ALAMEDA,
Calif., Aug. 1, 2023 /PRNewswire/ -- Penumbra,
Inc. (NYSE: PEN), a global healthcare company focused on innovative
therapies, today reported financial results for the second quarter
ended June 30, 2023.
- Revenue of $261.5 million in
the second quarter of 2023, an increase of 25.5% as reported and in
constant currency1 compared to the second quarter of
2022.
Second Quarter 2023 Financial Results
Total revenue
increased to $261.5 million for the
second quarter of 2023 compared to $208.3
million for the second quarter of 2022, an increase of 25.5%
as reported and on a constant currency basis. The United States represented 71% of total
revenue and international represented 29% of total revenue for the
second quarter of 2023. Revenue from sales of vascular products
grew to $152.7 million for the second
quarter of 2023, an increase of 23.6%, or 23.7% on a constant
currency basis. Revenue from sales of neuro products grew to
$108.8 million for the second quarter
of 2023, an increase of 28.3%, or 28.1% on a constant currency
basis.
Gross profit was $166.9 million, or 63.8% of total revenue
for the second quarter of 2023, compared to $134.0 million, or 64.3% of total revenue,
for the second quarter of 2022. Gross margin is impacted by product
mix, regional mix, start-up costs associated with new product
launches, and macroeconomic factors such as inflation headwinds. As
such, with favorable product mix, improvement in productivity, and
by 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 $149.0
million, or 57.0% of total revenue, for the second 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 $134.2
million, or 64.4% of total revenue, for the second 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 $146.6 million, or 56.1% of total revenue, for
the second quarter of 2023, and $132.4
million, or 63.5% of total revenue, for the second quarter
of 2022, respectively. R&D expenses were $21.5 million for the second quarter of 2023,
compared to $19.6 million for the
second quarter of 2022. SG&A expenses were $127.4 million for the second quarter of
2023, compared to $114.6 million
for the second quarter of 2022.
Income from operations was $17.9 million for the second quarter of
2023, compared to a loss from operations of $0.1 million for the second 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 $20.3 million for the second quarter of
2023, compared to non-GAAP income from operations1 of
$1.6 million for the second
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 $1.05 billion to
$1.07 billion, which represents 24%
to 26% growth over 2022 revenue of $847.1
million. We continue to expect growth in our global vascular
business to be slightly above this range and growth in our global
neuro business to be below this range for the full year
2023.
Webcast and Conference Call Information
Penumbra, Inc.
will host a conference call to discuss the second quarter 2023
financial results after market close on Tuesday, August 1, 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 and Presentations" 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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1See
"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 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 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 or tax deficiencies 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 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 or tax
deficiencies 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:
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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June 30,
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
|
|
$
114,167
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$
69,858
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Marketable
investments
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|
106,896
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118,172
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Accounts receivable,
net
|
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208,965
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203,384
|
Inventories
|
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358,770
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|
334,006
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Prepaid expenses and other
current assets
|
|
39,078
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|
30,279
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Total current assets
|
|
827,876
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|
755,699
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Property and equipment,
net
|
|
65,958
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|
65,015
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Operating lease
right-of-use assets
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|
187,494
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|
192,636
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Finance lease
right-of-use assets
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31,751
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33,323
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Intangible assets,
net
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76,116
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|
81,161
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Goodwill
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166,166
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166,046
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Deferred
taxes
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|
66,671
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64,213
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Other non-current
assets
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10,500
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12,793
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Total assets
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$
1,432,532
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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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$
25,819
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$
26,679
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Accrued
liabilities
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105,606
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106,300
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Current
operating lease liabilities
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10,715
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10,033
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Current finance
lease liabilities
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1,984
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1,920
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Total current liabilities
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144,124
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144,932
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Non-current operating
lease liabilities
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|
194,655
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198,955
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Non-current finance
lease liabilities
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|
23,922
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|
24,865
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Other non-current
liabilities
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|
3,288
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3,276
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Total liabilities
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365,989
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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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1,000,658
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963,040
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Accumulated other
comprehensive loss
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(5,579)
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(8,124)
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Retained
earnings
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71,426
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43,904
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Total stockholders'
equity
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1,066,543
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998,858
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Total liabilities and
stockholders' equity
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$
1,432,532
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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
June 30,
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Six Months Ended
June 30,
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2023
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2022
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2023
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2022
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Revenue
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$
261,499
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$
208,344
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$
502,897
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$
412,239
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Cost of
revenue
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94,638
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74,309
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184,964
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150,786
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Gross
profit
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|
166,861
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134,035
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317,933
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261,453
