Thoratec® Reports Fourth Quarter And Full Year Fiscal 2012 Financial Results
Thoratec® Reports Fourth Quarter And Full Year Fiscal 2012 Financial Results
- Revenue of $128.5 million for the fourth quarter, an increase of 17%
year-over-year, and $491.7 million for the full year, an increase of 16%
- HeartMate II® worldwide unit growth of 20% for the fourth quarter and 23%
for fiscal year 2012
- GAAP Net Loss per Diluted Share of $0.25 for the fourth quarter, driven by
PVAD™ and IVAD™ intangible asset write-down, and Net Income per Diluted Share
of $0.94 for the full year
- Non-GAAP Net Income per Diluted Share of $0.38 for the fourth quarter and
$1.83 for the full year
PR Newswire
PLEASANTON, Calif., Feb. 5, 2013
PLEASANTON, Calif., Feb. 5, 2013 /PRNewswire/ -- Thoratec Corporation (NASDAQ:
THOR), a world leader in device-based mechanical circulatory support therapies
to save, support and restore failing hearts, today reported its financial
results for the fourth quarter of 2012.
"Thoratec had an impressive year in 2012, with sales growth of 16 percent
driven by our HeartMate II® and CentriMag® product lines, highlighting our
leadership positions in chronic and acute mechanical circulatory support,"
said Gary F. Burbach, President and Chief Executive Officer. "We were
particularly pleased to finish the year with strong fourth quarter results,
including 20 percent unit growth for HeartMate II on a worldwide basis,
reflecting continued adoption in the U.S. Destination Therapy indication as
well as in international markets."
For the quarter ended December 29, 2012, Thoratec reported revenues of $128.5
million, a 17 percent increase over revenues of $109.4 million in the fourth
quarter of 2011. Net loss on a GAAP basis was $(14.4) million, or $(0.25) per
diluted share, compared with GAAP net income of $15.3 million, or $0.25 per
diluted share, in the same period a year ago. 2012 results include a pre-tax
impairment charge of $50.2 million related to certain purchased intangible
assets associated with the PVAD™ and IVAD™ product line. Non-GAAP net income,
which is described later in this press release, was $22.6 million, or $0.38
per diluted share, compared with non-GAAP net income of $22.7 million, or
$0.38 per diluted share, in the same period a year ago.
For the year ended December 29, 2012, revenues were $491.7 million, an
increase of 16 percent over revenues of $422.7 million for fiscal year 2011.
Net income from continuing operations on a GAAP basis was $56.2 million, or
$0.94 per diluted share, compared with GAAP net income from continuing
operations of $72.6 million, or $1.20 per diluted share, for fiscal year 2011.
Non-GAAP net income from continuing operations was $109.2 million, or $1.83
per diluted share, compared with non-GAAP net income from continuing
operations of $97.0 million, or $1.56 per diluted share, for fiscal year 2011.
"We look forward to driving continued market growth and solidifying our
leadership position in chronic and acute mechanical circulatory support during
2013," Burbach commented. "Additionally, we remain focused on investing in
longer-term strategic initiatives, including late-stage development activities
related to HeartMate III™ and HeartMate PHP™, both of which we plan to bring
into pivotal clinical trials later this year."
Fourth Quarter and Fiscal Year 2012 Financial Results
For the fourth quarter of 2012, Thoratec reported revenues of $128.5 million,
an increase of 17 percent compared to the same quarter last year. The
HeartMate product line contributed $110.8 million, an increase of 18 percent,
while the CentriMag product line contributed $11.5 million, an increase of 31
percent. The PVAD and IVAD product line contributed $5.6 million, a decrease
of 8 percent.
For the fiscal year ended December 29, 2012, Thoratec reported revenues of
$491.7 million, an increase of 16 percent compared to fiscal year 2011. The
HeartMate product line contributed $434.6 million to revenues, an increase of
19 percent, while the CentriMag product line contributed $35.7 million, an
increase of 39 percent, including revenues of $6.1 million related to the
acquisition of Levitronix Medical. The PVAD and IVAD product line contributed
$19.0 million, a decrease of 33 percent.
