– Q1 2022 Total Revenue of $80.4 million
–
Inogen, Inc. (NASDAQ: INGN), a medical technology company
offering innovative respiratory products for use in the homecare
setting, today reported financial results for the three months
ended March 31, 2022.
First Quarter 2022 Highlights
- Total revenue of $80.4 million, down 7.5% from the same period
in 2021, primarily due to supply chain constraints
- Total revenue up 5.2% sequentially from the fourth quarter of
2021
- Domestic direct-to-consumer revenue of $34.4 million, up 12.2%
while domestic business-to-business revenue of $5.1 million,
declined 83.4% from the same period in 2021 due to supply
constraints and strategic optimization of sales channel mix
- International business-to-business revenue of $27.9 million,
grew 77.7% from the same period in 2021 (86.8% increase on a
constant currency basis)
- Rental revenue of $13.0 million, up 31.8% from the same period
in 2021
- Gross margin of 43.5% declined 240 basis points from the same
period in 2021, as higher cost of materials and lower labor and
overhead absorption, due to temporary manufacturing shutdown in
early 2022, more than offset higher average selling prices
- GAAP loss per diluted share of $0.62 compares to a loss of
$0.03 in the first quarter of 2021; adjusted loss per diluted share
of $0.39, compares to adjusted earnings per diluted share of $0.14
in the prior year (see accompanying table for reconciliation of
GAAP and non-GAAP measures)
- Encouraging progress on the new commercial strategy for the
prescriber channel
- EU MDR Generic Device Group submission has been filed for the
Company’s portable oxygen concentrators (POC) and is currently
under review
“We are pleased with our performance for the first quarter of
2022. In spite of the current macro headwinds, we continue to
effectively address higher costs and supply chain challenges,” said
Inogen’s President and Chief Executive Officer, Nabil Shabshab. “We
have been nimble and decisive in our efforts to strategically
manage inventory and meet most of the customer demand. As part of
our focus to mitigate supply related cost inflation, we have
recently implemented an additional price increase in our domestic
direct-to-consumer channel beginning in March 2022 in addition to
the price increase that went into effect September 2021.
Additionally, we have completed the submission for the EU MDR
Generic Device Group pertaining to our POCs in March 2022 and are
supplying product ahead of the MDD certificate expiry to meet most
of the demand in Europe. We are continuing our investment in the
business, strengthening our commercial, clinical and research and
development capabilities to position our company for long-term,
sustainable growth and profitability in the years to come.”
First Quarter 2022 Financial Results
In the first quarter of 2022, the Company reported a net loss of
$14.2 million and loss per diluted share of $0.62. On an adjusted
basis, the Company reported a net loss of $8.8 million, Adjusted
EBITDA loss of $5.0 million, and loss per diluted share of $0.39
(see accompanying table for reconciliation of GAAP and non-GAAP
measures). Current quarter financial results reflect lower revenue,
higher supply chain costs, and planned investments in sales and
marketing and research and development.
Total revenue for the three months ended March 31, 2022
decreased 7.5% to $80.4 million from $86.9 million in the same
period in 2021, primarily driven by supply chain constraints that
limited production capacity and resulted in lower sales in the
domestic business-to-business channel. Total revenue in the first
quarter of 2022 was up 5.2% sequentially compared to the fourth
quarter of 2021.
Revenue by channel:
Domestic direct-to-consumer sales increased 12.2% to $34.4
million in the first quarter of 2022 from $30.6 million in the
first quarter of 2021 while domestic business-to-business sales in
the first quarter of 2022 declined 83.4% to $5.1 million compared
to $30.7 million in the first quarter of 2021 due to supply
constraints and strategic sales channel optimization decisions.
International business-to-business sales in the first quarter of
2022 of $27.9 million increased 77.7% (or 86.8% on a constant
currency basis) driven by a strategic focus on existing demand
ahead of the EU MDR certificate expiry in parallel to the ongoing
regulatory filings.
Rental revenue in the first quarter of 2022 increased 31.8% to
$13.0 million from $9.9 million in the same period in 2021,
primarily due to increased patients on service and higher Medicare
reimbursement rates due to the removal of the budget neutrality
provision effective April 1, 2021 and inflation adjustment
effective January 1, 2022.
Total gross margin was 43.5% in the first quarter of 2022 versus
45.9% in the comparative period in 2021. The 240 basis points
decline was driven primarily by higher cost of materials associated
with higher prices paid for semiconductor chips on the open market
and lower labor and overhead absorption due to the temporary
manufacturing shutdown in early 2022, partially offset by higher
average selling prices.
