Impinj, Inc. (NASDAQ: PI), a leading provider and pioneer of
RAIN RFID solutions, today released its financial results for the
third quarter ended September 30, 2020.
“Third-quarter revenue improved sequentially, driven primarily
by rebounding retail-apparel volumes that drove endpoint IC sales,”
said Chris Diorio, Impinj co-founder and CEO. “With game-changing
new products and a platform and vision that sit squarely in the
center of our end users’ digital transformation, the opportunity in
front of us is more compelling than ever.”
Third Quarter 2020 Financial Summary
- Revenue of $28.2 million
- GAAP gross margin of 47.4%; non-GAAP gross margin of 50.1%
- GAAP net loss of $14.3 million, or loss of $0.63 per diluted
share using 22.9 million shares
- Adjusted EBITDA loss of $6.2 million
- Non-GAAP net loss of $6.7 million, or loss of $0.29 per diluted
share using 22.9 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.
Fourth Quarter 2020 Financial Considerations
Impinj provides guidance based on current market conditions and
expectations; actual results may differ materially. Please refer to
the comments below regarding forward-looking statements. The
following table presents Impinj’s financial outlook for the fourth
quarter of 2020 (in millions, except per share data):
Three Months Ending
December 31, 2020
Revenue
$26.5 to $28.5
GAAP Net loss
($17.2) to ($16.2)
Adjusted EBITDA loss
($8.9) to ($7.4)
Non-GAAP net loss
($9.3) to ($7.8)
GAAP Weighted-average shares — basic and
diluted
23.00 to 23.10
GAAP Net loss per share — basic and
diluted
($0.75) to ($0.70)
Non-GAAP Weighted-average shares — basic
and diluted
23.00 to 23.10
Non-GAAP Net loss per share — basic and
diluted
($0.40) to ($0.34)
A reconciliation between GAAP and non-GAAP is provided in the
"Non-GAAP Financial Measures" section below.
Conference Call Information
Impinj will host a conference call today, Oct. 28, 2020 at 5:00
p.m. ET / 2:00 p.m. PT for analysts and investors to ask questions
on its third 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 Following the webcast, an archived version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 10148757.
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,
our strategy, prospects, the impact of Covid-19, and financial
considerations for fourth quarter of 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)
September 30, 2020
December 31, 2019 (1)
Assets:
Current assets:
Cash and cash equivalents
$
40,063
$
66,898
Short-term investments
65,057
49,597
Accounts receivable, net
17,730
23,735
Inventory
37,982
34,153
Prepaid expenses and other current
assets
3,339
2,386
Total current assets
164,171
176,769
Property and equipment, net
16,365
17,442
Operating lease right-of-use assets
14,472
16,501
Other non-current assets
1,193
453
Goodwill
3,881
3,881
Total assets
$
200,082
$
215,046
Liabilities and stockholders'
equity:
Current liabilities:
Accounts payable
$
8,597
$
5,600
Accrued compensation and employee related
benefits
4,062
5,859
Accrued liabilities
2,334
3,755
Current portion of operating lease
liabilities
3,618
3,380
Current portion of deferred revenue
953
551
Other current liabilities
19
352
Total current liabilities
19,583
19,497
Long-term debt, net of current portion
53,595
50,876
Operating lease liabilities, net of
current portion
16,160
18,907
Deferred revenue, net of current
portion
260
213
Long-term liabilities — other
1,056
314
Total liabilities
90,654
89,807
Stockholders' equity:
Common stock, $0.001 par value
23
22
Additional paid-in capital
408,342
387,926
Accumulated other comprehensive income
12
34
Accumulated deficit
(298,949
)
(262,743
)
Total stockholders' equity
109,428
125,239
Total liabilities and stockholders'
equity
$
200,082
$
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
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
Revenue
$
28,196
$
40,762
$
102,475
$
112,015
Cost of revenue
14,824
20,981
54,749
57,945
Gross profit
13,372
19,781
47,726
54,070
Operating expenses:
Research and development
11,901
10,344
33,619
27,678
Sales and marketing
6,964
7,842
20,577
24,579
General and administrative
7,527
5,503
26,215
16,653
Total operating expenses
26,392
23,689
80,411
68,910
Loss from operations
(13,020
)
(3,908
)
(32,685
)
(14,840
)
Other income, net
49
317
584
947
Interest expense
(1,360
)
(413
)
(4,021
)
(1,263
)
Loss before income taxes
(14,331
)
(4,004
)
(36,122
)
(15,156
)
Income tax expense
(15
)
(77
)
(84
)
(151
)
Net loss
$
(14,346
)
$
(4,081
)
$
(36,206
)
$
(15,307
)
Net loss per share — basic and diluted
$
(0.63
)
$
(0.19
)
$
(1.60
)
$
(0.70
)
Weighted-average shares — basic and
diluted
22,931
21,961
22,686
21,738
IMPINJ, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands,
unaudited)
Nine Months Ended
September 30,
2020
2019
Operating activities:
Net loss
$
(36,206
)
$
(15,307
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation
3,402
3,637
Stock-based compensation
15,501
11,813
Accretion of discount or amortization of
premium on short-term investments
85
(464
)
Amortization of debt issuance costs and
debt discount
2,719
51
Changes in operating assets and
liabilities:
Accounts receivable
6,005
(6,341
)
Inventory
(3,829
)
8,451
Prepaid expenses and other assets
(1,637
)
(222
)
Deferred revenue
449
114
Accounts payable
2,608
1,508
Accrued compensation and employee related
benefits
(1,797
)
(2,440
)
Operating lease right-of-use assets
2,029
1,505
Operating lease liabilities
(2,509
)
(2,255
)
Accrued liabilities and other
liabilities
(372
)
164
Net cash provided by (used in) operating
activities
(13,552
)
214
Investing activities:
Purchases of investments
(57,298
)
(59,036
)
Proceeds from maturities of
investments
41,675
51,794
Purchases of property and equipment
(2,336
)
(971
)
Net cash used in investing activities
(17,959
)
(8,213
)
Financing activities:
Principal payments on finance lease
obligations
(240
)
(410
)
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
4,916
8,041
Net cash provided by financing
activities
4,676
7,400
Net decrease in cash and cash
equivalents
(26,835
)
(599
)
Cash and cash equivalents
Beginning of period
66,898
17,530
End of period
$
40,063
$
16,931
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 provide 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 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 as 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). In fourth-quarter
2019, we revised our definition of adjusted EBITDA to exclude loss
on debt extinguishment incurred in connection with the December
2019 repayment of our senior credit facility. In second-quarter
2020, we revised our definition of adjusted EBITDA to exclude
litigation settlement costs for the class-action and derivative
lawsuits, including related costs. We have excluded these costs and
expenses because we do not believe they reflect our core operations
and us excluding them enables more consistent evaluation of our
operating performance. Neither revision to the definition of
adjusted EBITDA impacted adjusted EBITDA previously reported for
prior periods preceding the revisions.
