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.

 

Agnes Lee ir@inogen.net

Inogen (NASDAQ:INGN)
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From Jan 2023 to Feb 2023 Click Here for more Inogen Charts.
Inogen (NASDAQ:INGN)
Historical Stock Chart
From Feb 2022 to Feb 2023 Click Here for more Inogen Charts.