Fourth Quarter 2014 Financial Results

IRadimed Corporation Announces Fourth Quarter 2014 Financial Results

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IRADIMED CORPORATION Announces Fourth Quarter 2014 Financial Results • Reports fourth quarter 2014 non-GAAP diluted EPS of $0.03 • Expects full year 2015 revenue growth of 79% to 85% Winter Springs, Florida, February 5, 2015 – IRADIMED CORPORATION (NASDAQ:IRMD), the only provider of non-magnetic intravenous (IV) infusion pump systems that are designed to be safe for use during magnetic resonance imaging (MRI) procedures, today announced financial results for the three months and full year ended December 31, 2014. On September 2, 2014, the Company announced that it had received a warning letter from the FDA and immediately ceased domestic shipments of all MRI compatible IV infusion pumps. On December 22, 2014, the Company announced that it had resumed domestic shipments of their MRI compatible IV pumps. The domestic stop ship negatively impacted the fourth quarter 2014 financial results. For the fourth quarter ended December 31, 2014, the Company reported revenue of $3.6 million, an increase of 4% compared to $3.5 million for the fourth quarter of 2013. Net income was $0.3 million, or $0.02 per diluted share, compared with net income of $0.5 million, or $0.05 per diluted share for the fourth quarter of 2013. Gross profit margin was 74.4% for the fourth quarter of 2014, compared to 72.3% for the fourth quarter of 2013. Domestic sales were approximately 32% of total revenue for the quarter, compared to 76% for the fourth quarter 2013. The Company reported non-GAAP income from operations of $0.4 million, compared to $0.8 million in the fourth quarter of 2013. Non-GAAP net income was $0.03 per diluted share, compared to $0.06 in the fourth quarter 2013. Free cash flow for the quarter was $(1.0) million, compared to $0.7 million for the fourth quarter of 2013. For the full year ended December 31, 2014, the Company reported revenue of $15.6 million, an increase of 38% compared to $11.3 million for the prior year. Net income was $2.1 million, or $0.20 per diluted share, compared with net income of $1.9 million, or $0.22 per diluted share for the prior year. Gross profit margin was 78.3% for the year ended December 31, 2014, compared to 74.8% for the prior year. Domestic sales were approximately 73% of total revenue for 2014, compared to 71% for 2013. The Company reported non-GAAP income from operations of $3.8 million for the year ended December 31, 2014, compared to $3.1 million in the prior year. Non-GAAP net income was $0.25 per diluted share, compared to $0.24 in 2013. Free cash flow for 2014 was $2.0 million, compared to $1.3 million for 2013. “Our fourth quarter, although challenging due to our compliance with the FDA requested distribution hold, ended on a positive note as we resumed domestic shipments of our pump systems, and just last week, we announced that we resumed shipments of our Dose Error Reduction System option. During the preparation of our recent 510(k) submission, we enhanced our production processes resulting in additional efficiencies, which we expect will drive higher margins. On the sales front, we continue to see a high level of both product interest and orders from customers.” said Roger Susi, President and Chief Executive Officer of the Company. “I am amazed with and appreciate our customers for the loyalty they have shown as we have only had one order cancelled resulting from the domestic ship hold, and that customer has just recently requested a new quote for our products,” continued Susi. Financial Guidance The Company reiterated its revenue and earnings guidance for the first quarter and full year 2015. For the first quarter 2015, the Company expects revenue of approximately $6.8 million to $7.0 million and non-GAAP diluted EPS of $0.11 to $0.13. For the full year 2015, the Company expects revenue of $28.0 million to $29.0 million and non-GAAP diluted EPS of $0.50 to $0.52. 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, February 5, 2015. 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 72099787. The conference call will also be available real-time via the internet at http://www.iradimed.com/enus/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 only provider of non-magnetic IV infusion pump systems that are designed to be 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 non-ferrous 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 ability to receive clearance of its 510(k) submission, additional actions by or requests from the FDA (including a request to cease domestic distribution of products) and unanticipated costs or delays associated with resolution of these matters; 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; 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 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 December 31, 2014 December 31, 2013 (unaudited) ASSETS Current assets: Cash and cash equivalents.......................................................................... $9,454,150 $2,461,559 Accounts receivable, net ............................................................................ 1,960,214 1,982,083 Investments ................................................................................................ 7,913,793 246,203 Inventory, net ............................................................................................. 2,125,838 1,340,331 Prepaid expenses and other current assets.................................................. 276,540 119,974 Prepaid income taxes.................................................................................. 320,941 170,496 Deferred income taxes................................................................................ 116,339 65,961 Total current assets................................................................................. 22,167,815 6,386,607 Property and equipment, net .......................................................................... 794,835 327,343 Intangible assets, net ...................................................................................... 250,836 267,024 Deferred income taxes.................................................................................... 76,557 — Other assets .................................................................................................... 19,676 5,897 Total assets.............................................................................................$23,309,719 $6,986,871 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable ....................................................................................... $629,167 $427,474 Accrued payroll and benefits...................................................................... 1,244,898 655,362 Other accrued taxes.................................................................................... 65,790 80,787 Warranty reserve ........................................................................................ 27,925 12,002 Deferred revenue ........................................................................................ 308,341 207,395 Officer note payable ................................................................................... — 6,333 Accrued income taxes ................................................................................ — 62,971 Total current liabilities........................................................................... 2,276,121 1,452,324 Deferred revenue ............................................................................................ 142,902 57,676 Deferred income taxes.................................................................................... — 54,087 Total liabilities ....................................................................................... 2,419,023 1,564,087 Stockholders’ equity: Preferred stock ........................................................................................... — 140 Common stock ........................................................................................... 