Good day, ladies and gentlemen. And welcome to the Inogen 2014 Third Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will be having a question-and-answer session, and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded as of November 11, 2014. I would now like to turn the call over to [Li Savo] (ph), Investor Relations. Please go ahead.

Thank you. And thank you all for participating in today’s call. Joining me from Inogen is President and CEO, Ray Huggenberger; and CFO and Founder, Ali Bauerlein. Earlier today, Inogen released financial results for the third quarter ended September 30, 2014. Before we begin, I want to remind you that our comments today will include forward-looking statements within the meaning of federal securities laws. Forward-looking statements include among others statements regarding our expectations, goals or intentions, including, but not limited to our assessment of the impact from competitive bidding under new CMS rules and regulations, our expectations regarding our pricing and sales strategies, market share expectations, our current views with respect to our revenue, net income, EBITDA and adjusted EBITDA guidance, our expectations regarding the performance of the Inogen At Home and our fourth-generation portable oxygen concentrator the Inogen One G4 and our expectation that we will expand our sales and marketing resources. These forward-looking statements are based on management’s current expectations, estimates, forecasts and projections, and are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated in forward-looking statements. Our business is and any financial projections provided today, subject to numerous risks and uncertainties, including the possibility that Inogen will not realize anticipated revenue, the impact of reduced reimbursement rates in connection with the implementation of the competitive bidding under new CMS rules, the possible loss of key employees, customers or suppliers, and intellectual property risks of Inogen is unable to secure and maintain patent or other intellectual property protection for the intellectual property used in it’s products. Information on these and additional risks, uncertainties and other information affecting Inogen’s business and operating results is contained in Inogen’s annual report on Form 10-K filed with the SEC for the year…

Thank you, Li. Good afternoon everyone and thank you for joining us for our third quarter call. Given that it’s Veteran’s Day today, I’d like to first acknowledge and thank all of our veterans. Many of our customers probably served our country and I would like on behalf of everybody here at Inogen thank them and all veterans for their service. I’m pleased to report another strong quarter of revenue growth with solid performance across all aspects of our business, punctuated by some milestone achievements for the company. On the topline, this quarter we posted total revenues of $29.4 million, reflecting 48.6% year-over-year growth. This is primarily due to stronger than unanticipated growth in both our business-to-business and direct-to-consumer sales channels. Subsequent to quarter end, other recent highlights include the successful release to market of our Inogen At Home oxygen concentrator and the closing of our secondary follow-on offering of approximately 2.4 million shares sold entirely by existing stockholders on November 4, 2014. This offering provide an increase public float of our stock as it decrease insight and affiliate ownership of shares held by certain of our early venture capital investors. I am very proud of the results we have seen in the first nine month, as we executed against a successful strategy we set forth at the beginning of the year. We continue to focus on generating leverage from the investments we made in our go-to-market capacity and raising consumer awareness for our oxygen therapy solutions through the support of our patient centric sales and marketing efforts. As the only manufacturer currently offering portable oxygen concentrators directly to consumers in the United States, we believe this approach has been instrumental in driving strong patient demand and brand awareness. Over the next several minutes, I'd like to provide some additional…

Okay. Thanks, Ray and good afternoon everyone. During my prepared remarks, I will review the details of our third quarter financial performance, provide our updated full year 2014 guidance and our current outlook for full year 2015. As Ray reported, our total revenue in the third quarter of 2014 was $29.4 million versus $19.8 million for the third quarter of 2013, which is an increase of 48.6%. This reflects continued strong performance on the topline and high revenue growth in all segments. Business-to-business sales in the U.S. were particularly strong in our fastest-growing segment in the quarter at 92.6% growth in the third quarter of 2014 versus the comparative period in 2013. Similar to the first half of 2014, we continue to see a direct-to-consumer shift towards cash sales from rentals overall. But we still managed high growth in rental revenue. Our nine months year-to-date 2014 revenue was $83.4 million, which is a 49.8% increase over the first nine months of 2013, where we recorded revenue of $55.7 million. Total units sold in the third quarter of 2014 increased to over 8,800 from 5,300 in the same period in 2013, which is a 66% increase over the same period in 2013. Turning to a more detailed look at our third quarter revenue, direct-to-consumer sales were $7.1 million, an increase of 51.2% in the third quarter of 2014 over the same period in 2013 and accounted for 24.1% of total revenue. However, the third quarter of 2014, sales were down from our second quarter of 2014 direct-to-consumer sales of $8.8 million. The sequential quarterly decline was anticipated due to the seasonality that we see in consumer buying patterns but still exceeded our expectations for the current period. Direct-to-consumer revenues in the third quarter of 2014 were $10 million, an increase of…

