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, 2018

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	2018		2017
Cash	$	43,188	$	46,237
Money market accounts		107,906		93,430
Certificates of deposit		3,190		490
Corporate bonds		—		2,796
Total cash and cash equivalents	$	154,284	$	142,953
Marketable securities
Certificates of deposit	$	8,461	$	10,516
Corporate bonds		22,043		17,972
Agency mortgage-backed securities		1,005		2,004
U.S. Treasury securities		2,503		499
Total marketable securities	$	34,012	$	30,991

Schedule of Gross Accounts Receivable Balance Concentrations by Major Category

Gross accounts receivable balance concentrations by major category as of March 31, 2018 and December 31, 2017 were as follows:

	March 31,		December 31,
Gross accounts receivable	2018		2017
Rental ⁽¹⁾	$	6,143	$	6,236
Business-to-business & other receivables⁽²⁾		32,945		28,474
Total gross accounts receivable	$	39,088	$	34,710

(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 $9,461 and $10,394 as of March 31, 2018 and December 31, 2017, 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 $18,000 in coverage as of March 31, 2018 and allocated up to $12,000 in coverage as of December 31, 2017 for this customer with a $1,000 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, 2018 and December 31, 2017 were as follows:

	March 31,		December 31,
Net accounts receivable	2018		2017
Rental ⁽¹⁾	$	3,695	$	4,212
Business-to-business & other receivables ⁽²⁾		31,394		27,232
Total net accounts receivable	$	35,089	$	31,444

(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, 2018 and December 31, 2017:

	March 31,		December 31,
Allowances - accounts receivable	2018		2017
Doubtful accounts	$	1,589	$	1,415
Rental revenue adjustments		1,013		947
Sales returns		1,397		904
Total allowances - accounts receivable	$	3,999	$	3,266

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 76.9% and 72.2% of the non-U.S. revenue for the three months ended March 31, 2018 and March 31, 2017, 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, 2018 and March 31, 2017 is as follows:

	Three months ended March 31,
	2018		2017
U.S. revenue	$	62,145	$	41,077
Non-U.S. revenue		16,906		11,423
Total revenue	$	79,051	$	52,500

Schedule of Inventories

Inventories that are considered current consist of the following:

	March 31,			December 31,
	2018			2017
Raw materials and work-in-progress	$	18,814		$	16,324
Finished goods		4,640			2,917
Less: reserves		(489	)		(399	)
Inventories	$	22,965		$	18,842

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		2-5 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, 2018 and March 31, 2017, respectively.

	Three months ended March 31,
	2018		2017
Rental equipment	$	2,165	$	2,689
Other property and equipment		530		488
Total depreciation and amortization	$	2,695	$	3,177

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

Property and equipment and rental equipment with associated accumulated depreciation are summarized below for March 31, 2018 and December 31, 2017, respectively.

	March 31,		December 31,
Property and equipment	2018		2017
Rental equipment, net of allowances of $754 and $754, respectively	$	47,420	$	49,349
Other property and equipment		17,387		15,219
Property and equipment		64,807		64,568

Accumulated depreciation
Rental equipment		33,671		34,754
Other property and equipment		10,238		9,711
Accumulated depreciation		43,909		44,465

Property and equipment, net
Rental equipment, net of allowances of $754 and $754, respectively		13,749		14,595
Other property and equipment		7,149		5,508
Property and equipment, net	$	20,898	$	20,103

Schedule of Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill for the three months ended March 31, 2018 were as follows:

Balance as of December 31, 2017	$	2,363
Translation adjustment		67
Balance as of March 31, 2018	$	2,430

Summary of Intangible Assets

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

	Average
	estimated	Gross
	useful lives	carrying		Accumulated
March 31, 2018	(in years)	amount		amortization		Net amount
Licenses	10	$	185	$	142	$	43
Patents and websites	5		4,173		1,131		3,042
Customer relationships	4		1,479		339		1,140
Non-compete agreement	3		246		75		171
Commercials	2-3		303		243		60
Total		$	6,386	$	1,930	$	4,456


	Average
	estimated	Gross
	useful lives	carrying		Accumulated
December 31, 2017	(in years)	amount		amortization		Net amount
Licenses	10	$	185	$	137	$	48
Patents and websites	5		4,173		959		3,214
Customer relationships	4		1,437		240		1,197
Non-compete agreement	3		240		52		188
Commercials	2-3		303		233		70
Total		$	6,338	$	1,621	$	4,717

Schedule of Annual Estimated Amortization Expense for Intangibles

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

	March 31, 2018
Remaining 9 months of 2018	$	906
2019		1,147
2020		1,069
2021		790
2022		544
Thereafter		—
	$	4,456

Schedule of Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses as of March 31, 2018 and December 31, 2017 consisted of the following:

	March 31,		December 31,
	2018		2017
Accounts payable	$	13,589	$	9,541
Accrued inventory (in-transit and unvouchered receipts) and trade payables		7,644		7,252
Accrued purchasing card liability		2,089		2,381
Accrued franchise, sales and use taxes		498		479
Other accrued expenses		940		973
Accounts payable and accrued expenses	$	24,760	$	20,626

Schedule of Accrued Payroll

Accrued payroll as of March 31, 2018 and December 31, 2017 consisted of the following:

	March 31,		December 31,
	2018		2017
Accrued bonuses	$	1,306	$	3,086
Accrued wages and other payroll related items		3,803		2,453
Accrued vacation		1,498		1,338
Accrued payroll	$	6,607	$	6,877