Q1 2025 IRadimed Corp Earnings Call
Welcome to the Emirates Corporation, first quarter of 2025 Financial Results Conference call. Currently all participants are in the Sonoma mode and at the end of the call we will conduct a question and answer session.
This call is being recorded today, Monday, May 5, 2025, and contains time-sensitive accurate information only today. Earlier, IRadimed released his financial results for the first quarter of 2025.
A copy of this press release announcing the company's earnings is available under the heading news on their website at eradimed.com.
A copy of the press release was also furnished to the Securities and Exchange Commission on Form 8K and can be found at scc.gov.
This call is being broadcast live over the internet on the company's website at IRadimed.com and a replay will be available on the website for the next 90 days.
Some of the information today's session will cost for two forward-looking statements within the meaning of the Private Security's Logitech Mitigation Reform Act of 1995.
Forward-looking statements, focus on future performance, results, plans and events, and may include the company's expected future results.
Speaker Change: Eradimed reminds you that future results may differ materially from these forward looking statements due to several risk factors.
Speaker Change: for description of the relevant risk and uncertainties that may affect the company's business. Please see the risk factor section of the company's most recent reports filed with the Securities and Exchange Commission, which may be obtained free from the SEC's website at SEC.gov.
Speaker Change: I would like to turn the call over to Robert Susi, president and executive, excuse me, chief executive officer of Eradimed Corporation. Mr. Susi.
Speaker Change: Thank you, operator, and good morning. Thanks, thanks one and all for joining us on today's call.
Speaker Change: I am pleased to report another record quarter, making our 15th consecutive quarter of record revenues. For the first quarter of 2025, we achieved revenue of 19.5 million, which is an 11% increase over the same period last year.
Speaker Change: Gross Profit came in at 76.1% with earnings very strong as well, with gap diluted earnings per share increasing 16% from Q1 of 2024.
Speaker Change: Performance in the quarter was led by pump shipments with bookings of our 3860 MRI I'm continuing to excel into one
Speaker Change: But I'm also very happy to report the chipmins of our disposables grew well, and the bookings in Q1 indicate that our emphasis on the monitoring sales for 2025 can be expected to achieve our plans with this product line as well.
Speaker Change: Our COFO Jack, Glenn, will walk you through the financial details in a bit, but I'd like to address two other issues.
Speaker Change: questions of tariff impact and the FDA, particularly our 510K clearance and doj impacts.
Speaker Change: Starting with the tariff impact in a word, it's too soon to tell, but a review of the amount of foreign specifically Chinese materials we utilize should provide a background.
Speaker Change: As you dive into our gross margin or conversely our cost of goods, you would see that about 12% of revenue is bomb cost or the parts and stuff we buy to make our products.
Speaker Change: Examining this further, we find that about 3% of revenue, a quarter of this bomb, a cost, is connected to a high-tariff sources.
Speaker Change: If even in a horrible worst case, if Chinese tariffs should remain at 145 percent,
Speaker Change: Our 3% cost of such high tariff parts goes to 4.35%, so we do not see the risk of material cost impacts directly.
Speaker Change: from even this current first shot over the bow high tear that we put in place against China.
Speaker Change: Still, there are many other indirect effects of tariffs that are very difficult to predict at this time. For one, there is the threat that we already see with certain suppliers raising their pricing by using tariffs, more as an excuse to gouge.
We watch that carefully, though.
Speaker Change: We are actively dealing with such tactics and so far are managing those well.
Speaker Change: The good news thus far is that we do not see our customers reacting or feeling tear of pain. Therefore, we can report that we remain optimistic with the plans and guidance we have given. As for those impacts, particularly with the CDRH and FDA.
Speaker Change: It's interesting to note that we understand that some 20,000 jobs in this agency alone have reportedly been cut, yet we have felt nothing.
Speaker Change: We recently filed responses to the 50 or 60 additional information questions FDA asked us a few months ago regarding the 3870s 510K filed back in October and within a week we had an FDA response.
Speaker Change: This sort of engagement appears very quick, certainly as quick as we have seen, and would indicate that work at the FDA continues to get done.
Speaker Change: Along the lines of FDA and 510K clearance, we iterate what I explained in prior calls.
Speaker Change: This new device, the 3870 MRIV pump, will be a 2026 revenue story. We are in track and remain expectant of clearance in mid 2025, however, we expect only a light revenue from this new device in Q4 2025.
Speaker Change: as the cell and shipment cycle is measured in months, even for an exciting and anticipated new offering.
Morrow: Moral, as witnessed by the strong and continuing sales through customer replacement of the older 3860 IV pump driven by discontinuing offering our extended maintenance on pumps seven years and older, the new 3870 pump sales are expected to dwarf sales of this older model as the quarters progressed through 2026 and into 2027 certainly.
