SAN FRANCISCO, Dec. 23, 2019 (GLOBE NEWSWIRE) — iRhythm Technologies, Inc. (NASDAQ: IRTC), a leading digital health care solutions company focused on the advancement of cardiac care, announced the filing of its Quarterly Report on Form 10-Q for the period ended September 30, 2019 with the Securities and Exchange Commission. The company had previously announced the filing would be delayed due to its identification of errors affecting prior periods in the course of preparing the Form 10-Q that would require further analysis.
iRhythm has evaluated the errors and determined that the related impact was not material to its financial statements for any prior annual or interim period. Correcting the cumulative impact of the errors however, is significant to its results for the third quarter ended September 30, 2019. Accordingly, the company has revised previously reported financial information.
Updated Guidance for Full Year 2019
iRhythm projects revenue for the full year 2019 in the range of $213 million to $214 million, which represents 45% growth over the company’s prior year. Gross margins for the full year 2019 are now expected to be between 75.0% to 76.0% and operating expenses for the full year 2019 are expected to be between $210 million and $214 million including, $36 million to $38 million in research and development and $174 million to $176 million for SG&A. Full year operating expenses, excluding Verily costs, are expected to be between $202 million to $206 million including $29 million to $31 million for research and development and $173 million to $175 million for SG&A. This compares to previous revenue guidance of $215 to $217 million, gross margins of 75.5% to 76.5% and operating expenses of $210 to $214 million including, $36 million to $38M in research and development and $174 million to $176 million for SG&A.
The company continues to expect sales headcount between 130 to 140 for the remainder of the year.
Webcast and Conference Call Information
iRhythm’s management team will host a conference call today beginning at 8:30 a.m. ET / 5:30 a.m. PT. 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: 6086183 or from the webcast on the “Investors” section of the company’s website at: www.irhythmtech.com.
Forward-Looking Statements
This press 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 and expectations for growth. 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 the company’s public filings with the Securities and Exchange Commission. 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.
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
| IRHYTHM TECHNOLOGIES, INC. | |||||||||||||||
| Revision of Prior Period Financial Statements | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (In thousands, except share and per share data) | |||||||||||||||
| As reported | Three months ended | Nine months ended | |||||||||||||
| March 31, 2019 | June 30, 2019 | September 30, 2019 | September 30, 2019 | ||||||||||||
| Revenue, net | $ | 47,214 | $ | 53,331 | $ | 55,957 | $ | 156,502 | |||||||
| Cost of revenue | 11,730 | 12,825 | 13,785 | 38,340 | |||||||||||
| Gross profit | 35,484 | 40,506 | 42,172 | 118,162 | |||||||||||
| Gross Margin | 75.2 | % | 76.0 | % | 75.4 | % | 75.5 | % | |||||||
| Operating expenses: | |||||||||||||||
| Research and development | 6,756 | 8,639 | 12,723 | 28,118 | |||||||||||
| Selling, general and administrative | 36,705 | 43,189 | 48,007 | 127,901 | |||||||||||
| Total operating expenses | 43,461 | 51,828 | 60,730 | 156,019 | |||||||||||
| Loss from operations | (7,977 | ) | (11,322 | ) | (18,558 | ) | (37,857 | ) | |||||||
| Interest expense | (409 | ) | (440 | ) | (409 | ) | (1,258 | ) | |||||||
| Other income, net | 379 | 310 | 377 | 1,066 | |||||||||||
| Loss before income taxes | (8,007 | ) | (11,452 | ) | (18,590 | ) | (38,049 | ) | |||||||
