Fourth Quarter Year-over-Year Revenue Growth of
15.3%
Full Year 2022 Year-over-Year Revenue Growth of
5.4%
Inogen, Inc. (Nasdaq: INGN), a medical technology company
offering innovative respiratory products for use in the homecare
setting, today announced financial results for the fourth quarter
and the full year ended December 31, 2022.
Fourth Quarter 2022 Highlights
All comparisons are to the prior year period unless otherwise
noted.
- Reported total revenue increased 15.3% to $88.1 million, on a
constant currency basis total revenue for the quarter increased
17.7%.
- GAAP net loss of $56.6 million, adjusted net loss of $13.0
million, and adjusted EBITDA was a loss of $10.6 million. GAAP net
loss included a one-time loss on disposal of intangible asset of
$52.2 million and an offsetting reduction to the fair value of
contingent liability of $13.7 million.
- Cash and cash equivalents were $187.0 million as of December
31, 2022.
Full Year 2022 Highlights
All comparisons are to the prior year period unless otherwise
noted.
- Reported total revenue increased 5.4% to $377.2 million, on a
constant currency basis total revenue for the year increased
6.9%.
- Continued progress on our rental strategy led to a 22.5%
increase in rental revenue, primarily due to higher rental patients
on service, higher percentage of billable patients and higher
reimbursement rates.
- GAAP net loss of $83.8 million, adjusted net loss of $26.2
million and adjusted EBITDA was a loss of $13.5 million. GAAP net
loss included a one-time loss on disposal of intangible asset of
$52.2 million and an offsetting reduction to fair value of
contingent liability of $15.4 million.
- Achieved regulatory milestones and announced new products to be
launched in 2023.
“Despite the headwinds we faced in 2022, I am pleased with how
our team successfully managed these challenges, while growing
revenue and executing on our transformation,” said Nabil Shabshab,
President and Chief Executive Officer. “We remain focused on our
innovation pipeline to provide a foundation for growth along with
judicious management of operating expenses to drive medium to
long-term growth.”
Fourth Quarter 2022 Financial Results
Fourth quarter total revenue increased 15.3% to $88.1 million
from $76.4 million in the fourth quarter of 2021, primarily due to
growth in domestic business-to-business sales and rental revenue,
partially offset by lower direct-to-consumer sales.
Total gross margin was 33.5% in the fourth quarter of 2022
versus 50.5% in the comparative period in 2021. The decline was
driven primarily by sales channel mix, increased material costs
including premiums paid for components and higher warranty costs,
partially offset by higher manufacturing productivity from
increased production volumes.
Total operating expense for the quarter was $88.0 million
compared to $45.3 million in the fourth quarter of 2021,
representing an increase of 94.3%. The current period expenses
include a one-time loss on disposal of intangible asset of $52.2
million. Excluding this loss, operating expense decreased 20.9%,
primarily due to the change in fair value of the New Aera earnout
liability.
GAAP net loss for the fourth quarter of 2022 was $56.6 million
compared to GAAP net loss of $22.9 million in the fourth quarter of
2021. Adjusted net loss was $13.0 million compared to adjusted net
loss of $20.1 million in the fourth quarter of 2021.
Adjusted EBITDA was a negative $10.6 million in the fourth
quarter of 2022 compared to a negative $0.5 million in the fourth
quarter of 2021.
Cash and cash equivalents were $187.0 million as of December 31,
2022, and no debt outstanding.
Full Year 2022 Financial Results
Total revenue of $377.2 million, up 5.4% versus 2021, primarily
due to higher international business-to-business sales and rental
revenue, partially offset by lower domestic business-to-business
and direct-to-consumer sales.
Total gross margin was 40.7% for the full year 2022 versus 49.3%
in 2021. The decline was primarily driven by increased material
costs related to premiums paid for semiconductor chips and sales
channel mix. Additional impacts included higher cost of other
materials and warranty costs as well as lower manufacturing
productivity. This was partially offset by the impact of higher
selling prices across all channels.
Total operating expense for the full year was $238.8 million
compared to $167.2 million for the full year 2021, representing an
increase of 42.8%. Excluding the loss on disposal of intangible
asset, operating expense increased 11.6%. The increased spend was
primarily due to ongoing strategic investments required to position
the Company for long-term sustainable growth. These expenses
included increases in personnel-related expenses, our prescriber
initiative, product development, and consulting expenses.
