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): July 30, 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 July 30, 2020, iRadimed Corporation issued a press release (the “Press Release”) announcing its financial results for the second quarter ended June 30, 2020. 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 July 30, 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: July 30, 2020
  By: /s/Chris Scott
  Name: Chris Scott
  Title: Chief Financial Officer

 

 

Exhibit 99.1

 

 

 

IRADIMED CORPORATION Announces Second Quarter 2020 Financial Results

 

·Reports second quarter 2020 revenue of $6.8 million, GAAP diluted EPS of $(0.17) and non-GAAP diluted EPS of $0.05

 

·Reports combined cash and investments of $47.8 million as of June 30, 2020

 

Winter Springs, Florida, July 30, 2020 – iRadimed Corporation (the “Company”) (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 and six months ended June 30, 2020.

 

“As our customers continue being pressured in their efforts to respond to the current pandemic’s impacts, second quarter revenue was, as expected, depressed. Additionally, earnings were impacted by a significant one-time charge resulting from costs incurred from the separation of our former CEO,” said Roger Susi, President and Chief Executive Officer of the Company.

 

“However, we are seeing encouraging signs from healthy international demand and an increased ability to engage U.S. customers via video conferencing and in some cases, face-to-face interactions, specifically with existing customers. Sales of our services and disposables have been picking up, pointing towards a trend that MR imaging of patients needing IV therapy is strengthening. Still, with the constantly changing waves and locations of COVID-19 outbreaks, continued unpredictability must be expected, but to be clear, we are enthusiastic about the progress we are making with our sales tactics and confident that as the pandemic and the uncertainties it brings subside, strong demand for our products will result,” said Susi.

 

Three Months Ended June 30, 2020

 

For the second quarter ended June 30, 2020, the Company reported revenue of $6.8 million compared to $9.2 million for the second quarter 2019. Net loss was $(2.1) million, or $(0.17) per diluted share, compared to net income of $2.1 million, or $0.17 per diluted share for the second quarter 2019.

 

During the three months ended June 30, 2020, the Company recognized total general and administrative expense of $2.8 million related to our former CEO, of which $2.7 million relates to the separation.

 

Non-GAAP net income was $0.6 million for the quarter ended June 30, 2020, which excludes $0.3 million of on-going stock compensation expense, net of tax, and $2.4 million of expenses, net of tax, related to the separation of our former CEO. Non-GAAP net income for the quarter ended June 30, 2019 was $2.4 million, which excludes $0.4 million of stock compensation expense, net of tax expense. Non-GAAP earnings per diluted share was $0.05 for the second quarter 2020, compared to $0.20 for the second quarter 2019.

 

 

 

Six Months Ended June 30, 2020

 

For the six months ended June 30, 2020, the Company reported revenue of $15.5 million compared to $17.7 million for the same period in 2019. Net loss was $(0.3) million, or $(0.03) per diluted share, compared to net income of $3.9 million, or $0.32 per diluted share for the same period in 2019.

 

During the six months ended June 30, 2020, the Company recognized total general and administrative expense of $3.2 million related to our former CEO, of which $2.7 million relates to the separation.

 

Non-GAAP net income was $2.8 million for the six months ended June 30, 2020, which excludes $0.7 million of on-going stock compensation expense, net of tax, and $2.4 million of expenses, net of tax, related to the separation of our former CEO. Non-GAAP net income for the six months ended June 30, 2019 was $4.0 million, which excludes $0.6 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 earnings per diluted share was $0.22 for the six months ended June 30, 2020, compared to $0.33 for the same period in 2019.

 

Revenue Information:

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
   2020   2019   2020   2019 
   (unaudited)   (unaudited) 
Devices:                    
MRI Compatible IV Infusion Pump Systems  $1,875,159   $4,550,542   $4,539,993   $8,743,296 
MRI Compatible Patient Vital Signs Monitoring Systems   1,927,473    1,891,031    4,546,988    3,657,639 
Total Devices Revenue   3,802,632    6,441,573    9,086,981    12,400,935 
Disposables and Services   2,535,548    2,313,755    5,467,449    4,350,428 
Amortization of extended warranty agreements   456,512    470,268    917,803    911,826 
Total revenue  $6,794,692   $9,225,596   $15,472,233   $17,663,189 

 

For the second quarter 2020, domestic sales were 68.3 percent of total revenue, compared to 82.0 percent for the second quarter 2019. Gross profit margin was 72.6 percent for the second quarter 2020, compared to 79.9 percent for the second quarter 2019.

