Tactile Systems Technology, Inc. Reports Fourth Quarter and Full Year 2024 Financial Results

MINNEAPOLIS, Feb. 18, 2025 (GLOBE NEWSWIRE) -- Tactile Systems Technology, Inc. (“Tactile Medical”; the “Company”) (Nasdaq: TCMD), a medical technology company providing therapies for people with chronic disorders, today reported financial results for the fourth quarter and full year ended December 31, 2024. Fourth Quarter 2024 Summary & Recent Business Highlights: Total revenue increased 10% year-over-year to $85.6 millionGross margin of 75% versus 72% in Q4 2023Net income of $9.7 million versus $8.2 million in Q4 2023Adjusted EBITDA of $16.2 million versus $15.4 million in Q4 2023Expanded launch of Nimbl to include patients with lower extremity lymphedemaAppointed Laura King to Board of DirectorsPromoted Aaron Snodgrass to Senior Vice President, Sales, effective February 18, 2025 Full Year 2024 Summary: Total revenue increased 7% year-over-year in 2024 to $293.0 millionGross margin of 74% in 2024, compared to 71% in 2023Operating cashflow of $40.7 million in 2024, compared to $35.9 million in 2023Ended 2024 with $94.4 million in cash, up from $61.0 million at the end of 2023 “Our fourth quarter results capped off a dynamic year for Tactile, during which we launched our next-generation lymphedema platform, generated clinical evidence supporting the value of our therapies, deployed new workflow-related tools to enhance speed and efficiency in order operations, and served over 79,000 patients with our lymphedema and airway clearance solutions,” said Sheri Dodd, President and Chief Executive Officer of Tactile Medical. “Financially, we demonstrated a consistent ability to strengthen our balance sheet and expand profitability, while also delivering double-digit revenue growth in the fourth quarter.” Ms. Dodd concluded, “Our financial and operational progress in 2024, coupled with strong market fundamentals and an innovative portfolio, leaves us confident that we are well-positioned to advance our market leadership this year and over the long-term while delivering sustainable, profitable growth. In 2025, we will also continue investing in our strategic priority to enhance the overall patient experience, including through improving access to care, expanding treatment options, and supporting the end-to-end patient journey.” Fourth Quarter 2024 Financial Results Total revenue in the fourth quarter of 2024 increased $7.9 million, or 10%, to $85.6 million, compared to $77.7 million in the fourth quarter of 2023. The increase in total revenue was attributable to an increase of $7.6 million, or 11%, in sales and rentals of the lymphedema product line and an increase of $0.3 million, or 4%, in sales of the airway clearance product line in the quarter ended December 31, 2024, compared to the fourth quarter of 2023. Gross profit in the fourth quarter of 2024 increased $8.4 million, or 15%, to $64.4 million, compared to $56.0 million in the fourth quarter of 2023. Gross margin was 75.2% of revenue, compared to 72.1% of revenue in the fourth quarter of 2023. Operating expenses in the fourth quarter of 2024 increased $7.6 million, or 17%, to $51.9 million, compared to $44.2 million in the fourth quarter of 2023. Operating income was $12.5 million in the fourth quarter of 2024, compared to $11.8 million in the fourth quarter of 2023. Interest income was $0.9 million in each of the fourth quarters of 2024 and 2023. Interest expense was $0.5 million in the fourth quarter of 2024, compared to $0.9 million in the fourth quarter of 2023. Income tax expense was $3.3 million in the fourth quarter of 2024, compared to $3.6 million in the fourth quarter of 2023. Net income in the fourth quarter of 2024 was $9.7 million, or $0.40 per diluted share, compared to $8.2 million, or $0.35 per diluted share, in the fourth quarter of 2023. Weighted average shares used to compute diluted net income per share were 24.5 million and 23.8 million for the fourth quarters of 2024 and 2023, respectively. Adjusted EBITDA was $16.2 million in the fourth quarter of 2024, compared to $15.4 million in the fourth quarter of 2023. Full Year 2024 Financial Results Total revenue in the full year of 2024 increased $18.6 million, or 7%, to $293.0 million, compared to $274.4 million in the full year of 2023. The increase in total revenue was attributable to an increase of $17.6 million, or 7%, in sales and rentals of the lymphedema product line and an increase of $0.9 million, or 3%, in sales of the airway clearance product line in the full year of 2024, compared to the full year of 2023. Net income in the full year of 2024 was $17.0 million, or $0.70 per diluted share, compared to $28.5 million, or $1.23 per diluted share, in the full year of 2023. Weighted average shares used to compute diluted net income per share were 24.1 million and 23.2 million in the full year of 2024 and 2023, respectively. Adjusted EBITDA was $37.1 million in the full year of 2024, compared to $29.7 million in the full year of 2023. Balance Sheet Summary As of December 31, 2024, the Company had $94.4 million in cash and $26.3 million of outstanding borrowings under its credit agreement, compared to $61.0 million in cash and $29.3 million of outstanding borrowings under its credit agreement as of December 31, 2023. As of December 31, 2024, $26.5 million remained available under the Company’s $30.0 million share repurchase program, which became effective on October 30, 2024, and expires October 31, 2026. 