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Impinj Announces Fourth Quarter and Full Year 2017 Financial Results

SEATTLE, Feb. 15, 2018 (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 fourth quarter and full year ended Dec. 31, 2017. Revenue in the fourth quarter of 2017 was $26.9 million, less than the $29.0 to $30.0 million range shared in the February 1 preliminary announcement. The decrease is due to Impinj agreeing to a partner’s request for a one-time product exchange after the preliminary revenue estimates were previously announced, requiring an accounting reserve in the fourth quarter of 2017. Impinj expects to recognize the revenue in the first quarter of 2018 when the exchange is completed. As a result, Impinj is increasing the revenue outlook for the first quarter of 2018 by $3.25 million, to between $23.25 and $25.25 million.

“Our fourth quarter revenue included strong fixed-reader unit-volume growth of 42% year-over-year,” said Chris Diorio, Impinj co-founder and CEO. "As we announced earlier this month, we anticipate softness in our first-quarter 2018 endpoint IC volumes and revenue due to shortened lead times contributing to a reduction in our order backlog, as well as ongoing reductions in inlay-partner inventory,” Diorio continued. “We remain confident in our market opportunity, position, and in our vision of identifying, locating and authenticating every item in our everyday world, and connecting every one of those items to the cloud.”

Fourth Quarter 2017 Financial Summary

  • Revenue declined 20% year-over-year to $26.9 million
  • GAAP gross margin of 48.4%; non-GAAP gross margin of 50.5%
  • GAAP net loss of $9.3 million, or loss of $0.45 per basic and diluted share using 20.9 million shares
  • Adjusted EBITDA loss of $5.8 million
  • Non-GAAP net loss of $5.9 million, or loss of $0.28 per diluted share using 20.9 million shares

Full Year 2017 Financial Summary

  • Revenue grew 12% year-over-year to $125.3 million
  • GAAP gross margin of 51.8%; non-GAAP gross margin of 53.4%
  • GAAP net loss of $17.3 million, or a loss of $0.84 per basic and diluted share using 20.7 million shares
  • Adjusted EBITDA loss of $5.6 million
  • Non-GAAP net loss of $6.1 million, or loss of $0.29 per diluted share using 20.7 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.

First Quarter 2018 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 first quarter of 2018 (in millions, except per share data):

    Three Months Ended
    March 31,
    2018
Revenue   $23.25 to $25.25
GAAP Net income (loss)   $(15.5) to $(14.0)
Adjusted EBITDA   $(7.5) to $(6.0)
Non-GAAP net income (loss)   $(8.9) to $(7.4)
GAAP Weighted-average shares outstanding — basic and diluted   21.0 to 21.4
GAAP Net income (loss) per share — basic and diluted   $(0.74) to $(0.65)
Non-GAAP Weighted-average shares outstanding — basic and diluted   21.0 to 21.4
Non-GAAP Net income (loss) per share — basic and diluted   $(0.42) to $(0.35)

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, Feb. 15, 2018 at 5:00 p.m. ET / 2:00 p.m. PT for analysts and investors to discuss the company’s fourth quarter and full year 2017 results as well as its outlook for its first quarter of 2018. 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 10115853.

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, and financial outlook for the first quarter of 2018. 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 are 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. 

 

 

IMPINJ, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value, unaudited)
             
