IRADIMED CORPORATION (NASDAQ:IRMD), a leader in the development of
innovative magnetic resonance imaging (“MRI”) medical devices and
the only known provider of a non-magnetic intravenous (“IV”)
infusion pump system and non-magnetic patient vital signs monitor
that is designed for use during MRI procedures, today announced
financial results for the three and nine months ended
September 30, 2018.
For the third quarter ended September 30, 2018, the Company
reported revenue of $7.6 million compared to $5.7 million for the
third quarter 2017. Net income was $2.4 million, or $0.20 per
diluted share, compared to a net income of $0.2 million, or $0.02
per diluted share for the third quarter 2017. Gross profit margin
was 76.0 percent, compared to 77.0 percent for the third quarter
2017. Domestic sales were 80.1 percent of total revenue, compared
to 88.2 percent for the third quarter 2017. Revenue from sales of
our 3880 MRI compatible patient vital signs monitoring system was
$1.7 million for the third quarter 2018 compared to $0.1 million
for the third quarter 2017.
Non-GAAP net income was $1.7 million for the quarter ended
September 30, 2018, which excludes $0.4 million of stock
compensation expense, net of tax and a $1.1 million reduction to
net income for an infrequent tax item related to the excess tax
benefits recognized in the provision for income taxes associated
with the exercise and sale of certain incentive stock options.
Non-GAAP net income for the quarter ended September 30, 2017 was
$0.8 million, which excludes $0.6 million of stock compensation
expense, net of tax. Non-GAAP earnings per diluted share was $0.14,
compared to $0.07 for the third quarter 2017. Free cash flow was
$0.7 million, compared to $1.7 million for the third quarter
2017.
For the nine months ended September 30, 2018, the Company
reported revenue of $22.1 million compared to $16.4 million for the
same period in 2017. Net income was $4.6 million, or $0.38 per
diluted share, compared to a net income of $0.3 million, or $0.03
per diluted share for the same period in 2017. Gross profit margin
was 76.3 percent, compared to 76.0 percent for the same period in
2017. Domestic sales were 80.6 percent of total revenue, compared
to 86.6 percent for the same period in 2017. Revenue from sales of
our 3880 MRI compatible patient vital signs monitoring system was
$4.4 million for the nine months ended September 30, 2018, compared
to $0.8 million for the same period in 2017.
Non-GAAP net income was $4.6 million for the nine months ended
September 30, 2018, which excludes $1.0 million of stock
compensation expense, net of tax and a $1.1 million reduction to
net income for an infrequent tax item related to the excess tax
benefits recognized in the provision for income taxes associated
with the exercise and sale of certain incentive stock options.
Non-GAAP net income for the same period in 2017 was $1.4 million,
which excludes $1.1 million of stock compensation expense, net of
tax. Non-GAAP earnings per diluted share for the nine months ended
September 30, 2018 was $0.38, compared to $0.12 for the same period
in 2017. Free cash flow was $3.7 million for the nine months ended
September 30, 2018, compared to $1.4 million for the same
period in 2017.
As of September 30, 2018, the Company had combined cash and
investments of $31.2 million.
“I am very pleased with these results and with the Company’s
performance overall. For the third quarter 2018, which is typically
our most challenging quarter, we achieved nearly 34% revenue growth
over last year and over 3% from the second quarter this year.
Customer orders for our new patient monitoring system have exceeded
our expectations and our international business has been stronger
than anticipated throughout the year. We expect these trends to
continue for the remainder of 2018 and beyond,” said Roger Susi,
President and Chief Executive Officer of the Company.
Financial Guidance
For the fourth quarter 2018, the Company expects to report
revenue of $7.9 million to $8.1 million, GAAP diluted earnings per
share of $0.09 to $0.10 and non-GAAP diluted earnings per share of
$0.12 to $0.13.
The Company increased its revenue guidance for the full year
2018 and now expects to report revenue of $30.0 million to $30.2
million. The Company previously expected full year 2018 revenue of
$29.5 million to $30.1 million.
The Company also increased its earnings guidance for the full
year 2018 and now expects to report GAAP diluted earnings per share
of $0.47 to $0.48 and non-GAAP diluted earnings per share of $0.50
to $0.51. The Company previously expected full year 2018 GAAP
diluted earnings per share of $0.35 to $0.37 and non-GAAP diluted
earnings per share of $0.45 to $0.47.
The Company’s non-GAAP earnings per share guidance excludes
stock-based compensation expense, net of tax, and an infrequent tax
item, which the Company expects to be approximately $1.4 million
and $(1.1) million, respectively. For the fourth quarter 2018, the
Company’s non-GAAP earnings per share guidance excludes stock-based
compensation expense, net of tax of $0.3 million.
