Impinj, Inc. (NASDAQ: PI), a leading provider and pioneer of
RAIN RFID solutions, today released its financial results for the
second quarter ended June 30, 2020.
“Covid-19 negatively impacted our second-quarter results, and
the continuing uncertainty tempers our third-quarter outlook,” said
Chris Diorio, Impinj co-founder and CEO. “Regardless, we see
brightness ahead. Endpoint IC bookings are improving, large systems
opportunities are accelerating and, longer term, we see adoption
accelerating as leading end users leverage the improved visibility,
insights, virtualization and customer experience that RAIN brings
to their businesses.”
Second Quarter 2020 Financial Summary
- Revenue of $26.5 million
- GAAP gross margin of 49.0%; non-GAAP gross margin of 51.4%
- GAAP net loss of $17.5 million, or loss of $0.77 per diluted
share using 22.7 million shares
- Adjusted EBITDA loss of $5.2 million
- Non-GAAP net loss of $5.6 million, or loss of $0.25 per diluted
share using 22.7 million shares
A reconciliation between GAAP and non-GAAP information is
contained in the tables below. Additionally, descriptions of these
non-GAAP financial measures are provided in the “Non-GAAP Financial
Measures” sections below.
Third Quarter 2020 Financial Considerations
Impinj is continuing to monitor the impact of Covid-19 on its
business, including how Covid-19 will affect customers, end users,
suppliers and other business partners. However, given the
uncertainty regarding the duration and severity of the
epidemiological, economic and operational impacts of Covid-19, as
of the date of this report Impinj cannot reasonably estimate the
pandemic’s impact on its operating results for third-quarter 2020
or future periods.
For additional information regarding the impact of Covid-19 on
our business, operating results, financial condition and prospects,
please see Impinj’s Quarterly Report on Form 10-Q expected to be
filed on the date hereof.
Proposed Settlement of Stockholder and Securities Class
Action Lawsuits
Securities Class Action
Lawsuits
On July 9, 2020, following a private settlement mediation with
lead plaintiff in the federal securities class actions and
plaintiff in the New York State securities class action discussed
below, the parties in both actions executed a stipulation of
settlement that resolves the claims asserted in both actions. The
proposed settlement provides for a payment to the plaintiff class
of $20.0 million. Our insurers will contribute approximately $14.6
million to the settlement, and we will contribute the remaining
settlement amount of approximately $5.4 million. Accordingly, we
recorded a provision of $5.4 million related to our estimated
settlement amount to general and administrative expenses for the
three and six months ended June 30, 2020. The proposed settlement
is subject to preliminary and, following notice to class members,
final approval by the United States District Court for the Western
District of Washington.
Shareholder Derivative Actions
On July 10, 2020, following a private settlement mediation, the
parties in this action executed a stipulation of settlement to
settle and resolve the claims asserted in this consolidated
derivative action. The proposed settlement requires us to implement
certain corporate governance changes and the payment of up to
$900,000 to plaintiffs’ counsel for attorneys’ fees and expenses.
Our insurers will contribute the entire amount paid for attorneys’
fees and expenses. The proposed settlement is subject to
preliminary and, following notice to shareholders, final approval
by the United States District Court for the District of Delaware.
On July 15, 2020, the court entered an order requesting that the
parties file supplemental briefing in respect of their joint motion
for preliminary approval of the settlement. These supplemental
briefs are due August 5, 2020.
Conference Call Information
Impinj will host a conference call today, July 29, 2020 at 5:00
p.m. ET / 2:00 p.m. PT for analysts and investors to ask questions
on its second quarter 2020 results. Open to the public, investors
may access the call by dialing +1-412-317-5196. A live webcast of
the conference call will also be accessible on our website at
investor.impinj.com. Following the webcast, an archived version
will be available on the website for one year. A telephonic replay
of the call will be available one hour after the call and will run
for five business days and may be accessed by dialing
+1-412-317-0088 and entering passcode 10145777.
Management’s prepared written remarks, along with quarterly
financial data, will be made available on our website at
investor.impinj.com commensurate with this release.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934 and the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include statements regarding the market for RAIN RFID,
bookings, systems deployments, our strategy, prospects, the impact
of Covid-19, and financial considerations for third-quarter 2020
and future periods. Forward-looking statements are subject to known
and unknown risks and uncertainties and are based on potentially
inaccurate assumptions that could cause actual results to differ
materially from those expected or implied by the forward-looking
statements. Actual results may differ materially from the results
predicted, and reported results should not be considered as an
indication of future performance. The potential risks and
uncertainties that could cause actual results to differ from the
results predicted include, among others, those risks and
uncertainties included under the caption "Risk Factors" and
elsewhere in our annual report on Form 10-K and quarterly reports
on Form 10-Q filed with the U.S. Securities and Exchange
Commission. All information provided in this release and in the
attachments is as of the date hereof, and we undertake no duty to
update this information unless required by law.
