iRhythm Technologies Announces Third Quarter 2017 Financial Results and Raises Guidance for Full Year 2017
November 01 2017 - 4:03PM
iRhythm Technologies, Inc. (NASDAQ:IRTC), a leading digital
health care solutions company focused on the advancement of cardiac
care, today reported financial results for the three and nine
months ended September 30, 2017.
Recent Highlights
- Revenue for the quarter ended September 30, 2017 increased 49%
year-over-year to $25.0 million
- Gross margin for the third quarter 2017 was 72% versus 69% in
the third quarter of 2016
“Third quarter and year-to-date performance highlight the
progress we are making in establishing our Zio Service as the new
standard of care for ambulatory cardiac monitoring,” said Kevin
King, CEO. "This consistent growth in demand has enabled us to
confidently expand our salesforce and infrastructure throughout
2017, as well as make significant progress in growing in-network
coverage, which has meaningfully increased our productivity and
volume.”
Third Quarter Financial ResultsRevenue for the
three months ended September 30, 2017 was $25.0 million, an
increase of 49% year-over-year and 5% sequentially. Revenue
growth remains predominantly driven by increased volume of the Zio
Service in both new and existing accounts, as well as continued
success with in-network contracting efforts.
Gross profit for the third quarter of 2017 was $18.1 million, or
72% gross margin, up from $11.5 million, or 69% gross margin, in
the same period of the prior year. Margin expansion is primarily
attributable to productivity gains through the company’s
machine-learned algorithms associated with report generation, the
impact from the mix shift to contracted claims, and continued
reduction of device-related manufacturing costs.
Operating expenses for the third quarter of 2017 were $24.1
million, an increase of 70% compared to $14.2 million for the same
period of the prior year. The increase in operating expenses was
primarily driven by accelerated salesforce expansion investments
and a material increase in stock-based compensation.
Loss from operations for the third quarter of 2017 was $6.5
million, compared to $4.1 million for the same period of the prior
year.
Cash, cash equivalents, and investments totaled $107.4 million
as of September 30, 2017.
Guidance for Full Year 2017 iRhythm projects
revenue for the full year 2017 to range from $96 to $97 million,
gross margins for the full year 2017 to range from 71.5% to 72.5%
and operating expenses for the full year 2017 to be between $93 and
$95 million. This compares to previous guidance of $94 to $96
million in revenue, 71.5% to 72.5% in gross margins, and $89 and
$92 million in operating expenses for the full year 2017 provided
on August 2, 2017.
Webcast and Conference Call
InformationiRhythm’s management team will host a
conference call today beginning at 1:30 p.m. PT / 4:30 p.m. ET.
Investors interested in listening to the conference call may do so
by dialing (844) 348-0016 for domestic callers or (213) 358-0876
for international callers, and referencing Conference ID: 96279903
or from the webcast on the “Investor Relations” section of the
company’s website at: www.irhythmtech.com.
About iRhythm Technologies, Inc. iRhythm
is a leading digital health care company redefining the way cardiac
arrhythmias are clinically diagnosed. The company combines wearable
biosensor devices worn for up to 14 days and cloud-based data
analytics with powerful proprietary algorithms that distill data
from millions of heartbeats into clinically actionable information.
The company believes improvements in arrhythmia detection and
characterization have the potential to change clinical management
of patients.
Forward-Looking StatementsThis news release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 and the Private Securities Litigation Reform
Act of 1995. These statements include, but are not limited to,
statements regarding expectations for expansion in our salesforce,
increases in our in-network contracting and financial guidance.
Such statements are based on current assumptions that involve risks
and uncertainties that could cause actual outcomes and results to
differ materially. These risks and uncertainties, many of which are
beyond our control, include risks described in the section entitled
“Risk Factors” and elsewhere in our Form 10-Q filing made with the
Securities and Exchange Commission on August 7, 2017. These
forward-looking statements speak only as of the date hereof and
should not be unduly relied upon. iRhythm disclaims any obligation
to update these forward-looking statements.
