IRMD - Earnings call transcript Q1 2018

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the IRADIMED CORPORATION First Quarter 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session.

As a reminder, this conference call is being recorded today, April 30, 2018 and contains time-sensitive information that is accurate only as of today. results first financial XXXX. released IRADIMED for quarter the Earlier, the press is on A IRADIMED.com. this announcing their Company’s at News, copy of heading, release earnings the available website under to release X-K Form afternoon. also press Commission this the of and Exchange copy be A furnished the Securities on will sec.gov. the furnished, at the can be Form Once X-K of found copy for days. This call at over be and replay a live on IRADIMED.com call available on will XX Internet is the being the the website of broadcast website the next the Company’s The call today’s agenda follows. for as be will President and opening Susi, Chief Roger IRADIMED, Executive will comments. Officer present of Then Sales Brent discuss Johnson, IRADIMED’s Marketing, orders. Executive Vice President of customer and Worldwide will Scott, Chris call finally, Company’s to financial Officer, before IRADIMED’s And will up summarize the Chief Financial questions. the opening results,

forward-looking Litigation Some the meaning of the Act to Reform furnished information constitute within Private statements of be Securities in XXXX. will of the session today’s

Forward-looking plans, results, of forward-looking results that future from differ statements and Company’s risk on XXXX. materially events, future IRADIMED those are expected the a number the you due to reminds may for include performance, factors. focused results statements and these

IRADIMED which the the and the most may of would Corporation. of affect be at Chief Mr. that Roger recent to free turn SEC’s may the the business, filed the section please and see over Officer reports with uncertainties description relevant Risk Commission, sec.gov. Company’s risk the Susi? Exchange now Factors website obtained for from For Company’s I of call to and like Susi, Executive Securities President

Roger Susi

guidance. revenue GAAP of first and nearly positive everyone. income income earnings response the Operationally, $X.XX than of quarter, pleased $X.XX illustrate device revenue prior business $X.X net company of is meaningfully toward QX, and offerings, you, and which higher net nearly non-GAAP This well. of QX, I by X%. diluted over these our metrics XXXX, revenue we share. with XX% XXXX quarter share customer new with diluted million. our they and performing the morning with also monitor. am year. XXXX Both strength patient per very now XXXX, include Thank good and grew reported increased exceeding morning, first per results, Compared last believe our MRI GAAP non-GAAP

execute efforts $XXX coupled the we for multiple progress of XX% and quarter XX% I'd timing processes, the quarters, team With has my development revenue and all monitor the of into my from from their it approximately now. nicely new you momentum from see several $XXX that These in patient with operational take for continuation development, and what coming add revenue the making to while building bright towards between IRADIMED's of an is with of integrated in five are which towards margins XX%. although remaining of with been sales pumps; new operational smoothly monitor; is meeting on carry XX% next to I XX% integrating several patient along from company Of having years, During IV like years. in as progress to and are a vision back approvals FDA what products our from fully services the million on I the and around to momentum our currently the of be corresponding an on for quarter-to-quarter picture Manufacturing sales significant new made established exciting the development the over major look potential. details with and the management on future, detection pipeline. another IV our million projects breakup production I'd we on the expectations run of progress have and with into the share the patient new driving like future and annual five vision, focused first generating step website. spots that orders demand tracking not product bioscience pumps. chip this and right are of monitoring These products, discuss commercialization. aspirational new on can located clearance disposables achieving progressing years, device. they five are engineering a seeing our continue a found ferromagnetic am This markets, to from clear X% thermal developing monitor simultaneously of presentation we to goal Based international under X% our I devices new process,

be much line. our there products in ability have that towards level the a this the our this revenue drive achieve us will to when be done, composition, years, I we considering however, confidence to great While of straight work to five although, in expect path can't is strengths of goal,

pump, we have the IV pump this of in device with cornerstone of goal and technology, clearly the market. experience First tremendous million is IV our the this $XXX comprised

