Impinj Announces Second Quarter 2016 Financial Results


SEATTLE, Aug. 31, 2016 (GLOBE NEWSWIRE) -- Impinj, Inc. (NASDAQ:PI), a leading provider and pioneer of solutions for identifying, locating and authenticating everyday items using RAIN RFID, today announced its second quarter 2016 financial results for the period ended June 30, 2016.

“We delivered strong second quarter results. Revenue grew 36% year-over-year to a record driven by continued demand for our Monza endpoint ICs, which we believe is an indication of accelerating market growth and our strong market position,” said Chris Diorio, co-founder and CEO. “We see a massive and growing market opportunity for our offerings and, with the successful completion of our IPO, we have expanded our available capital and will continue to execute our strategy to further capitalize on this exciting growth opportunity.”

Second Quarter Financial Summary

  • Revenue grew 36% year-over-year to $26.0 million
  • GAAP gross margin of 52.3%; Non-GAAP gross margin of 53.4%
  • GAAP net loss of $0.3 million; GAAP net loss attributable to common shareholders of $3.1 million or a loss of $0.71 per share using 4.3 million shares
  • Adjusted EBITDA of $1.3 million
  • Non-GAAP net income of $0.9 million, or $0.06 per share using 13.9 million shares

A reconciliation between historical GAAP and non-GAAP information, including of weighted average basic and diluted shares, is contained in the tables below and in the section titled "Non-GAAP Financial Measures" below are descriptions of these non-GAAP financial measures.

Third Quarter 2016 Financial Outlook
Impinj provides guidance based on current market conditions and expectations and actual results may differ materially. Please refer to the company’s comments below regarding Forward Looking Statements. For the third quarter of 2016, the company currently expects:

  • Revenue in the range of $27.4 million to $28.9 million
  • Adjusted EBITDA in the range of $0.3 million to $1.8 million
  • Non-GAAP net income in the range of $0.2 million to $1.7 million, and non-GAAP earnings per share in the range of $0.01 and $0.09, using approximately 18.6 million shares.

All forward-looking non-GAAP financial measures contained in this section titled "Third Quarter 2016 Financial Outlook" exclude non-cash income and expenses. We have not reconciled guidance for non-GAAP metrics to their most directly comparable GAAP measures because such items that impact these measures are not within our control or cannot be reasonably predicted. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measures is not available without unreasonable effort.

Conference Call Information
Impinj will host a conference call and webcast today, Aug. 31, 2016 at 4:30 p.m. ET / 1:30 p.m. PT for analysts and investors to discuss its second quarter results and outlook for its third quarter of 2016. Open to the public, investors may access the call by dialing +1-412-317-6060. A live webcast of the conference call will also be accessible on the company's 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 10091002.

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 our financial outlook for the third quarter of 2016.  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 filings with the U.S. Securities and Exchange Commission, including, but not limited to, the prospectus filed pursuant to Rule 424(b) under the Securities Act of 1993 with the SEC on July 21, 2016.  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.

Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), we use the following non-GAAP financial measures: non-GAAP gross margin, net income and earnings per share and Adjusted EBITDA. In computing these non-GAAP financial measures, we exclude the effects of stock-based compensation expense, depreciation and amortization, non-cash interest and other income/expense, and non-cash income tax expense not considered to be indicative of our ongoing core business operating results. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain income, expenses and expenditures that may not be indicative of our ongoing core business operating results. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and planning, forecasting, and analyzing future periods. The 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.

For a reconciliation of these non-GAAP financial measures to GAAP measures, please see the tables captioned "Reconciliations of GAAP financial measures to Non-GAAP financial measures" included at the end of this release.

About Impinj
Impinj (NASDAQ:PI) is a leading provider of RAIN RFID solutions. The Impinj Platform connects billions of everyday items such as apparel, medical supplies, automobile parts, drivers’ licenses, food and luggage to applications such as inventory management, patient safety, asset tracking and item authentication, delivering real-time information to businesses about items they create, manage, transport and sell. The Impinj Platform wirelessly delivers information about these items’ unique identity, location and authenticity, or Item Intelligence™, to the digital world, which Impinj believes is the essence of the Internet of Things.

