INGN - Earnings call 4 2023

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Operator

Greetings, and welcome to the Inogen 2023 Fourth Quarter Financial Results Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Marissa Bych from Gilmartin Group. Thank you.

You may begin.

Marissa Bych

Great. participating call. for all you in today's Thank

Joining Interim CFO, President and Smith; and CEO, Kevin Mike me are Sergesketter.

This available Earlier today, of financial XXXX XXXX. package. of the the fourth release Inogen released with financial and results company's website, full a Relations the Investor on for along quarter earnings section is supplemental year

financial As including, strategy about our statements prospects products, and for without for demand the related products and the and results our term. innovation, presented expectations for regarding supply the will today of in both initiatives, information reminder, market and progress limitation, a short include for statements, beyond, XXXX our our forward-looking XXXX, including business our expectations growth our to strategic our long

our are today's recent as obligation based set the uncertainties only to us detail forth to more any February as date, call filed forward-looking results predictions Exchange update and currently forward-looking disclaim Commission. this may with available and and these information Securities by in statements statements, most vary, we law. of on are in required Actual except XXXX. in statements XX, may These and are be risks forward-looking involve periodic report The

and statements these Investor website. Please financial files information. historical investor of refer for posted the have presentation in the to our section We Relations company's more detailed

manage operating and in Reconciliations results non-GAAP Management Inogen's of business between U.S. our and with other taken for by conjunction and presented measures information non-GAAP information basis. a make and not core in investors certain decisions. expenses indicative GAAP Management our provide are on internally are call, non-GAAP within release. noncash the understand, excluding to evaluate financial results. also earnings that financial uses and will items management tables During measures non-GAAP GAAP present we financial both believes certain useful operating U.S. measures, that

Kevin And with Inogen's President turn CEO, to the that, over and Smith. will I call

Kevin Smith

conference XXXX fourth you joining thank for and call. afternoon, our quarter Good

During my going insight CEO, into my to quarter. highlights provide during strategic Inogen. today's priorities and pleased call, here forward, a recent experiences my call as few months I'm our leading the be first share I first earnings will at outline from

great We have product great and team a portfolio. a

month roots. challenges as the global field I organization our substantial and internal business, my observed structure, external performance. and reflected of management our its sales visiting from first to on I our spent strengths CEO, portfolio, understand have have investors my time the within During and much feedback regarding and strategy, and teams, seeking company

have opportunity across conversations our company immense I the business. From to the confidence ahead capability my in leaders, improvements with of our and the make

to strategize additional X our path leaders pleased to forward, our I As welcome team. I'm new

Greg as and products, improve are experience. Chief strategy Ramade to will We thrilled commercial have in experience Inogen's Commercial help Greg's January. appointed Officer customer

their additions Michael bringing teams. potential. strengthening also FP&A our Michael We January. the both our as late are X, Bourque finance in stewarding appointment March confident new company forward Inogen's of to will that step accounting joining am achieving next look week, CFO, announced effective and I full and whose on organization towards our a we be

I would into Inogen's like to strategic forward. priorities share going insights

remain the to updates of as our lives be for patients. expand for and about exciting and opportunity we'll our Our this an ability to our pursuit increasing represents An to impact they're optimistic is achieve We of process growth. Physio-Assist the Physio-Assist existing portfolio, top new market. is regulatory piece revenue U.S. positioning important of priority providing available. the clearance, the ability clearance business to introduction

this make and We cost to also our a with This portfolio. advancing pipeline optimization improve our products and includes we innovation innovation with end, coming mobile of the Advancing is health will our technologies profitability also of the pursuing transformative within priority. production evaluating be our accessible, to the a digital to sold. in sustainable more structures To goods cost return intent development key are effective. years. We're

new Inogen cost further diagnostic establishing ease we markets. can And superior business-to-business in patient devices us our best-in-class to evaluate will that and and of proviral continued all and strengthen sales stakeholders the loyalty. platforms to improve In efforts, relationships market, investment known their with compliance, distributors patient capabilities. tandem use our these and further our effectiveness continue know our bring to strategies are preference Inogen monitoring and for and in even existing with of their and with take partners POCs

most highest to therapies the remain respiratory to We quality, the patients dedicated around dependable advanced most and delivering globe.

to Now quarter total We accomplishments fiscal the $XXX in XXXX and revenue. achieved I fourth revenue quarter $XX full our highlight XXXX. million in during and fourth like million would year year

recent Our launch our well along with part which in full the by in were Rove X sales driven progressing is of Europe, expectations.

