HeartWare Reports Third Quarter 2012 Results

                 HeartWare Reports Third Quarter 2012 Results

- International Revenue Growth of 40% Highlights Third Quarter Performance -

- Conference call today at 8:00 a.m. U.S. E.T. -

PR Newswire

FRAMINGHAM, Mass. and SYDNEY, Nov. 9, 2012

FRAMINGHAM, Mass. and SYDNEY, Nov. 9, 2012 /PRNewswire/ --HeartWare
International, Inc. (NASDAQ: HTWR; ASX: HIN), a leading innovator of less
invasive, miniaturized circulatory support technologies that are
revolutionizing the treatment of advanced heart failure, today announced
revenue of $22.9 million for the third quarter ended September 30, 2012,
compared to revenue of $21.3 million for the same period of 2011. Revenue
from international markets increased approximately 40% to $19.2 million in the
third quarter of 2012, from $13.7 million in the third quarter of 2011. U.S.
revenue, which is presently derived from clinical trial activities, was $3.7
million in the third quarter of 2012, compared to $7.6 million in the third
quarter of 2011, due to the completed enrollment of the Company's Destination
Therapy clinical trial in the second quarter of this year. Currency
fluctuations decreased revenue by nine percent in the third quarter compared
to the same period in 2011.

For the nine months ended September 30, 2012, revenues increased approximately
31% to $78.3 million, compared to $59.7 million in the first nine months of
2011, supported by 60% commercial revenue growth internationally. Currency
fluctuations decreased revenue by seven percent compared to the same period in
2011.

"We are pleased to have maintained strong international growth, particularly
during the summer months of Europe, as 214 HeartWare^® Ventricular Assist
Systems were sold outside the U.S. in the third quarter of 2012, a 51%
increase compared to 142 in the third quarter of last year," noted Doug
Godshall, President and Chief Executive Officer. "With the completion of
enrollment in our Destination Therapy study in the United States, domestic
revenue was primarily limited to the remaining slots in the Continued Access
Protocol in the Bridge-to-Transplant indication. As a result, 42 of the 256
global units sales generated during the third quarter of 2012 were from the
U.S. Globally more than 2,500 patients have now received the HeartWare System
at one of the 103 international hospital sites or 50 clinical sites in the
U.S.

"Following the positive recommendation of the Circulatory System Devices
Advisory Committee in the second quarter, we have been focused on working with
the FDA as it finalizes its review of our Premarket Approval (PMA) application
for U.S. commercialization of the HeartWare Ventricular Assist System as a
bridge to heart transplantation," added Mr. Godshall. "Our team has been
diligent in preparation for anticipated launch, and we look forward to the
opportunity to advance the global commercialization of the HeartWare System
and HVAD^® Pump."

Total operating expenses for the third quarter of 2012 were $35.1 million, as
compared to $23.5 million in the same period of 2011. Research and
development expense was $21.4 million for the third quarter of 2012, as
compared to $12.7 million in the same period of 2011. Increased development
costs are a result of continuing clinical trial costs and research and
development costs related to advancing HeartWare's pipeline technologies,
including the MVAD^® platform and a fully implantable system, as well as other
early research initiatives.

Selling, general and administrative expenses were $13.8 million in the third
quarter of 2012, compared to $10.8 million in the third quarter of 2011. The
increase in selling, general and administrative expenses is related to
continued growth supporting commercial activity outside of the U.S.,
preparation for anticipated commercial launch in the U.S., and an overall
increase in corporate infrastructure to support the Company's rapid growth.

Net loss for the third quarter of 2012 was $25.0 million, or a $1.75 loss per
basic and diluted share, compared to a $14.0 million net loss, or a loss of
$1.00 per basic and diluted share, in the third quarter of 2011. For the nine
months ended September 30, 2012, the Company recorded a net loss of $66.6
million, or a $4.70 loss per basic and diluted share, compared to a $33.5
million net loss, or a loss of $2.41 per basic and diluted share, in the first
nine months of 2011.

At September 30, 2012, the Company had $117.6 million of cash, cash
equivalents and investments.

HeartWare will host a conference call on Friday, November 9, 2012 at 8:00 a.m.
U.S. Eastern Daylight Time to discuss the Company's financial results,
highlights from the quarter and business outlook. The call may be accessed by
dialing 1-877-941-1428 five minutes prior to the scheduled start time and
referencing "HeartWare." For callers outside the U.S., please dial
+1-480-629-9665.

