iRhythm(US:IRTC)2020-02-28 03:24Financial Data and Key Metrics Changes - Full year 2019 revenue was $214.6 million, representing a 46% growth over the prior year, exceeding initial guidance of $201 million to $206 million [11] - Gross margin for the year was 75.5%, a 1.8 percentage point improvement over the prior year [12] - Fourth quarter revenue was $59.1 million, up 41% compared to the prior year period, with gross margins increasing to 76.5%, a 2.4 percentage point improvement [12][35] - The net loss for the fourth quarter 2019 was $17.3 million, or a loss of $0.65 per share, compared with a net loss of $16.3 million, or loss of $0.67 per share for the same period of the prior year [43] Business Line Data and Key Metrics Changes - The full commercial launch of Zio AT in October 2019 has enabled the company to be a single supplier to large integrated delivery systems [21] - Customer feedback on Zio AT remains extremely positive, with significant clinical advantages noted [23] - The diagnostic yield of Zio AT is 83%, approximately 20 points higher than traditional MCTs [24] Market Data and Key Metrics Changes - The company anticipates full year 2020 revenues to range from $280 million to $290 million, representing annual revenue growth of 31% to 35% [14] - The silent AFib market is a major part of the company's expansion strategy, with participation in three large-scale clinical trials [27] Company Strategy and Development Direction - The three primary components of the company's growth strategy are increased market penetration, increased operating leverage, and expanding the addressable market into new indications and geographies [18] - The company plans to add 20 additional sales representatives in 2020, ending the year with approximately 160 sales reps [19] - The company is focused on developing next-generation atrial fibrillation products in partnership with Verily [30] Management's Comments on Operating Environment and Future Outlook - Management expressed high confidence in the ability to grow and expand the business, driven by competitive differentiation and clinical superiority [13] - The company does not foresee any material impact from the coronavirus on its business in the near term [51] - Management anticipates achieving cash flow breakeven no later than the first half of 2021 [50] Other Important Information - The company raised net proceeds of approximately $107 million from a follow-on offering in September 2019 to fund growth initiatives [17] - The transition of the category three CPT code to a category one code is progressing as expected, with a recommendation to CMS anticipated in July [31][32] Q&A Session Summary Question: Update on RVU process and timing - Management confirmed that full disclosure regarding RVU values is expected in July [54][55] Question: Impact of delayed returns on revenue - Management estimated that approximately $1 million in revenue was delayed, with a 70-30 split between December and January [56][57] Question: Growth impact of Zio AT - Management indicated that Zio AT is contributing to growth, enhancing the overall platform's value [60][62] Question: Commercial pricing stability - Management stated that commercial contract rates have remained stable, with potential for increases based on clinical evidence [126][127] Question: Long-term growth outlook - Management remains bullish on long-term growth opportunities, emphasizing the large market potential and competitive dynamics [117][118]