IRADIMED CORPORATION (NASDAQ:IRMD), the only known provider of
non-magnetic intravenous (IV) infusion pump systems that are
designed to be safe for use during magnetic resonance imaging (MRI)
procedures, today announced financial results for the three months
and full year ended December 31, 2016.
For the fourth quarter ended December 31, 2016, the Company
reported revenue of $6.0 million compared to $8.8 million for the
fourth quarter of 2015. Net income was $1.1 million, or $0.10
per diluted share, compared to net income of $2.4 million, or $0.19
per diluted share for the fourth quarter of 2015.
Gross profit margin was 78.2% for the fourth quarter of 2016,
compared to 83.0% for the fourth quarter of 2015. Domestic
sales were 85.4% of total revenue for the fourth quarter 2016,
compared to 86.6% for the fourth quarter 2015.
The Company reported non-GAAP net income of $1.3 million for the
quarter ended December 31, 2016, compared to non-GAAP net income of
$2.8 million for the quarter ended December 31, 2015. The
Company reported non-GAAP earnings per diluted share of $0.11 for
the quarter ended December 31, 2016, compared to $0.22 for the
quarter ended December 31, 2015. Free cash flow was $2.0
million for the quarter ended December 31, 2016, compared to $2.5
million for the quarter ended December 31, 2015.
For the year ended December 31, 2016, the Company reported
revenue of $32.5 million compared to $31.6 million for the prior
year. Net income was $7.2 million, or $0.60 per diluted
share, compared to net income of $7.5 million, or $0.60 per diluted
share for the prior year.
Gross profit margin was 81.1% for the full year 2016, compared
to 81.5% for the prior year. Domestic sales were 88.9% of
total revenue for the full year 2016, compared to 91.3% for the
prior year.
The Company reported non-GAAP net income of $8.4 million for the
year ended December 31, 2016, compared to non-GAAP net income of
$8.7 million for the year ended December 31, 2015. The
Company reported non-GAAP earnings per diluted share of $0.70 for
the year ended December 31, 2016, compared to $0.69 for the year
ended December 31, 2015. Free cash flow was $8.6 million for
the year ended December 31, 2016, compared to $7.4 million for the
year ended December 31, 2015.
At December 31, 2016, the Company had approximately $1.6 million
of backlog and expects that backlog will approximate this level
throughout 2017.
“Consistent with my previous comments, conversion of MR IV pump
opportunities, especially multi-pump opportunities, into confirmed
purchase orders continues to pressure revenue growth. With the goal
of mitigating this difficulty and growing sales of our IV pump,
during the second half of 2016, we performed a complete review of
our sales process. The aim of this review was to gain a deeper
understanding of the considerations made by our customers when
making purchasing decisions and how we can better assist them in
making those decisions. As a result of this review, and in
coordination with our recent internal national sales meeting, we
formalized the implementation of new sales techniques that we
believe will result in converting a high level of customer interest
into confirmed purchase orders for our IV pumps systems. I believe
that in as early as one quarter we will begin to see improvements
in bookings as a result of the new sales techniques we have
implemented. However, it may take two to three quarters to
fully assess the effectiveness of the program. We are watching
bookings closely and stand prepared to make additional enhancements
as needed,” said Roger Susi, President and Chief Executive Officer
of the Company.
“Since 2013, we have been positively impacted from the exodus of
our former competitor, which resulted in the ballooning of our
backlog that took us nearly two years to work down. While we have
benefited greatly from that event during the past three years, the
results of that event are not indicative of the normalized MRI
compatible IV pump market. We estimate that approximately $12.3
million of 2016 revenue came from backlog. Complicating any
comparison, is that a significant portion of our 2015 revenue that
was not from backlog came from sales to customers that were
converting from our former competitor’s IV pump to our MRI
compatible IV pump. During 2016, these conversion sales tapered
significantly and a growing portion of total revenue came from
sales to new customers that were implementing this technology for
the first time,” said Susi.
Financial Guidance
On January 18, 2017, the Company provided revenue, GAAP and
non-GAAP diluted earnings guidance for the first quarter and full
year 2017.