Investor Relations
Contact:
Media ContactLynn Pieper Lewis or Leigh Salvo
Aaron Murphy (415) 937-5404
(415)
229-3331investors@irhythmtech.com
media@irhythmtech.com
IRHYTHM TECHNOLOGIES,
INC.Condensed Consolidated Balance
Sheets(Unaudited)(In
thousands)
|
|
September 30, 2017 |
|
December 31, 2016 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
|
$ |
20,429 |
|
|
$ |
51,643 |
|
Short-term investments |
|
|
87,017 |
|
|
|
54,407 |
|
Accounts
receivable, net |
|
|
12,039 |
|
|
|
9,406 |
|
Inventory |
|
|
1,314 |
|
|
|
1,390 |
|
Prepaid
expenses and other current assets |
|
|
1,989 |
|
|
|
1,671 |
|
Restricted cash |
|
|
— |
|
|
|
91 |
|
Total
current assets |
|
|
122,788 |
|
|
|
118,608 |
|
Investments,
long-term |
|
|
— |
|
|
|
10,981 |
|
Property and equipment,
net |
|
|
6,207 |
|
|
|
4,653 |
|
Goodwill |
|
|
862 |
|
|
|
862 |
|
Other assets |
|
|
3,798 |
|
|
|
3,052 |
|
Total
assets |
|
$ |
133,655 |
|
|
$ |
138,156 |
|
Liabilities,
Convertible Preferred Stock and Stockholders’ Equity |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
2,076 |
|
|
$ |
2,103 |
|
Accrued
liabilities |
|
|
11,436 |
|
|
|
10,165 |
|
Deferred
revenue |
|
|
904 |
|
|
|
947 |
|
Accrued
interest, current portion |
|
|
149 |
|
|
|
— |
|
Debt,
current portion |
|
|
1,479 |
|
|
|
— |
|
Total
current liabilities |
|
|
16,044 |
|
|
|
13,215 |
|
Debt |
|
|
32,053 |
|
|
|
32,227 |
|
Deferred rent,
noncurrent portion |
|
|
169 |
|
|
|
26 |
|
Accrued interest, net
of current portion |
|
|
— |
|
|
|
126 |
|
Total
liabilities |
|
|
48,266 |
|
|
|
45,594 |
|
Stockholders’
equity: |
|
|
|
|
Common
stock |
|
|
28 |
|
|
|
22 |
|
Additional paid-in capital |
|
|
230,831 |
|
|
|
219,718 |
|
Accumulated other comprehensive loss |
|
|
(30 |
) |
|
|
(9 |
) |
Accumulated deficit |
|
|
(145,440 |
) |
|
|
(127,169 |
) |
Total stockholders’
equity |
|
|
85,389 |
|
|
|
92,562 |
|
Total liabilities and
stockholders’ equity |
|
$ |
133,655 |
|
|
$ |
138,156 |
|
|
|
|
|
|
|
|
|
|
IRHYTHM TECHNOLOGIES,
INC.Condensed Consolidated Statements of
Operations(Unaudited)(In
thousands, except share and per share data)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Revenue |
$ |
25,035 |
|
|
$ |
16,780 |
|
|
$ |
70,327 |
|
|
$ |
45,368 |
|
Cost of revenue |
|
6,920 |
|
|
|
5,282 |
|
|
|
20,002 |
|
|
|
15,097 |
|
Gross profit |
|
18,115 |
|
|
|
11,498 |
|
|
|
50,325 |
|
|
|
30,271 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Research
and development |
|
3,790 |
|
|
|
1,635 |
|
|
|
9,187 |
|
|
|
4,847 |
|
Selling,
general and administrative |
|
20,308 |
|
|
|
12,529 |
|
|
|
57,787 |
|
|
|
36,658 |
|
Total
operating expenses |
|
24,098 |
|
|
|
14,164 |
|
|
|
66,974 |
|
|
|
41,505 |
|
Loss from
operations |
|
(5,983 |
) |
|
|
(2,666 |
) |
|
|
(16,649 |
) |
|
|
(11,234 |
) |
Interest expense |
|
(862 |
) |
|
|
(807 |
) |
|
|
(2,522 |
) |
|
|
(2,388 |
) |
Other expense, net |
|
321 |
|
|
|
(602 |
) |
|
|
900 |
|
|
|
(1,015 |
) |
Net loss |
$ |
(6,524 |
) |
|
$ |
(4,075 |
) |
|
$ |
(18,271 |
) |
|
$ |
(14,637 |
) |
Net loss per common
share, basic and diluted |
$ |
(0.29 |
) |
|
$ |
(2.80 |
) |
|
$ |
(0.81 |
) |
|
$ |
(10.20 |
) |
Weighted-average shares
used to compute net loss per common share, basic and diluted |
|
22,811,907 |
|
|
|
1,454,307 |
|
|
|
22,446,399 |
|
|
|
1,434,583 |
|
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