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Inari Medical Reports First Quarter 2024 Financial Results

April 30, 2024

IRVINE, Calif., April 30, 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 first quarter ended March 31, 2024.

First Quarter Financial and Recent Business Highlights

  • Generated revenue of $143.2 million in Q1 of 2024, up 23.3% over the same quarter last year.
  • GAAP operating loss was $17.2 million in Q1 of 2024, compared to a $5.3 million operating loss in the same quarter of last year.
  • Non-GAAP operating loss was $5.6 million in Q1 of 2024, compared to a $5.3 million non-GAAP operating loss in the same quarter of last year.

“Our strong first quarter performance reflected crisp execution across our three growth pillars, as we continued to drive adoption of our highly differentiated, purpose-built toolkits across large, attractive markets,” said Drew Hykes, CEO of Inari Medical. “We also continued to grow our powerful commercial engine and invest in high quality, market impacting clinical data, including our PEERLESS study, which remains on track for presentation in the second half of 2024. Lastly, we continue to deliver a premium financial profile, characterized by best-in-class gross margin and operating expense leverage, excluding deal-related costs. Taken together, these efforts reflect our unwavering commitment to our mission and addressing unmet patient needs.”

First Quarter 2024 Financial Results
Revenue was $143.2 million for the first quarter of 2024, up 23.3% compared to $116.2 million for the first quarter of 2023. The increase over the prior year quarter was driven primarily by increased adoption of our procedures, new products, and global commercial expansion.

Gross profit was $124.3 million for the first quarter of 2024, compared to $102.4 million for the first quarter of 2023. Gross margin was 86.8% for the first quarter of 2024, compared to 88.2% for the for the first quarter of 2023. The year-over-year change was due increasing internationalization of the business, ramp up costs associated with new products, and product mix.

Operating expenses for the first quarter of 2024 were $141.5 million, compared to $107.8 million for the first quarter of 2023. The increase was mainly driven by personnel-related expenses, including commissions and stock-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; professional fees; and amortization expense related to an intangible asset acquired in the LimFlow acquisition.

GAAP operating loss was $17.2 million in the first quarter of 2024, compared with a $5.3 million GAAP operating loss for the first quarter of 2023.

Non-GAAP operating loss was $5.6 million in the first quarter of 2024. The following items were excluded from the non-GAAP operating loss: change in fair value of contingent consideration liability of $6.3 million, acquisition-related costs of $2.8 million, and acquired intangible asset amortization of $2.5 million. There were no non-GAAP adjustments related to the company’s operating loss for the first quarter of 2023.

Net loss was $24.2 million for the first quarter of 2024 and net loss per share was $0.42 on a weighted-average basic and diluted share count of 57.9 million, compared to a net loss of $2.2 million and a net loss per share of $0.04 on a weighted-average basic and diluted share count of 54.8 million, in the same period of the prior year.

Full Year 2024 Revenue Guidance and Operating Income Outlook

  • Inari expects full year 2024 revenue of $592.5 million to $602.5 million, reflecting growth of approximately 20% to 22% over 2023, and a raise versus the prior 2024 revenue guidance of $580 million to $595 million.
  • The company expects 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 first quarter 2024 financial results after market close on April 30, 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 and fair value adjustment to our contingent consideration liability. 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. 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, 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, its ability to integrate LimFlow, 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:
John Hsu, CFA
VP, Investor Relations

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(in thousands, except share and per share data)
 Three Months Ended March 31,
  2024   2023 
Revenue$143,194  $116,167 
Cost of goods sold 18,893   13,741 
Gross profit 124,301   102,426 
Operating expenses   
Research and development 26,880   22,064 
Selling, general and administrative 103,055   85,700 
Change in fair value of contingent consideration 6,303    
Amortization of intangible asset 2,461    
Acquisition-related expenses 2,779    
Total operating expenses 141,478   107,764 
Loss from operations (17,177)  (5,338)
Other income (expense)   
Interest income 1,191   4,145 
Interest expense (78)  (40)
Other (expense) income (23)  39 
Total other income 1,090   4,144 
Loss before income taxes (16,087)  (1,194)
Provision for income taxes 8,115   1,024 
Net loss$(24,202) $(2,218)
Other comprehensive income (loss)   
Foreign currency translation adjustments (7,359)  9 
Unrealized loss on available-for-sale debt securities (4)  (865)
Total other comprehensive loss (7,363)  (856)
Comprehensive loss$(31,565) $(3,074)
Net loss per share   
Basic$(0.42) $(0.04)
Diluted$(0.42) $(0.04)
Weighted average common shares used to compute net loss per share   
Basic 57,938,115   54,756,024 
Diluted 57,938,115   54,756,024 

Condensed Consolidated Balance Sheets
(in thousands, except share data and par value)
 March 31,
 December 31,
Current assets   
Cash and cash equivalents$66,707  $38,597 
Restricted cash 500   611 
Short-term investments in debt securities 34,595   76,855 
Accounts receivable, net 78,621   70,119 
Inventories, net 44,650   42,900 
Prepaid expenses and other current assets 8,240   6,481 
Total current assets 233,313   235,563 
Property and equipment, net 20,761   20,929 
Operating lease right-of-use assets 47,610   48,407 
Goodwill 209,642   214,335 
Intangible assets 145,774   150,884 
Deposits and other assets 4,676   4,117 
Total assets$661,776  $674,235 
Liabilities and Stockholders' Equity   
Current liabilities   
Accounts payable$12,026  $10,577 
Payroll-related accruals 38,748   48,706 
Accrued expenses and other current liabilities 33,544   15,364 
Operating lease liabilities, current portion 1,719   1,692 
Total current liabilities 86,037   76,339 
Operating lease liabilities, noncurrent portion 29,773   30,355 
Deferred tax liability 35,395   36,231 
Other long-term liability 63,341   66,400 
Total liabilities$214,546  $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 March 31, 2024 and December 31, 2023     
Common stock, $0.001 par value, 300,000,000 shares authorized as of March 31, 2024, and December 31, 2023; 58,001,145 and 57,762,414 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively 58   58 
Additional paid in capital 518,338   504,453 
Accumulated other comprehensive income 1,522   8,885 
Accumulated deficit (72,688)  (48,486)
Total stockholders' equity 447,230   464,910 
Total liabilities and stockholders' equity$661,776  $674,235 

Reconciliation of GAAP Operating Loss to Non-GAAP Operating Loss
(in thousands)

Reconciliation of GAAP Operating Loss to Non-GAAP Operating Loss:

 Three Months Ended March 31,
  2024   2023 
GAAP Operating loss$(17,177) $(5,338)
Non-GAAP Adjustments:   
Change in fair value of contingent consideration 6,303    
Amortization of acquired intangible asset 2,461    
Acquisition-related expenses (a) 2,779    
Non-GAAP Operating loss$(5,634) $(5,338)

(a) The acquisition-related expenses primarily include integration and retention related expenses.

Revenue Disaggregation

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

 Three Months Ended March 31,  
  2024   2023  % Growth
VTE$137,193  $114,058   20.3%
Emerging Therapies 6,001   2,109   184.5%
Total Revenue$143,194  $116,167   23.3%