Insulet Reports Second Quarter 2012 Results

Insulet Reports Second Quarter 2012 Results 
Second Quarter 2012 Revenue Increases 58% Year over Year 
Gross Profit Improves by 54% Compared to Q2'11 
Strongest Growth in Referrals to the OmniPod Insulin Pump in Three
BEDFORD, MA -- (Marketwire) -- 08/08/12 --  Insulet Corporation
(NASDAQ: PODD), the leader in tubeless insulin pump technology with
its OmniPod(R) Insulin Management System, today announced financial
results for the three and six months ended June 30, 2012.  
Second quarter 2012 revenue increased 58% to $51.0 million, compared
to $32.2 million in the second quarter of 2011. Second quarter 2012
revenue increased 7% over first quarter 2012 revenue of $47.8
million. Gross profit for the second quarter of 2012 was $22.3
million, compared to a gross profit of $14.5 million for the second
quarter of 2011. The Company acquired Neighborhood Diabetes on June
1, 2011, and its financial position and results of operations have
been included in the Company's financial results since that date. 
Operating loss in the second quarter of 2012 was $10.5 million,
compared to operating loss of $14.9 million in the second quarter of
2011. Total operating expenses were $32.9 million in the second
quarter of 2012, compared to $29.5 million in the second quarter of
2011. The increase is primarily due to the incremental operating
activities of Neighborhood Diabetes, including amortization on
acquired intangibles, as well as development and commercial expenses
related to the next generation OmniPod insulin pump.  
"Insulet delivered a robust performance in the second quarter of
2012, with the Company's strongest growth in referrals to the OmniPod
in three years," said Duane DeSisto, President and Chief Executive
Officer of Insulet. "With sales climbing, gross profits increasing
and completion of our infrastructure integration with Neighborhood
Diabetes, we remain on track to be at or near operating cash flow
break even by the end of this year. Further, we continue to make
significant progress towards 510(k) clearance of the smaller, lighter
next generation OmniPod. Our manufacturing capacity continues to
increase and we expect to be poised for launch once clearance is
obtained from the US Food and Drug Administration." 
Net loss for the second quarter of 2012 was $14.5 mi
llion, or $0.30
per share, compared to a net loss of $19.4 million, or $0.42 per
share, for the second quarter of 2011. Net loss for the second
quarter of 2012 includes approximately $3.9 million of net interest
expense, compared to $4.5 million of net interest expense in the
second quarter of 2011. The decrease is mainly a result of the
additional expense recorded upon the issuance of $143.8 million of
3.75% Convertible Notes in June 2011.  
For the six months ended June 30, 2012, revenue increased 63% to
$98.8 million from $60.5 million for the first six months of 2011.
Gross profit for the first six months of 2012 was $42.6 million, as
compared to a gross profit of $28.1 million in the first six months
of 2011. Operating loss for the first six months ended June 30, 2012
was $21.4 million as compared to an operating loss of $22.2 million
in the first six months ended June 30, 2011. Net loss for the first
six months of 2012 was $29.3 million, or $0.61 per share, compared to
$29.3 million, or $0.64 per share, for the first six months of 2011.  
As of June 30, 2012, the Company had cash and cash equivalents of
$70.1 million compared to $94.0 million as of December 31, 2011.  
Recent Highlights 

--  In July, the Company received two final follow-up comments from the US
    Food and Drug Administration (FDA) about the 510(k) submission for the
    next generation OmniPod that the Agency believes need to be resolved
    before its review of the Company's 510(k) submission can be
    successfully completed. The Company is currently working on its
    response to address both comments.
--  Last month the Company announced the appointment of W. Mark Lortz to
    its board of directors. Mr. Lortz brings extensive expertise in the
    diabetes industry, having served as the Chairman, President and Chief
    Executive Officer of blood glucose monitoring manufacturer TheraSense,
    Inc. from 1997 to 2004, when it was acquired by Abbott Laboratories.
--  Investments made to the commercial organization in the first half of
    2012, including the addition of an inside sales capability and
    incremental field personnel, have begun to show a return, as new
    referrals increased over 20% year over year.