For the first quarter 2017, the Company expects to report
revenue of $5.2 million to $5.3 million, GAAP loss per share of
$(0.01) to $(0.02) and non-GAAP diluted earnings per share of $0.00
to $0.01. The Company expects that approximately $0.3 million of
its first quarter 2017 revenue will come from backlog, compared to
approximately $3.2 million of its first quarter 2016 revenue that
came from backlog.
For the full year 2017, the Company expects to report revenue of
$23.9 million to $24.3 million, GAAP diluted earnings per share of
$0.07 to $0.08 and non-GAAP diluted earnings per share of $0.14 to
$0.18.
The Company’s non-GAAP earnings per share guidance excludes
stock-based compensation expense, net of tax, which the Company
expects to be approximately $1.3 million and $0.3 million for the
full year and first quarter 2017, respectively.
Use of non-GAAP Financial Measures
The Company believes the use of non-GAAP net income, free cash
flow and infrequent income tax items are helpful to our investors.
These measures, which we refer to as our non-GAAP financial
measures, are not prepared in accordance with GAAP. We calculate
non-GAAP net income as net income excluding stock-based
compensation expense, net of tax. Because of varying available
valuation methodologies, subjective assumptions and the variety of
equity instruments that can impact a company’s non-cash expenses,
we believe that providing non-GAAP financial measures that exclude
stock-based compensation expense allow for meaningful comparisons
between our operating results from period to period. We calculate
free cash flow as net cash provided by operating activities less
net cash used in investing activities for purchases of property and
equipment. We consider free cash flow to be a liquidity measure
that provides useful information to management and investors about
the amount of cash generated by our business that can be used for
strategic opportunities, including investing in our business,
making strategic acquisitions, strengthening our balance sheet and
returning cash to our shareholders via share repurchases.
Infrequent tax items are considered based on their nature and are
excluded from the provision for income taxes as these costs or
benefits are not indicative of our normal or future provision for
income taxes. All of our non-GAAP financial measures are important
tools for financial and operational decision making and for
evaluating our operating results.
A reconciliation of the non-GAAP financial measures used in this
release to the most comparable U.S. GAAP measures for the
respective periods can be found in the table later in this release
immediately following the condensed statements of cash flows.
These non-GAAP financial measures should not be considered
in isolation or as a substitute for a measure of the Company’s
operating performance or liquidity prepared in accordance with U.S.
GAAP and are not indicative of net income or cash provided by
operating activities.
Conference Call
IRADIMED has scheduled a conference call to discuss this
announcement beginning at 11:00 a.m. Eastern Time today, February
6, 2017. Individuals interested in listening to the
conference call may do so by dialing 1-844-413-1781 for domestic
callers, or 1-716-247-5767 for international callers, and entering
the reservation code 60697674.
The conference call will also be available real-time via the
internet at www.iradimed.com/en-us/investors/index.php and
selecting Events & Presentation. A recording of the call
will be available on the Company’s website following the completion
of the call.
About IRADIMED CORPORATION
IRADIMED CORPORATION is a leader in the development of MRI
compatible medical devices. We are the only known provider of
non-magnetic intravenous (IV) infusion pump systems that are
specifically designed to be safe for use during magnetic resonance
imaging (MRI) procedures. We were the first to develop an infusion
delivery system that largely eliminates many of the dangers and
problems present during MRI procedures. Standard infusion pumps
contain magnetic and electronic components which can create radio
frequency (RF) interference and are dangerous to operate in the
presence of the powerful magnet that drives an MRI system. Our
patented MRidium® MRI compatible IV infusion pump system has been
designed with a non-magnetic ultrasonic motor, uniquely-designed
non-ferrous parts and other special features in order to safely and
predictably deliver anesthesia and other IV fluids during various
MRI procedures. Our pump solution provides a seamless approach that
enables accurate, safe and dependable fluid delivery before, during
and after an MRI scan, which is important to critically-ill
patients who cannot be removed from their vital medications, and
children and infants who must generally be sedated in order to
remain immobile during an MRI scan.
Our 3880 MRI compatible patient vital signs monitoring system
has been designed with non-magnetic components and other special
features in order to safely and accurately monitor a patient’s
vital signs during various MRI procedures. The IRADIMED 3880
system operates dependably in magnetic fields up to 30,000 gauss,
which means it can operate virtually anywhere in the MRI scanner
room, including in very close proximity to the MRI scanner bore.