We actively have market, of are deeper long lines. running from efforts designing generation moved adoption not pump this by next yet rates will which with IV system, underway quicker facilitate expect the well development and penetration I hospitals that

elevated their Additionally, delivery. MRI existing our and so leadership in may factors the the expect further a growth combination next-generation MR IV from replacement to these pump rates solidify create customers IV that and will replace I want aging and result in need ultimately opportunity of pumps, fluid

historical welcomed offerings. was introduced year of patient as new adopt customer hone and hopeful market monitor sales been conservative. have as revenue far goal to we from other expect the the monitor, my monitor report the as more patient last been $XXX revolutionary customers feedback, continued that have we million towards thus grow late proud just vital a from to that our that becoming and prove given our new feel by positive I'm selling Ultimately, our skills anticipated, our to solution. sales Second, contribution the expected they may customers to I'm signs many is product device alternative this limited innovation restricted

portion pump our million largest $XXX of goal by are sale from and comes third which disposables services, system. of The the primarily driven the IV

pump, growth patient of the sales services. next growth from business, accelerating market disposables expectation an With expanding and in of from in monitoring increases generation our IV corresponding the I and MR foresee share supportive

billion from my remaining Finally, and ferromagnetic of the goal thermal detection $XXX comes portion management devices.

to have project XX the already longer-term to within Thermal detection late We management five-year I next look begun XX of is period. anticipate the product, ferromagnetic the months. in and development begin a commercialization beginning contribute that to

this is is me aware led what million anticipated goal So this the path a vision to $XXX exciting of outcome. goal, guidance, has our in stakeholders of clear five-year my not make

the to possess, we and development enable that with predominantly will our to being forward with core and that this devices goal. have taken of size, the see that technology attainment of we press continue steps With we the along capability sales five-year

quarter Now Brent, review the before guidance second XXXX. the to call financial like I'd our full passing for the and year over

we $X.XX today, quarter $X.XX earnings non-GAAP $X.XX. As GAAP revenues and $X.XX diluted per $X.X of second earnings earlier we announced of to to expect share $X.X million million, to

$X.XX and $X.XX earnings Additionally, XXXX per we year share to have of diluted share $X.XX expect diluted increased $X.XX. now our of earnings non-GAAP GAAP and full earnings to per guidance,

to $X.XX Our $X.XX previous earnings of $X.XX to was GAAP $X.XX. earnings and guidance of non-GAAP

full $XX.X remains XXXX to revenue million. our $XX at million guidance now For

for And of discussion to so I'd to our like the customers' now turn call Brent orders. over

Brent Johnson

Roger, good morning, and everyone. you, Thank

and patient pumps the IV the address then monitor. move I'll on new to First,

approximately the we composition orders sales The said, good care exceeded that's team with quarters quarter Roger bright orders a over and orders been pump existing that Booking pumps multiple to As IV of continues this with they gain influenced spot hospital. multi on IV this again strategy total first for recent quarter, order, a for now another orders of a us of and coming multi building the our targeting orders continuation year. for third three several first-time typically the quarter Multi pump the coming in expectations. of domestic us our system define consistent traction. quarters, our quarter, trends our pump from customer heavily for the for departments the was had for half from half sets IV our These which for well-established strength with of critical now. the and the other were sold as to last remains adopters, US pumps These give or accounted department the a XX and confidence order of pump first single by period, are our pumps quarter % of one units more customers. increase

are by hospital to process MRI strategy experiencing patients or lines see rate is without And in waiting MRI stable while conventional are of demand success for in we time-consuming, to pumps those changing often safe our using go success room or to extending stimulating medication. with customers IV diagnostic care converting difficult with are the just until and practice the beginning long-standing We long enough scan departments. IV critical into greater MRI pumps of

we've both As workaround solutions of risks have associated them. discussed with patient before, negative these

design. XXXXMRI As them visualize for with impressed our made additional IRADIMED see factor as monitoring hospitals the systems, form what demonstrations of signs The by efficiencies this vital device. patient utilization during by compatible are they resonates new possible compact and they

an below were encouraged remain world. our demand world us, the throughout as customers a company and transporting great US, this hospitals and into is the care our in into to that much there's discovery change certain that's having the the were and make the able of competitive operation. allows sales period with about the increasing price utilization anticipate too only additional the transport forecast, single full market makes customers, XXXX a truly is mobile a for efficiencies patient in to We to to for realizing quarter future believe a deals. I time-consuming multiple is IRADIMED for they MRI original considering of having orders ability to remains little capability not the in us us from into that without their Bundling bundle a we combined over, monitor back we our and IV advantage reading as for pump provide first of system patients amount as that aggressive and this While the the move highly one forward device opportunity we're to occurring and package with products compete the equipment driving