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Operating
expenses:
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Research and
development
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21,537
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19,559
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41,523
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40,123
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Sales, general and
administrative
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127,435
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114,615
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250,513
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225,515
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Total operating
expenses
|
|
148,972
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|
134,174
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|
292,036
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265,638
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Income (loss) from
operations
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|
17,889
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(139)
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25,897
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(4,185)
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Interest income
(expense), net
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839
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(72)
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1,393
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(119)
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Other income (expense),
net
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|
808
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(956)
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|
898
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(1,967)
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Income (loss) before
income taxes
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|
19,536
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(1,167)
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28,188
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(6,271)
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Provision for (benefit
from) income taxes
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|
576
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|
2,520
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|
666
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(2,663)
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Net income
(loss)
|
|
$
18,960
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|
$
(3,687)
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$
27,522
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|
$
(3,608)
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|
Net income (loss) per
share:
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Basic
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$
0.49
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$
(0.10)
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$
0.72
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$
(0.10)
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Diluted
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|
$
0.48
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$
(0.10)
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$
0.70
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$
(0.10)
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Weighted average shares
outstanding:
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Basic
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38,320,999
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37,767,519
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38,254,042
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37,707,156
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Diluted
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39,201,155
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37,767,519
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39,151,412
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37,707,156
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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
June 30,
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Six Months Ended
June 30,
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2023
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2022
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2023
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2022
|
GAAP operating
expenses
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$
148,972
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$
134,174
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$
292,036
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$
265,638
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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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|
4,759
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|
3,569
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Non-GAAP operating
expenses
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|
$
146,592
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$
132,389
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$
287,277
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$
262,069
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GAAP income (loss) from
operations
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$
17,889
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$
(139)
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$
25,897
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|
$
(4,185)
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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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|
4,759
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|
3,569
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Non-GAAP income (loss)
from operations
|
|
$
20,269
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|
$
1,646
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|
$
30,656
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|
$
(616)
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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 (Loss) and GAAP Diluted EPS to Non-GAAP Net
Income and Non-GAAP Diluted
EPS1
(unaudited)
(in thousands,
except share and per share amounts)
|
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|
|
Three Months
Ended
June 30,
2023
|
|
Three Months
Ended
June 30,
2022
|
|
Six Months
Ended
June 30,
2023
|
|
Six Months
Ended
June 30,
2022
|
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Net
income
|
|
Diluted
EPS
|
|
Net
(loss)
income
|
|
Diluted
EPS
|
|
Net
income
|
|
Diluted
EPS
|
|
Net
(loss)
income
|
|
Diluted
EPS
|
GAAP net income
(loss)
|
|
$
18,960
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|
$ 0.48
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|
$
(3,687)
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|
$ (0.10)
|
|
$
27,522
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|
$ 0.70
|
|
$
(3,608)
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|
$ (0.10)
|
GAAP net income (loss)
includes the effect of the
following
items:
|
|
|
|
|
|
|
|
|
|
|
|
|
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Amortization of finite
lived intangible assets acquired
|
|
2,380
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|
0.06
|
|
1,785
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|
0.05
|
|
4,759
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|
0.13
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|
3,569
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|
0.10
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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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|
(1,116)
|
|
(0.03)
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(832)
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(0.02)
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(Excess tax
benefits) tax deficiencies related to stock
compensation
awards
|
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(3,945)
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(0.10)
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2,725
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0.07
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(5,385)
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|
(0.14)
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|
944
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|
0.02
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Non-GAAP net
income
|
|
$
16,837
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|
$ 0.43
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|
$
407
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|
$ 0.01
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|
$
25,780
|
|
$ 0.66
|
|
$
73
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|
$ 0.00
|
|
|
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Weighted average shares
outstanding used to compute:
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GAAP diluted
EPS
|
|
39,201,155
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|
37,767,519
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|
39,151,412
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|
37,707,156
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Non-GAAP diluted
EPS3
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|
39,201,155
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|
38,686,507
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|
39,151,412
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|
38,722,453
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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 and six months ended June 30, 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
adjustments.
