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Section 1: 8-K (8-K)

ingn-8k_20180807.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8‑K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

August 7, 2018

 

INOGEN, INC.

(Exact name of registrant as specified in its charter)

Delaware

 

001-36309

 

33-0989359

(State or other jurisdiction

of incorporation)

 

(Commission File Number)

 

(IRS Employer

Identification No.)

326 Bollay Drive

Goleta, California 93117

(Address of principal executive offices, including zip code)

(805) 562-0500

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 


Item 2.02.

Results of Operations and Financial Condition.

On August 7, 2018, Inogen, Inc. issued a press release reporting its financial results for the second quarter ended June 30, 2018. A copy of the press release is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished in this Current Report under Item 2.02 and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.

Financial Statements and Exhibits.

(d)  Exhibits

 

Exhibit

 

Description

 

 

 

99.1

 

Press Release, dated August 7, 2018.


EXHIBIT INDEX

 

Exhibit

No.

 

Description

 

 

 

99.1

 

Press Release, dated August 7, 2018.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

INOGEN, INC.

 

 

 

Date:  August 7, 2018

By:

/s/ Alison Bauerlein

 

 

Alison Bauerlein

Executive Vice President, Finance,

Chief Financial Officer, Secretary and Treasurer

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

ingn-ex991_6.htm

 

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

Inogen Announces Record Second Quarter 2018 Financial Results and Increases 2018 Guidance

- Q2 2018 Sales Revenue up 58.5% Over the Same Period in 2017 -

 

Goleta, California, August 7, 2018Inogen, Inc. (NASDAQ: INGN), a medical technology company offering innovative respiratory products for use in the homecare setting, today reported financial results for the three-month period ended June 30, 2018.

 

Second Quarter 2018 Highlights

Record total revenue of $97.2 million, up 51.6% over the same period in 2017  

 

Record sales revenue of $92.0 million, up 58.5% over the same period in 2017

 

Rental revenue of $5.3 million, down 13.7% from the same period in 2017

Increase in planned hiring in Cleveland by year-end 2020 to 500 employees, approximately two-thirds of which are expected to be sales representatives, up from the original target of 240 employees

GAAP net income of $14.6 million, reflecting a 75.2% increase over the same period in 2017 and a 15.0% return on revenue

Adjusted EBITDA of $19.0 million, representing 32.2% growth over the same period in 2017 and a 19.5% return on revenue (see accompanying table for reconciliation of GAAP and non-GAAP measures)

Total units sold were 54,700, an increase of 22,300, or 68.8%, over the same period in 2017

 

“The second quarter of 2018 was a notably strong quarter for us as we generated record revenue across all three sales channels, while also reporting record operating income,” said Chief Executive Officer, Scott Wilkinson. “We are continuing to execute on our strategy to hire additional sales representatives and invest in advertising activities to increase consumer awareness as we believe this is still our most effective means to drive high revenue growth and portable oxygen concentrator adoption.”

 

Second Quarter 2018 Financial Results

Total revenue for the three months ended June 30, 2018 rose 51.6% to $97.2 million from $64.1 million in the same period in 2017. Direct-to-consumer sales rose 74.3% over the same period in 2017, ahead of expectations, primarily due to increased sales representative headcount and additional consumer advertising. Domestic business-to-business sales also exceeded expectations and grew 55.7% over the same period in 2017, primarily driven by continued strong demand from the Company’s private label partner and traditional home medical equipment providers. International business-to-business sales in the second quarter of 2018 increased 39.1% over the comparative period in 2017, primarily due to continued adoption from our European partners and favorable currency rates. Sales in Europe represented 88.3% of international sales in the second quarter of 2018, up slightly from 87.6% in the second quarter of 2017. Rental revenue in the second quarter of 2018 was $5.3 million compared to $6.1 million in the second quarter of 2017,

 


 

representing a decline of 13.7% from the same period in the prior year. The decrease in rental revenue was primarily due to a decline in net rental patients on service of 11.8% compared to the second quarter of 2017. Rental revenue accounted for 5.4% of total revenue in the second quarter of 2018, down from 9.5% of total revenue in the second quarter of 2017.  

 

Total gross margin was 49.8% in the second quarter of 2018 versus 49.2% in the comparative period in 2017. The increase in total gross margin was primarily due to a continued shift towards sales revenue versus rental revenue. Sales gross margin was 51.1% in the second quarter of 2018 versus 51.8% in the second quarter of 2017. The sales gross margin percentage declined primarily due to lower average selling prices in both business-to-business channels due to increased volumes and in the direct-to-consumer channel due to a pricing trial and subsequent reduction of direct-to-consumer pricing nationwide. This was partially offset by increased mix towards direct-to-consumer sales and lower average cost of goods sold per unit. Rental gross margin was 27.6% in the second quarter of 2018 versus 25.0% in the second quarter of 2017. The increase in rental gross margin was primarily due to lower depreciation expense.