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, 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 9982739.
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 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 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 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;
the Company’s ability to implement successful sales techniques for
existing and future products and 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,
2018 |
|
December 31,2017 |
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
23,699,164 |
|
$ |
18,205,976 |
|
Accounts receivable, net |
5,219,259 |
|
3,778,929 |
|
Investments |
7,487,283 |
|
8,135,123 |
|
Inventory, net |
4,275,409 |
|
4,210,846 |
|
Prepaid expenses and other current assets |
578,178 |
|
648,881 |
|
Prepaid income taxes |
1,409,113 |
|
127,855 |
|
Total current assets |
42,668,406 |
|
35,107,610 |
|
Property and equipment, net |
1,879,619 |
|
1,868,851 |
|
Intangible assets, net |
832,144 |
|
885,502 |
|
Deferred income taxes, net |
1,227,043 |
|
950,375 |
|
Other assets |
204,305 |
|
200,196 |
|
Total assets |
$ |
46,811,517 |
|
$ |
39,012,534 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
970,972 |
|
$ |
656,723 |
|
Accrued payroll and benefits |
1,810,982 |
|
1,512,336 |
|
Other accrued taxes |
86,281 |
|
109,502 |
|
Warranty reserve |
39,951 |
|
60,538 |
|
Deferred revenue |
1,776,953 |
|
1,617,571 |
|
Other current liability |
108,421 |
|
108,571 |
|
Accrued income taxes |
— |
|
12,731 |
|
Total current liabilities |
4,793,560 |
|
4,077,972 |
|
Deferred revenue |
1,925,782 |
|
2,003,685 |
|
Total liabilities |
6,719,342 |
|
6,081,657 |
|
Stockholders’ equity: |
|
|
|
|
Common stock |
1,093 |
|
1,060 |
|
Additional paid-in capital |
15,203,263 |
|
12,623,181 |
|
Retained earnings |
24,962,478 |
|
20,355,545 |
|
Accumulated other comprehensive loss |
(74,659 |
) |
(48,909 |
) |
Total stockholders’ equity |
40,092,175 |
|
32,930,877 |
|
Total liabilities and stockholders’ equity |
$ |
46,811,517 |
|
$ |
39,012,534 |
|
|
|
|
|
|
|
|
IRADIMED
CORPORATIONCONDENSED STATEMENTS OF
OPERATIONS(Unaudited)
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Revenue |
$ |
7,614,655 |
|
$ |
5,689,724 |
|
$ |
22,099,591 |
|
$ |
16,376,648 |
|
Cost of revenue |
1,826,716 |
|
1,307,767 |
|
5,229,141 |
|
3,929,699 |
|
Gross profit |
5,787,939 |
|
4,381,957 |
|
16,870,450 |
|
12,446,949 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
General and administrative |
2,181,839 |
|
2,551,290 |
|
6,563,727 |
|
6,848,472 |
|
Sales and marketing |
1,784,418 |
|
1,251,901 |
|
4,946,398 |
|
3,940,216 |
|
Research and development |
373,583 |
|
382,704 |
|
1,149,397 |
|
1,373,005 |
|
Total operating expenses |
4,339,840 |
|
4,185,895 |
|
12,659,522 |
|
12,161,693 |
|
Income from operations |
1,448,099 |
|
196,062 |
|
4,210,928 |
|
285,256 |
|
Other income, net |
42,555 |
|
28,715 |
|
110,465 |
|
79,377 |
|
Income before provision for income taxes |
1,490,654 |
|
224,777 |
|
4,321,393 |
|
364,633 |
|
Provision for income tax (benefit) expense |
(909,619 |
) |
32,384 |
|
(275,044 |
) |
48,507 |
|
Net income |
$ |
2,400,273 |
|
$ |
192,393 |
|
$ |
4,596,437 |
|
$ |
316,126 |
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
Basic |
$ |
0.22 |
|
$ |
0.02 |
|
$ |
0.43 |
|
$ |
0.03 |
|
Diluted |
$ |
0.20 |
|
$ |
0.02 |
|
$ |
0.38 |
|
$ |
0.03 |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
10,824,421 |
|
10,565,598 |
|
10,695,601 |
|
10,664,132 |
|
Diluted |
12,195,870 |
|
11,643,044 |
|
12,059,694 |
|
11,710,377 |
|
|
|
|
|
|
|
|
|
|
IRADIMED
CORPORATIONCONDENSED STATEMENTS OF CASH
FLOWS(Unaudited)
|
Nine Months Ended
September 30, |
|
|
2018 |
|
2017 |
|