and US expansion we're As two searching nurse committed markets and are during us directors sales and clinical call, for XXXX. in both area for plans about last the which expansion US that year, currently international by the teams manager for the and talked teams. on track additional remain managers, of itself, growing our sales sales We expansions remain XX team growing three total our customer and to service the our a the supplemented I bringing direct sales on plans to

quarter first results. our Now I'll summarize financial it to turn over Chris to

Chris Scott

Brad. I'll as Thanks as financial GAAP well on basis, discussing on our Today, a basis. be non-GAAP results

Our stock measure non-GAAP from operating taxes, infrequent of financial and purchases cash for our provisions GAAP the results or considered be related the provision performance. statements financial is are of our can their tax cash And of in less our flow the excluded income believe expense income measures, We excluded presentation on as costs our for more operations and cash flow normal tax used of based ongoing helpful with lastly based indicative are these thorough property future from analysis non-GAAP equipment. tax. providing and nature these items of free not along effects, compensation

release. the last non-GAAP on find to GAAP page of reconciliation measures these can a the You today's measure of nearest

current compared same was already last As to $X.X current current and XXXX million revenue and year. the international revenue quarter, XXXX was to first or unit or $X.X million $X.X of quarter the same revenue compared first same were from compatible The adjustments. million, of Domestic Operating quarter first $X.X from period in for the for revenue for for we million increase year price in XXXX. compared of of international for million sales quarter from last operating the employee of was in for was prior to expenses quarter reported million $X signs compared devices $X.X XX.X% to lower partially of approximately for from margin decrease to million consulting million million was revenue during is higher $X.X the The $X.X quarter the from basis the revenue, to of expenses for the patient sales compared last in million gross $X.X the compared same QX, $X compared commissions $X.X revenue, services of the known headcount, expenses last pumps for % the for XXXX quarter year monitor, for a new for margin year. the quarter, compared the benefits, Revenue our IV stated, due million costs. $XX,XXX, $X.X $X.X XX% XXXX, was and the for to ASP a quarter, the to of is was million XX% for Revenue revenue, million, the devices quarter. in $X.X increase selling $XX,XXX last first was The higher quarter. XX.X approximately quarter percent $X quarter, for due was MRI recognizing the or million first XX.X% revenue for to expenses quarter year. our to quarter, favorable for inventory result $X.X year. amortization and higher higher prior compared quarter. compared the in current quarter sales. year. sales due dollar disposables Revenue for of Gross average of The Included our XXXX contracts current cost to the vital mix result XXXX million from on favorable to extended the offset $X.X and first finally to quarter million sales, million, maintenance payroll by for

compared prior rate rate the to XXXX tax is XX.X effective to in taxable current was period %, higher income due tax for to XX.X% the current effective period. for Our primarily period. the quarter compared year the negative Higher

quarter, was diluted for current On quarter Act, for compared higher year. was rate loss percent tax income on US to a to share diluted the Federal first US our Jobs is Tax the $X.XX included year. rate basis, $X.XX net quarter On breakeven the non-GAAP net Federal share, as per GAAP a quarter first lower the per for basis compared current income and tax rate reflected of the included, results. first which quarter tax XXXX last for in $X.XX Cuts the the last Additionally, basis,

accounts and provided net $X.X XXXX For the net net increase the by operations cash is million, inflows three payable, of months ended accounts receivable, million higher for to to result XXXX, outflow net $X.X cash the a period. accrued cash of primarily March income and higher XXst, lower related cash compared The inventory. to was related income and outflows

million to flow $X.X measure Our free quarter the negative the last year. non-GAAP for first compared cash million a $X.X was current a period, for

XXst, investments. the of cash we $XX.X As March had for XXXX, of over Operator? million call and turn And now questions. I'll

Operator

first Securities. question [Operator from Larry our from Instructions] Solow And comes CJS

Your line is open.

