Inogen(US:INGN)2022-05-07 14:45Financial Data and Key Metrics Changes - Total revenue for Q1 2022 decreased by 7.5% to $80.4 million from $86.9 million in Q1 2021, primarily due to supply chain constraints [13][32] - Gross profit for Q1 2022 was $35 million, a decrease of $4.9 million compared to Q1 2021, driven by lower sales volume and higher material costs [33] - Total gross margin was 43.5% in Q1 2022, down from 45.9% in Q1 2021, reflecting higher material costs and lower labor absorption [34] Business Line Data and Key Metrics Changes - Domestic direct-to-consumer sales increased by 12.2% to $34.4 million in Q1 2022, driven by higher average selling prices [15] - Rental revenue increased by 31.8% to $13 million in Q1 2022, attributed to more patients on service and higher Medicare reimbursement rates [16] - Domestic business-to-business sales decreased by 83.4% to $5.1 million in Q1 2022 due to supply constraints [18] - International business-to-business sales increased by 77.7% to $27.9 million in Q1 2022, driven by prioritization of that market [19] Market Data and Key Metrics Changes - As of March 31, 2022, there were approximately 43,200 patients on service, a 24.5% increase compared to the previous year [16] - The company noted ongoing supply chain disruptions and increased costs due to semiconductor shortages, exacerbated by geopolitical events [20][21] Company Strategy and Development Direction - The company is focused on expanding its sales footprint in the prescriber channel and increasing productivity across commercial operations [11] - Investments are being made in R&D and clinical support to ensure long-term sustainable growth and profitability [12][31] - The company is pursuing additional motherboard redesigns and strategic sourcing to mitigate supply chain challenges [22] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand returning to pre-COVID-19 levels, despite ongoing supply chain challenges [19] - The company expects total revenue for Q2 2022 to improve sequentially and be similar to Q2 2021 [41] - Management anticipates continued cost pressures and supply chain uncertainty, particularly due to the war in Ukraine and COVID-19 lockdowns in China [40][42] Other Important Information - The company reported a net loss of $14.2 million in Q1 2022, with an adjusted EBITDA loss of $5 million [38] - Cash, cash equivalents, and marketable securities totaled $223.4 million as of March 31, 2022, with no debt outstanding [39] Q&A Session Summary Question: Can you provide insights on margins for the rest of the year? - Management indicated that they are not providing guidance for the back half of the year but expect Q2 margins to be in line with Q1 [49] Question: How are underlying volumes performing in the current environment? - Management stated that they cannot gauge underlying demand accurately due to supply constraints, but believe demand remains stable [50] Question: What is the strategy for the direct-to-consumer rental channel? - Management emphasized that both direct-to-consumer and prescriber channels are prioritized, with efforts to increase productivity and efficiency [54][56] Question: What is the outlook for the International B2B business until MDR is in place? - Management expects a temporary dip in sales due to the MDR certification process but anticipates a recovery once the certification is secured [66] Question: How is the company managing its cash balance amid supply chain issues? - Management expressed confidence in maintaining a strong cash position to support operations, investments, and potential growth opportunities [62]