 

Total operating expense increased to $34.4 million, or 35.4% of revenue, in the second quarter of 2018 versus $23.1 million, or 36.0% of revenue, in the second quarter of 2017.

 

Operating expense included research and development expense of $1.8 million in the second quarter of 2018, which was up from $1.3 million in the comparative period in 2017, primarily due to increased personnel-related expenses. Sales and marketing expense increased to $23.0 million in the second quarter of 2018 versus $11.9 million in the comparative period in 2017, primarily due to personnel-related expenses as we continued to hire inside sales representatives at our Cleveland facility and increased advertising expenditures. General and administrative expense decreased to $9.7 million in the second quarter of 2018 versus $9.9 million in the comparative period in 2017, primarily due to decreased bad debt expense and patent litigation costs, partially offset by increased personnel-related expenses.

 

The Company reported an income tax benefit of $1.0 million in the second quarter of 2018, compared to an income tax expense of $0.8 million reported in the second quarter of 2017. The Company’s income tax benefit in the second quarter of 2018 included a $3.9 million decrease in provision for income taxes related to excess tax benefits recognized from stock-based compensation compared to $2.5 million in the second quarter of 2017. Excluding the stock-based compensation benefit, the Company’s non-GAAP effective tax rate in the second quarter of 2018 was 21.2% versus 36.2% in the second quarter of 2017, primarily due to the impacts of the U.S. federal tax reform.  

 

In the second quarter of 2018, the Company reported net income of $14.6 million, compared to net income of $8.3 million in the second quarter of 2017. Earnings per diluted common share was $0.65 in the second quarter of 2018 versus $0.38 in the second quarter of 2017, an increase of 71.1%.    

 

Adjusted EBITDA for the three months ended June 30, 2018 rose 32.2% to $19.0 million, or 19.5% of revenue, from $14.4 million, or 22.4% of revenue, in the second quarter of 2017.  

 

Cash, cash equivalents, and marketable securities were $208.4 million as of June 30, 2018 compared to $188.3 million as of March 31, 2018, an increase of $20.1 million in the second quarter of 2018.  

 

 


 

Financial Outlook for 2018

Inogen is increasing its full year 2018 total revenue guidance range to $340 to $350 million, up from $310 to $320 million, representing growth of 36.3% to 40.3% versus 2017 full year results. The Company continues to expect direct-to-consumer sales to be its fastest growing channel, domestic business-to-business sales to have a significant growth rate, and international business-to-business sales to have a solid growth rate, where the 2018 strategy will continue to be heavily focused on the European markets. Inogen still expects rental revenue to be down approximately 10% in 2018 compared to 2017 as the Company continues to focus on sales.

 

Further, the Company is also increasing its full year 2018 GAAP net income and non-GAAP net income guidance range to $45 to $48 million, up from $38 to $41 million, representing growth of 114.3% to 128.5% compared to 2017 GAAP net income of $21.0 million and growth of 57.5% to 67.9% compared to 2017 non-GAAP net income of $28.6 million. The Company estimates that the decrease in provision for income taxes related to excess tax benefits recognized from stock-based compensation will lead to a reduction in provision for income taxes of approximately $12 million in 2018, up from $8 million, based on forecasted stock activity, which would lower its effective tax rate as compared to the U.S. statutory rate.  The Company expects its effective tax rate including stock-based compensation deductions to vary quarter-to-quarter depending on the amount of pre-tax net income, share price, and on the timing and size of stock option exercises. Excluding the estimated $12 million decrease in provision for income taxes expected in 2018, the Company still expects a non-GAAP effective tax rate of approximately 25%.

 

Inogen is also increasing its guidance range for full year 2018 Adjusted EBITDA to $65 to $69 million, up from $62 to $67 million, representing 27.9% to 35.7% growth compared to 2017 results.

 

Inogen also still expects net positive cash flow for 2018 with no additional capital required to meet its current operating plan.  

 

Conference Call

Individuals interested in listening to the conference call today at 1:30pm PT/4:30pm ET may do so by dialing (855) 238-8123 for domestic callers or (412) 317-5217 for international callers. Please reference Inogen (INGN) to join the call. To listen to a live webcast, please visit the Investor Relations section of Inogen's website at: http://investor.inogen.com/.  

