SEATTLE--(BUSINESS WIRE)-- Impinj, Inc. (NASDAQ: PI), a leading provider and pioneer of RAIN RFID solutions for identifying, locating and authenticating everyday items, today released its financial results for the third quarter ended September 30, 2019.
“Our third-quarter results were strong, with revenue and adjusted EBITDA outperforming our guidance,” said Chris Diorio, Impinj co-founder and CEO. “Quarterly revenue exceeded $40 million for the first time, driven by strong performance in both endpoint ICs and systems.”
Third Quarter 2019 Financial Summary
- Revenue of $40.8 million
- GAAP gross margin of 48.5%; non-GAAP gross margin of 50.2%
- GAAP net loss of $4.1 million, or loss of $0.19 per diluted share using 22.0 million shares
- Adjusted EBITDA of $2.1 million
- Non-GAAP net income of $1.9 million, or income of $0.09 per diluted share using 22.9 million shares
A reconciliation between GAAP and non-GAAP information is contained in the tables below. Additionally, descriptions of these non-GAAP financial measures are provided in the “Non-GAAP Financial Measures” sections below.
Fourth Quarter 2019 Financial Outlook
Impinj provides guidance based on current market conditions and expectations; actual results may differ materially. Please refer to the comments below regarding forward-looking statements. The following table presents Impinj’s financial outlook for the fourth quarter of 2019 (in millions, except per share data):
Three Months Ending |
||
December 31, 2019 |
||
Revenue |
$37.0 to $39.0 |
|
GAAP Net loss |
$(7.1) to $(6.1) |
|
Adjusted EBITDA (loss) |
$(0.5) to $1.0 |
|
Non-GAAP net income (loss) |
$(0.7) to $0.9 |
|
GAAP Weighted-average shares — basic and diluted |
22.05 to 22.15 |
|
GAAP Net loss per share — basic and diluted |
$(0.32) to $(0.28) |
|
Non-GAAP Weighted-average shares — basic |
22.05 to 22.15 |
|
Non-GAAP Weighted-average shares — diluted |
22.05 to 23.05 |
|
Non-GAAP Net income (loss) per share — basic and diluted |
$(0.03) to $0.04 |
A reconciliation between GAAP and non-GAAP is provided in the "Non-GAAP Financial Measures" section below.
Conference Call Information
Impinj will host a conference call today, Nov. 4, 2019 at 5:00 p.m. ET / 2:00 p.m. PT for analysts and investors to ask questions on its third quarter 2019 results, as well as its outlook for its fourth quarter of 2019. Open to the public, investors may access the call by dialing +1-412-317-5196. A live webcast of the conference call will also be accessible on our website at investor.impinj.com. Following the webcast, an archived version will be available on the website for one year. A telephonic replay of the call will be available one hour after the call and will run for five business days and may be accessed by dialing +1-412-317-0088 and entering passcode 10135364.
Management’s prepared written remarks, along with quarterly financial data, will be made available on our website at investor.impinj.com commensurate with this release.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding the market for RAIN RFID, our strategy, prospects, and financial outlook for the fourth quarter of 2019. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our annual report on Form 10-K and quarterly reports on Form 10-Q filed with the U.S. Securities and Exchange Commission. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update this information unless required by law.
About Impinj
Impinj, Inc. (NASDAQ: PI) wirelessly connects billions of everyday items such as apparel, medical supplies, automobile parts, luggage and food to consumer and business applications such as inventory management, patient safety, asset tracking and item authentication. The Impinj platform uses RAIN RFID to deliver timely information about these items to the digital world, thereby enabling the Internet of Things.
Impinj is a registered trademark of Impinj, Inc. All other trademarks are the property of their owners.
