UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K  

CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
November 12, 2015
Date of Report (Date of earliest event reported)  

Penumbra, Inc.
(Exact name of registrant as specified in its charter)

	
			
Delaware	001-37557	05-0605598	
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. employer identification number)	
One Penumbra Place
1351 Harbor Bay Parkway
Alameda, CA 94502
(Address of principal executive offices, including zip code)
 
(510) 748-3200
(Registrant’s telephone number, including area code)  
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions: 

		
☐	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))	

 

		
Item 2.02.	Results of Operations and Financial Condition.	
 
On November 12, 2015, Penumbra, Inc. issued a press release announcing financial results for the third fiscal quarter ended September 30, 2015. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information furnished on this Current Report on Form 8-K, including the attached exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

	
		
Item 9.01.	Financial Statements and Exhibits.	

	
			
Exhibit Number	 	Description	
99.1	 	Press release of Penumbra, Inc. dated November 12, 2015.	

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.

	
			
 	Penumbra, Inc.	
 	 	 	
Date: November 12, 2015	By:	/s/ Sri Kosaraju	
 	 	Sri Kosaraju	
 	 	Chief Financial Officer and Head of Strategy	

EXHIBIT INDEX

			
Exhibit Number	 	Description	
99.1	 	Press release of Penumbra, Inc. dated November 12, 2015.	

 
Penumbra, Inc. Reports Third Quarter 2015 Financial Results

ALAMEDA, Calif., November 12, 2015 (PR Newswire) - Penumbra, Inc. (NYSE: PEN) , a global interventional therapies company, today reported financial results for the third quarter ended September 30, 2015.

•	Revenue of $50.4 million, an increase of 55.3%, or 61.0% in constant currency 1 , over the third quarter of 2014.	
		
•	The Company closed its IPO on September 23, 2015, in which it sold 4.6 million shares of common stock at an offering price of $30.00 per share and raised approximately $124.8 million in net proceeds.	

Third Quarter 2015 Financial Results
Total revenue grew to $50.4 million for the third quarter of 2015 compared to $32.5 million for the third quarter of 2014, an increase of 55.3%, or 61.0% on a constant currency basis. The U.S. represented 70.2% of total revenue and international represented 29.8% of total revenue for the third quarter of 2015. Revenue from sales of neuro products grew to $36.3 million for the third quarter of 2015 compared to $27.0 million for the same quarter in 2014, an increase of 34.5%, or 40.9% on a constant currency basis. Revenue from sales of peripheral vascular products grew to $14.1 million for the third quarter of 2015 compared to $5.5 million for the same quarter in 2014, an increase of 157.6%, or 159.7% on a constant currency basis.

Gross profit was $33.5 million, or 66.4% of total revenue, for the third quarter of 2015, compared to $20.8 million, or 64.1% of total revenue, for the third quarter of 2014.

Total operating expenses were $31.3 million, or 62.1% of total revenue, for the third quarter of 2015, compared to $20.5 million, or 63.1% of total revenue, for the third quarter of 2014. R&D expenses were $4.6 million for the third quarter of 2015, compared to $3.9 million for the third quarter of 2014. The increase was primarily due to increases in headcount and related compensation expense. SG&A expenses were $26.8 million for the third quarter of 2015, compared to $16.6 million for the third quarter of 2014. The increase was primarily due to increases in headcount and related compensation expense as well as increases in legal, professional and consulting expenses associated with operating as a public company.

Net income for the third quarter of 2015 was $0.9 million, compared to $0.2 million for the third quarter of 2014.

As of September 30, 2015, cash and cash equivalents totaled $159.1 million. This reflects the completion of the Company’s IPO, which closed on September 23, 2015. In the IPO, Penumbra sold 4.6 million shares of common stock and raised $124.8 million in net proceeds, after deducting underwriting discounts and commissions and offering expenses.

Webcast and Conference Call Information
Penumbra, Inc. will host a conference call to discuss the third quarter 2015 financial results after market close on Thursday, November 12, 2015 at 4:30 PM Eastern Time. The conference call can be accessed live over the phone by dialing (877) 201-0168 for domestic callers or (647) 788-4901 for international callers (conference id: 67279996), or the webcast can be accessed on the “Investors” section of the Company’s website at: www.penumbrainc.com . The webcast will be available on the Company’s website for two weeks following the completion of the call.

