Ladies and gentlemen, thank you for standing by. Welcome to the IRadimed Corporation Second 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, July 30, 2015 and contains time-sensitive information that is accurate only as of today. Earlier today IRadimed released financial results for the second 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 the 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 available 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 present 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 constitute 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 to Roger Susi, President and Chief Executive Officer of the IRadimed Corporation. Mr. Susi?

Thank you, operator. Our second quarter results released earlier this morning reported revenue of $7.6 million, compared to $4.7 million last year. We also reported non-GAAP diluted earnings of $0.16 a share as compared to $0.13 in the second quarter of last year. And please keep in mind that our number of shares outstanding increased significantly with our IPO in Q3 of last year. And I’m also very pleased with the results as we exceeded our revenue and non-GAAP earnings guidance. This again shows the strength and desirability of IRadimed’s technology and the confidence our customers have in our MRI pump systems. Demand for our systems continues to show strength. And as we mentioned last quarter, one of our objectives this year is to work down our backlog to approximately 90 days, resulting from the hard work of our production teams. We have been able to make measurable progress towards that objective this quarter. We plan to continue to make this a focus area for the remainder of 2015 and until we are comfortable with the time between custom order and fulfillment. It is this confidence of our customers, which they have in our products and the dedication of our teams that have caused us to increase our full year guidance that Chris will discuss in just a few moments. Now I would like to provide you with a brief update on the FDA. This is a warning letter and our 510(k) submission, before we do turn it over to Chris. If you're not familiar with this topic, I encourage you to review our prior press releases and 10-K’s on this matter, all of which can be found on our website or on the SEC's website. As we reported last quarter, with the understanding that the FDA will not likely…

Thank you Roger. Today I'll be discussing our financial results on a GAAP basis, as well as on a non-GAAP basis. Our non-GAAP operating results excludes stock-based compensation expense and the 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 provided more thorough analysis of our ongoing financial performance. And find a reconciliation of these non-GAAP measures to the nearest GAAP measure on a last page of today's press release. As Roger stated, we reported second-quarter revenue of $7.6 million, a 62% increase from second quarter last year. Revenue from domestic sales increased to 95% of total revenue for the current quarter, compared to 90% for the same quarter last year. This increase was caused by our focus on fulfilling orders from our significant domestic backlog. Revenue from devices was approximately 84% of total revenue for the 2015 quarter, compared to 86% of total revenue for the 2014 quarter. Revenue from IV sets and services was approximately 16% of total revenue for the 2015 quarter, compared to 14% for the same period last year. We sold 220 IV pumps in the second quarter of 2015, compared to 146 pumps in the second quarter last year and our average selling price this quarter was approximately $29,000, compared to about $28,000 for the same quarter last year. Gross margin was significantly consistent at 81.3% in the most recent quarter compared to 81.5% in last year's quarter. The ASP was significantly influenced by the higher relative domestic sales this quarter when compared to the 2014 quarter. This global mix of sales drives changes to ASP and gross margin as we sell higher price points…

Thank you. We will now begin the question and answer session. [Operator Instructions] Our first question comes from Chris Lewis of ROTH Capital Partners. Your line is now open.

Hi, guys good morning, thanks for the taking the questions.

Hello, hey Chris, how are you?

Good. Wanted to start with, the revenue beat for the quarter came in about a half million dollars above the mid-point of your guidance. Can you just elaborate on what drove the upside there in terms of revenues during the quarter and the nature of those revenues whether it was more fulfilling orders from the backlog versus potential new orders? Thanks.

No, everything that’s going that’s being shipped today is being shipped from the backlog and as far the beat goes you know at the end of the first quarter we had some shipments that we thought would make it to the destination before the end of the period and it didn’t make it. So, those shipments rolled over into the second quarter here and then frankly our production team’s really performed well this quarter and produced more than what we had initially planned and with our focus on fulfilling that backlog and working it off as quickly as we can. We shipped those products that product out as it came off along. I mean that the combination of those two things really led to the beat, the half million dollar beat.

Understood and then the EPS guidance rate for the year you know you beat 2Q by a few pennies, but you pick up the 2015 EPS outlook by $0.06 if my math is correct. So, can you just walk us through where that implied additional earnings upside is coming from over the second half of the year and what gives you confidence in that earnings outlook going forward?

Yeah, I think when we said that, you know, that initial guidance, you know, it was early in the year and clarity on the cost structures is not quite as visible as it gets throughout the year. So, now we’re half way through the year and we’ve got better visibility on how the back-half will pan out than what we had in when we first set those estimates out, so I think that was, you know, those were the considerations that we made it just boils down to having better visibility in the second half of the year or for the remaining six months of the year.