Morrow: Finally, with regard to our new facility under construction, I'm pleased to report that we are at the finish stage.
Morrow: with only minor material supply disturbances, which the GC has managed to mitigate well. At this point, we are far enough that potential surprise material cost impacts are well behind us.
Morrow: We are confident in a June July final certificate of occupancy with plans to begin moving as early as the 4th of July weekend with full operations in the new building by the end
Morrow: I'd like to outline what we expect to see in Q2 2025. As the second quarter, 2025 financial guidance, we expect revenue of 19.7 to 19.9 million.
Morrow: with Gap DeLuted Ernie's per share of 37 to 40 cents and non-GAAP DeLuted Ernie's per share of 41 to 44 cents.
Morrow: We reiterate our 2025 Revenue Guidance of 78 to 82 million for the full year. Gap to Looter Learning's per share with $1.55 to $1.65 and non-GAAP to Looter Learning's per share of $1.71 to $1.81.
Speaker Change: Now I'll turn the call over to Jack Glenn, our CFO to review the quarter's financial results.
Jack Glenn: Thank you, Roger, and good morning, everyone. As in the past, our results are reported on a gap basis and non-GAAP basis.
Jack Glenn: You can find a description of our non-GAAP operating measures in this morning's earnings release and a reconciliation of these non-GAAP measures to the GAAP measures on the last page of today's release.
Jack Glenn: For the first quarter of 2025, we reported revenue of 19.5 million and 11% increase compared to 17.6 million in Q1 of 2024.
Jack Glenn: This growth was driven by sustained demand for our IV infusion pump systems which grew 16% to 6 million and disposable revenue which increased to 23% to 4.9 million.
Jack Glenn: Patient Vital Science Monitoring System for Revenue Remain Steadier, 6.5 million.
Jack Glenn: Domestic sales accounted for 82% of total revenue in Q1 2025, up from 76% in Q1 of 2024. Domestic revenue increased 19% to 16 million while international sales declined 15% to 3.5 million.
Jack Glenn: Device revenue increased 9% to 13 million in the first quarter driven by the increase in pump revenue and FMD systems.
Jack Glenn: Revenue from Disposables increased 23% in the quarter, reflecting higher pump utilization and service revenue remains stable at a million.
Jack Glenn: The gross margin was 76.1% for Q1 2025, consistent with Q1 of 2024 as we continue to manage our production cost effectively and maintain our ASPs for both products.
Jack Glenn: Operating expenses were 9.4 million or 48% of revenue compared to 8.6 million or 49% of revenue in Q1 of 2024.
Jack Glenn: The dollar increase was primarily driven by higher general and administrative expenses of 16% to 4.6 million due to a rise in legal and professional costs tied to the regulatory effort for the new pump and increased personnel and benefit costs.
Jack Glenn: Sales and marketing expenses increased 9% to 4.2 million, reflecting all domestic sales territories being filled and higher commissions from some domestic booking if you want.
Jack Glenn: Research and development expenses decreased 24% to 0.6 million as we finalize key development pages for the 3870 pump.
Jack Glenn: We recognize the tax expense of $1.3 million, resulting in an effective tax rate of 21.2% for Q1 2025 compared to 21.1% in Q1 of 2024.
Jack Glenn: Gap net income was 4.7 million or 37 cents per diluted share, a 16 percent increase from 4.1 million or 32 cents per diluted share in Q1 2024.
Jack Glenn: On a non-GAAT basis, adjusted net income was $5.3 million or 42 cents per diluted share, up 17% from $4.6 million or $0.36 cents per diluted share in Q1 2024.
Jack Glenn: Cash flow from operations was $4.3 million in Q1 2025, up 10% from $3.9 million in Q1 2024.
Jack Glenn: Three cash flow, a non-GAAP measure, was $0.4 million, down from $3.4 million in Q1, 2024, due to $3.9 million in capital expenditures in the quarter of which $3.5 million was for the new facility.
Speaker Change: We expect to spend approximately $3 million more on the facility through its completion in July of 2025. And with that, I will turn this call over for questions, operator.
Speaker Change: Thank you. If you would like to ask a question, please press star 1-1 on your telephone.
Speaker Change: You will then hear an automated message advising your hand is raised.
Speaker Change: If you would like to remove yourself from the queue, press star one one again.
Speaker Change: We also ask that you please wait for your name and company to be announced before proceeding with your question.
One moment while we compiled the Q&A roster.
[inaudible]
Speaker Change: The first question that we have today will be coming from the line of Frank.
