Double Digit Year-over-Year Revenue Growth
of 13.2%
Constant Currency Year-over-Year Revenue
Growth of 14.5%
Inogen, Inc. (Nasdaq: INGN), a medical technology company
offering innovative respiratory products for use in the homecare
setting, today announced financial results for the quarter ended
September 30, 2022, and provided a business update.
Third Quarter 2022 Highlights
- Reported total revenue was $105.4 million for the period ended
September 30, 2022, representing a 13.2% increase from $93.1
million for the period ended September 30, 2021.
- On a constant currency basis, total revenue for the period
ended September 30, 2022, increased 14.5%.
- GAAP net loss of $9.5 million, adjusted net loss of $4.1
million, and adjusted EBITDA was a loss of $1.2 million.
- Strong balance sheet and cash position.
“I am pleased with the progress the team has made on our
transformational journey. We fulfilled customer demand by
overcoming supply chain challenges through extraordinary efforts,
resulting in year-over-year double digit revenue growth,” said
Nabil Shabshab, Inogen’s President and Chief Executive Officer.
“Our balance sheet remains strong and capable of driving our
transformation. We are executing on our strategic initiatives,
improving commercial productivity while building innovation
programs that will enhance our ability to deliver sustainable
long-term growth and profitability.”
Third Quarter 2022 Financial Results
Third quarter total revenue increased 13.2% to $105.4 million
from $93.1 million in the third quarter of 2021, primarily driven
by higher domestic business-to-business sales, as well as continued
strength in the rental channel, partially offset by lower
international business-to-business and direct-to-consumer
sales.
Total gross margin was 40.6% in the third quarter of 2022 versus
51.2% in the comparative period in 2021. The decline was driven
primarily by increased material costs and unfavorable sales channel
mix, partially offset by higher average selling prices.
Total operating expense for the quarter was $53.1 million
compared to $41.3 million in the third quarter of 2021,
representing an increase of 28.5%. The increased spend was
primarily due to ongoing strategic investments required to position
the Company for long-term sustainable growth. Additionally, there
was a non-cash decrease in the benefit from the change in fair
value of the New Aera earnout liability.
GAAP net loss for the third quarter of 2022 was $9.5 million
compared to GAAP net income of $12.2 million in the third quarter
of 2021. Adjusted net loss was $4.1 million compared to adjusted
net income of $14.4 million in the third quarter of 2021.
Adjusted EBITDA was a negative $1.2 million in the third quarter
of 2022 compared to a positive $12.2 million in the third quarter
of 2021.
Cash and cash equivalents were $209.6 million as of September
30, 2022, and no debt outstanding.
A reconciliation of adjusted EBITDA and adjusted net income
(loss) for the three and nine months ended September 30, 2022 and
2021 are provided in the financial schedules that are a part of
this press release. An explanation of these non-GAAP financial
measures is also included below under the heading “Non-GAAP
Financial Measures.”
Fourth Quarter 2022 Financial Guidance
Inogen now projects revenue for the fourth quarter of 2022 to be
in the range of approximately $87 million to $92 million, or
approximately 14% to 20% growth year-over-year.
Conference Call
Individuals interested in listening to the conference call today
at 5:30am PT / 8:30am ET may do so by dialing:
US domestic callers (877) 841-3961
International callers (201) 689-8589
Please reference Inogen to join the call. To listen to a live
webcast, please visit the Investor Relations section of Inogen's
website at: http://investor.inogen.com/. This webcast will also be
archived on the website for 6 months.
A replay of the call will be available approximately three hours
after the live webcast ends and will be accessible through November
16, 2022. To access the replay, dial (877) 660-6853 or (201)
612-7415 and reference Conference ID: 13732881.
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 develops, manufactures and markets 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.
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 and operational results for
the fourth quarter of 2022, expectations related to 2023 for growth
as well as supply chain challenges; and expectations of future
growth and profitability. 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 parts used in
our 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
September 30, 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.
