Inogen Announces Fourth Quarter and Full Year 2022 Financial Results

GOLETA, Calif.--(BUSINESS WIRE)--Inogen, Inc. (Nasdaq: INGN), a medical technology company offering innovative respiratory products for use in the homecare setting, today announced financial results for the fourth quarter and the full year ended December 31, 2022.

Fourth Quarter 2022 Highlights

All comparisons are to the prior year period unless otherwise noted.

• Reported total revenue increased 15.3% to $88.1 million, on a constant currency basis total revenue for the quarter increased 17.7%.
• GAAP net loss of $56.6 million, adjusted net loss of $13.0 million, and adjusted EBITDA was a loss of $10.6 million. GAAP net loss included a one-time loss on disposal of intangible asset of $52.2 million and an offsetting reduction to the fair value of contingent liability of $13.7 million.
• Cash and cash equivalents were $187.0 million as of December 31, 2022.

Full Year 2022 Highlights

All comparisons are to the prior year period unless otherwise noted.

• Reported total revenue increased 5.4% to $377.2 million, on a constant currency basis total revenue for the year increased 6.9%.
• Continued progress on our rental strategy led to a 22.5% increase in rental revenue, primarily due to higher rental patients on service, higher percentage of billable patients and higher reimbursement rates.
• GAAP net loss of $83.8 million, adjusted net loss of $26.2 million and adjusted EBITDA was a loss of $13.5 million. GAAP net loss included a one-time loss on disposal of intangible asset of $52.2 million and an offsetting reduction to fair value of contingent liability of $15.4 million.
• Achieved regulatory milestones and announced new products to be launched in 2023.

“Despite the headwinds we faced in 2022, I am pleased with how our team successfully managed these challenges, while growing revenue and executing on our transformation,” said Nabil Shabshab, President and Chief Executive Officer. “We remain focused on our innovation pipeline to provide a foundation for growth along with judicious management of operating expenses to drive medium to long-term growth.”

Fourth Quarter 2022 Financial Results

Fourth quarter total revenue increased 15.3% to $88.1 million from $76.4 million in the fourth quarter of 2021, primarily due to growth in domestic business-to-business sales and rental revenue, partially offset by lower direct-to-consumer sales.

Total gross margin was 33.5% in the fourth quarter of 2022 versus 50.5% in the comparative period in 2021. The decline was driven primarily by sales channel mix, increased material costs including premiums paid for components and higher warranty costs, partially offset by higher manufacturing productivity from increased production volumes.

Total operating expense for the quarter was $88.0 million compared to $45.3 million in the fourth quarter of 2021, representing an increase of 94.3%. The current period expenses include a one-time loss on disposal of intangible asset of $52.2 million. Excluding this loss, operating expense decreased 20.9%, primarily due to the change in fair value of the New Aera earnout liability.

GAAP net loss for the fourth quarter of 2022 was $56.6 million compared to GAAP net loss of $22.9 million in the fourth quarter of 2021. Adjusted net loss was $13.0 million compared to adjusted net loss of $20.1 million in the fourth quarter of 2021.

Adjusted EBITDA was a negative $10.6 million in the fourth quarter of 2022 compared to a negative $0.5 million in the fourth quarter of 2021.

Cash and cash equivalents were $187.0 million as of December 31, 2022, and no debt outstanding.

Full Year 2022 Financial Results

Total revenue of $377.2 million, up 5.4% versus 2021, primarily due to higher international business-to-business sales and rental revenue, partially offset by lower domestic business-to-business and direct-to-consumer sales.

Total gross margin was 40.7% for the full year 2022 versus 49.3% in 2021. The decline was primarily driven by increased material costs related to premiums paid for semiconductor chips and sales channel mix. Additional impacts included higher cost of other materials and warranty costs as well as lower manufacturing productivity. This was partially offset by the impact of higher selling prices across all channels.

Total operating expense for the full year was $238.8 million compared to $167.2 million for the full year 2021, representing an increase of 42.8%. Excluding the loss on disposal of intangible asset, operating expense increased 11.6%. The increased spend was primarily due to ongoing strategic investments required to position the Company for long-term sustainable growth. These expenses included increases in personnel-related expenses, our prescriber initiative, product development, and consulting expenses.

GAAP net loss for full year 2022 was $83.8 million compared to GAAP net loss of $6.3 million for full year 2021. Adjusted net loss was $26.2 million compared to adjusted net income of $1.8 million for full year 2021.

