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 nine months ended September 30, 2017.
For the third quarter ended September 30, 2017, the Company
reported revenue of $5.7 million compared to $7.7 million for the
third quarter 2016. Net income was $0.2 million, or $0.02 per
diluted share, compared to net income of $1.6 million, or $0.13 per
diluted share for the third quarter 2016. Gross profit margin was
77.0%, compared to 81.7% for the third quarter 2016. Domestic sales
were 88.2% of total revenue, compared to 90.1% for the third
quarter 2016. Revenue for the third quarter ended September 30,
2017 included $0.1 million in sales of our patient vital signs
monitoring systems to international customers.
Non-GAAP net income was $0.8 million for the quarter ended
September 30, 2017, compared to non-GAAP net income of $1.7 million
for the third quarter 2016. Non-GAAP earnings per diluted share was
$0.07, compared to $0.14 for the third quarter 2016. Free cash flow
was $1.7 million, compared to $3.3 million for the third
quarter 2016.
For the nine months ended September 30, 2017, the Company
reported revenue of $16.4 million compared to $26.5 million for the
same period in 2016. Net income was $0.3 million, or $0.03 per
diluted share, compared to net income of $6.1 million, or $0.50 per
diluted share for the same period in 2016. Gross profit margin was
76.0%, compared to 81.7% for the same period in 2016. Domestic
sales were 86.6% of total revenue, compared to 89.7% for the same
period in 2016. Revenue for the nine months ended September 30,
2017 included $0.8 million in sales of our patient vital signs
monitoring systems to international customers.
Non-GAAP net income was $1.4 million for the nine months ended
September 30, 2017, compared to non-GAAP net income of $7.1 million
for the same period in 2016. Non-GAAP earnings per diluted share
was $0.12 for the nine months ended September 30, 2017, compared to
$0.59 for the same period in 2016. Free cash flow was $1.4 million
for the nine months ended September 30, 2017, compared to $6.6
million for the same period in 2016.
As of September 30, 2017, the Company had cash, cash equivalents
and investments of $25.2 million. During the nine months ended
September 30, 2017, the Company repurchased $1.8 million of its
common stock. We intend to retire the repurchased common stock
prior to December 31, 2017.
“I am pleased with these results as third quarter revenue was
slightly higher than our expectation and both GAAP and non-GAAP
earnings came in well above our estimates. In what is typically our
most challenging quarter, we were able to maintain the momentum in
customer bookings that has been building throughout 2017. Based on
these stronger than expected third quarter results, we are
increasing our full year non-GAAP earnings guidance to $0.17 to
$0.18 per share,” said Roger Susi, President and Chief Executive
Officer of the Company.
“Additionally, as announced in our October 26th press release,
we have received FDA 510(k) clearance for our new 3880 MRI
compatible patient vital signs monitoring system. This is a very
important step for IRADIMED and a milestone in our history. We are
anxious to begin shipping this device to our U.S. customers and
satisfying their already existing demand for the monitor. We are
also in the process of obtaining clearance for our MRI compatible
patient monitor from other regulatory bodies worldwide as we look
to penetrate other sizable markets with our new device,” said
Susi.
Financial Guidance
For the fourth quarter 2017, the Company expects revenue of
approximately $6.3 million to $6.7 million, GAAP diluted earnings
per share of $0.00 to $0.02 and non-GAAP diluted earnings per share
of $0.05 to $0.06.
The Company increased its full year 2017 non-GAAP diluted
earnings per share guidance and now expects to report non-GAAP
diluted earnings per share of $0.17 to $0.18, compared to its
previous estimate of $0.10 to $0.13.
The Company’s non-GAAP earnings per share guidance excludes
stock-based compensation expense, net of tax, which includes 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 (including the one-time charge for the warrant
modification), net of tax to be approximately $0.3 million and
$1.5 million for the fourth 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 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, October
30, 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 1131798.
The conference call will also be available real-time via the
internet at http://www.iradimed.com/en-us/investors/events/. 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 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
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
monitor is rated for operation in magnetic fields up to 30,000
gauss, which means it can operate virtually anywhere in the MRI
scanner room. The IRADIMED 3880 has a compact, lightweight design,
facilitating the transportation of patients 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; 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, small form factor and unique
wireless tablet remote control that allows for the effective
communication of patient vital signs information to clinicians
located in the MRI control room. Our 3880 MRI compatible patient
vital signs monitoring system is currently available to domestic
and international customers.
