SEATTLE, Nov. 03, 2016 (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, 2016.
“We delivered a strong third quarter, exceeding our revenue and earnings guidance. Revenue in the quarter grew 50% year-over-year to reach a record $31.0 million, driven primarily by accelerating demand for our endpoint ICs, followed by growing demand for our connectivity products. We view endpoint IC volumes as an indicator of market adoption and are excited by the broad-based demand we saw this quarter,” said Chris Diorio, Impinj co-founder and CEO. “We will continue investing in this massive market opportunity to enhance our leading market position and foster adoption of our platform.”
Third Quarter Financial Summary
- Revenue grew 50% year-over-year to $31.0 million
- GAAP gross margin of 52.8%; non-GAAP gross margin of 53.6%
- GAAP net income of $0.8 million; GAAP net income attributable to common shareholders of $0.2 million, or income of $0.01 per diluted share using 16.9 million shares
- Adjusted EBITDA of $2.2 million
- Non-GAAP net income of $1.9 million, or $0.10 per diluted share using 18.6 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 2016 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. For the fourth quarter of 2016, Impinj currently expects:
- Revenue in the range of $31.5 million to $33.0 million
- Adjusted EBITDA in the range of $0.75 million to $2.25 million
- Non-GAAP net income in the range of $0.75 million to $2.25 million, and non-GAAP diluted earnings per share in the range of $0.04 and $0.11 using approximately 20.2 million shares
All forward-looking non-GAAP financial measures in this section titled "Fourth Quarter 2016 Financial Outlook" exclude non-cash income and expenses. Impinj has not reconciled guidance for these non-GAAP measures to their most directly comparable GAAP measures because some items that impact these measures are either not within our control or not reasonably predictable, at least not without unreasonable effort.
Conference Call Information
Impinj will host a conference call and webcast today, Nov. 3, 2016 at 4:30 p.m. ET / 1:30 p.m. PT for analysts and investors to discuss the company’s third quarter results and outlook for the fourth 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 10094192.
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 fourth 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 Form 10-Q filed with the SEC on September 2, 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 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 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. We believe 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. 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 (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) | ||||||||
| September 30, | December 31, | |||||||
| 2016 | 2015 | |||||||
| Assets: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 47,935 | $ | 10,121 | ||||
| Short-term investments | 14,063 | — | ||||||
| Accounts receivable, net | 17,531 | 12,889 | ||||||
| Inventory | 20,486 | 11,837 | ||||||
| Prepaid expenses and other current assets | 1,628 | 1,095 | ||||||
| Total current assets | 101,643 | 35,942 | ||||||
| Property and equipment, net | 13,303 | 12,351 | ||||||
| Other non-current assets | — | 637 | ||||||
| Goodwill | 3,881 | 3,881 | ||||||
| Other intangible assets, net | — | 37 | ||||||
| Total assets | $ | 118,827 | $ | 52,848 | ||||
| Liabilities, redeemable convertible preferred stock and stockholders' equity (deficit): | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,540 | $ | 3,182 | ||||
| Accrued compensation and employee related benefits | 5,374 | 4,038 | ||||||
| Accrued liabilities | 4,337 | 2,895 | ||||||
| Current portion of long-term debt | 1,419 | 5,227 | ||||||
| Current portion of capital lease obligations | 1,103 | 1,190 | ||||||
| Current portion of deferred rent | 227 | 258 | ||||||
| Current portion of deferred revenue | 413 | 684 | ||||||
| Total current liabilities | 16,413 | 17,474 | ||||||
