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, 2017

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	2017		2016
Cash	$	51,200	$	48,533
Money market accounts		46,162		39,277
Certificates of deposit		1,718		5,041
Corporate bonds		6,025		—
Total cash and cash equivalents	$	105,105	$	92,851
Marketable securities
Certificates of deposit	$	11,864	$	10,855
Corporate bonds		7,270		10,178
Agency mortgage-backed securities		4,001		—
Total marketable securities	$	23,135	$	21,033

Schedule of Gross Accounts Receivable Balance Concentrations by Major Category

Gross accounts receivable balance concentrations by major category as of March 31, 2017 and December 31, 2016 were as follows:

	March 31,		December 31,
Gross accounts receivable	2017		2016
Medicare	$	10,583	$	12,500
Medicaid/other government		564		617
Private insurance		2,740		3,475
Patient responsibility		3,898		3,227
Business-to-business & other receivables (1)		20,708		19,541
Total gross accounts receivable	$	38,493	$	39,360

Business-to-business receivables include one single customer with an accounts receivable balance of $10,090, which represented more than 10% of the Company’s net accounts receivable balance as of March 31, 2017, and one single customer with an accounts receivable balance of $9,791, which represented more than 10% of the Company’s net accounts receivable balance as of December 31, 2016. This customer received extended payment terms through a direct financing plan offered. The Company also has a credit insurance policy in place, which allocates up to $9,000 in coverage for this customer with a $500 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, 2017 and December 31, 2016 were as follows:

	March 31,		December 31,
Net accounts receivable	2017		2016
Medicare	$	6,452	$	7,208
Medicaid/other government		392		410
Private insurance		2,202		1,832
Patient responsibility		2,404		2,538
Business-to-business & other receivables (1)		19,477		18,840
Total net accounts receivable	$	30,927	$	30,828

(1)

Schedule of Allowances for Accounts Receivable

The following tables set forth the accounts receivable allowances as of March 31, 2017 and December 31, 2016:

	March 31,		December 31,
Allowances - accounts receivable	2017		2016
Doubtful accounts	$	1,824	$	1,869
Rental revenue adjustments		4,628		6,078
Sales returns		1,114		585
Total allowances - accounts receivable	$	7,566	$	8,532

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 72.2% and 68.3% of the non-U.S. revenue for the three months ended March 31, 2017 and March 31, 2016, 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, 2017 and March 31, 2016 is as follows:

	Three months ended March 31,
	2017		2016
U.S. revenue	$	41,077	$	33,024
Non-U.S. revenue		11,423		9,965
Total revenue	$	52,500	$	42,989

Schedule of Inventories

Inventories that are considered current consist of the following:

	March 31,			December 31,
	2017			2016
Raw materials and work-in-progress	$	11,072		$	12,382
Finished goods		3,102			2,152
Less: reserves		(213	)		(191	)
Inventories	$	13,961		$	14,343

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 Property and Equipment and Rental Equipment

Depreciation and amortization expense related to property and equipment and rental equipment are summarized below for the three months ended March 31, 2017 and March 31, 2016, respectively.

	Three months ended March 31,
	2017		2016
Rental equipment	$	2,689	$	2,947
Other property and equipment		488		478
Total depreciation and amortization	$	3,177	$	3,425

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, 2017 and December 31, 2016, respectively.

	March 31,		December 31,
Property and equipment	2017		2016
Rental equipment, net of allowances of $617 and $725, respectively	$	53,482	$	54,582
Other property and equipment		13,167		12,633
Property and equipment		66,649		67,215

Accumulated depreciation
Rental equipment		34,294		33,937
Other property and equipment		8,557		8,079
Accumulated depreciation		42,851		42,016

Net property and equipment
Rental equipment		19,188		20,645
Other property and equipment		4,610		4,554
Property and equipment, net	$	23,798	$	25,199

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, 2017	(in years)	amount		amortization		Net amount
Licenses	10	$	185	$	123	$	62
Patents and websites	5		873		817		56
Commercials	2-3		287		191		96
Total		$	1,345	$	1,131	$	214


	Average
	estimated	Gross
	useful lives	carrying		Accumulated
December 31, 2016	(in years)	amount		amortization		Net amount
Licenses	10	$	185	$	118	$	67
Patents and websites	5		873		810		63
Commercials	2-3		287		176		111
Total		$	1,345	$	1,104	$	241

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, 2017
Remaining 9 months of 2017	$	75
2018		86
2019		33
2020		9
2021		6
Thereafter		5
	$	214

Schedule of Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses as of March 31, 2017 and December 31, 2016 consisted of the following:

	March 31,		December 31,
	2017		2016
Accounts payable	$	8,885	$	5,738
Accrued inventory (in-transit and unvouchered receipts) and trade payables		5,137		4,290
Accrued purchasing card liability		1,762		1,760
Accrued franchise, sales and use taxes		334		281
Other accrued expenses		731		726
Accounts payable and accrued expenses	$	16,849	$	12,795