8-K/A
iRhythm Holdings, Inc. (IRTC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 4, 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. ☐
Explanatory Note
This Current Report on Form 8-K/A amends the Current Report on Form 8-K filed by iRhythm Technologies, Inc. with the Securities and Exchange Commission on August 6, 2020 (the “Original Report”) and is being filed in order to provide a revised version of Exhibit 99.1. The Original Report otherwise remains unchanged.
Item 2.02. Results of Operations and Financial Condition.
On August 6, 2020, iRhythm Technologies, Inc. issued a press release regarding its financial results for the second quarter ended June 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 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 4, 2020 Douglas Devine was granted a performance-based restricted stock unit, award covering a target of 9,123 shares of Common Stock. This award vests over 2.5 years and is subject to performance-based criteria relating to the achievement of certain corporate goals. The maximum number of shares of Common Stock that may vest under the award is 200% of the target number of shares of Common Stock subject to the award. Upon achievement of performance during a performance period, the applicable portion of the award will vest subject to Mr. Devine’s continued employment with the Company through the date that performance is certified. The performance period ends on December 31, 2022 with certification expected by March 15, 2023. The equity award is consistent with the terms of Mr. Devine’s offer letter filed as Exhibit 10.1 to the Company’s Form 8-K filed on June 4, 2020.
Item 8.01 Other Events.
Effective August 5, 2020 Mark Rubash was appointed to the Company’s Nominating and Corporate Governance Committee (the “Committee”). Mr. Rubash will receive standard compensation for his membership on the Committee.
Item 9.01 Financial Statements and Exhibits
| (d) | Exhibits. |
|---|---|
| Exhibit No. | Description |
| --- | --- |
| 99.1 | Press Release of iRhythm Technologies, Inc. dated as of August 6, 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: August 7, 2020 | By: | /s/ Kevin M. King |
| Kevin M. King | ||
| Chief Executive Officer |
Document
Exhibit 99.1
iRhythm Technologies Announces Second Quarter 2020 Financial Results
SAN FRANCISCO, August 6, 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 June 30, 2020.
Second Quarter 2020 Summary
•Revenue of $50.9 million
◦3% decrease compared to second quarter 2019
◦20% decrease compared to first quarter 2020
•Gross margin was 69.6%
◦560 basis point year-over-year contraction
“Despite the challenges presented by the pandemic, we have continued to deliver our Zio service without interruption to the physicians and patients that rely on it. Our team recognized the need for high quality care has never been greater and I could not be prouder of the commitment we have demonstrated,” said Kevin King, CEO. “Second quarter results were encouraging, despite the COVID-19 impact felt early in the quarter. We saw a steady pace of recovery in registration rates throughout the quarter that exceeded our initial expectations.
“Importantly, we believe we continued to penetrate the market and take share as an acute shift away from Holter monitoring took place. Our digital platform is well suited to deliver services in a virtual environment, with a single-use Zio device and home enrollment capability. We expect it will remain an important component of many of our accounts’ workflows going forward. We also saw significant traction with Zio AT, signaling the increasing value our complete platform solution provides in streamlining workflows across cardiac monitoring needs.
“While we are encouraged by our recent rebound, the macro environment remains uncertain and several market factors could result in suppressed demand through the rest of 2020. We are managing our business for the long-term with planned investments to drive growth and profitability and remain as confident as ever in the durability of our business,” concluded King.
Second Quarter Financial Results
Revenue for the three months ended June 30, 2020 decreased 3% to $50.9 million, from $52.4 million during the same period in 2019. The decrease was primarily due to lower volumes but was slightly offset by increased ASP.
Gross profit for the second quarter of 2020 was $35.4 million, or 69.6% gross margin, compared to $39.4 million, or gross margin of 75.2%, during the same period in 2019.
Operating expenses for the second quarter of 2020 $55.6 million, compared to $50.0 million for the same period in 2019 which was an increase of 11.1%. Excluding a $3.0 million milestone payment to Verily, operating expense increased 5.1% to $52.6 million.
