SAN FRANCISCO, May 07, 2020 (GLOBE NEWSWIRE) -- iRhythm Technologies, Inc. (NASDAQ: IRTC), a leading digital health care solutions company focused on the advancement of cardiac care, today reported financial results for the three months ended March 31, 2020.
First Quarter 2020 Highlights
- Revenue of $63.5 million for the three months ended March 31, 2020
○ 31% increase compared to first quarter revenue reported in 2019
○ 8% sequential growth versus fourth quarter 2019
○ Estimated impact of $2.0 million due to COVID-19 - Gross margin was 74.7%
○ 90 basis point year-over-year contraction over reported gross margin - Enacted numerous measures designed to keep employees and healthcare providers safe, ensure business continuity, reduce operating expense, and preserve cash in response to the ongoing COVID-19 pandemic
“Prior to the onset of the COVID-19 virus and its widespread impact on the healthcare sector, we had an exceptionally strong start to the year. Recognizing the growing threat of the pandemic, our team began to identify and subsequently take the steps necessary to protect our employees and our communities while continuing to deliver our Zio service. We quickly implemented protocols that have allowed us to deliver uninterrupted patient care with our Zio platform, thus ensuring an ongoing opportunity for physicians to continue to diagnose cardiac arrhythmias, as well as provide continuity of care,” said Kevin King, CEO. “The components of our near and mid-term strategy remain sound and we expect these to continue to drive expansion of our business as the recovery takes hold and in a longer-term post-recovery environment.”
First Quarter Financial Results
Revenue for the three months ended March 31, 2020 increased 31% to $63.5 million, from $48.3 million during the same period in 2019. The increase was primarily due to increased salesforce productivity, expansion into new accounts, improved penetration of existing accounts, and the successful launch of Zio AT.
Gross profit for the first quarter of 2020 was $47.5 million, or 74.7% gross margin, compared to $36.6 million, or gross margin of 75.6%, during the same period in 2019.
Operating expenses for the first quarter of 2020 were $56.7 million, compared to $44.8 million for the same period in 2019. The increase in operating expenses was driven by salesforce expansion, organizational support for the company’s network sales strategy, expansion of R&D activities, bad debt expense associated with higher sales volumes and general administrative expenditures.
Net loss for the first quarter of 2020 was $9.1 million, or a loss of $0.34 per share, compared with net loss of $8.3 million, or a loss of $0.34 per share, for the same period in 2019.
Guidance for Full Year 2020
iRhythm withdrew its previously announced annual guidance for 2020 on April 9, 2020. Given the uncertain scope and duration of the COVID-19 pandemic, the company remains unable to accurately estimate the impact of the pandemic on its future operations and financial results.
Webcast and Conference Call Information
iRhythm’s management team will host a conference call today beginning at 1:30 p.m. PT / 4:30 p.m. ET. Investors interested in listening to the conference call may do so by accessing the webcast on the “Investors” section of the company’s website at: www.irhythmtech.com.
About iRhythm Technologies, Inc.
iRhythm is a leading digital health care company redefining the way cardiac arrhythmias are clinically diagnosed. The company combines wearable biosensor devices worn for up to 14 days and cloud-based data analytics with powerful proprietary algorithms that distill data from millions of heartbeats into clinically actionable information. The company believes improvements in arrhythmia detection and characterization have the potential to change clinical management of patients.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These statements include statements regarding financial guidance, the impact of COVID-19 on our business, market opportunity, ability to penetrate the market, operating plans and expectations for economic recovery. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include risks described in the section entitled “Risk Factors” and elsewhere in our filing made with the Securities and Exchange Commission on the Form 10-K on March 2, 2020. These forward-looking statements speak only as of the date hereof and should not be unduly relied upon. iRhythm disclaims any obligation to update these forward-looking statements.
| Investor Relations Contact: | Media Contact: |
| Lynn Pieper Lewis or Leigh Salvo | Saige Smith |
| (415) 937-5404 | (262) 289-7065 |
| investors@irhythmtech.com | irhythm@highwirepr.com |
| IRHYTHM TECHNOLOGIES, INC. Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share and per share data) | |||||||
| March 31, 2020 | December 31, 2019 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 56,514 | $ | 20,462 | |||
| Short-term investments | 65,256 | 120,089 | |||||
| Accounts receivable, net | 24,211 | 23,867 | |||||
| Inventory | 4,227 | 4,037 | |||||
| Prepaid expenses and other current assets | 4,223 | 4,337 | |||||
| Total current assets | 154,431 | 172,792 | |||||
| Long-term investments | — | 8,030 | |||||
| Property and equipment, net | 28,454 | 26,464 | |||||
| Operating lease right-of-use assets | 89,249 | 90,124 | |||||
| Goodwill | 862 | 862 | |||||
| Other assets | 9,944 | 7,940 | |||||
| Total assets | $ | 282,940 | $ | 306,212 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 5,544 | $ | 8,243 | |||
| Accrued liabilities | 23,247 | 32,714 | |||||
| Deferred revenue | 1,115 | 1,251 | |||||
| Debt, current portion | 4,861 | 1,944 | |||||
| Operating lease liabilities, current portion | 8,078 | 7,914 | |||||
| Total current liabilities | 42,845 | 52,066 | |||||
| Debt, noncurrent portion | 30,076 | 32,989 | |||||
| Operating lease liabilities, noncurrent portion | 85,042 | 85,748 | |||||
| Total liabilities | 157,963 | 170,803 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity: | |||||||
| Preferred Stock | — | — | |||||
| Common stock | 25 | 25 | |||||
| Additional paid-in capital | 394,507 | 395,695 | |||||
| Accumulated other comprehensive income (loss) | 364 | 82 | |||||
| Accumulated deficit | (269,919 | ) | (260,393 | ) | |||
| Total stockholders’ equity | 124,977 | 135,409 | |||||
| Total liabilities and stockholders’ equity | $ | 282,940 | $ | 306,212 | |||
| IRHYTHM TECHNOLOGIES, INC. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share data) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Revenue, net | $ | 63,535 | $ | 48,334 | ||||
| Cost of revenue | 16,063 | 11,773 | ||||||
| Gross profit | 47,472 | 36,561 | ||||||
| Operating expenses: | ||||||||
| Research and development | 8,415 | 6,699 | ||||||
| Selling, general and administrative | 48,230 | 38,066 | ||||||
| Total operating expenses | 56,645 | 44,765 | ||||||
| Loss from operations | (9,173 | ) | (8,204 | ) | ||||
| Interest expense | (380 | ) | (409 | ) | ||||
| Other income, net | 505 | 375 | ||||||
| Loss before income taxes | (9,048 | ) | (8,238 | ) | ||||
| Income tax provision | 17 | 12 | ||||||
| Net loss | $ | (9,065 | ) | $ | (8,250 | ) | ||
| Net loss per common share, basic and diluted | $ | (0.34 | ) | $ | (0.34 | ) | ||
| Weighted-average shares, basic and diluted | 26,839,870 | $ | 24,474,308 | |||||