| Long-term debt, net of current portion | 9,991 | 10,683 | ||||||
| Capital lease obligations, net of current portion | 1,842 | 2,526 | ||||||
| Long-term liabilities—other | 747 | 678 | ||||||
| Warrant liability | — | 2,865 | ||||||
| Deferred rent, net of current portion | 5,094 | 4,984 | ||||||
| Deferred revenue, net of current portion | 954 | 710 | ||||||
| Total liabilities | 35,041 | 39,920 | ||||||
| Commitment and contingencies | ||||||||
| Redeemable convertible preferred stock, $0.001 par value | ||||||||
| Series 1: none authorized and issued at September 30, 2016; 5,334 shares authorized, issued and outstanding at December 31, 2015 | — | 60,184 | ||||||
| Series 2: none authorized and issued at September 30, 2016; 2,979 shares authorized and 2,557 shares issued and outstanding at December 31, 2015 | — | 37,779 | ||||||
| Total redeemable convertible preferred stock | — | 97,963 | ||||||
| Stockholders' equity (deficit): | ||||||||
| Common stock, $0.001 par value, 495,000 shares authorized; 18,780 and 4,382 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 18 | 4 | ||||||
| Additional paid-in capital | 271,074 | 100,276 | ||||||
| Accumulated deficit | (187,306 | ) | (185,315 | ) | ||||
| Total stockholders' equity (deficit) | 83,786 | (85,035 | ) | |||||
| Total liabilities, redeemable convertible preferred stock and stockholders' equity (deficit) | $ | 118,827 | $ | 52,848 | ||||
| IMPINJ, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (in thousands, except per share data, unaudited) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenue: | ||||||||||||||||
| Product revenue | $ | 30,889 | $ | 20,299 | $ | 78,302 | $ | 55,165 | ||||||||
| Development, service and licensing revenue | 124 | 365 | 330 | 687 | ||||||||||||
| Total revenue | 31,013 | 20,664 | 78,632 | 55,852 | ||||||||||||
| Cost of revenue: | ||||||||||||||||
| Cost of product revenue | 14,574 | 9,988 | 37,408 | 26,889 | ||||||||||||
| Cost of development, service and licensing revenue | 64 | 60 | 159 | 156 | ||||||||||||
| Total cost of revenue | 14,638 | 10,048 | 37,567 | 27,045 | ||||||||||||
| Gross profit | 16,375 | 10,616 | 41,065 | 28,807 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 6,622 | 4,304 | 17,782 | 12,488 | ||||||||||||
| Sales and marketing | 5,584 | 3,772 | 15,902 | 10,151 | ||||||||||||
| General and administrative | 3,356 | 1,938 | 8,214 | 5,089 | ||||||||||||
| Total operating expenses | 15,562 | 10,014 | 41,898 | 27,728 | ||||||||||||
| Income (loss) from operations | 813 | 602 | (833 | ) | 1,079 | |||||||||||
| Interest income (expense) and other income (expense), net | ||||||||||||||||
| Interest expense | (345 | ) | (297 | ) | (1,322 | ) | (742 | ) | ||||||||
| Interest income and other income (expense), net | 383 | (263 | ) | 477 | (177 | ) | ||||||||||
| Total interest income (expense) and other income (expense), net | 38 | (560 | ) | (845 | ) | (919 | ) | |||||||||
| Income (loss) before tax expense | 851 | 42 | (1,678 | ) | 160 | |||||||||||
| Income tax expense | (43 | ) | (29 | ) | (98 | ) | (78 | ) | ||||||||
| Net income (loss) | $ | 808 | $ | 13 | $ | (1,776 | ) | $ | 82 | |||||||
| Less: Accretion of preferred stock | (608 | ) | (2,826 | ) | (6,258 | ) | (8,476 | ) | ||||||||
| Net income (loss) attributable to common stockholders — basic and diluted | $ | 200 | $ | (2,813 | ) | $ | (8,034 | ) | $ | (8,394 | ) | |||||
| Net income (loss) per share attributable to common stockholders — basic and diluted | $ | 0.01 | $ | (0.72 | ) | $ | (1.01 | ) | $ | (2.20 | ) | |||||
| Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | ||||||||||||||||
| Basic | 15,318 | 3,904 | 7,991 | 3,813 | ||||||||||||
| Diluted | 16,859 | 3,904 | 7,991 | 3,813 | ||||||||||||
| IMPINJ, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (in thousands, unaudited) | ||||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2016 | 2015 | |||||||
| Operating activities: | ||||||||
| Net income (loss) | $ | (1,776 | ) | $ | 82 | |||
| Adjustment to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 2,143 | 1,282 | ||||||
