ALAMEDA,
Calif., May 2, 2023 /PRNewswire/ -- Penumbra, Inc.
(NYSE: PEN), a global healthcare company focused on innovative
therapies, today reported financial results for the first quarter
ended March 31, 2023.
- Revenue of $241.4 million in
the first quarter of 2023, an increase of 18.4%, or 19.7% in
constant currency1, compared to the first quarter of
2022.
First Quarter 2023 Financial Results
Total revenue
increased to $241.4 million for
the first quarter of 2023 compared to $203.9 million for the first quarter of
2022, an increase of 18.4%, or 19.7% on a constant currency basis.
The United States represented 71%
of total revenue and international represented 29% of total revenue
for the first quarter of 2023. Revenue from sales of vascular
products grew to $142.8 million
for the first quarter of 2023, an increase of 16.3%, or 17.2% on a
constant currency basis. US vascular revenue increased 23.0%
compared to the first quarter of 2022. Revenue from sales of
neuro products grew to $98.5 million
for the first quarter of 2023, an increase of 21.5%, or 23.4% on a
constant currency basis.
Gross profit was $151.1 million, or 62.6% of total revenue
for the first quarter of 2023, compared to $127.4 million, or 62.5% of total revenue,
for the first quarter of 2022. Gross margin is impacted by product
mix, regional mix and start up costs associated with new product
launches. As such, with favorable product mix, improvement in
productivity, and leveraging our fixed costs on higher volume of
new product sales during the year, our gross margin may be
positively impacted in the future.
Total operating expenses were $143.1
million, or 59.3% of total revenue, for the first quarter of
2023, including a $2.4 million
amortization expense of finite lived intangible assets acquired in
connection with the Sixense acquisition. This compares to total
operating expenses of $131.5 million,
or 64.5% of total revenue, for the first quarter of 2022, including
a $1.8 million amortization expense
of finite lived intangible assets acquired in connection with the
Sixense acquisition. Excluding this charge, total non-GAAP
operating expenses1 were $140.7
million, or 58.3% of total revenue, for the first quarter of
2023, and $129.7 million, or 63.6% of
total revenue, for the first quarter of 2022, respectively. R&D
expenses were $20.0 million for the
first quarter of 2023, compared to $20.6
million for the first quarter of 2022. SG&A expenses
were $123.1 million for the
first quarter of 2023, compared to $110.9 million for the first quarter of
2022.
Income from operations was $8.0 million for the first quarter of 2023,
compared to a loss from operations of $4.0 million for the first quarter of 2022.
Excluding the charge associated with the amortization expense of
finite lived intangible assets acquired in connection with the
Sixense acquisition, non-GAAP income from
operations1 was $10.4 million for the first quarter of 2023,
compared to a non-GAAP loss from operations1 of
$2.3 million for the first
quarter of 2022.
Updated Full Year 2023 Financial
Outlook
The Company is increasing its guidance for 2023 total revenue to be
in the range of $1.04 billion to
$1.06 billion, which represents 23%
to 25% growth over 2022 revenue of $847.1
million. Relative to our total revenue guidance range of
23-25% growth, we expect growth in our vascular business to be
slightly above this range and growth in our neuro business to be
below this range.
Webcast and Conference Call Information
Penumbra, Inc.
will host a conference call to discuss the first quarter 2023
financial results after market close on Tuesday, May 2, 2023 at 4:30 PM Eastern Time. The conference call can be
accessed live over the phone by dialing (888) 330-2443 for domestic
and international callers (conference id: 4604622), or the webcast
can be accessed on the "Events" section under the "Investors" tab
of the Company's website at: www.penumbrainc.com. The webcast will
be available on the Company's website for at least two weeks
following the completion of the call.
About Penumbra
Penumbra, Inc., headquartered in
Alameda, California, is a global
healthcare company focused on innovative therapies. Penumbra
designs, develops, manufactures and markets novel products and has
a broad portfolio that addresses challenging medical conditions in
markets with significant unmet need. Penumbra supports healthcare
providers, hospitals and clinics in more than 100 countries. For
more information, visit www.penumbrainc.com and connect on Twitter
and LinkedIn.
