IRADIMED CORPORATION (NASDAQ:IRMD), a leader in the development of
innovative magnetic resonance imaging (MRI) medical devices and the
only known provider of non-magnetic intravenous (IV) infusion pump
systems that are designed to be safe for use during MRI procedures,
today announced financial results for the three and six months
ended June 30, 2017.
For the second quarter ended June 30, 2017, the
Company reported revenue of $5.5 million compared to $9.9 million
for the second quarter 2016. Net income was $0.4 million, or $0.03
per diluted share, compared to net income of $2.2 million, or $0.19
per diluted share for the second quarter 2016. Gross profit margin
was 77.7%, compared to 82.4% for the second quarter 2016. Domestic
sales were 87.7% of total revenue, compared to 91.1% for the second
quarter 2016. Revenue for the second quarter ended June 30, 2017
included $0.4 million in sales of our patient vital signs
monitoring systems to international customers.
Non-GAAP net income was $0.7 million for the
quarter ended June 30, 2017, compared to non-GAAP net income of
$2.9 million for the second quarter 2016. Non-GAAP earnings per
diluted share was $0.06, compared to $0.24 for the second quarter
2016. Free cash flow was $0.1 million, compared to $1.1 million for
the second quarter 2016.
For the six months ended June 30, 2017, the Company
reported revenue of $10.7 million compared to $18.8 million for the
same period in 2016. Net income was $0.1 million, or $0.01 per
diluted share, compared to net income of $4.5 million, or $0.37 per
diluted share for the same period in 2016. Gross profit margin was
75.5%, compared to 81.7% for the same period in 2016. Domestic
sales were 85.7% of total revenue, compared to 89.6% for the same
period in 2016. Revenue for the six months ended June 30, 2017
included $0.8 million in sales of our patient vital signs
monitoring systems to international customers.
Non-GAAP net income was $0.7 million for the six
months ended June 30, 2017, compared to non-GAAP net income of $5.5
million for the same period in 2016. Non-GAAP earnings per diluted
share was $0.06 for the six months ended June 30, 2017, compared to
$0.45 for the same period in 2016. Free cash flow was $(0.3)
million for the six months ended June 30, 2017, compared to $3.3
million for the same period in 2016.
As of June 30, 2017, the Company had cash, cash
equivalents and investments of $23.8 million. During the three and
six months ended June 30, 2017, the Company repurchased $1.6
million of its common stock.
“I am pleased with our second quarter results.
While we are comparing against our highest ever reported quarterly
revenue in the second quarter 2016, second quarter 2017 revenue was
up 7% over the first quarter and both GAAP and non-GAAP earnings
came in above our estimates. Bookings of our IV pumps were strong
during the second quarter exceeding our expectations and we look to
carry this momentum into the second half of the year,” said Roger
Susi, President and Chief Executive Officer of the Company.
“Additionally, we continue to see a positive
reaction to our patient vital signs monitoring system from our
international customers. Earlier this month, we re-submitted the
510(k) application to FDA for our patient monitor and we are now
looking forward to a timely clearance. As we have stated
previously, we are planning to launch U.S. sales of the monitor in
the fourth quarter, if FDA clearance is received by that time. We
anticipate that our U.S. customers will have a similar positive
reaction to the monitor as our international customers have had,
building our confidence in a successful U.S. launch,” said
Susi.
Financial Guidance
For the third quarter 2017, the Company expects
revenue of approximately $5.5 million to $5.6 million, GAAP
earnings per share of $(0.01) to $0.00 and non-GAAP diluted
earnings per share of $0.02 to $0.03.
The Company’s non-GAAP earnings per share guidance
excludes stock-based compensation expense, net of tax, and a
one-time charge to earnings, net of tax, related to the
modification of the underwriters’ warrants on July 17, 2017 as
announced in an 8-K filed with the Securities and Exchange
Commission on July 21, 2017. The Company expects stock-based
compensation expense net of tax to be approximately $0.3 million
and $1.2 million for the third quarter and full year 2017,
respectively. The Company also expects the one-time charge related
to the modification of the underwriters’ warrants, net of tax to be
approximately $0.2 million for the third quarter and full year
2017.
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 allows 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, July 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 56257952.
