• Inari Medical Reports Third Quarter 2024 Financial Results

    Source: Nasdaq GlobeNewswire / 28 Oct 2024 15:05:00   America/Chicago

    IRVINE, Calif., Oct. 28, 2024 (GLOBE NEWSWIRE) -- Inari Medical, Inc. (NASDAQ: NARI) (“Inari”), a medical device company with a mission to treat and transform the lives of patients suffering from venous and other diseases, today reported financial results for its third quarter ended September 30, 2024.

    Third Quarter Financial and Recent Business Highlights

    • Generated revenue of $153 million in Q3 of 2024, up 21% over the same quarter of last year.
    • GAAP operating loss was $13.6 million in Q3 of 2024, compared to a $2.1 million operating income in the same quarter of last year.
    • Non-GAAP operating loss was $0.4 million in Q3 of 2024, compared to a $4.8 million non-GAAP operating income in the same quarter of last year.
    • Cash, cash equivalents and short-term investments were $112 million as of Q3 of 2024.
    • Received acceptance for the PEERLESS study to be presented as a late-breaking clinical trial at the 2024 Transcatheter Cardiovascular Therapeutics (TCT) Annual Scientific Symposium on October 29th.

    “We continue to drive strong performance across the entire Inari portfolio as we advance our leading position in large, underserved vascular markets,” said Drew Hykes, CEO of Inari Medical. “Our products are performing well, and looking ahead, we have several important catalysts on the horizon. On that note, we look forward to the presentation of our PEERLESS data at the Transcatheter Cardiovascular Therapeutics (TCT) Symposium tomorrow, our upcoming full market release of Artix following FDA clearance earlier this month, and our plans to offer Inari solutions in Japan and China. We’ve never been more committed to our mission of addressing unmet patient needs with purpose-built solutions.”

    Third Quarter 2024 Financial Results
    Revenue was $153.4 million for the third quarter of 2024, up 21.4% compared to $126.4 million for the third quarter of 2023. The increase over the prior year quarter was driven primarily by an expansion in our sales territories, opening of new accounts, increase in adoption of our procedures, global commercial expansion, and introduction of new products.

    Gross profit was $133.5 million for the third quarter of 2024, compared to $111.9 million for the third quarter of 2023. Gross margin was 87.1% for the third quarter of 2024, compared to 88.5% for the third quarter of 2023. The year-over-year change was primarily due to product mix, the ramp up costs associated with new products, and increasing internationalization of the business.

    Operating expenses for the third quarter of 2024 were $147.1 million, compared to $109.8 million for the third quarter of 2023. The increase was mainly driven by personnel-related expenses, including commissions and share-based compensation associated with increased headcount to fund the expansion of the commercial, research and development, clinical, and support organizations; change in fair value of the contingent consideration liability; capitalized software impairment and related costs; professional fees including legal expenses; amortization expense related to an intangible asset acquired in the LimFlow acquisition, and travel related costs.

    GAAP operating loss was $13.6 million in the third quarter of 2024, compared to a $2.1 million GAAP operating income for the third quarter of 2023. Sequentially, GAAP operating loss improved by $8.8 million.

    Non-GAAP operating loss was $0.4 million in the third quarter of 2024. Non-GAAP operating income was $4.8 million in the third quarter of 2023. Sequentially, non-GAAP operating loss improved by $12.8 million. The following items were excluded from the non-GAAP operating loss in the third quarter of 2024: change in fair value of contingent consideration liability of $6.6 million, capitalized software impairment and related costs of $3.8 million, acquired intangible asset amortization of $2.5 million, and acquisition-related expenses of $0.3 million. The following items were excluded from the non-GAAP operating income in the third quarter of 2023: acquisition-related expenses of $2.7 million.

    Net loss was $18.4 million for the third quarter of 2024 and net loss per share was $0.31 on a weighted-average basic and diluted share count of 58.4 million, compared to net income of $3.2 million and net income per share of $0.06 on a weighted-average basic share count of 57.4 million and $0.05 on a weighted-average diluted share count of 58.6 million, respectively, in the same period of the prior year.

    Full Year 2024 Revenue Guidance and Operating Income Outlook

    • Inari raises full year 2024 revenue guidance to $601.5 million to $604.5 million, an increase of $3.5 million at the midpoint from our prior guidance range of $594.5 million to $604.5 million, reflecting growth of approximately 21.9% to 22.5% over 2023.
    • The company continues to expect to reach sustained operating profitability in the first half of 2025.

