Impinj Reports First Quarter 2020 Financial Results

Impinj Reports First Quarter 2020 Financial Results

SEATTLE–(BUSINESS WIRE)–Impinj, Inc. (NASDAQ: PI), a leading provider and pioneer of RAIN RFID solutions, today released its financial results for the first quarter ended March 31, 2020.

“Our first-quarter revenue was strong, setting another company record,” said Chris Diorio, Impinj co-founder and CEO. “Despite the prevailing sentiment in many of our end markets being negative, there are bright spots as well, such as in omnichannel retail and supply chain and logistics. Regardless, considering the significant uncertainties looking forward, we feel it is prudent to not give quantitative guidance for the second quarter.”

First Quarter 2020 Financial Summary

Revenue of $47.8 million

GAAP gross margin of 44.7%; non-GAAP gross margin of 46.1%

GAAP net loss of $4.3 million, or loss of $0.19 per diluted share using 22.4 million shares

Adjusted EBITDA of $3.0 million

Non-GAAP net income of $2.9 million, or income of $0.13 per diluted share using 23.0 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.

Second Quarter 2020 Financial Considerations

Impinj is continuing to monitor the impact of the Covid-19 pandemic on its business, including how the pandemic will affect customers, end-users, suppliers and other business partners. However, given the uncertainty regarding the duration and severity of the epidemiological, economic and operational impacts of Covid-19, as of the date of this report Impinj cannot reasonably estimate the pandemic’s impact on its operating results for the second quarter of 2020 or future periods.

For additional information regarding the impact of the Covid-19 pandemic’s impact on our business, operating results, financial condition and prospects, please see Impinj’s Quarterly Report on Form 10-Q expected to be filed on the date hereof.

Conference Call Information

Impinj will host a conference call today, Apr. 27, 2020 at 5:00 p.m. ET / 2:00 p.m. PT for analysts and investors to ask questions on its first quarter 2020 results. 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 Following the webcast, an archived version will be available on the website for one year.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 10142298.

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, the impact of the Covid-19 pandemic, and financial considerations for the second quarter of 2020 and future periods. 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 (NASDAQ: PI) helps businesses and people analyze, optimize, and innovate by wirelessly connecting billions of everyday things—such as apparel, automobile parts, luggage, and shipments—to the Internet. The Impinj platform uses RAIN RFID to deliver timely data about these everyday things to business and consumer applications, enabling a boundless Internet of Things. www.impinj.com

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)

 

 

March 31, 2020

 

 

December 31, 2019 (1)

 

Assets:

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

83,722

 

 

$

66,898

 

Short-term investments

 

35,497

 

 

 

49,597

 

Accounts receivable, net

 

28,106

 

 

 

23,735

 

Inventory

 

31,763

 

 

 

34,153

 

Prepaid expenses and other current assets

 

1,892

 

 

 

2,386

 

Total current assets

 

180,980

 

 

 

176,769

 

Property and equipment, net

 

16,923

 

 

 

17,442

 

Operating lease right-of-use assets

 

15,844

 

 

 

16,501

 

Other non-current assets

 

579

 

 

 

453

 

Goodwill

 

3,881

 

 

 

3,881

 

Total assets

$

218,207

 

 

$

215,046

 

Liabilities and stockholders’ equity:

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

6,748

 

 

$

5,600

 

Accrued compensation and employee related benefits

 

3,926

 

 

 

5,859

 

Accrued liabilities

 

4,699

 

 

 

3,755

 

Current portion of operating lease liabilities

 

3,469

 

 

 

3,380

 

Current portion of deferred revenue

 

661

 

 

 

551

 

Other current liabilities

 

161

 

 

 

352

 

Total current liabilities

 

19,664

 

 

 

19,497

 

Long-term debt, net of current portion

 

51,755

 

 

 

50,876

 

Operating lease liabilities, net of current portion

 

17,995

 

 

 

18,907

 

Deferred revenue, net of current portion

 

258

 

 

 

213

 

Long-term liabilities — other

 

316

 

 

 

314

 

Total liabilities

 

89,988

 

 

 

89,807

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

Common stock, $0.001 par value

 

23

 

 

 

22

 

Additional paid-in capital

 

395,160

 

 

 

387,926

 

Accumulated other comprehensive income

 

105

 

 

 

34

 

Accumulated deficit

 

(267,069

)

 

 

(262,743

)

Total stockholders’ equity

 

128,219

 

 

 

125,239

 

Total liabilities and stockholders’ equity

$

218,207

 

 

$

215,046

 

(1) Certain immaterial amounts on our condensed consolidated balance sheets in prior periods have been reclassified to conform with current period presentation.

