Conformis (NSDQ:CFMS) announced today that it is furloughing a third of its employees and tossed out its 2020 financial guidance amid the coronavirus crisis.
The Billerica, Mass.–based orthopedic arthroplasty technology company’s furlough includes approximately 80 employees and substantially all of its temporary workforce, effective today. Conformis said it identified essential and non-essential functions to its business over the next eight weeks at reduced production and sales levels.
Conformis said it plans to recall employees as needed as the crisis passes and orders trend up, as it has observed historically high levels of canceled scheduled surgeries.
“Our core product areas of knee and hip surgery are being impacted in unprecedented ways by COVID-19,” Conformis president & CEO Mark Augusti said in a news release. “As the virus spreads around the world and our customers — the hospitals and their professionals who do incredible work — battle against the virus, demand for arthroplasty has dropped significantly. When combined with patients’ desire to self-isolate, we have seen a significant reduction in elective surgeries, including an almost complete shutdown of elective arthroplasty in many major cities across Europe and the United States. We are working tirelessly to take care of our Conformis team, our customers, and our patients.
Despite what the company viewed as a solid start to 2020, the company is scrapping the revenue guidance it released earlier this month, as the estimates are no longer accurate or reliable. Currently, Conformis can’t estimate the total decline in its business as a result of the coronavirus, but it does not expect it to come to a complete standstill, barring a national ban on elective surgery.
The company said it has implemented business contingency plans and created a COVID-19 response team to monitor and develop plans and policies to address the threat of the virus, while a separate commercially-focused team is looking to gain intelligence from hospital and physician customers.
Conformis has increased cleaning at its facilities and restricted vendor and visitor access, it has reviewed its supply chain and partners and taken steps to reduce operational expenses, such as eliminating or deferring non-essential programs.
“The situation is changing by the day and there is still tremendous uncertainty, but we feel it is important to share an update on some of what we have seen to date and describe key actions we have taken to mitigate the impact of COVID-19,” Augusti said. “While at this time we cannot predict how long this crisis will last, we know that eventually, it will end. And when it does, we aim to be prepared to serve our customers and patients as we have in the past.”