We several have XXXX. followed of XXXX our achievements early progress areas in with

and conclusion compelling therapy of Baseline period mobile evidence POCs of higher lower through the real-world oxygen mortality health illness using the a utilization median The ER patients. resource visits costs analyzed using supporting POCs patients XX-month completed POCs recently For cost longer in study burden effectiveness, was autonomy. months patients duration overall survival, to duration risks strongly with shorter and X lower and correlated of over of care and study. example, risk saw long-term with XXX,XXX adoption a of a mobility over of we autonomy of than hospitalizations lower consequently,

benefits. we using devices patients. our is key are in with At restrict that their reinforces not to patient well-being that pride further This it Inogen, mobility have offer health take the do and and compatible the in devices mobility it clear

and to battery improve mobility always weight to are outcomes. improve through ways patient life, find to device striving We size

rolled partners. sure for our specific to to our to for out maintenance to ability patient linked Inogen updates also practical connect connected devices, of are wearable app early experiences February, devices. but to and we ability for monitoring all portals and devices dependable, notifications These not track only service make are error minute, changes part per users. included In to patient better effort and and breaths the business-to-business and Changes customers diagnostic user our provide broader

initiated have a we via [ run our our in channel list ] which we prescribe addition, within referrals. POCs In shift

to of we to and in-house. patients an As effort increase our moving process, bringing forecasting as away rentals we as from is step partnerships improve are able support ensuring predictability, and possible. the the of rental this external channel our continued and many important for are expand rental prescriber part sales I assist believe one our

evaluate opportunities structure. we to always, for all As of streamline will our business to cost and look continue relationships our

the to the a market. business-to-business of seeing over to turn I in opportunity market capitalize address I'd we recent also domestic our brand differentiated the exiting this the news competitor call Before to but the leadership, on we to Due are development, like product recognition. volatility potential see offering channel, Mike, some and

we be void to it. if there market, be so, will expect We in the may step and fill in a and that ready

review financial I'll now Mike? turn the call more over of to a our Mike results. detailed for

Michael Sergesketter

domestic and primarily was prior of and rental good Unless direct-to-consumer year year sales comparable are revenue. everyone. financial period. decline offset afternoon, XXXX you, was the driven a otherwise XX.X% revenue quarter million, comparisons all noted, period. of in versus decrease business-to-business to fourth sales, for $XX.X the Thank a Kevin, decrease . Total The partially by by the prior higher

basis on revenue total had impact basis point revenue. quarter, and fourth XXX on exchange impact negative foreign XX a point negative the a For international

by Looking representatives, prior fourth basis, a at sales to fewer period, in $XX.X from on primarily quarter higher in quarter XX.X% million partially productivity. XXXX detailed more driven of the decreased direct-to-consumer fourth revenue million the by rep offset $XX.X

of the in Domestic and compared expense XXXX $XX.X business management. cost with period quarter and competitive business revenue pressure, decreased HME million pricing million the fourth driven increased in XX.X% $XX.X to by comparable capital of

Physio-Assist, increased offset million compared to competitive and pricing Simeox period, million by quarter of the in increasing driven International of in X% addition the revenue $XX.X sales revenue, partially business-to-business cost capital. pressure fourth primarily to by an $XX.X prior the XXXX of

patients of XX.X% revenue prior on the was $XX.X of quarter million the in primarily the from number in service. increase Rental by $XX.X Growth an period. to driven XXXX in increased fourth million

our premiums to overhead for warranty Total inventory-related higher losses. Now XXX by costs fourth increasing partially from costs, and period, margins. labor and the margin prior the gross in paid was basis offset primarily components, points lower by on gross XX.X% quarter, driven

an revenue insurance servicing gross Sales Rental of labor XXX margin of margin a points, increase revenue as costs. basis decreased as was XX.X%, to XXX higher to driven well costs. was primarily decline component rates and due gross XX.X%, coverage mix relating points, lower primarily by basis reimbursement

from gross fourth of quarter expect driven margin lower to relative by efficiency and components. modestly quarter the premium higher a in XXXX price of first labor We XXXX impact the

of asset year of fair value onetime partially to debt prior the CEO expense operating million offset costs The In of primarily million disposal and of and related decrease fourth expense. $XX.X intangible loss certain liabilities an the period, Moving on period, prior decrease in million $XX the the total to to expense. compared on the $XX.X the representing was operating by due transition decreased change XX%. to in to a bad earn-out in quarter,

