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IRADIMED CORPORATION Announces Fourth Quarter 2018 Financial Results


  • Reports fourth quarter 2018 revenue of $8.3 million
  • Reports fourth quarter 2018 GAAP diluted EPS of $0.14 and non-GAAP diluted EPS of $0.16
  • Announces 2019 full year and first quarter financial guidance

WINTER SPRINGS, Fla., Feb. 06, 2019 (GLOBE NEWSWIRE) -- IRADIMED CORPORATION (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 monitoring system that are designed for use during MRI procedures, today announced financial results for the three months and year ended December 31, 2018.

Financial Results

For the fourth quarter ended December 31, 2018, the Company reported revenue of $8.3 million compared to $6.7 million for the fourth quarter 2017. Net income was $1.7 million, or $0.14 per diluted share, compared to net income of $0.2 million, or $0.02 per diluted share for the fourth quarter 2017. Net income for the three months ended December 31, 2017 includes a one-time charge of $0.5 million related to the Tax Cuts and Jobs Act (“TCJA”). Gross profit margin was 76.2 percent, compared to 75.5 percent for the fourth quarter 2017. Domestic sales were 80.8 percent of total revenue, compared to 79.4 percent for the fourth quarter 2017. Revenue from sales of our 3880 MRI compatible patient vital signs monitoring system was $2.1 million for the fourth quarter 2018 compared to $0.9 million for the fourth quarter 2017.

Non-GAAP net income was $2.0 million for the quarter ended December 31, 2018, which excludes $0.3 million of stock compensation expense, net of tax. Non-GAAP net income for the quarter ended December 31, 2017 was $1.1 million, which excludes $0.5 million of stock compensation expense, net of tax and a one-time charge of $0.5 million resulting from the TCJA. Non-GAAP earnings per diluted share was $0.16, compared to $0.10 for the fourth quarter 2017. Free cash flow was $3.5 million, compared to $1.3 million for the fourth quarter 2017.

For the year ended December 31, 2018, the Company reported revenue of $30.4 million compared to $23.1 million for the same period in 2017. Net income was $6.3 million, or $0.52 per diluted share compared to net income of $0.5 million, or $0.04 per diluted share for the year ended December 31, 2017. Net income for the year ended December 31, 2017 includes a one-time charge of $0.5 million related to the TCJA. Gross profit margin was 76.3 percent, compared to 75.9 percent for the same period in 2017. Domestic sales were 80.5 percent of total revenue, compared to 84.5 percent for the same period in 2017. Revenue from sales of our 3880 MRI compatible patient vital signs monitoring system was $6.5 million for the year ended December 31, 2018, compared to $1.7 million for the same period in 2017.

Non-GAAP net income was $6.6 million for the year ended December 31, 2018, which excludes $1.3 million of stock compensation expense, net of tax and a $1.0 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 year ended December 31, 2017 was $2.6 million, which excludes $1.6 million of stock compensation expense, net of tax and a one-time charge of $0.5 million resulting from the TCJA. Non-GAAP earnings per diluted share for the year ended December 31, 2018 was $0.54, compared to $0.22 for the same period in 2017. Free cash flow was $7.1 million for the year ended December 31, 2018, compared to $2.6 million for the same period in 2017.

As of December 31, 2018, the Company had combined cash and investments of $34.4 million.

“Revenue for the fourth quarter exceeded our expectations and increased over 24% from the fourth quarter last year. On an annual basis, revenue increased 32%, with the strongest growth coming from sales of our patient vital signs monitoring systems. Earnings also exceeded our expectations and is due to the collective efforts of everyone at IRADIMED. I am very pleased with these results and the Company’s performance this year. As I look forward to 2019, I expect to continue to build on this strong performance,” said Roger Susi, President and Chief Executive Officer of the Company.

Financial Guidance

This financial guidance includes the expected impact of our CE Mark expiration as announced on January 22, 2019.

For the full year 2019, the Company expects to report revenue of $38.5 million to $39.5 million, GAAP diluted earnings per share of $0.60 to $0.64 and non-GAAP diluted earnings per share of $0.69 to $0.73.

For the first quarter 2019, the Company expects to report revenue of $8.3 million to $8.5 million, GAAP diluted earnings per share of $0.10 to $0.11 and non-GAAP diluted earnings per share of $0.12 to $0.13.

The Company’s non-GAAP earnings per share guidance excludes stock-based compensation expense, net of tax, which the Company expects to be approximately $1.2 million for the year ending December 31, 2019. For the first quarter 2019, 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, February 6, 2019. 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 4098614.

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 an EC Certificate or CE Mark for our existing products, 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 CORPORATION
CONDENSED BALANCE SHEETS
 
  December 31,
2018
  December 31,
2017
 
  (unaudited)      
ASSETS        
Current assets:        
Cash and cash equivalents $ 28,027,688   $ 18,205,976  
Accounts receivable, net 4,209,992   3,778,929  
Investments 6,349,915   8,135,123  
Inventory, net 4,059,443   4,210,846  
Prepaid expenses and other current assets 526,787   648,881  
Prepaid income taxes 1,367,892   127,855  
Total current assets 44,541,717   35,107,610  
Property and equipment, net 1,869,561   1,868,851  
Intangible assets, net 832,519   885,502  
Deferred income taxes, net 1,088,702   950,375  
Other assets 109,759   200,196  
Total assets $ 48,442,258   $ 39,012,534  
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable $ 772,470   $ 656,723  
Accrued payroll and benefits 1,802,321   1,512,336  
Other accrued taxes 133,000   109,502  
Warranty reserve 74,524   60,538  
Deferred revenue 1,798,784   1,617,571  
Other current liability 108,421   108,571  
Accrued income taxes   12,731  
Total current liabilities 4,689,520   4,077,972  
Deferred revenue 1,807,005   2,003,685  
Total liabilities 6,496,525   6,081,657  
Stockholders’ equity:        
Common stock 1,099   1,060  
Additional paid-in capital 15,317,335   12,623,181  
Retained earnings 26,669,491   20,355,545  
Accumulated other comprehensive loss (42,192 ) (48,909 )
Total stockholders’ equity 41,945,733   32,930,877  
Total liabilities and stockholders’ equity $ 48,442,258   $ 39,012,534  


