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Impinj Announces Third Quarter 2017 Financial Results

SEATTLE, Nov. 01, 2017 (GLOBE NEWSWIRE) -- Impinj, Inc. (NASDAQ:PI), a leading provider and pioneer of RAIN RFID solutions for identifying, locating and authenticating everyday items, today announced its financial results for the third quarter ended Sept. 30, 2017.

“We delivered a solid third quarter with strong reader and gateway volume growth,” said Chris Diorio, Impinj co-founder and CEO. “Our 2017 endpoint IC unit guidance remains unchanged at between 7.0 and 7.2 billion units. We see indicators of growing adoption for RAIN, and the Impinj platform, however, we expect to see a slight decrease in endpoint IC volumes in the second half of the year. We remain confident in our market opportunity and will continue investing in and delivering solutions and enterprise partnerships that leverage our platform, accelerate adoption and drive scale in this gigantic market opportunity.”

Third Quarter 2017 Financial Summary

  • Revenue grew 5% year-over-year to $32.6 million
  • GAAP gross margin of 52.1%; non-GAAP gross margin of 53.7%
  • GAAP net loss of $4.9 million, or loss of $0.23 per basic and diluted share using 20.8 million shares
  • Adjusted EBITDA loss of $1.5 million
  • Non-GAAP net loss of $1.6 million, or loss of $0.08 per diluted share using 20.8 million shares

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

Fourth Quarter 2017 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 2017 (in millions, except per share data):

    Three Months Ended
    December 31,
    2017
Revenue   $28.25 to $29.75
GAAP Net income (loss)   $(8.75) to $(7.25)
Adjusted EBITDA   $(4.85) to $(3.35)
Non-GAAP net income (loss)   $(4.95) to $(3.45)
GAAP Weighted-average shares outstanding — basic and diluted   20.9 to 21.4
GAAP Net income (loss) per share — basic and diluted   $(0.42) to $(0.34)
Non-GAAP Weighted-average shares outstanding — basic and diluted   20.9 to 21.4
Non-GAAP Net income (loss) per share — basic and diluted   $(0.24) to $(0.16)
     

Impinj has reconciled guidance provided as non-GAAP measures to their most directly comparable GAAP measures in the tables provided below.

Conference Call Information

Impinj will host a conference call and webcast today, Nov. 1, 2017 at 5:00 p.m. ET / 2:00 p.m. PT for analysts and investors to discuss the company’s third quarter 2017 results as well as its outlook for its fourth quarter 2017. 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 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 10111865.

Management’s prepared written remarks, along with quarterly financial data for the last eight quarters, will be made available on the company’s 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, financial outlook for the fourth quarter of 2017 and our outlook regarding 2017 endpoint IC volumes. 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.

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which we have 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. 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. We believe these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain income, expenses and expenditures that not considered to 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. 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.

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, 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.

Contacts:
Investor Relations
Maria Riley & Chelsea Lish
The Blueshirt Group
ir@impinj.com
+1-206-315-4470

Media Relations
Gaylene Meyer
Sr. Director Communications
gmeyer@impinj.com
+1-206-812-9816

IMPINJ, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value, unaudited)

