ALAMEDA, Calif., Aug. 3, 2020 /PRNewswire/ -- Penumbra,
Inc. (NYSE: PEN), a global healthcare company focused
on innovative therapies, today reported financial results for the
second quarter ended June 30,
2020.
- Revenue of $105.1 million
in the second quarter of 2020, a decrease of 21.7%, or 21.3% in
constant currency1, compared to the second quarter of
2019. US revenue of $78.0 million was slightly less than 10%
below the same period a year ago.
Second Quarter 2020 Financial Results
Total revenue declined to $105.1 million for the second quarter of
2020 compared to $134.2 million
for the second quarter of 2019, a decrease of 21.7%, or 21.3% on a
constant currency basis. The United
States represented 74% of total revenue and international
represented 26% of total revenue for the second quarter of 2020.
Revenue from sales of vascular products declined to $46.3 million for the second quarter of
2020, a decrease of 12.1%, or 11.9% on a constant currency basis.
US vascular revenue declined 5.7% and international vascular
revenue declined 36.7% compared to the second quarter of 2019.
Revenue from sales of neuro products declined to $58.8 million for the second quarter of 2020, a
decrease of 27.8%, or 27.3% on a constant currency basis. US neuro
revenue and international neuro revenue declined 13.3% and 45.4%,
respectively, compared to the second quarter of 2019.
Gross profit was $64.9 million, or 61.8% of total revenue,
for the second quarter of 2020, compared to $93.9 million, or 70.0% of total revenue,
for the second quarter of 2019.
Total operating expenses for the second quarter of 2020 were
$82.6 million, or 78.6% of total
revenue. This compares to total operating expenses of $81.1 million, or 60.5% of total revenue, for the
second quarter of 2019. R&D expenses were $22.7 million for the second quarter of 2020,
compared to $13.5 million for the
second quarter of 2019. SG&A expenses were $59.9 million for the second quarter of
2020, compared to $67.7 million
for the second quarter of 2019.
Operating loss for the second quarter of 2020 was $17.6 million, compared to an operating
income of $12.8 million for the
second quarter of 2019.
As of June 30, 2020, cash, cash
equivalents and marketable investments totaled $278.3 million, which includes net cash proceeds
of approximately $134.8 million from
an underwritten public offering completed in June 2020.
Impact of COVID-19 Pandemic
The Company's business trends continue to be impacted by the
global COVID-19 pandemic. The Company has experienced and believes
that the impact of the COVID-19 pandemic on the Company's business
differs by geography and procedure type. Due to the uncertain scope
and duration of the pandemic, and uncertain timing of global
recovery and economic normalization, we still cannot reliably
estimate the future impact on our operations and financial results.
Further, we think the recent resurgence in the United States and other parts of the world
could cause periodic disruption in our revenue until the pandemic
is contained.
Webcast and Conference Call Information
Penumbra, Inc. will host a conference call to discuss the second
quarter 2020 financial results after market close on Monday,
August 3, 2020 at 4:30 PM Eastern
Time. The conference call can be accessed live over the
phone by dialing (833) 350-1434 for domestic and international
callers (conference id: 8138127), 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 sells its products to
hospitals and healthcare providers primarily through its direct
sales organization in the United
States, most of Europe,
Canada and Australia, and through distributors in select
international markets. The Penumbra logo is a trademark of
Penumbra, Inc. For more information, visit www.penumbrainc.com.
|
1
|
See "Non-GAAP
Financial Measures" for important information about our use of
constant currency and other non-GAAP measures.
|
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) non-GAAP net (loss) income and non-GAAP diluted
earnings per share ("EPS") and b) constant currency.
Non-GAAP net (loss) income and non-GAAP diluted EPS. The
Company defines non-GAAP net (loss) income as net income
attributable to Penumbra, Inc. excluding the effects of the
impairment loss on indefinite-lived intangible asset and the excess
tax benefits associated with share-based compensation arrangements.
The Company defines non-GAAP diluted EPS as GAAP diluted EPS,
excluding the effects of the same items above.
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.
