EX-99.1 2 pen-123116exhibit991.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
image1a03.jpg
Penumbra, Inc. Reports Fourth Quarter and Full Year 2016 Financial Results

ALAMEDA, CA, February 28, 2017 (PR Newswire) - Penumbra, Inc. (NYSE: PEN), a global healthcare company focused on interventional therapies, today reported financial results for the fourth quarter and full year ended December 31, 2016.

2016 Financial Highlights:

•
Revenue of $73.1 million for the fourth quarter of 2016, an increase of 34.3%, or 33.9% in constant currency1, over the fourth quarter of 2015.
•
Revenue of $263.3 million for the full year 2016, an increase of 41.5%, and same in constant currency1, over the prior year.

“We are extremely proud of our accomplishments in the fourth quarter and full year 2016. Both our Neuro and Peripheral Vascular businesses saw strong growth driven by several important product and geographic launches, as well as an uncharacteristically strong December,” said Adam Elsesser, Penumbra’s chairman, president and chief executive officer. “Tens of thousands of patients were treated with our products in 2016, and for that we are particularly proud. We also made significant strategic strides to position ourselves to treat multiple times that number of patients in the future.”

Fourth Quarter 2016 Financial Results
Total revenue grew to $73.1 million for the fourth quarter of 2016 compared to $54.4 million for the fourth quarter of 2015, an increase of 34.3%, or 33.9% on a constant currency basis. The U.S. represented 66.5% of total revenue and international represented 33.5% of total revenue for the fourth quarter of 2016. Revenue from sales of neuro products grew to $51.4 million for the fourth quarter of 2016, an increase of 31.5%, or 30.7% on a constant currency basis. Revenue from sales of peripheral vascular products grew to $21.8 million for the fourth quarter of 2016, an increase of 41.5%, or 41.9% on a constant currency basis.

Gross profit was $46.6 million, or 63.7% of total revenue, for the fourth quarter of 2016, compared to $36.5 million, or 67.0% of total revenue, for the fourth quarter of 2015.

Total operating expenses were $47.7 million, or 65.3% of total revenue, for the fourth quarter of 2016, compared to $34.6 million, or 63.7% of total revenue, for the fourth quarter of 2015. R&D expenses were $6.1 million for the fourth quarter of 2016, compared to $5.5 million for the fourth quarter of 2015. SG&A expenses were $41.6 million for the fourth quarter of 2016, compared to $29.2 million for the fourth quarter of 2015.
    
Operating loss was $1.2 million for the fourth quarter of 2016, compared to an operating profit of $1.8 million for the fourth quarter of 2015. In the quarter, the Company early adopted a new accounting standard related to stock compensation which will be included in the provision for income tax in the quarter. The impact from the beginning of the year will also be applied to the tax provision for the full year 2016.

As of December 31, 2016, cash and cash equivalents and marketable investments totaled $128.8 million.

Full Year 2016 Financial Results
Total revenue grew to $263.3 million for the year ended December 31, 2016, compared to $186.1 million for 2015, an increase of 41.5%, and same on a constant currency basis. The U.S. represented 66.9% of total revenue and international represented 33.1% of total revenue for the year ended December 31, 2016. Revenue from sales of neuro products grew to $185.5 million for 2016, an increase of 31.2%, or 31.0% on a constant currency basis. Revenue from sales of peripheral vascular products grew to $77.8 million for 2016, an increase of 74.1%, or 74.5% on a constant currency basis.


 
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 (including reconciliations to the most comparable GAAP measures).
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Gross profit was $170.8 million, or 64.9% of total revenue, for the year ended December 31, 2016, compared to $124.1 million, or 66.7% of total revenue, for the year ended December 31, 2015.

Total operating expenses were $172.2 million, or 65.4% of total revenue, for the year ended December 31, 2016, compared to $119.9 million, or 64.4% of total revenue, for the year ended December 31, 2015. R&D expenses were $23.9 million for the year ended December 31, 2016, compared to $18.0 million for the year ended December 31, 2015. SG&A expenses were $148.3 million for the year ended December 31, 2016, compared to $101.9 million for the year ended December 31, 2015.

