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

Aug 04, 2020 • 04:30 pm ET

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

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Presentation
Executive
Alison Bauerlein

mobility of our patient population from COVID-19, which may not recur in future periods.

As for operating expense, total operating expense decreased to $35.1 million in the second quarter of 2020 versus $38.1 million in the second quarter of 2019. Primarily due to a reduction in advertising expense, partially offset by the impacts associated with New Aera intangible amortization and change in the fair value of the earn-out liability.

Research and development expense increased to $3.3 million in the second quarter of 2020 compared to $1.5 million in the second quarter of 2019, primarily associated with the $1.9 million of New Aera intangible amortization expense. Sales and marketing expense decreased to $22.1 million in the second quarter of 2020 versus $27.8 million in the comparative period of 2019, primarily due to decreased advertising expenditures of $7.2 million in the second quarter of 2020 as compared to $11.6 million in the second quarter of 2019.

General and administrative expense increased to $9.7 million in the second quarter of 2020 versus $8.8 million in the second quarter of 2019, primarily due to increased consulting fees and $0.9 million expense from the change in fair value of the New Aera earnout liability.

As Scott noted, we received $6.2 million from the CARES Act provider relief fund, all of which was received and recognized in the second quarter of 2020. In regards to receiving these funds, we recorded $5.6 million in other income, which was associated with lost revenues from the COVID-19 PHE and also recorded a $0.6 million benefit in general and administrative expense due to COVID-19 PHE related costs incurred in the quarter.

In the second quarter of 2020, we generated an operating loss of $2.4 million and adjusted EBITDA of $10 million. In the second quarter of 2020, we reported a net income of $2.6 million compared to $10.2 million in the second quarter of 2019. Earnings per diluted common share was $0.12 in the second quarter of 2020 versus $0.45 in the second quarter of 2019.

Now turning to guidance. Because of the unprecedented market uncertainties, we are still unable to provide guidance for the full year 2020. Given the uncertain, scope and duration of the COVID-19 PHE, we are unable to estimate the impact on our financial results including our revenue, revenue mix, net income and adjusted EBITDA estimates for the full year. Given these uncertainties, we are continuing to be cost efficient by decreasing certain personnel hires and reducing advertising spend while also increasing rental setups to improve lead utilization.

I also want to reiterate Scott's comments on our liquidity position. We believe our strong cash, cash equivalents and marketable securities of $218.6 million with no debt outstanding, provides us the stability and liquidity necessary to operate during this time of uncertainty. With that, we'll be happy to take your questions.