INGN 8-K
Inogen Inc (INGN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 4, 2023, Inogen, Inc. (the "Company") issued a press release reporting its financial results for the first quarter ended March 31, 2023. A copy of the press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished in this Current Report under Item 2.02 and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit |
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Description |
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99.1 |
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104 |
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The cover page of this Current Report on Form 8-K, formatted in Inline XBRL. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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INOGEN, INC. |
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Date: |
May 4, 2023 |
By: |
/s/ Kristin Caltrider |
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Kristin Caltrider |
Exhibit 99.1
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Inogen Announces First Quarter 2023 Financial Results
Total Revenue of $72.2 Million In Line with Company Expectations
Rental Revenue Year-over-Year Growth of 25%
GOLETA, Calif., May 04, 2023 -- 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 March 31, 2023.
First Quarter 2023 Highlights
All comparisons are to the prior year period unless otherwise noted.
“First quarter revenue was in line with our internal expectations. We remain confident that our focus on revenue growth and disciplined execution will support our return to profitability and result in an anticipated positive adjusted EBITDA by Q4 2023,” said Nabil Shabshab, President and Chief Executive Officer. “We believe that 2023 is an inflection point for Inogen with continued successful execution on our channel strategy, further advancement of our innovation agenda, and focus on returning to profitability.”
First Quarter 2023 Financial Results
First quarter total revenue decreased 10.2% to $72.2 million from $80.4 million in the first quarter of 2022, primarily due to a decrease in direct-to-consumer sales and international business-to-business sales, partially offset by higher domestic business-to-business sales and higher rental revenue.
Total gross margin was 42.6% in the first quarter of 2023 versus 43.5% in the comparative period in 2022. The decline was driven primarily by channel mix, partially offset by improved manufacturing productivity and higher average selling prices.
Total operating expense for the quarter, excluding restructuring costs, increased 4.6%. Total operating expense with restructuring costs was $52.6 million compared to $48.6 million in the first quarter of 2022, representing an increase of 8.3%.
GAAP net loss for the first quarter of 2023 was $20.3 million compared to GAAP net loss of $14.2 million in the first quarter of 2022. Adjusted net loss was $14.5 million compared to adjusted net loss of $8.7 million in the first quarter of 2022.
Adjusted EBITDA was a negative $11.8 million in the first quarter of 2023 compared to a negative $5.0 million in the first quarter of 2022.
Cash, cash equivalents and marketable securities were $174.6 million as of March 31, 2023, and no debt outstanding.
A reconciliation of adjusted EBITDA and adjusted net loss for the three months ended March 31, 2023 and 2022 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 “Reconciliation of U.S. GAAP to Other Non-GAAP Financial Measures.”
Quarterly Conference Call Information
Inogen will issue first quarter 2023 financial results after the market closes on Thursday, May 4, 2023. On the same day, the Company will host a conference call at 2:00 pm Pacific Time / 5:00 pm Eastern Time. Individuals interested in listening to the conference call may do so by dialing:
US domestic callers (888) 645-4404
Non-US callers (862) 298-0702
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 May 11, 2023. To access the replay, dial (877) 660-6853 or (201) 612-7415 and reference Conference ID: 13737870.
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 revenue growth and profitability; and expectations for positive adjusted EBITDA by Q4 2023. 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 or expenses will not decrease; risks related cost inflation for 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, 2022, 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 March 31, 2023, 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 months ended March 31, 2022, and March 31, 2023. 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.
Contact
Agnes Lee
Consolidated Statements of Comprehensive Loss |
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(unaudited) |
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(amounts in thousands, except share and per share amounts) |
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Three months ended |
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March 31, |
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2023 |
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2022 |
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Revenue |
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Sales revenue |
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$ |
55,887 |
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$ |
67,402 |
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Rental revenue |
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16,275 |
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12,983 |
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Total revenue |
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72,162 |
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80,385 |
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Cost of revenue |
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Cost of sales revenue |
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33,964 |
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39,500 |
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Cost of rental revenue, including depreciation of $3,078 and $2,638, respectively |
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7,465 |
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5,879 |
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Total cost of revenue |
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41,429 |
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45,379 |
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Gross profit |
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30,733 |
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35,006 |
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Operating expense |
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Research and development |
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5,344 |
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5,364 |
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Sales and marketing |
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28,441 |
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28,039 |
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General and administrative |
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18,863 |
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15,189 |
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Total operating expense |
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52,648 |
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48,592 |
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Loss from operations |
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(21,915 |
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(13,586 |
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Other income (expense) |
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Interest income |
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1,525 |
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29 |
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Other income (expense) |
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237 |
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(433 |
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Total other income (expense), net |
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1,762 |
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(404 |
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Loss before provision for income taxes |
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(20,153 |
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(13,990 |
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Provision for income taxes |
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196 |
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224 |
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Net loss |
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$ |
(20,349 |
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$ |
(14,214 |
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Other comprehensive income (loss), net of tax |
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Change in foreign currency translation adjustment |
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170 |
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(203 |
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Change in net unrealized gains (losses) on foreign currency hedging |
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— |
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(528 |
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Less: reclassification adjustment for net (gains) losses included in net income |
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— |
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454 |
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Total net change in unrealized gains (losses) on foreign currency hedging |
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— |
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(74 |
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Change in net unrealized gains (losses) on marketable securities |
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69 |
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(8 |
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Total other comprehensive income (loss), net of tax |
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239 |
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(285 |
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Comprehensive loss |
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$ |
(20,110 |
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$ |
(14,499 |
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Basic net loss per share attributable to common stockholders (1) |
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$ |
(0.88 |
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$ |
(0.62 |
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Diluted net loss per share attributable to common stockholders (1) (2) |
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$ |
(0.88 |
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$ |
(0.62 |
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Weighted-average number of shares used in calculating net loss per share attributable to common stockholders: |
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Basic common shares |
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23,009,617 |
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22,754,421 |
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Diluted common shares |
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23,009,617 |
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22,754,421 |
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Consolidated Balance Sheets |
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(unaudited) |
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(amounts in thousands) |
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March 31, |
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December 31, |
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2023 |
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2022 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
164,137 |
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$ |
187,014 |
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Marketable securities |
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10,428 |
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— |
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Accounts receivable, net |
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53,885 |
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62,725 |
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Inventories, net |
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38,822 |
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34,093 |
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Income tax receivable |
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1,859 |
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1,626 |
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Prepaid expenses and other current assets |
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14,016 |
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19,187 |
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Total current assets |
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283,147 |
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304,645 |
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Property and equipment, net |
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45,942 |
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43,269 |
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Goodwill |
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32,887 |
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32,852 |
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Operating lease right-of-use asset |
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21,108 |
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21,653 |
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Other assets |
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2,590 |
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2,622 |
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Total assets |
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$ |
385,674 |
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$ |
405,041 |
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Liabilities and stockholders' equity |
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Current liabilities |
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Accounts payable and accrued expenses |
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$ |
32,183 |
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$ |
33,974 |
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Accrued payroll |
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10,757 |
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11,190 |
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Warranty reserve - current |
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8,075 |
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7,790 |
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Operating lease liability - current |
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3,570 |
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3,515 |
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Deferred revenue - current |
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8,794 |
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8,880 |
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Total current liabilities |
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63,379 |
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65,349 |
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Warranty reserve - noncurrent |
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12,018 |
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12,123 |
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Operating lease liability - noncurrent |
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19,179 |
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19,764 |
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Deferred revenue - noncurrent |
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9,801 |
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10,399 |
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Total liabilities |
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104,377 |
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107,635 |
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Stockholders' equity |
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Common stock |
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23 |
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23 |
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Additional paid-in capital |
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316,127 |
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312,126 |
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Accumulated deficit |
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(34,849 |
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(14,500 |
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Accumulated other comprehensive loss |
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(4 |