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3For the
purposes of calculating Non-GAAP diluted EPS for the three and six
months ended June 30, 2022, non-GAAP diluted weighted average
shares outstanding of 38,686,507 and 38,722,453 respectively were
used, as the Company had non-GAAP net income 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
June 30,
|
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Reported
Change
|
|
FX
Impact
|
|
Constant Currency
Change
|
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|
2023
|
|
2022
|
|
$
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|
%
|
|
$
|
|
$
|
|
%
|
United
States
|
|
$
186,772
|
|
$
141,456
|
|
$
45,316
|
|
32.0 %
|
|
$
—
|
|
$
45,316
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|
32.0 %
|
International
|
|
74,727
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|
66,888
|
|
7,839
|
|
11.7 %
|
|
(84)
|
|
7,755
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|
11.6 %
|
Total
|
|
$
261,499
|
|
$
208,344
|
|
$
53,155
|
|
25.5 %
|
|
$
(84)
|
|
$
53,071
|
|
25.5 %
|
|
|
Six Months Ended
June 30,
|
|
Reported
Change
|
|
FX
Impact
|
|
Constant Currency
Change
|
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
United
States
|
|
$
358,651
|
|
$
285,764
|
|
$
72,887
|
|
25.5 %
|
|
$
—
|
|
$
72,887
|
|
25.5 %
|
International
|
|
144,246
|
|
126,475
|
|
17,771
|
|
14.1 %
|
|
2,418
|
|
20,189
|
|
16.0 %
|
Total
|
|
$
502,897
|
|
$
412,239
|
|
$
90,658
|
|
22.0 %
|
|
$
2,418
|
|
$
93,076
|
|
22.6 %
|
Penumbra,
Inc.
Reconciliation of
Revenue Growth by Product Categories to Constant Currency Revenue
Growth1
(unaudited)
(in thousands,
except for percentages)
|
|
|
|
Three Months Ended
June 30,
|
|
Reported
Change
|
|
FX
Impact
|
|
Constant Currency
Change
|
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
Vascular
|
|
$
152,684
|
|
$
123,543
|
|
$
29,141
|
|
23.6 %
|
|
$
111
|
|
$
29,252
|
|
23.7 %
|
Neuro
|
|
108,815
|
|
84,801
|
|
24,014
|
|
28.3 %
|
|
(195)
|
|
23,819
|
|
28.1 %
|
Total
|
|
$
261,499
|
|
$
208,344
|
|
$
53,155
|
|
25.5 %
|
|
$
(84)
|
|
$
53,071
|
|
25.5 %
|
|
|
Six Months Ended
June 30,
|
|
Reported
Change
|
|
FX
Impact
|
|
Constant Currency
Change
|
|
|
2023
|
|
2022
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
Vascular
|
|
$
295,533
|
|
$
246,352
|
|
$
49,181
|
|
20.0 %
|
|
$
1,118
|
|
$
50,299
|
|
20.4 %
|
Neuro
|
|
207,364
|
|
165,887
|
|
41,477
|
|
25.0 %
|
|
1,300
|
|
42,777
|
|
25.8 %
|
Total
|
|
$
502,897
|
|
$
412,239
|
|
$
90,658
|
|
22.0 %
|
|
$
2,418
|
|
$
93,076
|
|
22.6 %
|
|
|
|
|
|
|
|
|
|
|
1See
"Non-GAAP Financial Measures" for important information about our
use of non-GAAP measures.
|
Investor Relations
Penumbra, Inc.
510-995-2461
investors@penumbrainc.com
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SOURCE Penumbra, Inc.