EX-99.1 2 pen-093015exhibit991.htm EXHIBIT 99.1 Exhibit


Penumbra, Inc. Reports Third Quarter 2015 Financial Results

ALAMEDA, Calif., November 12, 2015 (PR Newswire) - Penumbra, Inc. (NYSE: PEN), a global interventional therapies company, today reported financial results for the third quarter ended September 30, 2015.

•
Revenue of $50.4 million, an increase of 55.3%, or 61.0% in constant currency1, over the third quarter of 2014.
•
The Company closed its IPO on September 23, 2015, in which it sold 4.6 million shares of common stock at an offering price of $30.00 per share and raised approximately $124.8 million in net proceeds.

Third Quarter 2015 Financial Results
Total revenue grew to $50.4 million for the third quarter of 2015 compared to $32.5 million for the third quarter of 2014, an increase of 55.3%, or 61.0% on a constant currency basis. The U.S. represented 70.2% of total revenue and international represented 29.8% of total revenue for the third quarter of 2015. Revenue from sales of neuro products grew to $36.3 million for the third quarter of 2015 compared to $27.0 million for the same quarter in 2014, an increase of 34.5%, or 40.9% on a constant currency basis. Revenue from sales of peripheral vascular products grew to $14.1 million for the third quarter of 2015 compared to $5.5 million for the same quarter in 2014, an increase of 157.6%, or 159.7% on a constant currency basis.

Gross profit was $33.5 million, or 66.4% of total revenue, for the third quarter of 2015, compared to $20.8 million, or 64.1% of total revenue, for the third quarter of 2014.

Total operating expenses were $31.3 million, or 62.1% of total revenue, for the third quarter of 2015, compared to $20.5 million, or 63.1% of total revenue, for the third quarter of 2014. R&D expenses were $4.6 million for the third quarter of 2015, compared to $3.9 million for the third quarter of 2014. The increase was primarily due to increases in headcount and related compensation expense. SG&A expenses were $26.8 million for the third quarter of 2015, compared to $16.6 million for the third quarter of 2014. The increase was primarily due to increases in headcount and related compensation expense as well as increases in legal, professional and consulting expenses associated with operating as a public company.

Net income for the third quarter of 2015 was $0.9 million, compared to $0.2 million for the third quarter of 2014.

As of September 30, 2015, cash and cash equivalents totaled $159.1 million. This reflects the completion of the Company’s IPO, which closed on September 23, 2015. In the IPO, Penumbra sold 4.6 million shares of common stock and raised $124.8 million in net proceeds, after deducting underwriting discounts and commissions and offering expenses.

Webcast and Conference Call Information
Penumbra, Inc. will host a conference call to discuss the third quarter 2015 financial results after market close on Thursday, November 12, 2015 at 4:30 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: 67279996), 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.


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






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 following non-GAAP financial measures in this press release: constant currency revenue, non-GAAP net income per share (basic and diluted), non-GAAP net income attributable to common stockholders and non-GAAP weighted average shares used to compute non-GAAP net income per share (basic and diluted).

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.

Non-GAAP net income per share (basic and diluted) and its components, non-GAAP net income attributable to common stockholders and non-GAAP weighted average shares used to compute non-GAAP net income per share (basic and diluted), (1) exclude the effect of allocating net income (loss) between common stock and participating convertible preferred stock under the two-class method to allocate earnings, and (2) reflect the conversion of our outstanding convertible preferred stock upon the closing of our IPO as if such conversion occurred on a one-for-one basis as of the beginning of the applicable period(s).

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 income per share (basic and diluted), and its components, as useful metrics as they provide an alternative framework for assessing our profitability as compared to periods prior to our IPO.