For the fourth quarter of 2012, GAAP gross margin was 30.6 percent compared to
67.1 percent in the same quarter last year. The decrease in GAAP gross margin
was due primarily to an impairment of purchased intangible assets related to
the PVAD and IVAD product line. Non-GAAP gross margin, described later in
this press release, was 71.7 percent compared to 71.4 percent in the same
quarter last year. The increase in non-GAAP gross margin was primarily driven
by volume-based efficiencies and favorable product mix, offset in part by a
volume-based tax on our VAD sales in France, which we recorded for the first
time in the fourth quarter of 2012.
GAAP gross margin in 2012 was 59.3 percent versus 68.0 percent a year ago. The
year-over-year decrease in GAAP gross margin was mainly attributable to the
impairment of PVAD and IVAD intangible assets. Non-GAAP gross margin was 71.7
percent versus 71.2 percent in 2011. The year-over-year increase in gross
margin was due to volume-based efficiencies, favorable product mix, and the
contribution from the acquisition of Levitronix Medical.
For the fourth quarter of 2012, GAAP operating expenses were $64.1 million
compared to $48.3 million in the same quarter last year. Non-GAAP operating
expenses, described later in this press release, were $57.6 million compared
to $43.0 million in the same quarter last year. The increase in non-GAAP
operating expenses was due primarily to product and market development
initiatives, project-related payments, and incentive compensation.
Operating expenses on a GAAP basis in 2012 were $215.7 million versus $173.5
million a year ago. On a non-GAAP basis, operating expenses in 2012 were
$192.6 million versus $153.6 million in 2011. The year-over-year increase in
operating expenses was due primarily to project-related payments, spending on
product and market development initiatives, the addition of research and
development personnel, and acquisition-related charges. Non-GAAP operating
expenses are described later in this press release.
On a GAAP basis, other income was $1.7 million in 2012 versus other expense of
$2.3 million in 2011. On a non-GAAP basis, other income totaled $1.7 million
versus other income of $0.8 million a year ago. Other income and expense on a
non-GAAP basis is described later in this press release.
The company's GAAP effective tax rate in 2012 was 27.4 percent versus 35.1
percent in 2011. The non-GAAP tax rate, which is described later in this press
release, was 32.4 percent in 2012 compared with 34.5 percent in 2011. The
decrease in the GAAP effective tax rate was primarily due to the impairment of
purchased intangible assets related to the PVAD and IVAD product line, and a
greater percentage of earnings generated in lower-tax jurisdictions. The
decrease in the non-GAAP effective tax rate was primarily attributable to a
greater percentage of earnings generated in lower-tax jurisdictions.
Cash and investments were $260.4 million as of December 29, 2012, compared to
$307.9 million as of September 29, 2012 and $209.5 million as of December 31,
2011. During the fourth quarter of 2012 the company used $75.0 million in
cash to fund an accelerated share repurchase agreement as part of our stock
repurchase program.
GUIDANCE FOR FISCAL YEAR 2013
The following statements are based on current expectations. These statements
are forward-looking and actual results may differ materially. For a more
detailed discussion of forward-looking statements, please see additional
information below.
The company expects revenues will be in the range of $490 to $510 million,
driven by growth of the HeartMate and CentriMag product lines, and partially
offset by a continued decline in the PVAD and IVAD product line.
Gross margin is expected to be approximately 68.5 percent on a GAAP basis and
approximately 70.5 percent on a non-GAAP basis. Included in these estimates
for gross margin is the impact of the U.S. medical device excise tax, which we
estimate will contribute approximately $6 million to cost of goods sold in
2013.
We expect the effective tax rate to be approximately 30.5 to 31.0 percent on
both a GAAP and non-GAAP basis.
GAAP net income per diluted share is expected to be in the range of $1.32 to
$1.42 and non-GAAP net income per diluted share is expected to be in the range
of $1.76 to $1.86.
CONFERENCE CALL/WEBCAST INFORMATION
Thoratec will hold a conference call to discuss its financial results and
operating activities for all interested parties at 1:30 p.m., Pacific Standard
Time (4:30 p.m., Eastern Standard Time), today. The teleconference can be
accessed by calling (719) 457-2638, passcode 4837615. Please dial in 10-15
minutes prior to the beginning of the call. The webcast will be available via
the Internet at http://www.thoratec.com. A replay of the conference call will
be available through Tuesday, February 12, via http://www.thoratec.com or by
telephone at (719) 457-0820, passcode 4837615.
