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
ended March 31, 2017. The Company also announced that its Board of
Directors has approved a share repurchase program, authorizing the
repurchase of up to $8 million of the Company’s common stock
through April 28, 2018.
First Quarter 2017 Financial Results
For the first quarter ended March 31, 2017, the Company reported
revenue of $5.2 million compared to $9.0 million for the first
quarter of 2016. For the first quarter 2017, the Company
reported a net loss of $(0.2) million, or $(0.02) per diluted
share, compared to net income of $2.3 million, or $0.19 per diluted
share for the first quarter of 2016.
Gross profit margin was 73.1% for the first quarter 2017,
compared to 81.0% for the first quarter 2016. Domestic sales
were 83.6% of total revenue for the first quarter 2017, compared to
87.8% for the first quarter 2016.
The Company reported non-GAAP net income of $0.0 million for the
quarter ended March 31, 2017, compared to non-GAAP net income of
$2.6 million for the quarter ended March 31, 2016. The
Company reported non-GAAP earnings per diluted share of $0.00 for
the quarter ended March 31, 2017, compared to $0.21 for the quarter
ended March 31, 2016. Free cash flow was $(0.4) million for
the quarter ended March 31, 2017, compared to $2.2 million for the
quarter ended March 31, 2016.
As of March 31, 2017, the Company had cash, cash equivalents and
investments of $25.2 million.
“These quarterly results are in line with our guidance and
expectations. IV pump bookings began to accelerate during March and
we look to grow that momentum throughout the rest of the year.
Backlog grew slightly from the year-end level and was within our
expectations. We believe these are the first signs that our new
sales techniques are beginning to take hold and resulting in higher
levels of interest and, ultimately, higher levels of confirmed
orders. Additionally, I am very pleased with the strong interest
and bookings from international customers for our new MRI
compatible patient vital signs monitoring system. The interest
shown by our international customers has exceeded our expectations
giving us greater confidence in its market acceptance once launched
in the United States. Regarding the U.S. regulatory status of our
MRI compatible patient monitor, recent communications with FDA have
caused us to revise our expected U.S. launch date from Q3 to Q4 of
this year. This revision is primarily the result of additional
human factors and signal quality testing that FDA is now requiring
us to perform, which will extend the time to 510(k) clearance and
is the cause of our full year revenue and earnings guidance
revision”, said Roger Susi, President and Chief Executive Officer
of the Company.
Share Repurchase Program
The Company intends to use cash on hand, investments and cash
generated from operations to fund the share repurchase program.
The timing and amount of the repurchases will be subject to
applicable legal requirements including federal and state
securities laws. Purchases will be made in open market transactions
effected through a broker-dealer at prevailing market prices, in
block trades, or in privately negotiated transactions. Any
repurchased shares will be available for general corporate
purposes.
Financial Guidance
For the second quarter 2017, the Company expects revenue of
approximately $5.4 million to $5.5 million, GAAP earnings per share
of $(0.01) to $0.00 and non-GAAP diluted earnings per share of
$0.01 to $0.02.
The Company revised its full year guidance and now expects to
report revenue of $22.7 million to $23.1 million, GAAP diluted
earnings per share of $0.03 to $0.04 and non-GAAP diluted earnings
per share of $0.10 to $0.13. The Company previously expected 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 $0.3 million and $1.2 million for the
second quarter and full year 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, April 28,
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 11362726.
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 fourth 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 for
existing and future products; 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 CORPORATION |
CONDENSED BALANCE SHEETS |
|
|
March 31, 2017 |
|
December 31,2016 |
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
$ |
17,456,641 |
|
$ |
17,713,871 |
|
Accounts
receivable, net |
3,737,117 |
|
3,775,699 |
|
Investments |
7,788,741 |
|
7,965,521 |
|
Inventory, net |
4,273,721 |
|
3,886,590 |
|
Prepaid
expenses and other current assets |
359,691 |
|
362,900 |
|
Prepaid
income taxes |
134,624 |
|
151,820 |
|
Total
current assets |
33,750,535 |
|
33,856,401 |
|
Property and equipment,
net |
1,633,080 |
|
1,456,149 |
|
Intangible assets,
net |
898,223 |
|
918,712 |
|
Deferred income
taxes |
964,129 |
|
789,402 |
|
Other assets |
171,346 |
|
173,820 |
|
Total
assets |
$ |
37,417,313 |
|
$ |
37,194,484 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
$ |
859,114 |
|
$ |
1,120,830 |
|
Accrued
payroll and benefits |
1,004,771 |
|
1,035,266 |
|
Other
