iRhythm Technologies Files Quarterly Report on Form 10-Q for Third Quarter 2019 and Updates Guidance for Full Year 2019
Conference Call Scheduled for Today at 8:30 AM ET/5:30 AM PT
SAN FRANCISCO, December 23, 2019 - 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
Investor Relations Contact:
 
Media Contact:
Leigh Salvo
 
Saige Smith
(415) 937-5404
 
(262) 289-7065
investors@irhythmtech.com
 
irhythm@highwirepr.com







IRHYTHM TECHNOLOGIES, INC.
Revision of Prior Period Financial Statements
(Unaudited)
(In thousands, except percentages)
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 percentages)
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 percentages)
 
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
)