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iRhythm Technologies Announces Second Quarter 2020 Financial Results

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 Salvo Saige Smith
(415) 937-5404 (262) 289-7065
[email protected] [email protected]

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