All right. Thanks, Ali. Well, we believe the combination of our direct-to-consumer strategy with our singular focus of designing and developing our oxygen concentrator technology has created a best-in-class product portfolio. I am confident that we are sufficiently well-capitalized to continue making strategic investments in our products and our infrastructure that will materially contribute to our future growth. More specifically, in 2015 we plan to expand our sales and marketing channels include more internal and physician-based sales people, increase direct-to-consumer advertising to drive consumer awareness and adoption, and strive for some great international distribution primarily in Europe. We also tend to further develop innovative-related products specifically our Inogen One G4 portable oxygen concentrator. We will continue to secure contracts with private payers and Medicaid in order to become in-network with non-Medicare payers and we will continue to focus on cost reduction through scalable manufacturing, reliability improvements, asset utilization, and service cost reduction that will position us well into competitive bidding environment where we expect additional cuts to Medicare reimbursement rates in 2016, as we have previously discussed. I would like to thank the investors who have supported the company’s initiatives and have shown confidence in our strategy, our leadership team and ongoing progress in delivering innovative solutions to significantly improve the quality of life of patients on oxygen therapy. I believe that 2015 will be another year of higher growth, execution and productivity for Inogen. Next week Ali and I will be meeting with investors with JPMorgan in the Mid-Atlantic and at the Stifel Healthcare Conference in New York. We are also hosting an Analyst and Investor Day in New York on December 15. We hope to have the opportunity to meet with many of you during one of these events. With that, thanks for joining us today and we look forward to updating you on our progress in future calls. And we will now open it up for questions. [Liwas] (ph)?

(Operator Instructions) And our first question comes from the line of Mike Weinstein with JPMorgan. Your line is now open. Please proceed with your question.

Hi. Thank you, guys, and congratulation again on the quarter. Let me start with the B2B side of the business, which has really taken off last couple of quarters, those in the U.S. and internationally? And I was hoping you could spend time on those because they’re very different? So you talked about the kind of the continued gains internationally that maybe start there in terms of why has that business picked up as (indiscernible) it has? And then really the same question going to apply to the U.S., so if you could address those? Thanks.

Okay. So internationally, I mean, we have had solid growth rates internationally for the first -- for the past couple of years. If you remember for the first three quarters this year, international was good, was growth rates in the 20s and 30s, which simply come from the technology settling into the market in Europe. This month, this quarter, we’ve had better than average growth rate in Europe and that is mostly driven by an easier comp, because typically in the third quarter you have vacation periods hitting the books and so we saw that last year and we didn’t see at this year. This year was a pretty consistent demand and so that made the comparison a little bit easier. On the domestic side, I would say, I think, we have couple of things going on. One is, of course, more consumer win as demand that is not necessarily hitting the Inogen phone line but its hitting the general market and it’s pull-through demand. There is also, I think, an increasing awareness of the industry that there has to -- they have to do something to reduce their cost base and POC are a solution to that problem. Now I’ve been asked many times, are we seeing a shift in the business-to-business as the market adopting POCs on the large scale? I think that market participants are aware of their need to reduce costs and POCs are certainly something that some of them are looking into are trying out. However, that is not an event that’s going to happen there as that industry transition. It’d be a process over a number of years, but what we do believe is that eventually POCs will be the standard-of-care for the majority of patients on long-term oxygen therapy. So it’s a gradual process that is -- that we see in starting and that gets compounded by the fact that we generate pull-through demand through our direct-to-consumer marketing efforts.