The IRADIMED 3880 has a compact, lightweight design allowing
it to travel with the patient from their critical care unit, to the
MRI and back, resulting in increased patient safety through
uninterrupted vital signs monitoring and decreasing the amount of
time critically ill patients are away from critical care units. The
features of the IRADIMED 3880 include: wireless ECG with
dynamic gradient filtering; wireless SpO2 using Masimo® algorithms;
non-magnetic respiratory CO2; non-invasive blood pressure; patient
temperature, and; optional advanced multi-gas anesthetic agent unit
featuring continuous Minimum Alveolar Concentration measurements.
The IRADIMED 3880 MRI compatible patient
vital signs monitoring system has an easy-to-use design and allows
for the effective communication of patient vital signs information
to clinicians. Our 3880 MRI compatible patient vital signs
monitoring system is currently available to international
customers. Once we receive FDA 510(k) clearance, the 3880 will be
available to U.S. customers. We currently anticipate commencing
marketing the 3880 to U.S. customers in the third quarter of
2017.
For more information please visit www.iradimed.com.
Forward-Looking Statements
This press release contains forward-looking statements as
defined in the Private Securities Litigation Act of 1995,
particularly statements regarding our expectations, beliefs, plans,
intentions, future operations, financial condition and prospects,
and business strategies. These statements relate to future events
or our future financial performance or condition and involve
unknown risks, uncertainties and other factors that could cause our
actual results, level of activity, performance or achievement to
differ materially from those expressed or implied by these
forward-looking statements. The risks and uncertainties
referred to above include, but are not limited to, risks associated
with the Company’s ability to receive FDA 510(k) clearance for its
MRI compatible patient vital signs monitoring system; unexpected
costs, delays or diversion of management’s attention associated
with its MRI compatible patient vital signs monitoring system
510(k) submission; implement successful sales techniques; evaluate
the effectiveness of its sales techniques; additional actions by or
requests from the FDA; our significant reliance on a single
product; unexpected costs, expenses and diversion of management
attention resulting from the FDA warning letter; potential
disruptions in our limited supply chain for our products; a
reduction in international distribution; actions of the FDA or
other regulatory bodies that could delay, limit or suspend product
development, manufacturing or sales; the effect of recalls, patient
adverse events or deaths on our business; difficulties or delays in
the development, production, manufacturing and marketing of new or
existing products and services; changes in laws and regulations or
in the interpretation or application of laws or regulations.
Further information on these and other factors that could affect
the Company’s financial results is included in filings we make with
the Securities and Exchange Commission from time to time. All
forward-looking statements are based on information available to us
on the date hereof, and we assume no obligation to update
forward-looking statements.
|
|
IRADIMED CORPORATIONCONDENSED
BALANCE SHEETS |
|
|
|
|
December 31,2016 |
|
December 31,2015 |
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