    December 31,     December 31,  
    2017     2016  
Assets:                
Current assets:                
Cash and cash equivalents   $ 19,285     $ 33,636  
Short-term investments     38,831       66,905  
Accounts receivable, net     22,244       17,447  
Inventory     47,083       27,734  
Prepaid expenses and other current assets     2,359       3,004  
Total current assets     129,802       148,726  
Property and equipment, net     18,110       14,929  
Other non-current assets     241        
Goodwill and other intangible assets, net     3,881       3,881  
Total assets   $ 152,034     $ 167,536  
Liabilities and stockholders' equity:                
Current liabilities:                
Accounts payable   $ 4,666     $ 7,166  
Accrued compensation and employee related benefits     5,729       7,647  
Accrued liabilities     3,162       6,098  
Current portion of long-term debt     4,088       2,589  
Current portion of capital lease obligations     936       1,130  
Current portion of deferred rent     628       306  
Current portion of deferred revenue     714       445  
Total current liabilities     19,923       25,381  
Long-term debt, net of current portion     5,500       9,676  
Capital lease obligations, net of current portion     745       1,698  
Long-term liabilities — other     532       770  
Deferred rent, net of current portion     5,891       5,022  
Deferred revenue, net of current portion     501       966  
Total liabilities     33,092       43,513  
Stockholders' equity:                
Preferred stock, $0.001 par value — 5,000 shares authorized, no shares issued and outstanding at December 31, 2017 and December 31, 2016            
Common stock, $0.001 par value — 495,000 shares authorized, 20,973 and 20,336 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively     21       20  
Additional paid-in capital     323,482       311,216  
Accumulated other comprehensive income (loss)     (36 )     (10 )
Accumulated deficit     (204,525 )     (187,203 )
Total stockholders' equity     118,942       124,023  
Total liabilities and stockholders' equity   $ 152,034     $ 167,536  


IMPINJ, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data, unaudited)
           
    Three Months Ended     Year Ended
    December 31,     December 31,
    2017     2016     2017     2016    
Revenue   $ 26,863     $ 33,655     $ 125,300     $ 112,287    
Cost of revenue     13,854       15,267       60,359       52,834    
Gross profit     13,009       18,388       64,941       59,453    
Operating expenses:                                  
Research and development     8,912       7,403       32,220       25,185    
Sales and marketing     9,092       6,428       31,579       22,330    
General and administrative     4,529       4,212       18,161       12,426    
Total operating expenses     22,533       18,043       81,960       59,941    
Income (loss) from operations     (9,524 )     345       (17,019 )     (488 )  
Interest income (expense) and other income (expense), net:                                  
Interest expense     (4 )     (311 )     (908 )     (1,633 )  
Interest income and other income (expense), net     (55 )     139       508       616    
Total interest income (expense) and other, net     (59 )     (172 )     (400 )     (1,017 )  
Income (loss) before tax expense     (9,583 )     173       (17,419 )     (1,505 )  
Income tax benefit (expense)     249       (70 )     97       (168 )  
Net income (loss)   $ (9,334 )   $ 103     $ (17,322 )   $ (1,673 )  
Less: Accretion of preferred stock                       (6,258 )  
Net income (loss) attributable to common stockholders   $ (9,334 )   $ 103     $ (17,322 )   $ (7,931 )  
Net income (loss) per share attributable to common stockholders:                                  
Basic   $ (0.45 )   $ 0.01     $ (0.84 )   $ (0.74 )  
Diluted   $ (0.45 )   $ 0.01     $ (0.84 )   $ (0.74 )  
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:                                  
Basic     20,907       19,078       20,680       10,778    
Diluted     20,907       20,667       20,680       10,778    

 

IMPINJ, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands, unaudited)
             
    Three Months Ended     Year Ended  
    December 31,     December 31,  
    2017     2016     2017     2016  
Net income (loss)   $ (9,334 )   $ 103     $ (17,322 )   $ (1,673 )
Other comprehensive income (loss):                                
Unrealized gains (losses) on investments     (19 )     (10 )     (26 )     (10 )
Total other comprehensive income (loss)     (19 )     (10 )     (26 )     (10 )
Comprehensive income (loss)   $ (9,353 )   $ 93     $ (17,348 )   $ (1,683 )