Great. With the success, particularly at the DTC build-out over the last year, as you’re going into ’15, can you just talk a little about how you’re thinking about spending incremental dollars, even kind of what you’ve learned about the business model over that period of time?

Yeah. I mean, our focus is going to continue to be to drive the demand and that is best done as we have demonstrated in 2014. That is best done by increasing awareness and scaling our sales force. This is pretty much along the same line as what we talked about at the end of the last quarter is we’re in the process of trying to increase our sales force from a pure number standpoint, both on the inside, as well as on the outside. And then the media and marketing spend will be following that sales force build-out in order to keep them busy with needs that they can follow-up.

Yeah. And really, we very purposefully only gave guidance for 2015 revenue at this time. We really wanted to see where we were going to end up with the sales rep count to give good -- a good view into what we expected in terms of expenses and overall net income and EBITDA next year. So we would expect to continue to get leverage out of our sales and marketing costs and our overall operating costs. But given that we don’t know the exact timing of how many reps we are going to get in and when those reps are going to come in to then reach that full productivity. That’s why we’re only giving high level revenue guidance at this time.

Understood. Let me ask one more question, Ray and Ali. Can you give us an update comparatively anything you’re seeing new in any new products and new efforts by the competitor is large or small?

Yeah. There really hasn’t been anything new. We recently in October was the Annual Medtrade Conference, which is well-attended in our industry and there was no new product that came out or new business model that was dramatically different from the products already available on the market today.

And typically if anybody has anything that’s coming out in the next six months, they would typically show it -- that showed up, doesn’t mean that will trade. Nothing could happen in the next six month. But historically, that’s where we’ve seen products that are new or are about to be launch to be shown at that conference. We didn’t see anything there.

Right. Okay. I’ll let others jump in. Thank you, guys.

Thank you.

Thank you.

Our next question comes from the line of Ben Andrew with William Blair. Your line is now open. Please proceed with your question.

Good afternoon. It’s actually Margaret Kaczor in for Ben today. Couple of quick ones for us, maybe just a follow-up on some Mike’s question on B2B strength in the U.S. Can you give us any clarity in terms of where did that mix come from? Was that more in terms of website? Was that DME? And then the size of the DME buyers, were they mom-and-pops? Were they some of the larger players?

So the majority of those sales were the resellers versus the standard home providers. We don’t provide the exact breakout of those, but certainly that’s where we saw heightened demand for the quarter. And what was the second part of your question, Margaret?

Of those DMEs that were buying. Are they still the mom-and-pops at this point? So you’re not really getting the one cares the world and trying to buy…

Yes. So, most of our customers are either the mom-and-pops or regional customers. We don’t have any of the national buying in and any type of volume.

Okay. And then I guess of the market, what percent do you think is actually going though some of these resellers versus DMEs. Obviously, it’s -- on a market basis, it’s got to be skewed towards the DMEs that you guys have to be participating largely in that reseller market?

Yes, we are participating in the reseller market more than the DME market. POCs as a category, we think are still primarily going through the resellers versus the standard DME, but there are more and more local providers, who are adopting a nondelivery solution for patients, given where we are, what competitive bidding and reimbursement cuts that they are seeing that this is a way to start operating their businesses more effectively. So that is, as Ray said, it’s not an event, it’s a process and we’ve seen people wanting to work with us as a partner on those and with I am sure our competitors as well for other POCs.

Okay. And then in terms of the sales mix, more in that direct sales business, where do you really see that long-term maybe '15, '16, '17? B2B domestic is obviously growing fast, but you think that B2C can continue to accelerate? Where do you see that mix going out?

Well, I think, we are going to continue to see direct-to-consumer sales to be a very vital part of our commercial success. Obviously what we saw in 2014 was with regards to consumer sales was the fact that we kind of switched our strategy at the beginning of the year to focus more on the sales side versus the rentals that of course kind of dampened rental growth a little bit, although we’re still pretty strong there. But it gave an extra kick to consumer sales. As soon as the comps become equal, obviously you’re not going to see growth rates staying the same because you can’t get that step switch that benefit from the switch of our strategy twice, all right. So when we compare '15 over '14, we will still see good solid growth in consumer sales, but it won’t be as dominant as it was in 2014.

