UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT Pursuant

to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): February 6, 2020

 

Iradimed Corporation

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation)

 

001-36534 73-1408526
(Commission File Number) (IRS Employer Identification No.)

 

1025 Willa Springs Dr., Winter Springs, FL 32708
(Address of principal executive offices) (Zip Code)

 

(407) 677-8022

(Registrant’s telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨       Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨       Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:   Trading Symbol   Name of each exchange on which registered:
Common stock, par value $0.0001   IRMD   NASDAQ Capital Market

 

 

 

 

 

 

Item 2.02Results of Operations and Financial Condition.

 

On February 6, 2020, iRadimed Corporation (the “Company”) issued a press release (the “Press Release”) announcing its financial results for the fourth quarter ended December 31, 2019. A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section. Furthermore, such information, including Exhibit 99.1, shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01Financial Statements and Exhibits.

 

(d)       Exhibits

 

Exhibit No.   Description
99.1   Press release dated February 6, 2020.

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  IRADIMED CORPORATION
     
Date: February 6, 2020    
  By: /s/Chris Scott
  Name:   Chris Scott
  Title:   Chief Financial Officer

 

 

 

 

Exhibit 99.1

 

 

 

IRADIMED CORPORATION Announces Fourth Quarter 2019 Financial Results

 

·Reports fourth quarter 2019 revenue of $10.9 million, GAAP diluted EPS of $0.26 and non-GAAP diluted EPS of $0.30
·Renewed CE Mark for patient vital signs monitor and shipped associated backlog during the fourth quarter 2019
·Announces 2020 full year and first quarter financial guidance

 

Winter Springs, Florida, February 6, 2020 – iRadimed Corporation (NASDAQ: 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, 2019.

 

“Revenue for the fourth quarter increased over 30% from the fourth quarter last year and for the full year 2019, revenue increased over 26% from the full year 2018. We also set a record high for orders during 2019 and the fourth quarter marked our first period with orders exceeding $10 million. Operationally, we accomplished much during the year, including resolving the FDA warning letter and regaining the CE Mark for our patient monitor. We are very pleased with these accomplishments and the financial growth and look forward to building on this momentum in 2020. We are more focused than ever on driving near-term growth and laying the groundwork for sustained value creation,” said Leslie McDonnell, President and Chief Executive Officer of the Company.

 

Fourth Quarter 2019

 

For the fourth quarter ended December 31, 2019, the Company reported revenue of $10.9 million compared to $8.3 million for the fourth quarter 2018. Net income was $3.2 million, or $0.26 per diluted share, compared to $1.7 million, or $0.14 per diluted share for the fourth quarter 2018. Diluted earnings per share for the fourth quarter 2019 was positively impacted by $0.10 due to a favorable effective tax rate primarily associated with stock-based compensation.

 

Gross profit margin was 74.8 percent, compared to 76.2 percent for the fourth quarter 2018. Domestic sales were 73.6 percent of total revenue, compared to 80.8 percent for the fourth quarter 2018. Revenue from sales of our 3880 MRI compatible patient vital signs monitoring system was $3.5 million for the fourth quarter 2019 compared to $2.1 million for the fourth quarter 2018.

 

Non-GAAP net income was $3.7 million for the quarter ended December 31, 2019, which excludes $0.4 million of stock compensation expense, net of tax. Non-GAAP net income for the quarter ended December 31, 2018 was $2.0 million, which excludes $0.3 million of stock compensation expense, net of tax. Non-GAAP earnings per diluted share was $0.30, compared to $0.16 for the fourth quarter 2018. Free cash flow was $3.8 million, compared to $3.5 million for the fourth quarter 2018. Non-GAAP net income and non-GAAP earnings per diluted share for the fourth quarter 2019 were favorably impacted by a lower effective tax rate compared to the fourth quarter 2018.

 

 

 

 

Full-Year 2019

 

For the year ended December 31, 2019, the Company reported revenue of $38.5 million compared to $30.4 million for the same period in 2018. Net income was $9.6 million, or $0.78 per diluted share, compared to net income of $6.3 million, or $0.52 per diluted share for the same period in 2018. Diluted earnings per share for the full year 2019 was positively impacted by $0.10 due to a favorable effective tax rate primarily associated with stock-based compensation.