IMPINJ, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
       
    Year Ended  
    December 31,  
    2017     2016  
Operating activities:                
Net income (loss)   $ (17,322 )   $ (1,673 )
Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities:                
Depreciation and amortization     3,950       2,869  
Amortization and write-off of debt issuance costs     95       239  
Amortization of premium on short-term investments     70       31  
Revaluation of warrant liability           (559 )
Stock-based compensation     7,428       2,765  
Changes in operating assets and liabilities:                
Accounts receivable     (4,822 )     (4,515 )
Inventory     (19,349 )     (15,897 )
Prepaid expenses and other assets     439       (1,759 )
Deferred revenue     (196 )     17  
Deferred rent     1,191       86  
Accounts payable     (2,836 )     3,883  
Accrued compensation and benefits     (1,735 )     3,462  
Accrued liabilities     (2,799 )     1,554  
Net cash provided by (used in) operating activities     (35,886 )     (9,497 )
Investing activities:                
Purchases of investments     (49,125 )     (67,103 )
Proceeds from maturities of investments     77,075        
Purchases of property and equipment     (6,552 )     (3,530 )
Net cash provided by (used in) investing activities     21,398       (70,633 )
Financing activities:                
Proceeds from initial public offering, net of offering costs           108,096  
Payments on capital lease financing obligations     (1,147 )     (1,229 )
Payments on term loans     (2,772 )     (65,320 )
Proceeds from term loans           61,436  
Proceeds from exercise of stock options and employee stock purchase plan     4,656       600  
Proceeds from issuance of preferred stock upon exercise of warrants           62  
Payments of deferred offering costs     (600 )      
Net cash provided by (used in) financing activities     137       103,645  
Net increase (decrease) in cash and cash equivalents     (14,351 )     23,515  
Cash and cash equivalents:                
Beginning of period     33,636       10,121  
End of period   $ 19,285     $ 33,636  


 

IMPINJ, INC.
RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
 (in thousands, except percentages, unaudited)
             
    Three Months Ended     Year Ended  
    December 31,     December 31,  
    2017     2016     2017     2016  
GAAP Gross Profit   $ 13,009     $ 18,388     $ 64,941     $ 59,453  
Adjustments:                                
Depreciation and amortization     465       281       1,738       1,059  
Stock-based compensation     86       57       231       96  
Non-GAAP Gross Profit   $ 13,560     $ 18,726     $ 66,910     $ 60,608  
                                 
GAAP Gross Margin     48.4 %     54.6 %     51.8 %     52.9 %
Adjustments:                                
Depreciation and amortization     1.7 %     0.8 %     1.4 %     0.9 %
Stock-based compensation     0.3 %     0.2 %     0.2 %     0.1 %
Non-GAAP Gross Margin     50.5 %     55.6 %     53.4 %     53.9 %
                                 
GAAP Research and development expense   $ 8,912     $ 7,403     $ 32,220     $ 25,185  
Adjustments:                                
Depreciation and amortization     (369 )     (285 )     (1,329 )     (1,126 )
Stock-based compensation     (881 )     (567 )     (2,431 )     (983 )
Non-GAAP Research and development expense   $ 7,662     $ 6,551     $ 28,460     $ 23,076  
                                 
GAAP Sales and marketing expense   $ 9,092     $ 6,428     $ 31,579     $ 22,330  
Adjustments:                                
Depreciation and amortization     (150 )     (108 )     (523 )     (475 )
Stock-based compensation     (1,013 )     (535 )     (3,113 )     (1,289 )
Non-GAAP Sales and marketing expense   $ 7,929     $ 5,785     $ 27,943     $ 20,566  
                                 
GAAP General and administrative expense   $ 4,529     $ 4,212     $ 18,161     $ 12,426  
Adjustments:                                
Depreciation and amortization     (98 )     (52 )     (360 )     (209 )
Stock-based compensation     (685 )     (189 )     (1,653 )     (397 )
Non-GAAP General and administrative expense   $ 3,746     $ 3,971     $ 16,148     $ 11,820  
                                 
GAAP Total operating expense   $ 22,533     $ 18,043     $ 81,960     $ 59,941  
Adjustments:                                
Depreciation and amortization     (617 )     (445 )     (2,212 )     (1,810 )
Stock-based compensation     (2,579 )     (1,291 )     (7,197 )     (2,669 )
Non-GAAP Total operating expense   $ 19,337     $ 16,307     $ 72,551     $ 55,462  

 

IMPINJ, INC.
RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data, unaudited)
             
    Three Months Ended     Year Ended  
    December 31,     December 31,  
    2017     2016     2017     2016  
GAAP Interest income (expense) and other income (expense), net   $ (59 )   $ (172 )   $ (400 )   $ (1,017 )
Adjustments:                                
Non-cash interest expense     23       19       95       130  
Change in the fair value of preferred stock warrant liability                       (559 )
Write-off of unamortized debt issuance costs                       109  
Non-GAAP Interest income (expense) and other income (expense), net   $ (36 )   $ (153 )   $ (305 )   $ (1,337 )
                                 