    September 30,       December 31,  
    2017     2016  
Assets:                
Current assets:                
Cash and cash equivalents   $ 17,558     $ 33,636  
Short-term investments     44,916       66,905  
Accounts receivable, net     25,610       17,447  
Inventory     45,817       27,734  
Prepaid expenses and other current assets     2,585       3,004  
Total current assets     136,486       148,726  
Property and equipment, net     17,715       14,929  
Other non-current assets     171        
Goodwill and other intangible assets, net     3,881       3,881  
Total assets   $ 158,253     $ 167,536  
Liabilities and stockholders' equity:                
Current liabilities:                
Accounts payable   $ 2,843     $ 7,166  
Accrued compensation and employee related benefits     3,770       7,647  
Accrued liabilities     5,227       6,098  
Current portion of long-term debt     4,083       2,589  
Current portion of capital lease obligations     1,017       1,130  
Current portion of deferred rent     536       306  
Current portion of deferred revenue     756       445  
Total current liabilities     18,232       25,381  
Long-term debt, net of current portion     6,524       9,676  
Capital lease obligations, net of current portion     964       1,698  
Long-term liabilities — other     836       770  
Deferred rent, net of current portion     5,769       5,022  
Deferred revenue, net of current portion     485       966  
Total liabilities     32,810       43,513  
Stockholders' equity:                
Preferred stock, $0.001 par value — 5,000 shares authorized, no shares issued and outstanding at September 30, 2017 and December 31, 2016            
Common stock, $0.001 par value — 495,000 shares authorized, 20,955 and 20,336 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively     21       20  
Additional paid-in capital     320,630       311,216  
Accumulated other comprehensive income (loss)     (17 )     (10 )
Accumulated deficit     (195,191 )     (187,203 )
Total stockholders' equity     125,443       124,023  
Total liabilities and stockholders' equity   $ 158,253     $ 167,536  
 


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

    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2017     2016     2017     2016  
Revenue   $ 32,599     $ 31,013     $ 98,437     $ 78,632  
Cost of revenue     15,606       14,638       46,505       37,567  
Gross profit     16,993       16,375       51,932       41,065  
Operating expenses:                                
Research and development     8,846       6,622       23,308       17,782  
Sales and marketing     8,107       5,584       22,487       15,902  
General and administrative     4,723       3,356       13,632       8,214  
Total operating expenses     21,676       15,562       59,427       41,898  
Income (loss) from operations     (4,683 )     813       (7,495 )     (833 )
Interest income (expense) and other income (expense), net     (118 )     38       (341 )     (845 )
Income (loss) before tax expense     (4,801 )     851       (7,836 )     (1,678 )
Income tax expense     (50 )     (43 )     (152 )     (98 )
Net income (loss)   $ (4,851 )   $ 808     $ (7,988 )   $ (1,776 )
Less: Accretion of preferred stock           (608 )           (6,258 )
Net income (loss) attributable to common stockholders   $ (4,851 )   $ 200     $ (7,988 )   $ (8,034 )
Net income (loss) per share attributable to common stockholders — basic and diluted   $ (0.23 )   $ 0.01     $ (0.39 )   $ (1.01 )
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:                                
Basic     20,826       15,318       20,604       7,991  
Diluted     20,826       16,859       20,604       7,991  
                                 


IMPINJ, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands, unaudited)

    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2017     2016     2017     2016  
Net income (loss)   $ (4,851 )   $ 808     $ (7,988 )   $ (1,776 )
Other comprehensive income (loss):                                
Unrealized gains (losses) on investments     33             (7 )      
Total other comprehensive income (loss)     33             (7 )      
Comprehensive income (loss)   $ (4,818 )   $ 808     $ (7,995 )   $ (1,776 )
 


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

    Nine Months Ended  
    September 30,  
    2017     2016  
Operating activities:                
Net income (loss)   $ (7,988 )   $ (1,776 )
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities:                
Depreciation and amortization     2,868       2,143  
Amortization and write-off of debt issuance costs     72       220  
Amortization of premium on short-term investments     120        
Revaluation of warrant liability           (559 )
Stock-based compensation     4,763       1,417  
Changes in operating assets and liabilities:                
Accounts receivable     (8,138 )     (4,617 )
Inventory     (18,083 )     (8,649 )
Prepaid expenses and other assets     278       (479 )
Deferred revenue     (170 )     (27 )
Deferred rent     977       79  
Accounts payable     (4,125 )     377  
Accrued compensation and benefits     (3,745 )     1,118  
Accrued liabilities     117       1,254  
Net cash provided by (used in) operating activities     (33,054 )     (9,499 )
Investing activities:                
Purchases of investments     (28,887 )     (14,116 )
Proceeds from maturities of investments     50,726        
Purchases of property and equipment     (6,156 )     (2,327 )
Net cash provided by (used in) investing activities     15,683       (16,443 )
Financing activities:                
Proceeds from initial public offering, net of offering costs           68,808  
Payments on capital lease financing obligations     (847 )     (954 )
Payments on term loans     (1,730 )     (65,233 )
Proceeds from term loans           60,517  
Proceeds from exercise of stock options and employee stock purchase plan     4,520       556  
Proceeds from issuance of preferred stock upon exercise of warrants           62  
Payments of deferred offering costs     (650 )      
Net cash provided by (used in) financing activities     1,293       63,756  
Net increase (decrease) in cash and cash equivalents     (16,078 )     37,814  
Cash and cash equivalents                
Beginning of period     33,636       10,121  
End of period   $ 17,558     $ 47,935  
 