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1 See "Non-GAAP
Financial Measures" for important information about our use of
non-GAAP measures.
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Non-GAAP Financial Measures
In addition to financial
measures prepared in accordance with U.S. generally accepted
accounting principles ("GAAP"), the Company uses the following
non-GAAP financial measures in this press release: a) constant
currency and b) non-GAAP operating expenses, non-GAAP income (loss)
from operations, non-GAAP net income (loss) and non-GAAP diluted
earnings per share ("EPS").
Constant Currency. The Company's constant currency
revenue disclosures estimate the impact of changes in foreign
currency rates on the translation of the Company's current period
revenue as compared to the applicable comparable period in the
prior year. This impact is derived by taking the current local
currency revenue and translating it into U.S. dollars based upon
the foreign currency exchange rates used to translate the local
currency revenue for the applicable comparable period in the prior
year, rather than the actual exchange rates in effect during the
current period. It does not include any other effect of changes in
foreign currency rates on the Company's results or business.
Non-GAAP operating expenses, non-GAAP income (loss) from
operations, non-GAAP net income (loss) and non-GAAP diluted
EPS. The adjustments to the GAAP financial measures
reflect the exclusion of:
- the effect of the amortization of finite lived intangible
assets acquired in connection with the Sixense acquisition over
their estimated useful lives; and
- the excess tax benefits associated with share-based
compensation arrangements.
Full reconciliation of these non-GAAP measures to the most
comparable GAAP measures is set forth in the tables below.
Our management believes the non-GAAP financial measures
disclosed in this press release are useful to investors in
assessing the operating performance of our business and provide
meaningful comparisons to prior periods and thus a more complete
understanding of our business than could be obtained absent this
disclosure. Specifically, we consider the change in constant
currency revenue as a useful metric as it provides an alternative
framework for assessing how our underlying business performed
excluding the effect of foreign currency rate fluctuations. We
consider non-GAAP operating expenses, non-GAAP income (loss) from
operations, non-GAAP net income (loss) and non-GAAP diluted EPS
useful metrics as they provide an alternative framework for
assessing how our underlying business performed excluding the
amortization expense of finite lived intangible assets acquired in
connection with the Sixense acquisition and the excess tax benefits
associated with share-based compensation arrangements.
The non-GAAP financial measures included in this press release
may be different from, and therefore may not be comparable to,
similarly titled measures used by other companies. These non-GAAP
measures should not be considered in isolation or as alternatives
to GAAP measures. We urge investors to review the reconciliation of
these non-GAAP financial measures to the comparable GAAP financial
measures included in this press release, and not to rely on any
single financial measure to evaluate our business.
Forward-Looking Statements
Except for historical
information, certain statements in this press release are
forward-looking in nature and are subject to risks, uncertainties
and assumptions about us. Our business and operations are subject
to a variety of risks and uncertainties and, consequently, actual
results may differ materially from those projected by any
forward-looking statements. Factors that could cause actual results
to differ from those projected include, but are not limited to: the
impact of the COVID-19 pandemic on our business, results of
operations and financial condition; failure to sustain or grow
profitability or generate positive cash flows; failure to
effectively introduce and market new products; delays in product
introductions; significant competition; inability to further
penetrate our current customer base, expand our user base and
increase the frequency of use of our products by our customers;
inability to achieve or maintain satisfactory pricing and margins;
manufacturing difficulties; permanent write-downs or write-offs of
our inventory; product defects or failures; unfavorable outcomes in
clinical trials; inability to maintain our culture as we grow;
fluctuations in foreign currency exchange rates; potential adverse
regulatory actions; and the potential impact of any acquisitions,
mergers, dispositions, joint ventures or investments we may make.
