Quarterly report pursuant to Section 13 or 15(d)

Balance Sheet Components

v3.24.3
Balance Sheet Components
9 Months Ended
Sep. 30, 2024
Balance Sheet Related Disclosures [Abstract]  
Balance Sheet Components

5. Balance sheet components

Accounts receivable and allowance for bad debts, returns, and adjustments

Net accounts receivable (gross accounts receivable, net of allowances) balance concentrations by major category as of September 30, 2024 and December 31, 2023 were as follows:

 

 

September 30,

 

 

December 31,

 

Net accounts receivable

 

2024

 

 

2023

 

Rental (1)

 

$

5,460

 

 

$

6,401

 

Business-to-business and other receivables (2)

 

 

28,773

 

 

 

35,840

 

Total net accounts receivable

 

$

34,233

 

 

$

42,241

 

 

(1)
Rental includes Medicare, Medicaid/other government, private insurance, and patient pay.
(2)
Business-to-business receivables included extended terms for two customers: 1) one customer had a net accounts receivable balance of $5,055 and $8,639 as of September 30, 2024 and December 31, 2023, respectively; and 2) one customer had a net accounts receivable balance of $4,994 as of December 31, 2023. Each customer received extended payment terms through a direct financing plan offered.

The following table sets forth the accounts receivable allowances as of September 30, 2024 and December 31, 2023:

 

 

September 30,

 

 

December 31,

 

Allowances - accounts receivable

 

2024

 

 

2023

 

Doubtful accounts

 

$

5,026

 

 

$

2,341

 

Sales returns

 

 

506

 

 

 

479

 

Total allowances - accounts receivable

 

$

5,532

 

 

$

2,820

 

Concentration of customers and vendors

The Company primarily sells its products to traditional home medical equipment providers, distributors, and resellers in the United States and in foreign countries on a credit basis. The Company also sells its products direct-to-consumers primarily on a prepayment basis. Medicare's service reimbursement programs represented more than 10% of the Company's total revenue for the three and nine months ended September 30, 2023. Two customers represented more than 10% of the Company’s net accounts receivable balance with net accounts receivable balances of $5,055 and $3,730, respectively, as of September 30, 2024 and $8,639 and $4,994, respectively, as of December 31, 2023.

The Company also rents products directly to consumers for insurance reimbursement, which resulted in a customer concentration relating to Medicare’s service reimbursement programs. Medicare’s service reimbursement programs accounted for 57.0% and 69.7% of rental revenue in the nine months ended September 30, 2024 and 2023, respectively, and based on total revenue were 9.6% and 13.7% for the nine months ended September 30, 2024 and 2023, respectively. Accounts receivable balances relating to Medicare’s service reimbursement programs (including held and unbilled, net of allowances) amounted to $1,375 or 4.0% of total net accounts receivable as of September 30, 2024 compared to $2,059 or 4.9% of total net accounts receivable as of December 31, 2023.

The Company currently purchases raw materials from a limited number of vendors, which resulted in a concentration of three major vendors. The three major vendors supply the Company with raw materials used to manufacture the Company’s products. For the nine months ended September 30, 2024, the Company’s three major vendors accounted for 20.9%, 19.2%, and 10.6%, respectively, of total raw material purchases. For the nine months ended September 30, 2023, the Company’s three major vendors accounted for 29.3%, 16.3%, and 9.1%, respectively, of total raw material purchases.

A portion of revenue is earned from sales outside the United States. Approximately 76.3% and 76.9% of the non-U.S. revenue for the three months ended September 30, 2024 and 2023, respectively, were invoiced in Euros. Approximately 78.4% and 78.0% of the non-U.S. revenue for the nine months ended September 30, 2024 and 2023, respectively, were invoiced in Euros. A breakdown of the Company’s revenue from U.S. and non-U.S. sources for the three and nine months ended September 30, 2024 and 2023, respectively, is as follows:

 

 

Three months ended
September 30,

 

 

Nine months ended
September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

U.S. revenue

 

$

56,506

 

 

$

58,354

 

 

$

166,730

 

 

$

171,887

 

Non-U.S. revenue

 

 

32,328

 

 

 

25,613

 

 

 

88,894

 

 

 

67,877

 

Total revenue

 

$

88,834

 

 

$

83,967

 

 

$

255,624

 

 

$

239,764

 

 

Inventories

Inventories are stated at the lower of cost and net realizable value, using the first-in, first-out (FIFO) method. The Company records adjustments to inventory for potentially excess, obsolete, slow-moving, or impaired items, and losses on firm purchase commitments as a component of cost of sales in the consolidated statements of comprehensive loss. The Company recorded noncurrent inventory related to inventories that are expected to be realized or consumed after one year of $1,821 and $1,225 as of September 30, 2024 and December 31, 2023, respectively. Noncurrent inventories are primarily related to raw materials purchased in bulk to support long-term expected repairs to reduce costs and are classified in other assets. During the nine months ended September 30, 2024 and 2023, $509 and $1,997, respectively, of inventory was transferred to rental equipment and was considered a noncash transaction in the production and purchase of rental equipment on the consolidated statements of cash flows. Inventories that are considered current consist of the following:

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Raw materials and work-in-progress

 

$

17,870

 

 

$

18,036

 

Finished goods

 

 

8,451

 

 

 

6,871

 

Less: reserves

 

 

(3,001

)

 

 

(3,067

)

Inventories, net

 

$

23,320

 

 

$

21,840

 

Property and equipment

Repair and maintenance expense, which includes labor, parts, and freight, for rental equipment was $1,689 and $1,320 for the three months ended September 30, 2024 and 2023, respectively, and $4,890 and $3,873 for the nine months ended September 30, 2024 and 2023, respectively.

