Iradimed Corp. (IRMD) Cuts Q3, FY16 Outlook
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Iradimed Corp. (Nasdaq: IRMD) revised its third quarter and full year 2016 financial guidance.
The Company now expects revenue for the third quarter 2016 of approximately $7.5 million to $7.6 million, compared to its previous guidance of $9.9 million to $10.0 million and GAAP diluted earnings per share of approximately $0.09 to $0.10. The Company also now expects non-GAAP diluted earnings per share of approximately $0.11 to $0.12, compared to its previous guidance of $0.23 to $0.24.
For the full year 2016, the Company now expects revenue of approximately $32.9 million to $33.2 million, compared to its previous guidance of $39.0 million to $40.0 million and GAAP diluted earnings per share of approximately $0.50 to $0.52. The Company also now expects non-GAAP earnings per diluted share of approximately $0.60 to $0.63, compared to its previous guidance of $0.91 to $0.93.
“While this news is disappointing, I remain encouraged by the higher volume and dollar value of recent quoting activity. However, it is the combination of underestimating sales cycle times resulting from our new sales strategy and the achievement of our long stated goal of reducing backlog that has led to the reduction of our revenue and earnings estimates,” said Roger Susi, President and Chief Executive Officer of the Company.
“Our new sales strategy requires our sales team to directly call upon hospital departments outside of radiology and anesthesiology. Thus far, the sales team has done very well at creating initial interest in our pump from these other hospital departments and this is evident in the opportunity and quoting details. However, not having been previously targeted, these other departments have never budgeted for the purchase of an MRI compatible IV pump, which is resulting in an extended sales cycle. To maintain that momentum and convert quotes into purchase orders, we are focused on the continued development of the abilities of our sales team and implementing better sales techniques aimed at closing deals more quickly,” said Susi.
“Given these developments in the sales cycle, there may be up to approximately $3.2 million of third quarter revenue from backlog and approximately $13 million of 2016 revenue from backlog. As we anticipate that backlog will not be significant going forward, we feel it is important to consider the reduction in backlog during 2016 when forecasting 2017 revenue. Consistent with our historical practice, we expect to issue 2017 revenue and earnings guidance during the first half of January 2017,” said Susi.
IRADIMED has scheduled a conference call to discuss recent sales cycle developments at 8:30 AM Eastern Time on Tuesday, October 4, 2016. Individuals interested in listening to the conference call may do so by dialing 1-844-413-1781 for domestic callers, or 1-716-247-5767 for international callers, and entering reservation code 92830659.
The conference call will also be available real-time via the Internet at www.iradimed.com/en-us/investors/index.php and selecting Events & Presentations. A recording of the call will be available on the Company’s website for 90 days following completion of the call.
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