Impinj, Inc. (NASDAQ: PI) is a radio-frequency identification technology (RFID) company, headquartered in Seattle, Washington. The company filed its S-1 on June 2 and an S-1/A on July 20, 2016, and hopes to raise $60 million in its IPO. The company has a price range of $12 to $14. It is offering 4.6 million shares. Of the offered shares, 38,461 are being reserved by the underwriters for venture capitalist Tom Alberg, who has disclosed his intention to purchase. The lead underwriters for the offering include Piper Jaffray, RBC Capital Markets and Pacific Crest Securities.
Impinj was founded in 2000 and provides wireless technology tags for items such as apparel, drivers licenses, medical supplies, automobile parts, food, luggage and other items so that they can be authenticated, identified and located. The company's platform uses its own radio-frequency identification technology system called RAIN for: item authentication, inventory management, asset tracking and patient safety. According to its filings, Impinj is the only company that sells a platform that spans software, endpoints and connectivity. The company reports it had total revenues of $78.5 million in 2015 and $21.6 million for the first three months of 2016. Impinj became profitable in 2013. Its net profit in 2015 was $900,000.
Executive management overview
The founder, vice-chair and chief executive officer of Impinj, Chris Diorio holds 125 issued patents and has had scholarly works appear in 67 different publications. He has been the recipient of many industry awards and has more than 30 years of experience in computer engineering and radio engineering. Diorio holds a Ph.D. from the California Institute of Technology.
Eric Brodersen is the president and chief operating officer of Impinj. Before joining the company in 2014, Brodersen served as the senior vice president of marketing and business development for Isilon Systems. He graduated with his Bachelor of Arts in government from Harvard University and completed his Master of Business Administration at the University of Michigan.
Financial risks and highlights
Impinj reported profits of $297,000 on $63.8 million total revenues in 2014, which increase to profits of $900,000 on $78 million total revenues in 2015. The company's market is growing with market research firms predicting the opportunity within the retail industry to grow by 39% CAGR between 2014 and 2020, reaching $5.4 billion. Similarly, the healthcare opportunity is expected to grow to $5.3 billion by 2020 with a CAGR of 14%. The RAIN tag IC volumes grew to 5.3 billion by 2015 and are expected to grow to 20 billion by 2020.
The company risks include its concentrated ownership amongst its executive officers, principal stockholders and directors, who will hold more than 53% of the stock following the IPO. This majority share ownership will allow them to control matters that are submitted for approval by the company's stockholders. It also indicates that it has limited sales and marketing resources, and it relies on third parties to sell its products.
Conclusion: Consider Buying In
While the adoption of RAIN technology is still uncertain, Impinj has strong market opportunity for growth, and its profits and revenues have been steadily increasing. It is rare for a venture capitalist, such as Tom Alberg, to purchase additional shares at a company's IPO; his decision to do so strongly suggests the company's future potential. We recommend that investors consider buying shares of Impinj. We are hearing the deal is popular on the institutional side.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in PI over the next 72 hours.
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