GAAP net loss for full year 2022 was $83.8 million compared to
GAAP net loss of $6.3 million for full year 2021. Adjusted net loss
was $26.2 million compared to adjusted net income of $1.8 million
for full year 2021.
Adjusted EBITDA was a negative $13.5 million for the full year
2022 compared to a positive $29.5 million for the full year
2021.
A reconciliation of adjusted EBITDA and adjusted net income
(loss) for the three and twelve months ended December 31, 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.”
Quarterly Conference Call Information
Inogen will issue fourth quarter and full year 2022 financial
results after the market closes on Thursday, February 23, 2023. On
the same day, the Company will host a conference call beginning at
2:00 pm PT / 5:00 pm ET.
Individuals interested in listening to the conference call may
do so by dialing:
US domestic callers (877) 841-3961 Non-US
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 March 2,
2023. To access the replay, dial (877) 660-6853 or (201) 612-7415
and reference Conference ID: 13735129.
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, Inc. (Nasdaq: INGN) is a leading global medical
technology company offering innovative respiratory products for use
in the homecare setting. Inogen supports patient respiratory care
by developing, manufacturing, and marketing innovative
best-in-class portable oxygen concentrators used to deliver
supplemental long-term oxygen therapy to patients suffering from
chronic respiratory conditions. Inogen partners with patients,
prescribers, home medical equipment providers, and distributors to
make its oxygen therapy products widely available allowing patients
the chance to remain ambulatory while managing the impact of their
disease.
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, Inogen’s expectations for future
growth and profitability; expectations related to our sales force
and productivity; and our expectations related to management of
operating expenses. 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, or cost inflation for such components; the
risks our innovation pipeline will not produce meaningful results;
the impact of changes in reimbursement rates and reimbursement and
regulatory policies; and the possible loss of key employees,
customers, or suppliers; the risk that expenses and costs will
exceed Inogen’s expectations. 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 year ended December 31, 2021, Quarterly Report on
Form 10-Q for the period ended September 30, 2022, and in its other
filings with the Securities and Exchange Commission. Additional
information will also be set forth in Inogen’s Annual Report on
Form 10-K for the year ended December 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.
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
twelve months ended December 31, 2022, and December 31, 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 Loss
(unaudited)
(amounts in thousands, except
share and per share amounts)
Three months ended
Twelve months ended
December 31,
December 31,
2022
2021
2022
2021
Revenue
Sales revenue
$
73,184
$
63,371
$
320,549
$
311,730
Rental revenue
14,907
13,032
56,692
46,273
Total revenue
88,091
76,403
377,241
358,003
Cost of revenue
Cost of sales revenue
51,753
32,187
197,805
161,824
Cost of rental revenue, including
depreciation of $2,950 and $2,603, for the three months ended and
$11,103 and $8,860 for the twelve months ended, respectively
6,867
5,628
25,903
19,696
Total cost of revenue
58,620
37,815
223,708
181,520
Gross profit
29,471
38,588
153,533
176,483
Operating expense
Research and development
5,934
4,684
21,943
16,576
Sales and marketing
28,606
29,706
120,767
112,815
General and administrative
1,259
10,871
43,905
37,852
Loss on disposal of intangible asset
52,161
—
52,161
—
Total operating expense
87,960
45,261
238,776
167,243
Income (loss) from operations
(58,489
)
(6,673
)
(85,243
)
9,240
Other income (expense)
Interest income
1,715
22
2,837
129
Other income (expense)
305
(238
)
(862
)
(710
)
Total other income (expense),
net
2,020
(216
)
1,975
(581
)
Income (loss) before provision for
income taxes
(56,469
)
(6,889
)
(83,268
)
8,659
Provision for income taxes
141
15,988
504
14,992
Net loss
$
(56,610
)
$
(22,877
)
$
(83,772
)
$
(6,333
)
Other comprehensive income (loss), net
of tax
Change in foreign currency translation
adjustment
856
(215
)
(597
)
(800
)
Change in net unrealized gains (losses) on
foreign currency hedging
(1,461
)
(282
)
(3,130
)
1,746
Less: reclassification adjustment for net
(gains) losses included in net income
784
314
1,990
47
Total net change in unrealized gains
(losses) on foreign currency hedging
(677
)
32
(1,140
)
1,793
Change in net unrealized gains (losses) on
marketable securities
9
1
25
1
Total other comprehensive income
(loss), net of tax
188
(182
)
(1,712
)
994
Comprehensive loss
$
(56,422
)
$
(23,059
)
$
(85,484
)
$
(5,339
)
Basic net loss per share attributable
to common stockholders (1)
$
(2.47
)
$
(1.01
)
$
(3.67
)
$
(0.28
)
Diluted net loss per share attributable
to common stockholders (1) (2)
$
(2.47
)
$
(1.01
)
$
(3.67
)
$
(0.28
)
Weighted-average number of shares used
in calculating net loss per share attributable to common
stockholders:
Basic common shares
22,926,276
22,707,987
22,852,571
22,490,027
Diluted common shares
22,926,276
22,707,987
22,852,571
22,490,027
(1) Reconciliations of net loss attributable to common stockholders
basic and diluted can be found in Inogen’s Annual Report on Form
10-K to be filed with the Securities and Exchange Commission. (2)
Due to a net loss for the three and twelve
months ended December 31, 2022, and December 31, 2021 diluted loss
per share is the same as basic.
