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Impinj Announces First Quarter 2018 Financial Results

SEATTLE, Wash., May 07, 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 quarter ended March 31, 2018.

“Based on team execution, enhanced partner inventory visibility and positive bookings trends,” said Chris Diorio, Impinj co-founder and CEO, “we believe we are on track to make the first half of 2018 the turning point for our business.”

First Quarter 2018 Financial Summary

  • Revenue was $25.1 million
  • GAAP gross margin of 46.9%; non-GAAP gross margin of 49.2%
  • GAAP net loss of $14.4 million, or loss of $0.68 per basic and diluted share using 21.1 million shares
  • Adjusted EBITDA loss of $7.1 million
  • Non-GAAP net loss of $8.0 million, or loss of $0.38 per diluted share using 21.1 million shares, calculated using our historical methodology for non-GAAP net income; see "Non-GAAP Financial Measures" below for more information

A reconciliation between GAAP and non-GAAP and a description of the methodology we intend to use for calculating non-GAAP net loss for future periods is provided in the "Non-GAAP Financial Measures" section below.

Second 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 second quarter of 2018 (in millions, except per share data):

     
    Three Months Ended
    June 30,
    2018
Revenue   $25.0 to $27.0
GAAP Net loss (1)   $(12.1) to $(10.6)
Adjusted EBITDA   $(7.75) to $(6.25)
Non-GAAP Net loss   $(8.0) to $(6.5)
GAAP Weighted-average shares — basic and diluted   21.3 to 21.6
GAAP Net loss per share — basic and diluted (1)   $(0.57) to $(0.49)
Non-GAAP Weighted-average shares — basic and diluted   21.3 to 21.6
Non-GAAP Net loss per share — basic and diluted   $(0.38) to $(0.30)
     
(1) GAAP net loss guidance excludes the impact of forecasted stock-based compensation expense related to the voluntary stock option exchange offer announced on April 18, 2018.
 

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 and webcast today, May 7, 2018 at 5:00 p.m. ET / 2:00 p.m. PT for analysts and investors to discuss our first quarter 2018 results as well as its outlook for its second 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 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 10119247.

Management’s prepared written remarks, along with quarterly financial data for the last eight quarters, 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 second 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.

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
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)
             
    March 31,     December 31,  
    2018     2017  
Assets:                
Current assets:                
Cash and cash equivalents   $ 28,000     $ 19,285  
Short-term investments     29,873       38,831  
Accounts receivable, net     17,023       22,244  
Inventory     54,706       47,083  
Prepaid expenses and other current assets     1,846       2,359  
Total current assets     131,448       129,802  
Property and equipment, net     17,507       18,110  
Other non-current assets     208       241  
Goodwill and other intangible assets, net     3,881       3,881  
Total assets   $ 153,044     $ 152,034  
Liabilities and stockholders' equity:                
Current liabilities:                
Accounts payable   $ 4,499     $ 4,666  
Accrued compensation and employee related benefits     4,444       5,729  
Accrued liabilities     3,374       3,162  
Accrued restructuring costs     2,352        
Current portion of long-term debt           4,088  
Current portion of capital lease obligations     814       936  
Current portion of deferred rent     363       628  
Current portion of deferred revenue     586       714  
Total current liabilities     16,432       19,923  
Long-term debt, net of current portion     19,841       5,500  
Capital lease obligations, net of current portion     625       745  
Long-term liabilities — other     548       532  
Long-term restructuring liabilities     1,286        
Deferred rent, net of current portion     5,596       5,891  
Deferred revenue, net of current portion     156       501  
Total liabilities     44,484       33,092  
Stockholders' equity:                
Preferred stock, $0.001 par value — 5,000 shares authorized, no shares issued and outstanding at March 31, 2018 and December 31, 2017            
Common stock, $0.001 par value — 495,000 shares authorized, 21,332 and 20,973 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively     21       21  
Additional paid-in capital     327,562       323,482  
Accumulated other comprehensive loss     (56 )     (36 )
Accumulated deficit     (218,967 )     (204,525 )
Total stockholders' equity     108,560       118,942  
Total liabilities and stockholders' equity   $ 153,044     $ 152,034  
                 


       
IMPINJ, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data, unaudited)
       