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 innovative 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 |
|
|
June 30, 2017 |
|
December 31, 2016 |
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
$ |
16,800,617 |
|
$ |
17,713,871 |
|
Accounts
receivable, net |
3,787,528 |
|
3,775,699 |
|
Investments |
7,024,047 |
|
7,965,521 |
|
Inventory, net |
4,259,769 |
|
3,886,590 |
|
Prepaid
expenses and other current assets |
300,532 |
|
362,900 |
|
Prepaid
income taxes |
811,985 |
|
151,820 |
|
Total
current assets |
32,984,478 |
|
33,856,401 |
|
Property and equipment,
net |
1,709,526 |
|
1,456,149 |
|
Intangible assets,
net |
886,726 |
|
918,712 |
|
Deferred income
taxes |
1,083,748 |
|
789,402 |
|
Other assets |
179,366 |
|
173,820 |
|
Total
assets |
$ |
36,843,844 |
|
$ |
37,194,484 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
$ |
736,888 |
|
$ |
1,120,830 |
|
Accrued
payroll and benefits |
1,102,069 |
|
1,035,266 |
|
Other
accrued taxes |
87,565 |
|
119,094 |
|
Warranty
reserve |
39,893 |
|
40,905 |
|
Deferred
revenue |
1,544,955 |
|
1,033,146 |
|
Other
current liability |
120,634 |
|
120,634 |
|
Accrued
income taxes |
— |
|
192,006 |
|
Total
current liabilities |
3,632,004 |
|
3,661,881 |
|
Deferred revenue |
1,915,135 |
|
1,643,478 |
|
Total
liabilities |
5,547,139 |
|
5,305,359 |
|
Stockholders’
equity: |
|
|
|
|
Common
stock |
1,076 |
|
1,072 |
|
Additional paid-in capital |
12,895,637 |
|
12,055,188 |
|
Retained
earnings |
19,979,514 |
|
19,869,714 |
|
Treasury
stock |
(1,553,193 |
) |
— |
|
Accumulated other comprehensive loss |
(26,329 |
) |
(36,849 |
) |
Total
stockholders’ equity |
31,296,705 |
|
31,889,125 |
|
Total
liabilities and stockholders’ equity |
$ |
36,843,844 |
|
$ |
37,194,484 |
|
IRADIMED CORPORATION |
CONDENSED STATEMENTS OF
OPERATIONS |
(Unaudited) |
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Revenue |
$ |
5,524,364 |
|
$ |
9,868,905 |
|
$ |
10,686,924 |
|
$ |
18,833,058 |
|
Cost of revenue |
1,234,314 |
|
1,739,067 |
|
2,621,932 |
|
3,444,864 |
|
Gross
profit |
4,290,050 |
|
8,129,838 |
|
8,064,992 |
|
15,388,194 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
General
and administrative |
2,189,925 |
|
3,088,205 |
|
4,297,182 |
|
5,347,927 |
|
Sales and
marketing |
1,323,539 |
|
1,409,758 |
|
2,688,315 |
|
2,692,807 |
|
Research
and development |
449,011 |
|
291,822 |
|
990,301 |
|
526,157 |
|
Total
operating expenses |
3,962,475 |
|
4,789,785 |
|
7,975,798 |
|
8,566,891 |
|
Income
from operations |
327,575 |
|
3,340,053 |
|
89,194 |
|
6,821,303 |
|
Other income (expense),
net |
21,138 |
|
(4,669 |
) |
50,662 |
|
27,109 |
|
Income
before provision for income taxes |
348,713 |
|
3,335,384 |
|
139,856 |
|
6,848,412 |
|
Provision for income
tax (benefit) expense |
(8,360 |
) |
1,104,133 |
|
16,123 |
|
2,335,150 |
|
Net income |
$ |
357,073 |
|
$ |
2,231,251 |
|
$ |
123,733 |
|
$ |
4,513,262 |
|
|
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.03 |
|
$ |
0.21 |
|
$ |
0.01 |
|
$ |
0.41 |
|
Diluted |
$ |
0.03 |
|
$ |
0.19 |
|
$ |
0.01 |
|
$ |
0.37 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
10,687,746 |
|
10,778,673 |
|
10,714,215 |
|
10,937,311 |
|
Diluted |
11,727,473 |
|
11,966,289 |
|
11,764,747 |
|
12,138,856 |
|
IRADIMED CORPORATION |
CONDENSED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
Six Months Ended June 30, |
|
|
2017 |
|
2016 |
|
Operating
activities: |
|
|
|
|
Net
income |
$ |
123,733 |
|
$ |
4,513,262 |