Total operating expense increased to $48.6 million in the first
quarter of 2022 versus $42.0 million in the first quarter of 2021,
primarily due to increased personnel-related expense, one-time
recruiting and severance costs, consulting expense, product
development costs, and a non-cash increase in the change in fair
value of the New Aera earnout liability versus the comparative
period. Research and development expense increased to $5.4 million
in the first quarter of 2022, compared to $4.0 million in the first
quarter of 2021. Sales and marketing expense increased to $28.0
million in the first quarter of 2022 versus $25.5 million in the
comparative period of 2021. General and administrative expense
increased to $15.2 million in the first quarter of 2022 versus
$12.5 million in the first quarter of 2021. The increased spend is
directly tied to the strategic investment required to position the
Company for long-term, sustainable growth.
Financial Outlook for 2022
As previously disclosed, Inogen is not providing detailed
financial guidance for full year 2022. Given the ongoing
uncertainty related to the COVID-19 pandemic, supply chain
disruptions, including the new complexities brought on by the war
in Ukraine and the COVID-19 lockdown in China potentially impacting
the second half of the year, Inogen will not be providing full year
revenue guidance for 2022. The Company expects total revenue for
the second quarter of 2022 to improve sequentially and to be in
line with the same period in 2021.
The Company continues to incur higher material costs associated
with open-market purchases of semiconductor chips used in its POC
motherboards and batteries for the second quarter of 2022, as
compared to prior year, consistent with our expectations. The
Company expects gross margin percentage for the second quarter of
2022 to be in line with the first quarter of 2022, as higher
selling prices are offset by continued cost pressure.
Inogen continues to make significant investments in clinical
research, research and development, commercial operations and in
building the necessary infrastructure and capabilities to support
future durable revenue growth and margin expansion. For the second
quarter and full year of 2022, the Company expects losses in
Adjusted EBITDA and earnings per diluted share resulting from
continued investment in the business.
Conference Call
Individuals interested in listening to the conference call today
at 2:00pm PT/5:00pm ET may do so by dialing (877) 841-3961 for
domestic callers or (201) 689-8589 for international callers. To
listen to a live webcast, please visit the Investor Relations
section of Inogen's website at: http://investor.inogen.com/.
A replay of the call will be available beginning May 5, 2022 at
4:00pm PT/7:00pm ET through May 19, 2022. To access the replay,
dial (877) 660-6853 or (201) 612-7415 and reference Access Code:
13727825. The webcast will also be available on Inogen's website
for one year following the completion of the call.
Inogen has used, and intends to continue to use, its Investor
Relations website, http://investor.inogen.com/, as a means of
disclosing material non-public information and for complying with
its disclosure obligations under Regulation FD. For more
information, visit http://investor.inogen.com/.
About Inogen
Inogen is a medical technology company offering innovative
respiratory products for use in the homecare setting. The Company
primarily develop, manufacture and market innovative portable
oxygen concentrators used to deliver supplemental long-term oxygen
therapy to patients suffering from chronic respiratory
conditions.
For more information, please visit www.inogen.com.
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including, among others, statements regarding the Company’s
expectations related to its financial results for the second
quarter and full-year 2022, including revenue growth rates, cost of
goods sold, operating loss, net loss, Adjusted EBITDA and operating
expense; expectations with respect to the Company’s supply chain,
including the availability of semiconductor chips used in its
batteries and POCs; demand for the Company’s products in its
various business channels; expectations regarding the Company’s
initiatives to drive productivity and sales; the Company’s planned
investments in clinical research and R&D; expectations
regarding the Company’s prospects for long-term, sustainable growth
and profitability; expectations related to the Company’s prescriber
sales organization; and expectations related to the Company’s EU
MDR filings. Any statements contained in this communication that
are not statements of historical fact may be deemed to be
forward-looking statements. Words such as “believes,”
“anticipates,” “plans,” “expects,” “will,” “intends,” “potential,”
“possible,” and similar expressions are intended to identify
forward-looking statements. Forward-looking statements are subject
to numerous risks and uncertainties that could cause actual results
to differ materially from currently anticipated results, including
but not limited to, risks arising from the possibility that Inogen
will not realize anticipated revenue; risks related to the
Company’s supply chain and limited availability of semiconductor
chips used in its batteries and POCs, the risk of further slowdowns
or temporarily halts of production, or cost inflation for such
components; the impact of changes in reimbursement rates and
reimbursement and regulatory policies; the possible loss of key
employees, customers, or suppliers; expenses and costs will exceed
Inogen’s expectations; intellectual property risks if Inogen is
unable to secure and maintain patent or other intellectual property
protection for the intellectual property used in its products. In
addition, Inogen's business is subject to numerous additional risks
and uncertainties and information on these and additional risks,
uncertainties, and other information affecting Inogen’s business
operating results are contained in its Annual Report on Form 10-K
for the period ended December 31, 2021, and in its other filings
with the Securities and Exchange Commission. Additional information
will also be set forth in Inogen’s Quarterly Report on Form 10-Q
for the period ended March 31, 2022, to be filed with the
Securities and Exchange Commission. These forward-looking
statements speak only as of the date hereof. Inogen disclaims any
obligation to update these forward-looking statements except as may
be required by law.
