Well, good afternoon, everybody. Thank you so much for joining us. Today, we have the opportunity to hear from Roger Susi, who is the Founder, President, and CEO of IRadimed. He's also joined here to my left by, Jack Glenn, the CFO of the company. They've planned for about a 15 minute-20 minute presentation, followed by Q&A, so we'd love to hear your questions to the extent that there are any from the audience. Thank you.
Thank you. Good afternoon, and hello, everyone. Again, Roger Susi, I'm the President, Founder, and CEO of IRadimed Corporation, and Jack Glenn, our CFO, is here with me today. I'd like to point out that it's the first time for us at JP Morgan in a conference, though the company has been around for a number of years. We started business in 2005. So before I get too far into what we're gonna deliver today, we will be discussing some issues and information that may be forward-looking, and so the obligatory disclosure, IRadimed is a public company, IRMD, a NASDAQ listed business. We've been public since 2014.
So with that, let me start out by rather than delivering a message about what it is we intend to do to grow our business or start a business, since we've been around a number of years, I thought I would start out with what we do currently and how we have a few interesting legs to stand on. We are somewhat of a unicorn, we feel, and we discover when we're at conferences such as this, in that we have strong revenue, we have excellent gross margins and net profits, as you see here, and solid growth. The last few years have been, you know, in the 20s per year growth rate. We have cash, and we spin off a good bit of cash.
In fact, we started to deliver some return of capital to our investors here a few years ago in the form of special dividends, and we recently announced a quarterly dividend for continuing that return of capital. That those dividends are somewhat close to about 50% of the cash we, well, we plan to deliver these last couple of years, have delivered these last couple of years, and will do so as we hope in future comes. So, we are, as the first slide shows, an MRI patient care. So what is that? It is a device business, right? We make capital equipment to support the monitoring and delivery of IV fluids to patients undergoing MRI procedures.
We'll get into the devices that we do, but briefly, it's an IV pump, non-magnetic, MRI-safe, a patient monitor, also MRI-safe, non-magnetic, and we recently introduced a device we call an FMD, which is a ferromagnetic detector, which is a device that goes around the doorway to detect ferrous materials that may be accidentally brought into the room. But first, why is this. You know, give you a little bit of genesis on the starting of the company and how we got into this niche, and that it's rather limited as far as the number of competitors still to this day. It was back in the 1980s that I accidentally and very fortuitously fell into the MRI niche.
We were, my first business was called Invivo Research, and we were making patient monitoring devices, generally for anesthesia uses, surgery. And, we were invited to help with a monitoring problem in, in an MRI, the new MRIs. You know, MRI was relatively new in the 1980s. And that begat this first device you see here on, on the image, which was the first MRI patient monitor system in the mid-eighties. That grew and, we, as we commercialized that business, we eventually got rid of, got out of the other patient monitoring areas that were where we had competitors, 'cause we found that this niche was well-protected, and we were the only players doing this. And Invivo basically continued to have about 90%+ of the world market for MRI patient monitoring all the way up until recently.
During 1993, Invivo became a public company, and then in the early 2000s, it became it was sold, and it, it's now a part of Philips. Philips has continued in that space. In 2005, I started a new business, this one, IRadimed, and this business was totally aimed initially at doing an MRI safe patient IV pump, which you see pictured here under the 2005 category. And, recently, 2016, IRadimed grew a second leg to stand on, and that being, to go back in to, address, what was still what was probably necessary to do to upgrade and to, and to carry the MRI patient monitoring business forward and bring it into the 1980s.
IRadimed launched its patient monitor in late 2016, early 2017. So, you know, what's so special about this niche? Well, it's dangerous. Why do we have so few competitors? It's dangerous, and you just can't take the typical IV pump or MRI or patient monitoring hardware into this environment. This pie chart shows you some of the hazards that are intrinsic to the MRI environment. They're fairly obvious as far as it's a magnet, right? So things become projectiles, and there's mechanical problems when you introduce other devices and things around this large magnet. But what's not so obvious is there's a lot of radio frequency energy used in MRI, and that creates heat, that creates thermal problems, translate: burns.
And as well as devices, electronic devices emit radio frequency noises on their own, and that can ruin the images. So the green bullets break it down. There's the hazards. The small picture on the far right here, that shows what was a cart made for MRI, so aluminum, not magnetic, but placed inside of it were magnetic things. In this case, IV pumps that were not made for the MRI, and you see what happened, poof! Pulled into the magnet, and fortunately, in this case, there was no patient in the bore at the time.
So, why is this, again, an uncluttered space, and IRadimed is the only player still today that makes an MRI safe IV pump and really shares this market now, since we launched our monitor in late 2016 with the Invivo Philips product. So again, we protect our part of this universe with IP. We have quite a few patents on how we make these things non-magnetic. Use of Piezo Ceramic devices are ways that we filter and shield things to keep the RF noises from ruining the images. And then again, since the devices dwell inside the MR chamber, the scan room, as it's sometimes called, and where the patient is, inside the bore of a magnet, users are outside of that room in the control room.
