Roger Susi - President and Chief Executive Officer Chris Scott - Chief Financial Officer and Secretary.

Chris Lewis - ROTH Capital Larry Haimovitch - HMTC Chris Lewis - ROTH Capital Partners.

Ladies and gentlemen, thank you for standing by. Welcome to iRadimed Corporation First Quarter 2015 Financial Results Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session.

As a reminder, this conference call is being recorded today, April 30, 2015 and contains time-sensitive information that is accurate only as of today. Earlier today iRadimed released financial results for the first quarter of 2015.

A copy of this press release announcing the company’s earnings is available under the heading, News, on their website at iradimed.com. A copy of the press release was also furnished to Securities and Exchange Commission on Form 8-K. A copy of this Form 8-K can be found at sec.gov.

This call is being broadcast live on the internet on the company’s website at iradimed.com. And a replay of the call will be on the website for the next 90 days. The agenda for today’s call will be as follows.

Roger Susi, President and Chief Executive Officer of iRadimed will be presenting opening comments; then Chris Scott iRadimed’s Chief Financial Officer will summarize the company’s financial results before opening the call up to your questions.

Some of the information to be furnished in today’s session will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those focused on the future performance, results, plans, and events, and include the company’s expected results for 2015.

iRadimed reminds you that future results may differ materially from these forward looking statements due to a number of risk factors.

For a description of the relevant risk and uncertainties that may affect the company’s business, please see the Risk Factors section of the company’s most recent reports filed with the Securities and Exchange Commission, which may be obtained for free from the SEC’s website in sec.gov.

I would now like to turn the call over Roger Susi, President and Chief Executive Officer of the iRadimed Corporation. Mr.

Susi?.

Thank you, operator. Our first quarter results released earlier this morning reported a 97% increase in revenue to $7 million from $3.6 million during the first quarter of 2014. We also reported non-GAAP diluted earnings of $0.14 a share as compared to $0.07 in that first quarter last year.

I am and all of us here at iRadimed are very pleased with these results and we believe that that reflect the strength of our target market and iRadimed’s ability to execute and deliver. Demand for our pump systems continues with appreciable momentum leading us to increase our 2015 financial guidance.

During the quarter we also made a decision to accelerate the growth of our sales team to better serve our existing customer and further penetrate our markets while in investments that we continue to make in our production facility and team members are allowing us to better support the increasing demand for our products.

With regards to customer orders and backlog, one of our objectives this year is to work down our backlog approximately 90 days, as we discussed a bit in the past. However, due to strong demand for our pump systems during the quarter, we were unable to make progress towards that objective.

With increased efforts we hope to be able to reduce that remaining portion 2015 and prior to the launch of our patient monitoring system planned for next year. Now I’d like to provide you with a brief update on the FDA warning letter and our 510-K submission.

If you are not familiar with this issue I encourage you to review our prior press releases in 8-K on this matter all of which can be found on our website at iradimed.com. or on the SEC’s website at sec.gov.

To recap, since filing the FDA requested 510(k) late last November, in December and again in January we reported that for the agencies discretion and we believe with consideration of the public health need we were permitted to resume domestic distribution of our pump systems.

Also since late last year an understanding the FDA likely will not finalize the 510-K approval process until a warning letter is cleared we turned our full attention to the review of modifications of various areas of our quality system. Those efforts are presently being finalized.

Meanwhile in late January, we did receive comments requesting further information supplementing the 510(k) filing which is not uncommon. Several of these requested items also requires significant efforts, some internal as well as some requiring outside test report.

As such, excuse me as much as possible has been done with parallel efforts but now with these issues connected to clearing the warning letter nearing completion, we can turn our full attention to the supplemental 510(k) information.

We expect to supply this response to FDA by late July and while we expect to receive an onsite inspection for the purpose of clearing the warning letter, which could occur at any time in the near future.

In short, much effort has been and continues to be allocated to resolving issues with the FDA and we anticipate being able to report positive resolution in these next few months. Now, briefly moving onto new product development.

