8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): November 5, 2020

iRhythm Technologies, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	001-37918	20-8149544
(State or other jurisdiction of<br>incorporation or organization)	(Commission<br>File Number)	(I.R.S. Employer<br>Identification Number)

699 8th Street, Suite 600

San Francisco, California 94103

(Address of principal executive office) (Zip Code)

(415) 632-5700

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, Par Value $0.001 Per Share	IRTC	The NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On November 5, 2020, iRhythm Technologies, Inc. issued a press release regarding its financial results for the third quarter ended September 30, 2020. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.

This information is intended to be furnished under Item 2.02 of Form 8-K and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits

(d)	Exhibits.
Exhibit No.	Description
---	---
99.1	Press Release of iRhythm Technologies, Inc. dated as ofNovember 5, 2020.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	IRHYTHM TECHNOLOGIES, INC.
Date: November 5, 2020	By:	/s/ Kevin M. King
		Kevin M. King
		Chief Executive Officer

Document

Exhibit 99.1

iRhythm Technologies Announces Third Quarter 2020 Financial Results

SAN FRANCISCO, November 5, 2020 -- 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 September 30, 2020.

Third Quarter 2020 Summary

•Revenue of $71.9 million

◦31.6% increase compared to third quarter 2019

◦41.4% increase compared to second quarter 2020

•Gross margin was 74.7%

◦Consistent with comparable quarter in 2019

◦510 basis point increase quarter on quarter

•Adjusted EBITDA (defined as EBITDA less stock compensation) was positive for the first time at $14.8 million

•Completed follow on offering generating $206.8 million in net proceeds

◦Cash and Short Term Investments of $327.2 million at quarter end

•Recipient of National Health System funding in the United Kingdom as a winner of the Artificial Intelligence in Health and Care Award

“Our strong performance during the quarter was driven by further penetration of Zio XT in both existing and new accounts, continued ramp of Zio AT and continued utilization of our Home Enrollment service to sustain patient registration volumes in telemedicine settings. As we exited the quarter, many centers were prescribing Zio at or above the daily average we saw in February, prior to the impact of COVID-19. While the pandemic undoubtedly created unprecedented challenges, it also served to escalate awareness as to the benefits of Zio as our digital platform allows for cardiac monitoring independent of patient and physician location,” said Kevin King, CEO.

“There still remains some degree of regional variability in terms of registration volumes, and this trend significantly correlates to the new or continuing outbreaks in those areas. Nonetheless, we remain very confident in our ability to drive further market penetration, as well as the potential for expansion into the asymptomatic market following data from important trials currently underway,” concluded King.

Third Quarter Financial Results

Revenue for the three months ended September 30, 2020 increased 31.6% to $71.9 million, from $54.7 million during the same period in 2019. The increase was primarily due to higher volumes.

Gross profit for the third quarter of 2020 was $53.7 million, or 74.7% gross margin, compared to $40.9 million, or gross margin of 74.8%, during the same period in 2019.

Operating expenses for the third quarter of 2020 were $58.5 million, compared to $59.1 million for the same period in 2019 which was a decrease of 1%.

Net loss for the third quarter of 2020 was $4.7 million, or a loss of $0.17 per share, compared with net loss of $18.3 million, or a loss of $0.72 per share, for the same period in 2019.

Total Cash and Short-Term Investment balance as of September 30, 2020 was $327.2 million.

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.

Exhibit 99.1

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.

Use of Non-GAAP Financial Measures

iRhythm has supplemented its GAAP net income (loss) with a non-GAAP measure of Adjusted EBITDA. Management believes that this non-GAAP financial measure provides useful supplemental information to management and investors regarding the performance of the Company, facilitates a more meaningful comparison of results for current periods with previous operating results, and assists management in analyzing future trends, making strategic and business decisions and establishing internal budgets and forecasts. A reconciliation of non-GAAP Adjusted EBITDA to GAAP net income (loss), the most directly comparable GAAP measure, is provided in the schedule below.

There are limitations in using this non-GAAP financial measure because it is not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. This non-GAAP financial measure should not be considered in isolation or as a substitute for GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with iRhythm’s financial statements prepared in accordance with GAAP and the reconciliations of the non-GAAP financial measure provided in the schedule below.

Investor Relations Contact:	Media Contact:
Leigh Salvo	Saige Smith
(415) 937-5404	(262) 289-7065
investors@irhythmtech.com	irhythm@highwirepr.com

Exhibit 99.1

IRHYTHM TECHNOLOGIES, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share and per share data)

	September 30,<br>2020		December 31,<br>2019
Assets
Current assets:
Cash and cash equivalents	$	95,336	$	20,462
Short-term investments	231,901		120,089
Accounts receivable, net	28,955		23,867
Inventory	5,062		4,037
Prepaid expenses and other current assets	4,685		4,337
Total current assets	365,939		172,792
Long-term investments	—		8,030
Property and equipment, net	32,775		26,464
Operating lease right-of-use assets	86,247		90,124
Goodwill	862		862
Other assets	11,378		7,940
Total assets	$	497,201	$	306,212
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,838	$	8,243
Accrued liabilities	32,185		32,714
Deferred revenue	938		1,251
Debt, current portion	10,694		1,944
Operating lease liabilities, current portion	8,211		7,914
Total current liabilities	55,866		52,066
Debt, noncurrent portion	24,252		32,989
Operating lease liabilities, noncurrent portion	82,537		85,748
Total liabilities	162,655		170,803
Commitments and contingencies
Stockholders’ equity:
Preferred Stock	—		—
Common stock	27		25
Additional paid-in capital	629,484		395,695
Accumulated other comprehensive income	68		82
Accumulated deficit	(295,033)		(260,393)
Total stockholders’ equity	334,546		135,409
Total liabilities and stockholders’ equity	$	497,201	$	306,212

Exhibit 99.1

IRHYTHM TECHNOLOGIES, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except share and per share data)

	Three Months Ended<br>September 30,				Nine Months Ended<br>September 30,
	2020		2019		2020		2019
Revenue, net	$	71,944	$	54,673	$	186,357	$	155,448
Cost of revenue	18,232		13,785		49,779		38,570
Gross profit	53,712		40,888		136,578		116,878
Operating expenses:
Research and development	8,768		13,499		29,725		28,031
Selling, general and administrative	49,701		45,649		140,945		125,876
Total operating expenses	58,469		59,148		170,670		153,907
Loss from operations	(4,757)		(18,260)		(34,092)		(37,029)
Interest expense	(384)		(409)		(1,145)		(1,258)
Other income, net	569		396		1,311		1,066
Loss before income taxes	(4,572)		(18,273)		(33,926)		(37,221)
Income tax provision	105		20		253		47
Net loss	$	(4,677)	$	(18,293)	$	(34,179)	$	(37,268)
Net loss per common share, basic and diluted	$	(0.17)	$	(0.72)	$	(1.25)	$	(1.50)
Weighted-average shares, basic and diluted	28,050,210		25,247,831		27,358,096		24,818,482

Exhibit 99.1

IRHYTHM TECHNOLOGIES, INC.

Reconciliation of Net Loss to Adjusted EBITDA

(Unaudited)

(In thousands)

	Three Months Ended<br>September 30,
Net loss	$	(4,677)
Income tax provision	105
Depreciation and Amortization	1,702
Interest expense	223
Stock-based compensation	17,444
Adjusted EBITDA	$	14,797