Understood. And then Roger, can you elaborate on what the expectations are for the next steps in the FDA process? When do you expect to hear back from the Agency regarding your submission last week and maybe what’s assumed in that positive decision by the fourth quarter?

Sure, will be happy to. So, well, it’s holiday season as well at the FDA so we don’t anticipate that they’re just going to be available to jump right on what we submitted last week, but they spent six weeks after we first submitted 510(k) to come up with their questions, their round of questions that we got in the latter part of January. And, so, we’re hopeful that it’ll be about six weeks or less to read through the data that we returned to them last week. That’s a guess right, but if they do get it in six weeks or less I’m thinking they’re probably not going to get started on it though plus a couple weeks into August. So, my idea is we’ll probably either be getting yet another round of questions which isn’t too unusual to have a couple or more simple questions by the 1st of October or they’ll be satisfied with what they’ve asked and we’ve answered already and, you know, 1st of October they’ll be ready to, you know, supply us with clearance of the 510(k). Now, they won’t actually hand us that clearance until they lift the warning letter. So, you know, few quarters ago we had this similar question. I was preparing as we mentioned repeated earlier today that we decided we’d work on being prepared for subsequent audit to clear the warning letter first that didn’t materialize. We got prepared anyways, but the actual audit didn’t materialize. So, now, we have to look at it like the tables will be turned and they’re waiting for the reviewer of the 510(k) to be ready to clear it and when that I’m assuming that might be as, you know, sometime early October, he’ll pick up the phone and he’ll tell the appropriate persons within the agency that they are ready to clear this 510(k), but for this warning letter in place. So, at that point we should be hearing from them that they’ll be wanting to come in and do a follow-up audit so that this warning letter can get cleared and then we could get the actual copy, the hard copy, the formal release clearance of the 510(k). That’s why we said you know, we think it, you know, a very good possibility this happening in that fourth quarter.

Understood, make sense. Appreciate the color there. And just one more from me and I’ll hop back in queue. Roger, appreciate the comments on the MRI monitor and the progress you’re making there. Just, how do you feel the development of that product is coming along? Are there any major challenges still to figure out in terms of the development of that product? Thanks.

We have our hands, we feel we got our hands pretty much around everything now as I said, there is, yeah we don’t have any more huge mysteries as far as initial technology we’re going to employ. We have made, you know, enough prototype work on those high mystery let’s say high technical risk if you will, issues that we’re comfortable we can make these things and so yeah, pretty bullish that things are moving ahead now and just that, you know, execution and wrap up the development and start collecting data very soon we’ll use that in the 510(k) submission.

Got it. Thanks for taking the questions and congrats.

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

Hey, good morning Chris and Roger.

Hey good morning, Larry.

Good morning.

Couple of questions, one, on the competitive environment on the product you’re now in the market with as I recall when you were going public several, you know, I guess it’s almost a year ago now, your principal competitor was going to be exiting the market around mid-2015. I just wanted a quick update on that. What is the status? Are they in the market at all right now or where does that situation stand?

Sure, Larry. Maybe I’ll take that right? So that was - their departure from the market was in two pieces if you recall right?

Yeah.

So, they quit selling their IV pump that’s been a couple of years ago. So, that was actually well before the IPO. What they had been doing was still supplying the disposable device to keep the product that had been in the field the IV pumps in the field operable, and they did in fact announce and as far as we know, they did in fact finally do the following. They announced that they were going to quit supplying these IV sets to anyone and that that would happen at the end of June and that seems to actually have been the case. So they are not delivering and we can’t see any of that anymore. They did what they said they were going to do and they have pretty much orphaned all those devices in the field now finally.

So, Chris, I’m sorry, Roger, what do you think that means for you guys? Does it mean that more of these competitive customers with all other things being equal now that the competitors of the market completely would want to switch over because they can’t get disposable supplies. I’m sure you have that all baked into your guidance of course, but I’d love to understand the competitive situation in that particular regard.

Yeah, the as we said, the business, you know, is still coming in, you know, very strong. You know, I think we even said at last quarter’s discussion, you know, we thought maybe first quarter would be not so strong with the bookings and how orders were coming in here, but it turned out to be a very positive surprise and yeah, nothing slowed down there and that’s, you know, so that’s one reason that, you know, we could feel very comfortable to expand our production, you know, and as you see in the revenue numbers and though Chris said we’re shipping yes from backlog still, which is quite still long, the orders yeah, they’re still coming in very strongly.