| Amortization and write-off of debt issuance costs | 220 | 96 | ||||||
| Revaluation of warrant liability | (559 | ) | 177 | |||||
| Stock-based compensation | 1,417 | 885 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (4,617 | ) | (2,703 | ) | ||||
| Inventory | (8,649 | ) | (4,254 | ) | ||||
| Prepaid expenses and other assets | (479 | ) | (218 | ) | ||||
| Deferred revenue | (27 | ) | (318 | ) | ||||
| Deferred rent | 79 | (510 | ) | |||||
| Accounts payable | 377 | 217 | ||||||
| Accrued compensation and benefits | 1,118 | 1,285 | ||||||
| Accrued liabilities | 1,254 | 165 | ||||||
| Net cash provided by (used in) operating activities | (9,499 | ) | (3,814 | ) | ||||
| Investing activities: | ||||||||
| Purchases of investments | (14,116 | ) | — | |||||
| Purchases of property and equipment | (2,327 | ) | (2,639 | ) | ||||
| Net cash used in investing activities | (16,443 | ) | (2,639 | ) | ||||
| Financing activities: | ||||||||
| Proceeds from initial public offering, net of offering costs | 68,808 | — | ||||||
| Payments on capital lease financing obligations | (954 | ) | (550 | ) | ||||
| Payments on term loans | (65,233 | ) | (2,040 | ) | ||||
| Proceeds from term loans | 60,517 | 12,021 | ||||||
| Proceeds from issuance of common stock upon exercise of stock options | 556 | 344 | ||||||
| Proceeds from issuance of preferred stock upon exercise of warrants | 62 | — | ||||||
| Payments of deferred offering costs | — | (59 | ) | |||||
| Net cash provided by (used in) financing activities | 63,756 | 9,716 | ||||||
| Net increase (decrease) in cash and cash equivalents | 37,814 | 3,263 | ||||||
| Cash and cash equivalents | ||||||||
| Beginning of period | 10,121 | 6,939 | ||||||
| End of period | $ | 47,935 | $ | 10,202 | ||||
| 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, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| GAAP Gross Profit | $ | 16,375 | $ | 10,616 | $ | 41,065 | $ | 28,807 | ||||||||
| Adjustments: | ||||||||||||||||
| Depreciation and amortization | 225 | 232 | 778 | 687 | ||||||||||||
| Stock-based compensation | 28 | 5 | 39 | 26 | ||||||||||||
| Non-GAAP Gross Profit | $ | 16,628 | $ | 10,853 | $ | 41,882 | $ | 29,520 | ||||||||
| GAAP Gross Margin | 52.8 | % | 51.4 | % | 52.2 | % | 51.6 | % | ||||||||
| Adjustments: | ||||||||||||||||
| Depreciation and amortization | 0.7 | % | 1.1 | % | 1.0 | % | 1.2 | % | ||||||||
| Stock-based compensation | 0.1 | % | 0.0 | % | 0.0 | % | 0.0 | % | ||||||||
| Non-GAAP Gross Margin | 53.6 | % | 52.5 | % | 53.2 | % | 52.8 | % | ||||||||
| GAAP Research and development expense | $ | 6,622 | $ | 4,304 | $ | 17,782 | $ | 12,488 | ||||||||
| Adjustments: | ||||||||||||||||
| Depreciation and amortization | (278 | ) | (116 | ) | (841 | ) | (324 | ) | ||||||||
| Stock-based compensation | (282 | ) | (57 | ) | (416 | ) | (241 | ) | ||||||||
| Non-GAAP Research and development expense | $ | 6,062 | $ | 4,131 | $ | 16,525 | $ | 11,923 | ||||||||
| GAAP Sales and marketing expense | $ | 5,584 | $ | 3,772 | $ | 15,902 | $ | 10,151 | ||||||||
| Adjustments: | ||||||||||||||||
| Depreciation and amortization | (106 | ) | (70 | ) | (367 | ) | (199 | ) | ||||||||
| Stock-based compensation | (343 | ) | (190 | ) | (754 | ) | (507 | ) | ||||||||
| Non-GAAP Sales and marketing expense | $ | 5,135 | $ | 3,512 | $ | 14,781 | $ | 9,445 | ||||||||
| GAAP General and administrative expense | $ | 3,356 | $ | 1,938 | $ | 8,214 | $ | 5,089 | ||||||||
| Adjustments: | ||||||||||||||||
| Depreciation and amortization | (50 | ) | (25 | ) | (157 | ) | (72 | ) | ||||||||
| Stock-based compensation | (102 | ) | (33 | ) | (208 | ) | (111 | ) | ||||||||
| Non-GAAP General and administrative expense | $ | 3,204 | $ | 1,880 | $ | 7,849 | $ | 4,906 | ||||||||
| GAAP Total operating expense | $ | 15,562 | $ | 10,014 | $ | 41,898 | $ | 27,728 | ||||||||
| Adjustments: | ||||||||||||||||
| Depreciation and amortization | (434 | ) | (211 | ) | (1,365 | ) | (595 | ) | ||||||||