$ |
17,713,871 |
|
$ |
19,368,114 |
|
Accounts
receivable, net |
3,775,699 |
|
3,863,632 |
|
Investments |
7,965,521 |
|
7,602,204 |
|
Inventory, net |
3,886,590 |
|
2,383,158 |
|
Prepaid
expenses and other current assets |
362,900 |
|
320,529 |
|
Prepaid
income taxes |
151,820 |
|
273,968 |
|
Deferred
income taxes |
311,871 |
|
141,446 |
|
Total
current assets |
34,168,272 |
|
33,953,051 |
|
Property and equipment,
net |
1,456,149 |
|
905,622 |
|
Intangible assets,
net |
918,712 |
|
193,243 |
|
Deferred income
taxes |
477,531 |
|
88,398 |
|
Other assets |
173,820 |
|
103,893 |
|
Total
assets |
$ |
37,194,484 |
|
$ |
35,244,207 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
$ |
1,120,830 |
|
$ |
1,005,460 |
|
Accrued
payroll and benefits |
1,035,266 |
|
1,288,248 |
|
Other
accrued taxes |
119,094 |
|
30,687 |
|
Warranty
reserve |
40,905 |
|
34,081 |
|
Deferred
revenue |
1,033,146 |
|
529,867 |
|
Other
current liability |
120,634 |
|
— |
|
Accrued
income taxes |
192,006 |
|
— |
|
Total
current liabilities |
3,661,881 |
|
2,888,343 |
|
Deferred revenue |
1,643,478 |
|
422,839 |
|
Total
liabilities |
5,305,359 |
|
3,311,182 |
|
Stockholders’
equity: |
|
|
|
|
Common
stock |
1,072 |
|
1,118 |
|
Additional paid-in capital |
12,055,188 |
|
19,332,023 |
|
Retained
earnings |
19,869,714 |
|
12,655,169 |
|
Accumulated other comprehensive loss |
(36,849 |
) |
(55,285 |
) |
Total
stockholders’ equity. |
31,889,125 |
|
31,933,025 |
|
Total
liabilities and stockholders’ equity |
$ |
37,194,484 |
|
$ |
35,244,207 |
|
|
|
|
|
|
|
|
|
|
IRADIMED CORPORATIONCONDENSED
STATEMENTS OF OPERATIONS(Unaudited) |
|
|
|
|
Three Months EndedDecember 31, |
|
Years EndedDecember 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
Revenue |
$ |
5,990,273 |
|
$ |
8,799,256 |
|
$ |
32,496,548 |
|
$ |
31,593,720 |
|
Cost of revenue |
1,304,088 |
|
1,499,977 |
|
6,154,836 |
|
5,840,407 |
|
Gross
profit |
4,686,185 |
|
7,299,279 |
|
26,341,712 |
|
25,753,313 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
General
and administrative |
1,577,849 |
|
2,140,810 |
|
8,795,703 |
|
7,769,881 |
|
Sales and
marketing |
1,238,900 |
|
1,306,397 |
|
5,278,448 |
|
4,705,977 |
|
Research
and development |
364,215 |
|
499,997 |
|
1,347,507 |
|
1,764,306 |
|
Total
operating expenses |
3,180,964 |
|
3,947,204 |
|
15,421,658 |
|
14,240,164 |
|
Income
from operations |
1,505,221 |
|
3,352,075 |
|
10,920,054 |
|
11,513,149 |
|
Other income (expense),
net |
9,588 |
|
(36,274 |
) |
32,680 |
|
121,385 |
|
Income
before provision for income taxes |
1,514,809 |
|
3,315,801 |
|
10,952,734 |
|
11,364,534 |
|
Provision for income
taxes |
374,010 |
|
911,095 |
|
3,738,189 |
|
4,104,614 |
|
Net income |
$ |
1,140,799 |
|
$ |
2,404,706 |
|
$ |
7,214,545 |
|
$ |
7,529,920 |
|
|
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.11 |
|
$ |
0.22 |
|
$ |
0.67 |
|
$ |
0.68 |
|
Diluted |
$ |
0.10 |
|
$ |
0.19 |
|
$ |
0.60 |
|
$ |
0.60 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
10,717,020 |
|
11,101,444 |
|
10,818,427 |
|
11,003,272 |
|
Diluted |
11,724,448 |
|
12,656,735 |
|
11,989,681 |
|
12,556,887 |
|
|
|
|
|
|
|
|
|
|
|
|
IRADIMED CORPORATIONCONDENSED
STATEMENTS OF CASH FLOWS(Unaudited) |
|
|
|
|
Years EndedDecember 31, |
|
|
2016 |
|
2015 |
|
Operating
activities: |
|
|
|
|
Net
income |
$ |
7,214,545 |
|
$ |
7,529,920 |
|
Adjustments to reconcile net income to net cash provided
by operating activities: |
|
|
|
|
Bad debt
expense |
12,636 |
|
3,553 |
|
Provision