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 new products;
unexpected costs, delays or diversion of management’s attention
associated with the design, manufacture or sale of new products;
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 CORPORATIONCONDENSED BALANCE
SHEETS |
|
|
|
|
September 30, 2017 |
|
December 31, 2016 |
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
$ |
18,406,305 |
|
$ |
17,713,871 |
|
Accounts
receivable, net |
3,508,432 |
|
3,775,699 |
|
Investments |
6,804,783 |
|
7,965,521 |
|
Inventory, net |
4,129,357 |
|
3,886,590 |
|
Prepaid
expenses and other current assets |
287,061 |
|
362,900 |
|
Prepaid
income taxes |
311,217 |
|
151,820 |
|
Total
current assets |
33,447,155 |
|
33,856,401 |
|
Property and equipment,
net |
1,853,506 |
|
1,456,149 |
|
Intangible assets,
net |
885,713 |
|
918,712 |
|
Deferred income
taxes |
1,553,469 |
|
789,402 |
|
Other assets |
179,785 |
|
173,820 |
|
Total
assets |
$ |
37,919,628 |
|
$ |
37,194,484 |
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
$ |
794,446 |
|
$ |
1,120,830 |
|
Accrued
payroll and benefits |
1,438,417 |
|
1,035,266 |
|
Other
accrued taxes |
68,247 |
|
119,094 |
|
Warranty
reserve |
48,513 |
|
40,905 |
|
Deferred
revenue |
1,380,618 |
|
1,033,146 |
|
Other
current liability |
120,634 |
|
120,634 |
|
Accrued
income taxes |
— |
|
192,006 |
|
Total
current liabilities |
3,850,875 |
|
3,661,881 |
|
Deferred revenue |
1,928,347 |
|
1,643,478 |
|
Total
liabilities |
5,779,222 |
|
5,305,359 |
|
Stockholders’
equity: |
|
|
|
|
Common
stock |
1,076 |
|
1,072 |
|
Additional paid-in capital |
13,808,596 |
|
12,055,188 |
|
Retained
earnings |
20,171,907 |
|
19,869,714 |
|
Treasury
stock |
(1,818,542 |
) |
— |
|
Accumulated other comprehensive loss |
(22,631 |
) |
(36,849 |
) |
Total
stockholders’ equity |
32,140,406 |
|
31,889,125 |
|
Total
liabilities and stockholders’ equity |
$ |
37,919,628 |
|
$ |
37,194,484 |
|
IRADIMED CORPORATIONCONDENSED
STATEMENTS OF OPERATIONS(Unaudited) |
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Revenue |
$ |
5,689,724 |
|
$ |
7,673,217 |
|
$ |
16,376,648 |
|
$ |
26,506,275 |
|
Cost of revenue |
1,307,767 |
|
1,405,884 |
|
3,929,699 |
|
4,850,748 |
|
Gross
profit |
4,381,957 |
|
6,267,333 |
|
12,446,949 |
|
21,655,527 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
General
and administrative |
2,551,290 |
|
1,869,927 |
|
6,848,472 |
|
7,217,854 |
|
Sales and
marketing |
1,251,901 |
|
1,346,742 |
|
3,940,216 |
|
4,039,550 |
|
Research
and development |
382,704 |
|
457,134 |
|
1,373,005 |
|
983,291 |
|
Total
operating expenses |
4,185,895 |
|
3,673,803 |
|
12,161,693 |
|
12,240,695 |
|
Income
from operations |
196,062 |
|
2,593,530 |
|
285,256 |
|
9,414,832 |
|
Other income (expense),
net |
28,715 |
|
(4,017 |
) |
79,377 |
|
23,092 |
|
Income
before provision for income taxes |
224,777 |
|
2,589,513 |
|
364,633 |
|
9,437,924 |
|
Provision for income
tax expense |
32,384 |
|
1,029,029 |
|
48,507 |
|
3,364,179 |
|
Net income |
$ |
192,393 |
|
$ |
1,560,484 |
|
$ |
316,126 |
|
$ |
6,073,745 |
|
|
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.02 |
|
$ |
0.15 |
|
$ |
0.03 |
|
$ |
0.56 |
|
Diluted |
$ |
0.02 |
|
$ |
0.13 |
|
$ |
0.03 |
|
$ |
0.50 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
10,565,598 |
|
10,684,650 |
|
10,664,132 |
|
10,852,476 |
|
Diluted |
11,643,044 |
|
11,867,997 |
|
11,710,377 |
|
12,055,467 |
|
IRADIMED CORPORATIONCONDENSED
STATEMENTS OF CASH FLOWS(Unaudited) |
|
|
|
|
Nine Months Ended
September 30, |
|
|
2017 |
|
2016 |
|
Operating
activities: |