       
IMPINJ, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value, unaudited)
       
  June 30,  December 31, 
  2016  2015 
Assets:        
Current assets:        
Cash and cash equivalents $14,432  $10,121 
Accounts receivable, net  15,623   12,889 
Inventory  19,228   11,837 
Prepaid expenses and other current assets  1,142   1,095 
Total current assets  50,425   35,942 
Property and equipment, net  12,621   12,351 
Other non-current assets  1,528   637 
Goodwill  3,881   3,881 
Other intangible assets, net     37 
Total assets $68,455  $52,848 
Liabilities, redeemable convertible preferred stock and stockholders' deficit:        
Current liabilities:        
Accounts payable $7,473  $3,182 
Accrued compensation and employee related benefits  4,006   4,038 
Accrued liabilities  4,225   2,895 
Current portion of long-term debt  13,162   5,227 
Current portion of capital lease obligations  1,100   1,190 
Current portion of deferred rent  182   258 
Current portion of deferred revenue  371   684 
Total current liabilities  30,519   17,474 
Long-term debt, net of current portion  15,033   10,683 
Capital lease obligations, net of current portion  2,115   2,526 
Long-term liabilities—other  724   678 
Warrant liability  2,711   2,865 
Deferred rent, net of current portion  5,104   4,984 
Deferred revenue, net of current portion  970   710 
Total liabilities  57,176   39,920 
Commitment and contingencies        
Redeemable convertible preferred stock, $0.001 par value        
Series 1: 5,334 shares authorized; 5,334 shares issued and outstanding  65,834   60,184 
Series 2: 2,979 shares authorized; 2,557 shares issued and outstanding  37,897   37,779 
Total redeemable convertible preferred stock  103,731   97,963 
Stockholders' deficit:        
Common stock, $0.001 par value, 17,083 shares authorized; 4,478 and 4,382 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively  4   4 
Additional paid in capital  95,443   100,276 
Accumulated deficit  (187,899)  (185,315)
Total stockholders' deficit  (92,452)  (85,035)
Total liabilities, redeemable convertible preferred stock and stockholders' deficit $68,455  $52,848 


       
IMPINJ, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data, unaudited)
       
  Six Months Ended  Three Months Ended 
  June 30,  June 30, 
  2016  2015  2016  2015 
Revenue:                
Product revenue $47,413  $34,866  $25,862  $18,871 
Development, service and licensing revenue  206   322   126   252 
Total revenue  47,619   35,188   25,988   19,123 
Cost of revenue:                
Cost of product revenue  22,834   16,901   12,339   8,901 
Cost of development, service and licensing revenue  95   96   57   59 
Total cost of revenue  22,929   16,997   12,396   8,960 
Gross profit  24,690   18,191   13,592   10,163 
Operating expenses:                
Research and development  11,160   8,184   5,726   4,023 
Sales and marketing  10,318   6,379   5,288   3,333 
General and administrative  4,858   3,151   2,356   1,597 
Total operating expenses  26,336   17,714   13,370   8,953 
Income (loss) from operations  (1,646)  477   222   1,210 
Interest expense and other income (expense), net                
Interest expense  (977)  (445)  (490)  (230)
Other income (expense), net  94   86   54   24 
Total interest expense and other income (expense), net  (883)  (359)  (436)  (206)
Income (loss) before tax expense  (2,529)  118   (214)  1,004 
Income tax expense  (55)  (49)  (40)  (30)
Net income (loss) $(2,584) $69  $(254) $974 
Less: Accretion of preferred stock  (5,650)  (5,650)  (2,825)  (2,825)
Net loss attributable to common stockholders—basic and diluted $(8,234) $(5,581) $(3,079) $(1,851)
Net loss per share attributable to common stockholders—basic and diluted $(1.92) $(1.48) $(0.71) $(0.48)
Weighted—average shares used to compute net loss per share attributable to common stockholders—basic and diluted  4,294   3,766   4,321   3,845 


    
IMPINJ, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
    
  Six Months Ended 
  June 30, 
  2016  2015 
Operating activities:        
Net income (loss) $(2,584) $69 
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities:        
Depreciation and amortization  1,483   839 
Amortization of debt issuance costs  84   64 
Revaluation of warrant liability  (93)  (71)
Stock-based compensation  662   600 
Changes in operating assets and liabilities:        
Accounts receivable  (2,734)  (3,313)
Inventory  (7,391)  (4,390)
Prepaid expenses and other assets  (621)  (166)
Deferred revenue  (53)  105 
Deferred rent  44   (375)
Accounts payable  4,291   2,821 
Accrued compensation and benefits  (235)  77 
Accrued liabilities  829   53 
Net cash provided by (used in) operating activities  (6,318)  (3,687)
Investing activities:        
Purchases of property and equipment  (1,048)  (436)
Net cash used in investing activities  (1,048)  (436)
Financing activities:        
Payments on capital lease financing obligations  (622)  (335)
Payments on term loans  (45,733)  (598)
Proceeds from term loans  57,934   4,009 
Proceeds from issuance of common stock upon exercise of stock options  358   282 
Proceeds from issuance of preferred stock upon exercise of warrants  57    
Payments of deferred offering costs  (317)   
Net cash provided by (used in) financing activities  11,677   3,358 
Net increase (decrease) in cash and cash equivalents  4,311   (765)
Cash and cash equivalents        
Beginning of period  10,121   6,939 
End of period $14,432  $6,174 

