Penumbra, Inc. Reports Third Quarter 2016 Financial Results

ALAMEDA, Calif., Nov. 3, 2016 /PRNewswire/ — Penumbra, Inc. (NYSE: PEN), a global interventional therapies company, today reported financial results for the third quarter ended September 30, 2016.

Penumbra, Inc. Logo (PRNewsFoto/Penumbra, Inc.)
  • Revenue of $67.2 million in the third quarter of 2016, an increase of 33.3%, or 32.5% in constant currency1, over the third quarter of 2015.

Third Quarter 2016 Financial Results
Total revenue grew to $67.2 million for the third quarter of 2016 compared to $50.4 million for the third quarter of 2015, an increase of 33.3%, or 32.5% on a constant currency basis. The U.S. represented 66.1% of total revenue and international represented 33.9% of total revenue for the third quarter of 2016. Revenue from sales of neuro products grew to $47.5 million for the third quarter of 2016, an increase of 30.9%, or 29.9% on a constant currency basis. Revenue from sales of peripheral vascular products grew to $19.7 million for the third quarter of 2016, an increase of 39.3%, or 39.4% on a constant currency basis.

Gross profit was $42.9 million, or 63.8% of total revenue, for the third quarter of 2016, compared to $33.5 million, or 66.4% of total revenue, for the third quarter of 2015.

Total operating expenses were $44.2 million, or 65.8% of total revenue, for the third quarter of 2016, compared to $31.3 million, or 62.1% of total revenue, for the third quarter of 2015. R&D expenses were $6.5 million for the third quarter of 2016, compared to $4.6 million for the third quarter of 2015. SG&A expenses were $37.7 million for the third quarter of 2016, compared to $26.8 million for the third quarter of 2015.

Net loss for the third quarter of 2016 was $1.1 million, compared to net income of $0.9 million for the third quarter of 2015.

As of September 30, 2016, cash and cash equivalents and marketable investments totaled $141.8 million.

Webcast and Conference Call Information
Penumbra, Inc. will host a conference call to discuss the third quarter 2016 financial results after market close on Thursday, November 3, 2016 at 5:00 PM Eastern Time. The conference call can be accessed live over the phone by dialing (877) 201-0168 for domestic callers or (647) 788-4901 for international callers (conference id: 92689865), or the webcast can be accessed on the “Investors” section of the Company’s website at: www.penumbrainc.com. The webcast will be available on the Company’s website for two weeks following the completion of the call.

About Penumbra
Penumbra, Inc., headquartered in Alameda, California, is a global interventional therapies company that designs, develops, manufactures and markets innovative medical devices. The company has a broad portfolio of products that address challenging medical conditions and significant clinical needs across two major markets, neuro and peripheral vascular. Penumbra sells its products to hospitals primarily through its direct sales organization in the U.S., most of Europe, Canada and Australia, and through distributors in select international markets. Penumbra and the Penumbra logo are trademarks of Penumbra, Inc.

Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company has disclosed the non-GAAP financial measure relating to constant currency revenue in this press release.

Our 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.

Full reconciliation of this non-GAAP measure to the most comparable GAAP measures is set forth in the tables below.

Our management believes the non-GAAP financial measure disclosed in this press release is useful to investors in assessing the operating performance of our business and provides a meaningful comparison 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.

The non-GAAP financial measure included in this press release may be different from, and therefore may not be comparable to, similarly titled measures used by other companies. Non-GAAP measures should not be considered in isolation or as alternatives to GAAP measures. We urge investors to review the reconciliation of the non-GAAP financial measure 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; and potential adverse regulatory actions. These risks and uncertainties, as well as others, are discussed in greater detail in our filings with the Securities and Exchange Commission, including our Annual Report Form 10-K for the year ended December 31, 2015 filed with the SEC on March 8, 2016. 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.

1 Constant currency results are non-GAAP financial measures. Please refer to “Non-GAAP Financial Measures” for important information about our use of constant currency results, including reconciliations to the most comparable GAAP measures.