Yeah, we still see strong consumer demand to the product and we are not reaching any point of market penetration or where we feel like they are reaching a saturation point of cash sales. And that not only have to do with the fact that our patient population does have significant churn in, in each year with new patients coming into the pool, but also because of the huge quality of life factor for our patients. These are patients that really do want to get out there and live their lives for as many years as they have remaining and without products like ours that is a huge challenge for them. And so we've seen a lot of patients really wanting to use our product and own it instead of having to continue on the tank.

Okay. And then maybe last one for us. Can you describe a little bit about how you make your marketing decisions? We’ve talked in the past about the number of reps really deciding on the number of leads in the marketing spend that you may have in any given year. I mean, you guys didn’t really give a ton of clarity into 2015 guidance yet towards that, but maybe give any color that you can for us in terms of what amount of leads you would be comfortable in, in terms of growth? Thank you.

Okay. So the way we are determining marketing spend is directly correlated to the size of our sales force and with that the consumption of leads. We have over the years developed pretty solid formulas as to how many dollars will translate into how many leads. And how many sales reps will consume how many leads in any given to the period of time. So depending on how much we grow the sales force, there is more or less a linear growth in our marketing spend in order to keep that sales force fit. I don’t know if that helps you, but because we haven’t given any guidance on how big the expansion of the sales force will be because we don't know at this point. But whenever its going to be, the marketing spend will follow that number pretty much in a linear fashion.

Okay. Thank you.

Our next question comes from the line of Danielle Antalffy with Leerink Partners. Your line is now open. Please proceed with your question.

Thanks so much. Good afternoon every one and thanks for ….

Hey, Danielle.

Hi. And congrats on a great quarter. So one of the things that we found during our tax is that Inogen actually has a strong brand name amongst physicians at least the ones that we’ve spoken to. Can you talk about the build-out of the sales force that will be calling directly on clinicians? And how we should think about this impacting sales growth longer-term i.e. do we see this moving eventually to physicians writing scripts specifically for Inogen POC? How much is that happening today? How much do you think that will happen in the future?

Yes.

Go ahead.

So what we think about our sales force long-term, we certainly see a large component of that being associated with what -- our physician-based sales force. So that is core to our strategy long-term although it’s a small portion of our overall sales force right now. We do think that the work that we’ve done on the consumer advertising side has driven not only consumer awareness of our product, but physician awareness of our product. And so we would expect that -- happy to hear that we have a brand name with the physician. So that is an -- important part of our strategy but remember those only drive rental. Those don't typically drive consumer cash sales. So well that is important long-term to get patients earlier in the disease diagnosis and set them up immediately. It typically wouldn’t lead to a strong cash sale. So we think really a good mix of sales force of both direct-to-consumer lead based marketing efforts as well as a physician based sales force will be the right approach. But certainly we are early in the process of adding to that sales team. And we would expect to build that team out over the next several years.

Okay, great. That’s helpful and thanks for the color on the mix, that’s actually really good point. And on -- for 2015, happy to see such strong guidance, can you talk about the level of visibility you guys have that gives you confidence in that guidance and sort of how much lead way do you have into next year sales?

Yeah so, I think even though we’ve only been a public company for a few quarters, now you guys have seen that we have consistently wanted to put out achievable guidance number that we felt like we really understood the drivers, reached those revenue numbers. And we’ve been very consistent with that approach for 2015 and wanting to really do that based on what we know today. So knowing what we haven’t sales force and what that translates in terms of both cash sales and rentals. Remember, 30% of our business or so is the rental revenue and that is relatively stable. We have a very easy way of predicting exactly what that rental revenue is. So the areas that are more -- that can be more lumpy in our business is really that business-to-business sales, especially internationally. So this year, we’ve really seen a lot more repeat orders from good, strong partners both in the U.S. and internationally as people are starting to make that shift towards POC. So we do feel very strongly that we have good visibility onto those partner relationship and that there is a lot of a room for us to be able to hit those numbers in 2015.