XXXX, loss a adjusted share per On loss $XX.X per million loss million. share an of million a $X.XX. loss a the diluted of In EBITDA fourth diluted and $X.XX. net we quarter basis, $XX.X of $XX.X reported an reported we was of Adjusted and GAAP net a of adjusted loss of

balance sheet. our Moving on to

marketable XXXX, securities outstanding. December $XXX.X of we As cash, of million and with cash debt equivalents XX, no had

driven touch Now as sales, versus decrease rental international $XXX.X year domestic was decrease sales full to year of as full on period. of revenue. XXXX year was well million, partially offset the higher for by in prior Total a revenue the direct-to-consumer XX.X% The declines by performance. and business-to-business

negative year, year impact revenue negative representing million X.X%. revenue. XX $XXX.X to Total point point expense was $XXX.X foreign XXXX, exchange a a and decrease million a basis full for impact the operating of on the full XX total compared international basis had on For

primarily noncash XXXX loss million of fair asset value operating onetime the expense the in the change and million impairment intangible of the by on XXXX, X.X%, $XX.X of $XX.X in the charge in increased disposal liabilities. of driven earnout Excluding

full loss a year for year million full net was net loss for XXXX. compared Adjusted $XX.X the year compared XXXX. GAAP adjusted GAAP compared million to loss million a negative XXXX. EBITDA net $XX.X $XX.X for $XXX.X million a Adjusted was the million million was $XX.X negative full to of of $XX.X loss net to

I expectations Before I back line revenue Kevin, to for would to share quarter. like the the first turn our

the to million, reflecting expect of to $XX quarter XXXX first of We to $XX X% X% revenue million compared XXXX. first of quarter growth

will back I to that, closing for With remarks. pass Kevin the call

Kevin Smith

a new chapter XXXX to to excited the I The our I'm new optimistic the for Inogen. welcome of and additions start for future, team. opens remain management

are trusted reliable. and Our products

Physio-Assist of we to our robust, ability exciting patients' to a have is with and recent pipeline impact particularly opportunity our to innovation addition lives portfolio. Our the increase

to While work there's equipped much our the to be challenges ahead. handle is team done,

Before and turning for would this past for the an the over benefits I interim presence moment it immense company been time. the in His and thank Mike questions, role to X months. has stepping a to take myself like during CFO for

open will Operator? up it questions. I that, With for

Operator

with from question first comes Our Robbie Instructions] [Operator Marcus JPMorgan.

K. Gong

This is Robbie. for Allen on

Just my first question.

when And about then when performance quarter, again, kind we stood to the weak. seems expecting you're us think in it sequential relatively a your pretty we to stay think DTC guidance, look down. I out the significant as at though that of step

the you on the are for stabilizing you what over And So confidence business? that plans that gives what quarters? really coming execute can your

Kevin Smith

is Yes. Kevin. this Sure,

business, to continue one look We grow opportunities stabilize the within the our over the -- we're quarters is look allow to coming that's when at us opportunities reducing that will on. to we the to business. X It's focused see there we So the -- opportunities at and areas friction improve channels. grow here really sales the

to spend also for see approval BXB focus opportunities of also to our of digital Physio-Assist COGS within controlling going key profitability. and forward our our and near-term improve pathway portfolio. expansion us is the some health another We And Reducing channel.

negatives. seen I've more positives But than

in We of our But do improvement room top an strategy. lot we have within place, the a good for existing team a of sales line. see product is that

just we we that working month. appointed have of but a to have ensure last patients we on that maximizing the month. number new We're each that we want Chief we're started Commercial who We -- can Officer, it, reach

aspects as fix It That business. want of sales. and the incentive whole we're DTC of because the prioritizing to business cash certain both types number of the rental not as at a structure, there's our well And business a as that. looks we of incorporates sales our

K. Gong

think over position, capital? And about confident should of just cash raise to you of $XXX then ship quarter capital of your more is steady a How you not need we strategy. million. before thinking But you're a or the rain little just might how mentioned about with you're key cost burn, ended kind the the kind that part whether

Kevin Smith

Yes, sure.

end our with million and our So $XXX continue innovation outstanding. to sales the at cash debt investments over burn. and to had of equivalents monitor expense no capabilities. on within manufacturing year, organization and the in and we cash pipeline, We're our We focused manage our going

We do don't going to that a to our we sheet we missed? I that anticipate have balance Mike, fund Anything believe and strong and there, out add initiatives position capital risk. a upcoming for

Michael Sergesketter

No, . I think you covered it well.

