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Impinj Hopes to Raise $60M From IPO
The RFID chip, reader and software provider's second attempt to go public is more conservative—and better timed—than its previous offering.
Jun 03, 2016—
Yesterday, Seattle-based ultrahigh-frequency (UHF) RFID technology company Impinj registered with the Securities and Exchange Commission its plans to launch an initial public offering (IPO), with the goal of raising $60 million. The company says it has applied to list its common stock on the NASDAQ global market under the symbol "PI," but did not indicate how many shares it expects to issue, or the expected initial per-share offering price.
This is the second time Impinj has filed for an IPO. The firm sought to raise $100 million with an IPO in April 2011 (see Impinj Files for Initial Public Offering), but withdrew its bid 15 months later. Its revenue in 2011 was about half of what it is currently, making this year's offering a more measured approach, according to Bill McBeath, ChainLink Research's chief research officer. "It seems that they have a more tempered, realistic set of expectations this time," he says, adding that the offering is an indication of the upward trajectory of both Impinj and the industry. "I think it's a sign that the industry is healthy."
In the preliminary prospectus that Impinj filed with the SEC, the company indicated that it holds a 65 percent market share for passive UHF RFID tag chips compliant with the EPC Gen 2 RFID standard, which Impinj refers to as the RAIN standard. The firm estimated that approximately 70 percent of unit volume of fixed readers use its reader chips, as do "the majority of handheld readers," and further claimed to have sold 13 billion tag ICs to date.
According to the preliminary prospectus, the past three years have been profitable for the chip, reader and software company. In 2015, Impinj reported earning $78.5 million in total revenue, up from $63.8 the year prior. During the first quarter of this year, it earned $21.6 million in revenue—a 34.6 percent increase compared with the $16.0 million it earned in the first three months of 2015.
The positive financial data notwithstanding, Impinj expressed the following caveat: "We have incurred losses since our inception in 2000 and only first became profitable in 2013. Although we had net income of $297,000 and $900,000 for 2014 and 2015, respectively, we had an accumulated deficit of $187.6 million as of March 31, 2016. Our ability to increase or sustain profitability depends on numerous factors, many of which are out of our control.… We expect significant expenditures to support operations, product development, and business and headcount expansion in sales, engineering, and marketing as a public company. If we fail to increase our revenue or manage our expenses, we may not increase or sustain profitability in the future."
The company declined to comment about the offering for this story. "Given the securities law restrictions related to initial public offerings," says Erika Bitzer, Impinj's marketing and communications senior director, "we are unable to comment on our plans for the IPO beyond what we have disclosed in our registration statement." However, according to its S1 filing, the company will use the proceeds it receives from the IPO to develop new products and expand those it already offers, though it also expects to use $5.0 million of those proceeds to pay off debt.
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