for excess and obsolete inventory |
94,186 |
|
51,089 |
|
Depreciation and amortization. |
248,299 |
|
223,942 |
|
Excess
tax benefit on the exercise of stock options |
(603,553 |
) |
(1,728,595 |
) |
Stock-based compensation |
1,841,901 |
|
1,220,118 |
|
Impairment of intangible assets |
— |
|
55,433 |
|
Loss on
maturities of investments |
83,957 |
|
3,575 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
Accounts
receivable |
75,297 |
|
(1,906,971 |
) |
Inventory |
(1,483,361 |
) |
(308,409 |
) |
Prepaid
expenses and other current assets |
4,937 |
|
(31,977 |
) |
Other
assets |
(117,235 |
) |
(113,959 |
) |
Deferred
income taxes |
(570,910 |
) |
(16,116 |
) |
Accounts
payable |
1,113 |
|
376,293 |
|
Accrued
payroll and benefits. |
(252,982 |
) |
43,350 |
|
Other
accrued taxes |
88,407 |
|
(35,103 |
) |
Warranty
reserve |
6,824 |
|
6,156 |
|
Deferred
revenue |
1,723,918 |
|
501,463 |
|
Other
current liability |
120,634 |
|
— |
|
Accrued
income taxes, net of prepaid income taxes |
917,707 |
|
1,775,568 |
|
Net cash
provided by operating activities |
9,406,320 |
|
7,649,330 |
|
Investing
activities: |
|
|
|
|
Purchases
of investments |
(4,992,626 |
) |
— |
|
Proceeds
from maturities of investments |
4,575,140 |
|
253,370 |
|
Purchases
of property and equipment |
(780,809 |
) |
(298,723 |
) |
Capitalized intangible assets |
(743,486 |
) |
(16,116 |
) |
Net cash
used in investing activities |
(1,941,781 |
) |
(61,469 |
) |
Financing
activities: |
|
|
|
|
Proceeds
from stock option and warranty exercises |
247,133 |
|
597,508 |
|
Income
tax benefits credited to equity |
603,553 |
|
1,728,595 |
|
Purchases
of treasury stock |
(9,969,468 |
) |
— |
|
Net cash
(used in) provided by financing activities |
(9,118,782 |
) |
2,326,103 |
|
Net (decrease) increase
in cash and cash equivalents |
(1,654,243 |
) |
9,913,964 |
|
Cash and cash
equivalents, beginning of period |
19,368,114 |
|
9,454,150 |
|
Cash and cash
equivalents, end of period |
$ |
17,713,871 |
|
$ |
19,368,114 |
|
|
|
IRADIMED
CORPORATIONRECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (UNAUDITED) |
|
|
|
Non-GAAP Net Income and Diluted
EPS |
|
|
|
|
Three Months EndedDecember 31, |
|
Years EndedDecember 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
Net income |
$ |
1,140,799 |
|
$ |
2,404,706 |
|
$ |
7,214,545 |
|
$ |
7,529,920 |
|
Excluding: |
|
|
|
|
|
|
|
|
Stock-based compensation expense, net of tax expense |
139,562 |
|
340,499 |
|
1,214,274 |
|
953,357 |
|
Infrequent tax item |
— |
|
17,305 |
|
— |
|
198,192 |
|
Non-GAAP
net income |
$ |
1,280,361 |
|
$ |
2,762,510 |
|
$ |
8,428,819 |
|
$ |
8,681,469 |
|
Weighted average shares
outstanding – diluted |
|
11,724,448 |
|
|
12,656,735 |
|
|
11,989,681 |
|
|
12,556,887 |
|
Non-GAAP net income per
share – diluted |
$ |
0.11 |
|
$ |
0.22 |
|
$ |
0.70 |
|
$ |
0.69 |
|
Free Cash Flow |
|
|
|
|
Three Months EndedDecember 31, |
|
Years EndedDecember 31, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
Net cash provided by
operating activities |
$ |
2,223,693 |
|
$ |
2,566,720 |
|
$ |
9,406,320 |
|
$ |
7,649,330 |
|
Less: |
|
|
|
|
|
|
|
|
Purchases
of property and equipment |
233,722 |
|
105,355 |
|
780,809 |
|
298,723 |
|
Non-GAAP
net income |
$ |
1,989,971 |
|
$ |
2,461,365 |
|
$ |
8,625,511 |
|
$ |
7,350,607 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media Contact:
Chris Scott
Chief Financial Officer
IRADIMED CORPORATION
(407) 677-8022
InvestorRelations@iradimed.com
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