ALAMEDA, Calif., May 7,
2019 /PRNewswire/ -- Penumbra, Inc. (NYSE: PEN), a
global healthcare company focused on innovative
therapies, today reported financial results for the first
quarter ended March 31, 2019.
- Revenue of $128.4 million in
the first quarter of 2019, an increase of 25.1%, or 27.2% in constant currency1, over the
first quarter of 2018.
First Quarter 2019 Financial Results
Total revenue
grew to $128.4 million for the
first quarter of 2019 compared to $102.7 million for the first quarter of
2018, an increase of 25.1%, or 27.2% on a constant currency basis.
The United States represented 64%
of total revenue and international represented 36% of total revenue
for the first quarter of 2019. Revenue from sales of neuro products
grew to $81.5 million for the first
quarter of 2019, an increase of 14.1%, or 16.5% on a constant
currency basis. Revenue from sales of vascular products grew to
$47.0 million for the first
quarter of 2019, an increase of 50.2%, or 51.8% on a constant
currency basis.
Gross profit was $83.9 million, or 65.3% of total revenue,
for the first quarter of 2019, compared to $66.6 million, or 64.8% of total revenue,
for the first quarter of 2018.
Total operating expenses for the first quarter of 2019 were
$72.8 million, or 56.6% of total
revenue. This compares to total operating expenses of $62.5 million, or 60.9% of total revenue,
for the first quarter of 2018. R&D expenses were $11.7 million for the first quarter of 2019,
compared to $8.0 million for the
first quarter of 2018. SG&A expenses were $61.1 million for the first quarter of 2019,
compared to $54.5 million for
the first quarter of 2018.
Operating income for the first quarter of 2019 was $11.2 million, compared to operating
income of $4.0 million for the
first quarter of 2018.
Webcast and Conference Call Information
Penumbra, Inc.
will host a conference call to discuss the first quarter 2019
financial results after market close on Tuesday, May 7, 2019
at 4:30 PM Eastern Time. The
conference call can be accessed live over the phone by dialing
(866) 393-4306 for domestic callers or (734) 385-2616 for
international callers (conference id: 6096838), or the webcast can
be accessed on the "Events" section under the "Investors" tab of
the Company's website at: www.penumbrainc.com. The webcast will be
available on the Company's website for at least two weeks following
the completion of the call.
About Penumbra
Penumbra, Inc., headquartered in
Alameda, California, is a global
healthcare company focused on innovative therapies. Penumbra
designs, develops, manufactures and markets innovative products and
has a broad portfolio that addresses challenging medical conditions
and significant clinical needs across two major markets, neuro and
vascular. Penumbra sells its products to hospitals primarily
through its direct sales organization in the United States, most of Europe, Canada and Australia, and through distributors in select
international markets. The Penumbra logo is a trademark of
Penumbra, Inc. For more information, visit www.penumbrainc.com.
Non-GAAP Financial Measures
In addition to financial
measures prepared in accordance with U.S. generally accepted
accounting principles ("GAAP"), the Company uses the following
non-GAAP financial measures in this press release: a) non-GAAP net
income and non-GAAP diluted earnings per share ("EPS") and b)
constant currency.
Non-GAAP net income and non-GAAP diluted EPS. The Company
defines non-GAAP net income as net income attributable to Penumbra,
Inc. excluding a) the income tax effects from the Tax Cuts and Jobs
Act of 2017 (the "Tax Reform Act") and b) the effects of the excess
tax benefits associated with share-based compensation arrangements.
The Company defines non-GAAP diluted EPS as GAAP diluted EPS,
excluding the effects of the same items above.
Constant Currency. The Company's constant currency
revenue disclosures estimate the impact of changes in foreign
currency rates on the translation of the Company's current period
revenue as compared to the applicable comparable period in the
prior year. This impact is derived by taking the current local
currency revenue and translating it into U.S. dollars based upon
the foreign currency exchange rates used to translate the local
currency revenue for the applicable comparable period in the prior
year, rather than the actual exchange rates in effect during the
current period. It does not include any other effect of changes in
foreign currency rates on the Company's results or business.
Full reconciliation of these non-GAAP measures to the most
comparable GAAP measures is set forth in the tables below.
Our management believes the non-GAAP financial measures
disclosed in this press release are useful to investors in
assessing the operating performance of our business and provide
meaningful comparisons to prior periods and thus a more complete
understanding of our business than could be obtained absent this
disclosure. Specifically, we consider the change in constant
currency revenue as a useful metric as it provides an alternative
framework for assessing how our underlying business performed
excluding the effect of foreign currency rate fluctuations. We
consider non-GAAP net income and non-GAAP diluted EPS useful
metrics as they provide an alternative framework for assessing how
our underlying business performed excluding the one-time effects of
the transition tax from the Tax Reform Act and the excess tax
benefits associated with share-based compensation arrangements, net
of any related valuation allowance.