Great, thanks and my second question concerns your high class problem. You’ve got plenty of cash on the balance sheet; you keep generating cash, any thoughts from you and the board about how you deal with such a wonderful problem?

Maybe I’ll let Chris take that one.

You know, Larry, we do talk about those things, I mean we got nothing in the orders right now, but I think we’ve always taken a position that, you know, if there was if we’re able to run across something that was attractive that kind of met our standards with a similar distribution channel selling into the same team facilities and departments within the hospital that either was at the level of our gross margins and operating margins or we thought that we could bring them to that level then I think that looks to be awfully attractive. But admittedly, our standards are pretty high in those areas and I think that, you know, that takes some of that some of the potentials out of the picture, but we are looking, we’re open to those ideas and then we do talk about those types of things. It’s just we have not yet found the right opportunity for us at this level.

Has the board considered the possibility of a small dividend, considering that you’re likely to be very strong cash flow positive going forward and you already have a significant amount of cash.

Yeah, I would say that that’s not one that we do talk about, but I think we’re more focused on finding that opportunity with another company and growing the overall company further than what we’re doing today.

Okay. Thanks, very much guys.

Thanks Larry.

Thanks.

Thank you. Our next questions comes, a follow-up question, from Chris Lewis of ROTH Capital Partner, your line is now open.

Hey guys, just a couple of quick follow-ups. First is on gross margins and ASPs, once again exceeded our expectations due to some favorable mix with the U.S., is this type of mix U.S. should this be something we can expect here as a sustainable level at least over the next couple of quarters as you continue to work down that backlog.

Yeah Chris, I think somewhere in the, maybe the 88% you know as low as 88% U.S. up to 95%, I haven’t seen us go anything above 95%, 95% U.S. since I’ve been here, but I think somewhere in that range that should be the expectation through the next couple of quarters anyways.

Good. And then can you just give us an update on the sales force. I think you had some plans maybe to add one or two reps mid this year. So is that still the case and…

Yeah, that’s the case today, as we sit today, we’ve grown the sales force by one and we’re interviewing and looking to make decisions here very soon on our second so that will bring our total to 12 and we’ve also made some adjustments in the management structure there. We now have one Regional Sales Director overseeing a number of the other sales managers. So, I think overall our sales force is growing and like I said, very soon, we’ll be up to 12 those managers and one Regional Director and then later on in the year our plan is to still look for two additional individuals, which so are planning at the end of the year will be to exit with 14 sales managers and that one Regional Sales Director.

So, got it, excellent.

[indiscernible] and things are going as planned in those areas, yes.

Okay. Great thanks.

Thank you. Our next question comes from Jon Gruber from Gruber McBaine, your line is now open.

Congratulations on a great quarter and I apologize if you answered this Scotr, tuned in a little late. Where is backlog and what’s been the, you know, the history of the book-to-bill in the last couple of quarters are, and that was basically how are orders doing here?

Yeah, well, I mean as Roger mentioned earlier, you know, orders have been stronger than we had anticipated so far in the first and second quarter and that’s obviously done well for us in our backlog we don’t give the number out on a quarterly basis, we do disclose it at year-end and that number was about $19.5 million at year-end and then just during the first quarter the backlog actually grew, so we did give some directional guidance on where backlog was in the first quarter and it grew in the first quarter. In the second quarter, we were able to take it down a little bit from where it was at the first quarter, but we’re still above where we were at year-end [indiscernible] so directionally that’s what backlog has done since year-end, but you know the orders remain strong and healthy and I think that goes back to Roger’s comments about the confidence and desirability of the technology that we have.

And what’s the target backlog for the year-end this year, do you hope it, do you expect it to be above the 95 of last year or you want to bring it down?

We talked about bringing it down to roughly 90 days. I think that’s comfortable for us and it’s the selling point for our customers also but we’re not going to achieve that by the end of the year. That’s going to play out over the next several quarters and in my view pretty deep into next year before we’re able to work that down to the 90-day level.

Yeah, and the 90-day level depends on how much you increase your revenue.

Right.

[indiscernible].

This is orders and also increasing production capacity and so there’s a little bit of - there’s some balance there that we’ll need to act on.

Thank you very much.

Right, thank you Jon.

Thank you. This concludes our question and answer session. At this time, I would now like to turn the conference back over to Roger.

Yes, thank you operator. Yeah, Chris and I want to think you all for participating in today’s call and for your interest and support of IRadimed. We both look forward to speaking with you again soon very much, thank you.

Thank you. This concludes the call. Please disconnect.