Steve Foster, President and Chief Executive Officer of Tenon Medical, commented, "Tenon demonstrated solid performance in the second quarter with revenue growth of 21% from the prior year, driven by a 7% increase in The Catamaran System surgical procedures. Taking our learnings from 2023, during the quarter, we have successfully filled all sales positions in our five U.S. regions. In the second quarter, based upon the initial impact of our expanded sales operation, we hosted 37 physicians in targeted workshop activities and Catamaran focused training sessions.
Additionally, we are pleased to report four consecutive quarters of positive gross profit with growth of 142% over the prior year second quarter. Our gross margin of 52% was driven by a normalization of higher revenue associated with the moderate increase in the number of surgical procedures, as we maintain a controlled operating leverage structure offset by lower overhead absorption into inventory.
Further, as we near completion of enrollment of our Post-Market, Prospective, Multi-Center clinical trial, we have been notified that publication of our interim analysis is now imminent. This peer reviewed analysis reinforces that the Catamaran procedure delivers on its promises. We look forward to sharing details when publication is complete in the near future.
Lastly, I'd like to extend gratitude to my partner in Tenon's journey and wish Steve Van Dick the best in his retirement. Steve's financial expertise and leadership has established Tenon's solid foundation to support our long-term strategic growth and expansion. While Steve will remain as a CFO advisor, we are confident in the financial experience of Jay Hanson as interim Principal Accounting Officer, having held the position of Senior Director of SEC reporting and compliance under the guidance of Mr. Van Dick while we continue our executive search process for a permanent CFO," concluded Mr. Foster.
Second Quarter 2024 Financial Results
Revenue was $0.9 million in the second quarter of 2024, an increase of 21%, compared to $0.7 million in the comparable year ago period. Revenue for the six months ended June 30, 2024, was $1.6 million, an increase of 38%, compared to $1.2 million in six months ended June 30, 2023. The increase in revenue for the three and six months ended June 30, 2024, as compared to the same periods in 2023 was primarily due to increases of 7% and 19%, respectively, in the number of surgical procedures in which The Catamaran System was used.
Gross profit in the second quarter of 2024 was $0.5 million, or 52% of revenues, two times the multiple of $0.2 million, or 26% of revenues in the comparable year ago quarter. For the six months ended June 30, 2024, gross profit was $0.9 million, or 58% of revenues, compared to a gross profit of $147,000, or 13% of revenue, for the six months ended June 30, 2023. Gross margin percentage improved due to higher revenue associated with the increase in the number of surgical procedures.
Operating expenses totaled $4.3 million for the second quarter of 2024, largely in line with expenses of $4.5 million in the second quarter of 2023. For the six months ended June 30, 2024, operating expenses totaled $8.3 million compared to $9.4 million in the prior year period. Operating expenses consist of a decline in research and development and sales and marketing expenses, offset by an increase in general and administrative expenses.
Net loss was $3.8 million for the second quarter of 2024, a marginal improvement from a loss of $4.3 million in the same period of 2023. For the six months ended June 30, 2024, net loss was $7.4 million compared to $9.1 million in the previous year period. The Company expects to incur additional losses in the future.
As of June 30, 2024, cash and cash equivalents totaled $2.0 million, as compared to $2.4 million as of December 31, 2023. As of June 30, 2024, the Company had no outstanding debt.
Q2 2024 Earnings Conference Call
Management will host an investor conference call at 4:30 p.m. ET (1:30 p.m. PT) today, Tuesday, August 13, 2024, to discuss Tenon's second quarter 2024 financial results, provide a corporate update, and conclude with Q&A with the Company's covering analysts. To participate, please use the following information:
Please dial in at least 10 minutes before the start of the call to ensure timely participation.
An audio playback of the call will be available through August 27, 2024, on Tenon's Investor Relations website at https://ir.tenonmed.com/ or via telephone replay by dialing 1-844-512-2921 (USA) or 1-412-317-6671 (International). The access code will be 13747648.
About Tenon Medical, Inc.
Tenon Medical, Inc., a medical device company formed in 2012, has developed The Catamaran? SI Joint Fusion System that offers a novel, less invasive approach to the SI joint using a single, robust titanium implant. The system features the Catamaran? Fixation Device which passes through both the axial and sagittal planes of the ilium and sacrum, stabilizing and transfixing the SI joint along its longitudinal axis. The angle and trajectory of the Catamaran surgical approach is also designed to provide a pathway away from critical neural and vascular structures and into the strongest cortical bone. Tenon is underway with a national launch of this system to address the greatly underserved market opportunity that exists in this space. For more information, please visit www.tenonmed.com.
The Tenon Medical logo and Tenon Medical, are registered trademarks of Tenon Medical, Inc. Catamaran is a trademark of Tenon Medical, Inc.
Safe Harbor
This press release contains "forward-looking statements," which are statements related to events, results, activities or developments that Tenon expects, believes or anticipates will or may occur in the future. Forward-looking often contain words such as "intends," "estimates," "anticipates," "hopes," "projects," "plans," "expects," "seek," "believes," "see," "should," "will," "would," "target," and similar expressions and the negative versions thereof. Such statements are based on Tenon's experience and perception of current conditions, trends, expected future developments and other factors it believes are appropriate under the circumstances, and speak only as of the date made. Forward-looking statements are inherently uncertain and actual results may differ materially from assumptions, estimates or expectations reflected or contained in the forward-looking statements as a result of various factors. For details on the uncertainties that may cause our actual results to be materially different than those expressed in our forward-looking statements, please review our Annual Report on Form 10-K on file with the Securities and Exchange Commission at www.sec.gov, particularly the information contained in the section entitled "Risk Factors." We undertake no obligation to publicly update or revise any forward-looking statements to reflect new information or future events or otherwise unless required by law.
Investor Contact:
Shannon Devine
MZ North America
203-741-8811
[email protected]
Tenon Medical, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except share data)
Tenon Medical, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
(In thousands, except per share data)
SOURCE: Tenon Medical, Inc.
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