The Company refined its estimate for full year 2012 revenue to be in
the range of $210 to $220 million and its estimate for operating loss
to be in the range of $32 to $38 million. For the third quarter of
2012, the Company is estimating revenue of $53 to $57 million.  
Conference Call
 Insulet will host a conference call on Wednesday,
August 8, 2012 at 5:00PM Eastern time to discuss the Company's second
quarter results and present information concerning its business,
strategies and outlook. To listen to the conference call, please dial
877-831-5664 for domestic callers and 832-412-1780 for international
callers. The conference ID is 15001228. A replay of the conference
call will be available two hours after the start of the call through
August 15, 2012 by dialing 855-859-2056 (domestic) and 404-537-3406
(international), conference ID 15001228. An online archive of the
conference call will also be available by accessing the Investor
Information section of the company's website at 
Forward-Looking Statement
 The June 30, 2012 financial results
contained in this news release are subject to finalization in
connection with the preparation of the Company's Quarterly Report on
Form 10-Q for the three and six months ended June 30, 2012. This
press release contains forward-looking statements which are made
pursuant to the safe harbor provisions of Section 27A of the
Securities Act of 1933 and of Section 21E of the Securities Exchange
Act of 1934 concerning Insulet's expectations, anticipations,
intentions, beliefs or strategies regarding the future, including
those related to its expected revenue and operating losses, planned
expansion of sales of the next generation OmniPod System in the U.S.
and abroad, product demand, the market acceptance of our next
generation OmniPod System, regulatory matters and financial
performance. These forward-looking statements are based on its
current expectations and beliefs concerning future developments and
their potential effects on Insulet. There can be no assurance that
future developments affecting Insulet will be those that it has
anticipated. These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond its control) or other
assumptions that may cause actual results or performance to be
materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include,
but are not limited to: risks associated with the Company's
dependence on the OmniPod System; Insulet's ability to increase
customer orders and manufacturing volumes; adverse changes in general
economic conditions; impact of healthcare reform legislation;
Insulet's inability to raise additional funds in the future on
acceptable terms or at all; potential supply problems or price
fluctuations with sole source or other third-party suppliers on which
Insulet is dependent; international business risks; Insulet's
inability to obtain adequate coverage or reimbursem
ent from
third-party payors for the OmniPod System and potential adverse
changes in reimbursement rates or policies relating to the OmniPod;
potential adverse effects resulting from competition with
competitors; technological innovations adversely affecting the
Company's business; potential termination of Insulet's license to
incorporate a blood glucose meter into the OmniPod System; Insulet's
ability to protect its intellectual property and other proprietary
rights; conflicts with the intellectual property of third parties,
including claims that Insulet's current or future products infringe
the proprietary rights of others; adverse regulatory or legal actions
relating to the OmniPod System; failure to obtain timely regulatory
approval for the sale of the next generation OmniPod System; failure
of Insulet's contract manufacturers or component suppliers to comply
with FDA's quality system regulations, the potential violation of
federal or state laws prohibiting "kickbacks" or protecting patient
health information, or any challenges to or investigations into
Insulet's practices under these laws; product liability lawsuits that
may be brought against Insulet; reduced retention rates; unfavorable
results of clinical studies relating to the OmniPod System or the
products of Insulet's competitors; potential future publication of
articles or announcement of positions by physician associations or
other organizations that are unfavorable to Insulet's products; the
expansion, or attempted expansion, into foreign markets; the
concentration of substantially all of Insulet's manufacturing
capacity at a single location in China and substantially all of
Insulet's inventory at a single location in Massachusetts; Insulet's
ability to attract and retain key personnel; Insulet's ability to
manage its growth; intense competition among distributors of diabetes
supplies impairing Insulet's business; loss of an opportunity to sell
insulin pumps supplied by Insulet's competitors; failure to retain
key supplier and payor partners; failure by Neighborhood Diabetes to
retain supplier pricing discounts and achieve satisfactory gross
margins; failure to retain and manage successfully Insulet's Medicare
and Medicaid business; existence of unanticipated liabilities arising
in connection with the Neighborhood Diabetes business; fluctuations
in quarterly results of operations; risks associated with potential
future acquisitions; Insulet's ability to generate sufficient cash to
service all of its indebtedness; the expansion of Insulet's
distribution network; Insulet's ability to successfully maintain
effective internal controls; and other risks and uncertainties
described in its Annual Report on Form 10-K, which was filed with the
Securities and Exchange Commission on February 28, 2012 in the
section entitled "Risk Factors," and in its other filings from time
to time with the Securities and Exchange Commission. Should one or
more of these risks or uncertainties materialize, or should any of
its assumptions prove incorrect, actual results may vary in material
respects from those projected in these forward-looking statements.
Insulet undertakes no obligation to publicly update or revise any
forward-looking statements. 
About Insulet Corporation 
 Insulet Corporation (NASDAQ: PODD) is an
innovative medical device company dedicated to making the lives of
people with diabetes easier. Through its OmniPod Insulin Management
System, Insulet seeks to expand the use of insulin pump therapy among
people with insulin-dependent diabetes. The OmniPod is a
revolutionary and easy-to-use tubeless insulin pump that features
just two parts and fully-automated cannula insertion. Insulet's
subsidiary, Neighborhood Diabetes, is a leading distributor for
diabetes products and supplies, delivered through a high touch
customer service model. Founded in 2000, Insulet Corporation is based
in Bedford, Mass. For more information, please visit:  