Larry Solow

morning, for Good Thanks guys. taking questions. the

on the changing your real briefly first one guidance. on -- Just just

changed sort improvement compared little year? outlook the Is to quarter? lower the I for expectations a So sales my driver it the haven't least what's bit that earnings know you Is outlook all. at SG&A of at the of this your sort of in

Chris Scott

Yes. that SG&A Lower part is Larry. of

our first quarter. spending our I controls, cost think pretty and in being habits we did we're with -- well also the

of was medical tax, I happen which released the had until excise and also suspension after device that very our further the helpful guidance. we didn't think

think all those So a it's combination I things. of

Larry Solow

not the XX. it, targets And you on expect you Got be to headcount to you guys thought call add by and the side the okay. two sales that more to year-end because XX said Is had plans. SG&A last I at bodies expect just or it

Brent Johnson

plan we to This bring Larry. XX. quarter Yes, two and this two would is next it adding which quarter are Brent. Yes, more to we add

Larry Solow

to little booking than were speak then think give other know little maybe speak half current was then you exact why you. quarter comment just you numbers you And got you just I quarter of on two that? on the and Got a bit pump And the expected a a of you anyhow, quantify the today, of more maybe data on less monitor just actually sales orders? slower but QX don't to but I think this bit just on can add normal side, expect you bit little little you to can or so there, XX you two back it, got and year,

Brent Johnson

Sure.

the bit orders one QX sale, yes, so you at of your typically if QX First usually quarters, a pump of a weaker part question, QX, our pump is little quarter. look strongest of is were,

the but of is amount So about had again strongest usually quarter-to-quarter sales, we QX same quarter. once our

don't any see typically so as that in QX. I And because of kind less we issues a little sales see in

we bit. little on So the pump like the a our exceeded expectations results side said,

again with patient On to talk we the yes patient monitor, don't a well, have the about. monitor lot side, history of it's- here

it's pretty expectations, was we here. see domestically some we're quarter little We've the monitors. speaking a with patient put and as those the you again little on new bit bit first the April and on quarter came ourselves domestic we so a a again the salesforce, of this QX, on on the in already plan. one in internationally So for and results. domestic a aggressive of we just -- -- strong on again a it's a expectations up quarter -- sales But domestically, just product, We but domestic to off teams train had side, ahead train below a start side, and --again great ramping

Larry Solow

it. Got

XX% but Just if you million about target annual sales from the there? $XX five $XX replacement, the would give Roger I sort sales, growth last a color other what when you or be that of time more a new drive, it out new would combination expect great. timeline product any And on more year two, in of you sort the for today. us it a million, rough mention would be maybe don't on of did pump imply question it about know

Roger Susi

pump change that see in definite mark in change to about towards available. We're the plan, slope expecting new a third $XXX slope see yes, million the the once that year. that Well, is in Yes. you'll

So right have I kicks the of we and of business, afterburner really replacement think now. mentioned, which the don't because if real in any we

Larry Solow

Will as what that the was long sort -- or relative what to new need miss, one drives that last or is well the one won't because a becomes actually new they have a replacement? and of be just can't you'll obsolete that new that it Right current product product features it whole

Roger Susi

Larry. above. All above, the right, the You're all

Operator

comes our Capital ROTH you. from Thank next Partners. David question Solomon And from

open. is line Your

David Solomon

Hey, guys, thanks for taking questions. my

the want to Just off pumps. on start

orders. China Were in users users? are So pump down? from and triple double you said now first-time from XX% increase those more Are that experienced multi those

Brent Johnson

don't I quarters it really previous you on mean that we tell what are where yes, again I in have about this David, those pretty but in we much XX:XX. I granularity new typically where do remarks, we general that. guidelines have sales, follows can the once it's talked my installations,

go We some have have patients in we the like so that MRI may where their after And we broken into pumps, can get and existing we them board for on in a the they got bring one that their multiple we buying ICU, then or beachhead bring buying department area. out. with installations once try to and there pumps

David Solomon

is again, color you sales the little the on that company? pumps? more on side that pumps are the weren't on people pumps higher Can just that gotten give aware and to the Okay, a then so shift that your bit the of in and international monitor interested have now international

Brent Johnson

that's be quarter the we're to we've strong tends that business, is is the area has end a it are like player this previous more we in the we helping area. And as in get a and little up an in part second international where large, starting I known orders we seen that something and think, and there international our we said of than internationally business. the But to patient international sales. had tend call in on some recognition is a that and is more us row to out said, big established market major because a different it and think more domestic larger monitor down a there's becoming So and I business efforts that that, with in influence sales is do monitors some higher again more the top