A live webcast of the call will also be available at the Company's website
(www.heartware.com) by selecting "HeartWare Third Quarter 2012 Conference
Call" under the section titled "Corporate Presentations" on the Home Page. A
replay of the conference call will be available through the above weblink
immediately following completion of the call.

About HeartWare International

HeartWare International develops and manufactures miniaturized implantable
heart pumps, or ventricular assist devices, to treat Class IIIB / IV patients
suffering from advanced heart failure. The HeartWare^® Ventricular Assist
System features the HVAD^® pump, a small full-support circulatory assist
device (up to 10L/min flow) designed to be implanted next to the heart,
avoiding the abdominal surgery generally required to implant competing
devices. HeartWare has received CE Marking for the HeartWare System in the
European Union and TGA approval in Australia. The device is currently the
subject of United States clinical trials for two indications:
bridge-to-transplant and destination therapy. For additional information,
please visit www.heartware.com.

HeartWare International, Inc. is a member of the Russell 2000^® and its
securities are publicly traded on The NASDAQ Stock Market and the Australian
Securities Exchange.

HEARTWARE^®, HVAD^®, MVAD^® and HeartWare logos are registered trademarks of
HeartWare, Inc.

Forward-Looking Statements

This announcement contains forward-looking statements that are based on
management's beliefs, assumptions and expectations and on information
currently available to management. All statements that address operating
performance, events or developments that we expect or anticipate will occur in
the future are forward-looking statements, including without limitation our
expectations with respect to the timing and progress of clinical trials, the
presentation of clinical trial data, expected timing of regulatory filings and
approvals, commercialization planning and research and development activities.
Management believes that these forward-looking statements are reasonable as
and when made. However, you should not place undue reliance on
forward-looking statements because they speak only as of the date when made.
HeartWare does not assume any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. HeartWare may not actually achieve the plans,
projections or expectations disclosed in forward-looking statements, and
actual results, developments or events could differ materially from those
disclosed in the forward-looking statements. Forward-looking statements are
subject to a number of risks and uncertainties, including without limitation,
the possibility the FDA does not approve the marketing of the HeartWare^®
Ventricular Assist System in the U.S., and those described in Part I, Item 1A.
"Risk Factors" in our Annual Report on Form 10-K filed with the Securities and
Exchange Commission. We may update our risk factors from time to time in Part
II, Item 1A."Risk Factors" in our Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, or other filings with the Securities and Exchange
Commission.

For further information:
Christopher Taylor
HeartWare International, Inc.
Email: ctaylor@heartwareinc.com
Phone: +1 508 739 0864



- Tables to Follow-







HEARTWARE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)


                             Three Months Ended      Nine Months Ended

                             September 30,           September 30,
                             2012        2011        2012         2011
Revenue, net                 $  22,862  $  21,340  $  78,261  $  59,704
Cost of revenue              10,925      7,884       34,418       23,392
Gross profit                 11,937      13,456      43,843       36,312
Operating expenses:
Selling, general and         13,768      10,833      40,687       29,389
administrative
Research and development     21,379      12,705      61,392       32,285
Total operating expenses     35,147      23,538      102,079      61,674
Loss from operations         (23,210)    (10,082)    (58,236)     (25,362)
Other expense, net           (1,776)     (3,882)     (8,377)      (8,129)
Net loss                     $          $          $ (66,613)  $ (33,491)
                             (24,986)   (13,964)
Net loss per common share —  $        $        $          $  
basic and diluted            (1.75)      (1.00)      (4.70)      (2.41)
Weighted average shares
outstanding — basic and      14,274      13,948      14,185       13,924
diluted



HEARTWARE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

(unaudited)
                                        September 30, 2012  December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents               $     111,883  $     71,257
Short-term investments, net             5,743               91,925
Accounts receivable, net                16,919              14,953
Inventories, net                        38,654              32,005
Prepaid expenses and other current      6,237               4,507
assets
Total current assets                    179,436             214,647
Property, plant and equipment, net      19,413              18,325
Other assets, net                       13,164              7,760
Total assets                            $    212,013    $    240,732
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                        $      9,374  $      5,025
Other accrued liabilities               15,622              12,436
Total current liabilities               24,996              17,461
Convertible senior notes, net           98,737              94,277
Other long-term liabilities             4,140               2,210
Stockholders' equity                    84,140              126,784
Total liabilities and stockholders'     $     212,013  $    240,732
equity





SOURCE HeartWare International, Inc.

Website: http://www.heartware.com
 
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