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: 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 prospectus dated September 17, 2015. 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)
 
 
September 30,
2015
 
December 31,
2014
Assets
 
 
 
 
Current assets:
 
 
 
 
     Cash and cash equivalents
 
$
159,098

 
$
3,290

     Marketable investments
 
—

 
48,253

     Accounts receivable, net of doubtful accounts of $494 and $602
 
26,055

 
18,912

     Inventories
 
50,324

 
33,451

     Deferred taxes
 
7,333

 
6,280

     Prepaid expenses and other current assets
 
6,267

 
5,115

          Total current assets
 
249,077

 
115,301

Property and Equipment, net
 
8,646

 
5,181

Deferred taxes
 
1,309

 
571

Other non-current assets
 
293

 
328

         Total assets
 
$
259,325

 
$
121,381

Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)
 
 
 
 
Current Liabilities:
 
 
 
 
     Accounts payable
 
$
4,024

 
$
2,348

     Accrued liabilities
 
24,253

 
18,475

          Total current liabilities
 
28,277

 
20,823

Other non-current liabilities
 
2,458

 
1,461

          Total liabilities
 
30,735

 
22,284

Convertible preferred stock
 
—

 
111,467

Stockholders’ Equity (Deficit):
 
 
 
 
Common stock
 
30

 
5

Additional paid-in capital
 
249,230

 
8,446

Notes receivable from stockholders
 
(26
)
 
(117
)
Accumulated other comprehensive loss
 
(1,536
)
 
(864
)
Accumulated deficit
 
(19,108
)
 
(19,840
)
     Total stockholders’ equity (deficit)
 
228,590

 
(12,370
)
          Total liabilities, convertible preferred stock and stockholders’ equity (deficit)
 
$
259,325

 
$
121,381






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,
 
 
2,015
 
2,014
 
2,015
 
2,014
Revenue
 
$
50,416

 
$
32,464

 
$
131,679

 
$
90,107

Cost of revenue
 
16,919

 
11,667

 
44,079

 
31,156

     Gross profit
 
33,497

 
20,797

 
87,600

 
58,951

Operating expenses:
 
 
 
 
 
 
 
 
     Research and development
 
4,560

 
3,897

 
12,543

 
11,435

     Sales, general and administrative
 
26,755

 
16,589

 
72,698

 
44,829

          Total operating expenses
 
31,315

 
20,486

 
85,241

 
56,264

Income from operations
 
2,182

 
311

 
2,359

 
2,687

Interest income (expense), net
 
17

 
144

 
402

 
183

Other income (expense), net
 
(115
)
 
(56
)
 
(613
)
 
(148
)
Income before provision for income taxes
 
2,084

 
399

 
2,148

 
2,722

Provision for income taxes
 
1,183

 
227

 
1,416

 
893

Net income
 
$
901

 
$
172

 
$
732

 
$
1,829

Net income (loss) attributable to common stockholders
 
$
276

 
$
(1,192
)
 
$
175

 
$
(933
)
Net income (loss) per share attributable to common stockholders
          —Basic
 
$
0.04

 
$
(0.25
)
 
$
0.03

 
$
(0.2
)
          —Diluted
 
$
0.03

 
$
(0.25
)
 
$
0.02

 
$
(0.2
)
Weighted average shares used to compute net income (loss) per share attributable to common stockholders
          —Basic
 
7,853,730

 
4,688,045

 
5,962,031

 
4,577,725

          —Diluted
 
10,189,248

 
4,688,045

 
8,494,651

 
4,577,725







Penumbra, Inc.
Reconciliation of Revenue Growth by Geographic Regions to Constant Currency Revenue Growth1 
(unaudited)
(in thousands)
 
 
Three Months Ended September 30,
 
Change
 
 FX Impact
 
Constant Currency Change
 
 
2015
 
2014
 
$
 
%
 
 $
 
$
 
%
United States
 
$
35,394

 
$
22,305

 
$
13,089

 
58.7%
 
$
—

 
$
13,089

 
58.7%
International
 
15,022

 
10,159

 
4,863

 
47.9%
 
1,844

 
6,707

 
66.0%
     Total
 
$
50,416

 
$
32,464

 
$
17,952

 
55.3%
 
$
1,844

 
$
19,796

 
61.0%
Penumbra, Inc.
Reconciliation of Revenue Growth by Product Categories to Constant Currency Revenue Growth1 
(unaudited)
(in thousands)
 