About Penumbra
Penumbra, Inc., headquartered in Alameda, California is a global interventional therapies company that designs, develops, manufactures and markets innovative medical devices. The company has a broad portfolio of products that address challenging medical conditions and significant clinical needs across two major markets, neuro and peripheral vascular. Penumbra sells its products to hospitals primarily through its direct sales organization in the U.S., most of Europe, Canada and Australia, and through distributors in select international markets. Penumbra and the Penumbra logo are trademarks of Penumbra, Inc.

1 Co nstant currency results are non-GAAP financial measures. Please refer to “Non-GAAP Financial Measures” below for important information about our use of constant currency results and other non-GAAP financial measures (including reconciliations to the most comparable GAAP measures).

Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company has disclosed the following non-GAAP financial measures in this press release: constant currency revenue, non-GAAP net income per share (basic and diluted), non-GAAP net income attributable to common stockholders and non-GAAP weighted average shares used to compute non-GAAP net income per share (basic and diluted).

Our constant currency revenue disclosures estimate the impact of changes in foreign currency rates on the translation of the Company’s current period revenue as compared to the applicable comparable period in the prior year. This impact is derived by taking the current local currency revenue and translating it into U.S. Dollars based upon the foreign currency exchange rates used to translate the local currency revenue for the applicable comparable period in the prior year, rather than the actual exchange rates in effect during the current period. It does not include any other effect of changes in foreign currency rates on the Company’s results or business.

Non-GAAP net income per share (basic and diluted) and its components, non-GAAP net income attributable to common stockholders and non-GAAP weighted average shares used to compute non-GAAP net income per share (basic and diluted), (1) exclude the effect of allocating net income (loss) between common stock and participating convertible preferred stock under the two-class method to allocate earnings, and (2) reflect the conversion of our outstanding convertible preferred stock upon the closing of our IPO as if such conversion occurred on a one-for-one basis as of the beginning of the applicable period(s).

Full reconciliation of these non-GAAP measures to the most comparable GAAP measures is set forth in the tables below.

Our management believes the non-GAAP financial measures disclosed in this press release are useful to investors in assessing the operating performance of our business and provide meaningful comparisons to prior periods and thus a more complete understanding of our business than could be obtained absent this disclosure. Specifically, we consider the change in constant currency revenue as a useful metric as it provides an alternative framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. We consider non-GAAP net income per share (basic and diluted), and its components, as useful metrics as they provide an alternative framework for assessing our profitability as compared to periods prior to our IPO.

The non-GAAP financial measures included in this press release may be different from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP measures should not be considered in isolation or as alternatives to GAAP measures. We urge investors to review the reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures included in this press release, and not to rely on any single financial measure to evaluate our business.

Forward-Looking Statements
Except for historical information, certain statements in this press release are forward-looking in nature and are subject to risks, uncertainties and assumptions about us. Our business and operations are subject to a variety of risks and uncertainties and, consequently, actual results may differ materially from those projected by any forward-looking statements. Factors that could cause actual results to differ from those projected include, but are not limited to: failure to sustain or grow profitability or generate positive cash flows; failure to effectively introduce and market new products; delays in product introductions; significant competition; inability to further penetrate our current customer base, expand our user base and increase the frequency of use of our products by our customers; inability to achieve or maintain satisfactory pricing and margins; manufacturing difficulties; permanent write-downs or write-offs of our inventory; product defects or failures; unfavorable outcomes in clinical trials; inability to maintain our culture as we grow; fluctuations in foreign currency exchange rates; and potential adverse regulatory actions. These risks and uncertainties, as well as others, are discussed in greater detail in our filings with the Securities and Exchange Commission, including our prospectus dated September 17, 2015. There may be additional risks of which we are not presently aware or that we currently believe are immaterial which could have an adverse impact on our business. Any forward-looking statements are based on our current expectations, estimates and assumptions regarding future events and are applicable only as of the dates of such statements. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change.