Penumbra, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)

September 30,
2016

December 31,
2015

Assets

Current assets:

Cash and cash equivalents

$

15,856

$

19,547

Marketable investments

125,975

129,257

Accounts receivable, net

36,635

29,444

Inventories

70,092

56,761

Prepaid expenses and other current assets

18,665

9,352

Total current assets

267,223

244,361

Property and Equipment, net

16,224

8,951

Deferred taxes

13,394

10,143

Other non-current assets

438

393

Total assets

$

297,279

$

263,848

Liabilities and Stockholders’ Equity

Current Liabilities:

Accounts payable

$

3,584

$

2,567

Accrued liabilities

33,760

25,581

Total current liabilities

37,344

28,148

Other non-current liabilities

6,081

3,178

Total liabilities

43,425

31,326

Stockholders’ Equity:

Common stock

31

30

Additional paid-in capital

275,031

252,087

Notes receivable from stockholders

(5)

Accumulated other comprehensive loss

(3,592)

(2,115)

Accumulated deficit

(17,616)

(17,475)

Total stockholders’ equity

253,854

232,522

Total liabilities and stockholders’ equity

$

297,279

$

263,848

Penumbra, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share amounts)

Three Months Ended September 30,

Nine Months Ended September 30,

2016

2015

2016

2015

Revenue

$

67,187

$

50,416

$

190,212

$

131,679

Cost of revenue

24,313

16,919

65,963

44,079

Gross profit

42,874

33,497

124,249

87,600

Operating expenses:

Research and development

6,497

4,560

17,762

12,543

Sales, general and administrative

37,740

26,755

106,685

72,698

Total operating expenses

44,237

31,315

124,447

85,241

(Loss) Income from operations

(1,363)

2,182

(198)

2,359

Interest income, net

631

17

1,700

402

Other expense, net

(360)

(115)

(856)

(613)

(Loss) Income before provision for income taxes

(1,092)

2,084

646

2,148

Provision for income taxes

14

1,183

787

1,416

Net (loss) income

$

(1,106)

$

901

$

(141)

$

732

Net (loss) income attributable to common stockholders

$

(1,106)

$

276

$

(141)

$

175

Net (loss) income per share attributable to common stockholders
—Basic

$

(0.04)

$

0.04

$

0.00

$

0.03

—Diluted

$

(0.04)

$

0.03

$

0.00

$

0.02

Weighted average shares used to compute net (loss) income per share attributable to common stockholders
—Basic

30,604,384

7,853,730

30,269,463

5,962,031

—Diluted

30,604,384

10,189,248

30,269,463

8,494,651

Penumbra, Inc.
Reconciliation of Revenue Growth by Geographic Regions to Constant Currency Revenue Growth1
(unaudited)
(in thousands)

Three Months Ended September 30,

Reported Change

FX Impact

Constant Currency Change

2016

2015

$

%

$

$

%

United States

$

44,380

$

35,394

$

8,986

25.4

%

$

$

8,986

25.4

%

International

22,807

15,022

$

7,785

51.8

%

(374)

$

7,411

49.3

%

$

67,187

$

50,416

$

16,771

33.3

%

$

(374)

$

16,397

32.5

%

Penumbra, Inc.
Reconciliation of Revenue Growth by Product Categories to Constant Currency Revenue Growth1
(unaudited)
(in thousands)

Three Months Ended September 30,

Reported Change

FX Impact

Constant Currency Change

2016

2015

$

%

$

$

%

Neuro

$

47,534

$

36,309

$

11,225

30.9

%

$

(384)

$

10,841

29.9

%

Peripheral Vascular

19,653

14,107

$

5,546

39.3

%

10

$

5,556

39.4

%

Total

$

67,187

$

50,416

$

16,771

33.3

%

$

(374)

$

16,397

32.5

%

Penumbra, Inc.
Reconciliation of Revenue Growth by Geographic Regions to Constant Currency Revenue Growth1
(unaudited)
(in thousands)

Nine Months Ended September 30,

Reported Change

FX Impact

Constant Currency Change

2016

2015

$

%

$

$

%

United States

$

127,484

$

89,364

$

38,120

42.7

%

$

$

38,120

42.7

%

International

62,728

42,315

$

20,413

48.2

%

236

$

20,649

48.8

%

$

190,212

$

131,679

$

58,533

44.5

%

$

236

$

58,769

44.6

%

Penumbra, Inc.
Reconciliation of Revenue Growth by Product Categories to Constant Currency Revenue Growth1
(unaudited)
(in thousands)

Nine Months Ended September 30,

Reported Change

FX Impact

Constant Currency Change

2016

2015

$

%

$

$

%

Neuro

134,180

102,363

$

31,817

31.1

%

$

94

$

31,911

31.2

%

Peripheral Vascular

56,032

29,316

$

26,716

91.1

%

142

$

26,858

91.6

%

Total

$

190,212

$

131,679

$

58,533

44.5

%

$

236

$

58,769

44.6

%

1 See “Non-GAAP Financial Measures” above for important information about our use of this non-GAAP measure and further information about our calculation of constant currency results.

Investor Relations
Penumbra, Inc.
510-995-2461
investors@penumbrainc.com

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SOURCE Penumbra, Inc.