Use of Non-GAAP Financial Measures
Inogen has presented certain financial information in accordance
with U.S. GAAP and also on a non-GAAP basis for the three months
ended March 31, 2022. Management believes that non-GAAP financial
measures, taken in conjunction with U.S. GAAP financial measures,
provide useful information for both management and investors by
excluding certain non-cash and other expenses that are not
indicative of Inogen's core operating results. Management uses
non-GAAP measures to compare Inogen's performance relative to
forecasts and strategic plans, to benchmark Inogen's performance
externally against competitors, and for certain compensation
decisions. Non-GAAP information is not prepared under a
comprehensive set of accounting rules and should only be used to
supplement an understanding of Inogen's operating results as
reported under U.S. GAAP. Inogen encourages investors to carefully
consider its results under U.S. GAAP, as well as its supplemental
non-GAAP information and the reconciliation between these
presentations, to more fully understand its business.
Reconciliations between U.S. GAAP and non-GAAP results are
presented in the accompanying tables of this release. For future
periods, Inogen is unable to provide a reconciliation of non-GAAP
measures without unreasonable effort as a result of the uncertainty
regarding, and the potential variability of, the amounts of
interest income, interest expense, depreciation and amortization,
stock-based compensation, provision for income taxes, and certain
other infrequently occurring items, such as acquisition-related
costs, that may be incurred in the future.
Consolidated Balance
Sheets
(unaudited)
(amounts in thousands)
March 31,
December 31,
2022
2021
Assets
Current assets
Cash and cash equivalents
$
213,399
$
235,524
Marketable securities
9,989
9,989
Accounts receivable, net
33,983
24,452
Inventories, net
34,078
31,873
Income tax receivable
1,435
1,343
Prepaid expenses and other current
assets
25,238
26,005
Total current assets
318,122
329,186
Property and equipment, net
39,329
38,926
Goodwill
32,934
32,979
Intangible assets, net
58,000
60,147
Operating lease right-of-use asset
24,080
24,912
Other assets
2,151
3,363
Total assets
$
474,616
$
489,513
Liabilities and stockholders'
equity
Current liabilities
Accounts payable and accrued expenses
$
32,375
$
25,689
Accrued payroll
8,839
17,307
Warranty reserve - current
6,519
6,480
Operating lease liability - current
3,401
3,393
Deferred revenue - current
8,689
8,568
Income tax payable
-
75
Total current liabilities
59,823
61,512
Warranty reserve - noncurrent
6,574
7,246
Operating lease liability - noncurrent
22,409
23,281
Earnout liability - noncurrent
16,016
15,386
Deferred revenue - noncurrent
11,509
11,861
Total liabilities
116,331
119,286
Stockholders' equity
Common stock
23
23
Additional paid-in capital
302,020
299,463
Retained earnings
55,058
69,272
Accumulated other comprehensive income
1,184
1,469
Total stockholders' equity
358,285
370,227
Total liabilities and stockholders'
equity
$
474,616
$
489,513
Consolidated Statements of
Comprehensive Loss
(unaudited)
(amounts in thousands, except
share and per share amounts)
Three months ended
March 31,
2022
2021
Revenue
Sales revenue
$
67,402
$
77,081
Rental revenue
12,983
9,851
Total revenue
80,385
86,932
Cost of revenue
Cost of sales revenue
39,500
42,635
Cost of rental revenue, including
depreciation of $2,638 and $1,888, respectively
5,879
4,424
Total cost of revenue
45,379
47,059
Gross profit
35,006
39,873
Operating expense
Research and development
5,364
4,015
Sales and marketing
28,039
25,491
General and administrative
15,189
12,499
Total operating expense
48,592
42,005
Loss from operations
(13,586
)