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 and nine
months ended September 30, 2022 and September 30, 2021. 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 Statements of
Comprehensive Income (Loss)
(unaudited)
(amounts in thousands, except
share and per share amounts)
Three months ended
Nine months ended
September 30,
September 30,
2022
2021
2022
2021
Revenue
Sales revenue
$
90,672
$
80,974
$
247,365
$
248,359
Rental revenue
14,717
12,131
41,785
33,241
Total revenue
105,389
93,105
289,150
281,600
Cost of revenue
Cost of sales revenue
55,891
40,437
146,052
129,637
Cost of rental revenue, including
depreciation of $2,795 and $2,315, for the three months ended and
$8,153 and $6,257 for the nine months ended, respectively
6,700
4,981
19,036
14,068
Total cost of revenue
62,591
45,418
165,088
143,705
Gross profit
42,798
47,687
124,062
137,895
Operating expense
Research and development
4,581
3,754
16,009
11,892
Sales and marketing
33,734
28,301
92,161
83,109
General and administrative
14,775
9,258
42,646
26,981
Total operating expense
53,090
41,313
150,816
121,982
Income (loss) from operations
(10,292
)
6,374
(26,754
)
15,913
Other income (expense)
Interest income
868
21
1,122
107
Other expense
(12
)
(466
)
(1,167
)
(472
)
Total other income (expense),
net
856
(445
)
(45
)
(365
)
Income (loss) before provision
(benefit) for income taxes
(9,436
)
5,929
(26,799
)
15,548
Provision (benefit) for income
taxes
70
(6,245
)
363
(996
)
Net income (loss)
$
(9,506
)
$
12,174
$
(27,162
)
$
16,544
Other comprehensive income (loss), net
of tax
Change in foreign currency translation
adjustment
(616
)
(251
)
(1,453
)
(585
)
Change in net unrealized gains (losses) on
foreign currency hedging
209
494
(1,669
)
2,028
Less: reclassification adjustment for net
(gains) losses included in net income
—
106
1,206
(267
)
Total net change in unrealized gains
(losses) on foreign currency hedging
209
600
(463
)
1,761
Change in net unrealized gains (losses) on
marketable securities
17
(1
)
16
-
Total other comprehensive income
(loss), net of tax
(390
)
348
(1,900
)
1,176
Comprehensive income (loss)
$
(9,896
)
$
12,522
$
(29,062
)
$
17,720
Basic net income (loss) per share
attributable to common stockholders (1)
$
(0.42
)
$
0.54
$
(1.19
)
$
0.74
Diluted net income (loss) per share
attributable to common stockholders (1) (2)
$
(0.42
)
$
0.53
$
(1.19
)
$
0.73
Weighted-average number of shares used
in calculating net income (loss) per share attributable to common
stockholders:
Basic common shares
22,882,333
22,619,272
22,827,733
22,416,575
Diluted common shares
22,882,333
22,854,229
22,827,733
22,803,355
(1)
Reconciliations of net income (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 and nine
months ended September 30,2022, diluted loss per share is the same
as basic.
Consolidated Balance
Sheets
(unaudited)
(amounts in thousands)
September 30,
December 31,
2022
2021
Assets
Current assets
Cash and cash equivalents
$
209,633
$
235,524
Marketable securities
-
9,989
Accounts receivable, net
50,533
24,452
Inventories, net
35,725
31,873
Income tax receivable
1,579
1,343
Prepaid expenses and other current
assets
20,306
26,005
Total current assets
317,776
329,186
Property and equipment, net
40,632
38,926
Goodwill
32,674
32,979
Intangible assets, net
53,700
60,147
Operating lease right-of-use asset
22,479
24,912
Other assets
2,323
3,363
Total assets
$
469,584
$
489,513
Liabilities and stockholders'
equity
Current liabilities
Accounts payable and accrued expenses
$
33,512
$
25,689
Accrued payroll
11,789
17,307
Warranty reserve - current
7,830
6,480
Operating lease liability - current
3,486
3,393
Deferred revenue - current
9,119
8,568
Income tax payable
-
75
Total current liabilities
65,736
61,512
Warranty reserve - noncurrent
7,630
7,246
Operating lease liability - noncurrent
20,662
23,281
Earnout liability - noncurrent
13,687
15,386
Deferred revenue - noncurrent
11,027
11,861
Total liabilities
118,742
119,286
Stockholders' equity
Common stock
23
23
Additional paid-in capital
309,140
299,463
Retained earnings
42,110
69,272
Accumulated other comprehensive income
(loss)
(431
)
1,469
Total stockholders' equity