Penumbra, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands)

									
 	 	September 30,
2015	 	December 31,
2014	
Assets	 	 	 	 	
Current assets:	 	 	 	 	
     Cash and cash equivalents	 	$	159,098		 	$	3,290		
     Marketable investments	 	—		 	48,253		
     Accounts receivable, net of doubtful accounts of $494 and $602	 	26,055		 	18,912		
     Inventories	 	50,324		 	33,451		
     Deferred taxes	 	7,333		 	6,280		
     Prepaid expenses and other current assets	 	6,267		 	5,115		
          Total current assets	 	249,077		 	115,301		
Property and Equipment, net	 	8,646		 	5,181		
Deferred taxes	 	1,309		 	571		
Other non-current assets	 	293		 	328		
         Total assets	 	$	259,325		 	$	121,381		
Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)	 	 	 	 	
Current Liabilities:	 	 	 	 	
     Accounts payable	 	$	4,024		 	$	2,348		
     Accrued liabilities	 	24,253		 	18,475		
          Total current liabilities	 	28,277		 	20,823		
Other non-current liabilities	 	2,458		 	1,461		
          Total liabilities	 	30,735		 	22,284		
Convertible preferred stock	 	—		 	111,467		
Stockholders’ Equity (Deficit):	 	 	 	 	
Common stock	 	30		 	5		
Additional paid-in capital	 	249,230		 	8,446		
Notes receivable from stockholders	 	(26	)	 	(117	)	
Accumulated other comprehensive loss	 	(1,536	)	 	(864	)	
Accumulated deficit	 	(19,108	)	 	(19,840	)	
     Total stockholders’ equity (deficit)	 	228,590		 	(12,370	)	
          Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	 	$	259,325		 	$	121,381		

Penumbra, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share amounts)

																	
 	 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	 	2,015	 	2,014	 	2,015	 	2,014	
Revenue	 	$	50,416		 	$	32,464		 	$	131,679		 	$	90,107		
Cost of revenue	 	16,919		 	11,667		 	44,079		 	31,156		
     Gross profit	 	33,497		 	20,797		 	87,600		 	58,951		
Operating expenses:	 	 	 	 	 	 	 	 	
     Research and development	 	4,560		 	3,897		 	12,543		 	11,435		
     Sales, general and administrative	 	26,755		 	16,589		 	72,698		 	44,829		
          Total operating expenses	 	31,315		 	20,486		 	85,241		 	56,264		
Income from operations	 	2,182		 	311		 	2,359		 	2,687		
Interest income (expense), net	 	17		 	144		 	402		 	183		
Other income (expense), net	 	(115	)	 	(56	)	 	(613	)	 	(148	)	
Income before provision for income taxes	 	2,084		 	399		 	2,148		 	2,722		
Provision for income taxes	 	1,183		 	227		 	1,416		 	893		
Net income	 	$	901		 	$	172		 	$	732		 	$	1,829		
Net income (loss) attributable to common stockholders	 	$	276		 	$	(1,192	)	 	$	175		 	$	(933	)	
Net income (loss) per share attributable to common stockholders
          —Basic	 	$	0.04		 	$	(0.25	)	 	$	0.03		 	$	(0.2	)	
          —Diluted	 	$	0.03		 	$	(0.25	)	 	$	0.02		 	$	(0.2	)	
Weighted average shares used to compute net income (loss) per share attributable to common stockholders
          —Basic	 	7,853,730		 	4,688,045		 	5,962,031		 	4,577,725		
          —Diluted	 	10,189,248		 	4,688,045		 	8,494,651		 	4,577,725		

Penumbra, Inc.
Reconciliation of Revenue Growth by Geographic Regions to Constant Currency Revenue Growth 1  
(unaudited)
(in thousands)