IMPINJ, INC. |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(in thousands, except par value, unaudited) |
|||||||
September 30, 2019 |
December 31, 2018 |
||||||
Assets: |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ |
16,931 |
$ |
17,530 |
|||
Short-term investments |
46,151 |
38,543 |
|||||
Accounts receivable, net |
24,803 |
18,462 |
|||||
Inventory |
36,274 |
44,725 |
|||||
Prepaid expenses and other current assets |
2,259 |
1,954 |
|||||
Total current assets |
126,418 |
121,214 |
|||||
Property and equipment, net |
16,704 |
19,778 |
|||||
Operating lease right-of-use assets |
17,149 |
— |
|||||
Other non-current assets |
256 |
196 |
|||||
Goodwill |
3,881 |
3,881 |
|||||
Total assets |
$ |
164,408 |
$ |
145,069 |
|||
Liabilities and stockholders' equity: |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ |
6,074 |
$ |
4,643 |
|||
Accrued compensation and employee related benefits |
4,908 |
7,409 |
|||||
Accrued liabilities |
2,722 |
2,887 |
|||||
Current portion of operating lease liabilities |
3,292 |
— |
|||||
Current portion of restructuring liabilities |
94 |
582 |
|||||
Current portion of long-term debt |
3,200 |
5,930 |
|||||
Current portion of finance lease liabilities |
353 |
523 |
|||||
Current portion of deferred rent |
— |
402 |
|||||
Current portion of deferred revenue |
794 |
649 |
|||||
Total current liabilities |
21,437 |
23,025 |
|||||
Long-term debt, net of current portion |
20,183 |
17,633 |
|||||
Operating lease liabilities, net of current portion |
19,778 |
— |
|||||
Finance lease liabilities, net of current portion |
18 |
258 |
|||||
Long-term liabilities — other |
302 |
304 |
|||||
Long-term restructuring liabilities |
— |
487 |
|||||
Deferred rent, net of current portion |
— |
5,294 |
|||||
Deferred revenue, net of current portion |
154 |
185 |
|||||
Total liabilities |
61,872 |
47,186 |
|||||
Stockholders' equity: |
|||||||
Common stock, $0.001 par value |
22 |
21 |
|||||
Additional paid-in capital |
357,541 |
337,627 |
|||||
Accumulated other comprehensive income (loss) |
36 |
(9 |
) |
||||
Accumulated deficit |
(255,063 |
) |
(239,756 |
) |
|||
Total stockholders' equity |
102,536 |
97,883 |
|||||
Total liabilities and stockholders' equity |
$ |
164,408 |
$ |
145,069 |
|||
IMPINJ, INC. |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(in thousands, except per share data, unaudited) |
||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Revenue |
$ |
40,762 |
$ |
34,405 |
$ |
112,015 |
$ |
88,015 |
||||||||
Cost of revenue |
20,981 |
17,857 |
57,945 |
46,045 |
||||||||||||
Gross profit |
19,781 |
16,548 |
54,070 |
41,970 |
||||||||||||
Operating expenses: |
||||||||||||||||
Research and development |
10,344 |
8,804 |
27,678 |
25,170 |
||||||||||||
Sales and marketing |
7,842 |
7,864 |
24,579 |
24,746 |
||||||||||||
General and administrative |
5,503 |
6,695 |
16,653 |
16,981 |
||||||||||||
Restructuring costs |
— |
— |
— |
3,749 |
||||||||||||
Total operating expenses |
23,689 |
23,363 |
68,910 |
70,646 |
||||||||||||
Loss from operations |
(3,908 |
) |
(6,815 |
) |
(14,840 |
) |
(28,676 |
) |
||||||||
Other income, net |
317 |
204 |
947 |
561 |
||||||||||||
Interest expense |
(413 |
) |
(390 |
) |
(1,263 |
) |
(970 |
) |
||||||||
Loss before income taxes |
(4,004 |
) |
(7,001 |
) |
(15,156 |
) |
(29,085 |
) |
||||||||
Income tax expense |
(77 |
) |
(69 |
) |
(151 |
) |
(159 |
) |
||||||||
Net loss |
$ |
(4,081 |
) |
$ |
(7,070 |
) |
$ |
(15,307 |
) |
$ |
(29,244 |
) |
||||
Net loss per share — basic and diluted |
$ |
(0.19 |
) |
$ |
(0.33 |
) |
$ |
(0.70 |
) |
$ |
(1.37 |
) |
||||
Weighted-average shares — basic and diluted |
21,961 |
21,403 |
21,738 |
21,287 |
||||||||||||
IMPINJ, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(in thousands, unaudited) |
||||||||
Nine Months Ended |
||||||||
September 30, |
||||||||
2019 |
2018 |
|||||||
Operating activities: |
||||||||
Net loss |
$ |
(15,307 |
) |
$ |
(29,244 |
) |
||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
Depreciation |
3,637 |
3,394 |
||||||
Stock-based compensation |
11,813 |
8,013 |
||||||
Non-cash restructuring benefit |
