Third Quarter 2014 Financial Results

IRadimed Corporation Announces Third Quarter 2014 Financial Results

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IRADIMED CORPORATION Announces Third Quarter 2014 Financial Results • Reports revenue growth of 54% year-over-year • Reports non-GAAP diluted EPS of $0.03 • Reiterates fourth quarter 2014 operating results Winter Springs, Florida, October 30, 2014 – IRADIMED CORPORATION (NASDAQ:IRMD), the leading provider of non-magnetic intravenous (IV) infusion pump systems that are safe for use during magnetic resonance imaging (MRI) procedures, today announced financial results for the three months ended September 30, 2014. For the third quarter ended September 30, 2014, the Company reported revenue of $3.8 million, an increase of 54% compared to $2.5 million for the third quarter of 2013. Net income was $0.2 million, or $0.02 per diluted share, compared with net income of $0.3 million, or $0.03 per diluted share for the third quarter of 2013. Gross profit was $2.9 million and gross profit margin was 74.8% for the third quarter of 2014, compared to gross profit of $1.8 million and gross profit margin of 73.0% for the third quarter of 2013. Domestic sales were approximately 93% of total revenue for the quarter, compared to 67% for the third quarter 2013. The Company reported non-GAAP income from operations of $0.6 million, up 36% compared to $0.4 million in the third quarter of 2013. Non-GAAP net income was $0.03 per diluted share, which was consistent with the third quarter of 2013. Free cash flow for the quarter increased to $1.0 million compared to $0.1 million for the third quarter of 2013. Roger Susi, Chief Executive Officer and President of IRADIMED, commented, “We continue to see high demand for our pump systems and that is evident in our 54% revenue growth and continued inflow of customer orders. However, our financial results were partially muted as we stopped all pump shipments domestically for the last month of the quarter. Since receiving the FDA warning letter, we have been focused on working diligently to address the FDA’s concerns and preparing our new 510(k) for submission. While in the FDA’s review process, we will focus on operational improvements so that we are more efficient once we resume shipping domestically. As for the team at IRADIMED, I am very proud of everyone. Our employees have remained positive and have collectively shown great confidence in the future of the company.” Financial Guidance The Company reiterated its revenue and earnings guidance for the fourth quarter 2014. The Company expects revenue of approximately $3.0 million for the fourth quarter 2014 and a net loss of between $0.02 and $0.03 per diluted share. Use of non-GAAP Financial Measures The Company believes the use of non-GAAP income from operations, non-GAAP net income and free cash flow 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 income from operations as income from operations excluding stock-based compensation expense. 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 and strengthening our balance sheet. 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 income from operations, 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, 2014. 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 19802174. The conference call will also be available real-time via the internet at http://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 the leading provider of non-magnetic IV infusion pump systems that are safe for use during MRI procedures. Other electromechanical medical devices and pumps contain magnetic and electronic parts that are potentially dangerous to operate in the presence of the powerful magnet that drives an MRI. The company’s MRidium (3850/3860+) IV pump systems have been designed with nonferrous parts, ceramic ultrasonic motors, non-magnetic mobile stands and other special features in order to safely and predictably deliver anesthesia and other IV fluids during various MRI procedures. The Company’s pump solution provides a seamless approach to providing IV fluids 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. For more information please visit www.iradimed.com. MRidium is a trademark of IRADIMED CORPORATION. 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 domestic shipment stoppage for its MRidium pump pursuant to an FDA warning letter requesting us to submit a new 510(k) submission; a securities class-action lawsuit that has been filed against the Company in connection with the FDA warning letter and shipment stoppage; our reliance on a single product that is not currently being shipped domestically; unexpected costs, expenses and diversion of management attention resulting from the FDA warning letter and the related securities class-action lawsuit; potential disruptions in our limited supply chain for our products; actions of regulatory bodies, such as the FDA warning letter, 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 September 30, 2014 December 31, 2013 (unaudited) ASSETS Current assets: Cash and cash equivalents..........................................................................$18,113,859 $2,461,559 Accounts receivable, net ............................................................................ 1,174,103 1,982,083 Investments ................................................................................................ — 246,203 Inventory, net ............................................................................................. 1,639,977 1,340,331 Prepaid expenses and other current assets.................................................. 247,937 119,974 Prepaid income taxes.................................................................................. — 170,496 Deferred income taxes................................................................................ 67,916 65,961 Total current assets................................................................................. 21,243,792 6,386,607 Property and equipment, net .......................................................................... 755,267 327,343 Intangible assets, net ...................................................................................... 259,473 267,024 Deferred income taxes.................................................................................... 131,130 — Other assets .................................................................................................... 21,866 5,897 Total assets.............................................................................................$22,411,528 $6,986,871 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable ....................................................................................... $640,235 $427,474 Accrued payroll and benefits...................................................................... 919,044 655,362 Other accrued taxes.................................................................................... 40,384 80,787 Warranty reserve ........................................................................................ 15,671 12,002 Deferred revenue ........................................................................................ 343,051 207,395 Officer note payable ................................................................................... — 6,333 Accrued income taxes ................................................................................ 141,818 62,971 Total current liabilities........................................................................... 2,100,203 1,452,324 Deferred revenue ............................................................................................ 160,387 57,676 Deferred income taxes.................................................................................... — 54,087 Total liabilities ....................................................................................... 2,260,590 1,564,087 Stockholders’ equity: Preferred stock, $0.0001 par value; 10,000,000 shares authorized; none issued and outstanding as of September 30, 2014 and 1,400,000 issued and outstanding as of December 31, 2013 ................. — 140 Common stock; $0.0001 par value; 90,000,000 shares authorized; 10,718,400 shares issued and outstanding as of September 30, 2014 and 7,000,000 shares issued and outstanding as of December 31, 2013 ................................................................................ 