 

For the six months ended June 30, 2020, domestic sales were 70.9 percent of total revenue, compared to 82.9 percent for the same period in 2019. Gross profit margin was 73.6 percent for the six months ended June 30, 2020, compared to 77.9 percent for the same period in 2019.

 

Cash Flow and Balance Sheet:

 

For the six months ended June 30, 2020, the Company generated $2.0 million of cash from operations, compared to $3.1 million for the same period in 2019.

 

For the second quarter ended June 30, 2020, free cash flow was $0.7 million, compared to $2.4 million for the second quarter 2019. For the six months ended June 30, 2020, free cash flow was $1.7 million, compared to $3.0 million for the same period in 2019.

 

As of June 30, 2020, the Company had combined cash and investments of $47.8 million.

 

 

 

Financial Guidance

 

The Company announced its full-year 2020 financial guidance on February 6, 2020. Due to the high degree of uncertainty created by the global impact of COVID-19, the Company withdrew its previous guidance on April 7, 2020 and is not providing any additional financial guidance at this time.

 

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 (1) 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; (2) operating expenses, net of tax, that we believe are not indicative of the Company’s on-going core operating performance, and; (3) 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 on-going core 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, July 30, 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 8281889.

 

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

 

   June 30,
2020
   December 31,2019 
    (unaudited)      
ASSETS          
Current assets:          
Cash and cash equivalents   $45,457,652   $43,481,781 
Accounts receivable, net    4,505,599    7,293,303 
Investments    2,326,186    2,768,287 
Inventory, net    4,868,721    3,641,561 
Prepaid expenses and other current assets    657,679    407,802 
Prepaid income taxes    2,268,898    1,370,947 
Total current assets    60,084,735    58,963,681 
Property and equipment, net    2,227,020    2,053,806 
Intangible assets, net    937,131    860,087 
Operating lease right-of-use asset    2,837,253    2,955,873 
Deferred income taxes, net    2,492,124    1,663,415 
Other assets    246,474    232,002 
Total assets   $68,824,737   $66,728,864 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable   $703,530   $993,742 
Accrued payroll and benefits    1,693,504    2,166,209 
Other accrued taxes    508,125    596,576 
Warranty reserve    88,372    81,761 
Deferred revenue    1,873,090    1,671,420 
Current portion of operating lease liability    248,159    240,843 
Other current liability    139,562    108,421 
Total current liabilities    5,254,342    5,858,972 
Deferred revenue    2,617,075    2,630,467 
Operating lease liability    2,589,094    2,715,030 
Total liabilities    10,460,511    11,204,469 
Stockholders’ equity:          
Common stock    1,220    1,177 
Additional paid-in capital    22,351,673    19,192,394 
Retained earnings    35,957,391    36,300,450 
Accumulated other comprehensive income    53,942    30,374 
Total stockholders’ equity    58,364,226    55,524,395 
Total liabilities and stockholders’ equity   $68,824,737   $66,728,864 

 

 

 

IRADIMED CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
   2020   2019   2020   2019 
Revenue   $6,794,692   $9,225,596   $15,472,233   $17,663,189 
Cost of revenue    1,864,587    1,858,288    4,078,317    3,906,115 
Gross profit    4,930,105    7,367,308    11,393,916    13,757,074 
Operating expenses:                    
General and administrative    5,002,427    2,460,372    7,865,154    4,873,068 
Sales and marketing    2,374,134    2,199,823    4,807,701    4,310,475 
Research and development    482,654    331,310    912,936    683,883 
Total operating expenses    7,859,215    4,991,505    13,585,791    9,867,426 
(Loss) income from operations    (2,929,110)   2,375,803    (2,191,875)   3,889,648 
Other income, net    17,852    78,025    116,354    170,599 
(Loss) income before provision for income taxes    (2,911,258)   2,453,828    (2,075,521)   4,060,247 
Provision for income taxes    (798,988)   364,987    (1,732,462)   125,841 
Net (loss) income   $(2,112,270)  $2,088,841   $(343,059)  $3,934,406 
                     