Operating activities: |
|
|
|
|
Net income |
$ |
4,596,437 |
|
$ |
316,126 |
|
Adjustments to reconcile net income to net cash
provided by operating activities: |
|
|
|
|
Change in allowance for doubtful accounts |
26,146 |
|
(9,557 |
) |
Change in provision for excess and obsolete
inventory |
97,901 |
|
38,021 |
|
Depreciation and amortization |
844,885 |
|
970,705 |
|
Write-off of non-trade accounts receivable |
— |
|
205,444 |
|
Stock-based compensation |
1,361,964 |
|
1,735,078 |
|
Deferred income taxes, net |
(272,056 |
) |
(769,615 |
) |
Loss on maturities of investments |
22,486 |
|
6,757 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
(1,466,476 |
) |
71,380 |
|
Inventory |
(257,884 |
) |
(273,121 |
) |
Prepaid expenses and other current assets |
(430,889 |
) |
(576,504 |
) |
Other assets |
(19,833 |
) |
(6,714 |
) |
Accounts payable |
203,918 |
|
(334,051 |
) |
Accrued payroll and benefits |
298,646 |
|
403,151 |
|
Other accrued taxes |
(23,221 |
) |
(50,847 |
) |
Warranty reserve |
(20,587 |
) |
7,608 |
|
Deferred revenue |
166,344 |
|
632,341 |
|
Other current liability |
(150 |
) |
— |
|
Prepaid income taxes, net of accrued income
taxes |
(1,293,989 |
) |
(351,403 |
) |
Net cash provided by operating activities |
3,833,642 |
|
2,014,799 |
|
Investing activities: |
|
|
|
|
Purchases of investments |
(1,124,512 |
) |
(1,321,257 |
) |
Proceeds from maturities of investments |
1,730,000 |
|
2,495,004 |
|
Purchases of property and equipment |
(150,609 |
) |
(653,171 |
) |
Capitalized intangible assets |
(13,484 |
) |
(28,800 |
) |
Net cash provided by investing activities |
441,395 |
|
491,776 |
|
Financing activities: |
|
|
|
|
Proceeds from exercises of stock options and
underwriters’ warrants |
1,234,565 |
|
49,460 |
|
Taxes paid related to net share settlement of
equity awards |
(16,414 |
) |
(45,059 |
) |
Purchases of treasury stock |
— |
|
(1,818,542 |
) |
Net cash provided by (used in) financing
activities |
1,218,151 |
|
(1,814,141 |
) |
Net increase in cash and cash equivalents |
5,493,188 |
|
692,434 |
|
Cash and cash equivalents, beginning of period |
18,205,976 |
|
17,713,871 |
|
Cash and cash equivalents, end of period |
$ |
23,699,164 |
|
$ |
18,406,305 |
|
|
|
|
|
|
|
|
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, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Net income |
$ |
2,400,273 |
|
$ |
192,393 |
|
$ |
4,596,437 |
|
$ |
316,126 |
|
Excluding: |
|
|
|
|
|
|
|
|
Stock-based compensation expense, net of tax
expense |
378,623 |
|
582,974 |
|
1,024,785 |
|
1,128,195 |
|
Infrequent tax item* |
(1,053,048 |
) |
— |
|
(1,053,048 |
) |
— |
|
Non-GAAP net income |
$ |
1,725,848 |
|
$ |
775,367 |
|
$ |
4,568,174 |
|
$ |
1,444,321 |
|
Weighted-average shares outstanding – diluted |
12,195,870 |
|
11,643,044 |
|
12,059,694 |
|
11,710,377 |
|
Non-GAAP net income per share – diluted |
$ |
0.14 |
|
$ |
0.07 |
|
$ |
0.38 |
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*The infrequent tax item is related to the excess tax benefits
recognized in the provision for income taxes associated with the
exercise and sale of certain incentive stock options.
Free Cash Flow
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Net cash provided by operating activities |
$ |
727,933 |
|
$ |
1,907,910 |
|
$ |
3,833,642 |
|
$ |
2,014,799 |
|
Less: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
45,281 |
|
241,971 |
|
150,609 |
|
653,171 |
|
Free cash flow |
$ |
682,652 |
|
$ |
1,665,939 |
|
$ |
3,683,033 |
|
$ |
1,361,628 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media Contact:Chris ScottChief Financial OfficerIRADIMED
CORPORATION(407) 677-8022 InvestorRelations@iradimed.com
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