Consolidated Balance
Sheets
(unaudited)
(amounts in thousands)
December 31,
December 31,
2022
2021
Assets
Current assets
Cash and cash equivalents
$
187,014
$
235,524
Marketable securities
—
9,989
Accounts receivable, net
62,725
24,452
Inventories, net
34,093
31,873
Income tax receivable
1,626
1,343
Prepaid expenses and other current
assets
19,187
26,005
Total current assets
304,645
329,186
Property and equipment, net
43,269
38,926
Goodwill
32,852
32,979
Intangible assets, net
177
60,147
Operating lease right-of-use asset
21,653
24,912
Other assets
2,445
3,363
Total assets
$
405,041
$
489,513
Liabilities and stockholders'
equity
Current liabilities
Accounts payable and accrued expenses
$
33,974
$
25,689
Accrued payroll
11,190
17,307
Warranty reserve - current
7,790
6,480
Operating lease liability - current
3,515
3,393
Deferred revenue - current
8,880
8,568
Income tax payable
—
75
Total current liabilities
65,349
61,512
Warranty reserve - noncurrent
12,123
7,246
Operating lease liability - noncurrent
19,764
23,281
Earnout liability - noncurrent
—
15,386
Deferred revenue - noncurrent
10,399
11,861
Total liabilities
107,635
119,286
Stockholders' equity
Common stock
23
23
Additional paid-in capital
312,126
299,463
Retained earnings (deficit)
(14,500
)
69,272
Accumulated other comprehensive income
(loss)
(243
)
1,469
Total stockholders' equity
297,406
370,227
Total liabilities and stockholders'
equity
$
405,041
$
489,513
Condensed Consolidated Cash
Flow
(unaudited)
(amounts in thousands)
Twelve months ended December
31,
2022
2021
Cash flows from operating
activities
Net loss
$
(83,772
)
$
(6,333
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
23,514
21,628
Loss on rental units and other fixed
assets
3,095
1,521
Gain on sale of former rental assets
(154
)
(65
)
Provision for sales revenue returns and
doubtful accounts
13,024
11,094
Provision for inventory losses
2,423
2,062
Stock-based compensation expense
12,283
10,943
Deferred income taxes
—
14,444
Change in fair value of earnout
liability
(15,386
)
(11,596
)
Loss on disposal of intangible asset
52,161
—
Changes in operating assets and
liabilities
(44,720
)
(20,065
)
Net cash provided by (used in) operating
activities
(37,532
)
23,633
Cash flows from investing
activities
Purchases of marketable securities
—
(9,987
)
Maturities of marketable securities
10,014
19,256
Investment in intangible assets
—
(132
)
Investment in property and equipment
(3,337
)
(5,482
)
Production and purchase of rental
equipment
(17,885
)
(18,453
)
Proceeds from sale of former assets
331
153
Net cash used in investing activities
(10,877
)
(14,645
)
Cash flows from financing
activities
Proceeds from stock options exercised
44
13,699
Proceeds from employee stock purchases
1,691
1,948
Payment of employment taxes related to
release of restricted stock
(1,355
)
(647
)
Net cash provided by financing
activities
380
15,000
Effect of exchange rates on cash
(481
)
(426
)
Net increase (decrease) in cash and
cash equivalents
$
(48,510
)
$
23,562
Supplemental Financial
Information
(unaudited)
(in thousands, except units
and patients)
Three months ended
Twelve months ended
December 31,
December 31,
2022
2021
2022
2021
Revenue by region and category
