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Penumbra, Inc. Reports Third Quarter 2021 Financial Results

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  • PEN

ALAMEDA, Calif., Nov. 3, 2021 /PRNewswire/ -- Penumbra, Inc. (NYSE: PEN), a global healthcare company focused on innovative therapies, today reported financial results for the third quarter ended September 30, 2021.

Penumbra, Inc. Logo (PRNewsFoto/Penumbra, Inc.)
Penumbra, Inc. Logo (PRNewsFoto/Penumbra, Inc.)
  • Revenue of $190.1 million in the third quarter of 2021, an increase of 25.8%, or 25.6% in constant currency1, compared to the third quarter of 2020.

Third Quarter 2021 Financial Results
Total revenue increased to $190.1 million for the third quarter of 2021 compared to $151.1 million for the third quarter of 2020, an increase of 25.8%, or 25.6% on a constant currency basis. The United States represented 71% of total revenue and international represented 29% of total revenue for the third quarter of 2021. Revenue from sales of vascular products grew to $105.5 million for the third quarter of 2021, an increase of 40.3% on both a reported and constant currency basis. Revenue from sales of neuro products grew to $84.7 million for the third quarter of 2021, an increase of 11.5%, or 11.1% on a constant currency basis.

Gross profit was $119.9 million, or 63.1% of total revenue, for the third quarter of 2021, compared to $90.9 million, or 60.2% of total revenue, for the third quarter of 2020.

Total operating expenses for the third quarter of 2021 were $111.1 million, or 58.5% of total revenue. This compares to total operating expenses of $111.1 million, or 73.5% of total revenue, for the third quarter of 2020. R&D expenses were $16.7 million for the third quarter of 2021, compared to $34.9 million for the third quarter of 2020. SG&A expenses were $94.4 million for the third quarter of 2021, compared to $76.2 million for the third quarter of 2020.

Operating income for the third quarter of 2021 was $8.8 million. This compares to an operating loss of $20.2 million for the third quarter of 2020.

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

Updated Full Year 2021 Financial Outlook
The Company is increasing its guidance for 2021 total revenue to be in the range of $735 million to $740 million, which represents 31% to 32% growth over 2020 revenue of $560.4 million. This new range compares to the previous range of $720 million to $730 million.

Webcast and Conference Call Information
Penumbra, Inc. will host a conference call to discuss the third quarter 2021 financial results after market close on Wednesday, November 3, 2021 at 4:30 PM Eastern Time. The conference call can be accessed live over the phone by dialing (833) 350-1434 for domestic and international callers (conference id: 2341689), 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. The Penumbra logo is a trademark of Penumbra, Inc. For more information, visit www.penumbrainc.com.

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 (loss) and non-GAAP diluted earnings per share ("EPS") and b) constant currency.

Non-GAAP net income (loss) and non-GAAP diluted EPS. The Company defines non-GAAP net income (loss) as net income (loss) attributable to Penumbra, Inc. excluding the effects of the impairment loss on an indefinite-lived intangible asset and 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 (loss) and non-GAAP diluted EPS useful metrics as they provide an alternative framework for assessing how our underlying business performed excluding the impairment loss on an indefinite-lived intangible asset 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, including our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 23, 2021. 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, 2021


December 31, 2020

Assets





Current assets:





Cash and cash equivalents


$

66,290



$

69,670


Marketable investments


200,637



195,162


Accounts receivable, net


120,074



114,608


Inventories


258,316



219,527


Prepaid expenses and other current assets


22,670



18,735


Total current assets


667,987



617,702


Property and equipment, net


56,632



48,169


Operating lease right-of-use assets


133,552



41,192


Finance lease right-of-use assets


36,845



38,065


Intangible assets, net


9,490



10,639


Goodwill


7,911



8,372


Deferred taxes


49,454



50,139


Other non-current assets


11,370



8,705


Total assets


$

973,241



$

822,983


Liabilities and Stockholders' Equity





Current liabilities:





Accounts payable


$

13,679



$

14,109


Accrued liabilities


93,222



85,795


Current operating lease liabilities


7,531



4,697


Current finance lease liabilities


1,627



1,331


Total current liabilities


116,059



105,932


Non-current operating lease liabilities


138,169



44,183


Non-current finance lease liabilities


26,775



27,066


Other non-current liabilities


7,635



8,014


Total liabilities


288,638



185,195


Stockholders' equity:





Common stock


36



36


Additional paid-in capital


621,457



598,299


Accumulated other comprehensive (loss) income


(1,093)



2,541


Retained earnings


70,539



40,622


Total Penumbra, Inc. stockholders' equity


690,939



641,498


Non-controlling interest


(6,336)



(3,710)


Total stockholders' equity


684,603



637,788


Total liabilities and stockholders' equity


$

973,241



$

822,983


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,



2021


2020


2021


2020

Revenue


$

190,117



$

151,076



$

543,579



$

393,514


Cost of revenue


70,205



60,153



193,644



149,652


Gross profit


119,912



90,923



349,935



243,862


Operating expenses:









Research and development


16,734



34,923



52,548



70,594


Sales, general and administrative


94,397



76,158



264,831



210,465


Total operating expenses


111,131



111,081



317,379



281,059


Income (loss) from operations


8,781



(20,158)



32,556



(37,197)


Interest income, net


138



413



917



820


Other (expense) income, net


(1,137)



14



(3,021)



(1,130)


Income (loss) before income taxes


7,782



(19,731)



30,452



(37,507)


(Benefit from) provision for income taxes


(249)



(9,855)



3,196



(15,618)


Consolidated net income (loss)


$

8,031



$

(9,876)



$

27,256



$

(21,889)


Net loss attributable to non-controlling interest


(819)



(1,061)



(2,661)



(2,539)


Net income (loss) attributable to Penumbra, Inc.