accrued taxes |
119,595 |
|
119,094 |
|
Warranty
reserve |
64,074 |
|
40,905 |
|
Deferred
revenue |
1,075,608 |
|
1,033,146 |
|
Other
current liability |
120,634 |
|
120,634 |
|
Accrued
income taxes |
375,953 |
|
192,006 |
|
Total
current liabilities |
3,619,749 |
|
3,661,881 |
|
Deferred revenue |
1,771,042 |
|
1,643,478 |
|
Total
liabilities |
5,390,791 |
|
5,305,359 |
|
Stockholders’
equity: |
|
|
|
|
Common
stock |
1,075 |
|
1,072 |
|
Additional paid-in capital |
12,434,675 |
|
12,055,188 |
|
Retained
earnings |
19,622,441 |
|
19,869,714 |
|
Accumulated other comprehensive loss |
(31,669 |
) |
(36,849 |
) |
Total
stockholders’ equity |
32,026,522 |
|
31,889,125 |
|
Total
liabilities and stockholders’ equity
|
$ |
37,417,313 |
|
$ |
37,194,484 |
|
IRADIMED CORPORATION, |
CONDENSED STATEMENTS OF
OPERATIONS |
(Unaudited) |
|
|
Three Months Ended
March 31, |
|
|
2017 |
|
2016 |
|
Revenue |
$ |
5,162,560 |
|
$ |
8,964,153 |
|
Cost of revenue |
1,387,618 |
|
1,705,797 |
|
Gross
profit |
3,774,942 |
|
7,258,356 |
|
Operating
expenses: |
|
|
|
|
General
and administrative |
2,107,257 |
|
2,259,722 |
|
Sales and
marketing |
1,364,776 |
|
1,283,048 |
|
Research
and development |
541,290 |
|
234,336 |
|
Total
operating expenses |
4,013,323 |
|
3,777,106 |
|
(Loss)
income from operations |
(238,381 |
) |
3,481,250 |
|
Other income, net |
29,524 |
|
31,778 |
|
(Loss)
income before provision for income taxes
|
(208,857 |
) |
3,513,028 |
|
Provision for income
tax expense |
24,483 |
|
1,231,017 |
|
Net (loss) income |
$ |
(233,340 |
) |
$ |
2,282,011 |
|
|
|
|
|
|
Net (loss) income per
share: |
|
|
|
|
Basic |
$ |
(0.02 |
) |
$ |
0.21 |
|
Diluted |
$ |
(0.02 |
) |
$ |
0.19 |
|
Weighted average shares
outstanding: |
|
|
|
|
Basic |
10,740,979 |
|
11,095,950 |
|
Diluted |
10,740,979 |
|
12,326,108 |
|
IRADIMED CORPORATION |
CONDENSED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
Three Months Ended
March 31, |
|
|
2017 |
|
2016 |
|
Operating
activities: |
|
|
|
|
Net
(loss) income |
$ |
(233,340 |
) |
$ |
2,282,011 |
|
Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities: |
|
|
|
|
Bad debt
expense |
(8,533 |
) |
15,686 |
|
Provision
for excess and obsolete inventory |
(7,171 |
) |
74,946 |
|
Depreciation and amortization |
84,069 |
|
60,914 |
|
Excess
tax benefit on the exercise of stock options |
— |
|
(56,579 |
) |
Stock-based compensation |
376,424 |
|
391,183 |
|
Loss on
maturities of investments |
5,099 |
|
7,026 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
Accounts
receivable |
47,115 |
|
(796,987 |
) |
Inventory |
(321,552 |
) |
(478,033 |
) |
Prepaid
expenses and other current assets |
2,018 |
|
(23,346 |
) |
Other
assets |
3,665 |
|
(4,384 |
) |
Deferred
income taxes |
(176,659 |
) |
(179,790 |
) |
Accounts
payable |
(320,124 |
) |
219,531 |
|
Accrued
payroll and benefits |
(30,495 |
) |
(413,037 |
) |
Other
accrued taxes |
501 |
|
(8,924 |
) |
Warranty
reserve |
23,169 |
|
457 |
|
Deferred
revenue |
170,026 |
|
94,673 |
|
Accrued
income taxes, net of prepaid income taxes |
201,143 |
|
1,246,506 |
|
Net cash
(used in) provided by operating activities |
(184,645 |
) |
2,431,853 |
|
Investing
activities: |
|
|
|
|
Purchases
of investments |
(1,321,257 |
) |
(728,336 |
) |
Proceeds
from maturities of investments |
1,500,050 |
|
300,000 |
|
Purchases
of property and equipment |
(240,400 |
) |
(199,338 |
) |
Capitalized intangible assets |
(111 |
) |
(289,591 |
) |
Net cash
used in investing activities |
(61,718 |
) |
(917,265 |
) |
Financing
activities: |
|
|
|
|
Proceeds
from stock option exercises |
33,086 |
|
73,590 |
|
Income
tax benefits credited to equity |
— |
|
56,579 |
|
Taxes
paid related to net share settlement of equity awards |
(43,953 |
) |
— |
|
Purchases
of treasury stock |
— |
|
(5,505,439 |
) |
Net cash
used in financing activities |
(10,867 |
) |
(5,375,270 |
) |
Net decrease in cash
and cash equivalents |
(257,230 |
) |
(3,860,682 |
) |
Cash and cash
equivalents, beginning of period |
17,713,871 |
|
19,368,114 |
|
Cash and cash
equivalents, end of period |
$ |
17,456,641 |
|
$ |
15,507,432 |
|
IRADIMED CORPORATION |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED) |
|
Non-GAAP Net Income and Diluted
EPS |
|
|
Three Months Ended
March 31, |
|
|
2017 |
|
2016 |
|
Net (loss) income |
$ |
(233,340 |
) |
$ |
2,282,011 |
|
Excluding: |
|
|
|
|
Stock-based compensation expense, net of tax expense
|
249,944 |
|
274,814 |
|
Non-GAAP
net income |
$ |
16,604 |
|
$ |
2,556,825 |
|
Weighted average shares
outstanding – diluted |
|
11,801,569 |
|
|
12,326,108 |
|
Non-GAAP net income per
share – diluted |
$ |
0.00 |
|
$ |
0.21 |
|
Free Cash Flow |
|
|
Three Months Ended
March 31, |
|
|
2017 |
|
2016 |
|
Net cash (used in)
provided by operating activities
|
$ |
(184,645 |
) |
$ |
2,431,853 |
|
Less: |
|
|
|
|
Purchases
of property and equipment |
240,400 |
|
199,338 |
|
Free cash
flow |
$ |
(425,045 |
) |
$ |
2,232,515 |
|
Media Contact:
Chris Scott
Chief Financial Officer
IRADIMED CORPORATION
(407) 677-8022
InvestorRelations@iradimed.com
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