We had to also introduce for these devices, both the pump and the monitor, a remote control. We pioneered how to do this wirelessly, then get signals in and out of that shielded room. So the first device that we launched IRadimed with was, again, non-magnetic, MR-safe IV pump. And here's pictured the device that we've had on the market a number of years now, and what is making about 1/2 of our revenue. And, as you see, it's, again, a device in a very great, a gross margin, mid-70s%. We have IV sets that go with this. There are disposables, disposable aspect to this thing.
It's a proprietary set, you have to buy them from us, and we enjoy a gross margin similar to the devices in both the razor and the razor blade, which is somewhat unusual. We've placed about 6,600 of these things in MRI systems around the world. We initially thought that this business was going to be a one-to-one, where we would sell one IV pump to a given magnet. It turned out some of our customers, as they started to use these devices, found that they needed more, and we fell into another fortuitous event, where it's no longer one-to-one in many of our hospitals. The higher acuity centers discovered that they need three, four, or five, sometimes, per MRI system to support patient flow, and I'll show you more of that in a moment.
So, the final two bullets here on the slide show going forward, that a coming replacement market to give us another spurt of growth to this business. These devices there have been on the market over 10 years. We have a new pump in the works, and that will introduce yet more growth through a replacement of these 6,600 pumps that we've sold in the past. But briefly, let's sort of review a bit about the workflow and why, where and why that multiplier effect comes from, right? So it's a safety sale, what we do, number one, and number two, to improve workflows with these patients that are coming and going out of MRI.
Many higher acuity centers need more than one pump, and also the monitor, soon we'll do this with the monitor as well in the coming years, to support their workflows. So imagine this, right? You have the MRI in the middle. Well, how do you get patients there? Typically, they're coming from an ICU, they're coming from somewhere else in the hospital. You can't—and if they have an IV pump with them, that's a typical IV pump that would be of the hundreds that are in a typical healthcare facility, they're magnetic, so you can't take them into that MRI space, into that room. So what we've found is to facilitate workflows, we put a pump up in the critical care area.
There, they take the patient off of their existing pump, they prep them for the MRI by putting them on our MRI safe pump, transport down to MRI, do the case, again back to the room, and recovery and what have you. So if you're working with a large number of pumps, and we find this with these higher acuity centers, especially when there's a lot of children and our neuro cases, these sorts of cases have a lot of sedatives given, a lot of IV fluids that need to be maintained, and so this brings the need to why you need maybe three, four pumps per MRI system to support that workflow. And we're planning to do that with the monitoring systems as well. Currently, the monitoring system that Invivo Philips sold, that was a 100-plus pound device.
Our monitor is the size of a lunchbox and weighs 8 lb , so it's highly portable and lends itself to this same multiplier effect workflow. This is what the monitor looks like. So again, it's a lunchbox-sized thing. It looks like a monitor, quacks like a monitor, moves like a monitor. The Invivo device was designed in the 1980s and big and heavy. We didn't have the luxury of having the Piezo devices then that could make it non-magnetic, and so that device relies on gravity to keep it from becoming a projectile. This device is completely non-magnetic, so different than our one and only competitor in that regard, which is a big regard. So we launched again in late 2016, early 2017, and we have installed about 2,200 of these things so far.
We are, in the U.S. market, as far as new ongoing sales, about at parity with our, with our former device and our big competitor, the Invivo Philips device already. Though Philips was selling those devices since the 1980s, starting with Invivo and then Philips from the early 2000s. The installed base for monitors that are out there in the world is, maybe 10,000-ish, that kind of number. And here's the opportunity, a little brief of this. So there's lots and lots of MRIs out there, approaching 40,000 units in the world, doing now to more than 100 million images daily with, or, you know, or annually with the MRI procedures. So this gives you a big, big, maybe addressable market, but we, we pare it down to something a little bit more realistic.
So in the U.S., that represents maybe 5,700, rest of the world, 20,000-21,000. There's a lot of freestanding surgery centers, for example, very, very small, low acuity hospitals. They aren't really candidates to buy the IV pump, and not so much for the monitor either. So this is really, this is really our addressable market down here below. And then when you look at the potential for the multiplier effect, there's those, a little subset of those hospitals that have that high quantity of, let's say, children, neuro cases, and so forth, that lend itself to many pumps and/or monitors to support each MRI system. So what's our commercial strategy? It's pretty simple. We've been, we've been growing a direct sales force in the U.S..
We're up to 28 reps that we have in throughout the U.S. market. We use distributors in the rest of the world. The dots are realistic there. We have distribution in a number of countries outside of the U.S., and again, control the U.S. market through direct sales with our own sales force, supported by a clinical specialist team that does the training and a lot of the install work and that sort of thing. Again, the new devices here mention this ferromagnetic detector. This is relatively new for us, and we are looking to expand that part of our business as well. So I mentioned earlier that we have a 6,600 pumps installed base in the world, and that we have a new pump in the works to replace our own pumps.
Those pumps, out of those 6,600 pumps out there, there's over 4,000 of them that are over five years old. These are devices that wear out. They don't last forever. The support cost and so forth increases as these things get four, five, six years old, and we have customers using eight, nine, 10-year-old pumps and keeping them on the road. But the new pump will come, we hope, in early 2025. We'll be making an FDA filing here shortly in April, May timeframe of this year, and hope that that'll be cleared early 2025. The latter half of 2025 then will become a replacement strategy for us, in this pump business. We have 4,000 plus that'll be old by then.