Operating loss was $1.4 million for the year ended December 31, 2016, compared to operating profit of $4.2 million for the year ended December 31, 2015. The benefit from income taxes was $15.7 million for the year ended December 31, 2016, which includes a benefit of $17.2 million due to the impact of applying the new stock compensation standard in the tax provision. This compares to a provision for income taxes of $1.7 million for the year ended December 31, 2015.

Full Year 2017 Financial Outlook
Penumbra projects total revenue for 2017 to be in the range of $312 to $317 million.

Webcast and Conference Call Information
Penumbra, Inc. will host a conference call to discuss the fourth quarter and full year 2016 financial results after market close on Tuesday, February 28, 2017 at 5:00 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: 58689898), 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 two weeks following the completion of the call.

About Penumbra
Penumbra, Inc., headquartered in Alameda, California is a global healthcare company focused on interventional therapies. We design, develop, manufacture and market innovative devices and have a broad portfolio of products that addresses 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.

Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses results on constant currency as a non-GAAP financial measure in this press release.

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.

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.

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,





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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 Annual Report on Form 10-K for the year ended December 31, 2016 that we expect to file on or before March 1, 2017. 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)
 
 
December 31,
 
 
2016
 
2015
Assets
 
 
 
 
Current assets:
 
 
 
 
     Cash and cash equivalents
 
$
13,236

 
$
19,547

     Marketable investments
 
115,517

 
129,257

     Accounts receivable
 
43,335

 
29,444

     Inventories
 
73,012

 
56,761

     Prepaid expenses and other current assets
 
18,727

 
9,352

          Total current assets
 
263,827

 
244,361

Property and Equipment, net
 
21,464

 
8,951

Deferred taxes
 
22,476

 
10,143

Other non-current assets
 
487

 
393

         Total assets
 
$
308,254

 
$
263,848

Liabilities and Stockholders’ Equity
 
 
 
 
Current Liabilities:
 
 
 
 
     Accounts payable
 
$
4,110

 
$
2,567

     Accrued liabilities
 
31,690

 
25,581

          Total current liabilities
 
35,800

 
28,148

Deferred Rent
 
5,083

 
1,511

Other non-current liabilities
 
824

 
1,667

          Total liabilities
 
41,707

 
31,326

Stockholders’ Equity:
 
 
 
 
Preferred stock
 
—

 
—

Common stock
 
31

 
30

Additional paid-in capital
 
273,865

 
252,087

Notes receivable from stockholders
 
—

 
(5
)
Accumulated other comprehensive loss
 
(4,688
)
 
(2,115
)
Accumulated deficit
 
(2,661
)
 
(17,475
)
     Total stockholders’ equity
 
266,547

 
232,522

          Total liabilities and stockholders’ equity
 
$
308,254

 
$
263,848






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Penumbra, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share amounts)
 
 
Three Months Ended December 31,
 
Year Ended December 31,
 
 
2016
 
2015
 
2016
 
2015
Revenue
 
$
73,105

 
$
54,416

 
$
263,317

 
$
186,095

Cost of revenue
 
26,525

 
17,958

 
92,488

 
62,037

     Gross profit
 
46,580

 
36,458

 
170,829

 
124,058

Operating expenses:
 
 
 
 
 
 
 
 
     Research and development
 
6,113

 
5,484

 
23,875

 
18,027

     Sales, general and administrative
 
41,619

 
29,154

 
148,304

 
101,852

          Total operating expenses
 
47,732

 
34,638

 
172,179

 
119,879

(Loss) Income from operations
 
(1,152
)
 
1,820

 
(1,350
)
 
4,179

Interest income, net
 
623

 
139

 
2,323

 
541

Other expense, net
 
(986
)
 
(83
)
 
(1,842
)
 
(696
)
(Loss) Income before provision for income taxes
 
(1,515
)
 
1,876

 
(869
)
 
