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
"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