BusinessWire

Impinj Reports Second Quarter 2020 Financial Results

SEATTLE--(BUSINESS WIRE)--Impinj, Inc. (NASDAQ: PI), a leading provider and pioneer of RAIN RFID solutions, today released its financial results for the second quarter ended June 30, 2020.

“Covid-19 negatively impacted our second-quarter results, and the continuing uncertainty tempers our third-quarter outlook,” said Chris Diorio, Impinj co-founder and CEO. “Regardless, we see brightness ahead. Endpoint IC bookings are improving, large systems opportunities are accelerating and, longer term, we see adoption accelerating as leading end users leverage the improved visibility, insights, virtualization and customer experience that RAIN brings to their businesses.”

Second Quarter 2020 Financial Summary

  • Revenue of $26.5 million
  • GAAP gross margin of 49.0%; non-GAAP gross margin of 51.4%
  • GAAP net loss of $17.5 million, or loss of $0.77 per diluted share using 22.7 million shares
  • Adjusted EBITDA loss of $5.2 million
  • Non-GAAP net loss of $5.6 million, or loss of $0.25 per diluted share using 22.7 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.

Third Quarter 2020 Financial Considerations

Impinj is continuing to monitor the impact of Covid-19 on its business, including how Covid-19 will affect customers, end users, suppliers and other business partners. However, given the uncertainty regarding the duration and severity of the epidemiological, economic and operational impacts of Covid-19, as of the date of this report Impinj cannot reasonably estimate the pandemic’s impact on its operating results for third-quarter 2020 or future periods.

For additional information regarding the impact of Covid-19 on our business, operating results, financial condition and prospects, please see Impinj’s Quarterly Report on Form 10-Q expected to be filed on the date hereof.

Proposed Settlement of Stockholder and Securities Class Action Lawsuits

Securities Class Action Lawsuits

On July 9, 2020, following a private settlement mediation with lead plaintiff in the federal securities class actions and plaintiff in the New York State securities class action discussed below, the parties in both actions executed a stipulation of settlement that resolves the claims asserted in both actions. The proposed settlement provides for a payment to the plaintiff class of $20.0 million. Our insurers will contribute approximately $14.6 million to the settlement, and we will contribute the remaining settlement amount of approximately $5.4 million. Accordingly, we recorded a provision of $5.4 million related to our estimated settlement amount to general and administrative expenses for the three and six months ended June 30, 2020. The proposed settlement is subject to preliminary and, following notice to class members, final approval by the United States District Court for the Western District of Washington.

Shareholder Derivative Actions

On July 10, 2020, following a private settlement mediation, the parties in this action executed a stipulation of settlement to settle and resolve the claims asserted in this consolidated derivative action. The proposed settlement requires us to implement certain corporate governance changes and the payment of up to $900,000 to plaintiffs’ counsel for attorneys’ fees and expenses. Our insurers will contribute the entire amount paid for attorneys’ fees and expenses. The proposed settlement is subject to preliminary and, following notice to shareholders, final approval by the United States District Court for the District of Delaware. On July 15, 2020, the court entered an order requesting that the parties file supplemental briefing in respect of their joint motion for preliminary approval of the settlement. These supplemental briefs are due August 5, 2020.

Conference Call Information

Impinj will host a conference call today, July 29, 2020 at 5:00 p.m. ET / 2:00 p.m. PT for analysts and investors to ask questions on its second quarter 2020 results. 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 10145777.

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, bookings, systems deployments, our strategy, prospects, the impact of Covid-19, and financial considerations for third-quarter 2020 and future periods. 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)

 

 

June 30, 2020

 

 

December 31, 2019 (1)

 

Assets:

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

$

97,488

 

 

$

66,898

 

Short-term investments

 

23,419

 

 

 

49,597

 

Accounts receivable, net

 

15,454

 

 

 

23,735

 

Inventory

 

37,091

 

 

 

34,153

 

Prepaid expenses and other current assets

 

1,785

 

 

 

2,386

 

Total current assets

 

175,237

 

 

 

176,769

 

Property and equipment, net

 

16,294

 

 

 

17,442

 

Operating lease right-of-use assets

 

15,170

 

 

 

16,501

 

Other non-current assets

 

701

 

 

 

453

 

Goodwill

 

3,881

 

 

 

3,881

 

Total assets

$

211,283

 

 

$

215,046

 

Liabilities and stockholders' equity:

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

$

4,473

 

 

$

5,600

 

Accrued compensation and employee related benefits

 

4,922

 

 

 

5,859

 

Accrued liabilities

 

10,613

 

 

 

3,755

 

Current portion of operating lease liabilities

 

3,546

 

 

 

3,380

 

Current portion of deferred revenue

 

819

 

 

 

551

 

Other current liabilities

 

76

 

