Inogen, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Balance Sheet Components (Tables)

Balance Sheet Components (Tables)

3 Months Ended

Mar. 31, 2020

Balance Sheet Related Disclosures [Abstract]

Summary of Cash, Cash Equivalents and Short-term Investments

Cash, cash equivalents, and marketable securities consist of the following:

	March 31,		December 31,
Cash and cash equivalents	2020		2019
Cash	$	50,238	$	51,560
Money market accounts		158,124		146,477
Total cash and cash equivalents	$	208,362	$	198,037
Marketable securities
Corporate bonds	$	—	$	2,013
U.S. Treasury securities		—		9,044
Total marketable securities	$	—	$	11,057

Schedule of Gross Accounts Receivable Balance Concentrations by Major Category

Gross accounts receivable balance concentrations by major category as of March 31, 2020 and December 31, 2019 were as follows:

	March 31,		December 31,
Gross accounts receivable	2020		2019
Rental ⁽¹⁾	$	3,442	$	3,003
Business-to-business and other receivables⁽²⁾		38,706		33,101
Total gross accounts receivable	$	42,148	$	36,104

(1)	Rental includes Medicare, Medicaid/other government, private insurance and patient pay.

(2)

Business-to-business receivables included one customer with a gross accounts receivable balance of $8,978 and $10,695 as of March 31, 2020 and December 31, 2019, respectively. This customer received extended payment terms through a direct financing plan offered. The Company also has a credit insurance policy in place, which allocated up to $20,000 in coverage as of March 31, 2020 and allocated up to $20,000 in coverage as of December 31, 2019 for this customer with a $400 deductible and 10% retention.

Schedule of Net Accounts Receivable Balance Concentrations by Major Category

Net accounts receivable (gross accounts receivable, net of allowances) balance concentrations by major category as of March 31, 2020 and December 31, 2019 were as follows:

	March 31,		December 31,
Net accounts receivable	2020		2019
Rental ⁽¹⁾	$	2,912	$	2,464
Business-to-business and other receivables ⁽²⁾		37,484		31,861
Total net accounts receivable	$	40,396	$	34,325

(1)	Rental includes Medicare, Medicaid/other government, private insurance and patient pay.

(2)

Schedule of Allowances for Accounts Receivable

The following tables set forth the accounts receivable allowances as of March 31, 2020 and December 31, 2019:

	March 31,		December 31,
Allowances - accounts receivable	2020		2019
Doubtful accounts	$	167	$	205
Rental revenue adjustments		409		411
Sales returns		1,176		1,163
Total allowances - accounts receivable	$	1,752	$	1,779

Breakdown of Company's Revenue from U.S. and Non-U.S. Sources

A portion of revenue is earned from sales outside the United States. Approximately 68.7% and 72.5% of the non-U.S. revenue for the three months ended March 31, 2020 and March 31, 2019, respectively, were invoiced in Euros. A breakdown of the Company’s revenue from U.S. and non-U.S. sources for the three months ended March 31, 2020 and March 31, 2019, respectively, is as follows:

	Three months ended March 31,
	2020		2019
U.S. revenue	$	68,406	$	70,399
Non-U.S. revenue		20,083		19,803
Total revenue	$	88,489	$	90,202

Schedule of Inventories

Inventories that are considered current consist of the following:

	March 31,			December 31,
	2020			2019
Raw materials and work-in-progress	$	33,066		$	31,676
Finished goods		5,931			5,174
Less: reserves		(1,397	)		(1,186	)
Inventories, net	$	37,600		$	35,664

Computation of Depreciation and Amortization using Straight Line Method Over Estimated Useful Lives of Assets

Property and equipment are stated at cost. Depreciation and amortization are calculated using the straight-line method over the assets’ estimated useful lives as follows:

Rental equipment		1.5-5 years
Manufacturing equipment and tooling		3-5 years
Computer equipment and software		2-3 years
Furniture and equipment		3-5 years
Leasehold improvements		Lesser of estimated useful life or remaining lease term

Summary of Depreciation and Amortization Expense of Rental Equipment and Other Property and Equipment

Depreciation and amortization expense related to rental equipment and other property and equipment are summarized below for the three months ended March 31, 2020 and March 31, 2019, respectively.

	Three months ended March 31,
	2020		2019
Rental equipment	$	1,299	$	1,705
Other property and equipment		921		761
Total depreciation and amortization	$	2,220	$	2,466

Summary of Property Plant and Equipment and Rental Equipment with Associated Accumulated Depreciation

Property and equipment and rental equipment with associated accumulated depreciation is summarized below as of March 31, 2020 and December 31, 2019, respectively.

	March 31,		December 31,
Property and equipment	2020		2019
Rental equipment, net of allowances of $395 and $395, respectively	$	38,995	$	39,308
Other property and equipment		26,496		24,986
Property and equipment		65,491		64,294

Accumulated depreciation
Rental equipment		31,035		30,984
Other property and equipment		14,789		13,872
Accumulated depreciation		45,824		44,856

Property and equipment, net
Rental equipment, net of allowances of $395 and $395, respectively		7,960		8,324
Other property and equipment		11,707		11,114
Property and equipment, net	$	19,667	$	19,438

Schedule of Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the three months ended March 31, 2020 were as follows:

Balance as of December 31, 2019	$	32,954
Translation adjustment		(42	)
Balance as of March 31, 2020	$	32,912

Summary of Changes in Net Carrying Values of Intangible Assets

The following tables represent the changes in net carrying values of intangible assets as of the respective dates:

	Average
	estimated	Gross
	useful lives	carrying		Accumulated
March 31, 2020	(in years)	amount		amortization		Net amount
Technology	10	$	77,700	$	4,856	$	72,844
Licenses	10		185		167		18
Patents and websites	5		4,274		2,479		1,795
Customer relationships	4		1,320		963		357
Commercials	2-3		777		509		268
Total		$	84,256	$	8,974	$	75,282


	Average
	estimated	Gross
	useful lives	carrying		Accumulated
December 31, 2019	(in years)	amount		amortization		Net amount
Technology	10	$	77,700	$	2,914	$	74,786
Licenses	10		185		165		20
Patents and websites	5		4,274		2,308		1,966
Customer relationships	4		1,346		897		449
Commercials	2-3		777		465		312
Total		$	84,282	$	6,749	$	77,533

Schedule of Annual Estimated Amortization Expense

Annual estimated amortization expense for each of the succeeding fiscal years is as follows:

	March 31,
	2020
Remaining 9 months of 2020	$	6,722
2021		8,678
2022		8,367
2023		7,792
2024		7,787
Thereafter		35,936
	$	75,282

Schedule of Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses as of March 31, 2020 and December 31, 2019 consisted of the following:

	March 31,		December 31,
	2020		2019
Accounts payable	$	18,727	$	16,399
Accrued inventory (in-transit and unvouchered receipts) and trade payables		11,129		11,124
Accrued purchasing card liability		1,940		1,675
Accrued franchise, sales and use taxes		501		713
Other accrued expenses		556		819
Accounts payable and accrued expenses	$	32,853	$	30,730

Schedule of Accrued Payroll

Accrued payroll as of March 31, 2020 and December 31, 2019 consisted of the following:

	March 31,		December 31,
	2020		2019
Accrued bonuses	$	1,143	$	87
Accrued wages and other payroll related items		4,939		3,158
Accrued vacation		2,262		2,169
Accrued employee stock purchase plan deductions		306		801
Accrued payroll	$	8,650	$	6,215