Non-GAAP Net Income (Loss)
We define non-GAAP net income (loss) as net income (loss),
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. In
fourth-quarter 2019, we revised our definition of non-GAAP net
income (loss) to exclude the prepayment penalty on debt
extinguishment incurred in connection with the December 2019
repayment of our senior credit facility and amortization of debt
discount related to the equity component of the 2019 Notes. We have
revised the prior period non-GAAP net income (loss) to conform to
our current period presentation. In second-quarter 2020, we revised
our definition of non-GAAP net income (loss) to exclude litigation
settlement costs for the class-action and derivative lawsuits,
including related costs. Excluding settlement and related costs did
not impact non-GAAP net income (loss) previously reported for prior
periods preceding the revision.
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
Nine Months Ended
September 30,
September 30,
2020
2019
2020
2019
GAAP Gross margin
47.4
%
48.5
%
46.6
%
48.3
%
Adjustments:
Depreciation
1.9
%
1.2
%
1.3
%
1.4
%
Stock-based compensation
0.8
%
0.5
%
0.6
%
0.4
%
Non-GAAP Gross margin
50.1
%
50.2
%
48.5
%
50.1
%
GAAP Net loss
$
(14,346
)
$
(4,081
)
$
(36,206
)
$
(15,307
)
Adjustments:
Depreciation
1,108
1,220
3,402
3,637
Stock-based compensation
5,683
4,793
15,501
11,813
Other income, net
(49
)
(317
)
(584
)
(947
)
Interest expense
1,360
413
4,021
1,263
Income tax expense
15
77
84
151
Settlement and related costs
—
—
5,359
—
Adjusted EBITDA
$
(6,229
)
$
2,105
$
(8,423
)
$
610
GAAP Net loss
$
(14,346
)
$
(4,081
)
$
(36,206
)
$
(15,307
)
Adjustments:
Depreciation
1,108
1,220
3,402
3,637
Stock-based compensation
5,683
4,793
15,501
11,813
Amortization of debt discount
897
—
2,637
—
Settlement and related costs
—
—
5,359
—
Non-GAAP Net income (loss)
$
(6,658
)
$
1,932
$
(9,307
)
$
143
Non-GAAP Net income (loss) per share:
Basic
$
(0.29
)
$
0.09
$
(0.41
)
$
0.01
Diluted
$
(0.29
)
$
0.08
$
(0.41
)
$
0.01
GAAP and non-GAAP Weighted-average shares
— basic
22,931
21,961
22,686
21,738
GAAP Weighted-average shares — diluted
22,931
21,961
22,686
21,738
Dilutive shares from stock plans
—
894
—
658
Non-GAAP Weighted-average shares —
diluted
22,931
22,855
22,686
22,396
IMPINJ, INC.
RECONCILIATIONS OF GAAP
FINANCIAL OUTLOOK TO NON-GAAP FINANCIAL OUTLOOK
(in thousands, except per
share data, unaudited – calculated at the midpoint of the outlook
range)
Three Months Ending
December 31,
2020
GAAP Net loss
$
(16,700
)
Adjustments:
Forecasted Depreciation
1,200
Forecasted Stock-based compensation
6,000
Forecasted Interest expense
1,400
Forecasted Other income, net
(50
)
Forecasted Income tax expense
—
Adjusted EBITDA loss
$
(8,150
)
GAAP Net loss
$
(16,700
)
Adjustments:
Forecasted Depreciation
1,200
Forecasted Stock-based compensation
6,000
Forecasted Accretion of debt discount
950
Non-GAAP Net loss
$
(8,550
)
GAAP Net loss per share — basic and
diluted
$
(0.72
)
Non-GAAP Net loss per share — basic and
diluted
$
(0.37
)
GAAP weighted-average shares — basic and
diluted
23,050
Non-GAAP weighted-average shares — basic
and diluted
23,050
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201028006017/en/
Investor Relations +1-206-315-4470 ir@impinj.com
Media Relations Jill West Sr. Director, Marketing &
Communications +1 206-834-1110 jwest@impinj.com
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