 

Gross profit margin was 77.1 percent, compared to 76.3 percent for the same period in 2018. Domestic sales were 80.3 percent of total revenue, compared to 80.5 percent for the same period in 2018. Revenue from sales of our 3880 MRI compatible patient vital signs monitoring system was $9.6 million for the year ended December 31, 2019 compared to $6.5 million for the same period in 2018.

 

Non-GAAP net income was $10.5 million for the year ended December 31, 2019, which excludes $1.4 million of stock compensation expense, net of tax and a $0.6 million reduction to non-GAAP net income resulting from an infrequent tax item related to excess tax benefits recognized in the provision for income taxes for the exercise and sale of certain incentive stock options. Non-GAAP net income for the year ended December 31, 2018 was $6.6 million, which excludes $1.3 million of stock compensation expense, net of tax and a $1.0 million reduction to non-GAAP 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 earnings per diluted share for the year ended December 31, 2019 was $0.85, compared to $0.54 for the same period in 2018. Non-GAAP net income and non-GAAP earnings per diluted share for 2019 were favorably impacted by a lower effective tax rate compared to 2018.

 

Free cash flow was $9.9 million, compared to $7.1 million for the year ended December 31, 2018.

 

As of December 31, 2019, the Company had combined cash and investments of $46.3 million.

 

Financial Guidance

 

For the full year 2020, the Company expects to report revenue of $46.3 million to $47.1 million, GAAP diluted earnings per share of $0.72 to $0.80 and non-GAAP diluted earnings per share of $0.84 to $0.92. The Company expects a higher effective tax rate during the full-year 2020, which negatively impacts forecasted 2020 earnings.

 

For the first quarter 2020, the Company expects to report revenue of $10.5 million to $10.7 million, GAAP diluted earnings per share of $0.16 to $0.18 and non-GAAP diluted earnings per share of $0.19 to $0.21.

 

The Company’s non-GAAP earnings per share guidance excludes stock-based compensation expense, net of tax, which the Company expects to be approximately $1.6 million for the year ending December 31, 2020. For the first quarter 2020, the Company’s non-GAAP earnings per share guidance excludes stock-based compensation expense, net of tax of $0.4 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 U.S. 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. 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. 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. 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, 2020. 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 7783873.

 

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; invasive and 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 and product candidates, receive FDA 510(k) clearance for new products and product candidates; 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, warnings or requests from the FDA or other regulatory bodies; our significant reliance on a limited number of products; 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,
2019
   December 31,
2018
 
    (unaudited)      
ASSETS          
Current assets:          
Cash and cash equivalents  $43,481,781   $28,027,688 
Accounts receivable, net   7,293,303    4,209,992 
Investments   2,768,287    6,349,915 
Inventory, net   3,641,561    4,059,443 
Prepaid expenses and other current assets   407,802    526,787 
Prepaid income taxes   1,370,947    1,367,892 
Total current assets   58,963,681    44,541,717 
Property and equipment, net   2,053,806    1,869,561 
Intangible assets, net   860,087    832,519 
Operating lease right-of-use asset   2,955,873     
Deferred income taxes, net   1,663,415    1,088,702 
Other assets   232,002    109,759 
Total assets  $66,728,864   $48,442,258 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $993,742   $772,470 
Accrued payroll and benefits   2,166,209    1,802,321 
Other accrued taxes   596,576    133,000 
Warranty reserve   81,761    74,524 
Deferred revenue   1,671,420    1,798,784 
Current portion of operating lease liability   240,843     
Other current liability   108,421    108,421 
Total current liabilities   5,858,972    4,689,520 
Deferred revenue   2,630,467    1,807,005 
Operating lease liability   2,715,030     
Total liabilities   11,204,469    6,496,525 
Stockholders’ equity:          
Common stock   1,177    1,099 
Additional paid-in capital   19,192,394    15,317,335 
Retained earnings   36,300,450    26,669,491 
Accumulated other comprehensive income (loss)   30,374    (42,192)
Total stockholders’ equity   55,524,395    41,945,733 
Total liabilities and stockholders’ equity  $66,728,864   $48,442,258 

 

  

 

 

IRADIMED CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three Months Ended
December 31,
   Years Ended
December 31,
 
