EX-99.1 2 pen-33123xexhibit991.htm EX-99.1 Document

Exhibit 99.1
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Penumbra, Inc. Reports First Quarter 2023 Financial Results

ALAMEDA, Calif., May 2, 2023 /PR Newswire/ -- Penumbra, Inc. (NYSE: PEN), a global healthcare company focused on innovative therapies, today reported financial results for the first quarter ended March 31, 2023.

•Revenue of $241.4 million in the first quarter of 2023, an increase of 18.4%, or 19.7% in constant currency1, compared to the first quarter of 2022.
First Quarter 2023 Financial Results
Total revenue increased to $241.4 million for the first quarter of 2023 compared to $203.9 million for the first quarter of 2022, an increase of 18.4%, or 19.7% on a constant currency basis. The United States represented 71% of total revenue and international represented 29% of total revenue for the first quarter of 2023. Revenue from sales of vascular products grew to $142.8 million for the first quarter of 2023, an increase of 16.3%, or 17.2% on a constant currency basis. Revenue from sales of neuro products grew to $98.5 million for the first quarter of 2023, an increase of 21.5%, or 23.4% on a constant currency basis.

Gross profit was $151.1 million, or 62.6% of total revenue for the first quarter of 2023, compared to $127.4 million, or 62.5% of total revenue, for the first quarter of 2022. Gross margin is impacted by product mix, regional mix and start up costs associated with new product launches. As such, with favorable product mix, improvement in productivity, and leveraging our fixed costs on higher volume of new product sales during the year, our gross margin may be positively impacted in the future.

Total operating expenses were $143.1 million, or 59.3% of total revenue, for the first quarter of 2023, including a $2.4 million amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition. This compares to total
operating expenses of $131.5 million, or 64.5% of total revenue, for the first quarter of 2022, including a $1.8 million amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition. Excluding this charge, total non-GAAP operating expenses1 were $140.7 million, or 58.3% of total revenue, for the first quarter of 2023, and $129.7 million, or 63.6% of total revenue, for the first quarter of 2022, respectively. R&D expenses were $20.0 million for the first quarter of 2023, compared to $20.6 million for the first quarter of 2022. SG&A expenses were $123.1 million for the first quarter of 2023, compared to $110.9 million for the first quarter of 2022.

Income from operations was $8.0 million for the first quarter of 2023, compared to a loss from operations of $4.0 million for the first quarter of 2022. Excluding the charge associated with the amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition, non-GAAP income from operations1 was $10.4 million for the first quarter of 2023, compared to a non-GAAP loss from operations1 of $2.3 million for the first quarter of 2022.

Updated Full Year 2023 Financial Outlook
The Company is increasing its guidance for 2023 total revenue to be in the range of $1.04 billion to $1.06 billion, which represents 23% to 25% growth over 2022 revenue of $847.1 million. Relative to our total revenue guidance range of 23-25% growth, we expect growth in our Vascular business to be slightly above this range and growth in our Neuro business to be below this range.
Webcast and Conference Call Information
Penumbra, Inc. will host a conference call to discuss the first quarter 2023 financial results after market close on Tuesday, May 2, 2023 at 4:30 PM Eastern Time. The conference call can be accessed live over the phone by dialing (888) 330-2443 for domestic and international callers (conference id: 4604622), 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 supports healthcare providers, hospitals and clinics in more than 100 countries. For more information, visit www.penumbrainc.com and connect on Twitter and LinkedIn.




1See “Non-GAAP Financial Measures” for important information about our use of non-GAAP measures.

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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) constant currency and b) non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP diluted earnings per share (“EPS”).

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.

Non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP diluted EPS. The adjustments to the GAAP financial measures reflect the exclusion of:

•the effect of the amortization of finite lived intangible assets acquired in connection with the Sixense acquisition over their estimated useful lives; and
•the excess tax benefits associated with share-based compensation arrangements.

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 operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP diluted EPS useful metrics as they provide an alternative framework for assessing how our underlying business performed excluding the amortization expense of finite lived intangible assets acquired in connection with the Sixense acquisition 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; potential adverse regulatory actions; and the potential impact of any acquisitions, mergers, dispositions, joint ventures or investments we may make. 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, 2022 filed with the SEC on February 23, 2023. 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.
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Penumbra, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)
March 31, 2023December 31, 2022
Assets
Current assets:
     Cash and cash equivalents$94,688 $69,858 
     Marketable investments104,409 118,172 
     Accounts receivable, net 207,364 203,384 
     Inventories344,042 334,006 
     Prepaid expenses and other current assets35,987 30,279 
          Total current assets786,490 755,699 
Property and equipment, net65,224 65,015 
Operating lease right-of-use assets189,839 192,636 
Finance lease right-of-use assets32,569 33,323 
Intangible assets, net78,669 81,161 
Goodwill166,161 166,046 
Deferred taxes65,173 64,213 
Other non-current assets11,173 12,793 
         Total assets$1,395,298 $1,370,886 
Liabilities and Stockholders’ Equity
Current liabilities:
     Accounts payable$28,199 $26,679 
     Accrued liabilities105,869 106,300 
  Current operating lease liabilities10,303 10,033 
  Current finance lease liabilities1,957 1,920 
          Total current liabilities146,328 144,932 
Non-current operating lease liabilities196,837 198,955 
Non-current finance lease liabilities24,423 24,865 
Other non-current liabilities3,241 3,276 
          Total liabilities370,829 372,028 
Stockholders’ equity:
Common stock38 38 
Additional paid-in capital978,826 963,040 
Accumulated other comprehensive loss(6,861)(8,124)
Retained earnings52,466 43,904 
Total stockholders’ equity1,024,469 998,858 
Total liabilities and stockholders’ equity$1,395,298 $1,370,886 