 

 

IMPINJ, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data, unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

Revenue

 

$

47,822

 

 

$

33,063

 

Cost of revenue

 

 

26,428

 

 

 

17,190

 

Gross profit

 

 

21,394

 

 

 

15,873

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

11,057

 

 

 

8,561

 

Sales and marketing

 

 

7,490

 

 

 

8,549

 

General and administrative

 

 

6,242

 

 

 

5,695

 

Total operating expenses

 

 

24,789

 

 

 

22,805

 

Loss from operations

 

 

(3,395

)

 

 

(6,932

)

Other income, net

 

 

409

 

 

 

321

 

Interest expense

 

 

(1,312

)

 

 

(429

)

Loss before income taxes

 

 

(4,298

)

 

 

(7,040

)

Income tax expense

 

 

(28

)

 

 

(28

)

Net loss

 

$

(4,326

)

 

$

(7,068

)

Net loss per share — basic and diluted

 

$

(0.19

)

 

$

(0.33

)

Weighted-average shares — basic and diluted

 

 

22,412

 

 

 

21,544

 

IMPINJ, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(4,326

)

 

$

(7,068

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

1,168

 

 

 

1,155

 

Stock-based compensation

 

 

5,221

 

 

 

3,477

 

Accretion of discount or amortization of premium on short-term investments

 

 

(4

)

 

 

(197

)

Amortization of debt issuance costs and debt discount

 

 

879

 

 

 

18

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(4,371

)

 

 

504

 

Inventory

 

 

2,390

 

 

 

3,506

 

Prepaid expenses and other assets

 

 

368

 

 

 

423

 

Deferred revenue

 

 

155

 

 

 

167

 

Accounts payable

 

 

1,096

 

 

 

949

 

Accrued compensation and employee related benefits

 

 

(1,933

)

 

 

(3,279

)

Operating lease right-of-use assets

 

 

657

 

 

 

419

 

Operating lease liabilities

 

 

(823

)

 

 

(739

)

Accrued liabilities and other liabilities

 

 

1,368

 

 

 

(66

)

Net cash provided by (used in) operating activities

 

 

1,845

 

 

 

(731

)

Investing activities:

 

 

 

 

 

 

 

 

Purchases of investments

 

 

 

 

 

(22,222

)

Proceeds from maturities of investments

 

 

14,175

 

 

 

22,944

 

Purchases of property and equipment

 

 

(1,112

)

 

 

(305

)

Net cash provided by investing activities

 

 

13,063

 

 

 

417

 

Financing activities:

 

 

 

 

 

 

 

 

Principal payments on finance lease obligations

 

 

(98

)

 

 

(147

)

Payments on term and equipment loans

 

 

 

 

 

(250

)

Proceeds from exercise of stock options and employee stock purchase plan

 

 

2,014

 

 

 

1,842

 

Net cash provided by financing activities

 

 

1,916

 

 

 

1,445

 

Net increase in cash and cash equivalents

 

 

16,824

 

 

 

1,131

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

66,898

 

 

 

17,530

 

End of period

 

$

83,722

 

 

$

18,661

 

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 performance measures include adjusted EBITDA and non-GAAP net income (loss), the definitions of which are 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 items can provide useful information for period-to-period comparisons of our business to allow investors and others to understand and evaluate 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; loss on debt extinguishment 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 discount related to the equity component of our senior convertible notes; and prepayment penalty on debt extinguishment. Under GAAP, certain convertible debt instruments that may be settled in cash on conversion are required to be accounted for as separate liability and equity components in a manner that reflects our non-convertible debt borrowing rate. This results in the debt component being treated as though it was issued at a discount, with the debt discount being amortized as additional non-cash interest expense over the term of the notes using the effective interest method. As a result, we believe that excluding this non-cash interest expense attributable to the debt discount in calculating our non-GAAP net income (loss) is useful because this interest expense is not indicative of our ongoing operational performance. We incurred prepayment penalty on debt extinguishment in connection with the December 2019 repayment of our senior credit facility, which was included in loss on debt extinguishment in our condensed consolidated statements of operations. Because of the non-recurring nature of the prepayment fees, we believe this expense is not representative of ongoing operation costs.

IMPINJ, INC.
RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(in thousands, except percentages, unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2020

 

 

2019

 

GAAP Gross margin

 

 

44.7

%

 

 

48.0

%

Adjustments:

 

 

 

 

 

 

 

 

Depreciation

 

 

1.0

%

 

 

1.6

%

Stock-based compensation

 

 

0.4

%

 

 

0.4

%

Non-GAAP Gross margin

 

 

46.1

%

 

 

50.0

%

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(4,326

)

 

$

(7,068

)

Adjustments:

 

 

 

 

 

 

 

 

Depreciation

 

 

1,168

 

 

 

1,155

 

Stock-based compensation

 

 

5,221

 

 

 

3,477

 

Other income, net

 

 

(409

)

 

 

(321

)

Interest expense

 

 

1,312

 

 

 

429

 

Income tax expense

 

 

28

 

 

 

28

 

Adjusted EBITDA

 

$

2,994

 

 

$

(2,300

)

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(4,326

)

 

$

(7,068

)

Adjustments:

 

 

 

 

 

 

 

 

Depreciation

 

 

1,168

 

 

 

1,155

 

Stock-based compensation

 

 

5,221

 

 

 

3,477

 

Amortization of debt discount

 

 

854

 

 

 

 

Non-GAAP Net income (loss)

 

$

2,917

 

 

$

(2,436

)

Non-GAAP Net income (loss) per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.13

 

 

$

(0.11

)

Diluted

 

$

0.13

 

 

$

(0.11

)

GAAP and non-GAAP Weighted-average shares — basic

 

 

22,412

 

 

 

21,544

 

 

 

 

 

 

 

 

 

 

GAAP Weighted-average shares — diluted

 

 

22,412

 

 

 

21,544

 

Dilutive shares from stock plans

 

 

589

 

 

 

 

Non-GAAP Weighted-average shares — diluted

 

 

23,001

 

 

 

21,544

 

 
Contacts
Investor Relations
[email protected]+1-206-315-4470

Media Relations
Jill West
Sr. Director, Marketing & Communications
[email protected]+1 206-834-111

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