2025 Financial Outlook The Company expects full year 2025 total revenue in the range of $316 million to $322 million, representing growth of approximately 8% to 10% year-over-year, compared to total revenue of $293.0 million in 2024. The Company also expects full year 2025 adjusted EBITDA in the range of $35 million to $37 million, compared to adjusted EBITDA of $37.1 million in 2024. Conference Call Management will host a conference call with a question-and-answer session at 5:00 p.m. Eastern Time on February 18, 2025, to discuss the results of the quarter and fiscal year. Those who would like to participate may dial 877-407-3088 (201-389-0927 for international callers) and provide access code 13751026. A live webcast of the call will also be provided on the investor relations section of the Company's website at investors.tactilemedical.com. For those unable to participate, a replay of the call will be available for two weeks at 877-660-6853 (201-612-7415 for international callers); access code 13751026. The webcast will be archived at investors.tactilemedical.com. About Tactile Systems Technology, Inc. (DBA Tactile Medical) Tactile Medical is a leader in developing and marketing at-home therapies for people suffering from underserved, chronic conditions including lymphedema, lipedema, chronic venous insufficiency and chronic pulmonary disease by helping them live better and care for themselves at home. Tactile Medical collaborates with clinicians to expand clinical evidence, raise awareness, increase access to care, reduce overall healthcare costs and improve the quality of life for tens of thousands of patients each year. Legal Notice Regarding Forward-Looking Statements This release contains forward-looking statements, including guidance for the full year 2025. Forward-looking statements are generally identifiable by the use of words like “may,” “will,” “should,” “could,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “continue,” “confident,” “outlook,” “guidance,” “project,” “goals,” “look forward,” “poised,” “designed,” “plan,” “return,” “focused,” “prospects” or “remain” or the negative of these words or other variations on these words or comparable terminology. The reader is cautioned not to put undue reliance on these forward-looking statements, as these statements are subject to numerous factors and uncertainties outside of the Company’s control that can make such statements untrue, including, but not limited to, the Company’s ability to obtain reimbursement from third-party payers for its products; the impacts of inflation, rising interest rates or a recession; the adequacy of the Company’s liquidity to pursue its business objectives; adverse economic conditions or intense competition; price increases for supplies and components; wage and component price inflation; loss of a key supplier; entry of new competitors and products; compliance with and changes in federal, state and local government regulation; loss or retirement of key executives, including prior to identifying a successor; technological obsolescence of the Company’s products; technical problems with the Company’s research and products; the Company’s ability to expand its business through strategic acquisitions; the Company’s ability to integrate acquisitions and related businesses; the effects of current and future U.S. and foreign trade policy and tariff actions; or the inability to carry out research, development and commercialization plans. In addition, other factors that could cause actual results to differ materially are discussed in the Company’s filings with the SEC. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company undertakes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise. Use of Non-GAAP Financial Measures This press release includes the non-GAAP financial measure of Adjusted EBITDA, which differs from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Adjusted EBITDA in this release represents net income, plus interest expense, net, or less interest income, net, less income tax benefit or plus income tax expense, plus depreciation and amortization, plus stock-based compensation expense, plus or minus the change in fair value of earn-out and plus executive transition costs. Reconciliation of this non-GAAP financial measure to its most directly comparable GAAP measure is included in this press release. This non-GAAP financial measure is presented because the Company believes it is a useful indicator of its operating performance. Management uses this measure principally as a measure of the Company’s operating performance and for planning purposes, including the preparation of the Company’s annual operating plan and financial projections. The Company believes this measure is useful to investors as supplemental information and because it is frequently used by analysts, investors and other interested parties to evaluate companies in its industry. The Company also believes this non-GAAP financial measure is useful to its management and investors as a measure of comparative operating performance from period to period. In addition, Adjusted EBITDA is used as a performance metric in the Company’s compensation program. The non-GAAP financial measure presented in this release should not be considered as an alternative to, or superior to, its respective GAAP financial measure, as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP, and it should not be construed to imply that the Company’s future results will be unaffected by unusual or non-recurring items. In addition, Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect certain cash requirements such as tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future. Adjusted EBITDA contains certain other limitations, including the failure to reflect our cash expenditures, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. In evaluating non-GAAP financial measures, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on the Company’s GAAP results in addition to using non-GAAP financial measures on a supplemental basis. The Company’s definition of these non-GAAP financial measures is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation. Tactile Systems Technology, Inc.Consolidated Balance Sheets December 31, December 31,(In thousands, except share and per share data) 2024 2023Assets Current assets Cash $94,367 $61,033Accounts receivable 44,937 43,173Net investment in leases 14,540 14,195Inventories 18,666 22,527Prepaid expenses and other current assets 5,053 4,366Total current assets 177,563 145,294Non-current assets Property and equipment, net 5,603 6,195Right of use operating lease assets 16,633 19,128Intangible assets, net 42,789 46,724Goodwill 31,063 31,063Accounts receivable, non-current — 10,936Deferred income taxes 18,311 19,378Other non-current assets 5,962 2,720Total non-current assets 120,361 136,144Total assets $297,924 $281,438Liabilities and Stockholders' Equity Current liabilities Accounts payable $5,648 $6,659Note payable 2,956 2,956Accrued payroll and related taxes 17,923 16,789Accrued expenses 7,780 5,904Income taxes payable 270 1,467Operating lease liabilities 2,980 2,807Other current liabilities 3,147 4,475Total current liabilities 40,704 41,057Non-current liabilities Note payable, non-current 23,220 26,176Accrued warranty reserve, non-current 1,209 1,681Income taxes payable, non-current 239 446Operating lease liabilities, non-current 15,955 18,436Total non-current liabilities 40,623 46,739Total liabilities 81,327 87,796 Stockholders’ equity: Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued and outstanding as of December 31, 2024 and December 31, 2023 — —Common stock, $0.001 par value, 300,000,000 shares authorized; 23,883,475 shares issued and outstanding as of December 31, 2024; 23,600,584 shares issued and outstanding as of December 31, 2023 24 24Additional paid-in capital 180,719 174,724Retained earnings 35,854 18,894Total stockholders’ equity 216,597 193,642Total liabilities and stockholders’ equity $297,924 $281,438 Tactile Systems Technology, Inc.Consolidated Statements of Operations Three Months Ended Year Ended December 31, December 31,(In thousands, except share and per share data) 2024 2023 2024 2023Revenue Sales revenue $75,270 $67,407 $256,012 $239,493 Rental revenue 10,315 10,245 36,972 34,930 Total revenue 85,585 77,652 292,984 274,423 Cost of revenue Cost of sales revenue 18,005 18,190 64,815 66,713 Cost of rental revenue 3,211 3,455 11,481 12,577 Total cost of revenue 21,216 21,645 76,296 79,290 Gross profit Gross profit - sales revenue 57,265 49,217 191,197 172,780 Gross profit - rental revenue 7,104 6,790 25,491 22,353 Gross profit 64,369 56,007 216,688 195,133 Operating expenses Sales and marketing 29,206 26,581 112,009 107,119 Research and development 2,038 1,793 8,832 7,823 Reimbursement, general and administrative 19,977 15,200 71,135 62,074 Intangible asset amortization and earn-out 633 633 2,531 76 Total operating expenses 51,854 44,207 194,507 177,092 Income from operations 12,515 11,800 22,181 18,041 Interest