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 months
and year ended December 31, 2017.
Financial Results
For the fourth quarter ended December 31, 2017, the Company
reported revenue of $6.7 million compared to $6.0 million for the
fourth quarter 2016. Net income was $0.2 million, or $0.02 per
diluted share and includes a one-time non-cash charge of $0.5
million related to the Tax Cuts and Jobs Act (“TCJA”) as discussed
later in this release. For the fourth quarter 2016, net income was
$1.1 million, or $0.10 per diluted share. Gross profit margin was
75.5 percent, compared to 78.2 percent for the fourth quarter 2016.
Domestic sales were 79.4 percent of total revenue, compared to 85.5
percent for the fourth quarter 2016. Revenue from sales of our
patient vital signs monitor was $0.9 million for the fourth quarter
2017 compared to $0.1 million for the fourth quarter 2016.
Non-GAAP net income was $1.1 million for the quarter ended
December 31, 2017, which excludes stock compensation expense, net
of tax of $0.5 million and a one-time non-cash charge of $0.5
million resulting from the TCJA that is discussed later in this
release. Non-GAAP net income for the quarter ended December 31,
2016 was $1.3 million. Non-GAAP earnings per diluted share was
$0.10, compared to $0.11 for the fourth quarter 2016. Free cash
flow was $1.3 million, compared to $2.0 million for the fourth
quarter 2016.
For the year ended December 31, 2017, the Company reported
revenue of $23.1 million compared to $32.5 million for the same
period in 2016. Net income was $0.5 million, or $0.04 per diluted
share and includes a one-time non-cash charge of $0.5 million
related to the TCJA as discussed later in this release. For the
full year 2016, net income was $7.2 million, or $0.60 per diluted
share. Gross profit margin was 75.9 percent, compared to 81.1
percent for the same period in 2016. Domestic sales were 84.5
percent of total revenue, compared to 88.9 percent for the same
period in 2016. Revenue from sales of our patient vital signs
monitor was $1.7 million for the year ended December 31, 2017
compared to $0.1 million for the full year 2016.
Non-GAAP net income was $2.6 million for the year ended December
31, 2017, which excludes stock compensation expense, net of tax of
$1.6 million and a one-time non-cash charge of $0.5 million
resulting from the TCJA that is discussed later in this release.
Non-GAAP net income for the full year 2016 was $8.4 million.
Non-GAAP earnings per diluted share was $0.22 for the year ended
December 31, 2017, compared to $0.70 for the same period in 2016.
Free cash flow was $2.6 million for the full year 2017, compared to
$8.6 million for the same period in 2016.
As of December 31, 2017, the Company had combined cash and
investments of $26.3 million. During the year ended December 31,
2017, the Company repurchased $1.8 million of its common stock.
“I am very pleased with the strong finish to 2017. Fourth
quarter 2017 revenue was nearly 12% higher than in the fourth
quarter last year and nearly 18% higher than in the third quarter
of 2017. Additionally, I am pleased with our accomplishments this
year, especially in the areas of engineering and regulatory
affairs. Working together, our engineering and regulatory affairs
teams obtained FDA 510(k) clearance of our new MRI compatible
patient vital signs monitor in October 2017. Additionally, the
regulatory affairs team secured quality certifications that are
required to sell our products in various markets including the
European Union and Japan,” said Roger Susi, President and Chief
Executive Officer of the Company.
“From a sales viewpoint, our sales team has made solid progress
executing on our critical care strategy as shown by higher volumes
of multi-pump orders placed by our customers during 2017. With the
highly positive initial response to our revolutionary new patient
monitor and momentum building in IV pump bookings, we look forward
to an exciting 2018 and expect accelerated revenue growth from our
current product offerings through 2019,” said Susi.
Impact of Tax Reform
Net income for the fourth quarter and full year 2017 was
negatively impacted as a result of the Tax Cuts and Jobs Act
(“TCJA”) enacted on December 22, 2017. As a result of the TCJA,
IRADIMED is required to revalue its deferred tax assets and
deferred tax liabilities to account for the future impact of lower
corporate tax rates on these deferred amounts. The reduction in the
U.S. Federal corporate tax rate negatively impacted IRADIMED’s
fourth quarter and full year 2017 earnings but is expected to
positively impact IRADIMED’s future earnings.
As of December 31, 2017, IRADIMED performed a preliminary
analysis to determine the impact of the revaluation of the deferred
tax assets and deferred tax liabilities. Based on this analysis,
IRADIMED recorded a one-time non-cash charge to income tax expense
of $0.5 million. The impact of the TCJA on fourth quarter and full
year earnings was excluded for purposes of calculating non-GAAP
diluted earnings per share for the fourth quarter and full year
2017.
Financial Guidance
On January 22, 2018, the Company provided revenue, GAAP and
non-GAAP diluted earnings guidance for the full year and first
quarter 2018.
For the full year 2018, the Company expects to report revenue of
$29.3 million to $30.0 million, GAAP diluted earnings per share of
$0.22 to $0.27 and non-GAAP diluted earnings per share of $0.33 to
$0.38.
