Shares of ConforMIS (NSDQ:CFMS) closed down nearly -8% yesterday and plunged another -40% in after-hours trading, after the medical device company lowered its outlook for the rest of the year and said it’s looking for a new CEO to replace founder Dr. Phillip Lang.
Losses widened 5.4% to -$15.0 million, or -37 per share, on sales of $20.3 million for the 3 months ended March 31 for Bedford, Mass.-based ConforMIS, for top-line growth of 37.8%.
Analysts on Wall Street were looking for losses of -36 on sales of $20.2 million.
“First quarter of 2016 showed strong revenue growth with product revenue up 36% year-over-year on a reported basis and 39% year-over-year on a constant currency basis,” Lang said in prepared remarks. “Product revenue growth in the 1st quarter was driven primarily by strong contributions from the limited launch of iTotal PS and benefits from improving order lead times and rescheduled cases from the second half of 2015 related to the voluntary recall.
“We are very pleased with the performance of iTotal PS in the 1st quarter of 2016 and have seen strong demand for this innovative product following the broad commercial launch in March 2016. We continue to anticipate strong growth and increasing contributions to product revenue from iTotal PS over the balance of the year. That said, despite the signs of a recovery in order trends for iTotal CR, iDuo and iUni, which we discussed on our 4th-quarter earnings call, subsequent order trends have not improved as expected and we have adjusted our 2016 product revenue guidance to reflect our revenue expectations for iTotal CR, iDuo and iUni for the remainder of the year.”
ConforMIS said it now expects 2016 earnings of $76 million to $81 million, down from prior guidance of $84 million to $87 million. Second-quarter sales are forecast at $17.7 million to $18.7 million, the company said.
The ConforMIS board said it tapped an executive search firm to seek a replacement for Lang, who’s expected to stay on until a new chief executive is hired. Lang is slated to keep his spot on the board, the company said.
CFMS shares closed down -7.7% at $10.11 apiece and plummeted a further -40.2% to $6.05 each.