Heart monitor maker iRhythm is marching to a new beat.
A year after commencing its last restructuring plan, the company is once again undergoing a reorganization. Among the first moves made in conjunction with the latest “business transformation,” according to a filing (PDF) with the U.S. Securities and Exchange Commission this week, is the resignation of Douglas Devine, iRhythm’s chief operating officer.
Devine joined iRhythm as its chief financial officer in June 2020, a position that he held until August 2022, when Brice Bobzien was appointed to take his place. Meanwhile, Devine had also taken on the title of COO at the end of 2021.
Overlapping with both of those roles was about a four-month stint as interim CEO, when Devine headed up the company before former Dexcom COO Quentin Blackford was selected to replace Mike Coyle at the helm.
According to the SEC filing, Devine will stay on at iRhythm as an executive advisor through mid-2024. The filing also noted that as of March 10, Daniel Wilson, currently the devicemaker’s executive VP of corporate strategy, corporate development and investor relations, is now focusing solely on the latter two of those three areas.
Despite the switch-up, the company doubled down on the financial forecasts it previously set for the year, with revenues expected to grow by up to 18% year over year to land somewhere between $475 million and $485 million in 2023. However, its adjusted EBITDA margin, an indicator of profitability, is expected to stand between negative 0.5% and positive 0.5% of revenues.
That reaffirmation comes shortly after iRhythm laid out a restructuring plan in its recently released annual report (PDF) that could cost the company up to $30 million.
Under the terms approved by iRhythm’s board of directors on Feb. 21, not only will the plan “result in the transition or augmentation of staff of certain operations to the Philippines,” but it also allows the company to look into hiring a third-party service to help rework its revenue cycle management operations.
According to the annual report, iRhythm has estimated that it will incur between $15 million and $20 million in third-party consulting fees, legal expenses and employee severance and retention costs—without detailing how many employees will be laid off in the process—plus another $8 million to $10 million in capital expenditures. Those costs will hit the company’s bottom line throughout 2023, and the restructuring plan will be “substantially complete” by the middle of next year.
Representatives for the company didn’t respond to a request for further comment on the executive shake-up or iRhythm’s ongoing business transformation.
The latest restructuring plan comes almost exactly a year after the previous reorganization was approved by iRhythm’s board.
Under the 2022 plan—which was enacted to allow the company “to effectively and efficiently scale its business”—it cut the amount of space leased for its San Francisco headquarters in half, a downsizing that resulted in $3.4 million in “severance and other employment costs.” In total, the costs of that restructuring took a $26.6 million hit to iRhythm’s 2022 earnings, according to the annual report.