Inogen Announces Second Quarter 2021 Financial Results
Inogen, Inc. (NASDAQ: INGN) reported a 41.7% increase in second-quarter 2021 revenue, reaching $101.6 million, driven by strong consumer demand and improved pricing. Domestic direct-to-consumer revenue rose 35.6% to $40.9 million, while rental revenue soared 85.2% to $11.3 million. However, the company faces supply chain challenges, particularly due to semiconductor shortages, which are expected to constrain revenue growth and increase costs. As of June 30, 2021, Inogen had $250 million in cash with no debt and anticipates a net loss in the second half of 2021 due to these challenges.
- Revenue increased 41.7% year-over-year to $101.6 million.
- Domestic direct-to-consumer revenue up 35.6% to $40.9 million.
- Rental revenue rose 85.2%, reflecting higher patient service utilization.
- Supply chain constraints expected to limit revenue growth.
- Increased cost of goods sold anticipated in the second half of 2021.
- Expected to incur net losses in both Q3 and Q4 of 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 months ended June 30, 2021.
Second Quarter 2021 Highlights
-
Total revenue of
$101.6 million , up41.7% from the same period in 2020, primarily due to strong consumer demand, improved average selling prices in all channels, and reduced COVID-19 pandemic-related impacts -
Domestic direct-to-consumer revenue of
$40.9 million , up35.6% from the same period in 2020 -
Rental revenue of
$11.3 million , up85.2% from the same period in 2020 -
Cash, cash equivalents, and marketable securities were
$250.0 million with no debt outstanding as of June 30, 2021
“We saw strong revenue growth of
Second Quarter 2021 Financial Results
Total revenue for the three months ended June 30, 2021 increased
Domestic business-to-business sales in the second quarter of 2021 increased
International business-to-business sales in the second quarter of 2021 increased by
Direct-to-consumer domestic sales increased
Rental revenue in the second quarter of 2021 increased
Total gross margin was
Total operating expense increased to
Research and development expense increased to
In the second quarter of 2021, the Company reported operating income of
As of June 30, 2021, the Company had cash, cash equivalents, and marketable securities of
Financial Outlook for 2021
The Company continues to see ongoing uncertainty in the business caused by the continued and varying impact of the COVID-19 pandemic, including related to supply chain disruption, the increased cost of critical components, the impact of the Delta variant and the potential emergence of new variants, the durability of higher consumer confidence and increased consumer ambulation, and worldwide vaccination rates. As a result, the Company is still unable to provide guidance for the full year 2021, including its revenue, revenue mix, net loss, and Adjusted EBITDA estimates for such periods.
The Company believes the semiconductor chip shortage experienced across many industries, has and will likely continue to have a negative impact on its ability to manufacture products as these chips are used across all of its portable oxygen concentrators in both its batteries and printed circuit boards. The Company will continue to work with its manufacturing partners and explore other open-market avenues to procure necessary semiconductor chips, but expects increasing challenges in terms of supply and pricing inflation until supply meets demand and prices stabilize.
The acquisition costs for these chips from third parties is expected to be significantly higher in the third quarter of 2021 than the standard purchase price and is expected to continue to increase if and to the extent that supply is available during the shortage. As a result, the Company expects these inflated costs will increase the Company’s cost of goods sold starting in the third quarter of 2021 and continuing until supply meets demand and prices stabilize. The Company believes based on its assessment and industry feedback that these supply shortages may continue through the second quarter of 2022. As a result, in the interim the Company expects to be supply constrained and unable to meet full customer demand for its products.
While the Company is still unable to provide financial guidance for full year 2021, the Company expects total revenue in the second half of 2021 to be lower than the first half of 2021, with the largest negative impact on its domestic business-to-business channel.
The Company also expects increased cost of goods sold per unit in the second half of 2021 due to cost inflation of materials and labor throughout the supply chain including semiconductor chips and higher freight costs. To partially offset these rising costs, the Company plans to implement price increases across its products, which are planned to be effective as of September 1, 2021.
The Company will continue to make investments in clinical research, research and development, and building the necessary infrastructure to support future revenue growth and predictability as well as margin expansion. As a result, operating expenses for the year in 2021 are expected to exceed those in 2020. In addition, while the Company incurred minimal expenses related to bonus and performance-based stock compensation expense in 2020, it expects such costs to increase in 2021 along with certain expenses related to the previously announced officer transitions and additions.