About Impinj
Impinj (NASDAQ: PI) helps businesses and people analyze,
optimize, and innovate by wirelessly connecting billions of
everyday things — such as apparel, automobile parts, luggage, and
shipments — to the Internet. The Impinj platform uses RAIN RFID to
deliver timely data about these everyday things to business and
consumer applications, enabling a boundless Internet of Things.
www.impinj.com
Impinj is a registered trademark of Impinj, Inc. All other
trademarks are the property of their owners.
IMPINJ, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except par
value, unaudited)
June 30, 2020
December 31, 2019 (1)
Assets:
Current assets:
Cash and cash equivalents
$
97,488
$
66,898
Short-term investments
23,419
49,597
Accounts receivable, net
15,454
23,735
Inventory
37,091
34,153
Prepaid expenses and other current
assets
1,785
2,386
Total current assets
175,237
176,769
Property and equipment, net
16,294
17,442
Operating lease right-of-use assets
15,170
16,501
Other non-current assets
701
453
Goodwill
3,881
3,881
Total assets
$
211,283
$
215,046
Liabilities and stockholders'
equity:
Current liabilities:
Accounts payable
$
4,473
$
5,600
Accrued compensation and employee related
benefits
4,922
5,859
Accrued liabilities
10,613
3,755
Current portion of operating lease
liabilities
3,546
3,380
Current portion of deferred revenue
819
551
Other current liabilities
76
352
Total current liabilities
24,449
19,497
Long-term debt, net of current portion
52,669
50,876
Operating lease liabilities, net of
current portion
17,082
18,907
Deferred revenue, net of current
portion
225
213
Long-term liabilities — other
608
314
Total liabilities
95,033
89,807
Stockholders' equity:
Common stock, $0.001 par value
23
22
Additional paid-in capital
400,772
387,926
Accumulated other comprehensive income
58
34
Accumulated deficit
(284,603
)
(262,743
)
Total stockholders' equity
116,250
125,239
Total liabilities and stockholders'
equity
$
211,283
$
215,046
(1) Certain immaterial amounts on our
condensed consolidated balance sheets in prior periods have been
reclassified to conform with current period presentation.
IMPINJ, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share data, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
Revenue
$
26,457
$
38,190
$
74,279
$
71,253
Cost of revenue
13,497
19,774
39,925
36,964
Gross profit
12,960
18,416
34,354
34,289
Operating expenses:
Research and development
10,661
8,773
21,718
17,334
Sales and marketing
6,123
8,188
13,613
16,737
General and administrative
12,446
5,455
18,688
11,150
Total operating expenses
29,230
22,416
54,019
45,221
Loss from operations
(16,270
)
(4,000
)
(19,665
)
(10,932
)
Other income, net
126
309
535
630
Interest expense
(1,349
)
(421
)
(2,661
)
(850
)
Loss before income taxes
(17,493
)
(4,112
)
(21,791
)
(11,152
)
Income tax expense
(41
)
(46
)
(69
)
(74
)
Net loss
$
(17,534
)
$
(4,158
)
$
(21,860
)
$
(11,226
)
Net loss per share — basic and diluted
$
(0.77
)
$
(0.19
)
$
(0.97
)
$
(0.52
)
Weighted-average shares — basic and
diluted
22,716
21,709
22,564
21,626
IMPINJ, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands,
unaudited)
Six Months Ended
June 30,
2020
2019
Operating activities:
Net loss
$
(21,860
)
$
(11,226
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation
2,294
2,417
Stock-based compensation
9,818
7,020
Accretion of discount or amortization of
premium on short-term investments
19
(362
)
Amortization of debt issuance costs and
debt discount
1,793
35
Changes in operating assets and
liabilities:
Accounts receivable
8,281
(2,798
)
Inventory
(2,938
)
6,815
Prepaid expenses and other assets
364
467
Deferred revenue
280
267
Accounts payable
(1,229
)
798
Accrued compensation and employee related
benefits
(937
)
(1,429
)
Operating lease right-of-use assets
1,331
868
Operating lease liabilities
(1,659
)
(1,490
)
Accrued liabilities and other
liabilities
7,252
459
Net cash provided by operating
activities
2,809
1,841
Investing activities:
Purchases of investments
(5,103
)
(36,569
)
Proceeds from maturities of
investments
31,275
37,794
Purchases of property and equipment
(1,237
)
(799
)
Net cash provided by investing
activities
24,935
426
Financing activities:
Principal payments on finance lease
obligations
(183
)
(283
)
Payments on term and equipment loans
—
(4,222
)
Proceeds from term loans, net of debt
issuance costs
—
3,991
Proceeds from exercise of stock options
and employee stock purchase plan
3,029
2,870
Net cash provided by financing
activities
2,846
2,356
Net increase in cash and cash
equivalents
30,590
4,623
Cash and cash equivalents
Beginning of period
66,898
17,530
End of period
$
97,488
$
22,153
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements
prepared and presented in accordance with U.S. generally accepted
accounting principles, or GAAP, our key non-GAAP performance
measures include adjusted EBITDA and non-GAAP net income (loss), as
defined below. We use adjusted EBITDA and non-GAAP net income
(loss) as key measures to understand and evaluate our core
operating performance and trends, to prepare and approve our annual
budget and to develop short- and long-term operating plans. We
believe these measures provides useful information for
period-to-period comparisons of our business to allow investors and
others to understand and evaluate our operating results in the same
manner as it does for our management and board of directors. Our
presentation of these non-GAAP financial measures is not meant to
be considered in isolation or as a substitute for our financial
results prepared in accordance with GAAP, and our non-GAAP measures
may be different from similarly termed non-GAAP measures used by
other companies.
