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
 
May 9, 2017
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
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))	
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

	
		
Item 2.02.	Results of Operations and Financial Condition.	
 
On May 9, 2017, Penumbra, Inc. issued a press release announcing financial results for the first fiscal quarter ended March 31, 2017 . 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 May 9, 2017.	

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: May 9, 2017	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 May 9, 2017.	

Exhibit 99.1

Penumbra, Inc. Reports First Quarter 2017 Financial Results

ALAMEDA, Calif., May 9, 2017 (PR Newswire) - Penumbra, Inc. (NYSE: PEN) , a global healthcare company focused on interventional therapies, today reported financial results for the first quarter ended March 31, 2017 .

•	Revenue of $73.2 million in the first quarter of 2017 , an increase of 26.4% , or 27.0% in constant currency 1 , over the first quarter of 2016.	

First Quarter 2017 Financial Results
Total revenue grew to $73.2 million for the first quarter of 2017 compared to $57.9 million for the first quarter of 2016 , an increase of 26.4% , or 27.0% on a constant currency basis. The U.S. represented 66.2% of total revenue and international represented 33.8% of total revenue for the first quarter of 2017 . Revenue from sales of neuro products grew to $50.2 million for the first quarter of 2017 , an increase of 21.7% , or 22.3% on a constant currency basis. Revenue from sales of peripheral vascular products grew to $23.0 million for the first quarter of 2017 , an increase of 38.0% , or 38.7% on a constant currency basis.

Gross profit was $47.7 million , or 65.2% of total revenue, for the first quarter of 2017 , compared to $39.9 million , or 68.9% of total revenue, for the first quarter of 2016 .

Total operating expenses were $49.8 million , or 68.0% of total revenue, for the first quarter of 2017 , compared to $38.1 million , or 65.7% of total revenue, for the first quarter of 2016 . R&D expenses were $7.0 million for the first quarter of 2017 , compared to $5.0 million for the first quarter of 2016 . SG&A expenses were $42.7 million for the first quarter of 2017 , compared to $33.1 million for the first quarter of 2016 .
    
Operating loss for the first quarter of 2017 was $2.0 million , compared to operating income of $1.8 million for the first quarter of 2016 .

As of March 31, 2017 , cash and cash equivalents and marketable investments totaled $231.6 million , which includes net cash proceeds of approximately $106.3 million from an underwritten public offering in March 2017.

Webcast and Conference Call Information
Penumbra, Inc. will host a conference call to discuss the first quarter 2017 financial results after market close on Tuesday, May 9, 2017 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: 8087116), or the webcast can be accessed on the “Events” section under the “Investors” tab 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 healthcare company focused on interventional therapies. Penumbra designs, develops, manufactures and markets innovative devices and has a broad portfolio of products that addresses 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 United States, most of Europe, Canada and Australia, and through distributors in select international markets. Penumbra and the Penumbra logo are trademarks of Penumbra, Inc.

Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses results on constant currency as a non-GAAP financial measure in this press release.

	

1 C onstant 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 (including reconciliations to the most comparable GAAP measures).
1

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.

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.

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 (SEC), including our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 28, 2017. 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.

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

									
 	 	March 31,
2017	 	December 31,
2016	
Assets	 	 	 	 	
Current assets:	 	 	 	 	
     Cash and cash equivalents	 	$	109,383		 	$	13,236		
     Marketable investments	 	122,256		 	115,517		
Accounts receivable, net	 	45,278		 	43,335		
     Inventories	 	79,187		 	73,012		
     Prepaid expenses and other current assets	 	14,554		 	18,727		
Restricted cash	 	1,704		 	—		
          Total current assets	 	372,362		 	263,827		
Property and equipment, net	 	22,905		 	21,464		
Deferred taxes	 	22,486		 	22,476		
Other non-current assets	 	612		 	487		
         Total assets	 	$	418,365		 	$	308,254		
Liabilities and Stockholders’ Equity	 	 	 	 	
Current liabilities:	 	 	 	 	
     Accounts payable	 	$	4,973		 	$	4,110		
     Accrued liabilities	 	33,591		 	31,690		
          Total current liabilities	 	38,564		 	35,800		
Deferred rent	 	5,501		 	5,083		
Other non-current liabilities	 	828		 	824		
          Total liabilities	 	44,893		 	41,707		
Stockholders’ equity:	 	 	 	 	
Common stock	 	33		 	31		
Additional paid-in capital	 	383,132		 	273,865		
Accumulated other comprehensive loss	 	(3,926	)	 	(4,688	)	
Accumulated deficit	 	(5,767	)	 	(2,661	)	
     Total stockholders’ equity	 	373,472		 	266,547		
          Total liabilities and stockholders’ equity	 	$	418,365		 	$	308,254		