If we take just a quarter of those and replace them each year, that doubles the pump revenue. That means about $20 million incrementally in revenue with the new pump as we bring it out and start to replace these older pumps. So that's the beauty of the replacement business. The replacement business is the same in the monitoring space, and that's actually been going on. We pioneered that at Invivo, and Philips Invivo kept that going. About every five years, they do the same strategy of replacing the patient monitor systems. That's been one reason we grew our competitive position so quickly in that space as well. Philips was in a replacement cycle when we launched our new monitor, and we dovetailed right into that, and we scooped a lot of that off the top.
So our roadmap, where are we going? It's the, you know, and the story is the same. We're gonna continue to leverage our opportunity with disposables to continue to sell pumps. We're gonna bring in the replacement pump in 2025, start a replacement cycle for the pump. We're going to continue to take monitor share away from the Invivo Philips space. We've got a program now where we're deliberately going out and finding the Philips monitors that are five years and older, and making the replacement strategy become one of ours. Show them the state-of-the-art monitor versus the 100 lb thing.
The difference when you see it is somewhat like as if in the cell phone business there had been no cell phone development since the days of the bag phone in the 1980s and all of a sudden somebody has an iPhone. It's pretty dramatic when you see the difference. And so these are the we're gonna leverage the heck out of that as well the fact just the look and feel of the product. We're gonna grow the business from... We pre-announced here just a few days ago 2023 at $65.6 million in revenue. We're gonna grow that to $100 million by 2026.
During 2026, we'll pass through $100 million, and we'll do it with that incremental $20 million, for example, from the replacement business of the pump, and then we'll do that with, starting in late 2026 and onward, we'll have a replacement device for our own pump, I mean, our own monitor, excuse me. We'll have a second-generation monitor. Here's a quick look at the growth that I mentioned earlier, 20%+. Here's what it looks like graphically. Another view, our revenues. Adjusted earnings is past several quarters. Company's been cash positive for years and years. We, I think we went cash positive in 2005 or 2006, just two quarters after we started the business. So it's a very profitable business, this niche position has allowed us to have. So I'll recap here.
Company highlights, 26% year-over-year growth. If you look at the third quarter, about 23% year-over-year growth here in 2023. $0.43 adjusted EPS in Q3 alone. We have approximately $64 million in cash working capital. We declared a $0.15 quarterly dividend recently, $0.48 special dividend went out actually today, I believe, Jack, right? Right. Yeah, we just paid it today. So it's a growing business, to recap. It's a profitable business. Of course, we have revenues to make that profit from, and we have cash. It's a little different than most companies probably can stand up and present a story about. So with that, I'll wrap it up.
Thank you. Are there any questions from the audience just yet? If not quite yet, Roger, I guess one, one question from me would be if you could maybe speak a little bit about some of the recurring revenue streams as it relates to disposables, and kinda how you see that evolving here over the next couple of years, maybe?
Oh, good question. Yeah. So the disposable. The IV pump has, of course, as I mentioned, a proprietary disposable, so you can't really run the device without it. And currently, our disposable run rate is at about what, Jack?
It's around about 25%, between 25% and 30% of our revenues on a quarterly basis.
Yeah.
And it's growing about 20%.
And the monitor, interestingly enough, also has a disposable. In the biggest one for the monitor has, you know, it does six vital signs, so there's a number of little pieces that get replaced in there. But the highest volume and I guess the most revenue-producing part of a disposable related to the monitor is the electrode. We make a specialized electrode that can go into the MRI.
It's developed to make skin contact very fast and yet not be so sticky 'cause it doesn't need to stay on there for a week like an ICU critical care kind of electrode does. And that's turned out to be growing very rapidly. As the monitor sales grow, of course, they drag that along with it. So yeah, we overall are running, as Jack said, about 25% of all this revenue is from those disposable items.
Thank you.
All right. Well...
Here's a question from the audience in the middle.
What's the price point of your device versus the Invivo Philips, and for the new device that you're gonna-
Oh, great
... come out for which, what would be the difference between-
Sorry, I didn't mention-
your device versus
Glad you asked that question.
Yeah.
So the pump ASP, U.S. ASP for the pump systems today, the existing pump system, is around $35,000 a copy. Typically, the customers get a pump. If you go back to that photograph, there's a pump, there's a second channel called a sidecar that most people get, so it's a two-channel setup, and that remote control. That's about $35,000. With the new pump, when we bring the new pump model out in 2025, that ASP will likely go up about 20% to about $42,000. So that's our pump business. The monitors in the U.S. market, the monitor ASP is around $67,000-$68,000, somewhere in there. It's rather expensive. And that comes with, as you saw, the small monitor, and there's a remote control for that as well, and a base station to relay it.
It does a wireless repeater thing to get the signals and commands back and forth from the monitor located in the MR suite to the control room. So that's a high 60s type of ASP. All right. Well, thank you all for attending, and look forward to seeing you next year.