Operator

Margaret And next from Andrew our question William comes with Blair.

Margaret Kaczor

what go to to was an guess, what recent I . share leaving. if us estimate the I'm to competitor the Is some Were the last maybe things can volatility demand? give Is kind back related of to related pricing? I that intra-quarter? market I And that market on also you in associated year. commentary your wanted guess, that their in with does mean? curious there of

Kevin Smith

exits you, Thank SoC the on with And POC the Margaret. and the Yes. both the market, business. from

I see As we mentioned, there in that dynamics there. a shift is do

We to us, for take able in themselves. we're opportunity advantage and believe ourselves they monitoring be position going present that. to as closely that are to be there's We putting

for on switch. within This them as This But where a our there, there less but we availability, ASP present We're to itself demand is be time. it's channel. that light those anticipate would well But various going as BXB an within coming opportunities something more a a void. focused not opportunities isn't see POCs, really over market We near-term potential business may opportunities. it's aspect channels on windfall. the is

market in to giving in and advantage market share. also step versus is to and believe that that I be their void, But an I fill markets, share is -- position what the really leadership on -- We our we have can't that comment help us that able a Margaret.

Margaret Kaczor

together. say of were the just sense X questions in I'll might But how can #X least maybe maybe you to trying at been. player just a I'm apply these the if roughly have they marketplace? they big get

other little And that company. around covering then I expecting. sure is real Inogen sales question down maybe I'm guidance, a And than lower we ever were I've sequential quarter bit than guess the the XXXX, in QX a for seen time not my

a business segment? by that you related give sort Or to business is So can breakdown of us better segment?

Kevin Smith

Yes.

market in share in that, here able I the So the shifts been will. market who's to don't comfort clarity down believe with -- have able I get #X exactly comment some be I position, to regards to road there's more certainly the the right the and it's and on we certainly being in now. I'm right and more address, position to If

be We do we as as And ahead on to we'll to of tied we're able position to giving opportunities, not additional as quarter-on-quarter, the segments. think forward. able the you there we ourselves I we the And at mentioned us. guidance working give But to also accelerate of we within further one this that as see out, look clarity. see growth be some necessarily I any it's go to upside go

Margaret Kaczor

So I'm basis? assume first correct? is . the business you the sorry, company in presented down guys total every even a would had you with Is guidance just the quarter, on way sequentially that that segment

Kevin Smith

QX? versus you QX The sequentially -- so -- mean

Margaret Kaczor

Correct.

Michael Sergesketter

BXB. . think, for you our if be We I trends, near domestic in the think way the had market, I And would we were look think about I our BXB. going at in think that growth term. forward would international QX, I the international down

Operator

Mike Needham & [Operator question from next with Company. Instructions] Matson Our comes

Michael Matson

the through number kind deemphasizing weren't were, months, had where DTC, side on kind few DTC and guess, up I were more but know, back to of there sales of drive focusing the they the and prior more trying been strategy force, degree, productivity the scaling So the only rental some smaller of things but reps. on you've just Kevin, they had to giving of management team for they somewhat I a channel the

run the points. so kind the different with kind you're is I They have kind and there's different, guess, X of margin -- And business? channels way structures But here. to of of call all that going consistent

us you X, you know at you if could where between to point. tell focus those maybe just plan So investment this

Kevin Smith

we there. have look want -- a we've for this patients looking we when are -- friction seen we thank is Yes. When out Inogen It's at of reaching have you some POC. the different Mike, the And us mentioned channels, within to that we're that question synergies before, that them. that the have to at I