While addressing the FDA warning letter has shifted our focus, we have been able to continue our efforts although at a slower pace for development of our MRI compatible patient-monitoring system. We still believe that we will be able to submit a 510(k) for some monitor late this year and anticipate it will contribute to 2016 revenue.

Again, I’m very pleased with our progress in all areas of the company and how 2015 is shaping up. Now I’d like to turn it over to Chris for summary of our financial results..

Thank you, Roger. Good morning, everyone. Today, I’ll be discussing our financial results on a GAAP basis, as well as on non-GAAP basis. Our non-GAAP operating results excludes stock base compensation expense and related tax effects. And our free cash flow measure is cash flow from operations, less cash used for purchases of property and equipment.

We believe that the presentation of these non-GAAP measures along with our GAAP financial statements provide a more thorough analysis of our on-going financial performance, under reconciliation of the non-GAAP measure to the nearest GAAP measure on the last page of today’s press release.

As Roger stated, revenue in the first quarter increased nearly 97% to $7 million, compared to $3.6 million for the prior year quarter. Revenue from domestic sales increased to 90% of total revenue for the current quarter compared to 69% for the same period in 2014.

This increase was caused by our focus on selling orders from our domestic customers as we resume domestic shipments late in the fourth quarter of 2014. Revenue from devices was approximately 84% of total revenue for the 2015 quarter, compared to 85% for the 2014 quarter.

Revenue from IV sets and services was approximately 16% of total revenue for 2015, compared to 15% for the same quarter last year. We sold 217 IV pumps in the first quarter of 2015, compared to 146 pumps in the same period last year. Our average selling price for the quarter was approximately $27,000 compared to $21,000 for the same period last year.

Gross margin was significantly consistent at 81% in the most recent quarter, compared to 81.5% in the same quarter last year. The decrease in gross margin is due to favorable inventory cost adjustments during the first quarter of last year.

The ASP was significantly influenced by the amount of domestic sales as a percent of total revenue when comparing to the same data point in the first quarter of 2014.

This global mix of sales drives changes to ASP and gross margins, as we sell at higher price points through our direct sales force domestically than we do to distributors internationally. Operating expenses for the first quarter 2015 decreased to 49% of revenue, compared to 58% in the prior-year quarter.

This decrease primarily relates to sales leverage partially offset by higher payroll and employee benefits costs resulting from our growing employee base, higher sales commissions resulting from higher sales, higher legal and professional fees, and higher administration fees paid to our GPO [ph] partners.

Operating income for the current quarter increased to 32% of revenue compared to 23% revenue in the prior year quarter. This resulted in non-GAAP operating income of 36% of revenue compared to 28% for the first quarter of 2014. Our first quarter effective tax rate was approximately 36% compared to about 37% in the 2014 period.

The lower effective tax rate is primarily due to lower U.S. State tax expense partially offset by lower deductions which had the effective increase in the tax rate. Net income for the current quarter was $0.12 per diluted share compared to $0.06 per diluted share in the 2014 period.

Weighted average diluted shares outstanding increased by 3.1 million shares over the 2014 quarter resulting from our IPO in July of 2014 and employee stock option exercises. On a non-GAAP basis, net income was $0.14 per diluted share for the first quarter 2015, compared to $0.07 for the prior year quarter.

Taking a look at our cash flow and balance sheet. Cash provided by operations increased by $600,000 to $1.1 million for 2015 from about $500,000 for the prior year period. Our free cash flow and non-GAAP measure increased to $1 million for the three months ended March 31compared to $500,000 for the same period last year.

Now on to our financial guidance. To reflect the continued strong demand for our products we are raising our revenue and earnings outlook for 2015. We now expect full year revenue of $29 million to $30 million and non-GAAP diluted EPS of $0.57 to $0.59.

For the second quarter of 2015, we expect to report revenue of between $7.1 million to $7.2 million and non-GAAP diluted EPS of $0.14 to $0.15. With that, I’ll turn it over to questions. Ben [ph]..