4,024

Provision for (benefit from) income taxes
 
881

 
243

 
(15,683
)
 
1,659

Net income
 
$
(2,396
)
 
$
1,633

 
$
14,814

 
$
2,365

Net income attributable to common stockholders
 
$
(2,396
)
 
$
1,633

 
$
14,814

 
$
1,084

Net income per share attributable to common stockholders
          —Basic
 
$
(0.08
)
 
$
0.05

 
$
0.49

 
$
0.09

          —Diluted
 
$
(0.08
)
 
$
0.05

 
$
0.44

 
$
0.08

Weighted average shares used to compute net income per share attributable to common stockholders
          —Basic
 
31,045,700

 
29,890,944

 
30,464,583

 
11,993,429

          —Diluted
 
31,045,700

 
32,321,410

 
33,478,078

 
14,219,650







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Penumbra, Inc.
Reconciliation of Revenue Growth by Geographic Regions to Constant Currency Revenue Growth1 
(unaudited)
(in thousands)
 
 
Three Months Ended December 31,
 
Reported Change
 
 FX Impact
 
Constant Currency Change
 
 
2016
 
2015
 
$
 
%
 
 $
 
$
 
%
United States
 
$
48,620

 
$
37,947

 
$
10,673

 
28.1
%
 
$
—

 
$
10,673

 
28.1
%
International
 
24,485

 
16,469

 
8,016

 
48.7
%
 
(269
)
 
7,747

 
47.0
%
     Total
 
$
73,105

 
$
54,416

 
$
18,689

 
34.3
%
 
$
(269
)
 
$
18,420

 
33.9
%
Penumbra, Inc.
Reconciliation of Revenue Growth by Product Categories to Constant Currency Revenue Growth1 
(unaudited)
(in thousands)
 
 
Three Months Ended December 31,
 
Reported Change
 
 FX Impact
 
Constant Currency Change
 
 
2016
 
2015
 
$
 
%
 
 $
 
$
 
%
Neuro
 
$
51,353

 
$
39,047

 
$
12,306

 
31.5
%
 
$
(322
)
 
$
11,984

 
30.7
%
Peripheral Vascular
 
21,752

 
15,369

 
6,383

 
41.5
%
 
53

 
6,436

 
41.9
%
     Total
 
$
73,105

 
$
54,416

 
$
18,689

 
34.3
%
 
$
(269
)
 
$
18,420

 
33.9
%

Penumbra, Inc.
Reconciliation of Revenue Growth by Geographic Regions to Constant Currency Revenue Growth1 
(unaudited)
(in thousands)
 
 
Year Ended December 31,
 
Reported Change
 
 FX Impact
 
Constant Currency Change
 
 
2016
 
2015
 
$
 
%
 
 $
 
$
 
%
United States
 
$
176,104

 
$
127,311

 
$
48,793

 
38.3
%
 
$
—

 
$
48,793

 
38.3
%
International
 
87,213

 
58,784

 
28,429

 
48.4
%
 
(34
)
 
28,395

 
48.3
%
     Total
 
$
263,317

 
$
186,095

 
$
77,222

 
41.5
%
 
$
(34
)
 
$
77,188

 
41.5
%
Penumbra, Inc.
Reconciliation of Revenue Growth by Product Categories to Constant Currency Revenue Growth1 
(unaudited)
(in thousands)
 
 
Year Ended December 31,
 
Reported Change
 
 FX Impact
 
Constant Currency Change
 
 
2016
 
2015
 
$
 
%
 
 $
 
$
 
%
Neuro
 
$
185,533

 
$
141,410

 
$
44,123

 
31.2
%
 
$
(228
)
 
$
43,895

 
31.0
%
Peripheral Vascular
 
77,784

 
44,685

 
33,099

 
74.1
%
 
194

 
33,293

 
74.5
%
     Total
 
$
263,317

 
$
186,095

 
$
77,222

 
41.5
%
 
$
(34
)
 
$
77,188

 
41.5
%
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.

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





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