years) | 1 year | ||
2016 Plan | Time-Based Restricted Stock Units | Maximum | |||
Stock-based compensation, general disclosures. | |||
Vesting period (in years) | 3 years | ||
2016 Plan | Performance-based stock-settled restricted stock units | |||
Stock-based compensation, general disclosures. | |||
Stock-based compensation expense | $ | $ 400 | $ 200 | |
Total unrecognized pre-tax compensation expense related to awards | $ | $ 3,100 | ||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 2 years 6 months | ||
Number of performance awards under share-based payment arrangement | item | 3 | ||
Units Outstanding | |||
Restricted stock unit awards outstanding at the beginning of the period (in shares) | shares | 198,232 | ||
Granted (in shares) | shares | 160,659 | ||
Vested (in shares) | shares | (38,842) | ||
Restricted stock unit awards outstanding at the end of the period (in shares) | shares | 320,049 | 198,232 | |
Weighted Average Grant Date Fair Value Per Unit | |||
Restricted stock unit awards outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 18.93 | ||
Granted (in dollars per share) | $ / shares | 13.88 | ||
Vested (in dollars per share) | $ / shares | 29.02 | ||
Restricted stock unit awards outstanding at the end of the period (in dollars per share) | $ / shares | $ 15.17 | $ 18.93 | |
Aggregate Intrinsic Value | |||
Restricted stock unit awards, Average Intrinsic Value | $ | $ 5,201 | $ 2,785 | |
2016 Plan | Performance-based stock-settled restricted stock units | Minimum | |||
Stock-based compensation, general disclosures. | |||
Performance goals revenue change and adjusted EBITDA margin | 25% | ||
2016 Plan | Performance-based stock-settled restricted stock units | Maximum | |||
Stock-based compensation, general disclosures. | |||
Performance goals revenue change and adjusted EBITDA margin | 175% | ||
2016 Plan | 2025 PSUs | Minimum | |||
Stock-based compensation, general disclosures. | |||
Performance goals revenue change and adjusted EBITDA margin | 25% | ||
2016 Plan | 2025 PSUs | Maximum | |||
Stock-based compensation, general disclosures. | |||
Performance goals revenue change and adjusted EBITDA margin | 175% | ||
2016 Plan | 2024 PSUs | Minimum | |||
Stock-based compensation, general disclosures. | |||
Performance goals revenue change and adjusted EBITDA margin | 25% | ||
2016 Plan | 2024 PSUs | Maximum | |||
Stock-based compensation, general disclosures. | |||
Performance goals revenue change and adjusted EBITDA margin | 175% | ||
2016 Plan | 2023 PSUs | |||
Stock-based compensation, general disclosures. | |||
Number of performance awards under share-based payment arrangement | item | 3 | ||
2016 Plan | Tranche one | 2024 PSUs | |||
Stock-based compensation, general disclosures. | |||
Award vesting percentage | 33.33% | ||
2016 Plan | Tranche one | 2023 PSUs | |||
Stock-based compensation, general disclosures. | |||
Award vesting percentage | 33.33% | ||
2016 Plan | Tranche two | 2025 PSUs | |||
Stock-based compensation, general disclosures. | |||
Award vesting percentage | 33.33% | ||
2016 Plan | Tranche three | 2026 PSUs | |||
Stock-based compensation, general disclosures. | |||
Award vesting percentage | 33.33% |
Stockholders' Equity - Employee
Stockholders' Equity - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2023 | Jan. 01, 2024 | Apr. 27, 2016 | |
Stockholders' Equity | ||||
Stock-based compensation expense | $ 2,039 | $ 2,023 | ||
2016 Plan | ||||
Stockholders' Equity | ||||
Shares reserved | 6,451,155 | |||
Employee Stock Purchase Plan | ||||
Stockholders' Equity | ||||
Purchase price of common stock under plan (as a percent) | 85% | |||
Offering period (in months) | 6 months | |||
Shares reserved | 1,605,871 | 236,003 | 1,600,000 | |
Incremental share increase (as a percent) | 1% | |||
Incremental share increase (in shares) | 500,000 | |||
Stock-based compensation expense | $ 100 | $ 200 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue | ||
Revenue | $ 61,088 | $ 58,846 |
Percentage of total revenue (in percent) | 100% | 100% |
Revenue from sale type lease | ||
Sales-type lease revenue | $ 7,781 | $ 6,055 |
Cost of sales-type lease revenue | 2,715 | 2,736 |
Gross profit | $ 5,066 | 3,319 |
Minimum | ||
Revenue from sale type lease | ||
Rental period of rent-to-purchase arrangements | 3 months | |
Maximum | ||
Revenue from sale type lease | ||
Rental period of rent-to-purchase arrangements | 10 months | |
Private insurers and other payers | ||
Revenue | ||
Revenue | $ 31,277 | 25,425 |
Veterans Administration | ||
Revenue | ||
Revenue | 6,826 | 5,823 |
Medicare | ||
Revenue | ||
Revenue | 14,210 | 18,504 |
Durable medical equipment distributors | ||
Revenue | ||
Revenue | 8,775 | 9,094 |
Lymphedema products | ||
Revenue | ||
Revenue | $ 52,313 | $ 49,752 |
Percentage of total revenue (in percent) | 86% | 85% |
Airway clearance products | ||
Revenue | ||
Revenue | $ 8,775 | $ 9,094 |
Percentage of total revenue (in percent) | 14% | 15% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Taxes | ||
Income tax benefit | $ (600) | $ (2,913) |
Effective Income Tax Rate Reconciliation, Percent | ||
Net effective rate | (21.40%) | (60.70%) |
Net Loss Per Share - Basic and
Net Loss Per Share - Basic and Diluted Net income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Net Loss Per Share | ||
Net Income (Loss) | $ (2,209) | $ (1,886) |
Weighted-average shares outstanding | 23,665,829 | 21,283,752 |
Weighted-average shares used to compute diluted net loss per share | 23,665,829 | 21,283,752 |
Net loss per share - Basic | $ (0.09) | $ (0.09) |
Net loss per share - Diluted | $ (0.09) | $ (0.09) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities Excluded From Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Net Income (Loss) Per Common Share | ||
Antidilutive securities excluded from computation of earnings per share | 1,641,299 | 1,682,727 |
Restricted stock units | ||
Net Income (Loss) Per Common Share | ||
Antidilutive securities excluded from computation of earnings per share | 813,602 | 736,942 |
Common stock options | ||
Net Income (Loss) Per Common Share | ||
Antidilutive securities excluded from computation of earnings per share | 422,757 | 586,212 |
Performance stock units | ||
Net Income (Loss) Per Common Share | ||
Antidilutive securities excluded from computation of earnings per share | 320,049 | 233,798 |
Employee stock purchase plan | ||
Net Income (Loss) Per Common Share | ||
Antidilutive securities excluded from computation of earnings per share | 84,891 | 125,775 |
Fair Value Measurements - Earn
Fair Value Measurements - Earn out liability (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 28, 2023 | May 25, 2023 | Mar. 31, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Payment on earn-out | $ (5,600) | $ (5,000) | |
Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Earn-out liability, beginning balance | $ 13,050 | ||
Fair value adjustments | 660 | ||
Earn-out liability, ending balance | $ 13,710 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Hierarchy (Details) - USD ($) | Nov. 28, 2023 | May 25, 2023 |
Fair Value Measurements | ||
Earn-out liability payment | $ 5,600,000 | $ 5,000,000 |
Imputed interest payment | $ 250,000 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (2,209) | $ (1,886) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |