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
June 30, 2023.
Second Quarter 2023 and Recent Business Highlights
All comparisons are to the prior year period unless otherwise
noted.
- Reported total revenue of $83.6 million, reflecting a decrease
of 19.1%; currency fluctuations accounted for 0.6% of the
decrease.
- GAAP net loss of $9.8 million, Adjusted net loss of $5.8
million and Adjusted EBITDA loss of $3.2 million.
- Entered into a share purchase agreement to acquire
Physio-Assist to add a sizable, growing, and underserved airway
clearance market opportunity in support of the strategy to become a
multi-portfolio global respiratory care company.
- Introduced Inogen® Rove 6™ in the United States, a portable
oxygen concentrator now with an 8-year expected service life,
further strengthening Inogen’s business-to-business and HME value
proposition including a very competitive total cost of
ownership.
“While disappointed in our second quarter performance, we remain
focused on driving execution behind our commercial strategy to
continue improving productivity in the direct-to-consumer channel,
expanding our presence in the prescriber channel and managing
volatility in the lower-margin business-to-business channels,” said
Nabil Shabshab, President and Chief Executive Officer.
“Importantly, we are making progress on improving Adjusted EBITDA,
while making select investments including innovation to organically
expand our portfolio in service of new patients and indications
beyond COPD. Additionally, the recent agreement to acquire
Physio-Assist will allow Inogen to serve patients in need of airway
clearance with a clinically differentiated product internationally
and eventually in the US. We believe that continued execution
behind our commercial and innovation strategies will provide a path
to revenue growth in 2024 with a continued focus on a return to
profitability.”
Second Quarter 2023 Financial Results
Second quarter total revenue decreased 19.1% to $83.6 million
from $103.4 million in the second quarter of 2022, as higher rental
revenue and domestic business-to business sales were more than
offset by declines in direct-to-consumer sales and international
B2B sales.
Total gross margin was 40.7% in the second quarter of 2023
versus 44.7% in the comparative period in 2022. Gross margin
declined by 400 basis points as the benefit from lower component
costs was more than offset by channel mix and lower average selling
prices in the business-to-business segments, namely in the US.
Total operating expense, which includes acquisition and
restructuring-related costs, was $45.8 million compared to $49.1
million in the second quarter of 2022, representing a decrease of
6.8%. Total operating expense, excluding one-time costs, declined
11.8% due to disciplined focus on aligning the company
infrastructure with its strategy and careful cost management.
GAAP net loss for the second quarter of 2023 was $9.8 million
compared to GAAP net loss of $3.4 million in the second quarter of
2022. Adjusted net loss was $5.8 million compared to Adjusted net
loss of $0.4 million in the second quarter of 2022. Adjusted EBITDA
was a negative $3.2 million in the second quarter of 2023 compared
to a positive $3.2 million in the second quarter of 2022.
Cash, cash equivalents and marketable securities were $170.1
million as of June 30, 2023, and no debt outstanding.
A reconciliation of Adjusted EBITDA and Adjusted net loss for
the three and six months ended June 30, 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.”
Financial Guidance
As a result of year-to-date performance and continued pressure
in the business-to-business channels, Inogen now expects 2023
annual revenue of $315 million to $320 million and Adjusted EBITDA
loss of $20 million to $25 million for the full year.
Quarterly Conference Call Information
Inogen will issue second quarter 2023 financial results after
the market closes on Monday, August 7, 2023. On the same day, the
Company will host a conference call at 1:30 p.m. Pacific Time /
4:30 p.m. Eastern Time. 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 August
14, 2023. To access the replay, dial (877) 660-6853 or (201)
612-7415 and reference Conference ID: 13739327.
