Impinj Reports Third Quarter 2019 Financial Results

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

 

Contacts

Investor Relations

ir@impinj.com
+1-206-315-4470

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