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 net (loss) income and non-GAAP diluted EPS useful
metrics as they provide an alternative framework for assessing how
our underlying business performed excluding the impairment loss on
indefinite-lived intangible asset 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; 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 (SEC), including our Annual
Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on
February 26, 2020 and our Quarterly Report on Form 10-Q for
the quarter ended March 31, 2020
filed with the SEC on May 7, 2020.
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)
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
134,381
|
|
|
$
|
72,779
|
|
|
Marketable
investments
|
|
143,914
|
|
|
116,610
|
|
|
Accounts receivable,
net
|
|
97,613
|
|
|
105,901
|
|
|
Inventories
|
|
183,442
|
|
|
152,992
|
|
|
Prepaid expenses and other
current assets
|
|
16,545
|
|
|
14,852
|
|
|
Total current assets
|
|
575,895
|
|
|
463,134
|
|
|
Property and
equipment, net
|
|
62,188
|
|
|
51,812
|
|
|
Operating lease
right-of-use assets
|
|
42,669
|
|
|
43,717
|
|
|
Finance lease
right-of-use assets
|
|
37,927
|
|
|
39,287
|
|
|
Intangible assets,
net
|
|
10,645
|
|
|
25,407
|
|
|
Goodwill
|
|
7,665
|
|
|
7,656
|
|
|
Deferred
taxes
|
|
36,474
|
|
|
31,305
|
|
|
Other non-current
assets
|
|
6,737
|
|
|
2,946
|
|
|
Total assets
|
|
$
|
780,200
|
|
|
$
|
665,901
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
14,432
|
|
|
$
|
15,111
|
|
|
Accrued
liabilities
|
|
57,718
|
|
|
67,630
|
|
|
Current
operating lease liabilities
|
|
4,446
|
|
|
4,142
|
|
|
Current finance
lease liabilities
|
|
1,016
|
|
|
4,165
|
|
|
Total current liabilities
|
|
77,612
|
|
|
91,048
|
|
|
Non-current operating
lease liabilities
|
|
45,925
|
|
|
47,242
|
|
|
Non-current finance
lease liabilities
|
|
26,202
|
|
|
26,748
|
|
|
Other non-current
liabilities
|
|
7,300
|
|
|
15,250
|
|
|
Total liabilities
|
|
157,039
|
|
|
180,288
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Common
stock
|
|
36
|
|
|
35
|
|
|
Additional paid-in
capital
|
|
581,066
|
|
|
430,659
|
|
|
Accumulated other
comprehensive loss
|
|
(2,097)
|
|
|
(2,324)
|
|
|
Retained
earnings
|
|
45,789
|
|
|
57,522
|
|
|
Total Penumbra, Inc.
stockholders' equity
|
|
624,794
|
|
|
485,892
|
|
|
Non-controlling
interest
|
|
(1,633)
|
|
|
(279)
|
|
|
Total stockholders'
equity
|
|
623,161
|
|
|
485,613
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
780,200
|
|
|
$
|
665,901
|
|
|
|
|
|
|
|
Penumbra,
Inc.
|
|
Condensed
Consolidated Statements of Operations
|
|
(unaudited)
|
|
(in thousands,
except share and per share amounts)
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Revenue
|
|
$
|
105,109
|
|
|
$
|
134,201
|
|
|
$
|
242,438
|
|
|
$
|
262,640
|
|
|
Cost of
revenue
|
|
40,179
|
|
|
40,273
|
|
|
89,499
|
|
|
84,802
|
|
|
Gross
profit
|
|
64,930
|
|
|
93,928
|
|
|
152,939
|
|
|
177,838
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
22,725
|
|
|
13,462
|
|
|
35,671
|
|
|
25,129
|
|
|
Sales, general and
administrative
|
|
59,854
|
|
|
67,665
|
|
|
134,307
|
|
|
128,756
|
|
|
Total operating
expenses
|
|
82,579
|
|
|
81,127
|
|
|
169,978
|
|
|
153,885
|
|
|
(Loss) income from
operations
|
|
(17,649)
|
|
|
12,801
|
|
|
(17,039)
|
|
|
23,953
|
|
|
Interest income,
net
|
|
108
|
|
|
784
|
|
|
407
|
|
|
1,517
|
|
|
Other income
(expense), net
|
|
511
|
|
|
(71)
|
|
|
(1,144)
|
|
|
(47)
|
|
|
(Loss) income before
income taxes
|
|
(17,030)
|
|
|
13,514
|
|
|
(17,776)
|
|
|
25,423
|
|
|
Benefit from income
taxes
|
|
(4,129)
|
|
|
(2,735)
|
|
|
(5,763)
|
|
|
(1,280)
|
|
|
Consolidated net
(loss) income
|
|
$
|
(12,901)
|
|
|
$
|
16,249
|
|
|
$
|
(12,013)
|
|
|
$
|
26,703
|
|
|
Net loss attributable
to non-controlling interest
|
|
(941)
|
|
|
(339)
|
|
|
(1,478)
|
|
|
(583)
|
|
|
Net (loss) income
attributable to Penumbra, Inc.
