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iRhythm Technologies Announces Second Quarter 2020 Financial Results

2020-08-06 19:07 ET - News Release

SAN FRANCISCO, Aug. 06, 2020 (GLOBE NEWSWIRE) -- In a release issued under the same headline earlier today by iRhythm Technologies, Inc. (NASDAQ: IRTC), please note that in the table of Condensed Consolidated Statements of Operations, the rows for "Net loss per common share, basic and diluted" and "Weighted-average shares, basic and diluted" were missing. The corrected release follows:

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 June 30, 2020.

Second Quarter 2020 Summary

  • Revenue of $50.9 million
    - 3% decrease compared to second quarter 2019
    - 20% decrease compared to first quarter 2020
  • Gross margin was 69.6%
    - 560 basis point year-over-year contraction

“Despite the challenges presented by the pandemic, we have continued to deliver our Zio service without interruption to the physicians and patients that rely on it.  Our team recognized the need for high quality care has never been greater and I could not be prouder of the commitment we have demonstrated,” said Kevin King, CEO. “Second quarter results were encouraging, despite the COVID-19 impact felt early in the quarter. We saw a steady pace of recovery in registration rates throughout the quarter that exceeded our initial expectations.

“Importantly, we believe we continued to penetrate the market and take share as an acute shift away from Holter monitoring took place.  Our digital platform is well suited to deliver services in a virtual environment, with a single-use Zio device and home enrollment capability. We expect it will remain an important component of many of our accounts’ workflows going forward. We also saw significant traction with Zio AT, signaling the increasing value our complete platform solution provides in streamlining workflows across cardiac monitoring needs. 

“While we are encouraged by our recent rebound, the macro environment remains uncertain and several market factors could result in suppressed demand through the rest of 2020. We are managing our business for the long-term with planned investments to drive growth and profitability and remain as confident as ever in the durability of our business,” concluded King.

Second Quarter Financial Results
Revenue for the three months ended June 30, 2020 decreased 3% to $50.9 million, from $52.4 million during the same period in 2019. The decrease was primarily due to lower volumes but was slightly offset by increased ASP.

Gross profit for the second quarter of 2020 was $35.4 million, or 69.6% gross margin, compared to $39.4 million, or gross margin of 75.2%, during the same period in 2019.

Operating expenses for the second quarter of 2020 $55.6 million, compared to $50.0 million for the same period in 2019 which was an increase of 11.1%. Excluding a $3.0 million milestone payment to Verily, operating expense increased 5.1% to $52.6 million.

Net loss for the second quarter of 2020 was $20.4 million, or a loss of $0.75 per share, compared with net loss of $10.7 million, or a loss of $0.43 per share, for the same period in 2019.

Total Cash and Short Term Investment balance at June 30, 2020 was $114.9M.

Guidance for Full Year 2020
As previously reported, iRhythm is not providing 2020 financial guidance due to the continued uncertainties from the impact of COVID-19.

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 SalvoSaige Smith
(415) 937-5404(262) 289-7065

Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)

 June 30, December 31,
  2020   2019 
Current assets:   
Cash and cash equivalents$   81,730  $   20,462 
Investments, short-term 33,196   120,089 
Accounts receivable, net 22,877   23,867 
Inventory 4,989   4,037 
Prepaid expenses and other current assets 3,743   4,337 
Total current assets 146,535   172,792 
Investments, long-term -   8,030 
Property and equipment, net 30,199   26,464 
Operating lease right-of-use asset 87,758   90,124 
Goodwill 862   862 
Other assets 10,870   7,940 
Total assets$   276,224  $   306,212 

Liabilities and Stockholders’ Equity
Current liabilities:   
Accounts payable$   5,012  $   8,243 
Accrued liabilities 25,170   2,714 
Deferred revenue 1,197   1,251 
Debt, current portion 7,778   1,944 
Operating lease liabilities, current portion 8,157   7,914 
Total current liabilities 47,314   52,066 
Debt, noncurrent portion 27,164   32,989 
Operating lease liabilities, noncurrent portion 83,800   85,748 
Total liabilities 158,278   170,803 
Stockholders’ equity:   
Preferred stock -   - 
Common stock 25   25 
Additional paid-in capital 408,096   395,695 
Accumulated other comprehensive gain 181   82 
Accumulated deficit (290,356)  (260,393)
Total stockholders’ equity$  117,946  $  135,409 
Total liabilities and stockholders’ equity$  276,224  $  306,212 


Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)

 Three Months Ended
June 30,
 Six Months Ended
June 30,
  2020   2019   2020   2019 
Revenue$ 50,878  $ 52,441  $ 114,413  $ 100,775 
Cost of Revenue   15,484     13,012     31,547     24,785 
Gross Profit   35,394     39,429     82,866     75,990 
Operating expense:       
Research and development   12,542     7,833     20,957     14,532 
Selling, general and administrative   43,014     42,161     91,244     80,227 
Total operating expenses   55,556     49,994    112,201     94,759 
Loss from operations (20,162)  (10,565)   (29,335)  (18,769)
Interest expense   (381)    (440)    (761)    (849)
Other income   237     295     742     670 
Loss before income taxes (20,306)   (10,710)   (29,354)   (18,948)
Income tax provision   131     15     148     27 
Net loss$(20,437) $(10,725) $(29,502) $(18,975)
Net loss per common share, basic and diluted$(0.75) $(0.43) $(1.09) $(0.77)
Weighted-average shares, basic and diluted 27,176,601   24,724,808   27,008,236   24,600,250 


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