Thank you. [Operator Instructions] And our first question comes from the line of Chris Lewis with ROTH Capital. Your line is open. Please go ahead..

Hi, guys. Thanks for talking the questions.

I wanted to start on the revenue guidance raise for the year, revenues came in at the high-end of your guidance this quarter, guiding sequentially about 100 to 200 grand sequential increase next quarter, but you raise the annual outlook by a $1 million for the year or so, but back intuit implies the acceleration sequentially at least in the back half of this year, can you elaborate on the fact does that played into that decision and what gives you confidence at this point for that implied acceleration in the second half of this year?.

Yes. Chris..

Yes. I think it deals with the investments that we’re making in our production facility and our team member out there. We’re growing production capacity and therefore growing our revenue guidance accordingly and I think that the reduction was more to it than just those factors there..

Okay. And then Roger you talked about the backlog I think in your 10(k) you disclose there was about 20 million, can you quantify what it was at end of the first quarter and maybe provide some additional color on what do you think are the most important steps to work down that backlog going forward? Thanks..

Sure. Well, we are – let’s say, I don’t have the exact figure in hand to what it is as of right at this moment the backlog. But it is little larger, so feel to grew little bit in this quarter, in fact. So we’ve reported that we were targeting, trying to turn it the other way. Good news, bad news is that we weren’t too successful with that.

Orders basically came in at that higher rate than we’d anticipated. So, that hopes answers your question about the backlog.

As far as what we’re doing to work it down, it’s going to be try to keep increasing our capacity without overshooting the target, so I think that’s one and without under estimating the strength of the market it’s a little bit of a moving target on both fronts at this point..

Can you provide update on just where the capacity is today in terms of number upon pumps being able to manufactured per month?.

Yes. We’re somewhere north of 85 a month, right now. So, we plan to get that headed closer 200..

Great.

And then you talked about accelerating the sales force expansion plans, can you provide an update on how many reps you had out there at the end of the quarter and plans to expand that sales force going forward?.

Yes. So at the end of the quarter -- at the end of the year we had 10. And our plan for the full-year was to take that up to the 14, two towards the middle of the year and two towards the end of the year. And we’re going to pulling an additional two.

And we’re also going to create an over site role sort of director or regional directors position to help, spend more time on the field and share best practices and things like that with existing sales team.

So, we anticipate that that role being in place beginning in the third quarter and we’re actively searching for the additional two roles on the sales team now..

We’re actually going to bring in another manager for the domestic group as its growing past 10 and maybe I should clarify, other things being equal we had anticipated putting on two more reps at the end of Q4. But having the stop-ship in place that cause us to be little bearish on that shot [ph] so we postponed.

As Chris is telling you now we put the fire back under that process especial since being a lot of return to shipping and seeing the demand.

And so we’re little bit on the catch-up at these sales guys, but we have been our site now and the two more sales people and the manager and certainly should be in position by the time we have this call next quarter..

Okay, guys. Thanks for the time. I’ll halt back in queue.

Thank you. [Operator Instructions] Our next question comes from the line of Larry Haimovitch of HMTC. Your line is open..

Thank you, operator. Good morning, Congrats on the progress. Nice quarter. I joined the call late and I’m looking at the press release here, I didn’t see any update in the press release regarding FDA.

Could you give me an all of us a little bit of an update and I apologize if you’ve already done and I can take it offline if you’ve already discussed it?.

I think I spend several minutes going through….

Okay..

Where we at with that.

I might add one thing just to make it clear, the message that I did put out there for those several minutes is one that focuses on the warning letter versus the 510(k), so I know that when I read things that are written in some of the reports that appear in the market it all about 510(k) which is I think the conventional Biotech Investors thinking, the all important of 510(k).

In our case it’s a little bit difference because this is a 510(k) sort of a redo to check, it’s more of a check to see things that the warning letter turned up as efficient in our processes. It’s a check to make sure that the things are okay there.