— |
(454 |
) |
|||||
Accretion of discount or amortization of premium on short-term investments |
(464 |
) |
(247 |
) |
||||
Amortization of debt issuance costs |
51 |
57 |
||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(6,341 |
) |
2,656 |
|||||
Inventory |
8,451 |
(2,112 |
) |
|||||
Prepaid expenses and other assets |
(222 |
) |
391 |
|||||
Deferred revenue |
114 |
(288 |
) |
|||||
Deferred rent |
— |
(176 |
) |
|||||
Accounts payable |
1,508 |
(774 |
) |
|||||
Accrued compensation and employee related benefits |
(2,440 |
) |
(720 |
) |
||||
Operating lease right-of-use assets |
1,505 |
— |
||||||
Operating lease liabilities |
(2,255 |
) |
— |
|||||
Accrued liabilities and other liabilities |
164 |
1,223 |
||||||
Restructuring liabilities |
— |
1,576 |
||||||
Net cash provided by (used in) operating activities |
214 |
(16,705 |
) |
|||||
Investing activities: |
||||||||
Purchases of investments |
(59,036 |
) |
(33,397 |
) |
||||
Proceeds from maturities of investments |
51,794 |
35,402 |
||||||
Purchases of property and equipment |
(971 |
) |
(3,051 |
) |
||||
Net cash used in investing activities |
(8,213 |
) |
(1,046 |
) |
||||
Financing activities: |
||||||||
Principal payments on finance lease obligations |
(410 |
) |
(717 |
) |
||||
Payments on term and equipment loans |
(4,222 |
) |
(2,230 |
) |
||||
Proceeds from term loans, net of debt issuance costs |
3,991 |
16,379 |
||||||
Proceeds from exercise of stock options and employee stock purchase plan |
8,041 |
2,627 |
||||||
Net cash provided by financing activities |
7,400 |
16,059 |
||||||
Net decrease in cash and cash equivalents |
(599 |
) |
(1,692 |
) |
||||
Cash and cash equivalents |
||||||||
Beginning of period |
17,530 |
19,285 |
||||||
End of period |
$ |
16,931 |
$ |
17,593 |
||||
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements prepared and presented in accordance with U.S. generally accepted accounting principles, or GAAP, we use non-GAAP financial measures by financial statement line items that exclude, if applicable for the periods presented, the effects of stock-based compensation, depreciation, investigation costs, restructuring costs and other expenses that we believe do not reflect our core operating performance. Our key non-GAAP liquidity and performance measures include adjusted EBITDA and non-GAAP net income (loss), see definitions of such below. We use adjusted EBITDA and non-GAAP net income (loss) as key measures to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operating plans. We believe excluding those income and expenses inherent in calculating adjusted EBITDA and non-GAAP net income (loss) can provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that adjusted EBITDA and non-GAAP net income (loss) provide useful information to investors and others in understanding and evaluating our operating results in the same manner as it does for our management and board of directors. Our presentation of these non-GAAP financial measures is not meant to be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP, and our non-GAAP measures may be different from non-GAAP measures used by other companies.
Adjusted EBITDA
We define adjusted EBITDA as net income (loss) determined in accordance with GAAP, excluding, if applicable for the periods presented, the effects of stock-based compensation; depreciation; investigation costs; restructuring costs; other income, net; interest expense; and income tax benefit (expense).
Non-GAAP Net Income (Loss)
We define non-GAAP net income (loss) as net income (loss) determined in accordance with GAAP, excluding, if applicable for the periods presented, the effects of stock-based compensation; depreciation; investigation costs; restructuring costs; amortization of debt issuance costs; and non-cash income tax benefit (expense). We exclude the non-cash portion of income taxes because of our ability to offset a substantial portion of future income tax liabilities by utilizing our deferred tax assets, which comprise primarily federal net operating loss carryforwards and federal research and experimentation credit carryforwards.