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Penumbra, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share amounts)
Three Months Ended March 31,
20232022
Revenue$241,398 $203,895 
Cost of revenue90,326 76,477 
Gross profit151,072 127,418 
Operating expenses:
Research and development 19,986 20,564 
Sales, general and administrative 123,078 110,900 
Total operating expenses 143,064 131,464 
Income (loss) from operations8,008 (4,046)
Interest income (expense), net554 (47)
Other income (expense), net90 (1,011)
Income (loss) before income taxes8,652 (5,104)
Provision for (benefit from) income taxes90 (5,183)
Net income$8,562 $79 
Net income per share:
Basic$0.22 $0.00 
Diluted$0.22 $0.00 
Weighted average shares outstanding:
Basic38,186,342 37,646,122 
Diluted39,075,388 38,708,657 

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Penumbra, Inc.
Reconciliation of GAAP Operating Expenses and GAAP Income (Loss) from Operations to Non-GAAP Operating Expenses and Non-GAAP Income (Loss) from Operations1
(unaudited)
(in thousands)
Three Months Ended March 31,
20232022
GAAP operating expenses$143,064 $131,464 
GAAP operating expenses includes the effect of the following item:
Amortization of finite lived intangible assets acquired2,380 1,785 
Non-GAAP operating expenses
$140,684 $129,679 
GAAP income (loss) from operations$8,008 $(4,046)
GAAP income (loss) from operations includes the effect of the following item:
Amortization of finite lived intangible assets acquired2,380 1,785 
Non-GAAP income (loss) from operations$10,388 $(2,261)
1See “Non-GAAP Financial Measures” for important information about our use of non-GAAP measures.
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Penumbra, Inc.
Reconciliation of GAAP Net Income and GAAP Diluted EPS to Non-GAAP Net Income (Loss) and Non-GAAP Diluted EPS1
(unaudited)
(in thousands, except share and per share amounts)

Three Months Ended
March 31, 2023		Three Months Ended
March 31, 2022
Net incomeDiluted EPSNet income (loss)Diluted EPS
GAAP net income $8,562 $0.22 $79 $0.00 
GAAP net income includes the effect of the following items:
Amortization of finite lived intangible assets acquired2,380 0.06 1,785 0.05 
Tax effect on the non-GAAP adjustment above2
(558)(0.01)(416)(0.01)
Excess tax benefits related to stock compensation awards(1,440)(0.04)(1,781)(0.05)
Non-GAAP net income (loss)$8,944 $0.23 $(333)$(0.01)
Weighted average shares outstanding used to compute:
GAAP diluted EPS39,075,38838,708,657
Non-GAAP diluted EPS3
39,075,38837,646,122
1See “Non-GAAP Financial Measures” for important information about our use of non-GAAP measures.

2For the three months ended March 31, 2023 and 2022, management used a combined federal and state tax rate of 23.44% and 23.29%, respectively, to compute the tax effect of non-GAAP measures.

3For the purposes of calculating Non-GAAP diluted EPS for the three months ended March 31, 2022, non-GAAP diluted weighted average shares outstanding of 37,646,122 was used, as the Company had a non-GAAP net loss in the period.



Penumbra, Inc.
Reconciliation of Revenue Growth by Geographic Regions to Constant Currency Revenue Growth1
(unaudited)
(in thousands, except for percentages)
Three Months Ended March 31,Reported ChangeFX ImpactConstant Currency Change
20232022$%$$%
United States$171,879 $144,308 $27,571 19.1 %$— $27,571 19.1 %
International69,519 59,587 9,932 16.7 %2,605 12,537 21.0 %
Total$241,398 $203,895 $37,503 18.4 %$2,605 $40,108 19.7 %
Penumbra, Inc.
Reconciliation of Revenue Growth by Product Categories to Constant Currency Revenue Growth1
(unaudited)
(in thousands, except for percentages)
Three Months Ended March 31,Reported Change FX ImpactConstant Currency Change
 20232022$% $$%
Vascular$142,849 $122,809 $20,040 16.3 %$1,112 $21,152 17.2 %
Neuro98,549 81,086 17,463 21.5 %1,493 18,956 23.4 %
Total$241,398 $203,895 $37,503 18.4 %$2,605 $40,108 19.7 %

1See “Non-GAAP Financial Measures” for important information about our use of non-GAAP measures.


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