Back

iRhythm Technologies Announces Fourth Quarter and 2016 Financial Results and Provides Full Year 2017 Financial Outlook

SAN FRANCISCO, Feb. 15, 2017 (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 and full year ended December 31, 2016.

2016 Highlights

  • Revenue for the year ended December 31, 2016 increased 77% to $64.1 million over 2015
  • Gross margins for the full year 2016 were 67.4%, a year-over-year improvement of 810 basis points
  • Completed initial public offering on October 20, receiving net proceeds of approximately $111 million
  • Payor coverage for the Company's Zio Service reached more than 290 million U.S. patients, with contracts and in-network arrangements of approximately 200 million
  • Zio Service provided to over 700,000 patients, accumulating more than 150 million hours of curated heartbeat data within the Company’s data repository       

"Our 2016 performance was marked by strong growth and operational execution across all areas of our business. We are pleased with the impact we have already made on changing how patients with cardiac arrhythmias are monitored, diagnosed and treated,” said Kevin King, CEO. "We believe the expanding adoption of our Zio Service is reshaping the market with a differentiated and competitive platform supported by broad payor coverage. Our goal is to be the leading provider of ambulatory monitoring for patients at risk for arrhythmias. Looking ahead, we plan to further extend the market for our Zio Service by growing our sales organization, expanding the number of contracted lives, and by addressing additional patient populations with unmet clinical needs.”

Fourth Quarter Financial Results

Revenue for the three months ended December 31, 2016 increased 72% to $18.7 million, from $10.9 million during the same period of the prior year. The increase in revenue was due primarily to increased volume of the Zio Service.  

Gross profit for the fourth quarter of 2016 was $12.9 million, or 69.1% gross margin, up from $6.7 million, or 61.7% gross margin, in the same period of the prior year.

Operating expenses for the fourth quarter of 2016 were $17.3 million, an increase of 27% compared to the same period of the prior year. The increase in operating expenses was driven primarily by selling, general and administrative expenses used to expand the company’s sales force and support the growth in operations.

Loss from operations for the fourth quarter of 2016 was $4.3 million, compared to $6.9 million for the same period of the prior year.

Full Year 2016 Financial Results

Revenue for the year ended December 31, 2016 increased 77% to $64.1 million, from $36.1 million in 2015. The increase in revenue was due primarily to increased volume of the Zio Service.  

Gross profit for the year was $43.2 million, or 67.4% gross margin, up from $21.4 million, or 59.3% gross margin, in the same period of the prior year.

Operating expenses for 2016 were $58.8 million, an increase of 37% compared to the prior year. The increase in operating expenses was driven primarily by selling, general and administrative expenses used to expand the company’s sales force and support the growth in operations.

Loss from operations for 2016 was $15.6 million, compared to $21.6 million from the prior year.

Cash, cash equivalents, short-term investments and long-term investments were $117.0 million as of December 31, 2016.  In October 2016, iRhythm completed an initial public offering, raising net proceeds of approximately $111 million, after deducting underwriting discounts and commissions and offering expenses.

Guidance for Full Year 2017

iRhythm projects revenue for the full year 2017 to range from $85 to $90 million, gross margins for the full year 2017 to range from 69% to 71% and operating expenses for the full year 2017 to be between $82 and $86 million.

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 dialing (844) 348-0016 for domestic callers or (213) 358-0876 for international callers, and referencing Conference ID: 58707805 or from the webcast on the “Investor Relations” section of the company’s website at: www.irhythmtech.com.

About iRhythm Technologies, Inc. 
iRhythm is a commercial-stage 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. 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 third quarter Form 10-Q filing made with the Securities and Exchange Commission on December 5, 2016. 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.

 
IRHYTHM TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
 
    December 31, 2016   December 31, 2015
Assets        
Current assets:        
Cash and cash equivalents   $ 51,643     $ 25,208  
Short-term investments     54,407        
Accounts receivable, net     9,406       5,577  
Inventory     1,390       1,145  
Prepaid expenses and other current assets     1,671       808  
Restricted cash     91       91  
Total current assets     118,608       32,829  
Property and equipment, net     4,653       2,036  
Goodwill     862       862  
Other assets     3,052       2,145  
Investments, long-term     10,981        
Total assets   $ 138,156     $ 37,872  
Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit)        
Current liabilities:        
Accounts payable   $ 2,103     $ 1,459  
Accrued liabilities     10,165       6,699  
Deferred revenue     947       506  
Accrued interest, current portion           111  
Total current liabilities     13,215       8,775  
Debt     32,227       30,552  
Deferred rent, noncurrent portion     26       28  
Accrued interest, net of current portion     126       96  
Preferred stock warrant liabilities           2,949  
Total liabilities     45,594       42,400  
Convertible preferred stock           97,096  
Stockholders’ equity (deficit):        
Common stock     22       1  
Additional paid-in capital     219,718       4,641  
Accumulated other comprehensive income     (9 )      
Accumulated deficit     (127,169 )     (106,266 )
Total stockholders’ equity (deficit)     92,562       (101,624 )
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)   $ 138,156     $ 37,872  
         


IRHYTHM TECHNOLOGIES, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
(In thousands, except share and per share data)
 
    Three Months Ended
December 31,
  Twelve Months Ended
December 31,
      2016       2015       2016       2015  
Revenue   $ 18,704     $ 10,854     $ 64,072     $ 36,140  
Cost of revenue     5,786       4,161       20,883       14,700  
Gross profit     12,918       6,693       43,189       21,440  
Operating expenses:                
Research and development     2,303       1,800       7,150       6,349  
Selling, general and administrative     14,963       11,787       51,621       36,722  
Total operating expenses     17,266       13,587       58,771       43,071  
Loss from operations     (4,348 )     (6,894 )     (15,582 )     (21,631 )
Interest expense     (827 )     (582 )     (3,248 )     (1,059 )
Other expense, net     (1,091 )     (226 )     (2,073 )     (109 )
Net loss and comprehensive loss   $ (6,266 )   $ (7,702 )   $ (20,903 )   $ (22,799 )
Net loss per common share, basic and diluted   $ (0.37 )   $ (5.46 )   $ (3.95 )   $ (16.57 )
Weighted-average shares used to compute net loss per common share,
  basic and diluted
    16,756,608       1,410,942       5,285,847       1,376,106  
                 

 

Investor Relations Contact:
Lynn Pieper Lewis or Leigh Salvo
(415) 937-5404
investors@irhythmtech.com

Media Contact
Aaron Murphy 
(415) 229-3331
media@irhythmtech.com

Primary Logo