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,  
    2017     2016     2017     2016  
GAAP Gross Profit   $ 16,993     $ 16,375     $ 51,932     $ 41,065  
Adjustments:                                
Depreciation and amortization     450       225       1,273       778  
Stock-based compensation     62       28       145       39  
Non-GAAP Gross Profit   $ 17,505     $ 16,628     $ 53,350     $ 41,882  
                                 
GAAP Gross Margin     52.1 %     52.8 %     52.8 %     52.2 %
Adjustments:                                
Depreciation and amortization     1.4 %     0.7 %     1.3 %     1.0 %
Stock-based compensation     0.2 %     0.1 %     0.1 %     0.0 %
Non-GAAP Gross Margin     53.7 %     53.6 %     54.2 %     53.2 %
                                 
GAAP Research and development expense   $ 8,846     $ 6,622     $ 23,308     $ 17,782  
Adjustments:                                
Depreciation and amortization     (343 )     (278 )     (960 )     (841 )
Stock-based compensation     (652 )     (282 )     (1,550 )     (416 )
Non-GAAP Research and development expense   $ 7,851     $ 6,062     $ 20,798     $ 16,525  
                                 
GAAP Sales and marketing expense   $ 8,107     $ 5,584     $ 22,487     $ 15,902  
Adjustments:                                
Depreciation and amortization     (128 )     (106 )     (373 )     (367 )
Stock-based compensation     (921 )     (343 )     (2,100 )     (754 )
Non-GAAP Sales and marketing expense   $ 7,058     $ 5,135     $ 20,014     $ 14,781  
                                 
GAAP General and administrative expense   $ 4,723     $ 3,356     $ 13,632     $ 8,214  
Adjustments:                                
Depreciation and amortization     (100 )     (50 )     (262 )     (157 )
Stock-based compensation     (505 )     (102 )     (968 )     (208 )
Non-GAAP General and administrative expense   $ 4,118     $ 3,204     $ 12,402     $ 7,849  
                                 
GAAP Total operating expense   $ 21,676     $ 15,562     $ 59,427     $ 41,898  
Adjustments:                                
Depreciation and amortization     (571 )     (434 )     (1,595 )     (1,365 )
Stock-based compensation     (2,078 )     (727 )     (4,618 )     (1,378 )
Non-GAAP Total operating expense   $ 19,027     $ 14,401     $ 53,214     $ 39,155  
 

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,  
    2017     2016     2017     2016  
GAAP Interest income (expense) and other income (expense), net   $ (118 )   $ 38     $ (341 )   $ (845 )
Adjustments:                                
Non-cash interest expense     24       27       72       111  
Change in the fair value of preferred stock warrant liability           (468 )           (559 )
Write-off of unamortized debt issuance costs           109             109  
Non-GAAP Interest income (expense) and other income (expense), net   $ (94 )   $ (294 )   $ (269 )   $ (1,184 )
                                 
GAAP Income tax expense   $ (50 )   $ (43 )   $ (152 )   $ (98 )
Adjustments:                                
Non-cash income tax expense     21       23       66       68  
Non-GAAP Income tax expense   $ (29 )   $ (20 )   $ (86 )   $ (30 )
                                 