The non-GAAP financial measures included in this press release
may be different from, and therefore may not be comparable to,
similarly titled measures used by other companies. These non-GAAP
measures should not be considered in isolation or as alternatives
to GAAP measures. We urge investors to review the reconciliation of
these non-GAAP financial measures to the comparable GAAP financial
measures included in this press release, and not to rely on any
single financial measure to evaluate our business.
Forward-Looking Statements
Except for historical
information, certain statements in this press release are
forward-looking in nature and are subject to risks, uncertainties
and assumptions about us. Our business and operations are subject
to a variety of risks and uncertainties and, consequently, actual
results may differ materially from those projected by any
forward-looking statements. Factors that could cause actual results
to differ from those projected include, but are not limited to:
failure to sustain or grow profitability or generate positive cash
flows; failure to effectively introduce and market new products;
delays in product introductions; significant competition; inability
to further penetrate our current customer base, expand our user
base and increase the frequency of use of our products by our
customers; inability to achieve or maintain satisfactory pricing
and margins; manufacturing difficulties; permanent write-downs or
write-offs of our inventory; product defects or failures;
unfavorable outcomes in clinical trials; inability to maintain our
culture as we grow; fluctuations in foreign currency exchange
rates; potential adverse regulatory actions; and potential impact
of any future acquisitions, mergers, dispositions, joint ventures
or investments we may make. These risks and uncertainties, as well
as others, are discussed in greater detail in our filings with the
Securities and Exchange Commission (SEC), including our Annual
Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on
February 26, 2019. There may be additional risks of which we
are not presently aware or that we currently believe are immaterial
which could have an adverse impact on our business. Any
forward-looking statements are based on our current expectations,
estimates and assumptions regarding future events and are
applicable only as of the dates of such statements. We make no
commitment to revise or update any forward-looking statements in
order to reflect events or circumstances that may change.
1See "Non-GAAP Financial Measures" for important
information about our use of constant currency and other non-GAAP
measures.
Penumbra,
Inc. Condensed Consolidated Balance
Sheets (unaudited) (in
thousands)
|
|
|
|
|
|
|
|
March 31,
2019
|
|
December 31,
2018
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
95,606
|
|
$
|
67,850
|
Marketable
investments
|
|
99,241
|
|
133,039
|
Accounts
receivable, net
|
|
94,679
|
|
81,896
|
Inventories
|
|
121,691
|
|
115,741
|
Prepaid expenses and other
current assets
|
|
11,869
|
|
12,200
|
Total current assets
|
|
423,086
|
|
410,726
|
Property and
equipment, net
|
|
35,380
|
|
35,407
|
Operating lease
right-of-use assets
|
|
42,376
|
|
—
|
Intangible assets,
net
|
|
26,813
|
|
27,245
|
Goodwill
|
|
7,659
|
|
7,813
|
Deferred
taxes
|
|
31,862
|
|
32,940
|
Other non-current
assets
|
|
1,613
|
|
875
|
Total assets
|
|
$
|
568,789
|
|
$
|
515,006
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable
|
|
$
|
7,692
|
|
$
|
8,176
|
Accrued
liabilities
|
|
58,032
|
|
57,886
|
Current
operating lease liabilities
|
|
3,688
|
|
—
|
Total current liabilities
|
|
69,412
|
|
66,062
|
Deferred
rent
|
|
—
|
|
7,586
|
Non-current operating
lease liabilities
|
|
46,070
|
|
—
|
Other non-current
liabilities
|
|
16,644
|
|
18,943
|
Total liabilities
|
|
132,126
|
|
92,591
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
34
|
|
34
|
Additional paid-in
capital
|
|
419,514
|
|
415,084
|
Accumulated other
comprehensive loss
|
|
(2,578)
|
|
(1,942)
|
Retained
earnings
|
|
19,762
|
|
9,064
|
Total Penumbra, Inc.
stockholders' equity
|
|
436,732
|
|
422,240
|
Non-controlling
interest
|
|
(69)
|
|
175
|
Total stockholders'
equity
|
|
436,663
|
|
422,415
|
Total liabilities and
stockholders' equity
|
|
$
|
568,789
|
|
$
|
515,006
|
Penumbra,
Inc. Condensed Consolidated Statements of
Operations (unaudited) (in thousands, except
share and per share amounts)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2019
|
|
2018
|
Revenue
|
|
$
|
128,439
|
|
$
|
102,701
|
Cost of
revenue
|
|
44,529
|
|
36,144
|
Gross
profit
|
|
83,910
|
|
66,557
|
Operating
expenses:
|
|
|
|
|
Research and
development
|
|
11,667
|
|
8,013
|
Sales, general and
administrative
|
|
61,091
|
|
54,499
|
Total operating
expenses
|
|
72,758
|
|
62,512
|
Income from
operations
|
|
11,152
|
|
4,045
|
Interest income,
net
|
|
733
|
|
749
|
Other income
(expense), net
|
|
24
|
|
(290)
|
Income before income
taxes and equity in losses of unconsolidated investee
|
|
11,909
|
|
4,504
|
Provision for
(benefit from) income taxes
|
|
1,455
|
|
(1,938)
|
Income before equity
in losses of unconsolidated investee
|
|
10,454
|
|
6,442
|
Equity in losses of
unconsolidated investee
|
|
—
|
|
(951)
|
Consolidated net
income
|
|
$
|
10,454
|
|
$
|
5,491
|
Net loss attributable
to non-controlling interest
|
|
(244)
|
|
—
|
Net income
attributable to Penumbra, Inc.
