Full Press Release Details
Inogen Releases Fourth Quarter and Full Year 2013 Financial Results and Provides 2014 Outlook
- Strong Q4 2013 Revenue Growth of 43% Year over Year -
- Full Year 2013 Revenue of $75.4 Million, Up 55% Year over Year
Goleta, California, March 27, 2014 Inogen, Inc. (NASDAQ: INGN), a medical technology company offering innovative respiratory products for
use in the home care setting, today reported financial results for the three and twelve months ended December 31, 2013.
Recent Highlights and
We are pleased with our operational performance and financial results in 2013. Additionally, we successfully completed our initial public offering in
February 2014, said President and Chief Executive Officer, Raymond Huggenberger. Entering 2014, Inogen is well-positioned to continue our strong momentum, and we are focused on executing our strategic initiatives including leveraging our
marketing and sales capacity, and introducing our innovative stationary oxygen concentrator to expand market penetration.
Total revenue for the three months ended December 31, 2013 rose 43% to $19.8 million, from $13.8 million in the 2012
period. Sales revenue was $10.9 million, up 42% from the prior year period. Rental revenue was $8.6 million in the 2013 quarter, up 45% from the prior year.
Gross margin was 51.5% in the fourth quarter of 2013, compared to 50.8% in the 2012 period. The increase was
largely driven by contribution from our Inogen One G3 product, which was launched in the fourth quarter of 2012, an increasing mix towards our direct-to-consumer channel, and additional leverage on servicing costs, partially offset by declining
Medicare reimbursement rates.
Operating expense was $9.6 million in the fourth quarter of 2013 versus $6.8 million in 2012. Of those operating expenses,
research and development expense was $0.6 million in the quarter versus $0.5 million in the 2012 period. Sales and marketing expense was $5.1 million in the quarter versus $3.8 million in the 2012 period. General and administrative expense was $4.0
million in the quarter, compared to $2.5 million in the 2012 period.
Adjusted EBITDA for the three months ended December 31, 2013 rose 82% to
$3.2 million, from $1.8 million in the 2012 period.
Net income, including the one-time tax asset benefit attributable to common stockholders for the
three months ended December 31, 2013, was $20.1 million, or $0.89 per diluted common share, compared with ($1.6) million, or ($5.71) loss per diluted common share, for the three months ended December 31, 2012. Adjusted net income excluding
this one-time tax benefit was $0.2 million.
Full Year 2013 Financial Results
Total revenue for the year ended December 31, 2013 rose 55% to $75.4 million, from $48.6 million in the 2012 period. Sales revenue was $44.0 million
up from $28.1 million, a 57% increase from the prior year period. Rental revenue was $30.5 million up from $19.9 million in 2013, a 54% increase from the prior year.
Gross margin was 51.7% for the year ended December 31, 2013 compared to 49.3% in the 2012 period. The increase was largely driven by the Inogen One G3
product launch in Q4 2012, an increasing mix towards our direct-to-consumer channel, and additional leverage on servicing costs, partially offset by declining Medicare reimbursement rates.
Operating expense was $34.5 million for the year ended December 31, 2013 versus $23.1 million in the 2012 period, a 49.3% increase. Research and
development expense was $2.4 million for the year ended December 31, 2013 versus $2.3 million in the 2012 period. Sales and marketing expense was $18.4 million in 2013 versus $12.6 million in the 2012 period. General and administrative expense
was $13.8 million in 2013, compared to $8.3 million in the 2012 period.
Adjusted EBITDA for the year ended December 31, 2013 rose 128% to
$13.4 million, from $5.9 million in the 2012 period.
Net income, including the one-time tax asset benefit attributable to common stockholders for the
year ended December 31, 2013, was $18.2 million, or $1.10 per diluted common share, compared with ($5.2) million, or ($19.97) loss per diluted common share, for the 2012 period. Adjusted net income excluding this one-time tax benefit was $3.6
Cash, cash equivalents, investments and restricted cash were $13.5 million as of December 31, 2013, which
did not include $52.5 million of IPO proceeds, net of underwriting fees, received in February 2014.
Inogen s Outlook for 2014 Includes:
Individuals interested in listening to the conference call today, March 27, at 1:30pm PT/4:30pm ET, may do so by dialing (855) 427-4393 for domestic
callers, or (484) 756-4258 for international callers, or from the webcast link in the investor relations section of the Company s website at: www.inogen.com. Participants should allow approximately 10 minutes prior to the call s start
time to visit the site and to download any streaming media software needed to listen to the Internet webcast. The webcast will be available on the Company s website for 30 days following the completion of the call.
Inogen is innovation in oxygen therapy. We
are a medical technology company that 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 Inogen s current estimates of 2014 total revenue growth, adjusted EBITDA, and net income. 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 impact of reduced reimbursement rates in connection with the implementation of the competitive
bidding process under Medicare; the possible loss of key employees, customers, or suppliers; and 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, including, among others, risks relating to market acceptance of its products; its ability to successfully launch new products and
applications; 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 in customer operations; 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 and operating results are contained in its final Prospectus filed with the Securities and Exchange Commission on February 14, 2014, and Inogen s other filings with
the Securities and Exchange Commission, including the Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on February 12, 2014. Additional information will
also be set forth in Inogen s Annual Report on Form 10-K for the year ended December 31, 2013 to be filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. Inogen, Inc.
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 GAAP and also on a non-GAAP basis for the fourth quarter and full year of 2013 and 2012.