GAAP Net Income   $ (4,851 )   $ 808     $ (7,988 )   $ (1,776 )
Adjustments:                                
Depreciation and amortization     1,021       659       2,868       2,143  
Stock-based compensation     2,140       755       4,763       1,417  
Interest income (expense) and other income (expense), net     118       (38 )     341       845  
Income tax expense     50       43       152       98  
Adjusted EBITDA   $ (1,522 )   $ 2,227     $ 136     $ 2,727  
                                 
GAAP Net Income   $ (4,851 )   $ 808     $ (7,988 )   $ (1,776 )
Adjustments:                                
Depreciation and amortization     1,021       659       2,868       2,143  
Stock-based compensation     2,140       755       4,763       1,417  
Non-cash interest expense     24       27       72       111  
Change in the fair value of preferred stock warrant liability           (468 )           (559 )
Write-off of unamortized debt issuance costs           109             109  
Non-cash income tax expense     21       23       66       68  
Non-GAAP Net income   $ (1,645 )   $ 1,913     $ (219 )   $ 1,513  
Non-GAAP Net income per share:                                
Basic   $ (0.08 )   $ 0.11     $ (0.01 )   $ 0.11  
Diluted   $ (0.08 )   $ 0.10     $ (0.01 )   $ 0.10  
 

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

    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2017     2016     2017     2016  
Weighted-average shares used to compute GAAP net income (loss) per share attributable to common stockholders — basic     20,826       15,318       20,604       7,991  
Adjustments:                                
Weighted-average shares of common stock issuable upon conversion of mandatorily redeemable convertible preferred stock           1,762             6,258  
Weighted-average shares used to compute non-GAAP net income per share — basic     20,826       17,080       20,604       14,249  
                                 
Weighted-average shares used to compute GAAP net income (loss) per share attributable to common stockholders — diluted     20,826       16,859       20,604       7,991  
Weighted-average shares of common stock issuable upon conversion of mandatorily redeemable convertible preferred stock           1,762             6,258  
Adjustments:                                
Effects of dilutive securities                                
Warrants to purchase common stock                       12  
Warrants to purchase mandatorily redeemable convertible preferred stock                       26  
Unvested shares of common stock subject to repurchase                       141  
Stock awards                       795  
Weighted-average shares used to compute non-GAAP net income per share — diluted     20,826       18,621       20,604       15,223  
 


IMPINJ, INC.
RECONCILIATIONS OF GAAP FINANCIAL OUTLOOK TO NON-GAAP FINANCIAL OUTLOOK
(in thousands, except per share data, unaudited)

    Three Months Ended  
    December 31,  
    2017  
GAAP Net income (loss)   $ (8,000 )
Adjustments:        
Forecasted Depreciation and amortization     1,200  
Forecasted Stock-based compensation     2,550  
Forecasted Interest income (expense) and other income (expense), net     100  
Forecasted Income tax expense     50  
Adjusted EBITDA   $ (4,100 )
         
GAAP Net income (loss)   $ (8,000 )
Adjustments:        
Forecasted Depreciation and amortization     1,200  
Forecasted Stock-based compensation     2,550  
Forecasted Non-cash interest expense     25  
Forecasted Non-cash income tax expense     25  
Non-GAAP Net income (loss)   $ (4,200 )
Non-GAAP Net income per share — basic and diluted   $ (0.20 )
         
Weighted-average shares used to compute GAAP net income (loss) per share attributable to common stockholders — basic and diluted     21,150  
Effects of dilutive securities        
Forecasted Unvested shares of common stock subject to repurchase      
Forecasted Stock awards      
Weighted-average shares used to compute non-GAAP net income per share — basic and diluted     21,150  
 

 

Impinj, Inc.
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Impinj is the leading provider of RAIN RFID solutions that provide Item Intelligence in the retail, pharmaceutical, healthcare, food and beverage, and many other industries.