Inogen Announces Fourth Quarter 2020 Financial Results

first_img $ 2020 Additional paid-in capital International revenues (GAAP) $ Facebook ) December 31, 2019 ) 292,219 $ December 31, ) 61,919 Sales revenue $ (909 (5,280 308,487 By Digital AIM Web Support – April 6, 2021 ) 106,428 WhatsApp Three months ended Accumulated other comprehensive income (loss) $ 2,976 25,300 3,322 Twelve months ended 4,927 4,618 Consolidated Balance Sheets (1,706 50,181 Change in net unrealized gains (losses) on foreign currency hedging Consolidated Statements of Comprehensive Income (Loss) 4,069 17,101 305,697 $ Less: reclassification adjustment for net (gains) losses included in net income Goodwill 447,339 December 31, Intangible assets, net (835 37,121 $ 11,057 Provision (benefit) for income taxes $ Rental revenue Cost of revenue Total net change in unrealized gains (losses) on foreign currency hedging December 31, 2020 14,080 21,648 Operating expense 461,852 39,581 2019 21,878,004 Operating lease liability – current 34,059 97,520 33,712 $ 5,855 30,730 2,048 Prepaid expenses and other current assets 2020 5,740 $ 24,272 $ $ 67 $ 5,478 Income tax payable (0.06 (229 (5,829 56,710 ) ) 1,242 Weighted-average number of shares used in calculating net income (loss) per share attributable to common stockholders: Operating lease liability – noncurrent 8,078 ) ) 26,940 26,559 ) December 31, 13,541 $ Pinterest (using 2019 FX rates) $ 13,609 102,718 ) Additional financial measures 22 Stockholders’ equity 2,092 ) 263,252 Retained earnings 20,950 41,908 190,082 ) (5,053 Earnout liability – noncurrent 29,717 349,623 (586 Total liabilities and stockholders’ equity 344,621 461,852 Change in foreign currency translation adjustment 447,339 Non-GAAP adjustments: $ (amounts in thousands, except share and per share amounts) Total liabilities 10,518 Facebook Deferred tax liability – noncurrent (6 217 21,821,104 9,350 Revenue Accrued payroll 12,392 (0.23 Warranty reserve – noncurrent Deferred revenue – noncurrent (84 280,189 (454 $ 0.94 2019 68 340,546 21,397 December 31, (384 Interest income 211,962 249 21,980,326 ) EBITDA (non-GAAP) 68,797 (using 2018 FX rates) Accounts receivable, net 43,333 (82 Total current assets 1,053 Interest income 22 Other income (expense) 3,322 (5,267 1,084 (5,121 GOLETA, Calif.–(BUSINESS WIRE)–Feb 24, 2021– 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- and twelve-month periods ended December 31, 2020. Fourth Quarter 2020 HighlightsTotal revenue of $74.0 million, down 6.3% from the same period in 2019, primarily due to the impacts of the COVID-19 pandemicDomestic business-to-business sales of $24.2 million, up 17.9% from the same period 2019Rental revenue of $9.4 million, up 71.7% from the same period in 2019Net loss of $5.1 million and Adjusted EBITDA of $3.0 million (see accompanying table for reconciliation of GAAP and non-GAAP measures)Cash, cash equivalents, and marketable securities were $231.2 million with no debt outstanding as of December 31, 2020 Full Year 2020 HighlightsTotal revenue of $308.5 million, down 14.8% versus 2019, primarily due to the impacts of the COVID-19 pandemicIncreased focus on rentals leading to a 32.3% increase in rental revenue, primarily due to a 27.3% increase in patients on service and an improved rental gross margin of 52.1% in 2020 compared to 34.1% in 2019$22.1 million increase in cash, cash equivalents, and marketable securities as of December 31, 2020 compared to December 31, 2019 “While the COVID-19 pandemic continued to have a significant effect on our business in the fourth quarter of 2020, primarily in the direct-to-consumer and international business-to-business sales channels, we are pleased with the rebound in performance that we saw in our domestic business-to-business channel which exhibited double-digit growth in the fourth quarter of 2020 over the comparable period of the prior year,” said Inogen’s newly appointed President and Chief Executive Officer, Nabil Shabshab. “Additionally, our recent focus on the rental channel produced strong operating performance with rental revenue growing significantly in the fourth quarter of 2020 versus the comparable period in the prior year.” Fourth Quarter 2020 Financial Results Total revenue for the three months ended December 31, 2020 declined 6.3% to $74.0 million from $78.9 million in the same period in 2019. Domestic business-to-business sales in the fourth quarter of 2020 increased 17.9% to $24.2 million compared to $20.6 million in the fourth quarter of 2019. The Company believes this increase was primarily a result of the unfulfilled orders in the fourth quarter of 2019, which led to an easier comparable period in the fourth quarter of 2020, and increased demand for portable oxygen concentrators (“POCs”) as hospital systems and stationary oxygen concentrator supply were strained to keep up with the rapid increase in COVID-19 cases. In addition, the Company believes the resolution of the competitive bidding uncertainty in October 2020 also contributed to