In total, the Company expects net losses in both the third and fourth quarters of 2021 and a net loss for full-year 2021, reflecting the anticipated supply-constrained revenue decline, increased cost of goods sold per unit, and higher operating expense in the second half of 2021 as compared to the first half of 2021.
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 August 4, 2021 at 3:30pm PT/6:30pm ET through August 18, 2021. To access the replay, dial (877) 660-6853 or (201) 612-7415 and reference Access Code: 13721387. 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 its financial results for 2021 by channel, cost of goods sold, net loss, and Adjusted EBITDA; the anticipated impact of the COVID-19 pandemic on the Company’s business; expectations with respect to the Company’s supply chain, including the availability semiconductor chips used in its batteries and POCs; 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 changes to reimbursement rates; expectations related to the Company’s physician sales force; expectations regarding the Company’s compensation expense; 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; risks related to the Company’s supply chain and limited availability of semiconductor chips used in its batteries and POCs or cost inflation for such components; 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 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. 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 March 31, 2021, 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, 2021, 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 six months ended June 30, 2021 and June 30, 2020. 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 –
Consolidated Balance Sheets |
||||||||
(unaudited) |
||||||||
(amounts in thousands) |
||||||||
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
||||
|
|
2021 |
|
2020 |
||||
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
238,850 |
|
|
$ |
211,962 |
|
Marketable securities |
|
|
11,106 |
|
|
|
19,257 |
|
Accounts receivable, net |
|
|
36,946 |
|
|
|
29,717 |
|
Inventories, net |
|
|
27,225 |
|
|
|
24,815 |
|
Income tax receivable |
|
|
1,982 |
|
|
|
2,048 |
|
Prepaid expenses and other current assets |
|
|
11,457 |
|
|
|
17,898 |
|
Total current assets |
|
|
327,566 |
|
|
|
305,697 |
|
Property and equipment, net |
|
|
34,030 |
|
|
|
28,230 |
|
Goodwill |
|
|
33,085 |
|
|
|
33,165 |
|
Intangible assets, net |
|
|
64,424 |
|
|
|
68,797 |
|
Operating lease right-of-use asset |
|
|
26,637 |
|
|
|
8,827 |
|
Deferred tax asset - noncurrent |
|
|
9,171 |
|
|
|
14,467 |
|
Other assets |
|
|
3,261 |
|
|
|
2,669 |
|
Total assets |
|
$ |
498,174 |
|
|
$ |
461,852 |
|
Liabilities and stockholders' equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
31,543 |
|
|
$ |
33,712 |
|
Accrued payroll |
|
|
12,108 |
|
|
|
7,091 |
|
Warranty reserve - current |
|
|
6,210 |
|
|
|
5,740 |
|
Operating lease liability - current |
|
|
3,562 |
|
|
|
1,931 |
|
Deferred revenue - current |
|
|
8,013 |
|
|
|
6,994 |
|
Income tax payable |
|
|
404 |
|
|
|
1,242 |
|
Total current liabilities |
|
|
61,840 |
|
|
|
56,710 |
|
Warranty reserve - noncurrent |
|
|
9,128 |
|
|
|
8,654 |
|
Operating lease liability - noncurrent |
|
|
24,911 |
|
|
|
8,078 |
|
Earnout liability - noncurrent |
|
|
19,165 |
|
|
|
26,940 |
|
Deferred revenue - noncurrent |
|
|
12,189 |
|
|
|
11,822 |
|
Deferred tax liability - noncurrent |
|
|
25 |
|
|
|
25 |
|
Total liabilities |