|
|
$
|
(11,960)
|
|
|
$
|
16,588
|
|
|
$
|
(10,535)
|
|
|
$
|
27,286
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to Penumbra, Inc. per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.34)
|
|
|
$
|
0.48
|
|
|
$
|
(0.30)
|
|
|
$
|
0.79
|
|
|
Diluted
|
|
$
|
(0.34)
|
|
|
$
|
0.46
|
|
|
$
|
(0.30)
|
|
|
$
|
0.75
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
35,400,542
|
|
|
34,694,228
|
|
|
35,221,727
|
|
|
34,601,270
|
|
|
Diluted
|
|
35,400,542
|
|
|
36,214,321
|
|
|
35,221,727
|
|
|
36,214,362
|
|
|
Penumbra,
Inc.
|
|
Reconciliation of
GAAP Net (Loss) Income and Diluted EPS to Non-GAAP Net Income and
Non-GAAP Diluted EPS1
|
|
(unaudited)
|
|
(in thousands,
except per share amounts)
|
|
|
|
Three Months
Ended
June 30, 2020
|
|
Three Months
Ended
June 30, 2019
|
|
Six Months Ended
June
30, 2020
|
|
Six Months Ended
June
30, 2019
|
|
|
Net loss
|
|
Diluted
EPS
|
|
Net
income
(loss)
|
|
Diluted
EPS
|
|
Net loss
|
|
Diluted
EPS
|
|
Net
income
(loss)
|
|
Diluted
EPS
|
|
GAAP net (loss)
income
|
|
$
|
(11,960)
|
|
|
$
|
(0.34)
|
|
|
$
|
16,588
|
|
|
$
|
0.46
|
|
|
$
|
(10,535)
|
|
|
$
|
(0.30)
|
|
|
$
|
27,286
|
|
|
$
|
0.75
|
|
|
GAAP net (loss) income
includes the effect of
the following items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment loss on
indefinite-lived
intangible asset
|
|
2,500
|
|
|
0.07
|
|
|
—
|
|
|
—
|
|
|
2,500
|
|
|
0.07
|
|
|
—
|
|
|
—
|
|
|
Excess tax benefits
related to stock
compensation awards
|
|
(1,320)
|
|
|
(0.03)
|
|
|
(6,745)
|
|
|
(0.19)
|
|
|
(2,802)
|
|
|
(0.08)
|
|
|
(8,989)
|
|
|
(0.24)
|
|
|
Non-GAAP net
income
|
|
$
|
(10,780)
|
|
|
$
|
(0.30)
|
|
|
$
|
9,843
|
|
|
$
|
0.27
|
|
|
$
|
(10,837)
|
|
|
$
|
(0.31)
|
|
|
$
|
18,297
|
|
|
$
|
0.51
|
|
|
1See
"Non-GAAP Financial Measures" for important information about our
use of non-GAAP measures and further information about our non-GAAP
net income and non-GAAP diluted EPS measures.
|
|
Penumbra,
Inc.