 

 

352

 

Total current liabilities

 

24,449

 

 

 

19,497

 

Long-term debt, net of current portion

 

52,669

 

 

 

50,876

 

Operating lease liabilities, net of current portion

 

17,082

 

 

 

18,907

 

Deferred revenue, net of current portion

 

225

 

 

 

213

 

Long-term liabilities — other

 

608

 

 

 

314

 

Total liabilities

 

95,033

 

 

 

89,807

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Common stock, $0.001 par value

 

23

 

 

 

22

 

Additional paid-in capital

 

400,772

 

 

 

387,926

 

Accumulated other comprehensive income

 

58

 

 

 

34

 

Accumulated deficit

 

(284,603

)

 

 

(262,743

)

Total stockholders' equity

 

116,250

 

 

 

125,239

 

Total liabilities and stockholders' equity

$

211,283

 

 

$

215,046

 

(1) Certain immaterial amounts on our condensed consolidated balance sheets in prior periods have been reclassified to conform with current period presentation.

 

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data, unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2020

 

2019

 

2020

 

2019

 

Revenue

 

$

26,457

 

 

$

38,190

 

 

$

74,279

 

 

$

71,253

 

 

Cost of revenue

 

 

13,497

 

 

 

19,774

 

 

 

39,925

 

 

 

36,964

 

 

Gross profit

 

 

12,960

 

 

 

18,416

 

 

 

34,354

 

 

 

34,289

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

10,661

 

 

 

8,773

 

 

 

21,718

 

 

 

17,334

 

 

Sales and marketing

 

 

6,123

 

 

 

8,188

 

 

 

13,613

 

 

 

16,737

 

 

General and administrative

 

 

12,446

 

 

 

5,455

 

 

 

18,688

 

 

 

11,150

 

 

Total operating expenses

 

 

29,230

 

 

 

22,416

 

 

 

54,019

 

 

 

45,221

 

 

Loss from operations

 

 

(16,270

)

 

 

(4,000

)

 

 

(19,665

)

 

 

(10,932

)

 

Other income, net

 

 

126

 

 

 

309

 

 

 

535

 

 

 

630

 

 

Interest expense

 

 

(1,349

)

 

 

(421

)

 

 

(2,661

)

 

 

(850

)

 

Loss before income taxes

 

 

(17,493

)

 

 

(4,112

)

 

 

(21,791

)

 

 

(11,152

)

 

Income tax expense

 

 

(41

)

 

 

(46

)

 

 

(69

)

 

 

(74

)

 

Net loss

 

$

(17,534

)

 

$

(4,158

)

 

$

(21,860

)

 

$

(11,226

)

 

Net loss per share — basic and diluted

 

$

(0.77

)

 

$

(0.19

)

 

$

(0.97

)

 

$

(0.52

)

 

Weighted-average shares — basic and diluted

 

 

22,716

 

 

 

21,709

 

 

 

22,564

 

 

 

21,626

 

 

IMPINJ, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

 

 

 

Six Months Ended

 

 

June 30,

 

 

2020

 

2019

Operating activities:

 

 

 

 

 

 

Net loss

 

$

(21,860

)

 

$

(11,226

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation

 

 

2,294

 

 

 

2,417

 

Stock-based compensation

 

 

9,818

 

 

 

7,020

 

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

 

 

19

 

 

 

(362

)

Amortization of debt issuance costs and debt discount

 

 

1,793

 

 

 

35

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

8,281

 

 

 

(2,798

)

Inventory

 

 

(2,938

)

 

 

6,815

 

Prepaid expenses and other assets

 

 

364

 

 

 

467

 

Deferred revenue

 

 

280

 

 

 

267

 

Accounts payable

 

 

(1,229

)

 

 

798

 

Accrued compensation and employee related benefits

 

 

(937

)

 

 

(1,429

)

Operating lease right-of-use assets

 

 

1,331

 

 

 

868

 

Operating lease liabilities

 

 

(1,659

)

 

 

(1,490

)

Accrued liabilities and other liabilities

 

 

7,252

 

 

 

459

 

Net cash provided by operating activities

 

 

2,809

 

 

 

1,841

 

Investing activities:

 

 

 

 

 

 

Purchases of investments

 

 

(5,103

)

 

 

(36,569

)

Proceeds from maturities of investments

 

 

31,275

 

 

 

37,794

 

Purchases of property and equipment

 

 

(1,237

)

 

 

(799

)

Net cash provided by investing activities

 

 

24,935

 

 

 

426

 

Financing activities:

 

 

 

 

 

 

Principal payments on finance lease obligations

 

 

(183

)

 

 

(283

)

Payments on term and equipment loans

 

 

 

 

 

(4,222

)

Proceeds from term loans, net of debt issuance costs

 

 

 

 

 

3,991

 

Proceeds from exercise of stock options and employee stock purchase plan

 

 

3,029

 

 

 

2,870

 

Net cash provided by financing activities

 

 

2,846

 

 

 

2,356

 

Net increase in cash and cash equivalents

 

 

30,590

 

 

 

4,623

 

Cash and cash equivalents

 

 

 

 

 

 

Beginning of period

 

 

66,898

 

 

 

17,530

 

End of period

 

$

97,488

 

 

$

22,153

 

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, our key non-GAAP performance measures include adjusted EBITDA and non-GAAP net income (loss), as defined 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 these measures provides 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 similarly termed non-GAAP measures used by other companies.