Business-to-business domestic sales
$
27,190
$
10,277
$
86,049
$
91,371
Business-to-business international
sales
20,703
20,083
101,163
79,460
Direct-to-consumer domestic sales
25,291
33,011
133,337
140,899
Direct-to-consumer domestic rentals
14,907
13,032
56,692
46,273
Total revenue
$
88,091
$
76,403
$
377,241
$
358,003
Additional financial measures
Units sold
43,500
29,400
170,500
175,800
Net rental patients as of period-end
45,600
42,900
45,600
42,900
Reconciliation of U.S. GAAP to
Other Non-GAAP Financial Measures
(unaudited)
(in thousands)
Three months ended
Twelve months ended
December 31,
December 31,
Non-GAAP EBITDA and Adjusted
EBITDA
2022
2021
2022
2021
Net loss (GAAP)
$
(56,610
)
$
(22,877
)
$
(83,772
)
$
(6,333
)
Non-GAAP adjustments:
Interest income
(1,715
)
(22
)
(2,837
)
(129
)
Provision for income taxes
141
15,988
504
14,992
Depreciation and amortization
5,978
5,767
23,514
21,628
EBITDA (non-GAAP)
(52,206
)
(1,144
)
(62,591
)
30,158
Stock-based compensation
3,098
2,396
12,283
10,943
Change in fair value of earnout
liability
(13,687
)
(1,727
)
(15,386
)
(11,596
)
Loss on disposal of intangible asset
52,161
—
52,161
—
Adjusted EBITDA (non-GAAP)
$
(10,634
)
$
(475
)
$
(13,533
)
$
29,505
Three months ended December
31,
Net Loss
Diluted EPS
Non-GAAP Adjusted Net Loss and Diluted
EPS
2022
2021
2022
2021
Financial Results (GAAP)
$
(56,610
)
$
(22,877
)
$
(2.47
)
$
(1.01
)
Non-GAAP adjustments:
Amortization of intangibles
2,022
2,153
Stock-based compensation
3,098
2,396
Change in fair value of earnout
liability
(13,687
)
(1,727
)
Loss on disposal of intangible asset
52,161
—
Income tax impact of adjustments (1)
—
—
Adjusted
$
(13,016
)
$
(20,055
)
$
(0.57
)
$
(0.88
)
Twelve months ended December
31,
Net Income (Loss)
Diluted EPS
Non-GAAP Adjusted Net Income (Loss) and
Diluted EPS
2022
2021
2022
2021
Financial Results (GAAP)
$
(83,772
)
$
(6,333
)
$
(3.67
)
$
(0.28
)
Non-GAAP adjustments:
Amortization of intangibles
8,469
8,775
Stock-based compensation
12,283
10,943
Change in fair value of earnout
liability
(15,386
)
(11,596
)
Loss on disposal of intangible asset
52,161
—
Income tax impact of adjustments (1)
—
—
Adjusted
$
(26,245
)
$
1,789
$
(1.15
)
$
0.08
(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 and 2021, which is due to the
recording of a valuation allowance.
Three months ended December
31,
Twelve months ended December
31,
Non-GAAP constant currency
revenue
2022
2021
2022
2021
Business-to-business domestic sales
$
27,190
$
10,277
$
86,049
$
91,371
Business-to-business international
sales
20,703
20,083
101,163
79,460
Direct-to-consumer domestic sales
25,291
33,011
133,337
140,899
Direct-to-consumer domestic rentals
14,907
13,032
56,692
46,273
Total revenue (GAAP)
88,091
76,403
377,241
358,003
Hedging gains
784
414
1,990
62
Total revenue, excluding hedging effect
(non-GAAP)
87,307
75,989
375,251
357,941
Exchange rate impact
2,111
331
7,279
(2,524
)
Constant currency revenues (non-GAAP)
$
89,418
$
76,320
$
382,530
$
355,417
Revenue growth (GAAP)
15.3
%
5.4
%
Constant currency revenue growth
(non-GAAP)
17.7
%
6.9
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230223005528/en/
Agnes Lee ir@inogen.net
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