EX-99.1 2 pen-33119xexhibit991.htm Document

Exhibit 99.1 
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Penumbra, Inc. Reports First Quarter 2019 Financial Results

ALAMEDA, Calif., May 7, 2019 (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, 2019.

•Revenue of $128.4 million in the first quarter of 2019, an increase of 25.1%, or 27.2% in constant currency1, over the first quarter of 2018.

First Quarter 2019 Financial Results
Total revenue grew to $128.4 million for the first quarter of 2019 compared to $102.7 million for the first quarter of 2018, an increase of 25.1%, or 27.2% on a constant currency basis. The United States represented 64% of total revenue and international represented 36% of total revenue for the first quarter of 2019. Revenue from sales of neuro products grew to $81.5 million for the first quarter of 2019, an increase of 14.1%, or 16.5% on a constant currency basis. Revenue from sales of vascular products grew to $47.0 million for the first quarter of 2019, an increase of 50.2%, or 51.8% on a constant currency basis.

Gross profit was $83.9 million, or 65.3% of total revenue, for the first quarter of 2019, compared to $66.6 million, or 64.8% of total revenue, for the first quarter of 2018.

Total operating expenses for the first quarter of 2019 were $72.8 million, or 56.6% of total revenue. This compares to total operating expenses of $62.5 million, or 60.9% of total revenue, for the first quarter of 2018. R&D expenses were $11.7 million for the first quarter of 2019, compared to $8.0 million for the first quarter of 2018. SG&A expenses were $61.1 million for the first quarter of 2019, compared to $54.5 million for the first quarter of 2018.

Operating income for the first quarter of 2019 was $11.2 million, compared  to operating income of $4.0 million for the first quarter of 2018.

Webcast and Conference Call Information
Penumbra, Inc. will host a conference call to discuss the first quarter 2019 financial results after market close on Tuesday, May 7, 2019 at 4:30 PM Eastern Time. The conference call can be accessed live over the phone by dialing (866) 393-4306  for domestic callers or (734) 385-2616 for international callers (conference id: 6096838), 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 innovative products and has a broad portfolio that addresses challenging medical conditions and significant clinical needs across two major markets, neuro and vascular. Penumbra sells its products to hospitals 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.
1See “Non-GAAP Financial Measures” for important information about our use of constant currency and other 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) non-GAAP net income and non-GAAP diluted earnings per share (“EPS”) and b) constant currency.

Non-GAAP net income and non-GAAP diluted EPS. The Company defines non-GAAP net income as net income attributable to Penumbra, Inc. excluding a) the income tax effects from the Tax Cuts and Jobs Act of 2017 (the “Tax Reform Act”) and b) the effects of 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 income and non-GAAP diluted EPS useful metrics as they provide an alternative framework for assessing how our underlying business performed excluding the one-time effects of the transition tax from the Tax Reform Act and the excess tax benefits associated with share-based compensation arrangements, net of any related valuation allowance.

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; potential adverse regulatory actions; and potential impact of any future 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, 2018 filed with the SEC on February 26, 2019. 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, 2019December 31, 2018
Assets
Current assets:
Cash and cash equivalents$95,606 $67,850 
Marketable investments99,241 133,039 
Accounts receivable, net 94,679 81,896 
Inventories121,691 115,741 
Prepaid expenses and other current assets11,869 12,200 
Total current assets423,086 410,726 
Property and equipment, net35,380 35,407 
Operating lease right-of-use assets42,376 — 
Intangible assets, net26,813 27,245 
Goodwill7,659 7,813 
Deferred taxes31,862 32,940 
Other non-current assets1,613 875 
Total assets$568,789 $515,006 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$7,692 $8,176 
Accrued liabilities58,032 57,886 
Current operating lease liabilities3,688 — 
Total current liabilities69,412 66,062 
Deferred rent— 7,586 
Non-current operating lease liabilities46,070 — 
Other non-current liabilities16,644 18,943 
Total liabilities132,126 92,591 
Stockholders’ equity:
Common stock34 34 
Additional paid-in capital419,514 415,084 
Accumulated other comprehensive loss (2,578)(1,942)
Retained earnings19,762 9,064 
Total Penumbra, Inc. stockholders’ equity436,732 422,240 
Non-controlling interest(69)175 
Total stockholders’ equity436,663 422,415 
Total liabilities and stockholders’ equity$568,789 $515,006 

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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, 
2019 2018 
Revenue$128,439 $102,701 
Cost of revenue44,529 36,144 
Gross profit83,910 66,557 
Operating expenses:
Research and development 11,667 8,013 
Sales, general and administrative 61,091 54,499 
Total operating expenses 72,758 62,512 
Income from operations11,152 4,045 
Interest income, net733 749 
Other income (expense), net24 (290)
Income before income taxes and equity in losses of unconsolidated investee11,909 4,504 
Provision for (benefit from) income taxes1,455 (1,938)
Income before equity in losses of unconsolidated investee10,454 6,442 
Equity in losses of unconsolidated investee— (951)
Consolidated net income$10,454 $5,491 
Net loss attributable to non-controlling interest(244)— 
Net income attributable to Penumbra, Inc.$10,698 $5,491 
Net income attributable to Penumbra, Inc. per share:
Basic$0.31 $0.16 
Diluted$0.30 $0.15 
Weighted average shares outstanding:
Basic34,507,279 33,846,142 
Diluted36,213,164 35,917,051 

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Penumbra, Inc.
Reconciliation of GAAP Net Income and Diluted EPS to Non-GAAP Net Income and Non-GAAP Diluted EPS1
(unaudited)
(in thousands, except per share amounts)
Three Months Ended March 31, 2019Three Months Ended March 31, 2018
Net income Diluted EPS Net income Diluted EPS 
GAAP net income$10,698 $0.30 $5,491 $0.15 
GAAP net income includes the effect of the following items:
Effect of the transition tax under the Tax Reform Act2
— — 88 — 
Excess tax benefits related to stock compensation awards(2,244)(0.07)(3,364)(0.09)
Non-GAAP net income$8,454 $0.23 $2,215 $0.06 

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.
2On December 22, 2017, the Tax Reform Act was enacted into law. This new tax law, among other changes, reduces the Company’s U.S. federal statutory corporate income tax rate from 34% to 21% effective January 1, 2018. During the three months ended March 31, 2018, the Company recorded a provisional tax charge for the one-time transition tax on the undistributed earnings of its foreign subsidiaries.


Penumbra, Inc.
Reconciliation of Revenue Growth by Geographic Regions to Constant Currency Revenue Growth3
(unaudited)
(in thousands)
Three Months Ended March 31,Reported Change FX Impact Constant Currency Change
2019 2018 $% $ $%
United States$82,511 $65,801 $16,710 25.4 %$— $16,710 25.4 %
International45,928 36,900 9,028 24.5 %2,214 11,242 30.5 %
Total$128,439 $102,701 $25,738 25.1 %$2,214 $27,952 27.2 %

Penumbra, Inc.
Reconciliation of Revenue Growth by Product Categories to Constant Currency Revenue Growth3
(unaudited)
(in thousands)
Three Months Ended March 31,Reported Change FX ImpactConstant Currency Change
 2019 2018 $% $$%
Neuro$81,471 $71,433 $10,038 14.1 %$1,714 $11,752 16.5 %
Vascular46,968 31,268 15,700 50.2 %500 16,200 51.8 %
Total$128,439 $102,701 $25,738 25.1 %$2,214 $27,952 27.2 %

3See “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
Source: Penumbra, Inc.


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