Adjusted EBITDA

We define adjusted EBITDA differently in this release than we have previously, by excluding proposed litigation settlements of class-action and derivative lawsuits including related costs, such as that we incurred in second-quarter 2020. Our consequent definition of adjusted EBITDA is 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; settlement and related costs; other income, net; interest expense; loss on debt extinguishment; and income tax benefit (expense). We have excluded settlement and related costs because we do not believe they reflect our core operations and us excluding them enables more consistent evaluation of our operating performances. Excluding the settlement and related costs 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 release than we have previously, by excluding proposed litigation settlements of class-action and derivative lawsuits including related costs, such as that we incurred in second-quarter 2020. Our consequent definition of non-GAAP net income (loss) is 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; settlement and related 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 our current period presentation. Excluding settlement and related costs did not impact non-GAAP net income previously reported for prior periods.

GAAP requires that certain convertible debt instruments that may be settled in cash on conversion be accounted for as separate liability and equity components in a manner that reflects our non-convertible debt borrowing rate. This accounting results in the debt component being treated as though it was issued at a discount, with the debt discount being amortized as additional non-cash interest expense over the debt instrument term 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.

IMPINJ, INC.

RECONCILIATIONS OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES

(in thousands, except percentages, unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2020

 

2019

 

2020

 

2019

GAAP Gross margin

 

 

49.0

%

 

 

48.2

%

 

 

46.2

%

 

 

48.1

%

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

1.7

%

 

 

1.4

%

 

 

1.3

%

 

 

1.5

%

Stock-based compensation

 

 

0.7

%

 

 

0.4

%

 

 

0.5

%

 

 

0.4

%

Non-GAAP Gross margin

 

 

51.4

%

 

 

50.0

%

 

 

48.0

%

 

 

50.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(17,534

)

 

$

(4,158

)

 

$

(21,860

)

 

$

(11,226

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

1,126

 

 

 

1,262

 

 

 

2,294

 

 

 

2,417

 

Stock-based compensation

 

 

4,597

 

 

 

3,543

 

 

 

9,818

 

 

 

7,020

 

Other income, net

 

 

(126

)

 

 

(309

)

 

 

(535

)

 

 

(630

)

Interest expense

 

 

1,349

 

 

 

421

 

 

 

2,661

 

 

 

850

 

Income tax expense

 

 

41

 

 

 

46

 

 

 

69

 

 

 

74

 

Settlement and related costs

 

 

5,359

 

 

 

 

 

 

5,359

 

 

 

 

Adjusted EBITDA loss

 

$

(5,188

)

 

$

805

 

 

$

(2,194

)

 

$

(1,495

)

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Net loss

 

$

(17,534

)

 

$

(4,158

)

 

$

(21,860

)

 

$

(11,226

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

1,126

 

 

 

1,262

 

 

 

2,294

 

 

 

2,417

 

Stock-based compensation

 

 

4,597

 

 

 

3,543

 

 

 

9,818

 

 

 

7,020

 

Amortization of debt discount

 

 

886

 

 

 

 

 

 

1,740

 

 

 

 

Settlement and related costs

 

 

5,359

 

 

 

 

 

 

5,359

 

 

 

 

Non-GAAP Net income (loss)

 

$

(5,566

)

 

$

647

 

 

$

(2,649

)

 

$

(1,789

)

Non-GAAP Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.25

)

 

$

0.03

 

 

$

(0.12

)

 

$

(0.08

)

Diluted

 

$

(0.25

)

 

$

0.03

 

 

$

(0.12

)

 

$

(0.08

)

GAAP and non-GAAP Weighted-average shares — basic

 

 

22,716

 

 

 

21,709

 

 

 

22,564

 

 

 

21,626

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP Weighted-average shares — diluted

 

 

22,716

 

 

 

21,709

 

 

 

22,564

 

 

 

21,626

 

Dilutive shares from stock plans

 

 

 

 

 

572

 

 

 

 

 

 

 

Non-GAAP Weighted-average shares — diluted

 

 

22,716

 

 

 

22,281

 

 

 

22,564

 

 

 

21,626

 

 


Contacts

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

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