Takahin
Frank Takahin: Great. Thanks for taking the questions. I was hoping to start with a question on disposable. Obviously that was a really great number in the first quarter. I was curious if there was any anomalies in that number. Was there a catch-up and kind of burning down some of the backlog? Is this a new run rate in the disposable line item? Any color around that would be helpful. Thank you.
Frank Takahin: Sure, Frank. I can address that one. I think from the disposable standpoint, what we've said in the past typically, we would expect the disposable to grow commensurate with the capital growth.
Frank Takahin: and certainly tied to the pump utilization most of that. The quarter, there was some working down at the backlog as we strived to decrease our backlog or lead time on this as well as both, due to making sure we're meeting customer
Frank Takahin: So we did some of that in Q1 so that played part in that but going forward certainly I think you know it's always a little bit hard to because of the lead times our shorter for the visibility for us but every expected to be sort of in line with kind of the growth overall of the capital side. Thank you very much.
Frank Takahin: Sales being in line with your expectations for this year, which I think was implied for that to reaccelerate a little bit as you adjusted some of the incentive compensation.
Frank Takahin: around that product. Can you maybe go a little bit deeper into the composition of the backlog and why you feel pretty confident that mine is just going to recover through the year?
Speaker Change: Yeah, thanks Frank. Good to hear from you. Yes, as we spoke, you know, before previous quarter, right, that we were, we were
Speaker Change: you know, going to push hard on bringing up the Monitor sales in 2025, basically expecting that there'll be a droop in the pump revenues later in the year. Certainly once this new pump is cleared.
Speaker Change: this huge run rate that we've experienced in the last go five, six quarters for the old 3860 pump. No, they will come to an end and
Speaker Change: and so as we mentioned, at least a quarter ago, for 2025, we really did re-emphasize the monitor with the sales force.
He's a big, yeah.
Speaker Change: Commission structure and just, you know, highlighting it at our meeting in January , etc.
Speaker Change: and that is showing fruit. We did well. The bookings were strong in Q1, usually Q1s kind of week, generally, after a good big Q4 finish, but monitor bookings in Q1.
Speaker Change: held up the rate that they had ended Q4 at, and thus far, there were only a...
Speaker Change: We're only about five weeks into this Q2. I can tell you that the bookings for the monitor have...
Speaker Change: have been very strong already for the start of Q2. So, you know, that's why I mentioned, it looks like our plans are firming up as we expected along the lines of increasing to the monitor books, bookings.
Speaker Change: Great. Great. That's great color. And then just one last one, wanted to follow up on some of the FDA interactions. I heard your comment that you submitted the file and then you had heard back or submitted the file that answering the questions and then you had heard back from the FDA. What's left now where we stand today until we should see the clearance occurred? Sure.
Speaker Change: Well, yeah, that's a, that's a, you know, if I can read it out, to read tea leaves, but it's more or less a guess. So, just to refresh, right, we refiled the 3875-10K.
back in October . And we got an AI letter. Oh,
Speaker Change: Relatively quickly after that, I think it's four or five weeks or so after we submitted, we got a letter with, like I said, 50s.
Speaker Change: 50 plus questions in it, and we work basically for five months coming up with responses to all those questions.
That was returned. I believe about two weeks ago.
and last week.
Speaker Change: We started hearing from the FDA interactively, you know, cookie emails. Hey, could you find us this in the filing? Hey, did you answer this? You know, you use a different phrase than we like to see for this and, you know, pork.
Speaker Change: by helping them, you know, finalize and clarify some questions that are open to their minds.
Speaker Change: We'll see how that continues. We had we had two such email questions last week and we return those late Friday.
Speaker Change: We'll take it week by week, but there's two ways I can go.
Speaker Change: These interactive questions can be a good sign. They get things done quickly without
Frank Takahin: That's generally a good sign, but you know it could be that they get off the rails again as we go to many of these sorts of questions. Too soon to tell Frank.
Frank Takahin: If all goes well, though, this shouldn't go on for more than three or four weeks. At that point, we'll know where we stand much better.
Speaker Change: Got it. Okay. That's helpful. Appreciate the color. Thanks and congrats on the solid start to the air.
Thanks.
Speaker Change: Thank you, and that does conclude today's Q&A session. I would like to turn the call back over to Roger for closing remarks.
John Glenn, John Glenn, Roger Susi, John Glenn, Roger Susi, John Glenn, Roger Susi,
Roger: Well, thank you, operator. Once again, it's been my pleasure to report Eradimed's performance for this opening quarter of 2025. The company's Business Foundation is strong and we look forward to attaining our plan for the gear as guided.
Speaker Change: At this point, the execution of those plans is the order of business and I will look forward to reporting our continued positive momentum with the next call. Until then, thank you all.
Speaker Change: Thank you and this concludes today's call and you may now disconnect.