|
|
Reconciliation of
Revenue Change by Geographic Regions and Product Categories to
Constant Currency Revenue Change2
|
|
(unaudited)
|
|
(in
thousands)
|
|
|
|
Three Months Ended
June 30,
|
|
Reported
Change
|
|
FX
Impact
|
|
Constant Currency
Change
|
|
|
2020
|
|
2019
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
|
United
States
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neuro
|
|
$
|
38,642
|
|
|
$
|
44,574
|
|
|
$
|
(5,932)
|
|
|
(13.3)
|
%
|
|
$
|
—
|
|
|
$
|
(5,932)
|
|
|
(13.3)
|
%
|
|
Vascular
|
|
39,401
|
|
|
41,800
|
|
|
(2,399)
|
|
|
(5.7)
|
%
|
|
—
|
|
|
(2,399)
|
|
|
(5.7)
|
%
|
|
Total United
States
|
|
$
|
78,043
|
|
|
$
|
86,374
|
|
|
$
|
(8,331)
|
|
|
(9.6)
|
%
|
|
$
|
—
|
|
|
$
|
(8,331)
|
|
|
(9.6)
|
%
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neuro
|
|
20,195
|
|
|
36,973
|
|
|
(16,778)
|
|
|
(45.4)
|
%
|
|
$
|
409
|
|
|
(16,369)
|
|
|
(44.3)
|
%
|
|
Vascular
|
|
6,871
|
|
|
10,854
|
|
|
(3,983)
|
|
|
(36.7)
|
%
|
|
113
|
|
|
(3,870)
|
|
|
(35.7)
|
%
|
|
Total
International
|
|
$
|
27,066
|
|
|
$
|
47,827
|
|
|
$
|
(20,761)
|
|
|
(43.4)
|
%
|
|
$
|
522
|
|
|
$
|
(20,239)
|
|
|
(42.3)
|
%
|
|
Total
|
|
$
|
105,109
|
|
|
$
|
134,201
|
|
|
$
|
(29,092)
|
|
|
(21.7)
|
%
|
|
$
|
522
|
|
|
$
|
(28,570)
|
|
|
(21.3)
|
%
|
|
Penumbra,
Inc.
|
|
Reconciliation of
Revenue Change by Geographic Regions and Product Categories to
Constant Currency Revenue Change2
|
|
(unaudited)
|
|
(in
thousands)
|
|
|
|
Six Months Ended
June 30,
|
|
Reported
Change
|
|
FX
Impact
|
|
Constant Currency
Change
|
|
|
2020
|
|
2019
|
|
$
|
|
%
|
|
$
|
|
$
|
|
%
|
|
United
States
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neuro
|
|
$
|
83,749
|
|
|
$
|
88,605
|
|
|
$
|
(4,856)
|
|
|
(5.5)
|
%
|
|
$
|
—
|
|
|
$
|
(4,856)
|
|
|
(5.5)
|
%
|
|
Vascular
|
|
90,068
|
|
|
80,280
|
|
|
9,788
|
|
|
12.2
|
%
|
|
—
|
|
|
9,788
|
|
|
12.2
|
%
|
|
Total United
States
|
|
$
|
173,817
|
|
|
$
|
168,885
|
|
|
$
|
4,932
|
|
|
2.9
|
%
|
|
$
|
—
|
|
|
$
|
4,932
|
|
|
2.9
|
%
|
|
International
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Neuro
|
|
$
|
53,164
|
|
|
$
|
74,413
|
|
|
$
|
(21,249)
|
|
|
(28.6)
|
%
|
|
$
|
1,099
|
|
|
$
|
(20,150)
|
|
|
(27.1)
|
%
|
|
Vascular
|
|
15,457
|
|
|
19,342
|
|
|
(3,885)
|
|
|
(20.1)
|
%
|
|
256
|
|
|
(3,629)
|
|
|
(18.8)
|
%
|
|
Total
International
|
|
$
|
68,621
|
|
|
$
|
93,755
|
|
|
$
|
(25,134)
|
|
|
(26.8)
|
%
|
|
$
|
1,355
|
|
|
$
|
(23,779)
|
|
|
(25.4)
|
%
|
|
Total
|
|
$
|
242,438
|
|
|
$
|
262,640
|
|
|
$
|
(20,202)
|
|
|
(7.7)
|
%
|
|
$
|
1,355
|
|
|
$
|
(18,847)
|
|
|
(7.2)
|
%
|
|
2See
"Non-GAAP Financial Measures" for important information about our
use of constant currency and other non-GAAP measures.
|
Investor Relations
Penumbra, Inc.
510-995-2461
investors@penumbrainc.com
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SOURCE Penumbra, Inc.