Management believes that non-GAAP financial measures, taken in conjunction with GAAP financial measures, provide useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of the
company s core operating results. Management uses non-GAAP measures to compare the company s performance relative to forecasts and strategic plans and to benchmark the company s performance externally against competitors. Non-GAAP
information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of the Company s operating results as reported under U.S. GAAP. Inogen encourages investors to carefully consider
its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in the accompanying
table of this release.
Investor Relations Contact:
Financial Tables Follow
CONDENSED BALANCE SHEETS
| As of December 31, | ||||||||
| 2013 | 2012 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 13,521 | $ | 15,112 | ||||
| Accounts receivable | 10,231 | 7,031 | ||||||
| Inventories | 4,248 | 4,059 | ||||||
| Deferred cost of rental revenues | 289 | 159 | ||||||
| Income tax receivable | 87 | |||||||
| Deferred tax asset-current | 3,923 | |||||||
| Prepaid expenses and other current | 531 | 309 | ||||||
| Total current assets | 32,830 | 26,670 | ||||||
| Property and equipment, net | 29,722 | 20,279 | ||||||
| Intangibles and other non-current assets | 215 | 558 | ||||||
| Deferred tax asset-noncurrent | 17,865 | |||||||
| Other assets | 1,765 | 79 | ||||||
| Total assets | $ | 82,397 | $ | 47,586 | ||||
| Liabilities, redeemable convertible preferred stock and stockholders deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable, accrued expense and payroll | $ | 12,117 | $ | 8,335 | ||||
| Current portion of long-term debt | 5,258 | 3,879 | ||||||
| Warranty reserve | 809 | 447 | ||||||
| Deferred revenue | 1,487 | 1,094 | ||||||
| Other current liabilities | 35 | |||||||
| Total current liabilities | 19,671 | 13,790 | ||||||
| Warrant liability | 260 | 164 | ||||||
| Deferred revenue-noncurrent | 776 | |||||||
| Long-term debt, net of current portion | 5,391 | 5,057 | ||||||
| Total liabilities | 26,098 | 19,011 | ||||||
| Redeemable convertible preferred stock | 118,671 | 109,345 | ||||||
| Preferred stock | 247 | 247 | ||||||
| Common stock | 1 | 1 | ||||||
| Accumulated deficit | (62,620 | ) | (81,018 | ) | ||||
| Total stockholders deficit | (62,372 | ) | (80,770 | ) | ||||
| Total liabilities, redeemable convertible preferred stock and stockholders deficit | $ | 82,397 | $ | 47,586 |
CONDENSED STATEMENTS OF OPERATIONS
(in thousands - except per share data)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Revenue | $ | 19,762 | $ | 13,841 | $ | 75,443 | $ | 48,576 | ||||||||
| Cost of sales revenue | 9,587 | 6,806 | 36,452 | 24,627 | ||||||||||||
| Gross profit | 10,175 | 7,035 | 38,991 | 23,949 | ||||||||||||
| Operating expenses | 9,622 | 6,831 | 34,527 | 23,120 | ||||||||||||
| Earnings from operations | 553 | 204 | 4,464 | 829 | ||||||||||||
| Other expense, net | 320 | 98 | 616 | 247 | ||||||||||||
| Income before tax provision (benefit) | 233 | 106 | 3,848 | 582 | ||||||||||||
| Tax provision (benefit) | (21,738 | ) | (2 | ) | (21,587 | ) | 18 | |||||||||
| Net income | $ | 21,971 | $ | 108 | $ | 25,435 | $ | 564 | ||||||||
| Less deemed dividend on redeemable convertible preferred stock | (1,919 | ) | (1,662 | ) | (7,278 | ) | (5,781 | ) | ||||||||
| Net income (loss) attributable to common stockholders | $ | 20,052 | $ | (1,554 | ) | $ | 18,157 | $ | (5,217 | ) | ||||||
| Diluted net income (loss) per share attributable to common stockholders | $ | 0.89 | $ | (5.71 | ) | $ | 1.10 | $ | (19.97 | ) | ||||||
| Non-GAAP Financial Measures | ||||||||||||||||
| Adjusted EBITDA | $ | 3,203 | $ | 1,759 | $ | 13,434 | $ | 5,883 | ||||||||
| Adjusted net income | $ | 164 | $ | 108 | $ | 3,628 | $ | 564 |
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net income (GAAP) | $ | 21,971 | $ | 108 | $ | 25,435 | $ | 564 | ||||||||
| Non-GAAP adjustments: | ||||||||||||||||
| Interest expense, net | 247 | 108 | 550 | 405 | ||||||||||||
| Income tax provision (benefit) | (21,738 | ) | (2 | ) | (21,587 | ) | 18 | |||||||||
| Depreciation and amortization | 2,549 | 1,533 | 8,544 | 4,984 | ||||||||||||
| Change in fair value of preferred stock warrant liability | 60 | 262 | (148 | ) | ||||||||||||
| Stock based compensation | 114 | 12 | 230 | 60 | ||||||||||||
| Adjusted EBITDA | $ | 3,203 | $ | 1,759 | $ | 13,434 | $ | 5,883 | ||||||||
| Net income (GAAP) | $ | 21,971 | $ | 108 | $ | 25,435 | $ | 564 | ||||||||
| Non-GAAP adjustments: | ||||||||||||||||
| One-time benefit from reversal of deferred tax valuation adjustment | (21,807 | ) | (21,807 | ) | ||||||||||||
| Adjusted net income | $ | 164 | $ | 108 | $ | 3,628 | $ | 564 |