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 improving
productivity in the direct-to-consumer channel, expanding our
presence in the prescriber channel and managing volatility in the
lower-margin business-to-business channels; broadening and
diversifying our portfolio through innovation; our 2023 revenue and
Adjusted EBITDA expectations. 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 to cost inflation; the risks our innovation pipeline
will not produce meaningful results; risks related to our pending
acquisition of Physio Assist including on expenses; 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 June 30, 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 and six
months ended June 30, 2023, and June 30, 2022. 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
Six months ended
June 30,
June 30,
2023
2022
2023
2022
Revenue
Sales revenue
$
68,343
$
89,291
$
124,230
$
156,693
Rental revenue
15,292
14,085
31,567
27,068
Total revenue
83,635
103,376
155,797
183,761
Cost of revenue
Cost of sales revenue
42,028
50,661
75,992
90,161
Cost of rental revenue, including
depreciation of $3,238 and $2,720 for the three months ended and
$6,316 and $5,358 for the six months ended, respectively
7,563
6,457
15,028
12,336
Total cost of revenue
49,591
57,118
91,020
102,497
Gross profit
34,044
46,258
64,777
81,264
Operating expense
Research and development
4,293
6,064
9,637
11,428
Sales and marketing
26,906
30,388
55,347
58,427
General and administrative
14,613
12,682
33,476
27,871
Total operating expense
45,812
49,134
98,460
97,726
Loss from operations
(11,768
)
(2,876
)
(33,683
)
(16,462
)
Other income (expense)
Interest income
1,646
225
3,171
254
Other income (expense)
337
(722
)
574
(1,155
)
Total other income (expense),
net
1,983
(497
)
3,745
(901
)
Loss before provision for income
taxes
(9,785
)
(3,373
)
(29,938
)
(17,363
)
Provision for income taxes
41
69
237
293
Net loss
$
(9,826
)
$
(3,442
)
$
(30,175
)
$
(17,656
)
Other comprehensive income (loss), net
of tax
Change in foreign currency translation
adjustment
7
(634
)
177
(837
)
Change in net unrealized gains (losses) on
foreign currency hedging
7
(1,204
)
7
(1,878
)
Less: reclassification adjustment for net
(gains) losses included in net income
—
606
—
1,206
Total net change in unrealized gains
(losses) on foreign currency hedging
7
(598
)
7
(672
)
Change in net unrealized gains (losses) on
marketable securities
64
7
133
(1
)
Total other comprehensive income
(loss), net of tax
78
(1,225
)
317
(1,510
)
Comprehensive loss
$
(9,748
)
$
(4,667
)
$
(29,858
)
$
(19,166
)
Basic net loss per share attributable
to common stockholders (1)
$
(0.42
)
$
(0.15
)
$
(1.31
)
$
(0.77
)
Diluted net loss per share attributable
to common stockholders (1) (2)
$
(0.42
)
$
(0.15
)
$
(1.31
)
$
(0.77
)
Weighted-average number of shares used
in calculating net loss per share attributable to common
stockholders:
Basic common shares
23,146,117
22,845,040
23,078,244
22,799,981
Diluted common shares
23,146,117
22,845,040
23,078,244
22,799,981
(1)
Reconciliations of net loss attributable
to common stockholders basic and diluted can be found in Inogen’s
Quarterly Report on Form 10-Q to be filed with the Securities and
Exchange Commission.
(2)
Due to a net loss for the three and six
months ended June 30, 2023 and June 30, 2022, diluted loss per
share is the same as basic.