   2019   2018   2019   2018 
Revenue  $10,890,653   $8,339,392   $38,517,141   $30,438,983 
Cost of revenue   2,741,838    1,982,492    8,816,161    7,211,633 
Gross profit   8,148,815    6,356,900    29,700,980    23,227,350 
Operating expenses:                    
General and administrative   2,968,476    2,147,155    10,451,266    8,710,882 
Sales and marketing   2,562,113    2,049,188    9,169,590    6,995,586 
Research and development   379,310    367,715    1,432,719    1,517,112 
Total operating expenses   5,909,899    4,564,058    21,053,575    17,223,580 
Income from operations   2,238,916    1,792,842    8,647,405    6,003,770 
Other income, net   115,249    83,072    395,912    193,537 
Income before provision for income taxes   2,354,165    1,875,914    9,043,317    6,197,307 
Provision for income tax (benefit) expense   (887,518)   168,901    (587,642)   (106,143)
Net income  $3,241,683   $1,707,013   $9,630,959   $6,303,450 
                     
Net income per share:                    
Basic  $0.28   $0.16   $0.85   $0.59 
Diluted  $0.26   $0.14   $0.78   $0.52 
Weighted average shares outstanding:                    
Basic   11,559,526    10,946,149    11,282,214    10,758,752 
Diluted   12,345,968    12,224,505    12,276,444    12,110,117 

 

  

 

 

IRADIMED CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Years Ended
December 31,
 
   2019   2018 
Operating activities:          
Net income  $9,630,959   $6,303,450 
Adjustments to reconcile net income to net cash provided by operating activities:          
Change in allowance for doubtful accounts   31,338    15,833 
Change in provision for excess and obsolete inventory   48,114    111,790 
Depreciation and amortization   1,242,325    1,105,003 
Stock-based compensation   1,854,965    1,764,319 
Deferred income taxes, net   (596,755)   (144,430)
(Gain) loss on maturities of investments   (10,764)   28,036 
Changes in operating assets and liabilities:          
Accounts receivable   (3,114,649)   (446,896)
Inventory   123,680    (121,591)
Prepaid expenses and other current assets   (487,650)   (407,461)
Other assets   (171,002)   65,135 
Accounts payable   149,319    34,161 
Accrued payroll and benefits   363,888    289,985 
Other accrued taxes   463,576    23,498 
Warranty reserve   7,237    13,986 
Deferred revenue   700,348    (5,885)
Other current liability       (150)
Prepaid income taxes   (3,055)   (1,252,768)
Other   859     
Net cash provided by operating activities   10,232,733    7,376,015 
Investing activities:          
Purchases of investments       (1,124,512)
Proceeds from maturities of investments   3,687,000    2,905,000 
Purchases of property and equipment   (368,281)   (228,315)
Capitalized intangible assets   (117,531)   (36,350)
Net cash provided by investing activities   3,201,188    1,515,823 
Financing activities:          
Proceeds from exercises of stock options   2,493,315    1,239,435 
Taxes paid related to net share settlement of equity awards   (473,143)   (309,561)
Net cash provided by financing activities   2,020,172    929,874 
Net increase in cash and cash equivalents   15,454,093    9,821,712 
Cash and cash equivalents, beginning of period   28,027,688    18,205,976 
Cash and cash equivalents, end of period  $43,481,781   $28,027,688 

 

  

 

 

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,
 
   2019   2018   2019   2018 
Net income  $3,241,683   $1,707,013   $9,630,959   $6,303,450 
Excluding:                    
Stock-based compensation expense, net of tax expense   412,443    302,531    1,394,748    1,327,316 
Infrequent tax item*           (564,810)   (1,053,048)
Non-GAAP net income  $3,654,126   $2,009,544   $10,460,897   $6,577,718 
Weighted-average shares outstanding – diluted   12,345,968    12,224,505    12,276,444    12,110,117 
Non-GAAP net income per share – diluted  $0.30   $0.16   $0.85   $0.54 

 

* The infrequent tax item is related to the excess tax benefits recognized in the provision for income taxes associated with the exercise and sale of certain incentive stock options.

 

Free Cash Flow

 

   Three Months Ended
December 31,
   Years Ended
December 31,
 
   2019   2018   2019   2018 
Net cash provided by operating activities  $3,948,859   $3,542,373   $10,232,733   $7,376,015 
Less:                    
Purchases of property and equipment   171,912    77,706    368,281    228,315 
Free cash flow  $3,776,947   $3,464,667   $9,864,452   $7,147,700 

 

Media Contact:

Chris Scott

Chief Financial Officer

iRadimed Corporation

(407) 677-8022

InvestorRelations@iradimed.com