Inogen finishes strong in 2015

Company has two Ps to thank: private label sales and productivity
Friday, March 18, 2016

GOLETA, Calif. – Inogen’s core business remains direct-to-consumer sales, but the POC maker got a nice boost from domestic business-to-business sales in 2015.

The B2B channel was Inogen’s fastest growing for the year, with year-over-year growth of 81.5%, primarily due to private label sales.

In the fourth quarter, these private label sales represented more than half of the increase in this channel, said CEO Ray Huggenberger during a conference call to discuss fourth quarter and 2015 financial results.

“It has exceeded our expectations in the first year,” he said of the private label POC that hit the market in early 2015.

One analyst estimated that private label sales added about $2 million to Inogen’s bottom line in the fourth quarter.

“That’s about $2 million on the bottom end,” responded CFO Ali Bauerlein, CFO. “We haven’t given a specific number of what it could be, but obviously the total increase in the quarter was about $4 million, so anywhere from $2 million to $4 million would be the contribution of that business.”

For the direct-to-consumer sales channel, Inogen reported year-over-year growth of 79.5% in 2015, primarily due to an increased sales force (the company has topped 166 reps internally, said President and COO Scott Wilkinson) and improved productivity.

Wilkinson acknowledged, however, that from an improved productivity standpoint, “a lot of the low-hanging fruit has been rinsed out.”

“So the amount of those productivity improvements on a percent basis year over year gets a little smaller each time around, but it should be greater than zero,” he said.

Looking forward, Inogen expects the release of its next generation Inogen One G4 in the second quarter to set up the company nicely for 2016. It will launch the product first in the direct-to-consumer channel, then the domestic B2B channel and finally the international B2B channel.

“We are going to be launching the G4 in a period that is, from a seasonality standpoint, usually our best time of year,” Wilkinson said. “We’ll see how things play out, but it’s a good time to be launching a new product.”