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(243 |
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Total stockholders' equity |
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281,297 |
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297,406 |
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Total liabilities and stockholders' equity |
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$ |
385,674 |
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$ |
405,041 |
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Condensed Consolidated Cash Flow |
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(unaudited) |
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(amounts in thousands) |
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Three months ended March 31, |
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2023 |
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2022 |
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Cash flows from operating activities |
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Net loss |
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$ |
(20,349 |
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$ |
(14,214 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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4,086 |
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5,760 |
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Loss on rental units and other assets |
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1,099 |
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706 |
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Gain on sale of former rental assets |
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(21 |
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(52 |
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Provision for sales revenue returns and doubtful accounts |
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2,258 |
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2,953 |
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Provision for inventory losses |
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603 |
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934 |
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Stock-based compensation expense |
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3,442 |
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2,665 |
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Change in fair value of earnout liability |
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— |
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630 |
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Changes in operating assets and liabilities |
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2,581 |
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(17,480 |
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Net cash used in operating activities |
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(6,301 |
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(18,098 |
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Cash flows from investing activities |
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Purchases of available-for-sale securities |
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(10,359 |
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— |
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Investment in property and equipment |
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(1,076 |
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(1,366 |
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Production and purchase of rental equipment |
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(5,733 |
) |
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(2,777 |
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Proceeds from sale of former assets |
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58 |
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91 |
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Net cash used in investing activities |
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(17,110 |
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(4,052 |
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Cash flows from financing activities |
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Proceeds from stock options exercised |
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384 |
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29 |
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Proceeds from employee stock purchases |
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630 |
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915 |
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Payment of employment taxes related to release of restricted stock |
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(455 |
) |
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(1,052 |
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Net cash provided by (used in) financing activities |
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559 |
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(108 |
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Effect of exchange rates on cash |
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(25 |
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133 |
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Net decrease in cash and cash equivalents |
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$ |
(22,877 |
) |
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$ |
(22,125 |
) |
Supplemental Financial Information |
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(unaudited) |
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(in thousands, except units and patients) |
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Three months ended |
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March 31, |
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2023 |
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2022 |
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Revenue by region and category |
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Business-to-business domestic sales |
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$ |
12,585 |
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$ |
5,101 |
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Business-to-business international sales |
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18,972 |
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27,941 |
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Direct-to-consumer domestic sales |
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24,330 |
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34,360 |
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Direct-to-consumer domestic rentals |
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16,275 |
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12,983 |
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Total revenue |
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$ |
72,162 |
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$ |
80,385 |
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Additional financial measures |
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Units sold |
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26,900 |
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30,400 |
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Net rental patients as of period-end |
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45,800 |
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43,200 |
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Reconciliation of U.S. GAAP to Other Non-GAAP Financial Measures |
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(unaudited) |
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(in thousands) |
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Three months ended |
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March 31, |
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Non-GAAP EBITDA and Adjusted EBITDA |
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2023 |
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2022 |
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Net loss (GAAP) |
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$ |
(20,349 |
) |
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$ |
(14,214 |
) |
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Non-GAAP adjustments: |
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Interest income |
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(1,525 |
) |
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(29 |
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Provision for income taxes |
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|
196 |
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|
224 |
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Depreciation and amortization |
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4,086 |
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5,760 |
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EBITDA (non-GAAP) |
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(17,592 |
) |
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(8,259 |
) |
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Stock-based compensation |
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3,442 |
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2,665 |
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Acquisition-related expenses |
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|
554 |
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|
— |
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Restructuring-related and other charges(1) |
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1,809 |
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— |
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Change in fair value of earnout liability |
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— |
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630 |
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Adjusted EBITDA (non-GAAP) |
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$ |
(11,787 |
) |
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$ |
(4,964 |
) |
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Three months ended March 31, |
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Net Loss |
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Diluted EPS |
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Non-GAAP Adjusted Net Loss and Diluted EPS |
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2023 |
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2022 |
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2023 |
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2022 |
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Financial Results (GAAP) |
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$ |
(20,349 |
) |
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$ |
(14,214 |
) |
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$ |
(0.88 |
) |
|
$ |
(0.62 |
) |
Non-GAAP adjustments: |
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Amortization of intangibles |
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26 |
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2,147 |
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Stock-based compensation |
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3,442 |
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2,665 |
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||
Acquisition-related expenses |
|
|
554 |
|
|
|
|
|
|
|
|
|
|
|||
Restructuring-related and other charges(1) |
|
|
1,809 |
|
|
|
— |
|
|
|
|
|
|
|
||
Change in fair value of earnout liability |
|
|
— |
|
|
|
630 |
|
|
|
|
|
|
|
||
Income tax impact of adjustments (2) |
|
|
— |
|
|
|
87 |
|
|
|
|
|
|
|
||
Adjusted |
|
$ |
(14,518 |
) |
|
$ |
(8,685 |
) |
|
$ |
(0.63 |
) |
|
$ |
(0.38 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three months ended |
|
|
|||||
Non-GAAP constant currency revenue |
|
2023 |
|
|
2022 |
|
|
||
Business-to-business domestic sales |
|
$ |
12,585 |
|
|
$ |
5,101 |
|
|
Business-to-business international sales |
|
|
18,972 |
|
|
|
27,941 |
|
|
Direct-to-consumer domestic sales |
|
|
24,330 |
|
|
|
34,360 |
|
|
Direct-to-consumer domestic rentals |
|
|
16,275 |
|
|
|
12,983 |
|
|
Total revenue (GAAP) |
|
|
72,162 |
|
|
|
80,385 |
|
|
Hedging gains |
|
|
— |
|
|
|
600 |
|
|
Total revenue, excluding hedging effect (non-GAAP) |
|
|
72,162 |
|
|
|
79,785 |
|
|
Exchange rate impact |
|
|
860 |
|
|
|
1,424 |
|
|
Constant currency revenues (non-GAAP) |
|
$ |
73,022 |
|
|
$ |
81,209 |
|
|
|
|
|
|
|
|
|
|
||
Revenue growth (GAAP) |
|
|
-10.2 |
% |
|
|
|
|
|
Constant currency revenue growth (non-GAAP) |
|
|
-8.5 |
% |
|
|
|
|
|