																									
 	 	Three Months Ended September 30,	 	Change	 	 FX Impact	 	Constant Currency Change	
 	 	2015	 	2014	 	$	 	%	 	 $	 	$	 	%	
United States	 	$	35,394		 	$	22,305		 	$	13,089		 	58.7%	 	$	—		 	$	13,089		 	58.7%	
International	 	15,022		 	10,159		 	4,863		 	47.9%	 	1,844		 	6,707		 	66.0%	
     Total	 	$	50,416		 	$	32,464		 	$	17,952		 	55.3%	 	$	1,844		 	$	19,796		 	61.0%	
Penumbra, Inc.
Reconciliation of Revenue Growth by Product Categories to Constant Currency Revenue Growth 1  
(unaudited)
(in thousands)

																									
 	 	Three Months Ended September 30,	 	Change	 	 FX Impact	 	Constant Currency Change	
 	 	2015	 	2014	 	$	 	%	 	 $	 	$	 	%	
Neuro	 	$	36,309		 	$	26,988		 	$	9,321		 	34.5%	 	$	1,729		 	$	11,050		 	40.9%	
Peripheral Vascular	 	14,107		 	5,476		 	8,631		 	157.6%	 	115		 	8,746		 	159.7%	
     Total	 	$	50,416		 	$	32,464		 	$	17,952		 	55.3%	 	$	1,844		 	$	19,796		 	61.0%	
1 See “Non-GAAP Financial Measures” above for important information about our use of non-GAAP measures and further information about our calculation of constant currency results.

Penumbra, Inc.
Reconciliation of Net Income (Loss) Attributable to Common Stockholders to Non-GAAP Net Income Attributable to Common Stockholders 2  
(unaudited)
(in thousands, except per share amounts)

																	
 	 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	 	2015	 	2014	 	2015	 	2014	
Net income (loss) attributable to common stockholders 3	 	$	276		 	$	(1,192	)	 	$	175		 	$	(933	)	
Add: Deemed dividend paid to preferred stockholders upon redemption	 	—		 	6,344		 	—		 	6,344		
Undistributed income (loss) attributable to preferred stockholders	 	625		 	—		 	557		 	—		
Less: Undistributed loss attributable to preferred stockholders	 	—		 	(4,980	)	 	—		 	(3,582	)	
Net income attributable to common stockholders—Non-GAAP	 	$	901		 	$	172		 	$	732		 	$	1,829		
Basic net income per share—Non-GAAP	 	$	0.04		 	$	0.01		 	$	0.03		 	$	0.08		
Diluted net income per share—Non-GAAP	 	$	0.03		 	$	0.01		 	$	0.03		 	$	0.07		
Penumbra, Inc.
Reconciliation of Weighted Average Shares Used to Compute Basic Net Income (Loss) per Share to
Weighted Average Shares Used to Compute Basic and Diluted Non-GAAP Net Income per Share 2  
(unaudited)

													
 	 	Three Months Ended September 30,	 	Nine Months Ended September 30,	
 	 	2015	 	2014	 	2015	 	2014	
Weighted average shares used to compute basic net income (loss) per share	 	7,853,730		 	4,688,045		 	5,962,031		 	4,577,725		
Less: Conversion of preferred shares on a weighted average basis upon closing of IPO	 	(1,696,557	)	 	—		 	(571,734	)	 	—		
Add: Conversion of preferred shares on a one-for-one basis at the beginning of the period	 	19,510,410		 	19,510,410		 	19,510,410		 	19,510,410		
Weighted average shares used to compute non-GAAP net income per share—Basic	 	25,667,583		 	24,198,455		 	24,900,707		 	24,088,135		
Potential dilutive options	 	1,979,194		 	2,075,046		 	2,362,685		 	2,127,880		
Potential dilutive restricted stock	 	356,324		 	115,402		 	169,935		 	82,322		
Potential dilutive common warrants	 	—		 	75,896		 	—		 	76,856		
Weighted average shares used to compute non-GAAP net income per share—Diluted	 	28,003,101		 	26,464,799		 	27,433,327		 	26,375,193		
2 See “Non-GAAP Financial Measures” above for important information about our use of non-GAAP measures and further information about our calculation of non-GAAP net income per share and its components.
3 We calculate GAAP net income (loss) attributable to common stockholders under the two-class method required for companies with participating securities.

Sara Thompson  
Head of Investor Relations  
Penumbra, Inc.  
510 995 2455  
investors@penumbrainc.com  
Source: Penumbra, Inc.