 

                 
IMPINJ, INC.
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except per share data, unaudited)
                 
  Six Months Ended  Three Months Ended 
  June 30,  June 30, 
  2016  2015  2016  2015 
GAAP Gross Margin  51.8%  51.7%  52.3%  53.1%
Adjustments:                
Depreciation and amortization  1.1%  1.2%  1.0%  1.3%
Stock-based compensation  0.1%  0.1%  0.1%  0.1%
Non-GAAP Gross Margin  53.0%  53.0%  53.4%  54.4%
 
 
  Six Months Ended  Three Months Ended 
  June 30,  June 30, 
  2016  2015  2016  2015 
GAAP Research and development expense $11,160  $8,184  $5,726  $4,023 
Adjustments:                
Depreciation and amortization  (563)  (209)  (300)  (107)
Stock-based compensation  (134)  (183)  (66)  (81)
Non-GAAP Research and development expense $10,463  $7,792  $5,360  $3,835 
                 
 
  Six Months Ended  Three Months Ended 
  June 30,  June 30, 
  2016  2015  2016  2015 
GAAP Sales and marketing expense $10,318  $6,379  $5,288  $3,333 
Adjustments:                
Depreciation and amortization  (261)  (130)  (131)  (66)
Stock-based compensation  (411)  (317)  (206)  (173)
Non-GAAP Sales and marketing expense $9,646  $5,932  $4,951  $3,094 
 
 
  Six Months Ended  Three Months Ended 
  June 30,  June 30, 
  2016  2015  2016  2015 
GAAP General and administrative expense $4,858  $3,151  $2,356  $1,597 
Adjustments:                
Depreciation and amortization  (107)  (46)  (55)  (23)
Stock-based compensation  (106)  (79)  (51)  (32)
Non-GAAP General and administrative expense $4,645  $3,026  $2,250  $1,542 
 
 
  Six Months Ended  Three Months Ended 
  June 30,  June 30, 
  2016  2015  2016  2015 
GAAP Total operating expense $26,336  $17,714  $13,370  $8,953 
Adjustments:                
Depreciation and amortization  (931)  (385)  (486)  (196)
Stock-based compensation  (651)  (579)  (323)  (286)
Non-GAAP Total operating expense $24,754  $16,750  $12,561  $8,471 

 

                 
IMPINJ, INC.
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(in thousands, except per share data, unaudited)
                 
  Six Months Ended  Three Months Ended 
  June 30,  June 30, 
  2016  2015  2016  2015 
GAAP Net Income $(2,584) $69  $(254) $974 
Adjustments:                
Depreciation and amortization  1,483   840   770   426 
Stock-based compensation  662   600   328   294 
Interest expense and other income (expense), net  883   359   436   206 
Income tax expense  55   49   40   30 
Adjusted EBITDA $499  $1,917  $1,320  $1,930 
                 
                 
  Six Months Ended  Three Months Ended 
  June 30,  June 30, 
  2016  2015  2016  2015 
GAAP Net Income $(2,584) $69  $(254) $974 
Adjustments:                
Depreciation and amortization  1,483   840   770   426 
Stock-based compensation  662   600   328   294 
Non-cash interest expense  84   -   37   - 
Change in the fair value of preferred stock warrant liability  (91)  (71)  (38)  (24)
Non-cash income tax expense  40   21   25   2 
Non-GAAP Net Income $(406) $1,459  $868  $1,672 
                 
                 
  Six Months Ended  Three Months Ended 
  June 30,  June 30, 
  2016  2015  2016  2015 
GAAP Weighted—average shares used to compute net loss per share attributable to common stockholders—basic and diluted  4,294   3,766   4,321   3,845 
Adjustments:                
Shares of common stock issuable upon conversion of mandatorily redeemable convertible preferred stock  8,526   8,522   8,530   8,522 
Non-GAAP Weighted—average shares used to compute net loss per share attributable to common stockholders—basic  12,820   12,288   12,851   12,367 
Effects of potentially dilutive securities                
Warrants to purchase common stock  -   15   18   16 
Warrants to purchase mandatorily redeemable convertible preferred stock  -   -   44   - 
Weighted-average unvested shares of common stock subject to repurchase  -   169   147   169 
Stock Options  -   1,101   859   1,174 
Non-GAAP Weighted—average shares used to compute net loss per share attributable to common stockholders—diluted  12,820   13,573   13,919   13,726 
                 
                 
  Six Months Ended  Three Months Ended 
  June 30,  June 30, 
  2016  2015  2016  2015 
Non-GAAP earnings per share—basic $(0.03) $0.12  $0.07  $0.14 
Non-GAAP earnings per share—diluted $(0.03) $0.11  $0.06  $0.12 
                 



            

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