GOLETA, Calif., Aug. 12, 2014 (GLOBE NEWSWIRE) -- Inogen, Inc. (Nasdaq:INGN), a medical technology company offering innovative respiratory products for use in the homecare setting, today reported financial results for the quarter ended June 30, 2014.
Second Quarter Highlights and Accomplishments
- Total revenue of $30.4 million in the second quarter of 2014, up 50.8% over the same period in 2013, reflecting a record high top-line and continued strong growth in all segments
- Sales revenue of $20.5 million in the second quarter of 2014, up 60.5% over the same period in 2013
- Rental revenue of $9.9 million in the second quarter of 2014, up 34.1% over the same period in 2013
- Adjusted EBITDA of $7.4 million in the second quarter of 2014, representing 68.4% growth over the same period in 2013 and a 24.4% return on revenue
- Rental patient population increased 38.7% over 2013 to more than 25,100 at the end of the second quarter of 2014
- Received FDA 510(k) clearance for the Inogen At Home™, which is expected to be the lightest 5 liter per minute continuous flow stationary oxygen concentrator on the market
“We are very encouraged with the level of productivity and traction we’ve seen throughout the first half of this year, with revenues reaching $54 million, a 50.5% increase over revenues for the first half of 2013. We saw solid results in both direct-to-consumer and business-to-business sales segments, with continued improvement in Adjusted EBITDA, which also reached a record for the quarter and demonstrated our substantial operating cost leverage,” commented President and Chief Executive Officer, Raymond Huggenberger. “We intend to continue to execute on our strategy to both raise awareness of our oxygen-therapy products and leverage the investments made in sales and marketing to drive demand. We also plan to increase our go-to-market resources to drive future growth and prepare for additional activities such as the commercial launch of our Inogen At Home™ product later this year.”
Second Quarter Financial Results
Total revenue for the three months ended June 30, 2014 rose 50.8% to $30.4 million, from $20.2 million in same period in 2013.
Sales revenue was $20.5 million in the second quarter of 2014, up from $12.8 million, a 60.5% increase from the 2013 period, due to the growth in our direct-to-consumer sales and our business-to-business sales worldwide. Total units sold increased to 9,200 for the second quarter of 2014, reflecting growth of 67.3% over the same quarter in 2013.
Rental revenue was $9.9 million in the second quarter of 2014, up from $7.4 million, a 34.1% increase from the 2013 period, primarily due to the 38.7% growth in the rental patient population, partially offset by rental reimbursement rate reductions associated with the Medicare Competitive Bidding program.
Gross margin for the second quarter was 49.7%, reflecting strong business-to-business and direct-to-consumer sales in the company’s total revenue mix. Sales gross margin for the second quarter was 47.8%, down from 49.3% for the 2013 period. The decline in sales margin primarily resulted from the decline in average selling prices across all segments as volume increased substantially and a direct-to-consumer price elasticity study that was conducted in the second quarter of 2014. This was partially offset by increased mix of direct-to-consumer sales versus business-to-business sales in the quarter. Direct-to-consumer sales carry a higher gross margin than business-to-business sales. Rental gross margin for the second quarter was 53.7%, a 100 basis point improvement from the first quarter of 2014.
Operating expense was $11.2 million in the second quarter of 2014 versus $8.7 million in the same period of 2013. Higher operating expenses were attributed to increased investments in commercialization activities to drive sales and new rentals and support our existing patient base, activities focused on the launch of the Inogen At HomeTM, as well as incremental costs associated with being a public company.
Adjusted EBITDA for the three months ended June 30, 2014 was $7.4 million, up 68.4% from the same period in the prior year and representing a 24.4% return on revenue, demonstrating substantial cost leverage across sales and marketing, research and development, and general and administrative expenses.
The company’s effective tax rate was 39.5% in second quarter 2014 versus an effective tax rate of 3.8% in second quarter of 2013. The company recorded a one-time tax benefit of $21.8 million in the fourth quarter of 2013 related to its net operating loss carryforward. The second quarter 2014 tax provision reflects the statutory rates and the company’s pre-tax income for book purposes, although the company will benefit from the utilization of the NOL carryforward on a cash basis for the foreseeable future.
Net income for the three months ended June 30, 2014 was $2.3 million, or $0.11 per diluted common share on a pro-forma non-GAAP basis, compared with $2.0 million, or $0.12 per diluted common share on a pro-forma non-GAAP basis, in the same period in 2013. Despite the higher effective tax rate, our net income increased 16.6% as a result of higher revenue achieved during the quarter and additional operating cost leverage.
The company ended the second quarter with $69.0 million in cash and cash equivalents, an increase from $59.6 million reported at the end of the first quarter of 2014. Debt outstanding increased $4.2 million in the second quarter of 2014.
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