 

A replay of the call will be available beginning August 7, 2018 at 3:30pm PT/6:30pm ET through 3:30pm PT/6:30pm ET on August 14, 2018. To access the replay, dial (877) 344-7529 or (412) 317-0088 and reference Access Code: 10121605. The webcast will also be available on Inogen's website for one year following the completion of the call.

 

Inogen has used, and intends to continue to use, its Investor Relations website, http://investor.inogen.com/, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. For more information, visit http://investor.inogen.com/.

 


 

About Inogen

Inogen is innovation in oxygen therapy. We are a medical technology company that develops, manufactures and markets innovative oxygen concentrators used to deliver supplemental long-term oxygen therapy to patients suffering from chronic respiratory conditions.

 

For more information, please visit www.inogen.com.

 

Cautionary Note Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding anticipated growth opportunities; hiring and marketing expectations; expectations for all revenue channels for full year 2018; the expected impact of the decrease in provision for income taxes related to excess tax benefits recognized from stock-based compensation for full year 2018; and financial guidance for 2018, including revenue, GAAP net income, Adjusted EBITDA, non-GAAP net income, net cash flow, effective tax rates, and the need for additional capital. Forward-looking statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from currently anticipated results, including but not limited to, risks arising from the possibility that Inogen will not realize anticipated revenue; the possible loss of key employees, customers, or suppliers; and intellectual property risks if Inogen is unable to secure and maintain patent or other intellectual property protection for the intellectual property used in its products. In addition, Inogen's business is subject to numerous additional risks and uncertainties, including, among others, risks relating to market acceptance of its products; competition; its sales, marketing and distribution capabilities; its planned sales, marketing, and research and development activities; interruptions or delays in the supply of components or materials for, or manufacturing of, its products; risks related to the recent data security incident, remediation measures, and potential claims; seasonal variations; unanticipated increases in costs or expenses; and risks associated with international operations. Information on these and additional risks, uncertainties, and other information affecting Inogen’s business operating results are contained in its Annual Report on Form 10-K for the year ended December 31, 2017 and in its other filings with the Securities and Exchange Commission. Additional information will also be set forth in Inogen’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 to be filed with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof.  Inogen disclaims any obligation to update these forward-looking statements except as may be required by law.

 

 


 

Use of Non-GAAP Financial Measures

Inogen has presented certain financial information in accordance with U.S. GAAP and also on a non-GAAP basis for the three and six months ended June 30, 2018 and June 30, 2017. Management believes that non-GAAP financial measures, taken in conjunction with U.S. GAAP financial measures, provide useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of Inogen's core operating results. Management uses non-GAAP measures to compare Inogen's performance relative to forecasts and strategic plans, to benchmark Inogen's performance externally against competitors, and for certain compensation decisions. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Inogen's operating results as reported under U.S. GAAP. Inogen encourages investors to carefully consider its results under U.S. GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between U.S. GAAP and non-GAAP results are presented in the accompanying table of this release. For future periods, Inogen is unable to provide a reconciliation of non-GAAP measures without unreasonable effort as a result of the uncertainty regarding, and the potential variability of, the amounts of interest income, interest expense, depreciation and amortization, stock-based compensation, provision (benefit) for income taxes, and certain other infrequently occurring items, such as acquisition related costs, that may be incurred in the future.

 

 

 

Investor Relations Contact:

Matt Bacso, CFA

mbacso@inogen.net

805-879-8205

 

Media Contact:

Byron Myers

805-562-0503

 

 

 

-- Financial Tables Follow --


 


 

Consolidated Balance Sheets

 

(amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2018

 

 

2017

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

166,344

 

 

$

142,953

 

Marketable securities

 

 

42,068

 

 

 

30,991

 

Accounts receivable, net

 

 

37,472

 

 

 

31,444

 

Inventories, net

 

 

27,407

 

 

 

18,842

 

Deferred cost of revenue

 

 

381

 

 

 

361

 

Income tax receivable

 

 

2,655

 

 

 

1,313

 

Prepaid expenses and other current assets

 

 

6,667

 

 

 

2,584

 

Total current assets

 

 

282,994

 

 

 

228,488

 

Property and equipment, net

 

 

21,972

 

 

 

20,103

 

Goodwill

 

 

2,304

 

 

 

2,363

 

Intangible assets, net

 

 

4,093

 

 

 

4,717

 

Deferred tax asset - noncurrent

 

 

20,736

 

 

 

18,636

 

Other assets

 

 

537

 

 

 

765

 

Total assets

 

$

332,636

 

 

$

275,072

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

31,174

 

 

$

20,626

 

Accrued payroll

 

 

9,108

 