Net loss for the second quarter of 2020 was $20.4 million, or a loss of $0.75 per share, compared with net loss of $10.7 million, or a loss of $0.43 per share, for the same period in 2019.
Total Cash and Short Term Investment balance at June 30, 2020 was $114.9M.
Guidance for Full Year 2020
As previously reported, iRhythm is not providing 2020 financial guidance due to the continued uncertainties from the impact of COVID-19.
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
Exhibit 99.1
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 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.
| Investor Relations Contact: | Media Contact: |
|---|---|
| Lynn Pieper Lewis or 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)
| June 30,<br>2020 | December 31,<br>2019 | |||
|---|---|---|---|---|
| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 81,730 | $ | 20,462 |
| Short-term investments | 33,196 | 120,089 | ||
| Accounts receivable, net | 22,877 | 23,867 | ||
| Inventory | 4,989 | 4,037 | ||
| Prepaid expenses and other current assets | 3,743 | 4,337 | ||
| Total current assets | 146,535 | 172,792 | ||
| Long-term investments | — | 8,030 | ||
| Property and equipment, net | 30,199 | 26,464 | ||
| Operating lease right-of-use assets | 87,758 | 90,124 | ||
| Goodwill | 862 | 862 | ||
| Other assets | 10,870 | 7,940 | ||
| Total assets | $ | 276,224 | $ | 306,212 |
| Liabilities and Stockholders’ Equity | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 5,012 | $ | 8,243 |
| Accrued liabilities | 25,170 | 32,714 | ||
| Deferred revenue | 1,197 | 1,251 | ||
| Debt, current portion | 7,778 | 1,944 | ||
| Operating lease liabilities, current portion | 8,157 | 7,914 | ||
| Total current liabilities | 47,314 | 52,066 | ||
| Debt, noncurrent portion | 27,164 | 32,989 | ||
| Operating lease liabilities, noncurrent portion | 83,800 | 85,748 | ||
| Total liabilities | 158,278 | 170,803 | ||
| Commitments and contingencies | ||||
| Stockholders’ equity: | ||||
| Preferred Stock | — | — | ||
| Common stock | 25 | 25 | ||
| Additional paid-in capital | 408,096 | 395,695 | ||
| Accumulated other comprehensive income | 181 | 82 | ||
| Accumulated deficit | (290,356) | (260,393) | ||
| Total stockholders’ equity | 117,946 | 135,409 | ||
| Total liabilities and stockholders’ equity | $ | 276,224 | $ | 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>June 30, | Six Months Ended<br>June 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||
| Revenue, net | $ | 50,878 | $ | 52,441 | $ | 114,413 | $ | 100,775 |
| Cost of revenue | 15,484 | 13,012 | 31,547 | 24,785 | ||||
| Gross profit | 35,394 | 39,429 | 82,866 | 75,990 | ||||
| Operating expenses: | ||||||||
| Research and development | 12,542 | 7,833 | 20,957 | 14,532 | ||||
| Selling, general and administrative | 43,014 | 42,161 | 91,244 | 80,227 | ||||
| Total operating expenses | 55,556 | 49,994 | 112,201 | 94,759 | ||||
| Loss from operations | (20,162) | (10,565) | (29,335) | (18,769) | ||||
| Interest expense | (381) | (440) | (761) | (849) | ||||
| Other income, net | 237 | 295 | 742 | 670 | ||||
| Loss before income taxes | (20,306) | (10,710) | (29,354) | (18,948) | ||||
| Income tax provision | 131 | 15 | 148 | 27 | ||||
| Net loss | $ | (20,437) | $ | (10,725) | $ | (29,502) | $ | (18,975) |
| Net loss per common share, basic and diluted | $ | (0.75) | $ | (0.43) | $ | (1.09) | $ | (0.77) |
| Weighted-average shares, basic and diluted | 27,176,601 | 24,724,808 | 27,008,236 | 24,600,250 |