|
|
127,258 |
|
|
|
112,229 |
|
Stockholders' equity |
|
|
|
|
|
|
|
|
Common stock |
|
|
23 |
|
|
|
22 |
|
Additional paid-in capital |
|
|
289,615 |
|
|
|
273,521 |
|
Retained earnings |
|
|
79,975 |
|
|
|
75,605 |
|
Accumulated other comprehensive income |
|
|
1,303 |
|
|
|
475 |
|
Total stockholders' equity |
|
|
370,916 |
|
|
|
349,623 |
|
Total liabilities and stockholders' equity |
|
$ |
498,174 |
|
|
$ |
461,852 |
|
Consolidated Statements of Comprehensive Income |
||||||||||||||||
(unaudited) |
||||||||||||||||
(amounts in thousands, except share and per share amounts) |
||||||||||||||||
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|
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|
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|
|
|
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|
|
|
||||
|
|
Three months ended |
|
Six months ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales revenue |
|
$ |
90,304 |
|
|
$ |
65,612 |
|
|
$ |
167,385 |
|
|
$ |
148,752 |
|
Rental revenue |
|
|
11,259 |
|
|
|
6,079 |
|
|
|
21,110 |
|
|
|
11,428 |
|
Total revenue |
|
|
101,563 |
|
|
|
71,691 |
|
|
|
188,495 |
|
|
|
160,180 |
|
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales revenue |
|
|
46,565 |
|
|
|
36,082 |
|
|
|
89,200 |
|
|
|
83,200 |
|
Cost of rental revenue, including depreciation of |
|
|
4,663 |
|
|
|
2,860 |
|
|
|
9,087 |
|
|
|
5,865 |
|
Total cost of revenue |
|
|
51,228 |
|
|
|
38,942 |
|
|
|
98,287 |
|
|
|
89,065 |
|
Gross profit |
|
|
50,335 |
|
|
|
32,749 |
|
|
|
90,208 |
|
|
|
71,115 |
|
Operating expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
4,123 |
|
|
|
3,290 |
|
|
|
8,138 |
|
|
|
6,895 |
|
Sales and marketing |
|
|
29,317 |
|
|
|
22,086 |
|
|
|
54,808 |
|
|
|
49,249 |
|
General and administrative |
|
|
5,224 |
|
|
|
9,724 |
|
|
|
17,723 |
|
|
|
19,501 |
|
Total operating expense |
|
|
38,664 |
|
|
|
35,100 |
|
|
|
80,669 |
|
|
|
75,645 |
|
Income (loss) from operations |
|
|
11,671 |
|
|
|
(2,351 |
) |
|
|
9,539 |
|
|
|
(4,530 |
) |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
29 |
|
|
|
176 |
|
|
|
86 |
|
|
|
728 |
|
Other income (expense) |
|
|
304 |
|
|
|
5,700 |
|
|
|
(6 |
) |
|
|
5,640 |
|
Total other income, net |
|
|
333 |
|
|
|
5,876 |
|
|
|
80 |
|
|
|
6,368 |
|
Income before provision for income taxes |
|
|
12,004 |
|
|
|
3,525 |
|
|
|
9,619 |
|
|
|
1,838 |
|
Provision for income taxes |
|
|
6,902 |
|
|
|
945 |
|
|
|
5,249 |
|
|
|
847 |
|
Net income |
|
$ |
5,102 |
|
|
$ |
2,580 |
|
|
$ |
4,370 |
|
|
$ |
991 |
|
Other comprehensive income (loss), net of tax |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in foreign currency translation adjustment |
|
|
123 |
|
|
|
178 |
|
|
|
(334 |
) |
|
|
20 |
|
Change in net unrealized gains (losses) on foreign currency hedging |
|
|
390 |
|
|
|
(417 |
) |
|
|
1,534 |
|
|
|
244 |
|
Less: reclassification adjustment for net (gains) losses included in net income |
|
|
(132 |
) |
|
|
134 |
|
|
|
(373 |
) |
|
|
146 |
|
Total net change in unrealized gains (losses) on foreign currency hedging |
|
|
258 |
|
|
|
(283 |
) |
|
|
1,161 |
|
|
|
390 |
|
Change in net unrealized gains (losses) on marketable securities |
|
|
(3 |
) |
|
|
1 |
|
|
|
1 |
|
|
|
(5 |
) |
Total other comprehensive income (loss), net of tax |
|
|
378 |
|
|
|
(104 |
) |
|
|
828 |
|
|
|
405 |
|
Comprehensive income |
|
$ |
5,480 |
|
|
$ |
2,476 |
|
|
$ |
5,198 |
|
|
$ |
1,396 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic net income per share attributable to common stockholders (1) |