|
|
$
|
10,698
|
|
$
|
5,491
|
|
|
|
|
|
Net income
attributable to Penumbra, Inc. per share:
|
|
|
|
|
Basic
|
|
$
|
0.31
|
|
$
|
0.16
|
Diluted
|
|
$
|
0.30
|
|
$
|
0.15
|
Weighted average
shares outstanding:
|
|
|
|
|
Basic
|
|
34,507,279
|
|
33,846,142
|
Diluted
|
|
36,213,164
|
|
35,917,051
|
Penumbra,
Inc. Reconciliation of GAAP Net Income and Diluted EPS to
Non-GAAP Net Income and Non-GAAP Diluted
EPS1 (unaudited) (in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2019
|
|
Three Months Ended
March 31, 2018
|
|
|
Net
income
|
|
Diluted
EPS
|
|
Net
income
|
|
Diluted
EPS
|
GAAP net
income
|
|
$
|
10,698
|
|
$
|
0.30
|
|
$
|
5,491
|
|
$
|
0.15
|
GAAP net income
includes the effect of the following items:
|
|
|
|
|
|
|
|
|
Effect of the
transition tax under the Tax Reform Act2
|
|
—
|
|
—
|
|
88
|
|
—
|
Excess tax benefits
related to stock compensation awards
|
|
(2,244)
|
|
(0.07)
|
|
(3,364)
|
|
(0.09)
|
Non-GAAP net
income
|
|
$
|
8,454
|
|
$
|
0.23
|
|
$
|
2,215
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
1
|
See "Non-GAAP
Financial Measures" for important information about our use of
non-GAAP measures and further information about our non-GAAP net
income and non-GAAP diluted EPS measures.
|
|
|
2
|
On December 22, 2017,
the Tax Reform Act was enacted into law. This new tax law, among
other changes, reduces the Company's U.S. federal statutory
corporate income tax rate from 34% to 21% effective January 1,
2018. During the three months ended March 31, 2018, the Company
recorded a provisional tax charge for the one-time transition tax
on the undistributed earnings of its foreign
subsidiaries.
|
Penumbra,
Inc. Reconciliation of Revenue Growth by Geographic
Regions to Constant Currency Revenue
Growth3 (unaudited) (in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
Reported
Change
|
|
FX
Impact
|
|
Constant Currency
Change
|
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
United
States
|
|
$
|
82,511
|
|
$
|
65,801
|
|
$
|
16,710
|
|
25.4
|
%
|
|
$
|
—
|
|
$
|
16,710
|
|
25.4
|
%
|
International
|
|
45,928
|
|
36,900
|
|
9,028
|
|
24.5
|
%
|
|
2,214
|
|
11,242
|
|
30.5
|
%
|
Total
|
|
$
|
128,439
|
|
$
|
102,701
|
|
$
|
25,738
|
|
25.1
|
%
|
|
$
|
2,214
|
|
$
|
27,952
|
|
27.2
|
%
|
|
Penumbra,
Inc. Reconciliation of Revenue Growth by Product
Categories to Constant Currency Revenue
Growth3 (unaudited) (in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
Reported
Change
|
|
FX
Impact
|
|
Constant Currency
Change
|
|
|
2019
|
|
2018
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
Neuro
|
|
$
|
81,471
|
|
$
|
71,433
|
|
$
|
10,038
|
|
14.1
|
%
|
|
$
|
1,714
|
|
$
|
11,752
|
|
16.5
|
%
|
Vascular
|
|
46,968
|
|
31,268
|
|
15,700
|
|
50.2
|
%
|
|
500
|
|
16,200
|
|
51.8
|
%
|
Total
|
|
$
|
128,439
|
|
$
|
102,701
|
|
$
|
25,738
|
|
25.1
|
%
|
|
$
|
2,214
|
|
$
|
27,952
|
|
27.2
|
%
|
|
|
|
|
|
|
|
|
|
3
|
See "Non-GAAP
Financial Measures" for important information about our use of
constant currency and other non-GAAP measures.
|
Investor Relations
Penumbra, Inc.
510-995-2461
investors@penumbrainc.com
View original content to download
multimedia:http://www.prnewswire.com/news-releases/penumbra-inc-reports-first-quarter-2019-financial-results-300845369.html
SOURCE Penumbra, Inc.