David Solomon

on monitor the just Excellent side. and

said a the international can monitors? versus or escrow You I group you breakdown that a did rough international for US get

Brent Johnson

Well, counts that far as yes, we like the unit things really and don't as that. granularity go into

you I can can think that and spoken about with you has see reference. Chris the see revenue that from present, financials wise

Roger Susi

have clearance Maybe comment I something previous not add that have I happened international my the I by should a mean FDA little mentioned -- as approvals might that when these and I we well.

been at sell internationals domestically of November about really only this in don't months, You last for we now year. this to began and thing forget XX

starting and areas, when a went gun for quite there's the in the it's off So a difference difference. two

David Solomon

going --I not are on and half side if it seeing and US give know how color are of love you they're you Absolutely that of the not fourth them a those on want you're you bit capital approach that kind year we kind some don't or equipment yet. when seeing it's it's purchase you a now heavy the we these can but until where, back indications and healthcare the saying, in towards seeing November. have do conversations it little like of maybe end Anything systems probably is order right the to quarter, it oh, more make

Brent Johnson

talked unfortunately, not we the part products in K we're process the to you didn't Roger to that a first have last product, that's XXX- and introduce US quote until sure, as able when Well,. November of the get natural we year. about, until

and of aged as as more more in you you So the and more quotations more natural order a glean orders. there put typically out market, out and sales, quotations

place taking Now we're in pioneering. that market it. It's it's different not there that market unless there not pioneering. is market we're selling a not a is It's the not this we are out a pump, sale

but in again place to made don't of the that lots got later until year. mean going now. of down do customers are But, that sure deals system, we've it's sometimes deals the going that commitments take systems in about natural are we budgeting involved verbal are in buying purchases a I have get yes, right -- things our of those So us for lots that progression

as field So on opportunities, of be and goes bringing more quotations time in and in out and qualified we put the to going on those more more deals. we're more

David Solomon

Great and you guys a something had done specifically? bundling nothing then Have just bundled that that for have plan side. or any Is future? official just the some been orders on where you that

Brent Johnson

Yes.

kept some gotten We've orders. have bundled, pumps monitors. and We

Sometimes that actually combined comes but just purchasing the two that. at because orders way, have that we orders are separate them is like gotten that hospital

David Solomon

any competitor pricing whether Great you and just so then question anything the the much. or last from or response from not Thank on else there's out monitor to there? side regards hearing you're

Brent Johnson

Yes.

to coming us are in to thing to in everything they're down they're on We try taking as come which coming they mean at is to you look to price else a a experimented is on and that a reputation we merits book corner could yet aggressively a XXX% the leading two slope competitor it come speed try us for have ways. deals. product, competitor. us have of because necessarily coming with I'll compete the trying out at seen not there they've little our got like that's tell done you market look got what price market one I and down I to seen basically place we've a it of seriously and entrenched really our And thing and deals, the I it guess has discount. deals price my is sell we've with or the to good down And in aggressively bit in me down. competitor they're price in in

we've experience seen this. have thus yet. a So again but there early out much months And doing don't lot that's into of again pretty what of far, we're this

that able be to So along. on go as more we information we'll you give

Operator

you. HMTC. Thank from from Larry Haimovitch next And question comes our

Your line is open.

Larry Haimovitch

interesting mentioned Good my the to the you morning, just by quarter. hear a questions an meant price wanted have one congrats what answered by All questioners. previous been and in you your be might gentlemen, had other thought term remarks on Brent that I I prepared discovery. and solid really euphemism that. very and

Roger Susi

when in Maybe got way market, I'll the approval one we Because this got pricing we US plan in more market it we that point with or that on year late year I'm had we could thing, to international it approval really it But did well pushing as US did take how to showing felt the that basically the I so really, first, been And that price, Larry. we experimentation last than price ago. and a the the we've we a the sales possibly a raise priced stuff device. frankly down first bit.

we a bit. So over have I might in it and the first quarter up pushed that little thought

And so that's what by we mean price experimenting.