    Webcast and Conference Call Information
    Inari Medical will host a conference call to discuss the third quarter 2024 financial results after market close on October 28, 2024 at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. The conference call can be accessed live by dialing (844) 825-9789 for domestic callers or (412) 317-5180 for international callers. The live webinar and presentation may be accessed by visiting the Events Section of the Inari investor relations website at ir.inarimedical.com.

    Use of Non-GAAP Financial Measures
    This press release contains references to non-GAAP operating income (loss), which is considered a non-GAAP financial measure. This means that non-GAAP operating income (loss) is determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). As used by Inari, non-GAAP operating income (loss) excludes from GAAP operating income (loss) the following items: amortization of acquired intangible assets, acquisition-related costs, fair value adjustment to our contingent consideration liability and capitalized software impairment and related costs. We present the non-GAAP operating income (loss) to exclude these charges because we believe these charges are significantly impacted by the timing and valuation of acquisitions, such as our LimFlow acquisition completed in the fourth quarter of 2023, as well as other non-recurring factors such as wind down of certain projects. Our management believes the presentation of non-GAAP operating income (loss) is useful because it provides meaningful comparisons to prior periods and provides visibility to our underlying operating performance and an additional means to evaluate the cost and expense trends excluding the impact of these acquisition-related items and other non-recurring transactions, which are not related to our core business operations.

    Our definition of non-GAAP operating income (loss) may differ from similarly titled measures used by others. Non-GAAP operating income (loss) should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP. We encourage investors to review the reconciliation of non-GAAP operating income (loss) to GAAP operating income (loss), which has been provided in the financial statement tables included in this press release.

    About Inari Medical, Inc.
    Patients first. No small plans. Take care of each other. These are the guiding principles that form the ethos of Inari Medical. We are committed to improving lives in extraordinary ways by creating innovative solutions for both unmet and underserved health needs. In addition to our purpose-built solutions, we leverage our capabilities in education, clinical research, and program development to improve patient outcomes. We are passionate about our mission to establish our treatments as the standard of care for venous thromboembolism and four other targeted disease states. We are just getting started. Learn more at www.inarimedical.com and connect with us on LinkedIn, X (Twitter), and Instagram.

    Forward Looking Statements
    Statements in this press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to substantial risks and uncertainties. Forward-looking statements contained in this press release may be identified by the use of words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements include expectations regarding Inari’s core business, plans for its current and future products, anticipated product launches, its ability to integrate and related expectations for the LimFlow acquisition, expectations regarding future growth, Inari's ability to meet customers' needs, and timing for achieving sustained operating profitability, and are based on Inari’s current expectations, forecasts, and assumptions. Forward-looking statements are subject to inherent uncertainties, risks and assumptions that are difficult to predict, and actual outcomes and results could differ materially due to a number of factors. These and other risks and uncertainties include those described more fully in the section titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and elsewhere in its Annual Report on Form 10-K for the period ended December 31, 2023, and in Inari’s other reports filed with the U.S. Securities and Exchange Commission. Forward-looking statements contained in this announcement are based on information available to Inari as of the date hereof and are made only as of the date of this release. Inari undertakes no obligation to update such information except as required under applicable law. These forward-looking statements should not be relied upon as representing Inari’s views as of any date subsequent to the date of this press release. In light of the foregoing, investors are urged not to rely on any forward-looking statement in reaching any conclusion or making any investment decision about any securities of Inari.

    Investor Contact:
    Marissa Bych
    Gilmartin Group LLC
    IR@inarimedical.com


    INARI MEDICAL, INC.
    Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
    (in thousands, except share and per share data)
    (unaudited)
     
     Three Months Ended September 30, Nine Months Ended September 30,
      2024   2023   2024   2023 
    Revenue$153,390  $126,366  $442,404  $361,538 
    Cost of goods sold 19,846   14,477   58,732   42,062 
    Gross profit 133,544   111,889   383,672   319,476 
    Operating expenses       
    Research and development 29,431   21,492   81,216   64,641 
    Selling, general and administrative 108,271   85,603   325,479   256,889 
    Change in fair value of contingent consideration 6,578   —   18,609   — 
    Amortization of intangible asset 2,504   —   7,414   — 
    Acquisition-related expenses 328   2,681   4,143   2,681 
    Total operating expenses 147,112   109,776   436,861   324,211 
    (Loss) income from operations (13,568)  2,113   (53,189)  (4,735)
    Other income (expense)       
    Interest income 1,104   4,202   3,371   12,899 
    Interest expense (78)  (43)  (233)  (127)
    Other expense (130)  (682)  (130)  (617)
    Total other income 896   3,477   3,008   12,155 
    (Loss) income before income taxes (12,672)  5,590   (50,181)  7,420 
    Provision for income taxes 5,695   2,428   23,736   4,391 
    Net (loss) income$(18,367) $3,162  $(73,917) $3,029 
    Other comprehensive income (loss)       
    Foreign currency translation adjustments 13,918   (68)  4,200   (138)
    Unrealized gain (loss) on available-for-sale debt securities 64   91   60   (1,869)
    Total other comprehensive income (loss) 13,982   23   4,260   (2,007)
    Comprehensive income (loss)$(4,385) $3,185  $(69,657) $1,022 
    Net (loss) income per share       
    Basic$(0.31) $0.06  $(1.27) $0.05 
    Diluted$(0.31) $0.05  $(1.27) $0.05 
    Weighted average common shares used to compute net (loss) income per share       
    Basic 58,366,364   57,384,884   58,149,296   56,478,317 
    Diluted 58,366,364   58,588,452   58,149,296   58,495,921 