(2,132
)
Other income (expense)
Interest income
29
57
Other income (expense)
(433
)
(310
)
Total other expense, net
(404
)
(253
)
Loss before provision (benefit) for
income taxes
(13,990
)
(2,385
)
Provision (benefit) for income
taxes
224
(1,653
)
Net loss
$
(14,214
)
$
(732
)
Other comprehensive income (loss), net
of tax
Change in foreign currency translation
adjustment
(203
)
(457
)
Change in net unrealized gains (losses) on
foreign currency hedging
(528
)
1,144
Less: reclassification adjustment for net
(gains) losses included in net income
454
(241
)
Total net change in unrealized gains
(losses) on foreign currency hedging
(74
)
903
Change in net unrealized gains (losses) on
marketable securities
(8
)
4
Total other comprehensive income, net
of tax
(285
)
450
Comprehensive loss
$
(14,499
)
$
(282
)
Basic net loss per share attributable
to common stockholders (1)
$
(0.62
)
$
(0.03
)
Diluted net loss per share attributable
to common stockholders (1)
$
(0.62
)
$
(0.03
)
Weighted-average number of shares used
in calculating net loss per share attributable to common
stockholders:
Basic common shares
22,754,421
22,181,394
Diluted common shares
22,754,421
22,181,394
(1)
Reconciliations of net loss attributable
to common stockholders basic and diluted can be found in Inogen’s
Quarterly Report on Form 10-Q to be filed with the Securities and
Exchange Commission.
(2)
Due to a net loss for the three months
ended March 31,2022 and March 31, 2021, diluted loss per share is
the same as basic.
Supplemental Financial
Information
(unaudited)
(in thousands, except units
and patients)
Three months ended
March 31,
2022
2021
Revenue by region and category
Business-to-business domestic sales
$
5,101
$
30,743
Business-to-business international
sales
27,941
15,720
Direct-to-consumer domestic sales
34,360
30,618
Direct-to-consumer domestic rentals
12,983
9,851
Total revenue
$
80,385
$
86,932
Additional financial measures
Units sold
30,400
49,400
Net rental patients as of period-end
43,200
34,700
Reconciliation of U.S. GAAP to
Other Non-GAAP Financial Measures
(unaudited)
(in thousands)
Three months ended
March 31,
Non-GAAP EBITDA and Adjusted
EBITDA
2022
2021
Net loss (GAAP)
$
(14,214
)
$
(732
)
Non-GAAP adjustments:
Interest income
(29
)
(57
)
Provision (benefit) for income taxes
224
(1,653
)
Depreciation and amortization
5,760
5,098
EBITDA (non-GAAP)
(8,259
)
2,656
Stock-based compensation
2,665
2,516
Change in fair value of earnout
liability
630
265
Adjusted EBITDA (non-GAAP)
$
(4,964
)
$
5,437
Three months ended March
31,
Net Income (Loss)
Diluted EPS
Non-GAAP Net Income (Loss) and Diluted
EPS
2022
2021
2022
2021
Financial Results (GAAP)
$
(14,214
)
$
(732
)
$
(0.62
)
$
(0.03
)
Non-GAAP adjustments:
Amortization of intangibles
2,147
2,264
Stock-based compensation
2,665
2,516
Change in fair value of earnout
liability
630
265
Income tax impact of adjustments (1)
87
(1,211
)
Adjusted
$
(8,685
)
$
3,102
$
(0.38
)
$
0.14
(1)
Income tax impact of adjustments
represents the tax impact related to the non-GAAP adjustments
listed above and reflects an effective tax rate of -1.6% for 2022
and 24% for 2021.
Three months ended
March 31,
2022
Non-GAAP international constant
currency revenue
(using 2021
FX rates)
March 31,
2021
International revenues (GAAP)
$
27,941
$
15,720
Foreign exchange impact
1,424
—
International constant currency revenues
(non-GAAP)
$
29,365
$
15,720
International revenue growth (GAAP)
77.7
%
International constant currency revenue
growth (non-GAAP)
86.8
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220505006061/en/
Investor and Media Contacts Bryan Locke, Mike DeGraff,
Gabriella Coffey ir@inogen.net
Inogen (NASDAQ:INGN)
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