Net (loss) income per share:                    
Basic   $(0.17)  $0.19   $(0.03)  $0.35 
Diluted   $(0.17)  $0.17   $(0.03)  $0.32 
Weighted average shares outstanding:                    
Basic    12,076,399    11,163,506    11,983,913    11,096,942 
Diluted    12,076,399    12,226,660    11,983,913    12,227,949 

 

 

 

IRADIMED CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   Six Months Ended
June 30,
 
   2020   2019 
Operating activities:          
Net (loss) income   $(343,059)  $3,934,406 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:          
Change in allowance for doubtful accounts    40,029    15,124 
Change in provision for excess and obsolete inventory    35,376    115,600 
Depreciation and amortization    668,823    672,676 
Stock-based compensation    3,227,590    850,789 
Deferred income taxes, net    (834,179)   35,574 
(Gain) loss on maturities of investments    (8,861)   3,778 
Changes in operating assets and liabilities:          
Accounts receivable    2,747,675    (1,682,525)
Inventory    (1,360,074)   (494,108)
Prepaid expenses and other current assets    (674,047)   (600,485)
Other assets    (26,402)   (10,830)
Accounts payable    (319,583)   178,912 
Accrued payroll and benefits    (472,705)   (243,044)
Other accrued taxes    (88,451)   (80,451)
Warranty reserve    6,611    533 
Deferred revenue    255,298    371,317 
Other current liability    31,141     
(Prepaid) accrued income taxes    (897,951)   78,366 
Net cash provided by operating activities    1,987,231    3,145,632 
Investing activities:          
Proceeds from maturities of investments    480,000    1,050,000 
Purchases of property and equipment    (300,558)   (118,962)
Capitalized intangible assets    (122,534)   (34,399)
Net cash provided by investing activities    56,908    896,639 
Financing activities:          
Proceeds from exercises of stock options    790,989    500,247 
Taxes paid related to net share settlement of equity awards    (859,257)   (148,212)
Net cash (used in) provided by financing activities    (68,268)   352,035 
Net increase in cash and cash equivalents    1,975,871    4,394,306 
Cash and cash equivalents, beginning of period    43,481,781    28,027,688 
Cash and cash equivalents, end of period   $45,457,652   $32,421,994 

 

 

 

IRADIMED CORPORATION

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)

 

Non-GAAP Net Income and Diluted EPS

 

   Three Months Ended
June 30,
   Six Months Ended
June 30,
 
   2020   2019   2020   2019 
Net (loss) income   $(2,112,270)  $2,088,841   $(343,059)  $3,934,406 
Excluding:                    
Stock-based compensation expense, net of tax expense    322,031    352,217    749,831    639,708 
Separation expenses, net of tax1    2,353,964        2,353,964     
Infrequent tax item2                (564,810)
Non-GAAP net income   $563,725   $2,441,058   $2,760,736   $4,009,304 
Weighted-average shares outstanding – diluted    12,388,190    12,226,660    12,375,844    12,227,949 
Non-GAAP net income per share – diluted   $0.05   $0.20   $0.22   $0.33 

 

                           
1Separation expenses recognized pursuant to a separation agreement as described in Exhibit 10.1 to Form 8-K filed with the Securities and Exchange Commission on June 16, 2020.
2The 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
June 30,
   Six Months Ended
June 30,
 
   2020   2019   2020   2019 
Net cash provided by operating activities   $790,596   $2,480,428   $1,987,231   $3,145,632 
Less:                    
Purchases of property and equipment    133,965    36,019    300,558    118,962 
Free cash flow   $656,631   $2,444,409   $1,686,673   $3,026,670 

 

 

Media Contact:

Chris Scott

Chief Financial Officer

iRadimed Corporation

(407) 677-8022

InvestorRelations@iradimed.com