IMPINJ, INC. |
||||||||||||||||
RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES |
||||||||||||||||
(in thousands, except percentages, unaudited) |
||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
GAAP Gross profit |
$ |
19,781 |
$ |
16,548 |
$ |
54,070 |
$ |
41,970 |
||||||||
Adjustments: |
||||||||||||||||
Depreciation |
496 |
497 |
1,543 |
1,500 |
||||||||||||
Stock-based compensation |
192 |
144 |
495 |
325 |
||||||||||||
Non-GAAP Gross profit |
$ |
20,469 |
$ |
17,189 |
$ |
56,108 |
$ |
43,795 |
||||||||
GAAP Gross margin |
48.5 |
% |
48.1 |
% |
48.3 |
% |
47.7 |
% |
||||||||
Adjustments: |
||||||||||||||||
Depreciation |
1.2 |
% |
1.5 |
% |
1.4 |
% |
1.7 |
% |
||||||||
Stock-based compensation |
0.5 |
% |
0.4 |
% |
0.4 |
% |
0.4 |
% |
||||||||
Non-GAAP Gross margin |
50.2 |
% |
50.0 |
% |
50.1 |
% |
49.8 |
% |
||||||||
GAAP Research and development |
$ |
10,344 |
$ |
8,804 |
$ |
27,678 |
$ |
25,170 |
||||||||
Adjustments: |
||||||||||||||||
Depreciation |
(499 |
) |
(403 |
) |
(1,406 |
) |
(1,190 |
) |
||||||||
Stock-based compensation |
(1,717 |
) |
(1,039 |
) |
(4,028 |
) |
(2,620 |
) |
||||||||
Non-GAAP Research and development |
$ |
8,128 |
$ |
7,362 |
$ |
22,244 |
$ |
21,360 |
||||||||
GAAP Sales and marketing |
$ |
7,842 |
$ |
7,864 |
$ |
24,579 |
$ |
24,746 |
||||||||
Adjustments: |
||||||||||||||||
Depreciation |
(127 |
) |
(129 |
) |
(383 |
) |
(389 |
) |
||||||||
Stock-based compensation |
(1,622 |
) |
(1,188 |
) |
(4,028 |
) |
(2,876 |
) |
||||||||
Non-GAAP Sales and marketing |
$ |
6,093 |
$ |
6,547 |
$ |
20,168 |
$ |
21,481 |
||||||||
GAAP General and administrative |
$ |
5,503 |
$ |
6,695 |
$ |
16,653 |
$ |
16,981 |
||||||||
Adjustments: |
||||||||||||||||
Depreciation |
(98 |
) |
(107 |
) |
(305 |
) |
(315 |
) |
||||||||
Stock-based compensation |
(1,262 |
) |
(964 |
) |
(3,262 |
) |
(2,192 |
) |
||||||||
Investigation costs |
— |
(1,449 |
) |
— |
(1,449 |
) |
||||||||||
Non-GAAP General and administrative |
$ |
4,143 |
$ |
4,175 |
$ |
13,086 |
$ |
13,025 |
||||||||
GAAP Total operating expenses |
$ |
23,689 |
$ |
23,363 |
$ |
68,910 |
$ |
70,646 |
||||||||
Adjustments: |
||||||||||||||||
Depreciation |
(724 |
) |
(639 |
) |
(2,094 |
) |
(1,894 |
) |
||||||||
Stock-based compensation |
(4,601 |
) |
(3,191 |
) |
(11,318 |
) |
(7,688 |
) |
||||||||
Investigation costs |
— |
(1,449 |
) |
— |
(1,449 |
) |
||||||||||
Restructuring costs |
— |
— |
— |
(3,749 |
) |
|||||||||||
Non-GAAP Total operating expenses |
$ |
18,364 |
$ |
18,084 |
$ |
55,498 |
$ |
55,866 |
||||||||
IMPINJ, INC. |
||||||||||||||||
RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES |
||||||||||||||||
(in thousands, except per share data, unaudited) |
||||||||||||||||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
GAAP Net loss |
$ |
(4,081 |
) |
$ |
(7,070 |
) |
$ |
(15,307 |
) |
$ |
(29,244 |
) |
||||
Adjustments: |
||||||||||||||||
Depreciation |
1,220 |
1,136 |
3,637 |
3,394 |
||||||||||||
