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December 23, 2019 at 7:00 AM EST

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, 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

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 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 )


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