| Income tax provision | 12 | 15 | 19 | 46 | |||||||||||
| Net loss | $ | (8,019 | ) | $ | (11,467 | ) | $ | (18,609 | ) | $ | (38,095 | ) | |||
| Adjustments | Three months ended | Nine months ended | |||||||||||||
| March 31, 2019 | June 30, 2019 | September 30, 2019 | September 30, 2019 | ||||||||||||
| Revenue, net | $ | 1,120 | $ | (890 | ) | $ | (1,284 | ) | $ | (1,054 | ) | ||||
| Cost of revenue | 43 | 187 | — | 230 | |||||||||||
| Gross profit | 1,077 | (1,077 | ) | (1,284 | ) | (1,284 | ) | ||||||||
| Gross Margin | |||||||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | (57 | ) | (806 | ) | 776 | (87 | ) | ||||||||
| Selling, general and administrative | 1,361 | (1,028 | ) | (2,358 | ) | (2,025 | ) | ||||||||
| Total operating expenses | 1,304 | (1,834 | ) | (1,582 | ) | (2,112 | ) | ||||||||
| Loss from operations | (227 | ) | 757 | 298 | 828 | ||||||||||
| Interest expense | — | — | — | — | |||||||||||
| Other income, net | (4 | ) | (15 | ) | 19 | — | |||||||||
| Loss before income taxes | (231 | ) | 742 | 317 | 828 | ||||||||||
| Income tax provision | — | — | — | — | |||||||||||
| Net loss | $ | (231 | ) | $ | 742 | $ | 317 | $ | 828 | ||||||
| As revised | Three months ended | Nine months ended | |||||||||||||
| March 31, 2019 | June 30, 2019 | September 30, 2019 | September 30, 2019 | ||||||||||||
| Revenue, net | $ | 48,334 | $ | 52,441 | $ | 54,673 | $ | 155,448 | |||||||
| Cost of revenue | 11,773 | 13,012 | 13,785 | 38,570 | |||||||||||
| Gross profit | 36,561 | 39,429 | 40,888 | 116,878 | |||||||||||
| Gross Margin | 75.6 | % | 75.2 | % | 74.8 | % | 75.2 | % | |||||||
| Operating expenses: | |||||||||||||||
| Research and development | 6,699 | 7,833 | 13,499 | 28,031 | |||||||||||
| Selling, general and administrative | 38,066 | 42,161 | 45,649 | 125,876 | |||||||||||
| Total operating expenses | 44,765 | 49,994 | 59,148 | 153,907 | |||||||||||
| Loss from operations | (8,204 | ) | (10,565 | ) | (18,260 | ) | (37,029 | ) | |||||||
| Interest expense | (409 | ) | (440 | ) | (409 | ) | (1,258 | ) | |||||||
| Other income, net | 375 | 295 | 396 | 1,066 | |||||||||||
| Loss before income taxes | (8,238 | ) | (10,710 | ) | (18,273 | ) | (37,221 | ) | |||||||
| Income tax provision | 12 | 15 | 19 | 46 | |||||||||||
| Net loss | $ | (8,250 | ) | $ | (10,725 | ) | $ | (18,292 | ) | $ | (37,267 | ) | |||
| IRHYTHM TECHNOLOGIES, INC. | |||||||||||||||||||
| Revision of Prior Period Financial Statements | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| (In thousands, except share and per share data) | |||||||||||||||||||
| As reported | Three months ended | Year ended | |||||||||||||||||
| March 31, 2018 | June 30, 2018 | September 30, 2018 | December 31, 2018 | December 31, 2018 | |||||||||||||||
| Revenue, net | $ | 30,565 | $ | 35,469 | $ | 38,104 | $ | 43,155 | $ | 147,293 | |||||||||
| Cost of revenue | 8,611 | 9,490 | 9,949 | 10,529 | 38,579 | ||||||||||||||
| Gross profit | 21,954 | 25,979 | 28,155 | 32,626 | 108,714 | ||||||||||||||
| Gross Margin | 71.8 | % | 73.2 | % | 73.9 | % | 75.6 | % | 73.8 | % | |||||||||
| Operating expenses: | |||||||||||||||||||
| Research and development | 4,019 | 4,564 | 5,164 | 7,003 | 20,750 | ||||||||||||||
| Selling, general and administrative | 28,577 | 33,094 | 32,739 | 37,172 | 131,582 | ||||||||||||||
| Total operating expenses | 32,596 | 37,658 | 37,903 | 44,175 | 152,332 | ||||||||||||||
| Loss from operations | (10,642 | ) | (11,679 | ) | (9,748 | ) | (11,549 | ) | (43,618 | ) | |||||||||
| Interest expense | (858 | ) | (861 | ) | (861 | ) | (535 | ) | (3,115 | ) | |||||||||
| Other income, net | 383 | 334 | 365 | 444 | 1,526 | ||||||||||||||
| Loss on extinguishment of debt | — | — | — | (3,029 | ) | (3,029 | ) | ||||||||||||
| Loss before income taxes | (11,117 | ) | (12,206 | ) | (10,244 | ) | (14,669 | ) | (48,236 | ) | |||||||||