1,072 700 Additional paid-in capital........................................................................... 15,295,438 2,346,137 Retained earnings....................................................................................... 4,854,428 3,074,883 Accumulated other comprehensive income ............................................... — 924 Total stockholders’ equity...................................................................... 20,150,938 5,422,784 Total liabilities and stockholders’ equity ...............................................$22,411,528 $6,986,871 IRADIMED CORPORATION CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2014 2013 2014 2013 Revenue ......................................................................................$3,811,947 $2,479,749 $12,069,553 $7,883,071 Cost of revenue........................................................................... 959,593 669,765 2,485,704 1,904,597 Gross profit.....................................................................2,852,354 1,809,984 9,583,849 5,978,474 Operating expenses: General and administrative.....................................................1,261,872 640,987 3,485,051 1,671,726 Sales and marketing................................................................ 880,711 513,734 2,505,019 1,578,119 Research and development ..................................................... 303,463 299,422 753,267 664,257 Total operating expenses................................................2,446,046 1,454,143 6,743,337 3,914,102 Income from operations.................................................. 406,308 355,841 2,840,512 2,064,372 Other income, net ....................................................................... (8,808) 18,817 6,275 38,216 Income before provision for income taxes..................... 397,500 374,658 2,846,787 2,102,588 Provision for income taxes......................................................... 160,143 113,983 1,067,242 639,978 Net income.................................................................................. $237,357 $260,675 $1,779,545 $1,462,910 Other comprehensive income (loss): Change in fair value of available-for-sale securities, net of tax expense (benefit) of $70 and $(432) for the three months ended September 30, 2014 and 2013, respectively, and $2,063 and $(2,681) for the nine months ended September 30, 2014 and 2013, respectively......................................................................... 130 (803) 3,832 (4,979) Realized gain on available-for-sale securities reclassified to net income, net of tax of $70 and $2,560 for the three and nine months ended September 30, 2014, respectively....................................... (130) — (4,756) — Comprehensive income .............................................................. $237,357 $259,872 $1,778,621 $1,457,931 Net income per share: Basic ................................................................................... $0.02 $0.04 $0.22 $0.21 Diluted ................................................................................ $0.02 $0.03 $0.18 $0.17 Weighted average shares outstanding: Basic ...................................................................................10,112,139 7,000,000 8,048,779 7,000,000 Diluted ................................................................................11,269,358 8,665,599 9,688,602 8,562,704 IRADIMED CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 30, 2014 2013 Operating activities: Net income..........................................................................................$1,779,545 $1,462,910 Adjustments to reconcile net income to net cash provided by operating activities: Provision for excess and obsolete inventory................................... 36,709 — Depreciation and amortization........................................................ 99,638 97,945 Stock-based compensation.............................................................. 503,881 203,939 Changes in operating assets and liabilities: Accounts receivable.................................................................... 807,980 (129,914) Inventory.....................................................................................(336,355) (279,055) Prepaid expenses and other current assets..................................(126,434) (61,276) Other assets................................................................................. (17,498) (4,504) Deferred income taxes................................................................(189,235) (44,940) Accounts payable........................................................................ 212,761 34,349 Accrued payroll and benefits...................................................... 263,682 (92,257) Other accrued taxes..................................................................... (40,403) 34,881 Warranty reserve......................................................................... 3,669 (134) Deferred revenue......................................................................... 238,367 96,298 Accrued income taxes, net of prepaid income taxes................... 249,343 (611,450) Other ........................................................................................... 1,461 — Net cash provided by operating activities...............................3,487,111 706,792 Investing activities: Purchases of investments.................................................................... (3,011) (2,958) Proceeds from sale of investments...................................................... 255,109 — Purchases of property and equipment.................................................(504,502) (121,173) Capitalized intangible assets............................................................... (21,726) (22,711) Net cash used in investing activities.......................................(274,130) (146,842) Financing activities: Repayment of officer note payable..................................................... (6,333) (214,267) Proceeds from the issuance of common stock....................................14,490,000 — Payment of initial public offering costs.............................................. (2,044,348) — Net cash provided by (used in) financing activities................12,439,319 (214,267) Net increase in cash and equivalents ......................................................15,652,300 345,683 Cash and cash equivalents, beginning of period.....................................2,461,559 1,697,306 Cash and cash equivalents, end of period ............................................... $18,113,859 $2,042,989 Supplemental disclosure of cash flow information: Cash paid for income taxes................................................................$.1,004,574 $1,301,500 IRADIMED CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) Non-GAAP Income from Operations Three Month Ended September 30, 2014 2013 Income from operations........................................................ $406,308 $355,841 Excluding: Stock-based compensation expense ................................. 171,599 67,980 Non-GAAP income from operations.................................... $577,907 $423,821 Non-GAAP Net Income and Diluted EPS Three Month Ended September 30, 2014 2013 Net income ............................................................................ $237,357 $260,675 Excluding: Stock-based compensation expense, net of tax expense ... 107,731 41,996 Non-GAAP net income ......................................................... $345,088 $302,671 Weighted average shares outstanding – diluted .................... 11,269,358 8,665,599 Non-GAAP net income per share – diluted .......................... $0.03 $0.03 Free Cash Flow Three Month Ended September 30, 2014 2013 Net cash provided by operating activities............................. $1,239,483 $184,920 Less: Purchases of property and equipment .............................. 286,077 82,986 Free cash flow....................................................................... $953,406 $101,934 Media Contact: Chris Scott Chief Financial Officer IRADIMED CORPORATION (407) 677-8022 InvestorRelations@iradimed.com

Kevin Jirka