These risks and uncertainties, as well as others, are discussed in
greater detail in our filings with the Securities and Exchange
Commission ("SEC"), including our Annual Report on Form 10-K for
the year ended December 31, 2022
filed with the SEC on February 23, 2023. There may be
additional risks of which we are not presently aware or that we
currently believe are immaterial which could have an adverse impact
on our business. Any forward-looking statements are based on
our current expectations, estimates and assumptions regarding
future events and are applicable only as of the dates of such
statements. We make no commitment to revise or update any
forward-looking statements in order to reflect events or
circumstances that may change.
Penumbra,
Inc.
Condensed
Consolidated Balance Sheets
(unaudited)
(in
thousands)
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March 31,
2023
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December 31,
2022
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Assets
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Current
assets:
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Cash and cash
equivalents
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$
94,688
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$
69,858
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Marketable
investments
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104,409
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118,172
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Accounts receivable,
net
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207,364
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203,384
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Inventories
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344,042
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334,006
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Prepaid expenses and other
current assets
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35,987
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30,279
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Total current assets
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786,490
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755,699
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Property and equipment,
net
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65,224
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65,015
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Operating lease
right-of-use assets
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189,839
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192,636
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Finance lease
right-of-use assets
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32,569
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33,323
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Intangible assets,
net
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78,669
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81,161
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Goodwill
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166,161
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166,046
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Deferred
taxes
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65,173
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64,213
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Other non-current
assets
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11,173
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12,793
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Total assets
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$
1,395,298
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$
1,370,886
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Liabilities and
Stockholders' Equity
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Current
liabilities:
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Accounts payable
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$
28,199
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$
26,679
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Accrued
liabilities
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105,869
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106,300
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Current
operating lease liabilities
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10,303
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10,033
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Current finance
lease liabilities
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1,957
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1,920
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Total current liabilities
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146,328
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144,932
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Non-current operating
lease liabilities
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196,837
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198,955
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Non-current finance
lease liabilities
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24,423
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24,865
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Other non-current
liabilities
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3,241
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3,276
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Total liabilities
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370,829
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372,028
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Stockholders'
equity:
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Common
stock
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38
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38
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Additional paid-in
capital
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978,826
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963,040
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Accumulated other
comprehensive loss
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(6,861)
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(8,124)
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Retained
earnings
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52,466
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43,904
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Total stockholders'
equity
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1,024,469
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998,858
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Total liabilities and
stockholders' equity
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$
1,395,298
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$
1,370,886
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Penumbra,
Inc.
Condensed
Consolidated Statements of Operations
(unaudited)
(in thousands,
except share and per share amounts)
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Three Months Ended
March 31,
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2023
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2022
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Revenue
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$
241,398
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$
203,895
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Cost of
revenue
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90,326
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76,477
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Gross
profit
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151,072
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127,418
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Operating
expenses:
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Research and
development
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19,986
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20,564
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Sales, general and
administrative
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123,078
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110,900
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Total operating
expenses
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143,064
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131,464
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Income (loss) from
operations
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8,008
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(4,046)
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Interest income
(expense), net
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554
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(47)
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Other income (expense),
net
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90
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(1,011)
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Income (loss) before
income taxes
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8,652
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(5,104)
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Provision for (benefit
from) income taxes
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90
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(5,183)
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Net income
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$
8,562
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$
79
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Net income per
share:
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Basic
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$
0.22
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$
0.00
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Diluted
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$
0.22
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$
0.00
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Weighted average shares
outstanding:
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Basic
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38,186,342
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37,646,122
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Diluted
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39,075,388
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38,708,657
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Penumbra,
Inc.