$

8,850



$

(8,815)



$

29,917



$

(19,350)











Net income (loss) attributable to Penumbra, Inc. per share:









Basic


$

0.24



$

(0.24)



$

0.82



$

(0.54)


Diluted


$

0.24



$

(0.24)



$

0.80



$

(0.54)


Weighted average shares outstanding:









Basic


36,617,961



36,207,716



36,532,822



35,568,591


Diluted


37,611,355



36,207,716



37,592,095



35,568,591


Penumbra, Inc.

Reconciliation of GAAP Net Income (Loss) and GAAP Diluted EPS to Non-GAAP Net Income (Loss) and Non-GAAP Diluted EPS1

(unaudited)

(in thousands, except per share amounts)




Three Months Ended
September 30, 2021


Three Months Ended
September 30, 2020


Nine Months Ended
September 30, 2021


Nine Months Ended
September 30, 2020



Net
income


Diluted
EPS


Net (loss)


Diluted
EPS


Net
income


Diluted
EPS


Net (loss)


Diluted
EPS

GAAP net income (loss)


$

8,850



$

0.24



$

(8,815)



$

(0.24)



$

29,917



$

0.80



$

(19,350)



$

(0.54)


GAAP net (loss) income includes the effect of the
following items:

















Impairment loss on indefinite-lived intangible
asset














2,500



0.07


Excess tax benefits related to stock compensation
awards


(4,244)



(0.12)



(7,386)



(0.21)



(7,431)



(0.20)



(10,188)



(0.29)


Non-GAAP net income (loss)


$

4,606



$

0.12



$

(16,201)



$

(0.45)



$

22,486



$

0.60



$

(27,038)



$

(0.76)



















GAAP diluted EPS




$

0.24





$

(0.24)





$

0.80





$

(0.54)


Non-GAAP diluted EPS




$

0.12





$

(0.45)





$

0.60





$

(0.76)



















Weighted average shares outstanding used to compute:

















GAAP diluted EPS


37,611,355


36,207,716


37,592,095


35,568,591

Non-GAAP diluted EPS


37,611,355


36,207,716


37,592,095


35,568,591

____________

1

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

Penumbra, Inc.

Reconciliation of Revenue Growth by Geographic Regions to Constant Currency Revenue Growth1

(unaudited)

(in thousands)




Three Months Ended September 30,


Reported Change


FX Impact


Constant Currency Change



2021


2020


$


%


$


$


%

United States


$

134,834



$

109,656



$

25,178



23.0

%


$



$

25,178



23.0

%

International


55,283



41,420



13,863



33.5

%


(355)



13,508



32.6

%

Total


$

190,117



$

151,076



$

39,041



25.8

%


$

(355)



$

38,686



25.6

%




Nine Months Ended September 30,


Reported Change


FX Impact


Constant Currency Change



2021


2020


$


%


$


$


%

United States


$

383,306



$

283,473



$

99,833



35.2

%


$



$

99,833



35.2

%

International


160,273



110,041



50,232



45.6

%


(5,459)



44,773



40.7

%

Total


$

543,579



$

393,514



$

150,065



38.1

%


$

(5,459)



$

144,606



36.7

%

Penumbra, Inc.

Reconciliation of Revenue Growth by Product Categories to Constant Currency Revenue Growth1

(unaudited)

(in thousands)




Three Months Ended September 30,


Reported Change


FX Impact


Constant Currency Change



2021


2020


$


%


$


$


%

Vascular


$

105,465



$

75,159



$

30,306



40.3

%


$

(23)



$

30,283



40.3

%

Neuro


84,652



75,917



8,735



11.5

%


(332)



8,403



11.1

%

Total


$

190,117



$

151,076



$

39,041



25.8

%


$

(355)



$

38,686



25.6

%




Nine Months Ended September 30,


Reported Change


FX Impact


Constant Currency Change



2021


2020


$


%


$


$


%

Vascular


$

295,314



$

180,684



$

114,630



63.4

%


$

(1,692)



$

112,938



62.5

%

Neuro


248,265



212,830



35,435



16.6

%


(3,767)



31,668



14.9

%

Total


$

543,579



$

393,514



$

150,065



38.1

%


$

(5,459)



$

144,606



36.7

%

____________

1

See "Non-GAAP Financial Measures" above 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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SOURCE Penumbra, Inc.