                            INSULET CORPORATION                             
                            Three Months Ended         Six Months Ended     
                                 June 30,                  June 30,         
                         ------------------------  ------------------------ 
                             2012         2011         2012         2011    
                         -----------  -----------  -----------  ----------- 
                           (In thousands, except share and per share data)  
Revenue                  $    51,035  $    32,211  $    98,789  $    60,469 
Cost of revenue               28,704       17,673       56,162       32,398 
                         -----------  -----------  -----------  ----------- 
Gross profit                  22,331       14,538       42,627       28,071 
Operating expenses:                                                         
 Research and                                                               
  development                  6,521        6,832       11,953       11,421 
 General and                                                                
  administrative              12,665       12,996       25,685       20,206 
 Sales and marketing          13,664        9,625       26,403       18,631 
                         -----------  -----------  -----------  ----------- 
  Total operating                                                           
   expenses                   32,850       29,453       64,041       50,258 
                         -----------  -----------  -----------  ----------- 
Operating loss               (10,519)     (14,915)     (21,414)     (22,187)
Other expense, net            (3,888)      (4,508)      (7,727)      (7,082)
                         -----------  -----------  -----------  ----------- 
Net loss before income                                                      
 taxes                       (14,407)     (19,423)     (29,141)     (29,269)
Income tax expense               (69)           -         (115)           - 
                         -----------  -----------  -----------  ----------- 
Net loss                 $   (14,476) $   (19,423) $   (29,256) $   (29,269)
                         ===========  ===========  ===========  =========== 
Net loss per share basic                                                    
 and diluted             $     (0.30) $     (0.42) $     (0.61) $     (0.64)
                         ===========  ===========  ===========  =========== 
Weighted average number                                                     
 of shares used in                                                          
 calculating basic and                                                      
 diluted net loss per                                                       
 share                    47,824,190   46,377,843   47,715,819   45,995,069 
                         ===========  ===========  ===========  =========== 
                            INSULET CORPORATION                             
                   CONDENSED CONSOLIDATED BALANCE SHEETS                    
                                                     As of         As of    
                                                   June 30,    December 31, 
                                                     2012          2011     
                                                 ------------  ------------ 
                                                    (In thousands, except   
                                                         share data)        
Current Assets                                                              
Cash and cash equivalents                        $     70,144  $     93,955 
Accounts receivable, net                               25,591        23,190 
Inventories                                            16,426        11,838 
Prepaid expenses and other current assets               3,454         2,802 
                                                 ------------  ------------ 
    Total current assets                              115,615       131,785 
Property and equipment, net                            21,422        19,422 
Intangible assets, net                                 25,753        29,002 
Goodwill                                               26,647        26,647 
Other assets                                            2,503         2,727 
                                                 ------------  ------------ 
    Total assets                                 $    191,940  $    209,583 
                                                 ============  ============ 
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Current Liabilities                                                         
Accounts payable                                 $     13,687  $     11,418 
Accrued expenses                                       13,535        13,064 
Deferred revenue                                        1,148         2,582 
Current portion of long-term debt                      13,849             - 
Other current liabilities                                 921           931 
                                                 ------------  ------------ 
    Total current liabilities                          43,140        27,995 
Long-term debt                                         99,382       108,540 
Other long-term liabilities                             1,668         1,652 
                                                 ------------  ------------ 
    Total liabilities                                 144,190       138,187 
Stockholders' Equity                                                        
Preferred stock, $.001 par value:                                           
  Authorized: 5,000,000 shares at June 30, 2012                             
   and December 31, 2011. Issued and                                        
   outstanding: zero shares at June 30, 2012 and                            
   December 31, 2011                                        -             - 
Common stock, $.001 par value:                                              
  Authorized: 100,000,000 shares at June 30,                                
   2012 and December 31, 2011. Issued and                                   
   outstanding: 47,915,851 and 47,504,131 shares                            
   at June 30, 2012 and December 31, 2011,                                  
   respectively                                            48            48 
Additional paid-in capital                            517,981       512,371 
Accumulated deficit                                  (470,279)     (441,023)
                                                 ------------  ------------ 
    Total stockholders' equity                         47,750        71,396 
                                                 ------------  ------------ 
    Total liabilities and stockholders' equity   $    191,940  $    209,583 
                                                 ============  ============ 

Stephanie Marks 
for Insulet Corporation
877-PODD-IR1 (877-763-3471) 
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