Impinj Reports Fourth Quarter 2019 Financial Results

SEATTLE, Wash.--()--Impinj, Inc. (NASDAQ: PI), a leading provider and pioneer of RAIN RFID solutions, today released its financial results for the fourth quarter and year ended December 31, 2019.

“I am very pleased with Impinj's 2019 execution and results,” said Chris Diorio, Impinj co-founder and CEO. “We delivered three consecutive record revenue quarters and strengthened our balance sheet. We also introduced game-changing new products that solidified our platform and advanced our strategy. We enter 2020 with strong momentum and a solid foundation for our business.”

Fourth Quarter 2019 Financial Summary

  • Revenue of $40.8 million
  • GAAP gross margin of 48.8%; non-GAAP gross margin of 50.6%
  • GAAP net loss of $7.7 million, or loss of $0.35 per diluted share using 22.2 million shares
  • Adjusted EBITDA of $1.0 million
  • Non-GAAP net income of $0.8 million, or income of $0.03 per diluted share using 22.8 million shares

Full Year 2019 Financial Summary

  • Revenue of $152.8 million
  • GAAP gross margin of 48.4%; non-GAAP gross margin of 50.2%
  • GAAP net loss of $23.0 million, or loss of $1.05 per diluted share using 21.8 million shares
  • Adjusted EBITDA of $1.6 million
  • Non-GAAP net income of $0.9 million, or income of $0.04 per diluted share using 22.6 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.

First Quarter 2020 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 2020 (in millions, except per share data):

 

 

Three Months Ending

 

 

March 31, 2020

Revenue

 

$37.0 to $41.0

GAAP Net loss

 

($9.5) to ($8.5)

Adjusted EBITDA

 

($2.3) to $0.7

Non-GAAP net income (loss)

 

($2.5) to $0.5

GAAP Weighted-average shares — basic and diluted

 

22.35 to 22.45

GAAP Net loss per share — basic and diluted

 

($0.43) to ($0.38)

Non-GAAP Weighted-average shares — basic and diluted

 

22.35 to 23.20

Non-GAAP Net income (loss) per share — basic and diluted

($0.11) to $0.02

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 today, Mar. 2, 2020 at 5:00 p.m. ET / 2:00 p.m. PT for analysts and investors to ask questions on its fourth quarter and full year 2019 results, as well as its outlook for its first quarter of 2020. 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 10138002.

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, and financial outlook for the first quarter of 2020. 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)

 

December 31, 2019

 

 

December 31, 2018

 

Assets:

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

66,898

 

 

$

17,530

 

Short-term investments

 

49,597

 

 

 

38,543

 

Accounts receivable, net

 

23,735

 

 

 

18,462

 

Inventory

 

34,153

 

 

 

44,725

 

Prepaid expenses and other current assets

 

2,386

 

 

 

1,954

 

Total current assets

 

176,769

 

 

 

121,214

 

Property and equipment, net

 

17,442

 

 

 

19,778

 

Operating lease right-of-use assets

 

16,501

 

 

 

 

Other non-current assets

 

453

 

 

 

196

 

Goodwill

 

3,881

 

 

 

3,881

 

Total assets

$

215,046

 

 

$

145,069

 

Liabilities and stockholders' equity:

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

5,600

 

 

$

4,643

 

Accrued compensation and employee related benefits

 

5,859

 

 

 

7,409

 

Accrued liabilities

 

3,755

 

 

 

2,887

 

Current portion of operating lease liabilities

 

3,380

 

 

 

 

Current portion of restructuring liabilities

 

94

 

 

 

582

 

Current portion of long-term debt

 

 

 

 

5,930

 

Current portion of finance lease liabilities

 

258

 

 

 

523

 

Current portion of deferred rent

 

 

 

 

402

 

Current portion of deferred revenue

 

551

 

 

 

649

 

Total current liabilities

 

19,497

 

 

 

23,025

 

Long-term debt, net of current portion

 