|
Adjustments to reconcile net income to net cash provided
by operating activities: |
|
|
|
|
Bad debt
expense |
(6,611 |
) |
33,548 |
|
Provision
for excess and obsolete inventory |
(12,634 |
) |
86,610 |
|
Depreciation and amortization |
199,023 |
|
122,744 |
|
Write-off
of non-trade accounts receivable |
205,444 |
|
— |
|
Excess
tax benefit on the exercise of stock options |
— |
|
(266,094 |
) |
Stock-based compensation |
821,803 |
|
1,595,589 |
|
Loss on
maturities of investments |
6,520 |
|
46,753 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
Accounts
receivable |
(210,662 |
) |
(1,959,411 |
) |
Inventory |
(335,619 |
) |
(649,766 |
) |
Prepaid
expenses and other current assets |
58,750 |
|
68,582 |
|
Other
assets |
(1,928 |
) |
(30,793 |
) |
Deferred
income taxes |
(297,619 |
) |
(614,295 |
) |
Accounts
payable |
(408,868 |
) |
175,350 |
|
Accrued
payroll and benefits |
66,803 |
|
(232,211 |
) |
Other
accrued taxes |
(31,529 |
) |
(10,194 |
) |
Warranty
reserve |
(1,012 |
) |
2,001 |
|
Deferred
revenue |
783,466 |
|
487,827 |
|
Other
current liability |
— |
|
108,317 |
|
Accrued
income taxes, net of prepaid income taxes |
(852,171 |
) |
284,051 |
|
Net cash
provided by operating activities |
106,889 |
|
3,761,870 |
|
Investing
activities: |
|
|
|
|
Purchases
of investments |
(1,321,257 |
) |
(2,762,917 |
) |
Proceeds
from maturities of investments |
2,270,004 |
|
2,303,092 |
|
Purchases
of property and equipment |
(411,200 |
) |
(424,047 |
) |
Capitalized intangible assets |
(9,214 |
) |
(567,137 |
) |
Net cash
provided by (used in) investing activities |
528,333 |
|
(1,451,009 |
) |
Financing
activities: |
|
|
|
|
Proceeds
from stock option exercises |
49,459 |
|
90,257 |
|
Income
tax benefits credited to equity |
— |
|
266,094 |
|
Taxes
paid related to net share settlement of equity awards |
(44,742 |
) |
— |
|
Purchases
of treasury stock |
(1,553,193 |
) |
(9,969,468 |
) |
Net cash
used in financing activities |
(1,548,476 |
) |
(9,613,117 |
) |
Net decrease in cash
and cash equivalents |
(913,254 |
) |
(7,302,256 |
) |
Cash and cash
equivalents, beginning of period |
17,713,871 |
|
19,368,114 |
|
Cash and cash
equivalents, end of period |
$ |
16,800,617 |
|
$ |
12,065,858 |
|
IRADIMED CORPORATION |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED) |
|
Non-GAAP Net Income and Diluted
EPS |
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Net income |
$ |
357,073 |
|
$ |
2,231,251 |
|
$ |
123,733 |
|
$ |
4,513,262 |
|
Excluding: |
|
|
|
|
|
|
|
|
Stock-based compensation expense, net of tax expense |
295,277 |
|
663,050 |
|
545,221 |
|
937,863 |
|
Non-GAAP
net income |
$ |
652,350 |
|
$ |
2,894,301 |
|
$ |
668,954 |
|
$ |
5,451,125 |
|
Weighted-average shares
outstanding – diluted |
11,727,473 |
|
11,966,289 |
|
11,764,747 |
|
12,138,856 |
|
Non-GAAP net income per
share – diluted |
$ |
0.06 |
|
$ |
0.24 |
|
$ |
0.06 |
|
$ |
0.45 |
|
Free Cash Flow |
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Net cash provided by
operating activities |
$ |
291,534 |
|
$ |
1,330,017 |
|
$ |
106,889 |
|
$ |
3,761,870 |
|
Less: |
|
|
|
|
|
|
|
|
Purchases
of property and equipment |
170,800 |
|
224,709 |
|
411,200 |
|
424,047 |
|
Free cash
flow |
$ |
120,734 |
|
$ |
1,105,308 |
|
$ |
(304,311 |
) |
$ |
3,337,823 |
|
Media Contact:
Chris Scott
Chief Financial Officer
IRADIMED CORPORATION
(407) 677-8022
InvestorRelations@iradimed.com
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