increased demand in the quarter, which was partially offset by lower reseller customer demand in the comparative period. International business-to-business sales in the fourth quarter of 2020 decreased by 20.4% (23.8% decrease on a constant currency basis) to $13.6 million compared to $17.1 million in the fourth quarter of 2019. The Company believes the decrease was primarily driven by the resurgence of the COVID-19 pandemic in the quarter causing additional lockdowns in many European countries along with reduced operational capacity of certain European respiratory assessment centers. Direct-to-consumer sales decreased 25.2% to $26.8 million in the fourth quarter of 2020 from $35.8 million in the fourth quarter of 2019. The Company believes the decrease was primarily driven by the impact of the COVID-19 public health emergency (“PHE”) on consumer travel, mobility, and consumer confidence, as well as an approximately 6% reduction in average inside sales representative headcount versus the fourth quarter of 2019, and an increased focus of inside sales representatives’ time on new rental setups. As of December 31, 2020, the Company had a total of 300 inside sales representatives, down from 329 as of December 31, 2019. Rental revenue in the fourth quarter of 2020 increased to $9.4 million from $5.4 million in the same period in 2019, an increase of 71.7%, primarily due to increased patients on service, higher billable patients as a percent of total patients on service, higher Medicare reimbursement rates, and lower rental revenue adjustments. As of December 31, 2020, the Company had approximately 32,200 patients on service, which was up 9.2% sequentially compared to September 30, 2020, and up 27.3% compared to December 31, 2019. The increase in patients on service was primarily driven by greater utilization of leads for rental opportunities and initiatives to increase physician awareness by the Company’s sales force. As of December 31, 2020, the Company had a total of 24 physician sales representatives, up from 17 as of December 31, 2019. Total gross margin was 46.0% in the fourth quarter of 2020 versus 43.0% in the comparative period in 2019. Sales revenue gross margin increased to 44.5% in the fourth quarter of 2020 versus 43.0% in the fourth quarter of 2019. This increase was primarily due to lower manufacturing cost per unit in the quarter due to certain manufacturing inefficiencies experienced in the comparable period of 2019 and lower warranty cost per unit. These increases were partially offset by higher labor and overhead cost per unit and lower average selling prices due to an increased mix of domestic business-to-business sales, which have a lower gross margin than direct-to-consumer sales. Rental revenue gross margin increased to 56.5% in the fourth quarter of 2020 versus 43.3% in the fourth quarter of 2019, primarily due to higher billable patients as a percent of total patients on service, higher Medicare reimbursement rates, lower rental revenue adjustments, and lower depreciation expense per patient on service. Total operating expense increased to $39.6 million in the fourth quarter of 2020 versus $39.2 million in the fourth quarter of 2019, primarily due to an increase in the fair value of the New Aera earnout liability and higher personnel-related expenses, partially offset by lower legal and consulting expenses and a reduction in product incentives and advertising. Research and development expense increased to $3.7 million in the fourth quarter of 2020 versus $3.6 million in the comparative period in 2019, primarily associated with increased product development costs. Sales and marketing expense decreased to $25.4 million in the fourth quarter of 2020 versus $25.5 million in the comparative period in 2019, primarily due to decreased product incentives and advertising expenditures, partially offset by increased personnel-related expenses. Advertising expenditures were $9.3 million in the fourth quarter of 2020 compared to $9.5 million in the fourth quarter of 2019. General and administrative expense increased to $10.5 million in the fourth quarter of 2020 versus $10.1 million in the comparative period in 2019, primarily due to a $0.4 million increase in the fair value of the New Aera earnout liability and increased recruiting costs, partially offset by lower legal and consulting expenses. The Company reported an operating loss for the three months ended December 31, 2020 of $5.5 million and Adjusted EBITDA of $3.0 million. In the fourth quarter of 2020, the Company reported a net loss of $5.1 million with loss per diluted common share of $0.23. As of December 31, 2020, the Company had cash, cash equivalents, and marketable securities were $231.2 million with no debt outstanding. Financial Outlook for 2021 Because of the unprecedented market uncertainties, the Company is unable to provide guidance for the full year 2021. Given the uncertain scope and duration of the COVID-19 pandemic, the Company is unable to estimate the impact