AP NEWS
Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

iRhythm Technologies Files Quarterly Report on Form 10-Q for Third Quarter 2019 and Updates Guidance for Full Year 2019

December 23, 2019 GMT

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, June 30, September September 2019 2019 30, 2019 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 ) - ------ - - ------- - - ------- - - ------- -

Nine Adjustments Three months ended months ended ---------- March 31, June 30, September September 2019 2019 30, 2019 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, June 30, September September 2019 2019 30, 2019 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, June 30, September December December 2018 2018 30, 2018 31, 2018 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, June 30, Septembe December December 2018 2018 r 30, 31, 2018 31, 2018 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, June 30, September December December 2018 2018 30, 2018 31, 2018 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 Adjustmen As Revised t ----------- -------- ----------- 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 ) - ------- - - ---- - - ------- -