Reconciliation of
GAAP Operating Expenses and GAAP Income (Loss) from Operations to
Non-GAAP Operating Expenses and
Non-GAAP Income (Loss) from Operations1
(unaudited)
(in
thousands)
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Three Months Ended
March 31,
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2023
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2022
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GAAP operating
expenses
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$
143,064
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$
131,464
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GAAP operating expenses
includes the effect of the following item:
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Amortization of finite
lived intangible assets acquired
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2,380
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1,785
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Non-GAAP operating
expenses
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$
140,684
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$
129,679
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GAAP income (loss) from
operations
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$
8,008
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$
(4,046)
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GAAP income (loss) from
operations includes the effect of the following item:
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Amortization of finite
lived intangible assets acquired
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2,380
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1,785
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Non-GAAP income (loss)
from operations
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$
10,388
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$
(2,261)
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________________________
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1See
"Non-GAAP Financial Measures" for important information about our
use of non-GAAP measures.
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Penumbra,
Inc.
Reconciliation of
GAAP Net Income and GAAP Diluted EPS to Non-GAAP Net Income (Loss)
and Non-GAAP Diluted EPS1
(unaudited)
(in thousands,
except share and per share amounts)
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Three Months
Ended
March 31,
2023
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Three Months
Ended
March 31,
2022
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Net
income
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Diluted
EPS
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Net income
(loss)
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Diluted
EPS
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GAAP net
income
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$
8,562
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$
0.22
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$
79
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$
0.00
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GAAP net income
includes the effect of the following items:
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Amortization of finite
lived intangible assets acquired
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2,380
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0.06
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1,785
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0.05
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Tax effect on the
non-GAAP adjustment above2
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(558)
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(0.01)
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(416)
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(0.01)
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Excess tax benefits
related to stock compensation awards
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(1,440)
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(0.04)
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(1,781)
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(0.05)
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Non-GAAP net income
(loss)
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$
8,944
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$
0.23
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$
(333)
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$
(0.01)
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Weighted average shares
outstanding used to compute:
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GAAP diluted
EPS
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39,075,388
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38,708,657
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Non-GAAP diluted
EPS3
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39,075,388
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37,646,122
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________________________
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1See
"Non-GAAP Financial Measures" for important information about our
use of non-GAAP measures.
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2For the
three months ended March 31, 2023 and 2022, management used a
combined federal and state tax rate of 23.44% and 23.29%,
respectively, to compute the tax effect of non-GAAP
measures.
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3For the
purposes of calculating Non-GAAP diluted EPS for the three months
ended March 31, 2022, non-GAAP diluted weighted average shares
outstanding of 37,646,122 was used, as the Company had a non-GAAP
net loss in the period.
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Penumbra,
Inc.
Reconciliation of
Revenue Growth by Geographic Regions to Constant Currency Revenue
Growth1
(unaudited)
(in thousands,
except for percentages)
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Three Months Ended
March 31,
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Reported
Change
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FX
Impact
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Constant Currency
Change
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2023
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2022
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$
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%
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$
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$
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%
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United
States
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$
171,879
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$
144,308
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$
27,571
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19.1 %
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$
—
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$
27,571
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19.1 %
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International
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69,519
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59,587
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9,932
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16.7 %
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2,605
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12,537
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21.0 %
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Total
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$
241,398
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$
203,895
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$
37,503
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18.4 %
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$
2,605
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$
40,108
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19.7 %
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Penumbra,
Inc.
Reconciliation of
Revenue Growth by Product Categories to Constant Currency Revenue
Growth1
(unaudited)
(in thousands,
except for percentages)
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Three Months Ended
March 31,
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Reported
Change
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FX
Impact
|
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Constant Currency
Change
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2023
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2022
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$
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%
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$
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$
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%
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Vascular
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$
142,849
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$
122,809
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$
20,040
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16.3 %
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$
1,112
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$
21,152
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17.2 %
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Neuro
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98,549
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81,086
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17,463
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21.5 %
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1,493
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18,956
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23.4 %
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Total
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$
241,398
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$
203,895
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$
37,503
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18.4 %
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$
2,605
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$
40,108
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19.7 %
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________________________
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1See
"Non-GAAP Financial Measures" for important information about our
use of non-GAAP measures.
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Investor Relations
Penumbra, Inc.
510-995-2461
investors@penumbrainc.com
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SOURCE Penumbra, Inc.