Adjusted EBITDA
We define adjusted EBITDA differently in this release than we
have previously, by excluding proposed litigation settlements of
class-action and derivative lawsuits including related costs, such
as that we incurred in second-quarter 2020. Our consequent
definition of adjusted EBITDA is net income (loss) determined in
accordance with GAAP, excluding, if applicable for the periods
presented, the effects of stock-based compensation; depreciation;
investigation costs; restructuring costs; settlement and related
costs; other income, net; interest expense; loss on debt
extinguishment; and income tax benefit (expense). We have excluded
settlement and related costs because we do not believe they reflect
our core operations and us excluding them enables more consistent
evaluation of our operating performances. Excluding the settlement
and related costs does not impact adjusted EBITDA previously
reported for prior periods.
Non-GAAP Net Income (Loss)
We define non-GAAP net income (loss) differently in this release
than we have previously, by excluding proposed litigation
settlements of class-action and derivative lawsuits including
related costs, such as that we incurred in second-quarter 2020. Our
consequent definition of non-GAAP net income (loss) is net income
(loss) determined in accordance with GAAP, excluding, if applicable
for the periods presented, the effects of stock-based compensation;
depreciation; investigation costs; restructuring costs; settlement
and related costs; amortization of debt discount related to the
equity component of our convertible notes; and prepayment penalty
on debt extinguishment. We have revised the prior period non-GAAP
net income (loss) to conform to our current period presentation.
Excluding settlement and related costs did not impact non-GAAP net
income previously reported for prior periods.
GAAP requires that certain convertible debt instruments that may
be settled in cash on conversion be accounted for as separate
liability and equity components in a manner that reflects our
non-convertible debt borrowing rate. This accounting results in the
debt component being treated as though it was issued at a discount,
with the debt discount being amortized as additional non-cash
interest expense over the debt instrument term using the effective
interest method. As a result, we believe that excluding this
non-cash interest expense attributable to the debt discount in
calculating our non-GAAP net income (loss) is useful because this
interest expense is not indicative of our ongoing operational
performance.
IMPINJ, INC.
RECONCILIATIONS OF GAAP
FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(in thousands, except
percentages, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2020
2019
2020
2019
GAAP Gross margin
49.0
%
48.2
%
46.2
%
48.1
%
Adjustments:
Depreciation
1.7
%
1.4
%
1.3
%
1.5
%
Stock-based compensation
0.7
%
0.4
%
0.5
%
0.4
%
Non-GAAP Gross margin
51.4
%
50.0
%
48.0
%
50.0
%
GAAP Net loss
$
(17,534
)
$
(4,158
)
$
(21,860
)
$
(11,226
)
Adjustments:
Depreciation
1,126
1,262
2,294
2,417
Stock-based compensation
4,597
3,543
9,818
7,020
Other income, net
(126
)
(309
)
(535
)
(630
)
Interest expense
1,349
421
2,661
850
Income tax expense
41
46
69
74
Settlement and related costs
5,359
—
5,359
—
Adjusted EBITDA loss
$
(5,188
)
$
805
$
(2,194
)
$
(1,495
)
GAAP Net loss
$
(17,534
)
$
(4,158
)
$
(21,860
)
$
(11,226
)
Adjustments:
Depreciation
1,126
1,262
2,294
2,417
Stock-based compensation
4,597
3,543
9,818
7,020
Amortization of debt discount
886
—
1,740
—
Settlement and related costs
5,359
—
5,359
—
Non-GAAP Net income (loss)
$
(5,566
)
$
647
$
(2,649
)
$
(1,789
)
Non-GAAP Net income (loss) per share:
Basic
$
(0.25
)
$
0.03
$
(0.12
)
$
(0.08
)
Diluted
$
(0.25
)
$
0.03
$
(0.12
)
$
(0.08
)
GAAP and non-GAAP Weighted-average shares
— basic
22,716
21,709
22,564
21,626
GAAP Weighted-average shares — diluted
22,716
21,709
22,564
21,626
Dilutive shares from stock plans
—
572
—
—
Non-GAAP Weighted-average shares —
diluted
22,716
22,281
22,564
21,626
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version on businesswire.com: https://www.businesswire.com/news/home/20200729005979/en/
Investor Relations ir@impinj.com +1-206-315-4470
Media Relations Jill West Sr. Director, Marketing &
Communications +1 206-834-1110 jwest@impinj.com
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