SI-BONE, Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual filing; the supplied filing text does not provide standalone fourth-quarter financial results.
Business context
SI-BONE develops and sells minimally invasive implants and instruments for sacroiliac joint fusion and related sacropelvic procedures. Substantially all revenue comes from its iFuse product family. The company reported approximately 65,000 procedures performed cumulatively by year-end 2021. It received FDA clearance for iFuse-TORQ in February 2021, targeting pelvic trauma and sacroiliac joint fusion.
Financial performance and liquidity
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $90.2 million | $73.4 million |
| Gross profit / margin | $79.7 million / 88% | $64.5 million / 88% |
| Operating expenses | $131.4 million | $103.1 million |
| Operating loss | $(51.7) million | $(38.6) million |
| Net loss | $(56.6) million | $(43.7) million |
| Net loss per share, diluted | $(1.71) | $(1.50) |
| Cash used in operations | $39.5 million | $30.7 million |
Revenue increased 23%, with U.S. revenue up $14.6 million and international revenue up $2.1 million. Management attributed growth to higher case volumes, a larger sales force and more active surgeons; lower U.S. average selling prices partly offset growth. Gross margin remained 88%. Operating expenses rose 28%, reflecting commercial expansion, increased training and travel as pandemic restrictions eased, and higher R&D and administrative costs.
At December 31, 2021, cash and short-term investments totaled $147.0 million, down from $196.4 million a year earlier. Total assets were $190.5 million, total liabilities $56.1 million, and stockholders’ equity $134.4 million. Net cash increased $9.8 million during 2021, principally reflecting maturities of marketable securities; operating activities used $39.5 million. Inventory rose to $11.5 million from $5.6 million, partly due to preparations for iFuse-TORQ and higher demand.
Debt was $35.0 million in principal at year-end, compared with $39.5 million of outstanding debt at year-end 2020. In August 2021, SI-BONE refinanced its Solar loan with a $35.0 million Silicon Valley Bank term loan. The new loan bears interest at the greater of 5.75% or prime plus 2.5%; principal amortization begins in September 2023, with maturity in 2025 or 2026 depending on a financial milestone. The company reported compliance with debt covenants.
Material changes, outlook and risks
- Revenue growth accelerated as elective-procedure deferrals from COVID-19 were less impactful than in 2020, although the pandemic continued to cause case deferrals and uncertainty.
- Management expects operating expenses to continue increasing and anticipates further operating losses. It believes current cash and marketable securities can fund operating and capital needs for the next 12 months and beyond, but notes that further capital may be needed if resources are consumed faster than expected. No specific revenue or earnings guidance is provided.
- Key risks include continuing losses and operating cash burn; reliance on a single product family; competition and pricing pressure; reimbursement changes; pandemic-related procedure disruption; inflation and supply-chain constraints; and reliance on third-party manufacturers, including a sole supplier for iFuse-3D.
- U.S. patents covering the original iFuse design, including its triangular shape, expire in November 2024; the company says competitors may market similar triangular devices after expiration. iFuse-3D patents are stated to expire in September 2035.
- Management reported no material legal proceedings. The company reported no material off-balance-sheet arrangements. The auditor issued an unqualified opinion on the financial statements and internal controls; management also concluded controls were effective as of year-end.
- The adoption of lease accounting in 2021 added operating lease right-of-use assets and liabilities to the balance sheet. Refinancing the Solar loan resulted in a $1.8 million loss on extinguishment of debt in 2021.
Important facts for investors to verify
- Obtain the quarterly results to assess Q4 revenue, losses, case volumes and seasonality; standalone Q4 figures are not clear in the supplied filing text.
- Track whether procedure volumes, surgeon activity and new-product adoption can sustain growth without further deterioration in average selling prices or margins.
- Review liquidity and cash-burn trends, and the SVB loan’s financial milestone, covenants, interest terms and future amortization schedule.
- Monitor COVID-19 and supply-chain effects, particularly instrument availability and dependence on the iFuse-3D supplier.
- Assess reimbursement-policy developments and the commercial impact of original iFuse patent expirations in November 2024.