350,842
370,227
Total liabilities and stockholders'
equity
$
469,584
$
489,513
Condensed Consolidated Cash
Flow
(unaudited)
(amounts in thousands)
Nine months ended September
30,
2022
2021
Cash flows from operating
activities
Net income (loss)
$
(27,162
)
$
16,544
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
17,536
15,861
Loss on rental units and other fixed
assets
2,488
952
Gain on sale of former rental assets
(93
)
(59
)
Provision for sales revenue returns and
doubtful accounts
10,816
8,248
Provision for rental revenue
adjustments
—
3,543
Provision for inventory losses
2,060
1,452
Stock-based compensation expense
9,185
8,547
Deferred income taxes
—
(1,014
)
Change in fair value of earnout
liability
(1,699
)
(9,822
)
Changes in operating assets and
liabilities
(35,181
)
(27,117
)
Net cash provided by (used in) operating
activities
(22,050
)
17,135
Cash flows from investing
activities
Maturities of marketable securities
10,005
15,705
Investment in intangible assets
—
(132
)
Investment in property and equipment
(2,770
)
(4,807
)
Production and purchase of rental
equipment
(11,320
)
(13,156
)
Proceeds from sale of former assets
152
122
Net cash used in investing activities
(3,933
)
(2,268
)
Cash flows from financing
activities
Proceeds from stock options exercised
35
13,699
Proceeds from employee stock purchases
1,691
1,948
Payment of employment taxes related to
release of restricted stock
(1,234
)
(617
)
Net cash provided by financing
activities
492
15,030
Effect of exchange rates on cash
(400
)
(283
)
Net increase (decrease) in cash and
cash equivalents
$
(25,891
)
$
29,614
Supplemental Financial
Information
(unaudited)
(in thousands, except units
and patients)
Three months ended
Nine months ended
September 30,
September 30,
2022
2021
2022
2021
Revenue by region and category
Business-to-business domestic sales
$
42,546
$
22,793
$
58,859
$
81,094
Business-to-business international
sales
15,078
21,834
80,460
59,377
Direct-to-consumer domestic sales
33,048
36,347
108,046
107,888
Direct-to-consumer domestic rentals
14,717
12,131
41,785
33,241
Total revenue
$
105,389
$
93,105
$
289,150
$
281,600
Additional financial measures
Units sold
54,200
44,600
127,000
146,400
Net rental patients as of period-end
44,600
40,400
44,600
40,400
Reconciliation of U.S. GAAP to
Other Non-GAAP Financial Measures
(unaudited)
(in thousands)
Three months ended
Nine months ended
September 30,
September 30,
Non-GAAP EBITDA and Adjusted
EBITDA
2022
2021
2022
2021
Net income (loss) (GAAP)
$
(9,506
)
$
12,174
$
(27,162
)
$
16,544
Non-GAAP adjustments:
Interest income
(868
)
(21
)
(1,122
)
(107
)
Provision (benefit) for income taxes
70
(6,245
)
363
(996
)
Depreciation and amortization
5,928
5,522
17,536
15,861
EBITDA (non-GAAP)
(4,376
)
11,430
(10,385
)
31,302
Stock-based compensation
3,500
2,792
9,185
8,547
Change in fair value of earnout
liability
(288
)
(2,052
)
(1,699
)
(9,869
)
Adjusted EBITDA (non-GAAP)
$
(1,164
)
$
12,170
$
(2,899
)
$
29,980
Three months ended September
30,
Net Income (Loss)
Diluted EPS
Non-GAAP Adjusted Net Income (Loss) and
Diluted EPS
2022
2021
2022
2021
Financial Results (GAAP)
$
(9,506
)
$
12,174
$
(0.42
)
$
0.53
Non-GAAP adjustments:
Amortization of intangibles
2,150
2,155
Stock-based compensation
3,500
2,792
Change in fair value of earnout
liability
(288
)
(2,052
)
Income tax impact of adjustments (1)
-
(695
)
Adjusted
$
(4,144
)
$
14,374
$
(0.18
)
$
0.63
Nine months ended September
30,
Net Income (Loss)
Diluted EPS
Non-GAAP Adjusted Net Income (Loss) and
Diluted EPS
2022
2021
2022
2021
Financial Results (GAAP)
$
(27,162
)
$
16,544
$
(1.19
)
$
0.73
Non-GAAP adjustments:
Amortization of intangibles
6,447
6,622
Stock-based compensation
9,185
8,547
Change in fair value of earnout
liability
(1,699
)
(9,869
)
Income tax impact of adjustments (1)
-
(1,272
)
Adjusted
$
(13,229
)
$
20,572
$
(0.58
)
$
0.90
(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 0% for 2022,
which is due to the recording of a valuation allowance, and 24% for
2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221102005392/en/
Agnes Lee ir@inogen.net
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