 

 

6,877

 

Warranty reserve - current

 

 

3,223

 

 

 

2,505

 

Deferred revenue - current

 

 

3,383

 

 

 

3,533

 

Income tax payable

 

 

344

 

 

 

345

 

Total current liabilities

 

 

47,232

 

 

 

33,886

 

Warranty reserve - noncurrent

 

 

5,507

 

 

 

3,666

 

Deferred revenue - noncurrent

 

 

11,713

 

 

 

9,402

 

Deferred tax liability - noncurrent

 

 

340

 

 

 

348

 

Other noncurrent liabilities

 

 

938

 

 

 

729

 

Total liabilities

 

 

65,730

 

 

 

48,031

 

Stockholders' equity

 

 

 

 

 

 

 

 

Common stock

 

 

21

 

 

 

21

 

Additional paid-in capital

 

 

231,879

 

 

 

218,109

 

Retained earnings

 

 

34,007

 

 

 

8,639

 

Accumulated other comprehensive income

 

 

999

 

 

 

272

 

Total stockholders' equity

 

 

266,906

 

 

 

227,041

 

Total liabilities and stockholders' equity

 

$

332,636

 

 

$

275,072

 


 


 

Consolidated Statements of Comprehensive Income

 

(unaudited)

 

(amounts in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales revenue

 

$

91,987

 

 

$

58,038

 

 

$

165,571

 

 

$

104,004

 

Rental revenue

 

 

5,251

 

 

 

6,083

 

 

 

10,718

 

 

 

12,617

 

Total revenue

 

 

97,238

 

 

 

64,121

 

 

 

176,289

 

 

 

116,621

 

Cost of revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales revenue

 

 

44,968

 

 

 

27,993

 

 

 

81,916

 

 

 

49,906

 

Cost of rental revenue, including depreciation of $1,966 and $2,522

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

for the three months ended and $4,131 and $5,211 for the six

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

months ended, respectively

 

 

3,800

 

 

 

4,561

 

 

 

8,176

 

 

 

9,404

 

Total cost of revenue

 

 

48,768

 

 

 

32,554

 

 

 

90,092

 

 

 

59,310

 

Gross profit

 

 

48,470

 

 

 

31,567

 

 

 

86,197

 

 

 

57,311

 

Operating expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

1,775

 

 

 

1,260

 

 

 

3,191

 

 

 

2,569

 

Sales and marketing

 

 

22,999

 

 

 

11,945

 

 

 

41,037

 

 

 

22,474

 

General and administrative

 

 

9,675

 

 

 

9,865

 

 

 

19,248

 

 

 

18,200

 

Total operating expense

 

 

34,449

 

 

 

23,070

 

 

 

63,476

 

 

 

43,243

 

Income from operations

 

 

14,021

 

 

 

8,497

 

 

 

22,721

 

 

 

14,068

 

Other income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

673

 

 

 

146

 

 

 

1,216

 

 

 

247

 

Other income (expense)

 

 

(1,048

)

 

 

523

 

 

 

(604

)

 

 

730

 

Total other income (expense), net

 

 

(375

)

 

 

669

 

 

 

612

 

 

 

977

 

Income before provision (benefit) for income taxes

 

 

13,646

 

 

 

9,166

 

 

 

23,333

 

 

 

15,045

 

Provision (benefit) for income taxes

 

 

(964

)

 

 

828

 

 

 

(2,035

)

 

 

775

 

Net income

 

$

14,610

 

 

$

8,338

 

 

$

25,368

 

 

$

14,270

 

Other comprehensive income (loss), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in foreign currency translation adjustment

 

 

76

 

 

 

197

 

 

 

184

 

 

 

197

 

Change in net unrealized gains (losses) on foreign currency hedging

 

 

723

 

 

 

(300

)

 

 

474

 

 

 

(246

)

Less: reclassification adjustment for net (gains) losses included in net income

 

 

(103

)

 

 

49

 

 

 

69

 

 

 

(8

)

Total net change in unrealized gains (losses) on foreign currency hedging

 

 

620

 

 

 

(251

)

 

 

543

 

 

 

(254

)

Change in net unrealized gains (losses) on available-for-sale investments

 

 

19

 

 

 

(6

)

 

 

 

 

 

58

 

Total other comprehensive income (loss), net of tax

 

 

715

 

 

 

(60

)

 

 

727

 

 

 

1

 

Comprehensive income

 

$

15,325

 

 

$

8,278

 

 

$

26,095

 

 

$

14,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share attributable to common stockholders (1)

 

$

0.69

 

 

$

0.40

 

 

$

1.20

 