IRADIMED CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
 
  Three Months Ended
December 31,
  Years Ended
December 31,
 
  2018   2017   2018   2017  
Revenue $ 8,339,392   $ 6,704,944   $ 30,438,983   $ 23,081,592  
Cost of revenue 1,982,492   1,640,197   7,211,633   5,569,896  
Gross profit 6,356,900   5,064,747   23,227,350   17,511,696  
Operating expenses:                
General and administrative 2,147,155   2,152,692   8,710,882   9,001,164  
Sales and marketing 2,049,188   1,562,743   6,995,586   5,502,959  
Research and development 367,715   349,559   1,517,112   1,722,564  
Total operating expenses 4,564,058   4,064,994   17,223,580   16,226,687  
Income from operations 1,792,842   999,753   6,003,770   1,285,009  
Other income, net 83,072   32,000   193,537   111,377  
Income before provision for income taxes 1,875,914   1,031,753   6,197,307   1,396,386  
Provision for income tax expense (benefit) 168,901   848,115   (106,143 ) 896,622  
Net income $ 1,707,013   $ 183,638   $ 6,303,450   $ 499,764  
                 
Net income per share:                
Basic $ 0.16   $ 0.02   $ 0.59   $ 0.05  
Diluted $ 0.14   $ 0.02   $ 0.52   $ 0.04  
Weighted average shares outstanding:                
Basic 10,946,149   10,563,860   10,758,752   10,638,858  
Diluted 12,224,505   11,788,023   12,110,117   11,720,316  


IRADIMED CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
 
  Years Ended
December 31,
 
  2018   2017  
Operating activities:        
Net income $ 6,303,450   $ 499,764  
Adjustments to reconcile net income to net cash provided by operating activities:        
Change in allowance for doubtful accounts 15,833   (7,083 )
Change in provision for excess and obsolete inventory 111,790   69,199  
Depreciation and amortization 1,105,003   1,308,738  
Write-off of non-trade accounts receivable   205,444  
Stock-based compensation 1,764,319   2,454,363  
Deferred income taxes, net (144,430 ) (150,657 )
Loss on maturities of investments 28,036   6,757  
Changes in operating assets and liabilities:        
Accounts receivable (446,896 ) (201,591 )
Inventory (121,591 ) (334,113 )
Prepaid expenses and other current assets (407,461 ) (1,161,964 )
Other assets 65,135   (13,860 )
Accounts payable 34,161   (523,449 )
Accrued payroll and benefits 289,985   477,070  
Other accrued taxes 23,498   (9,592 )
Warranty reserve 13,986   19,633  
Deferred revenue (5,885 ) 944,632  
Other current liability (150 ) (12,063 )
Prepaid income taxes, net of accrued income taxes (1,252,768 ) (155,310 )
Net cash provided by operating activities 7,376,015   3,415,918  
Investing activities:        
Purchases of investments (1,124,512 ) (2,693,739 )
Proceeds from maturities of investments 2,905,000   2,495,004  
Purchases of property and equipment (228,315 ) (775,574 )
Capitalized intangible assets (36,350 ) (49,189 )
Net cash provided by (used in) investing activities 1,515,823   (1,023,498 )
Financing activities:        
Proceeds from exercises of stock options and underwriters’ warrants 1,239,435   76,366  
Taxes paid related to net share settlement of equity awards (309,561 ) (158,140 )
Purchases of treasury stock   (1,818,541 )
Net cash provided by (used in) financing activities 929,874   (1,900,315 )
Net increase in cash and cash equivalents 9,821,712   492,105  
Cash and cash equivalents, beginning of period 18,205,976   17,713,871  
Cash and cash equivalents, end of period $ 28,027,688   $ 18,205,976  


IRADIMED CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
 
Non-GAAP Net Income and Diluted EPS
 
  Three Months Ended
December 31,
  Years Ended
December 31,
 
  2018   2017   2018   2017  
Net income $ 1,707,013   $ 183,638   $ 6,303,450   $ 499,764  
Excluding:                
Stock-based compensation expense, net of tax expense 302,531   464,931   1,327,316   1,593,125  
Infrequent tax item   473,899   (1,053,048 ) 473,899  
Non-GAAP net income $ 2,009,544   $ 1,122,468   $ 6,577,718   $ 2,566,788  
Weighted-average shares outstanding – diluted 12,224,505   11,788,023   12,110,117   11,720,316  
Non-GAAP net income per share – diluted $ 0.16   $ 0.10   $ 0.54   $ 0.22  


Free Cash Flow
 
  Three Months Ended
December 31,
  Years Ended
December 31,
 
  2018   2017   2018   2017  
Net cash provided by operating activities $ 3,542,373   $ 1,401,119   $ 7,376,015   $ 3,415,918  
Less:                
Purchases of property and equipment 77,706   122,403   228,315   775,574  
Free cash flow $ 3,464,667   $ 1,278,716   $ 7,147,700   $ 2,640,344  
 

Media Contact:
Chris Scott
Chief Financial Officer
IRADIMED CORPORATION
(407) 677-8022
InvestorRelations@iradimed.com