50,876

 

 

 

17,633

 

Operating lease liabilities, net of current portion

 

18,907

 

 

 

 

Finance lease liabilities, net of current portion

 

1

 

 

 

258

 

Long-term liabilities — other

 

313

 

 

 

304

 

Long-term restructuring liabilities

 

 

 

 

487

 

Deferred rent, net of current portion

 

 

 

 

5,294

 

Deferred revenue, net of current portion

 

213

 

 

 

185

 

Total liabilities

 

89,807

 

 

 

47,186

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Common stock, $0.001 par value

 

22

 

 

 

21

 

Additional paid-in capital

 

387,926

 

 

 

337,627

 

Accumulated other comprehensive income (loss)

 

34

 

 

 

(9

)

Accumulated deficit

 

(262,743

)

 

 

(239,756

)

Total stockholders' equity

 

125,239

 

 

 

97,883

 

Total liabilities and stockholders' equity

$

215,046

 

 

$

145,069

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)

 

 

Three Months Ended

 

 

Year Ended

 

 

December 31,

 

 

December 31,

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

Revenue

 

$

40,821

 

 

$

34,618

 

 

$

152,836

 

 

$

122,633

 

 

Cost of revenue

 

 

20,889

 

 

 

18,307

 

 

 

78,834

 

 

 

64,352

 

 

Gross profit

 

 

19,932

 

 

 

16,311

 

 

 

74,002

 

 

 

58,281

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

11,202

 

 

 

8,998

 

 

 

38,880

 

 

 

34,168

 

 

Sales and marketing

 

 

8,063

 

 

 

8,188

 

 

 

32,642

 

 

 

32,934

 

 

General and administrative

 

 

7,488

 

 

 

5,318

 

 

 

24,141

 

 

 

22,299

 

 

Restructuring costs

 

 

 

 

 

 

 

 

 

 

 

3,749

 

 

Total operating expenses

 

 

26,753

 

 

 

22,504

 

 

 

95,663

 

 

 

93,150

 

 

Loss from operations

 

 

(6,821

)

 

 

(6,193

)

 

 

(21,661

)

 

 

(34,869

)

 

Other income, net

 

 

295

 

 

 

247

 

 

 

1,242

 

 

 

808

 

 

Interest expense

 

 

(531

)

 

 

(433

)

 

 

(1,794

)

 

 

(1,403

)

 

Loss on debt extinguishment

 

 

(576

)

 

 

 

 

 

(576

)

 

 

 

 

Loss before income taxes

 

 

(7,633

)

 

 

(6,379

)

 

 

(22,789

)

 

 

(35,464

)

 

Income tax benefit (expense)

 

 

(47

)

 

 

392

 

 

 

(198

)

 

 

233

 

 

Net loss

 

$

(7,680

)

 

$

(5,987

)

 

$

(22,987

)

 

$

(35,231

)

 

Net loss per share — basic and diluted

 

$

(0.35

)

 

$

(0.28

)

 

$

(1.05

)

 

$

(1.65

)

 

Weighted-average shares — basic and diluted

 

 

22,173

 

 

 

21,477

 

 

 

21,847

 

 

 

21,334

 

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

 

 

Year Ended

 

 

 

December 31,

 

 

 

2019

 

 

2018

 

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(22,987

)

 

$

(35,231

)

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

 

 

 

 

 

 

 

 

Depreciation

 

 

4,809

 

 

 

4,534

 

Stock-based compensation

 

 

18,486

 

 

 

11,317

 

Non-cash restructuring benefit

 

 

 

 

 

(454

)

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

 

 

(506

)

 

 

(419

)

Amortization of debt issuance costs and debt discount

 

 

206

 

 

 

75

 

Loss on debt extinguishment

 

 

576

 

 

 

 

Deferred income taxes

 

 

 

 

 

(395

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(5,273

)

 

 

3,782

 

Inventory

 

 

10,572

 

 

 

2,358

 