 

$

0.69

 

Diluted net income per share attributable to common stockholders (1)

 

$

0.65

 

 

$

0.38

 

 

$

1.13

 

 

$

0.66

 

Weighted-average number of shares used in calculating net income

  per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic common shares

 

 

21,172,170

 

 

 

20,622,320

 

 

 

21,099,566

 

 

 

20,556,293

 

Diluted common shares

 

 

22,503,749

 

 

 

21,848,359

 

 

 

22,409,011

 

 

 

21,731,592

 

 

(1) Reconciliations of net income attributable to common stockholders basic and diluted can be found in Inogen’s Quarterly Report on Form 10-Q to be filed with the Securities and Exchange Commission.


 


 

Supplemental Financial Information

 

(unaudited)

 

(in thousands, except units and patients)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenue by region and category

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business-to-business domestic sales

 

$

32,943

 

 

$

21,154

 

 

$

60,959

 

 

$

38,615

 

Business-to-business international sales

 

 

20,759

 

 

 

14,919

 

 

 

37,665

 

 

 

26,342

 

Direct-to-consumer domestic sales

 

 

38,285

 

 

 

21,965

 

 

 

66,947

 

 

 

39,047

 

Direct-to-consumer domestic rentals

 

 

5,251

 

 

 

6,083

 

 

 

10,718

 

 

 

12,617

 

Total revenue

 

$

97,238

 

 

$

64,121

 

 

$

176,289

 

 

$

116,621

 

Additional financial measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Units sold

 

 

54,700

 

 

 

32,400

 

 

 

100,100

 

 

 

58,000

 

Net rental patients as of period-end

 

 

28,500

 

 

 

32,300

 

 

 

28,500

 

 

 

32,300

 

 

Reconciliation of U.S. GAAP to Other Non-GAAP Financial Measures

 

(unaudited)

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

Non-GAAP EBITDA and Adjusted EBITDA

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Net income

 

$

14,610

 

 

$

8,338

 

 

$

25,368

 

 

$

14,270

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(673

)

 

 

(146

)

 

 

(1,216

)

 

 

(247

)

Provision (benefit) for income taxes

 

 

(964

)

 

 

828

 

 

 

(2,035

)

 

 

775

 

Depreciation and amortization

 

 

2,816

 

 

 

3,117

 

 

 

5,809

 

 

 

6,321

 

EBITDA (non-GAAP)

 

 

15,789

 

 

 

12,137

 

 

 

27,926

 

 

 

21,119

 

Stock-based compensation

 

 

3,186

 

 

 

2,216

 

 

 

6,567

 

 

 

4,107

 

Adjusted EBITDA (non-GAAP)

 

$

18,975

 

 

$

14,353

 

 

$

34,493

 

 

$

25,226

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

Non-GAAP net income

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Net income

 

$

14,610

 

 

$

8,338

 

 

$

25,368

 

 

$

14,270

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017 U.S. tax reform(1)

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income

 

$

14,610

 

 

$

8,338

 

 

$

25,368

 

 

$

14,270

 

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

Non-GAAP provision (benefit) for income taxes and effective tax rate

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Income before provision (benefit) for income taxes

 

$

13,646

 

 

$

9,166

 

 

$

23,333

 

 

$

15,045

 

Provision (benefit) for income taxes

 

 

(964

)

 

 

828

 

 

 

(2,035

)

 

 

775

 

Effective tax rate

 

 

-7.1

%

 

 

9.0

%

 

 

-8.7

%

 

 

5.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for income taxes

 

$

(964

)

 

$

828

 

 

$

(2,035

)

 

$

775

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Excess tax benefits from stock-based compensation

 

 

3,853

 

 

 

2,489

 

 

 

7,105

 

 

 

4,702

 

2017 U.S. tax reform (1)

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes (non-GAAP)

 

$

2,889

 

 

$

3,317

 

 

$

5,070

 

 

$

5,477

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

$

13,646

 

 

$

9,166

 

 

$

23,333

 

 

$

15,045

 

Provision for income taxes (non-GAAP)

 

 

2,889

 

 

 

3,317

 

 

 

5,070

 

 

 

5,477

 

Effective tax rate (non-GAAP)

 

 

21.2

%

 

 

36.2

%

 

 

21.7

%

 

 

36.4

%

 

(1) On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was enacted into law, which significantly changes existing U.S. tax law and includes numerous provisions that affect the Company. During the fourth quarter of 2017, the Company recorded an estimated one-time net charge due to the impact of changes in the tax rate, primarily on deferred tax assets. There were no related charges during the second quarter or the first six months of 2018.

 

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