For the first quarter 2018, the Company expects to report
revenue of $6.8 million to $6.9 million, GAAP diluted earnings per
share of $0.04 to $0.05 and non-GAAP diluted earnings per share of
$0.06 to $0.07.
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 2018, 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, February
6, 2018. 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 5097406.
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 magnetic resonance imaging (“MRI”) compatible medical
devices. We are the only known provider of a non-magnetic
intravenous (“IV”) infusion pump system that is 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
system operates dependably 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
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.
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 |
|
|
December 31, 2017 |
|
December 31,2016 |
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and
cash equivalents |
$ |
18,205,976 |
|
$ |
17,713,871 |
|
Accounts
receivable, net |
3,778,929 |
|
3,775,699 |
|
Investments |
8,135,123 |
|
7,965,521 |
|
Inventory, net |
4,210,846 |
|
3,886,590 |
|
Prepaid
expenses and other current assets |
648,881 |
|
362,900 |
|
Prepaid
income taxes |
127,855 |
|
151,820 |
|
Total
current assets |
35,107,610 |
|
33,856,401 |
|
Property and equipment,
net |
1,868,851 |
|
1,456,149 |
|
Intangible assets,
net |
885,502 |
|
918,712 |
|
Deferred income taxes,
net |
950,375 |
|
789,402 |
|
Other assets |
200,196 |
|
173,820 |
|
Total
assets |
$ |
39,012,534 |
|
$ |
37,194,484 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
$ |
656,723 |
|
$ |
1,120,830 |
|
Accrued
payroll and benefits |
1,512,336 |
|
1,035,266 |
|
Other
accrued taxes |
109,502 |
|
119,094 |
|
Warranty
reserve |
60,538 |
|
40,905 |
|
Deferred
revenue |
1,617,571 |
|
1,033,146 |
|
Other
current liability |
108,571 |
|
120,634 |
|
Accrued
income taxes |
12,731 |
|
192,006 |
|
Total
current liabilities |
4,077,972 |
|
3,661,881 |
|
Deferred revenue |
2,003,685 |
|
1,643,478 |
|
Total
liabilities |
6,081,657 |
|
5,305,359 |
|
Stockholders’
equity: |
|
|
|
|
Common
stock |
1,060 |
|
1,072 |
|
Additional paid-in capital |
12,623,181 |
|
12,055,188 |
|
Retained
earnings |
20,355,545 |
|
19,869,714 |
|
Accumulated other comprehensive loss |
(48,909 |
) |
(36,849 |
) |
Total
stockholders’ equity |
32,930,877 |
|
31,889,125 |
|
Total
liabilities and stockholders’ equity |
$ |
39,012,534 |
|
$ |
37,194,484 |
|
|
IRADIMED CORPORATIONCONDENSED
STATEMENTS OF OPERATIONS(Unaudited) |
|
|
Three Months Ended December
31, |
|
Years Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenue |
$ |
6,704,944 |
|
$ |
5,990,273 |
|
$ |
23,081,592 |
|
$ |
32,496,548 |
Cost of revenue |
1,640,197 |
|
1,304,088 |
|
5,569,896 |
|
6,154,836 |
Gross
profit |
5,064,747 |
|
4,686,185 |
|
17,511,696 |
|
26,341,712 |
Operating
expenses: |
|
|
|
|
|
|
|
General
and administrative |
2,152,692 |
|
1,577,849 |
|
9,001,164 |
|
8,795,703 |
Sales and
marketing |
1,562,743 |
|
1,238,900 |
|
5,502,959 |
|
5,278,448 |
Research
and development |
349,559 |
|
364,215 |
|
1,722,564 |
|
1,347,507 |
Total
operating expenses |
4,064,994 |
|
3,180,964 |
|
16,226,687 |
|
15,421,658 |
Income
from operations |
999,753 |
|
1,505,221 |
|
1,285,009 |
|
10,920,054 |
Other income, net |
32,000 |
|
9,588 |
|
111,377 |
|
32,680 |
Income
before provision for income taxes |
1,031,753 |
|
1,514,809 |
|
1,396,386 |
|
10,952,734 |
Provision for income
tax expense |
848,115 |
|
374,010 |
|
896,622 |
|
3,738,189 |
Net income |
$ |
183,638 |
|
$ |
1,140,799 |
|
$ |
499,764 |
|
$ |
7,214,545 |
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.02 |
|
$ |
0.11 |
|
$ |
0.05 |
|
$ |
0.67 |
Diluted |
$ |
0.02 |
|
$ |
0.10 |
|
$ |
0.04 |
|
$ |
0.60 |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
10,563,860 |
|
10,717,020 |
|
10,638,858 |
|
10,818,427 |
Diluted |
11,788,023 |
|