Prepaid expenses and other assets

 

 

(524

)

 

 

473

 

Deferred revenue

 

 

(70

)

 

 

(381

)

Deferred rent

 

 

 

 

 

(260

)

Accounts payable

 

 

1,046

 

 

 

326

 

Accrued compensation and employee related benefits

 

 

(1,486

)

 

 

1,819

 

Operating lease right-of-use assets

 

 

2,153

 

 

 

 

Operating lease liabilities

 

 

(3,038

)

 

 

 

Accrued liabilities and other liabilities

 

 

744

 

 

 

(390

)

Restructuring liabilities

 

 

 

 

 

1,069

 

Net cash provided by (used in) operating activities

 

 

4,708

 

 

 

(11,777

)

Investing activities:

 

 

 

 

 

 

 

 

Purchases of investments

 

 

(72,413

)

 

 

(51,651

)

Proceeds from maturities of investments

 

 

61,743

 

 

 

52,352

 

Purchases of property and equipment

 

 

(2,429

)

 

 

(6,367

)

Net cash provided by (used in) investing activities

 

 

(13,099

)

 

 

(5,666

)

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of 2019 Notes, net of issuance costs

 

 

83,475

 

 

 

 

Premiums paid for Capped Call Transactions

 

 

(10,126

)

 

 

 

Principal payments on finance lease obligations

 

 

(522

)

 

 

(900

)

Payments on term and equipment loans

 

 

(28,192

)

 

 

(2,451

)

Proceeds from term loans, net of debt issuance costs

 

 

3,991

 

 

 

16,350

 

Proceeds from exercise of stock options and employee stock purchase plan

 

 

9,133

 

 

 

2,689

 

Net cash provided by financing activities

 

 

57,759

 

 

 

15,688

 

Net increase (decrease) in cash and cash equivalents

 

 

49,368

 

 

 

(1,755

)

Cash and cash equivalents

 

 

 

 

 

 

 

 

Beginning of period

 

 

17,530

 

 

 

19,285

 

End of period

 

$

66,898

 

 

$

17,530

 

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 differently in this report than we have in the past, due to loss on debt extinguishment incurred in connection with the December 2019 repayment of our senior credit facility. 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). We have excluded loss on debt extinguishment because we do not believe they reflect our core operations. The exclusion of loss on debt extinguishment does not impact adjusted EBITDA previously reported for prior periods.

Non-GAAP Net Income (Loss)

We define non-GAAP net income (loss) differently in this report than we have in the past due to the prepayment penalty on debt extinguishment incurred in connection with repayment of our senior credit facility and amortization of debt discount related to the equity component of the convertible notes we issued in December 2019. Amortization of debt issuance costs and non-cash income tax benefit (expense) are no longer excluded from 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 convertible notes; and prepayment penalty on debt extinguishment. We have revised the prior period non-GAAP net income (loss) to conform to current period presentation. 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 accreted 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

 

 

Year Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

GAAP Gross margin

 

 

48.8

%

 

 

47.1

%

 

 

48.4

%

 

 

47.5

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

1.1

%

 

 

1.5

%

 

 

1.3

%

 

 

1.6

%

Stock-based compensation

 

 

0.7

%

 

 

0.4

%

 

 

0.5

%

 

 

0.4

%

Non-GAAP Gross margin

 

 

50.6

%

 

 

49.0

%

 

 

50.2

%

 

 

49.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(7,680

)

 

$

(5,987

)

 

$

(22,987

)

 

$

(35,231

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

1,172

 

 

 

1,140

 

 

 

4,809

 

 

 

4,534

 

Stock-based compensation

 

 

6,673

 

 

 

3,304

 

 

 

18,486

 

 

 

11,317

 

Investigation costs

 

 

 

 

 

 

 

 

 

 

 

1,449

 

Restructuring costs

 

 

 

 

 

 

 

 

 

 

 

3,749

 

Other income, net

 

 

(295

)

 

 

(247

)

 

 