Consolidated Balance
Sheets
(unaudited)
(amounts in thousands)
June 30,
December 31,
2023
2022
Assets
Current assets
Cash and cash equivalents
$
167,687
$
187,014
Marketable securities
2,459
—
Accounts receivable, net
51,135
62,725
Inventories, net
30,744
34,093
Income tax receivable
1,821
1,626
Prepaid expenses and other current
assets
15,377
19,187
Total current assets
269,223
304,645
Property and equipment, net
49,195
43,269
Goodwill
32,889
32,852
Operating lease right-of-use asset
20,267
21,653
Other assets
2,777
2,622
Total assets
$
374,351
$
405,041
Liabilities and stockholders'
equity
Current liabilities
Accounts payable and accrued expenses
$
27,612
$
33,974
Accrued payroll
10,835
11,190
Warranty reserve - current
8,602
7,790
Operating lease liability - current
3,622
3,515
Deferred revenue - current
8,696
8,880
Total current liabilities
59,367
65,349
Warranty reserve - noncurrent
12,596
12,123
Operating lease liability - noncurrent
18,257
19,764
Deferred revenue - noncurrent
9,352
10,399
Total liabilities
99,572
107,635
Stockholders' equity
Common stock
23
23
Additional paid-in capital
319,357
312,126
Accumulated deficit
(44,675
)
(14,500
)
Accumulated other comprehensive income
(loss)
74
(243
)
Total stockholders' equity
274,779
297,406
Total liabilities and stockholders'
equity
$
374,351
$
405,041
Condensed Consolidated Cash
Flow
(unaudited)
(amounts in thousands)
Six months ended June
30,
2023
2022
Cash flows from operating
activities
Net loss
$
(30,175
)
$
(17,656
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
8,394
11,608
Loss on rental units and other assets
2,138
1,466
Gain on sale of former rental assets
(40
)
(93
)
Provision for sales revenue returns and
doubtful accounts
4,488
6,200
Provision for inventory losses
989
1,552
Stock-based compensation expense
6,705
5,685
Change in fair value of earnout
liability
—
(1,411
)
Changes in operating assets and
liabilities
5,230
(19,918
)
Net cash used in operating activities
(2,271
)
(12,567
)
Cash flows from investing
activities
Purchases of available-for-sale
securities
(12,826
)
—
Maturities of available-for-sale
securities
10,500
9,988
Investment in intangible assets
(494
)
—
Investment in property and equipment
(3,116
)
(2,236
)
Production and purchase of rental
equipment
(11,810
)
(7,083
)
Proceeds from sale of former assets
96
153
Net cash provided by (used in) investing
activities
(17,650
)
822
Cash flows from financing
activities
Proceeds from stock options exercised
384
35
Proceeds from employee stock purchases
630
915
Payment of employment taxes related to
release of restricted stock
(488
)
(1,159
)
Net cash provided by (used in) financing
activities
526
(209
)
Effect of exchange rates on cash
68
51
Net decrease in cash and cash
equivalents
$
(19,327
)
$
(11,903
)
Supplemental Financial
Information
(unaudited)
(in thousands, except units
and patients)
Three months ended
Six months ended
June 30,
June 30,
2023
2022
2023
2022
Revenue by region and category
Business-to-business domestic sales
$
18,272
$
11,212
$
30,857
$
16,313
Business-to-business international
sales
23,292
37,441
42,264
65,382
Direct-to-consumer domestic sales
26,779
40,638
51,109
74,998
Direct-to-consumer domestic rentals
15,292
14,085
31,567
27,068
Total revenue
$
83,635
$
103,376
$
155,797
$
183,761
Additional financial measures
Units sold
34,100
42,400
61,000
72,800
Net rental patients as of period-end
48,900
43,800
48,900
43,800
Reconciliation of U.S. GAAP to
Other Non-GAAP Financial Measures
(unaudited)
(in thousands)
Three months ended
Six months ended
June 30,
June 30,
Non-GAAP EBITDA and Adjusted
EBITDA
2023
2022
2023
2022
Net loss (GAAP)
$
(9,826
)
$
(3,442
)
$
(30,175
)
$
(17,656
)
Non-GAAP adjustments:
Interest income
(1,646
)
(225
)
(3,171
)
(254
)
Provision for income taxes
41
69
237
293
Depreciation and amortization
4,308
5,848
8,394
11,608
EBITDA (non-GAAP)
(7,123
)
2,250
(24,715
)
(6,009
)
Stock-based compensation
3,263
3,020
6,705
5,685
Acquisition-related expenses
467
—
1,021
—
Restructuring-related and other charges
(1)
201
—
2,010
—
Change in fair value of earnout
liability
—
(2,041
)
—
(1,411
)
Adjusted EBITDA (non-GAAP)
$
(3,192
)
$
3,229
$
(14,979
)
$
(1,735
)
Three months ended June
30,
Net Loss
Diluted EPS
Non-GAAP Adjusted Net Loss and Diluted
EPS
2023
2022
2023
2022
Financial Results (GAAP)
$
(9,826
)
$
(3,442
)
$
(0.42
)
$
(0.15
)
Non-GAAP adjustments:
Amortization of intangibles
53
2,150
Stock-based compensation
3,263
3,020
Acquisition-related expenses
467
—
Restructuring-related and other charges
(1)
201
—
Change in fair value of earnout
liability
—
(2,041
)
Income tax impact of adjustments (2)
—
(53
)
Adjusted
$
(5,842
)
$
(366
)
$
(0.25
)
$
(0.02
)
Six months ended June
30,
Net Loss
Diluted EPS
Non-GAAP Adjusted Net Loss and Diluted
EPS
2023
2022
2023
2022
Financial Results (GAAP)
$
(30,175
)
$
(17,656
)
$
(1.31
)
$
(0.77
)
Non-GAAP adjustments:
Amortization of intangibles
79
4,297
Stock-based compensation
6,705
5,685
Acquisition-related expenses
1,021
—
Restructuring-related and other charges
(1)
2,010
—
Change in fair value of earnout
liability
—
(1,411
)
Income tax impact of adjustments (2)
—
(146
)
Adjusted
$
(20,360
)
$
(9,231
)
$
(0.88
)
$
(0.40
)
(1)
Charges represent the costs associated
with workforce reductions and associated costs and other
restructuring-related activities.
(2)
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 2023 and
-1.7% for 2022, which is due to the recording of a valuation
allowance.
Three months ended June 30,
2023
% Change from Prior
Period
Three months ended June
30,
2022
2023
FX Effect
Constant Currency
Revenues
As Reported
Less FX Effect
Constant Currency
Revenues
Business-to-business domestic sales
$
11,212
$
18,272
$
—
$
18,272
63.0
%
0.0
%
63.0
%
Business-to-business international
sales
36,835
23,292
106
23,398
-36.8
%
0.3
%
-36.5
%
Direct-to-consumer domestic sales
40,638
26,779
—
26,779
-34.1
%
0.0
%
-34.1
%
Direct-to-consumer domestic rentals
14,085
15,292
—
15,292
8.6
%
0.0
%
8.6
%
Revenues, excluding hedging effect
$
102,770
$
83,635
$
106
$
83,741
-18.6
%
0.1
%
-18.5
%
Hedging gains
606
-
-
Total Revenues (3)
$
103,376
$
83,635
$
83,741
-19.1
%
Six months ended June 30,
2023
% Change from Prior
Period
Six months ended June
30,
2022
2023
FX Effect
Constant Currency
Revenues
As Reported
Less FX Effect
Constant Currency
Revenues
Business-to-business domestic sales
$
16,313
$
30,857
$
—
$
30,857
89.2
%
0.0
%
89.2
%
Business-to-business international
sales
64,176
42,264
966
43,230
-34.1
%
1.5
%
-32.6
%
Direct-to-consumer domestic sales
74,998
51,109
—
51,109
-31.9
%
0.0
%
-31.9
%
Direct-to-consumer domestic rentals
27,068
31,567
—
31,567
16.6
%
0.0
%
16.6
%
Revenues, excluding hedging effect
$
182,555
$
155,797
$
966
$
156,763
-14.7
%
0.5
%
-14.1
%
Hedging gains
1,206
-
-
Total Revenues (3)
$
183,761
$
155,797
$
156,763
-15.2
%
(3)
Total constant currency revenues of
$83,741 for the three months ended June 30, 2023 decreased $19,029
compared to $102,770 in revenues, excluding hedging effect for the
three months ended June 30, 2022. Total constant currency revenues
of $156,763 for the six months ended June 30, 2023 decreased
$25,792 compared to $182,555 in revenues, excluding hedging effect
for the six months ended June 30, 2022.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230807955739/en/
Agnes Lee ir@inogen.net
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