| Income tax provision | — | — | — | 44 | 44 | ||||||||||||||
| Net loss | $ | (11,117 | ) | $ | (12,206 | ) | $ | (10,244 | ) | $ | (14,713 | ) | $ | (48,280 | ) | ||||
| Adjustments | Three months ended | Year ended | |||||||||||||||||
| March 31, 2018 | June 30, 2018 | September 30, 2018 | December 31, 2018 | December 31, 2018 | |||||||||||||||
| Revenue, net | $ | 1,197 | $ | (177 | ) | $ | 337 | $ | (1,373 | ) | $ | (16 | ) | ||||||
| Cost of revenue | (61 | ) | (4 | ) | 4 | 277 | 216 | ||||||||||||
| Gross profit | 1,258 | (173 | ) | 333 | (1,650 | ) | (232 | ) | |||||||||||
| Gross Margin | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||
| Research and development | 24 | 84 | (78 | ) | 80 | 110 | |||||||||||||
| Selling, general and administrative | 1,190 | 846 | (116 | ) | (189 | ) | 1,731 | ||||||||||||
| Total operating expenses | 1,214 | 930 | (194 | ) | (109 | ) | 1,841 | ||||||||||||
| Loss from operations | 44 | (1,103 | ) | 527 | (1,541 | ) | (2,073 | ) | |||||||||||
| Interest expense | — | — | — | — | — | ||||||||||||||
| Other income, net | (4 | ) | 4 | (10 | ) | (15 | ) | (25 | ) | ||||||||||
| Loss on extinguishment of debt | — | — | — | — | — | ||||||||||||||
| Loss before income taxes | 40 | (1,099 | ) | 517 | (1,556 | ) | (2,098 | ) | |||||||||||
| Income tax provision | — | — | — | — | — | ||||||||||||||
| Net loss | $ | 40 | $ | (1,099 | ) | $ | 517 | $ | (1,556 | ) | $ | (2,098 | ) | ||||||
| As revised | Three months ended | Year ended | |||||||||||||||||
| March 31, 2018 | June 30, 2018 | September 30, 2018 | December 31, 2018 | December 31, 2018 | |||||||||||||||
| Revenue, net | $ | 31,762 | $ | 35,292 | $ | 38,441 | $ | 41,782 | $ | 147,277 | |||||||||
| Cost of revenue | 8,550 | 9,486 | 9,953 | 10,806 | 38,795 | ||||||||||||||
| Gross profit | 23,212 | 25,806 | 28,488 | 30,976 | 108,482 | ||||||||||||||
| Gross Margin | 73.1 | % | 73.1 | % | 74.1 | % | 74.1 | % | 73.7 | % | |||||||||
| Operating expenses: | |||||||||||||||||||
| Research and development | 4,043 | 4,648 | 5,086 | 7,083 | 20,860 | ||||||||||||||
| Selling, general and administrative | 29,767 | 33,940 | 32,623 | 36,983 | 133,313 | ||||||||||||||
| Total operating expenses | 33,810 | 38,588 | 37,709 | 44,066 | 154,173 | ||||||||||||||
| Loss from operations | (10,598 | ) | (12,782 | ) | (9,221 | ) | (13,090 | ) | (45,691 | ) | |||||||||
| Interest expense | (858 | ) | (861 | ) | (861 | ) | (535 | ) | (3,115 | ) | |||||||||
| Other income, net | 379 | 338 | 355 | 429 | 1,501 | ||||||||||||||
| Loss on extinguishment of debt | — | — | — | (3,029 | ) | (3,029 | ) | ||||||||||||
| Loss before income taxes | (11,077 | ) | (13,305 | ) | (9,727 | ) | (16,225 | ) | (50,334 | ) | |||||||||
| Income tax provision | — | — | — | 44 | 44 | ||||||||||||||
| Net loss | $ | (11,077 | ) | $ | (13,305 | ) | $ | (9,727 | ) | $ | (16,269 | ) | $ | (50,378 | ) | ||||
| IRHYTHM TECHNOLOGIES, INC. | |||||||||||
| Revision of Prior Period Financial Statements | |||||||||||
| (Unaudited) | |||||||||||
| (In thousands, except share and per share data) | |||||||||||
| Year ended December 31, 2017 | |||||||||||
| As Reported | Adjustment | As Revised | |||||||||
| Revenue, net | $ | 98,509 | $ | 620 | $ | 99,129 | |||||
| Cost of revenue | 27,708 | 495 | 28,203 | ||||||||
| Gross profit | 70,801 | 125 | 70,926 | ||||||||
| Gross Margin | 71.9 | % | 71.5 | % | |||||||
| Operating expenses: | |||||||||||
| Research and development | 13,335 | (70 | ) | 13,265 | |||||||
| Selling, general and administrative | 84,737 | 515 | 85,252 | ||||||||
| Total operating expenses | 98,072 | 445 | 98,517 | ||||||||
| Loss from operations | (27,271 | ) | (320 | ) | (27,591 | ) | |||||
| Interest expense | (3,386 | ) | — | (3,386 | ) | ||||||
| Other income, net | 1,237 | — | 1,237 | ||||||||
| Net loss | $ | (29,420 | ) | $ | (320 | ) | $ | (29,740 | ) | ||