1,082 700 Additional paid-in capital........................................................................... 15,785,838 2,346,137 Retained earnings....................................................................................... 5,125,249 3,074,883 Accumulated other comprehensive income ............................................... (21,473) 924 Total stockholders’ equity...................................................................... 20,890,696 5,422,784 Total liabilities and stockholders’ equity ...............................................$23,309,719 $6,986,871 IRADIMED CORPORATION CONDENSED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended December 31, For the Years Ended December 31, 2014 2013 2014 2013 Revenue ...................................................................................... $3,583,503 $3,457,027 $15,653,057 $11,340,097 Cost of revenue........................................................................... 918,696 957,818 3,404,400 2,853,385 Gross profit..................................................................... 2,664,807 2,499,209 12,248,657 8,486,712 Operating expenses: General and administrative..................................................... 1,331,922 741,549 4,816,973 2,392,305 Sales and marketing................................................................ 792,101 719,190 3,297,120 2,297,309 Research and development ..................................................... 315,407 345,615 1,068,674 1,009,872 Total operating expenses................................................ 2,439,430 1,806,354 9,182,767 5,699,486 Income from operations.................................................. 225,377 692,855 3,065,890 2,787,226 Other income, net ....................................................................... (54,824) (11,674) (48,549) (3,458) Income before provision for income taxes..................... 170,553 681,181 3,017,341 2,783,768 Provision for income taxes......................................................... (100,267) 207,200 966,975 846,878 Net income.................................................................................. $270,820 $473,981 $2,050,366 $1,936,890 Net income per share: Basic ................................................................................... $0.03 $0.07 $0.23 $0.28 Diluted ................................................................................ $0.02 $0.05 $0.20 $0.22 Weighted average shares outstanding: Basic ................................................................................... 10,804,854 7,000,000 8,743,461 7,000,000 Diluted ................................................................................ 11,737,104 8,839,521 10,219,143 8,624,314 IRADIMED CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Years Ended December 31, 2014 2013 Operating activities: Net income ..........................................................................................$2,050,366 $1,936,890 Adjustments to reconcile net income to net cash provided by operating activities: Provision for excess and obsolete inventory................................... 62,069 — Depreciation and amortization ........................................................ 149,056 139,040 Stock-based compensation .............................................................. 724,063 271,919 Changes in operating assets and liabilities: Accounts receivable .................................................................... 21,869 (396,589) Inventory ..................................................................................... (847,576) 45,655 Prepaid expenses and other current assets .................................. (154,912) (40,819) Other assets ................................................................................. (15,433) (4,594) Deferred income taxes................................................................. (167,305) (48,797) Accounts payable ........................................................................ 201,693 19,050 Accrued payroll and benefits ...................................................... 589,536 114,109 Other accrued taxes..................................................................... (14,997) 60,466 Warranty reserve ......................................................................... 15,923 (134) Deferred revenue......................................................................... 186,172 (126,985) Accrued income taxes, net of prepaid income taxes................... (213,416) (494,814) Other............................................................................................ (1,388) — Net cash provided by operating activities............................... 2,585,720 1,474,397 Investing activities: Purchases of investments ....................................................................(7,951,497) (4,986) Proceeds from sale of investments...................................................... 255,109 — Purchases of property and equipment ................................................. (583,977) (163,175) Capitalized intangible assets ............................................................... (22,311) (28,586) Net cash used in investing activities .......................................(8,302,676) (196,747) Financing activities: Proceeds from stock option exercises................................................. 105,000 — Income tax benefits credited to equity ................................................ 165,228 — Repayment of officer note payable ..................................................... (6,333) (513,397) 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................12,709,547 (513,397) Net increase in cash and equivalents....................................................... 6,992,591 764,253 Cash and cash equivalents, beginning of period ..................................... 2,461,559 1,697,306 Cash and cash equivalents, end of period ...............................................$9,454,150 $2,461,559 Supplemental disclosure of cash flow information: Cash paid for income taxes ................................................................. $1,182,430 $1,390,049 IRADIMED CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) Non-GAAP Income from Operations Three Months Ended December 31, Years Ended December 31, 2014 2013 2014 2013 Income from operations ........................................................ $ 225,377 $ 692,855 $ 3,065,890 $ 2,787,226 Excluding: Stock-based compensation expense................................ 220,182.... 67,980 724,063 271,919 Non-GAAP income from operations................................ $ 445,559..... $ 760,835 $ 3,789,953 $ 3,059,145 Non-GAAP Net Income and Diluted EPS Three Months Ended December 31, Years Ended December 31, 2014 2013 2014 2013 Net income............................................................................ $ 270,820 $ 473,981 $ 2,050,366 $ 1,936,890 Excluding: Stock-based compensation expense, net of tax expense......................................................... 139,795 41,997 459,131 166,618 Non-GAAP net income from operations ......................................................................... $ 410,615 $ 515,978 $ 2,509,497 $ 2,103,508 Weighted average shares outstanding – diluted ............................................................................ 11,737,104 8,839,521 10,219,143 8,624,314 Non-GAAP net income per share – diluted ............................................................................... $ 0.03 $ 0.06 $ 0.25 $ 0.24 Free Cash Flow Three Months Ended December 31, Years Ended December 31, 2014 2013 2014 2013 Net cash provided by operating activities................................................................ $ (901,391 ............) $ 767,605 $ 2,585,720 $ 1,474,397 Less: Purchases of property and equipment ..................................................................... 79,475 42,002 583,977 163,175 Free cash flow....................................................................... $ (980,866) $ 725,603 $ 2,001,743 $ 1,311,222 Media Contact: Chris Scott Chief Financial Officer IRADIMED CORPORATION (407) 677-8022 InvestorRelations@iradimed.com

Kevin Jirka