    INARI MEDICAL, INC.
    Condensed Consolidated Balance Sheets
    (in thousands, except share data and par value)
    (unaudited)
     
     September 30,
    2024    		 December 31,
    2023
    Assets   
    Current assets   
    Cash and cash equivalents$41,141  $38,597 
    Restricted cash 67   611 
    Short-term investments in debt securities 70,397   76,855 
    Accounts receivable, net 84,403   70,119 
    Inventories, net 55,210   42,900 
    Prepaid expenses and other current assets 12,168   6,481 
    Total current assets 263,386   235,563 
    Property and equipment, net 24,098   20,929 
    Operating lease right-of-use assets 48,301   48,407 
    Goodwill 213,345   214,335 
    Intangible assets 143,808   150,884 
    Deposits and other assets 4,301   4,117 
    Total assets$697,239  $674,235 
    Liabilities and Stockholders' Equity   
    Current liabilities   
    Accounts payable$15,523  $10,577 
    Payroll-related accruals 54,797   48,706 
    Accrued expenses and other current liabilities 76,881   15,364 
    Operating lease liabilities, current portion 1,579   1,692 
    Total current liabilities 148,780   76,339 
    Operating lease liabilities, noncurrent portion 31,145   30,355 
    Deferred tax liability 36,748   36,231 
    Other long-term liability 45,805   66,400 
    Total liabilities$262,478  $209,325 
    Commitments and contingencies (Note 9)   
    Stockholders' equity   
    Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2024 and December 31, 2023 —   — 
    Common stock, $0.001 par value, 300,000,000 shares authorized as of September 30, 2024, and December 31, 2023; 58,435,576 and 57,762,414 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 58   58 
    Additional paid in capital 543,961   504,453 
    Accumulated other comprehensive income 13,145   8,885 
    Accumulated deficit (122,403)  (48,486)
    Total stockholders' equity 434,761   464,910 
    Total liabilities and stockholders' equity$697,239  $674,235 



    INARI MEDICAL, INC.
    Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Operating Income (Loss)
    (in thousands)
    (Unaudited)
     
    Reconciliation of GAAP Operating (Loss) Income to Non-GAAP Operating (Loss) Income:
     
     Three Months Ended September 30, Nine Months Ended September 30,
      2024   2023   2024   2023 
    GAAP Operating (loss) income$(13,568) $2,113  $(53,189) $(4,735)
    Non-GAAP Adjustments:       
    Change in fair value of contingent consideration 6,578   —   18,609   — 
    Amortization of acquired intangible asset 2,504   —   7,412   — 
    Acquisition-related expenses(a) 328   2,681   4,142   2,681 
    Capitalized software impairment and related costs(b) 3,789   —   3,789   — 
    Non-GAAP Operating (loss) income$(369) $4,794  $(19,237) $(2,054)

    ________________
    (a) The acquisition-related expenses primarily include integration, severance and retention related expenses.
    (b) The capitalized software impairment and related costs primarily include the write-off of capitalized software and related wind down costs, which were recorded within the research and development expense within the condensed consolidated statements of operations.


    Revenue Disaggregation

    The following tables present the amount of revenue in VTE and Emerging Therapies recognized for the periods presented (in thousands, unaudited):

     Three Months Ended September 30,  
      2024   2023  % Growth
    VTE$145,346  $121,460   19.7%
    Emerging Therapies 8,044   4,906   64.0%
    Total Revenue$153,390  $126,366   21.4%


     Nine Months Ended September 30,  
      2024   2023  % Growth
    VTE$420,213  $349,604   20.2%
    Emerging Therapies 22,191   11,934   85.9%
    Total Revenue$442,404  $361,538   22.4%

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