Inogen (NASDAQ: INGN) reported Q4 EPS of ($0.06), $0.16 worse than the analyst estimate of $0.10. Revenue for the quarter came in at $78.9 million versus the consensus estimate of $86.42 million.

Fourth Quarter 2019 Highlights

• Total revenue of $78.9 million
• Inogen One G5® units accounted for over 40% of total unit volume in the period
• Limited launch of the Inogen Tidal Assist® Ventilator (TAV®) product in December 2019
• As of December 31, 2019, the Company had 329 inside direct-to-consumer sales representatives and 17 outside physician sales representatives

“While 2019 was a challenging year, revenue increased 8.2% over the prior year, excluding the previously disclosed large national provider who buys through our private label partner, to whom sales decreased $20.4 million from the prior year, and excluding the $3.1 million foreign exchange impact,” said Chief Executive Officer, Scott Wilkinson. (See accompanying tables for reconciliation of GAAP and non-GAAP measures.)

“In addition, we believe we took steps during 2019 to improve our operational execution and financial performance in 2020, including optimizing our direct-to-consumer salesforce, launching the Inogen One G5, and initiating our commercial plan for our newly acquired Tidal Assist Ventilator.” Mr. Wilkinson also added, “I want to reiterate our belief that the need and patient preference for our best-in-class portable oxygen concentrators remains strong and we believe that the market continues to be underpenetrated.”

GUIDANCE:

Inogen sees FY2020 revenue of $385-400 million, versus the consensus of $403.47 million.

Inogen is maintaining its full year 2020 total revenue guidance range provided on January 13, 2020 of $385 to $400 million, representing growth of 6.4% to 10.5% versus 2019 full year results. The Company still expects direct-to-consumer sales to be its fastest growing channel with domestic and international business-to-business sales to have a solid growth rate. Inogen expects rental revenue to grow modestly in 2020 compared to 2019, primarily due to an expected increase in patients on service as well as the low, single-digit percent rate increase in 2020 for Medicare beneficiaries.

The Company also expects minimal contribution of the Inogen Tidal Assist Ventilator for revenue in both the domestic business-to-business and direct-to-consumer channels in 2020.

The Company is reducing its full year 2020 GAAP net income guidance range to $14 to $18 million from the range of $25 to $27 million provided on November 5, 2019, compared to 2019 GAAP net income of $21.0 million. This decrease in net income guidance is primarily due to lower revenue estimates than previously expected as well as various manufacturing inefficiencies, particularly in the first quarter of 2020. While the Company does not give quarterly guidance, the Company does expect to have a net loss in the first quarter of 2020. The Company still expects a GAAP effective tax rate of approximately 25%. Net income guidance also assumes $7.8 million in estimated New Aera intangible amortization expense recorded in research and development expense in 2020 compared to $2.9 million in 2019.

Inogen is lowering its guidance range for full year 2020 Adjusted EBITDA to $44 to $50 million from the range of $56 to $58 million provided on November 5, 2019, compared to 2019 Adjusted EBITDA of $43.3 million.

Inogen expects net positive cash flow for 2020 with no additional equity capital required to meet its current operating plan.

For earnings history and earnings-related data on Inogen (INGN) click here.