 
Three Months Ended September 30,
 
Change
 
 FX Impact
 
Constant Currency Change
 
 
2015
 
2014
 
$
 
%
 
 $
 
$
 
%
Neuro
 
$
36,309

 
$
26,988

 
$
9,321

 
34.5%
 
$
1,729

 
$
11,050

 
40.9%
Peripheral Vascular
 
14,107

 
5,476

 
8,631

 
157.6%
 
115

 
8,746

 
159.7%
     Total
 
$
50,416

 
$
32,464

 
$
17,952

 
55.3%
 
$
1,844

 
$
19,796

 
61.0%
1See “Non-GAAP Financial Measures” above for important information about our use of non-GAAP measures and further information about our calculation of constant currency results.





Penumbra, Inc.
Reconciliation of Net Income (Loss) Attributable to Common Stockholders to Non-GAAP Net Income Attributable to Common Stockholders2 
(unaudited)
(in thousands, except per share amounts)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2015
 
2014
 
2015
 
2014
Net income (loss) attributable to common stockholders3
 
$
276

 
$
(1,192
)
 
$
175

 
$
(933
)
Add: Deemed dividend paid to preferred stockholders upon redemption
 
—

 
6,344

 
—

 
6,344

Undistributed income (loss) attributable to preferred stockholders
 
625

 
—

 
557

 
—

Less: Undistributed loss attributable to preferred stockholders
 
—

 
(4,980
)
 
—

 
(3,582
)
Net income attributable to common stockholders—Non-GAAP
 
$
901

 
$
172

 
$
732

 
$
1,829

Basic net income per share—Non-GAAP
 
$
0.04

 
$
0.01

 
$
0.03

 
$
0.08

Diluted net income per share—Non-GAAP
 
$
0.03

 
$
0.01

 
$
0.03

 
$
0.07

Penumbra, Inc.
Reconciliation of Weighted Average Shares Used to Compute Basic Net Income (Loss) per Share to
Weighted Average Shares Used to Compute Basic and Diluted Non-GAAP Net Income per Share2 
(unaudited)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2015
 
2014
 
2015
 
2014
Weighted average shares used to compute basic net income (loss) per share
 
7,853,730

 
4,688,045

 
5,962,031

 
4,577,725

Less: Conversion of preferred shares on a weighted average basis upon closing of IPO
 
(1,696,557
)
 
—

 
(571,734
)
 
—

Add: Conversion of preferred shares on a one-for-one basis at the beginning of the period
 
19,510,410

 
19,510,410

 
19,510,410

 
19,510,410

Weighted average shares used to compute non-GAAP net income per share—Basic
 
25,667,583

 
24,198,455

 
24,900,707

 
24,088,135

Potential dilutive options
 
1,979,194

 
2,075,046

 
2,362,685

 
2,127,880

Potential dilutive restricted stock
 
356,324

 
115,402

 
169,935

 
82,322

Potential dilutive common warrants
 
—

 
75,896

 
—

 
76,856

Weighted average shares used to compute non-GAAP net income per share—Diluted
 
28,003,101

 
26,464,799

 
27,433,327

 
26,375,193

2 See “Non-GAAP Financial Measures” above for important information about our use of non-GAAP measures and further information about our calculation of non-GAAP net income per share and its components.
3 We calculate GAAP net income (loss) attributable to common stockholders under the two-class method required for companies with participating securities.

Sara Thompson 
Head of Investor Relations 
Penumbra, Inc. 
510 995 2455 
investors@penumbrainc.com 
Source: Penumbra, Inc.