on its financial results, including revenue, net income or loss, and Adjusted EBITDA estimates for such period. As the Company saw in the fourth quarter of 2020, demand has increased so far in the first quarter of 2021 from the Company’s domestic HME partners in part, due to increased demand for POCs as hospital systems and stationary oxygen concentrator supply have been strained to keep up with the rapid increase in COVID-19 cases. While the Company does not know how long this increased need for POCs will continue, the Company expects its domestic business-to-business sales to increase in the first quarter of 2021 versus the comparative period in the prior year. In addition, the Company expects its rental revenue to grow in the first quarter of 2021 compared to the same period in the prior year due to increased patients on service, higher billable patients as a percent of total patients on service, and higher average reimbursement rates. However, the Company also expects its international business-to-business and direct-to-consumer sales channels in the first quarter of 2021 to decrease compared to the same period in the prior year as a result of the continued COVID-19 impact on these channels. While the Company expects the COVID-19 pandemic and any potential for further, prolonged lockdowns would have a negative impact on its sales revenue, the Company believes it is prudent to make investments to support its strategy to focus on rentals at the onset-of-care. As part of this strategic initiative, the Company plans to invest to expand its physician sales force and to build the infrastructure to enable it to offer physicians the necessary solutions to better serve their patients’ needs. Furthermore, the Company plans to continue to make investments to broaden its portfolio with innovative products and to support its products with expanded clinical evidence. Given such investment initiatives, the Company expects increased operating expense for the year in 2021. In addition, the Company incurred minimal expenses related to bonus and performance-based stock compensation in 2020, and it expects such costs to increase in 2021 along with certain expenses related to the recent CEO transition. Conference Call Individuals interested in listening to the conference call today at 1:30pm PT/4:30pm 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 February 24, 2021 at 3:30pm PT/6:30pm ET through March 10, 2021. To access the replay, dial (877) 660-6853 or (201) 612-7415 and reference Access Code: 13714750. 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 We are a medical technology company offering innovative respiratory products for use in the homecare setting. We 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 revenue and operating expenses in 2021, the anticipated impact of the COVID-19 pandemic on the Company’s business, including the impact on supply and demand for the Company’s products in its various business channels, the Company’s operating and sales strategy in respect to the COVID-19 pandemic, expectations regarding international sales and tender activity, expectations regarding changes to reimbursement rates, expectations related to the Company’s physician sales force, expectations for the first quarter of 2021 in the Company’s revenue channels, expectations regarding the Company’s stock-based compensation expenses and other compensation expenses, and expectations related to the Company’s rental strategy and growth prospects. 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; the risks related to the COVID-19 pandemic; the impact of changes in reimbursement rates and reimbursement and regulatory policies; the possible loss of key employees, customers, or suppliers; risks relating to Inogen’s acquisition of New Aera, Inc. and the integration of New Aera’s business and operations within those of Inogen; risks relating to reimbursement coding of the Tidal Assist © Ventilator (TAV); the possibility that Inogen will not realize anticipated revenue from the technology acquired from New Aera or that 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; and intellectual property risks relating to the acquisition of New Aera, including the risk of intellectual property litigation. In addition, Inogen’s business is subject to numerous additional risks and uncertainties, including, among others, risks relating to market acceptance of its products; competition; its sales, marketing and distribution capabilities; its planned sales, marketing, and research and development activities; interruptions or delays in the supply of components or materials for, or manufacturing of, its products; seasonal variations; unanticipated increases in costs or expenses; and risks associated with international operations. Information on these and additional risks, uncertainties, and other information affecting Inogen’s business operating results are contained in its Quarterly Report on Form 10-Q for the period ended September 30, 2020, 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, 2020, 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 and twelve months ended December 31, 2020 and 2019. 