|
$ |
0.23 |
|
|
$ |
0.12 |
|
|
$ |
0.20 |
|
|
$ |
0.05 |
|
Diluted net income per share attributable to common stockholders (1) |
|
$ |
0.22 |
|
|
$ |
0.12 |
|
|
$ |
0.19 |
|
|
$ |
0.04 |
|
Weighted-average number of shares used in calculating net income per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic common shares |
|
|
22,444,246 |
|
|
|
21,963,472 |
|
|
|
22,313,546 |
|
|
|
21,939,919 |
|
Diluted common shares |
|
|
22,874,321 |
|
|
|
22,221,356 |
|
|
|
22,734,079 |
|
|
|
22,229,744 |
|
(1) |
Reconciliations of net income 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. |
Supplemental Financial Information |
||||||||||||||||
(unaudited) |
||||||||||||||||
(in thousands, except units and patients) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Revenue by region and category |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business-to-business domestic sales |
|
$ |
27,558 |
|
|
$ |
21,564 |
|
|
$ |
58,301 |
|
|
$ |
49,118 |
|
Business-to-business international sales |
|
|
21,823 |
|
|
|
13,874 |
|
|
|
37,543 |
|
|
|
33,957 |
|
Direct-to-consumer domestic sales |
|
|
40,923 |
|
|
|
30,174 |
|
|
|
71,541 |
|
|
|
65,677 |
|
Direct-to-consumer domestic rentals |
|
|
11,259 |
|
|
|
6,079 |
|
|
|
21,110 |
|
|
|
11,428 |
|
Total revenue |
|
$ |
101,563 |
|
|
$ |
71,691 |
|
|
$ |
188,495 |
|
|
$ |
160,180 |
|
Additional financial measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units sold |
|
|
52,400 |
|
|
|
42,500 |
|
|
|
101,800 |
|
|
|
95,900 |
|
Net rental patients as of period-end |
|
|
37,100 |
|
|
|
26,400 |
|
|
|
37,100 |
|
|
|
26,400 |
|
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 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Net income |
|
$ |
5,102 |
|
|
$ |
2,580 |
|
|
$ |
4,370 |
|
|
$ |
991 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
(29 |
) |
|
|
(176 |
) |
|
|
(86 |
) |
|
|
(728 |
) |
Provision for income taxes |
|
|
6,902 |
|
|
|
945 |
|
|
|
5,249 |
|
|
|
847 |
|
Depreciation and amortization |
|
|
5,241 |
|
|
|
4,480 |
|
|
|
10,339 |
|
|
|
8,942 |
|
EBITDA (non-GAAP) |
|
|
17,216 |
|
|
|
7,829 |
|
|
|
19,872 |
|
|
|
10,052 |
|
Stock-based compensation |
|
|
3,239 |
|
|
|
1,277 |
|
|
|
5,755 |
|
|
|
4,061 |
|
Change in fair value of earnout liability |
|
|
(8,082 |
) |
|
|
932 |
|
|
|
(7,817 |
) |
|
|
(20 |
) |
Adjusted EBITDA (non-GAAP) |
|
$ |
12,373 |
|
|
$ |
10,038 |
|
|
$ |
17,810 |
|
|
$ |
14,093 |
|
|
|
Three months ended |
|
Six months ended |
||||||||||||
|
|
June 30,
|
|
|
|
|
|
June 30,
|
|
|
|
|
||||
Non-GAAP international constant currency revenue |
|
(using 2020
|
|
June 30,
|
|
(using 2020
|
|
June 30,
|
||||||||
International revenues (GAAP) |
|
$ |
21,823 |
|
|
$ |
13,874 |
|
|
$ |
37,543 |
|
|
$ |
33,957 |
|
Foreign exchange impact |
|
|
(1,314 |
) |
|
|
— |
|
|
|
(2,445 |
) |
|
|
— |
|
International constant currency revenues (non-GAAP) |
|
$ |
20,509 |
|
|
$ |
13,874 |
|
|
$ |
35,098 |
|
|
$ |
33,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
International revenue growth (GAAP) |
|
|
57.3 |
% |
|
|
|
|
|
|
10.6 |
% |
|
|
|
|
International constant currency revenue growth (non-GAAP) |
|
|
47.8 |
% |
|
|
|
|
|
|
3.4 |
% |
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210804005957/en/
FAQ
What were Inogen's second quarter 2021 revenue results?
What challenges is Inogen facing in the second half of 2021?
What is the outlook for Inogen's earnings in 2021?