(1,242

)

 

 

(808

)

Interest expense

 

 

531

 

 

 

433

 

 

 

1,794

 

 

 

1,403

 

Loss on debt extinguishment

 

 

576

 

 

 

 

 

 

576

 

 

 

 

Income tax benefit (expense)

 

 

47

 

 

 

(392

)

 

 

198

 

 

 

(233

)

Adjusted EBITDA

 

$

1,024

 

 

$

(1,749

)

 

$

1,634

 

 

$

(13,820

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(7,680

)

 

$

(5,987

)

 

$

(22,987

)

 

$

(35,231

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

1,172

 

 

 

1,140

 

 

 

4,809

 

 

 

4,534

 

Stock-based compensation

 

 

6,673

 

 

 

3,304

 

 

 

18,486

 

 

 

11,317

 

Investigation costs

 

 

 

 

 

 

 

 

 

 

 

1,449

 

Restructuring costs

 

 

 

 

 

 

 

 

 

 

 

3,749

 

Amortization of debt discount

 

 

140

 

 

 

 

 

 

140

 

 

 

 

Prepayment fees on debt extinguishment

 

 

470

 

 

 

 

 

 

470

 

 

 

 

Non-GAAP Net income (loss)

 

$

775

 

 

$

(1,543

)

 

$

918

 

 

$

(14,182

)

Non-GAAP Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.03

 

 

$

(0.07

)

 

$

0.04

 

 

$

(0.66

)

Diluted

 

$

0.03

 

 

$

(0.07

)

 

$

0.04

 

 

$

(0.66

)

GAAP and non-GAAP Weighted-average shares — basic

 

 

22,173

 

 

 

21,477

 

 

 

21,847

 

 

 

21,334

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Weighted-average shares — diluted

 

 

22,173

 

 

 

21,477

 

 

 

21,847

 

 

 

21,334

 

Dilutive shares from stock plans

 

 

657

 

 

 

 

 

 

705

 

 

 

 

Non-GAAP Weighted-average shares — diluted

 

 

22,830

 

 

 

21,477

 

 

 

22,552

 

 

 

21,334

 

IMPINJ, INC.

RECONCILIATIONS OF GAAP FINANCIAL OUTLOOK TO NON-GAAP FINANCIAL OUTLOOK

(in thousands, except per share data, unaudited – calculated at the midpoint of the outlook range)

 

 

Three Months Ending

 

 

 

March 31,

 

 

 

2020

 

GAAP Net loss

 

$

(9,000

)

Adjustments:

 

 

 

 

Forecasted Depreciation

 

 

1,200

 

Forecasted Stock-based compensation

 

 

5,900

 

Forecasted Interest expense

 

 

1,300

 

Forecasted Other income, net

 

 

(200

)

Forecasted Income tax expense

 

 

 

Adjusted EBITDA

 

$

(800

)

 

 

 

 

 

GAAP Net loss

 

$

(9,000

)

Adjustments:

 

 

 

 

Forecasted Depreciation

 

 

1,200

 

Forecasted Stock-based compensation

 

 

5,900

 

Forecasted Accretion of debt discount

 

 

900

 

Non-GAAP Net loss

 

$

(1,000

)

 

 

 

 

 

GAAP Net loss per share — basic and diluted

 

$

(0.40

)

Non-GAAP Net loss per share — basic and diluted

 

$

(0.04

)

 

 

 

 

 

GAAP weighted-average shares — basic and diluted

 

 

22,400

 

Non-GAAP weighted-average shares — basic and diluted

 

 

22,400

 

 

Contacts

Investor Relations
+1-206-315-4470
ir@impinj.com

Media Relations
Jill West
Sr. Director, Marketing & Communications
+1 206-834-1110
jwest@impinj.com

Contacts

Investor Relations
+1-206-315-4470
ir@impinj.com

Media Relations
Jill West
Sr. Director, Marketing & Communications
+1 206-834-1110
jwest@impinj.com