So feeling tight we're long-term, rate our pricing your shall exactly be way the where through --

Larry Haimovitch

it And competitors are prices. sounds also the reacting lower Roger your with like

Roger Susi

in $XXX,XXX even and seen now as they're we've and the XXs I into the area. a you quotes I into bit around and sure a know well, that it are, well They XXs cutting Yes. $XXX,XXX them quoting got think to we're used with occasionally right. getting down low the We as us see mean numbers and to I am they've are much out in a long seeing way there plus go. come little They're been

Chris Scott

the upon of course. configuration Depending

Roger Susi

Yes.

our yes, for are So, haircut them list that's a big under that. and

long yes, up So, to push wait they got underwater go a to us price-wise.

Larry Haimovitch

do What new or year the ASP be monitor? for range you me a ballpark the will your guess for give

Roger Susi

this pricing titration we're a of that Well, doing. that's

Brent Johnson

patient a patient other thing, sells as if a buy on IV forecast Whereas options to is be of there's to to because of the And you as configurations. going it's still kind mean the our lot pump configure not up fully variance as that much, average when those what than a little many there's easier and you really there speak more depends through basic not patient for that configuration monitor. much Larry, with and right. a monitor, there, the it the way monitor, I we're on that feeling not it there's so the

Larry Haimovitch

So -$XX,XXX. About vis-à-vis are much talking approximately? monitor, loaded difference How what's monitor price new in a $XX,XXX we new the about? barebones fully

Brent Johnson

is range on to Oh the no, probably probably the $XX,XXX. about it's is in The bigger end, low Larry, there. top end range

Larry Haimovitch

Okay.

Brent Johnson

difference, that's the is delta. the That

Larry Haimovitch

assuming one Yes. issues I'm capacity are other And expected? no monitor better does there have then manufacturing you do even than the question. if

Roger Susi

we're mentioned now operational got of market. Larry, over -- to XXX% we're this capacity. we've good take up plan wise here, I don't as a Right, to we not speed only but

aren't million we're even as even that showing five that next tell probably of my sharing only ambitions Our taking quite you from years, $XXX market. ourselves the of can the not XX% over high plan,

and capacity can have be So but million to with we do even -- have. the our well $XXX that five meeting production next the we space exceed over would our go rent goal very, to years great, million space $XXX more especially very goal out this and

Larry Haimovitch

year you is to What to What growth the average if does years? rate, compounded turn -- hit be? a out comp rate five annual five the $XXX were in right million annual

Roger Susi

It won't happen like the average.

Chris Scott

Yes. It's about XX%.

Larry Haimovitch

XX%, okay.

your go on over your to next five compounded grow years, annual will So a things according top the XX% line plan if basis.

Brent Johnson

Average.

Larry Haimovitch

earnings? would compounded? it that for does the vary or And higher be operating earnings right Okay, assuming than what would imply by to margins even it's obviously, I'm year. no year obviously that rate XX% going

Chris Scott

GAAP about margins achievement the basis. to XX% are on that operating XX% million on of talking of year we a $XXX Well

Larry Haimovitch

income? to Chris in what out a And be of does annual terms operating of growth compounded rate turn that

Chris Scott

have don't now, right I Larry. it with

Larry Haimovitch

more But than XX%.

Chris Scott

some Yes. get leverage it. of you'll Well, yes, out

Larry Haimovitch

Yes.

the growth achieve XX% be line on and XX% grow, that's could be income operating if right call pick the on to ballpark five that number average it just a number could compounding you above just you for goals line, a time you the could pick to your being. So top just grow for could it years

Chris Scott

I you. Susi Thank like I further to from any CAGR. over phone conference closing would remarks. revenue the now And turn lines. back than our to am for no the questions showing Greater Roger

Roger Susi

with very the how I'm of financial our and are in pleased performing Again, all results we areas business.

Our to for million in deliberate aim participating momentum five the you of years towards steps And throughout IRADIMED. make to is XXXX. goal continued positive this continue in And of Thank in coming. your today's achieving revenue for the $XXX support and call.

Operator

conference. does and conclude gentlemen, for today's you in participating Ladies the thank This program.

disconnect. all wonderful have a may You Everyone day.

IRadimed (IRMD) 30 Apr 182018 Q1 Earnings call transcript