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. – Financial Tables Follow – % 8,654 171,861 $ $ 273,521 361,943 (694 WhatsApp 28,298 178,900 (5,205 ) 24,249 Stock-based compensation 0.8 ) Revenue by region and category $ 19,789 Inogen Announces Fourth Quarter 2020 Financial Results $ 2,555 152,072 81,434 3,674 Total current liabilities (5,321 ) Common stock ) 17,576 $ Twitter 6,994 Marketable securities 10,160 Total assets Three months ended (67 361,943 ) 6,215 ) Total cost of revenue 34,325 (289 17,101 549 Income (loss) before provision (benefit) for income taxes ) Adjusted EBITDA (non-GAAP) (4,237 ) 9,401 Change in net unrealized gains (losses) on marketable securities (2,862 % (5,829 39,243 21,397 $ (amounts in thousands) 4,923 Net income (loss) $ 73,978 857 19,257 78,917 (87 3,142 22,042,288 December 31, $ 549 21,980,326 General and administrative 13,609 75,605 96,423 821 ) $ $ 25 (612 (1,375 25,389 ) Units sold 3,087 Total other income, net )center_img 32,954 14,108 8,827 ) (123 Total operating expense 42,600 % Basic net income (loss) per share attributable to common stockholders(1) ) (1,375 ) 452 ) Foreign exchange impact (811 (12 33,922 Non-GAAP international constant currency revenue (228 Three months ended (0.23 (244 156,158 ) 7,648 ) ) Comprehensive income (loss) (2) 4,702 -20.4 $ Cost of rental revenue, including depreciation of $1,700 and $1,472 for the three months ended and $5,695 and $6,253 for the twelve months ended, respectively 39,919 35,850 25,300 (unaudited) 4,712 (331 Current liabilities Business-to-business international sales 2020 Sales and marketing Gross profit (345 December 31, $ ) 19,438 -7.7 Cash and cash equivalents 835 77,960 $ % Total revenue (0.06 ) 64,628 35,664 Basic common shares — 198,037 ) 32,200 TAGS  (12,025 $ 810 6,745 22,042,288 $ 77,533 ) Reconciliation of U.S. GAAP to Other Non-GAAP Financial Measures Due to a net loss for the three and twelve months ended December 31, 2020, and for the three months ended December 31, 2019, diluted loss per share is the same as basic. 4,888 5,444 $ (140 ) ) 2,669 909 December 31, 40,800 $ 33,394 (207 Cost of sales revenue Research and development 1,931 $ 6 13,543 2019 -5.1 2,014 21,878,004 $ 20,571 ) 62,147 77,960 76 26,770 35,801 Income tax receivable 38,605 Direct-to-consumer domestic rentals 9,350 2020 Twelve months ended Total other comprehensive income (loss), net of tax $ 11,822 73,978 (unaudited) 78,917 (1,566 150,205 Operating lease right-of-use asset 3,628 Property and equipment, net 475 ) Twelve months ended $ 201,100 14,452 Assets 250 32,200 Inventories, net 156,764 (in thousands, except units and patients) (in thousands) $ 5,836 ) 81,102 Non-GAAP EBITDA and Adjusted EBITDA 112,229 22,241,064 9,129 Other assets 121,619 13,023 (5,121 Total revenue 562 Depreciation and amortization (536 $ Other comprehensive income (loss), net of tax ) Reconciliations of net income 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. 20,950 810 -20.3 (84 4,483 -23.8 138,180 Provision (benefit) for income taxes 475 (4,712 Accounts payable and accrued expenses 2020 Diluted common shares 20,139 Other income (expense) $ ) 87 Local NewsBusiness -20.6 View source version on businesswire.com:https://www.businesswire.com/news/home/20210224005911/en/ CONTACT: Investor Relations Contact: Matthew Pigeon [email protected] Contact: Byron Myers 805-562-0503 KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA INDUSTRY KEYWORD: MEDICAL DEVICES HEALTH SOURCE: Inogen, Inc. Copyright Business Wire 2021. PUB: 02/24/2021 04:10 PM/DISC: 02/24/2021 04:10 PM http://www.businesswire.com/news/home/20210224005911/en 18,581 28,230 Deferred revenue – current Income (loss) from operations $ $ 2019 (2,862 % $ (0.27 2,199 Supplemental Financial Information $ Change in fair value of earnout liability 1,219 Liabilities and stockholders’ equity 25,544 (using 2019 FX rates) 8,203 308,487 2,966 2019 Net rental patients as of period-end 105,550 73,473 $ 5,444 ) 7,091 December 31, 2020 (unaudited) 0.96 December 31, 2019 $ December 31, (1) 2020 (using 2018 FX rates) $ 28,298 872 $ 2019 24,815 62,147 ) Deferred tax asset – noncurrent $ Business-to-business domestic sales 2019 International revenue growth (GAAP) 14,467 Net income (loss) Twelve months ended (5,522 170,307 Total stockholders’ equity ) 2020 33,165 44,995 10,071 International constant currency revenues (non-GAAP) 317 13,834 % $ (0.27 Warranty reserve – current Current assets Diluted net income (loss) per share attributable to common stockholders(1)(2) $ International constant currency revenue growth (non-GAAP) ) % Three months ended ) 17,898 % 4.9 ) ) 175,974 ) Twitter Pinterest Direct-to-consumer domestic sales Previous articlePujols’ wife suggests Angels slugger to retire after seasonNext articleFunk scores 36 to lift Saint Joseph’s past Dayton 97-84 Digital AIM Web Supportlast_img read more