income 948 859 3,384 1,874 Interest expense (472) (897) (2,085) (4,147)Other income — 2 9 2 Income before income taxes 12,991 11,764 23,489 15,770 Income tax expense (benefit) 3,275 3,562 6,529 (12,745)Net income $9,716 $8,202 $16,960 $28,515 Net income per common share Basic $0.40 $0.35 $0.71 $1.24 Diluted $0.40 $0.35 $0.70 $1.23 Weighted-average common shares used to compute net income per common share Basic 24,007,863 23,551,388 23,883,729 22,925,497 Diluted 24,473,898 23,771,490 24,138,244 23,176,169 Tactile Systems Technology, Inc.Consolidated Statements of Cash Flows Year Ended December 31,(In thousands) 2024 2023Cash flows from operating activities Net income $16,960 $28,515 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 6,792 6,539 Deferred income taxes 1,067 (19,378)Stock-based compensation expense 7,819 7,547 Loss on disposal of property and equipment and intangibles 308 3 Change in fair value of earn-out liability — (2,475)Changes in assets and liabilities, net of acquisition: Accounts receivable (1,764) 11,653 Net investment in leases (345) 1,935 Inventories 3,861 597 Income taxes (1,404) (721)Prepaid expenses and other assets (3,929) 72 Right of use operating lease assets 187 71 Accounts receivable, non-current 10,936 12,125 Accounts payable (1,087) (3,853)Accrued payroll and related taxes 1,134 (311)Accrued expenses and other liabilities 120 (6,464)Net cash provided by operating activities 40,655 35,855 Cash flows from investing activities Purchases of property and equipment (2,392) (2,324)Proceeds from sale of property and equipment 12 — Intangible assets expenditures (117) (157)Net cash used in investing activities (2,497) (2,481)Cash flows from financing activities Proceeds from issuance of note payable — 8,250 Payments on earn-out — (10,575)Payments on note payable (3,000) (3,000)Payments on revolving line of credit — (25,000)Payments of deferred debt issuance costs — (125)Proceeds from exercise of common stock options 24 14 Proceeds from the issuance of common stock from the employee stock purchase plan 1,660 1,541 Payments for repurchases of common stock (3,508) — Proceeds from issuance of common stock at market — 34,625 Net cash (used in) provided by financing activities (4,824) 5,730 Net increase (decrease) in cash 33,334 39,104 Cash – beginning of period 61,033 21,929 Cash – end of period $94,367 $61,033 Supplemental cash flow disclosure Cash paid for interest $2,106 $4,560 Cash paid for taxes $6,848 $5,815 Capital expenditures incurred but not yet paid $76 $528 The following table summarizes revenue by product line for the three and twelve months ended December 31, 2024 and 2023: Three Months Ended Year Ended December 31, December 31,(In thousands) 2024 2023 2024 2023Revenue Lymphedema products $77,083 $69,464 $259,361 $241,721 Airway clearance products 8,502 8,188 33,623 32,702 Total $85,585 $77,652 $292,984 $274,423 Percentage of total revenue Lymphedema products 90% 89% 89% 88%Airway clearance products 10% 11% 11% 12%Total 100% 100% 100% 100% The following table contains a reconciliation of net income to Adjusted EBITDA for the three and twelve months ended December 31, 2024 and 2023, as well as the dollar and percentage change between the comparable periods: Tactile Systems Technology, Inc.Reconciliation of Net Income to Non-GAAP Adjusted EBITDA(Unaudited) Three Months Ended Increase Year Ended Increase December 31, (Decrease) December 31, (Decrease)(Dollars in thousands) 2024 2023 $ % 2024 2023 $ %Net income $9,716 $8,202 $1,514 18 % $16,960 $28,515 $(11,555) 41 %Interest (income) expense, net (476) 38 (514) N.M. % (1,299) 2,273 (3,572) (157)%Income tax expense (benefit) 3,275 3,562 (287) (8)% 6,529 (12,745) 19,274 (151) Depreciation and amortization 1,714 1,624 90 6 % 6,793 6,539 254 4 %Stock-based compensation 1,850 1,950 (100) (5)% 7,819 7,547 272 4 %Change in fair value of earn-out — — — — % — (2,475) 2,475 (100)%Executive transition costs 137 — 137 — % 248 — 248 — %Adjusted EBITDA $16,216 $15,376 $840 5 % $37,050 $29,654 $7,396 25 % The following table contains a reconciliation of GAAP net income guidance range to the Adjusted EBITDA guidance range for the twelve months ended December 31, 2025: Tactile Systems Technology, Inc.Reconciliation of FY 2025 GAAP Net Income to Adjusted EBITDA Guidance(Unaudited) Year Ended December 31, 2025(Dollars in thousands) Low HighNet income $15,750 $17,150 Interest income, net (2,500) (2,500)Income tax expense benefit 6,100 6,700 Depreciation and amortization 6,700 6,700 Stock-based compensation 8,800 8,800 Executive transition costs 150 150 Adjusted EBITDA $35,000 $37,000 Investor Inquiries:Sam BentzingerGilmartin Groupinvestorrelations@tactilemedical.com

Tactile Systems Technology, Inc. Reports Fourth Quarter and Full Year 2024 Financial Results

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