The fact that the FDA did use discretion and allow us to return to shipping was based bit upon need as well as the fact that there hasn’t been any harm cause by the pump. And so, the warning letter is really the more important factor I think that I’d like leave impression with everyone that’s on the call today and that’s where we’ve been..

And so, just to clarify, you’re not been slowed down in any way by the regulatory situation, is that a takeaway I should have..

That’s exactly – yes, exactly the point..

That’s exactly is the point..

Okay. Great, great. That’s fine. Thank you very much..

You’re welcome..

Thank you. Our next question is a follow-up from the line Chris Lewis of ROTH Capital Partners. Your line is open. Please go ahead..

Chris, maybe a question for you in terms of operating spent, you guys talked about some increased investments here. You’re expecting G&A by a pretty healthy margin sequentially in the first quarter.

Is this is a -- this is a kind of a normalized run rate to expect on the G&A line going forward?.

I think first quarter will be heavy in most cases as we’ve just got some additional expense that hits order fees for instance .We take the bulk of those in the first quarter when the work has performed. It has just out for that is just one example of the cause of line in the first quarter will be typically a little heavier than others.

I’m forecasting a slight decline in G&A spend for the rest of the year, but that said as we make these additional investments in the business there is some momentum there, there are some plan, is not just within G&A, obviously it’s going to be in sales and marketing line and will likely also be in R&D line..

Great. And then, gross margins came in by normal margin above where we were largely due to higher ASPs in the U.S.

Is this kind of a normal level we should think about going forward and perhaps you can provide what the second quarter guidance assumes for gross margins?.

Yes. As I always say in the prepared remarks that one of the more significant factors that impacts margin is that geographic sales mix. And this year because of the stop-ship in the last of – last part of last year, we will more focused on serving our domestic customers this year which will drive a higher ASP and gross margin.

I think domestic sale this quarter were about 90% of total revenue and I’m forecasting that to come down slightly, I don’t expect 90% for the rest of the year, but I don’t expect it to be 85%, I think we’re going to be somewhere in the middle.

So that will drive changes in the ASP and gross margin, though, I’m modeling in the high 70s on the gross margin line for the rest of the year..

Great. Appreciated and then Roger if I could seek one more and you’re talking about the MRI monitor, expected to be submitted to the FDA by the end year.

When do you expect that approval could come and maybe you could talk a little bit about how we should think perhaps the rate of adoption and potential growth for that monitor once its launch? Thanks..

Sure. We would plan if everything works well. Again, the warning letters are getting item to 510(k). It’s not being a problem in the case of the pumps since were allow to ship it, but could be a problem with the final date of approval of the monitors 510(k) that being a new one.

So, we’re looking forward to having a successful inspection soon and hopefully the FDA can clear the warning letter without too many months after such an inspection. With that said, we’re targeting – we’re looking forward to having a cleared 510(k) for the monitor by the end of the year. And we think that’s realistic.

And if timing changes we’ll reports coming, but that’s what we think right now. So we’d launched the product right as we go into the New Year. Adoption, well it’s an existing market. So we’re pioneering an unknown market on the one hand, but of course there is one big strong competitor in that area.

And so we feel that we’ll be able to find some low hanging fruit in that space and that’s because there is not just pretty much one large player. Medrad was a second player who had about 30% or so of this market who has vacated that space as I think everyone may recall from prior information we put out. So, we think there’s a bit a low hanging fruit.

But you know like any new product launch we got to get your sales people train. You got to get quotes in the system. There is a certain buy cycles at hospitals are in and we would expect to start seeing revenue by midyear, next year or so, let’s say just after mid-year in the third quarter..

Great. Appreciate all the color and congrats to the strong start for the year..

Thanks, Chris..

Thank you. And ladies and gentlemen that does include our question and answer period. I’d like to turn the conference back over to Mr. Roger Susi for any closing remarks..

Chris and I’d like to thank you participating in today’s call and for your interest that support with the iRadimed and we both look forward to speaking with you again very soon. Thank you..

Thank you. This concludes the call. Please disconnect..