|
|
|
|
Net
income |
$ |
316,126 |
|
$ |
6,073,745 |
|
Adjustments to reconcile net income to net cash provided
by operating activities: |
|
|
|
|
Change in
allowance for doubtful accounts |
(9,557 |
) |
19,100 |
|
Provision
for excess and obsolete inventory |
38,021 |
|
86,543 |
|
Depreciation and amortization |
970,705 |
|
709,871 |
|
Write-off
of non-trade accounts receivable |
205,444 |
|
— |
|
Excess
tax benefit on the exercise of stock options |
— |
|
(550,431 |
) |
Stock-based compensation |
1,735,078 |
|
1,788,045 |
|
Loss on
maturities of investments |
6,757 |
|
80,542 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
Accounts
receivable |
71,380 |
|
(648,730 |
) |
Inventory |
(273,121 |
) |
(1,170,928 |
) |
Prepaid
expenses and other current assets |
(576,504 |
) |
(622,454 |
) |
Other
assets |
(6,714 |
) |
(87,001 |
) |
Deferred
income taxes |
(769,615 |
) |
(638,467 |
) |
Accounts
payable |
(334,051 |
) |
(13,542 |
) |
Accrued
payroll and benefits |
403,151 |
|
7,667 |
|
Other
accrued taxes |
(50,847 |
) |
160,594 |
|
Warranty
reserve |
7,608 |
|
4,061 |
|
Deferred
revenue |
632,341 |
|
1,259,997 |
|
Other
current liability |
— |
|
115,489 |
|
Accrued
income taxes, net of prepaid income taxes |
(351,403 |
) |
608,526 |
|
Net cash
provided by operating activities |
2,014,799 |
|
7,182,627 |
|
Investing
activities: |
|
|
|
|
Purchases
of investments |
(1,321,257 |
) |
(4,284,445 |
) |
Proceeds
from maturities of investments |
2,495,004 |
|
4,075,103 |
|
Purchases
of property and equipment |
(653,171 |
) |
(547,087 |
) |
Capitalized intangible assets |
(28,800 |
) |
(588,228 |
) |
Net cash
provided by (used in) investing activities |
491,776 |
|
(1,344,657 |
) |
Financing
activities: |
|
|
|
|
Proceeds
from stock option exercises |
49,460 |
|
217,015 |
|
Income
tax benefit credited to equity |
— |
|
550,431 |
|
Taxes
paid related to net share settlement of equity awards |
(45,059 |
) |
— |
|
Purchases
of treasury stock |
(1,818,542 |
) |
(9,969,468 |
) |
Net cash
used in financing activities |
(1,814,141 |
) |
(9,202,022 |
) |
Net increase (decrease)
in cash and cash equivalents |
692,434 |
|
(3,364,052 |
) |
Cash and cash
equivalents, beginning of period |
17,713,871 |
|
19,368,114 |
|
Cash and cash
equivalents, end of period |
$ |
18,406,305 |
|
$ |
16,004,062 |
|
IRADIMED
CORPORATIONRECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (UNAUDITED) |
|
Non-GAAP Net Income and Diluted
EPS |
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Net income |
$ |
192,393 |
|
$ |
1,560,484 |
|
$ |
316,126 |
|
$ |
6,073,745 |
|
Excluding: |
|
|
|
|
|
|
|
|
Stock-based compensation expense, net of tax expense |
582,974 |
|
136,849 |
|
1,128,195 |
|
1,074,712 |
|
Non-GAAP
net income |
$ |
775,367 |
|
$ |
1,697,333 |
|
$ |
1,444,321 |
|
$ |
7,148,457 |
|
Weighted-average shares
outstanding – diluted |
11,643,044 |
|
11,867,997 |
|
11,710,377 |
|
12,055,467 |
|
Non-GAAP net income per
share – diluted |
$ |
0.07 |
|
$ |
0.14 |
|
$ |
0.12 |
|
$ |
0.59 |
|
Free Cash Flow |
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Net cash provided by
operating activities |
$ |
1,907,910 |
|
$ |
3,420,757 |
|
$ |
2,014,799 |
|
$ |
7,182,627 |
|
Less: |
|
|
|
|
|
|
|
|
Purchases
of property and equipment |
241,971 |
|
123,040 |
|
653,171 |
|
547,087 |
|
Free cash
flow |
$ |
1,665,939 |
|
$ |
3,297,717 |
|
$ |
1,361,628 |
|
$ |
6,635,540 |
|
Media Contact:Chris ScottChief Financial OfficerIRADIMED
CORPORATION(407) 677-8022 InvestorRelations@iradimed.com
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