GAAP Income tax benefit (expense)   $ 249     $ (70 )   $ 97     $ (168 )
Adjustments:                                
Non-cash income tax benefit (expense)     (297 )     23       (231 )     91  
Non-GAAP Income tax benefit (expense)   $ (48 )   $ (47 )   $ (134 )   $ (77 )
                                 
GAAP Net Income   $ (9,334 )   $ 103     $ (17,322 )   $ (1,673 )
Adjustments:                                
Depreciation and amortization     1,082       726       3,950       2,869  
Stock-based compensation     2,665       1,348       7,428       2,765  
Interest income (expense) and other income (expense), net     59       172       400       1,017  
Income tax benefit (expense)     (249 )     70       (97 )     168  
Adjusted EBITDA   $ (5,777 )   $ 2,419     $ (5,641 )   $ 5,146  
                                 
GAAP Net Income   $ (9,334 )   $ 103     $ (17,322 )   $ (1,673 )
Adjustments:                                
Depreciation and amortization     1,082       726       3,950       2,869  
Stock-based compensation     2,665       1,348       7,428       2,765  
Non-cash interest expense     23       19       95       130  
Change in the fair value of preferred stock warrant liability                       (559 )
Write-off of unamortized debt issuance costs                       109  
Non-cash income tax benefit (expense)     (297 )     23       (231 )     91  
Non-GAAP Net income   $ (5,861 )   $ 2,219     $ (6,080 )   $ 3,732  
Non-GAAP Net income per share:                                
Basic   $ (0.28 )   $ 0.12     $ (0.29 )   $ 0.24  
Diluted   $ (0.28 )   $ 0.11     $ (0.29 )   $ 0.22  

 

IMPINJ, INC.
RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(in thousands, unaudited)
             
    Three Months Ended     Year Ended  
    December 31,     December 31,  
    2017     2016     2017     2016  
Weighted-average shares used to compute GAAP net income (loss) per share attributable to common stockholders — basic     20,907       19,078       20,680       10,778  
Adjustments:                                
Weighted-average shares of common stock issuable upon conversion of mandatorily redeemable convertible preferred stock                       4,685  
Weighted-average shares used to compute non-GAAP net income per share — basic     20,907       19,078       20,680       15,463  
                                 
Weighted-average shares used to compute GAAP net income (loss) per share attributable to common stockholders — diluted     20,907       20,667       20,680       10,778  
Weighted-average shares of common stock issuable upon conversion of mandatorily redeemable convertible preferred stock                       4,685  
Adjustments:                                
Effects of dilutive securities                                
Warrants to purchase common stock                       9  
Warrants to purchase mandatorily redeemable convertible preferred stock                       19  
Unvested shares of common stock subject to repurchase                       118  
Stock awards                       1,150  
Weighted-average shares used to compute non-GAAP net income per share — diluted     20,907       20,667       20,680       16,759  



IMPINJ, INC.
RECONCILIATIONS OF GAAP FINANCIAL OUTLOOK TO NON-GAAP FINANCIAL OUTLOOK
(in thousands, except per share data, unaudited)
       
    Three Months Ended  
    March 31,  
    2018  
GAAP Net income (loss)   $ (14,700 )
Adjustments:        
Forecasted Depreciation and amortization     1,100  
Forecasted Stock-based compensation     2,700  
Forecasted Interest income (expense) and other income (expense), net     75  
Forecasted Income tax expense     75  
Forecasted Restructuring costs     4,000  
Adjusted EBITDA   $ (6,750 )
         
GAAP Net income (loss)   $ (14,700 )
Adjustments:        
Forecasted Depreciation and amortization     1,100  
Forecasted Stock-based compensation     2,700  
Forecasted Non-cash interest expense     25  
Forecasted Non-cash income tax expense     25  
Forecasted Non-cash restructuring costs     2,700  
Non-GAAP Net income (loss)     (8,150 )
Non-GAAP Net income per share — basic and diluted   $ (0.38 )
         
Weighted-average shares used to compute GAAP net income (loss) per share attributable to common stockholders — basic and diluted     21,200  
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     21,200  


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

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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.