Depreciation and amortization expense related to rental equipment and other property and equipment are summarized below for the three and nine months ended September 30, 2024 and 2023, respectively.

 

 

Three months ended
September 30,

 

 

Nine months ended
September 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Rental equipment

 

$

3,247

 

 

$

3,364

 

 

$

9,554

 

 

$

9,680

 

Other property and equipment

 

 

960

 

 

 

1,045

 

 

 

3,143

 

 

 

3,044

 

Total depreciation and amortization

 

$

4,207

 

 

$

4,409

 

 

$

12,697

 

 

$

12,724

 

Property and equipment and rental equipment with associated accumulated depreciation is summarized below as of September 30, 2024 and December 31, 2023, respectively.

 

 

September 30,

 

 

December 31,

 

Property and equipment

 

2024

 

 

2023

 

Rental equipment, net of allowances of $3,181 and $2,606, respectively

 

$

65,453

 

 

$

67,804

 

Other property and equipment

 

 

25,760

 

 

 

30,357

 

Property and equipment

 

 

91,213

 

 

 

98,161

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

Rental equipment

 

 

32,054

 

 

 

31,023

 

Other property and equipment

 

 

12,561

 

 

 

16,822

 

Accumulated depreciation

 

 

44,615

 

 

 

47,845

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

 

 

 

 

Rental equipment, net of allowances of $3,181 and $2,606, respectively

 

 

33,399

 

 

 

36,781

 

Other property and equipment

 

 

13,199

 

 

 

13,535

 

Property and equipment, net

 

$

46,598

 

 

$

50,316

 

Long-lived assets

The Company accounts for the impairment and disposition of long-lived assets in accordance with Accounting Standards Codification (ASC) 360 Property, Plant, and Equipment. In accordance with ASC 360, long-lived assets to be held are reviewed for events or changes in circumstances that indicate that their carrying value may not be recoverable. No impairments were recorded for the nine months ended September 30, 2024 and 2023.

Goodwill and other identifiable intangible assets

Goodwill

The changes in the carrying amount of goodwill for the nine months ended September 30, 2024 were as follows:

 

Balance as of December 31, 2023 (1)

 

$

10,057

 

Translation adjustment

 

 

113

 

Balance as of September 30, 2024 (1)

 

$

10,170

 

(1) Includes $32,894 of accumulated impairment losses as of September 30, 2024 and December 31, 2023.

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

 

 

 

 

September 30, 2024

 

(in years)

 

amount

 

 

amortization

 

 

Net amount

 

Developed technology

 

10

 

$

33,677

 

 

$

3,508

 

 

$

30,169

 

Licenses

 

10

 

 

159

 

 

 

159

 

 

 

 

Patents and websites

 

5

 

 

4,518

 

 

 

4,482

 

 

 

36

 

Customer relationships

 

4

 

 

3,007

 

 

 

1,513

 

 

 

1,494

 

Trade name

 

4

 

 

209

 

 

 

54

 

 

 

155

 

Commercials

 

3

 

 

494

 

 

 

241

 

 

 

253

 

Internally developed software

 

3

 

 

2,090

 

 

 

435

 

 

 

1,655

 

Total

 

 

 

$

44,154

 

 

$

10,392

 

 

$

33,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

 

 

estimated

 

Gross

 

 

 

 

 

 

 

 

 

useful lives

 

carrying

 

 

Accumulated

 

 

 

 

December 31, 2023

 

(in years)

 

amount

 

 

amortization

 

 

Net amount

 

Developed technology

 

10

 

$

33,303

 

 

$

971

 

 

$

32,332

 

Licenses

 

10

 

 

185

 

 

 

185

 

 

 

 

Patents and websites

 

5

 

 

4,518

 

 

 

4,429

 

 

 

89

 

Customer relationships

 

4

 

 

2,974

 

 

 

1,372

 

 

 

1,602

 

Trade name

 

4

 

 

206

 

 

 

15

 

 

 

191

 

Commercials

 

3

 

 

494

 

 

 

117

 

 

 

377

 

Total

 

 

 

$

41,680

 

 

$

7,089

 

 

$

34,591

 

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

 

 

September 30,

 

 

 

2024

 

Remaining 3 months of 2024

 

$

1,188

 

2025

 

 

4,717

 

2026

 

 

4,585

 

2027

 

 

4,048

 

2028

 

 

3,368

 

2029

 

 

3,368

 

Thereafter

 

 

12,488

 

 

 

$

33,762

 

 

Current liabilities

Accounts payable and accrued expenses as of September 30, 2024 and December 31, 2023 consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Accounts payable

 

$

15,459

 

 

$

13,454

 

Accrued inventory (in-transit and unvouchered receipts) and trade payables

 

 

7,263

 

 

 

10,054

 

Accrued purchasing card liability

 

 

 

 

 

2,197

 

Accrued loss on purchase commitments

 

 

1,723

 

 

 

2,057

 

Accrued franchise, sales and use taxes

 

 

457

 

 

 

472

 

Other accrued expenses

 

 

2,126

 

 

 

1,908

 

Total accounts payable and accrued expenses

 

$

27,028

 

 

$

30,142

 

Accrued payroll as of September 30, 2024 and December 31, 2023 consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Accrued bonuses

 

$

5,201

 

 

$

1,110

 

Accrued wages and other payroll related items

 

 

3,736

 

 

 

4,170

 

Accrued vacation

 

 

3,590

 

 

 

3,194

 

Accrued severance

 

 

1,667

 

 

 

2,284

 

Accrued employee stock purchase plan deductions

 

 

91

 

 

 

308

 

Total accrued payroll

 

$

14,285

 

 

$

11,066