Adjusted EBITDA was a negative $13.5 million for the full year 2022 compared to a positive $29.5 million for the full year 2021.

A reconciliation of adjusted EBITDA and adjusted net income (loss) for the three and twelve months ended December 31, 2022 and 2021 are provided in the financial schedules that are a part of this press release. An explanation of these non-GAAP financial measures is also included below under the heading “Non-GAAP Financial Measures.”

Quarterly Conference Call Information

Inogen will issue fourth quarter and full year 2022 financial results after the market closes on Thursday, February 23, 2023. On the same day, the Company will host a conference call beginning at 2:00 pm PT / 5:00 pm ET.

Individuals interested in listening to the conference call may do so by dialing:

US domestic callers (877) 841-3961
Non-US callers (201) 689-8589

Please reference Inogen to join the call. To listen to a live webcast, please visit the Investor Relations section of Inogen’s website at: http://investor.inogen.com/. This webcast will also be archived on the website for 6 months.

A replay of the call will be available approximately three hours after the live webcast ends and will be accessible through March 2, 2023. To access the replay, dial (877) 660-6853 or (201) 612-7415 and reference Conference ID: 13735129.

Inogen has used, and intends to continue to use, its Investor Relations website, http://investor.inogen.com/, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. For more information, visit http://investor.inogen.com/.

About Inogen

Inogen, Inc. (Nasdaq: INGN) is a leading global medical technology company offering innovative respiratory products for use in the homecare setting. Inogen supports patient respiratory care by developing, manufacturing, and marketing innovative best-in-class portable oxygen concentrators used to deliver supplemental long-term oxygen therapy to patients suffering from chronic respiratory conditions. Inogen partners with patients, prescribers, home medical equipment providers, and distributors to make its oxygen therapy products widely available allowing patients the chance to remain ambulatory while managing the impact of their disease.

For more information, please visit www.inogen.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, Inogen’s expectations for future growth and profitability; expectations related to our sales force and productivity; and our expectations related to management of operating expenses. Any statements contained in this communication that are not statements of historical fact may be deemed to be forward-looking statements. Words such as “believes,” “anticipates,” “plans,” “expects,” “will,” “intends,” “potential,” “possible,” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from currently anticipated results, including but not limited to, risks arising from the possibility that Inogen will not realize anticipated revenue; risks related to the Company’s supply chain, or cost inflation for such components; the risks our innovation pipeline will not produce meaningful results; the impact of changes in reimbursement rates and reimbursement and regulatory policies; and the possible loss of key employees, customers, or suppliers; the risk that expenses and costs will exceed Inogen’s expectations. Information on these and additional risks, uncertainties, and other information affecting Inogen’s business operating results are contained in its Annual Report on Form 10-K for the year ended December 31, 2021, Quarterly Report on Form 10-Q for the period ended September 30, 2022, and in its other filings with the Securities and Exchange Commission. Additional information will also be set forth in Inogen’s Annual Report on Form 10-K for the year ended December 31, 2022, to be filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. Inogen disclaims any obligation to update these forward-looking statements except as may be required by law.

Non-GAAP Financial Measures

Inogen has presented certain financial information in accordance with U.S. GAAP and also on a non-GAAP basis for the three and twelve months ended December 31, 2022, and December 31, 2021. Management believes that non-GAAP financial measures, taken in conjunction with U.S. GAAP financial measures, provide useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of Inogen’s core operating results. Management uses non-GAAP measures to compare Inogen’s performance relative to forecasts and strategic plans, to benchmark Inogen’s performance externally against competitors, and for certain compensation decisions. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Inogen’s operating results as reported under U.S. GAAP. Inogen encourages investors to carefully consider its results under U.S. GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between U.S. GAAP and non-GAAP results are presented in the accompanying tables of this release. For future periods, Inogen is unable to provide a reconciliation of non-GAAP measures without unreasonable effort as a result of the uncertainty regarding, and the potential variability of, the amounts of interest income, interest expense, depreciation and amortization, stock-based compensation, provision for income taxes, and certain other infrequently occurring items, such as acquisition-related costs, that may be incurred in the future.

⁽¹⁾ Income tax impact of adjustments represents the tax impact related to the non-GAAP adjustments listed above and reflects an effective tax rate of 0% for 2022 and 2021, which is due to the recording of a valuation allowance.

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