Inogen, Inc. (NASDAQ:INGN) Q2 2020 Earnings Conference Call - Final Transcript

Aug 04, 2020 • 04:30 pm ET


Inogen, Inc. (NASDAQ:INGN) Q2 2020 Earnings Conference Call - Final Transcript


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Scott Wilkinson

Officer and be responsible for sales efforts across all sales channels worldwide. Erin comes to us with broad sales experience including over 19 years in various sales roles across Allegiance Healthcare, Cardinal Health, CareFusion and Becton Dickinson. Byron Myers, who is currently the Executive Vice President of Sales and Marketing will become, Executive Vice President of Marketing, responsible for all marketing and product management efforts worldwide. We believe that with our expectations of future growth, we require dedicated senior leadership that bifurcates the growing responsibilities for sales and marketing. We are excited to have Erin and Byron as leaders in these roles.

We believe we are a leader in POC technology with our product offerings and that the market for our technology remains underpenetrated. While the COVID-19 PHE has created a challenging short-term impact, we're still working relentlessly to optimize [Technical Issues] We believe we can execute on our plan to create long-term shareholder value by focusing on increased patient and physician awareness of our innovative products and services.

Lastly, given where Inogen stands today and in spite of the challenges we and the global economy have been facing, we believe our strong cash, cash equivalents and marketable securities of $218.6 million with no debt outstanding provides us with a certain level of stability and liquidity to operate and be adaptable during this unprecedented time. We still see POCs as the future for oxygen therapy patients worldwide as they provide increased freedom and independence for patients, while also decreasing service and delivery cost to providers.

With that I will now turn the call over to our CFO, Ali Bauerlein. Ali?

Alison Bauerlein

Thanks, Scott and good afternoon, everyone. During my prepared remarks, I will review our second quarter of 2020 financial performance. As Scott noted, total revenue for the second quarter of 2020 was $71.7 million, representing a decline of 29.1% from the second quarter of 2019.

Turning to gross margin. For the second quarter of 2020, total gross margin was 45.7% compared to 49.7% in the second quarter of 2019. Our sales revenue gross margin was 45% in the quarter of 2020 versus 50.7% in the same period of 2019. The decrease in sales revenue gross margin was primarily due to increased mix towards domestic business-to-business sales, which have a lower gross margin than our international business-to-business and direct-to-consumer sales. Lower mix of accessory sales and increased overhead cost per unit due to lower sales volumes.

In addition, average selling prices were down in the second quarter of 2020 versus the same period in the prior year across all sales channel. Rental revenue gross margin increased to 53% in the second quarter of 2020 versus 30.4% in the second quarter of 2019, primarily due to higher medicare reimbursement rates, lower revenue adjustments and lower servicing and depreciation expense. While we are proud of the improvements in our rental revenue gross margin, we believe that the lower servicing costs in the second quarter of 2020 were partially due to the lack of