    Three Months Ended  
    March 31,  
    2018     2017  
Revenue   $ 25,068     $ 31,727  
Cost of revenue     13,306       14,959  
Gross profit     11,762       16,768  
Operating expenses:                
Research and development     8,003       7,343  
Sales and marketing     8,859       7,336  
General and administrative     5,225       4,087  
Restructuring costs     3,927        
Total operating expenses     26,014       18,766  
Loss from operations     (14,252 )     (1,998 )
Other income (expense), net     90       269  
Interest expense     (229 )     (374 )
Loss before income taxes     (14,391 )     (2,103 )
Income tax expense     (51 )     (57 )
Net loss   $ (14,442 )   $ (2,160 )
Net loss per share — basic and diluted   $ (0.68 )   $ (0.11 )
Weighted-average shares outstanding — basic and diluted     21,125       20,344  
                 


             
IMPINJ, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands, unaudited)
             
    Three Months Ended     Three Months Ended  
    March 31,     March 31,  
    2018     2017     2018     2017  
Net loss   $ (14,442 )   $ (2,160 )   $ (14,442 )   $ (2,160 )
Other comprehensive loss, net of tax:                                
Unrealized losses on investments     (20 )     (36 )     (56 )     (36 )
Total other comprehensive loss     (20 )     (36 )     (56 )     (36 )
Comprehensive loss   $ (14,462 )   $ (2,196 )   $ (14,498 )   $ (2,196 )
                                 


       
IMPINJ, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
       
    Three Months Ended  
    March 31,  
    2018     2017  
Operating activities:                
Net loss   $ (14,442 )   $ (2,160 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation     1,120       874  
Stock-based compensation     2,065       1,370  
Restructuring costs     454        
Accretion of discount or amortization of premium on short-term investments     (60 )     59
 
Amortization of debt issuance costs     21       23
 
Changes in operating assets and liabilities:                
Accounts receivable     5,221       (3,630 )
Inventory     (7,623 )     (11,455 )
Prepaid expenses and other assets     561       543  
Deferred revenue     (473 )     139  
Deferred rent     (1,123 )     925  
Accounts payable     34       (50 )
Accrued compensation and benefits     (1,236 )     (3,406 )
Accrued liabilities     307       147  
Accrued restructuring costs     3,638        
Net cash used in operating activities     (11,536 )     (16,621 )
Investing activities:                
Purchases of investments     (8,857 )     (17,293 )
Proceeds from maturities of investments     17,850       7,861  
Purchases of property and equipment     (698 )     (1,220 )
Net cash provided by (used in) investing activities     8,295       (10,652 )
Financing activities:                
Payments on capital lease financing obligations     (242 )     (280 )
Payments on term loans     (2,147 )     (159 )
Proceeds from term loans, net of debt issuance costs     12,379        
Proceeds from exercise of stock options and employee stock purchase plan     1,966       1,983  
Payments of deferred offering costs           (600 )
Net cash provided by financing activities     11,956       944  
Net increase (decrease) in cash and cash equivalents     8,715       (26,329 )
Cash and cash equivalents                
Beginning of period     19,285       33,636  
End of period   $ 28,000     $ 7,307  
                 

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 the effects of stock-based compensation, depreciation, 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 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 the effects of stock-based compensation, depreciation, restructuring costs, other income (expense), net, interest expense and income tax expense. Restructuring costs relate to an effort in the first quarter of 2018 to reduce headcount and sublease office space to match strategic and financial objectives and optimize resources for long term growth. We believe that adjusted EBITDA provides meaningful supplemental information regarding our performance and liquidity.

Non-GAAP Net Income (Loss) (historical methodology)

Non-GAAP net income (loss) historically consisted of net income (loss) determined in accordance with GAAP, excluding the effects of stock-based compensation, depreciation, restructuring costs not anticipated to be paid in cash during the period (for more information about restructuring costs, please refer to description in adjusted EBITDA above), amortization of debt issuance costs and non-cash income tax 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 primarily consist of federal net operating loss carryforwards and federal research and experimentation credit carryforwards.

Non-GAAP Net Income (Loss) (new methodology)

We have redefined non-GAAP net income (loss) to consist of net income (loss) determined in accordance with GAAP, excluding the effects of stock-based compensation, depreciation, restructuring costs (for more information about restructuring costs, please refer to description in adjusted EBITDA above), amortization of debt issuance costs and non-cash income tax 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 primarily consist of federal net operating loss carryforwards and federal research and experimentation credit carryforwards. We have added back all of the net restructuring costs, whether or not cash was paid during the period, because of the non-recurring nature of restructuring costs. By better reflecting our future operating performance we believe this presentation will enhance comparability of our operating results.