Same in from thing an are have with prescriber We the coming POC. that that channels. have Inogen referrals patients

in a to want in left of that a that next There's we're have for insurance number patients there's or dynamics want cash certain need patients POC they of having a sale. versus with between where from And channel the coverage that there off one handing coverage, we're process crossover distinct have these channel. friction appropriate to those months channels. And the

able minimize able of And is, to we preference what that number them an Inogen patient's to so and see to on friction, to that so coverage, status cash minimum the the POC POC minimum regardless opportunities be touches. it's of be maximize patients sale, that with to get a engine them cash we If touches. insurance an give forth, insurance it's the what

within them keep in and looking our this silos. and as Commercial sales. start Chief hard it, of at that so maximize it's space we But new we're perhaps very rental but do the well cash to those, not between way is the the crossover there accelerate answering best to as with pure Officer, a So to as there, lot see -- directly to hard the opportunities approaching it's DTC question it's specific

opportunity creating us, for that, is growth. for So

Michael Matson

you partnership commented to, I going on you that were this just then guess, end. And

you sales the referring think team had prior I prescriber up set or force. physician were management to this

I maybe employed those what I something. of I reps off by of were think XX it of a some you my the top but that don't was to? reps, around party the remember is the or were but company think head, third referring name

that And that Does it Inogen I is if Inogen become down? up? guess, what an go to force? sales and number XX, employees over does that happens or go just transition that Does to

Kevin Smith

Yes.

the is, -- went couple -- it's to that in-house. able reps question prescriber how what control forward. there yes, to tactical for be control channel third bringing we that a that sales and a of a those restructuring that I We're -- strategic So a have looks there away from. We're bit was answers party channel it's little control, fair going us sales that within and more to over

was We are by important But in-house. specifically right for also of channels. on not and bringing channel each one, an these sales sales by bringing to comment become us, control to -- OpEx, some take expenses. now rightsizing those that This that opportunity some going in I'm for those that. it's of the numbers to to control us profitable out

to the these And going operating forward as one to Inogen. channels again, right us it's for within be synergy important have

And as so bringing them move in-house plan enables us that with forward to well.

Michael Matson

then Physio-Assist. one one And last on just

to prior I you timing I on guess, regulatory the can about the going never this to a pathway or answer from the go really comment got guess, management just So straight -- is have through. thing when of even I team --

it what's the U.S.? get expected you when cleared and XXX(k)? can in a is thing of it launch the And timing So this

Kevin Smith

And we And about we what want through FDA. the in, the process. at that's firmly to that made. giving be when We've on when progress working Simeox until do happy regulatory We're we engaged very clarity we're with trying we've to that that will is and the any with say I'm Physio-Assist underway. to look Yes. I expectations not happen. approval know coming the going have to careful We it, as I have avoid but

that, some information So at back, Mike. come I'll the give and appropriate time, I'll on you more

Michael Matson

follow-up one Physio-Assist. on guess I

early to that growth. of out the that on to needing of about or you remarks that part So relying your in called -- prepared kind drive

of but what you the misinterpreting new get So this? on said think the business? POCs mean, imply other without growth you back relying you does what for categories I'm I there, like that POC maybe Physio-Assist do to part and can

Kevin Smith

as into we as a Simeox relationships, a can. well that will that see patients that Simple BXB on POCs as answer, Physio-Assist. overlay growth the road. that There's well. layering we get down Physio-Assist, the can We benefit within from without especially -- deeper yes, relying as will it. us the There POC even Physio-Assist, device synergies with clinicians device to a with develop help well channel are as with back that

a see do POC us grow for we Simeox. of But pathway the to independent business

Operator

Matthew Blackman our next Stifel. with question And from comes

Colin Clark

a from This the and management on how HME I Matt. for BXB expense you regarding is had Colin here. quick expect U.S. to one durable business be

How down continue You talked we be? expect that fourth possibly the revenues being . the about should expecting in and quarter to durable to quarter. in first environment this

Kevin Smith

globe as see We as We've They're the channels BXB the with conversations on been well working best direct partners having to channel. or partners friction BXB. us top between together, also to with the the out within and work the are find across BXB, upside our the building relationships. what the for be reduce ways channels to good synergies direct BXB

that and us, there for opportunities we see too, grow continue build to business. So

Colin Clark

just competitor. from your And one the follow-up exit on market

factored in confirm, any first wanted Just the to is way quarter that guidance? into

Kevin Smith

No, it's not.

Operator

disconnect. And a conference. for now great with questions have ladies conclude parties all And gentlemen, and Have All today. the evening. may we that's today's that, we

Inogen (INGN) 27 Feb 242023 Q4 Earnings call transcript