SAN FRANCISCO, Aug. 05, 2021 (GLOBE NEWSWIRE) -- 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, 2021.

Second Quarter 2021 Financial Highlights

Revenue was $81.3 million, a 59.8% increase compared to second quarter 2020
Gross margin was 68.0%, a 1.6% decrease compared to second quarter 2020
Adjusted EBITDA (defined as EBITDA less stock compensation) was negative $4.6 million
Cash and Short-Term Investments were $255.7 million as of June 30, 2021, a $6.6 million decrease from March 31, 2021

"Our second quarter results reflected continued strong demand for our Zio platform, as well as solid execution on our operating goals. We were pleased to see growth in both total revenues and unit volumes in the quarter, with Zio AT surpassing 10% of our total revenue for the first time," said Doug Devine, iRhythm Interim CEO and CFO. "We also made significant advancements to our technology platform in the second quarter with two new 510k clearances that demonstrate our continued commitment to innovation. We are pursuing many opportunities to leverage our technology platform to drive growth and value creation, including through new products such as Zio AT, new indications such as Silent AF, and international expansion. I remain incredibly excited about the future of iRhythm."

Second Quarter Financial Results

Revenue for the three months ended June 30, 2021 increased 59.8% to $81.3 million, from $50.9 million during the same period in 2020. The increase was primarily driven by a mix of volume growth, improvements in collections performance with some contracted and non-contracted payors, and some favorable pricing adjustments for Zio AT.

Gross profit for the second quarter of 2021 was $55.3 million, up from $35.4 million during the same period in 2020, while gross margins were 68.0%, down from 69.6% during the same period in 2020. The decrease in gross margin was primarily due to a decrease in Zio XT Medicare reimbursement rates, higher overtime costs related to capacity shortfalls offset by volume benefits.

Operating expenses for the second quarter of 2021 were $72.3 million, compared to $55.6 million for the same period in 2020. The increase in operating expenses was primarily due to increases in Stock Based Compensation and payroll offset by decrease in Verily milestone expense.

Net loss for the second quarter of 2021 was $17.4 million, or a loss of $0.59 per share, compared with net loss of $20.4 million, or a loss of $0.75 per share, for the same period in 2020.

Financial Guidance

For the full year 2021, the company expects revenue to range from $320 million to $325 million, representing year over year growth of 21% to 23%. Revenue guidance for the year does not assume any changes to Medicare reimbursement and as disclosed previously discussions with Novitas and the other Medicare Administrative Contractors (MACs) remain ongoing.

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 live and archived webcast of the event available 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 relating to reimbursement rates and coverage, market expansion, plans to reduce costs and improve efficiency and financial guidance. 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 filings made with the Securities and Exchange Commission on Forms 10-K and 10-Q. 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

Leigh Salvo

(415) 937-5404

investors@irhythmtech.com

Media Contact

Morgan Mathis

(310) 528-6306

irhythm@highwirepr.com

IRHYTHM TECHNOLOGIES, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share and per share data)

	June 30,			December 31,
		2021			2020
Assets
Current assets:
Cash and cash equivalents	$	138,872		$	88,628
Short-term investments		116,792			246,589
Accounts receivable, net		63,423			29,932
Inventory		9,261			5,313
Prepaid expenses and other current assets		7,219			7,363
Total current assets		335,567			377,825
Property and equipment, net		47,086			34,247
Operating lease right-of-use assets		87,533			84,714
Goodwill		862			862
Other assets		14,176			14,091
Total assets	$	485,224		$	511,739
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	8,945		$	4,365
Accrued liabilities		42,598			40,532
Deferred revenue		2,507			930
Debt, current portion		11,667			11,667
Operating lease liabilities, current portion		7,301			8,171
Total current liabilities		73,018			65,665
Debt, noncurrent portion		15,515			21,339
Operating lease liabilities, noncurrent portion		87,984			81,293
Other noncurrent liabilities		2,265			1,830
Total liabilities		178,782			170,127
Stockholders' equity:
Preferred stock		-			-
Common stock		27			27
Additional paid-in capital		656,231			646,258
Accumulated other comprehensive income		7			11
Accumulated deficit		(349,823	)		(304,684	)
Total stockholders' equity	$	306,442		$	341,612
Total liabilities and stockholders' equity	$	485,224		$	511,739

IRHYTHM TECHNOLOGIES, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share and per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021				2020
Revenue, net	$	81,278	$	50,878		$		155,589	$	114,413
Cost of revenue	25,995		15,484				49,453		31,547
Gross profit	55,283		35,394				106,136		82,866
Operating expenses:
Research and development	9,606		12,542			18,116			20,957
Selling, general and administrative	62,669		43,014			132,482			91,244
Total operating expenses	72,275		55,556			150,598			112,201
Loss from operations	(16,992)		(20,162)			(44,462)			(29,335)
Interest expense	(307)		(381)			(642)			(761)
Other income, net	55		237			179			742
Loss before income taxes	(17,244)		(20,306)			(44,925)			(29,354)
Income tax provision	116		131			214			148
Net loss	$	(17,360)	$	(20,437)		$		(45,139)	$	(29,502)
Net loss per common share, basic and diluted	$	(0.59)	$	(0.75)		$		(1.54)	$	(1.09)
Weighted-average shares, basic and diluted	29,318,894		27,176,601				29,242,089		27,008,236

IRHYTHM TECHNOLOGIES, INC.

Reconciliation of Net Loss to Adjusted EBITDA

(Unaudited)

(In thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Net loss	$	(17,360	)	$	(20,437	)	$	(45,139	)	$	(29,502	)
Income tax provision	116			131			214			148
Depreciation and Amortization	2,153			1,669			4,189			3,220
Interest expense	247			257			494			60
Stock-based compensation	10,260			9,768			30,490			10,073
Adjusted EBITDA	$	(4,584	)	$	(8,612	)	$	(9,752	)	$	(16,001	)

iRhythm Technologies Announces Second Quarter 2021 Financial Results