Stock-based compensation |
4,793 |
3,335 |
11,813 |
8,013 |
||||||||||||
Investigation costs |
— |
1,449 |
— |
1,449 |
||||||||||||
Restructuring costs |
— |
— |
— |
3,749 |
||||||||||||
Other income, net |
(317 |
) |
(204 |
) |
(947 |
) |
(561 |
) |
||||||||
Interest expense |
413 |
390 |
1,263 |
970 |
||||||||||||
Income tax expense |
77 |
69 |
151 |
159 |
||||||||||||
Adjusted EBITDA |
$ |
2,105 |
$ |
(895 |
) |
$ |
610 |
$ |
(12,071 |
) |
||||||
GAAP Net loss |
$ |
(4,081 |
) |
$ |
(7,070 |
) |
$ |
(15,307 |
) |
$ |
(29,244 |
) |
||||
Adjustments: |
||||||||||||||||
Depreciation |
1,220 |
1,136 |
3,637 |
3,394 |
||||||||||||
Stock-based compensation |
4,793 |
3,335 |
11,813 |
8,013 |
||||||||||||
Investigation costs |
— |
1,449 |
— |
1,449 |
||||||||||||
Restructuring costs |
— |
— |
— |
3,749 |
||||||||||||
Amortization of debt issuance costs |
16 |
18 |
51 |
57 |
||||||||||||
Non-cash income tax benefit |
— |
12 |
— |
40 |
||||||||||||
Non-GAAP Net income (loss) |
$ |
1,948 |
$ |
(1,120 |
) |
$ |
194 |
$ |
(12,542 |
) |
||||||
Non-GAAP Net income (loss) per share: |
||||||||||||||||
Basic |
$ |
0.09 |
$ |
(0.05 |
) |
$ |
0.01 |
$ |
(0.59 |
) |
||||||
Diluted |
$ |
0.09 |
$ |
(0.05 |
) |
$ |
0.01 |
$ |
(0.59 |
) |
||||||
GAAP and non-GAAP Weighted-average shares — basic |
21,961 |
21,403 |
21,738 |
21,287 |
||||||||||||
GAAP Weighted-average shares — diluted |
21,961 |
21,403 |
21,738 |
21,287 |
||||||||||||
Dilutive shares from stock plans |
894 |
— |
658 |
— |
||||||||||||
Non-GAAP Weighted-average shares — diluted |
22,855 |
21,403 |
22,396 |
21,287 |
||||||||||||
IMPINJ, INC. |
||||
RECONCILIATIONS OF GAAP FINANCIAL OUTLOOK TO NON-GAAP FINANCIAL OUTLOOK |
||||
(in thousands, except per share data, unaudited – calculated at the midpoint of the outlook range) |
||||
Three Months Ending |
||||
December 31, |
||||
2019 |
||||
GAAP Net loss |
$ |
(6,640 |
) |
|
Adjustments: |
||||
Forecasted Depreciation |
1,319 |
|||
Forecasted Stock-based compensation |
5,400 |
|||
Forecasted Interest expense |
422 |
|||
Forecasted Other income, net |
(340 |
) |
||
Forecasted Income tax expense |
64 |
|||
Adjusted EBITDA |
$ |
225 |
||
GAAP Net loss |
$ |
(6,640 |
) |
|
Adjustments: |
||||
Forecasted Depreciation |
1,319 |
|||
Forecasted Stock-based compensation |
5,400 |
|||
Forecasted Amortization of debt issuance costs |
21 |
|||
Forecasted Non-cash income tax expense |
— |
|||
Non-GAAP Net income |
$ |
100 |
||
GAAP Net loss per share — basic and diluted |
$ |
(0.30 |
) |
|
Non-GAAP Net loss per share — basic and diluted |
$ |
0.00 |
||
GAAP weighted-average shares — basic and diluted |
22,100 |
|||
Non-GAAP weighted-average shares — basic |
22,100 |
|||
Dilutive shares from stock plans |
900 |
|||
Non-GAAP weighted-average shares — diluted |
23,000 |
|||
View source version on businesswire.com: https://www.businesswire.com/news/home/20191104005968/en/
Investor Relations ir@impinj.com +1-206-315-4470
Source: Impinj, Inc.