Tactile Systems Technology, Inc. (NASDAQ: TCMD) reported Q4 EPS of $0.22, $0.03 worse than the analyst estimate of $0.25. Revenue for the quarter came in at $57.1 million versus the consensus estimate of $55.52 million.

Fourth Quarter 2019 Summary:

• Total revenue increased 23% year-over-year, to $57.1 million, compared to $46.4 million in fourth quarter 2018.
• Flexitouch revenue increased 21% year-over-year, to $51.6 million, compared to $42.7 million in fourth quarter 2018.
• Operating income increased 183% year-over-year, to $6.0 million, compared to $2.1 million in fourth quarter 2018.
• Net income increased 82% year-over-year, to $4.3 million, compared to $2.4 million in fourth quarter 2018.
• Adjusted EBITDA increased 26% year-over-year, to $10.4 million, compared to $8.3 million in fourth quarter 2018.

“We are pleased to report another quarter of impressive performance, which resulted in revenue growth of 23% year-over-year,” said Gerald R. Mattys, Chief Executive Officer of Tactile Medical. “Our solid execution during the fourth quarter enabled us to bring 2019 to a strong close, with improved profitability and full year revenue growth of 32%. Our success was driven by investments in expanding our field sales team, solid market adoption of the Flexitouch Plus system, a targeting strategy focused on the most productive accounts in the lymphedema market and the broad in-network coverage we have obtained with commercial payers. As we enter 2020, we remain focused on increasing our share of the growing $5+ billion addressable U.S. market opportunity in lymphedema and chronic venous insufficiency and believe we are poised to deliver 20% or more top line growth and another year of improved profitability.”

GUIDANCE:

Tactile Systems Technology, Inc. sees FY2020 revenue of $227.5-230.5 million, versus the consensus of $224.83 million.

• The Company expects full year 2020 total revenue in the range of $227.5 million to $230.5 million, representing growth of 20% to 22% year-over-year, compared to total revenue of $189.5 million in 2019.
• Pursuant to the Company’s adoption of ASC 842, full year 2019 revenue included approximately $5.0 million of rental revenue related to operating leases, which will not contribute to the Company’s revenue results going forward. Excluding the contribution to full year 2019 revenue related to the Company’s adoption of ASC 842, the 2020 expected revenue range reflects year-over-year growth of approximately 23% to 25% on an operational basis.

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