| Stock-based compensation | (727 | ) | (280 | ) | (1,378 | ) | (859 | ) | ||||||||
| Non-GAAP Total operating expense | $ | 14,401 | $ | 9,523 | $ | 39,155 | $ | 26,274 | ||||||||
| GAAP Interest expense | $ | (345 | ) | $ | (297 | ) | $ | (1,322 | ) | $ | (742 | ) | ||||
| Adjustments: | ||||||||||||||||
| Non-cash interest expense | 27 | 32 | 111 | 96 | ||||||||||||
| Non-GAAP Interest expense | $ | (318 | ) | $ | (265 | ) | $ | (1,211 | ) | $ | (646 | ) | ||||
| 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, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| GAAP Interest income and other income (expense), net | $ | 383 | $ | (263 | ) | $ | 477 | $ | (177 | ) | ||||||
| Adjustments: | ||||||||||||||||
| Change in the fair value of preferred stock warrant liability | (467 | ) | 248 | (559 | ) | 177 | ||||||||||
| Write-off of unamortized debt issuance costs | 109 | — | 109 | — | ||||||||||||
| Non-GAAP Interest income and other income (expense), net | $ | 25 | $ | (15 | ) | $ | 27 | $ | — | |||||||
| GAAP Income tax expense | $ | (43 | ) | $ | (29 | ) | $ | (98 | ) | $ | (78 | ) | ||||
| Adjustments: | ||||||||||||||||
| Non-cash income tax expense | 23 | 23 | 68 | 68 | ||||||||||||
| Non-GAAP Income tax expense | $ | (20 | ) | $ | (6 | ) | $ | (30 | ) | $ | (10 | ) | ||||
| GAAP Net Income | $ | 808 | $ | 13 | $ | (1,776 | ) | $ | 82 | |||||||
| Adjustments: | ||||||||||||||||
| Depreciation and amortization | 659 | 443 | 2,143 | 1,282 | ||||||||||||
| Stock-based compensation | 755 | 285 | 1,417 | 885 | ||||||||||||
| Interest income (expense) and other, net | (38 | ) | 560 | 845 | 919 | |||||||||||
| Income tax expense | 43 | 29 | 98 | 78 | ||||||||||||
| Adjusted EBITDA | $ | 2,227 | $ | 1,330 | $ | 2,727 | $ | 3,246 | ||||||||
| GAAP Net Income | $ | 808 | $ | 13 | $ | (1,776 | ) | $ | 82 | |||||||
| Adjustments: | ||||||||||||||||
| Depreciation and amortization | 659 | 443 | 2,143 | 1,282 | ||||||||||||
| Stock-based compensation | 755 | 285 | 1,417 | 885 | ||||||||||||
| Non-cash interest expense | 27 | 32 | 111 | 96 | ||||||||||||
| Change in the fair value of preferred stock warrant liability | (467 | ) | 248 | (559 | ) | 177 | ||||||||||
| Write-off of unamortized debt issuance costs | 109 | — | 109 | - | ||||||||||||
| Non-cash income tax expense | 23 | 23 | 68 | 68 | ||||||||||||
| Non-GAAP Net income | $ | 1,914 | $ | 1,044 | $ | 1,513 | $ | 2,590 | ||||||||
| Non-GAAP Net income per share: | ||||||||||||||||
| Basic | $ | 0.11 | $ | 0.08 | $ | 0.11 | $ | 0.21 | ||||||||
| Diluted | $ | 0.10 | $ | 0.08 | $ | 0.10 | $ | 0.19 | ||||||||
| 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, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Weighted-average shares used to compute GAAP net income (loss) per share attributable to common stockholders — basic | 15,318 | 3,904 | 7,991 | 3,813 | ||||||||||||
| Adjustments: | ||||||||||||||||
| Weighted-average shares of common stock issuable upon conversion of mandatorily redeemable convertible preferred stock | 1,762 | 8,522 | 6,258 | 8,522 | ||||||||||||
| Weighted-average shares used to compute non-GAAP net income per share — basic | 17,080 | 12,426 | 14,249 | 12,335 | ||||||||||||
| Weighted-average shares used to compute GAAP net income (loss) per share attributable to common stockholders — diluted | 16,859 | 3,904 | 7,991 | 3,813 | ||||||||||||
| Weighted-average shares of common stock issuable upon conversion of mandatorily redeemable convertible preferred stock | 1,762 | 8,522 | 6,258 | 8,522 | ||||||||||||
| Effects of dilutive securities | ||||||||||||||||
| Warrants to purchase common stock | — | 17 | 12 | 16 | ||||||||||||
| Warrants to purchase mandatorily redeemable convertible preferred stock | — | 33 | 26 | — | ||||||||||||
| Weighted-average unvested shares of common stock subject to repurchase | — | 154 | 141 | 175 | ||||||||||||
| Stock Options | — | 1,218 | 795 | 1,140 | ||||||||||||
| Weighted-average shares used to compute non-GAAP net income per share — diluted | 18,621 | 13,848 | 15,223 | 13,666 | ||||||||||||