11,724,448 |
|
11,720,316 |
|
11,989,681 |
|
IRADIMED CORPORATIONCONDENSED
STATEMENTS OF CASH FLOWS(Unaudited) |
|
|
Years Ended December 31, |
|
|
2017 |
|
2016 |
|
Operating
activities: |
|
|
|
|
Net
income |
$ |
499,764 |
|
$ |
7,214,545 |
|
Adjustments to reconcile net income to net cash provided
by operating activities: |
|
|
|
|
Change in
allowance for doubtful accounts |
(7,083 |
) |
12,636 |
|
Change in
provision for excess and obsolete inventory |
69,199 |
|
94,186 |
|
Depreciation and amortization |
1,308,738 |
|
955,809 |
|
Write-off
of non-trade accounts receivable |
205,444 |
|
— |
|
Excess
tax benefit on the exercise of stock options |
— |
|
(603,553 |
) |
Stock-based compensation |
2,454,363 |
|
1,841,901 |
|
Loss on
maturities of investments |
6,757 |
|
83,957 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
Accounts
receivable |
(201,591 |
) |
75,297 |
|
Inventory |
(334,113 |
) |
(1,483,361 |
) |
Prepaid
expenses and other current assets |
(1,161,964 |
) |
(702,573 |
) |
Other
assets |
(13,860 |
) |
(117,235 |
) |
Deferred
income taxes, net |
(150,657 |
) |
(570,910 |
) |
Accounts
payable |
(523,449 |
) |
1,113 |
|
Accrued
payroll and benefits |
477,070 |
|
(252,982 |
) |
Other
accrued taxes |
(9,592 |
) |
88,407 |
|
Warranty
reserve |
19,633 |
|
6,824 |
|
Deferred
revenue |
944,632 |
|
1,723,918 |
|
Other
current liability |
(12,063 |
) |
120,634 |
|
Prepaid
income taxes, net of accrued income taxes |
(155,310 |
) |
917,707 |
|
Net cash
provided by operating activities |
3,415,918 |
|
9,406,320 |
|
|
|
|
|
|
Investing
activities: |
|
|
|
|
Purchases
of investments |
(2,693,739 |
) |
(4,992,626 |
) |
Proceeds
from maturities of investments |
2,495,004 |
|
4,575,140 |
|
Purchases
of property and equipment |
(775,574 |
) |
(780,809 |
) |
Capitalized intangible assets |
(49,189 |
) |
(743,486 |
) |
Net cash
used in investing activities |
(1,023,498 |
) |
(1,941,781 |
) |
|
|
|
|
|
Financing
activities: |
|
|
|
|
Proceeds
from stock option exercises |
76,366 |
|
247,133 |
|
Income
tax benefit credited to equity |
— |
|
603,553 |
|
Taxes
paid related to net share settlement of equity awards |
(158,140 |
) |
— |
|
Purchases
of treasury stock |
(1,818,541 |
) |
(9,969,468 |
) |
Net cash
used in financing activities |
(1,900,315 |
) |
(9,118,782 |
) |
Net increase (decrease)
in cash and cash equivalents |
492,105 |
|
(1,654,243 |
) |
Cash and cash
equivalents, beginning of period |
17,713,871 |
|
19,368,114 |
|
Cash and cash
equivalents, end of period |
$ |
18,205,976 |
|
$ |
17,713,871 |
|
|
IRADIMED
CORPORATIONRECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (UNAUDITED) |
|
Non-GAAP Net Income and Diluted
EPS |
|
|
Three Months Ended December
31, |
|
Years Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income |
$ |
183,638 |
|
$ |
1,140,799 |
|
$ |
499,764 |
|
$ |
7,214,545 |
Excluding: |
|
|
|
|
|
|
|
Stock-based compensation expense, net of tax expense |
464,931 |
|
139,562 |
|
1,593,125 |
|
1,214,274 |
Infrequent tax item |
473,899 |
|
— |
|
473,899 |
|
— |
Non-GAAP
net income |
$ |
1,122,468 |
|
$ |
1,280,361 |
|
$ |
2,566,788 |
|
$ |
8,428,819 |
Weighted-average shares
outstanding – diluted |
11,788,023 |
|
11,724,448 |
|
11,720,316 |
|
11,989,681 |
Non-GAAP net income per
share – diluted |
$ |
0.10 |
|
$ |
0.11 |
|
$ |
0.22 |
|
$ |
0.70 |
|
Free Cash Flow |
|
|
Three Months Ended December
31, |
|
Years Ended December 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net cash provided by
operating activities |
$ |
1,401,119 |
|
$ |
2,223,693 |
|
$ |
3,415,918 |
|
$ |
9,406,320 |
Less: |
|
|
|
|
|
|
|
Purchases
of property and equipment |
122,403 |
|
233,722 |
|
775,574 |
|
780,809 |
Free cash
flow |
$ |
1,278,716 |
|
$ |
1,989,971 |
|
$ |
2,640,344 |
|
$ |
8,625,511 |
|
Media Contact:Chris ScottChief Financial OfficerIRADIMED
CORPORATION(407) 677-8022 InvestorRelations@iradimed.com
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