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

									
 	 	Three Months Ended March 31,	
 	 	2017	 	2016 (1)	
Revenue	 	$	73,213		 	$	57,919		
Cost of revenue	 	25,504		 	18,014		
Gross profit	 	47,709		 	39,905		
Operating expenses:	 	 	 	 	
Research and development	 	7,034		 	5,001		
Sales, general and administrative	 	42,721		 	33,069		
Total operating expenses	 	49,755		 	38,070		
(Loss) Income from operations	 	(2,046	)	 	1,835		
Interest income, net	 	644		 	510		
Other expense, net	 	(349	)	 	(224	)	
(Loss) Income before provision for (benefit from) income taxes	 	(1,751	)	 	2,121		
Provision for (benefit from) income taxes	 	1,355		 	(170	)	
Net (loss) income	 	$	(3,106	)	 	$	2,291		
Net (loss) income per share
—Basic	 	$	(0.10	)	 	$	0.08		
—Diluted	 	$	(0.10	)	 	$	0.07		
Weighted average shares used to compute net (loss) income per share
 —Basic	 	31,611,841		 	29,990,006		
—Diluted	 	31,611,841		 	33,023,495		

	
 	
1 We elected to early adopt ASU 2016-09 in the fourth quarter of 2016. Our condensed consolidated statement of operations for the three months ended March 31, 2016 was adjusted to include the impact of ASU 2016-09 adoption. See Notes 2 and 15 in the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2016 for detailed adoption information.

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

																											
 	 	Three Months Ended March 31,	 	Reported Change	 	 FX Impact	 	Constant Currency Change	
 	 	2017	 	2016	 	$	 	%	 	 $	 	$	 	%	
United States	 	$	48,487		 	$	39,412		 	$	9,075		 	23.0	%	 	$	—		 	$	9,075		 	23.0	%	
International	 	24,726		 	18,507		 	$	6,219		 	33.6	%	 	346		 	$	6,565		 	35.5	%	
 	 	$	73,213		 	$	57,919		 	$	15,294		 	26.4	%	 	$	346		 	$	15,640		 	27.0	%	
Penumbra, Inc.
Reconciliation of Revenue Growth by Product Categories to Constant Currency Revenue Growth 1  
(unaudited)
(in thousands)

																											
 	 	Three Months Ended March 31,	 	Reported Change	 	 FX Impact	 	Constant Currency Change	
 	 	2017	 	2016	 	$	 	%	 	 $	 	$	 	%	
Neuro	 	$	50,249		 	$	41,284		 	$	8,965		 	21.7	%	 	$	244		 	$	9,209		 	22.3	%	
Peripheral Vascular	 	22,964		 	16,635		 	$	6,329		 	38.0	%	 	102		 	$	6,431		 	38.7	%	
Total	 	$	73,213		 	$	57,919		 	$	15,294		 	26.4	%	 	$	346		 	$	15,640		 	27.0	%	

1 See “Non-GAAP Financial Measures” above for important information about our use of this non-GAAP measure and further information about our calculation of constant currency results.

Investor Relations
Penumbra, Inc.
510-995-2461
investors@penumbrainc.com  
Source: Penumbra, Inc.  

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