       
IMPINJ, INC.
RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
 (in thousands, except percentages, unaudited)
       
    Three Months Ended  
    March 31,  
    2018     2017  
GAAP Gross profit   $ 11,762     $ 16,768  
Adjustments:                
Depreciation     500       385  
Stock-based compensation     83       46  
Non-GAAP Gross profit   $ 12,345     $ 17,199  
                 
GAAP Gross margin     46.9 %     52.9 %
Adjustments:                
Depreciation     2.0 %     1.2 %
Stock-based compensation     0.3 %     0.1 %
Non-GAAP Gross margin     49.2 %     54.2 %
                 
GAAP Research and development expense   $ 8,003     $ 7,343  
Adjustments:                
Depreciation     (385 )     (306 )
Stock-based compensation     (759 )     (483 )
Non-GAAP Research and development expense   $ 6,859     $ 6,554  
                 
GAAP Sales and marketing expense   $ 8,859     $ 7,336  
Adjustments:                
Depreciation     (129 )     (119 )
Stock-based compensation     (757 )     (607 )
Non-GAAP Sales and marketing expense   $ 7,973     $ 6,610  
                 
GAAP General and administrative expense   $ 5,225     $ 4,087  
Adjustments:                
Depreciation     (106 )     (64 )
Stock-based compensation     (466 )     (234 )
Non-GAAP General and administrative expense   $ 4,653     $ 3,789  
                 
GAAP Total operating expense   $ 26,014     $ 18,766  
Adjustments:                
Depreciation     (620 )     (489 )
Stock-based compensation     (1,982 )     (1,324 )
Restructuring costs     (3,927 )      
Non-GAAP Total operating expense   $ 19,485     $ 16,953  
                 


       
IMPINJ, INC.
RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(in thousands, except per share data, unaudited)
       
    Three Months Ended  
    March 31,  
    2018     2017  
GAAP Net loss   $ (14,442 )   $ (2,160 )
Adjustments:                
Depreciation     1,120       874  
Stock-based compensation     2,065       1,370  
Other (income) expense, net     (90 )     (269 )
Interest expense     229       374  
Income tax expense     51       57  
Restructuring costs     3,927        
Adjusted EBITDA   $ (7,140 )   $ 246  
                 
Reconciliation based on historical methodology                
GAAP Net loss   $ (14,442 )   $ (2,160 )
Adjustments:                
Depreciation     1,120       874  
Stock-based compensation     2,065       1,370  
Amortization of debt issuance costs     21       23  
Non-cash income tax expense     16       22  
Restructuring costs not paid in cash in period presented     3,184        
Non-GAAP Net income (loss)   $ (8,036 )   $ 129  
Non-GAAP Net income (loss) per share:                
Basic   $ (0.38 )   $ 0.01  
Diluted   $ (0.38 )   $ 0.01  
                 
Reconciliation based on new methodology                
GAAP Net loss   $ (14,442 )   $ (2,160 )
Adjustments:                
Depreciation     1,120       874  
Stock-based compensation     2,065       1,370  
Amortization of debt issuance costs     21       23  
Non-cash income tax expense     16       22  
Restructuring costs     3,927        
Non-GAAP Net income (loss)   $ (7,293 )   $ 129  
Non-GAAP Net income (loss) per share:                
Basic   $ (0.35 )   $ 0.01  
Diluted   $ (0.35 )   $ 0.01  
                 


       
IMPINJ, INC.
RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES
(in thousands, unaudited)
       
    Three Months Ended  
    March 31,  
    2018     2017  
GAAP and non-GAAP Weighted-average shares — basic     21,125       20,344  
                 
GAAP Weighted-average shares — diluted     21,125       20,344  
Adjustments:                
Effects of dilutive securities                
Unvested shares of common stock subject to repurchase           100  
Stock awards           1,244  
Non-GAAP Weighted-average shares — diluted     21,125       21,688  
                 


       
IMPINJ, INC.
RECONCILIATIONS OF GAAP FINANCIAL OUTLOOK TO NON-GAAP FINANCIAL OUTLOOK
(in thousands, except per share data, unaudited)
       
    Three Months Ended  
    June 30,  
    2018  
GAAP Net loss   $ (11,350 )
Adjustments:        
Forecasted Depreciation     1,550  
Forecasted Stock-based compensation     2,500  
Forecasted Other (income) expense, net     (90 )
Forecasted Interest expense     340  
Forecasted Income tax expense     50  
Adjusted EBITDA   $ (7,000 )
         
GAAP Net loss   $ (11,350 )
Adjustments:        
Forecasted Depreciation     1,550  
Forecasted Stock-based compensation     2,500  
Forecasted Amortization of debt issuance costs     25  
Forecasted Non-cash income tax expense     25  
Non-GAAP Net loss   $ (7,250 )
Non-GAAP Net loss per share — basic and diluted   $ (0.34 )
Weighted-average shares — basic and diluted     21,450  
         

 

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