All right. That’s helpful. Thanks so much.

Thank you.

(Operator Instructions) The next question comes from the line of Mike Matson with Needham & Company. Your line is now open. Please proceed with your question. Mike Matson - Needham & Company: Hi. Thanks for taking my questions. I guess, just starting with the G4, can you maybe explain where that will sit into your product line and is that intended to replace either the G2 or the G3, or will it be more complementary to those products?

Yeah. It’s not going to be a flat out replacement right out of the gate. What we have done in the past and what we’ve intend to do this time around as well is, we fill out the product line with a smaller light of one more consumer attractive product. And then at the same time, we’re working on upgrading the products that are in the field today to provide more flow, more oxygen production. And we slot to new product in at the bottom and kind of expand the oxygen production. We’ll eventually -- the work we are doing on the G3 right now really and the availability of the G4, it would -- that will eventually replace the G2 at some point that’s possible but it’s not going to be right out of the gate. Mike Matson - Needham & Company: Okay. Thanks. And then just with regard to your direct-to-patient marketing campaigns, can you give us some idea of the mix of the various types of advertisers or the T.V. planets that you are using and then, I guess, how fast has your spending been growing on that advertising? It is being kind of in line with your sales, faster slower than your sales?

Yeah. So we don’t actually breakout the mix of our advertising because it frankly changing all of the time. So we optimize that on a daily basis and it’s a blend of T.V., online advertising and print advertising. That overall marketing spend, we have been able to show leverage on that as a percentage of our overall sales line, so that has been growing slower than sales. Mike Matson - Needham & Company: Okay. Thanks. And then -- I don’t know, if you may have given this earlier, but I was wondering if you could give us some cash flow metrics, so just cash from operations and then either free cash flow or capital expenditures in the quarter?

Yes. Let me pull that up. Hold on one second. So we were cash flow positive on an operating basis for the quarter. So we certainly generated cash outside of paying off our debt financing. So in the quarter, we paid in our debt financing that was a payoff of $12.9 million. So that was the majority of our cash usage for the quarter. So outside of that, we were cash flow positive for the quarters given our net income in the quarter of $2.1 million. We did have some usage of capital associated with our accounts receivable and our inventory. So, our overall cash flow for the quarter -- let’s see, so our rental assets in the third quarter, we had a couple million of spend. The year-to-date spend on rental assets was $10 million. Mike Matson - Needham & Company: Okay. All right. And then just on the -- I know you commented already on Medicare rules that came out on 31st. But I guess, I’m just wondering, what was in that sort of, if anything surprised you the most and was it better, worst than you expected?

It was better than we expected and the surprise really came from the six months phase in because essentially, there is a six-month period where the effective field reimbursement is going to be about the mid-way point between unrestricted reimbursement and the competitive bid rates. So that was definitely an upside, an upside surprise that we didn’t see coming. The only thing that was also a bit of a surprise was the fact that oxygen was excluded from the trial in the 12 regions, to kind of figure out whether or not the cap should be removed. I’m personally pretty sure that especially around c path, CMS will conclude that administering our cap is way more complicated that what it is worth. And that trial will show that our removal of the cap is probably in the best interest of all involved parties. However - whether oxygen is in the trial or outside the trial is really not that important at least for the short run, because I would not expect to see a decision on a cap whether it’s with or without oxygen until 2017. Mike Matson - Needham & Company: Okay. That’s all I have. Thanks a lot.

Thank you. And with no further questions in the queue, I would like to turn the call over to Mr. Raymond Huggenberger for any closing remarks.

Thank you. So, I don’t have anything massive at the end. I’d just like to again reiterate that we appreciate the interest in Inogen and I would like to thank everyone for joining us today. And hope you having a great evening. And I look forward to talking to you, hopefully face-to-face in one of the upcoming events. Thank you.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Have a good day everyone.