GAAP TO NON-GAAP RECONCILIATION
Thoratec management evaluates and makes operating decisions using various
measures. These measures are generally based on revenues generated by the
company's products and certain costs of producing those revenues, such as
costs of product sales, research and development and selling, general and
administrative expenses. We use the following measures, which are not
calculated in accordance with Generally Accepted Accounting Principles
("GAAP"): non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating
expenses, non-GAAP other income and expense, non-GAAP tax rate, non-GAAP net
income, non-GAAP net income per diluted share and non-GAAP shares used to
compute diluted net income per share. These are non-GAAP financial measures
under Section 101 of Regulation G under the Securities Exchange Act of 1934,
as amended. These non-GAAP financial measures are calculated by excluding
certain GAAP financial items that we believe have less significance to the
day-to-day operation of our business. The company has outlined below the type
and scope of these exclusions and the limitations on the use of the non-GAAP
financial measures as a result of these exclusions.
Management uses these non-GAAP financial measures for financial and
operational decision making, including in the determination of employee annual
cash incentive compensation, as a means to evaluate period-to-period
comparisons, as well as comparisons to our competitors' operating results.
Management also uses this information internally for forecasting and
budgeting, as it believes that the measures are indicative of Thoratec core
operating results. Management also believes that non-GAAP financial measures
provide useful supplemental information to management and investors regarding
the performance of the company's business operations, provide a greater
transparency with respect to key metrics used by management in its decision
making, facilitate comparisons of results for current periods and guidance for
future periods with our historical operating results, and assist in analyzing
future trends.
Non-GAAP net income consists of GAAP net income, excluding, as applicable, the
tax effected impact of share-based compensation expense, the write-down and
amortization of purchased intangible assets, expenses associated with the
accounting for convertible debt instruments that may be settled in cash upon
conversion, including partial settlements in accordance with Financial
Accounting Standards Board ("FASB") issued Accounting Standards Codification
("ASC") 470-20, Debt, Levitronix Medical fair market value (FMV) inventory
adjustments, and acquisition related charges.
Non-GAAP net income per diluted share is defined as non-GAAP net income
divided by the weighted average number of shares on a fully-diluted basis.
Non-GAAP shares used to compute diluted net income per share consists of GAAP
shares used to compute diluted net income per share adjusted for any
inclusions made in conjunction with dilutive impact of Thoratec's convertible
debt instruments and any exclusions made in conjunction with the application
of the two-class method for calculating net income per share.
Non-GAAP gross profit and gross margin consist of GAAP gross profit and gross
margin excluding share-based compensation expense, the write-down and
amortization of purchased intangible assets, and Levitronix Medical FMV
inventory adjustments related to the acquisition.
Non-GAAP operating expenses consist of GAAP operating expenses excluding
share-based compensation expense, amortization of purchased intangible assets,
and acquisition-related transaction costs.
Non-GAAP other income and expense consists of GAAP other income and expenses
excluding expenses related to the accounting for convertible debt instruments
that may be settled in cash upon conversion, including partial settlements, in
accordance with ASC 470-20, Debt.
Non-GAAP tax expense consists of the GAAP tax expense adjusted for the tax
effect of the adjustments from GAAP net income to non-GAAP net income.
Management believes that it is useful in measuring Thoratec's operations to
exclude the write-down and amortization of purchased intangible assets. These
costs are primarily fixed at the time of an acquisition and, unlike other
fixed costs that result from ordinary operations, are the result of infrequent
and irregular events.
Because of varying valuation methodologies, subjective assumptions and the
variety of award types that companies can use, Thoratec management believes
that providing non-GAAP financial measures that exclude share-based
compensation allows investors to compare Thoratec's recurring core business
operating results to those of other companies and over multiple periods. The
exclusion also enhances investors' ability to review Thoratec's business from
the same perspective as Thoratec management, which believes that share-based
compensation expense is not directly attributable to the underlying
performance of the company's business operations.
Due to the subjective assumptions used to develop non-cash interest expense
related to the accounting for convertible debt instruments that may be settled
in cash upon conversion, including partial settlements, in accordance with ASC
470-20, Debt, Thoratec management believes that providing non-GAAP financial
measures that exclude such expense allows investors to compare Thoratec's
recurring core business operating results to those of other companies and over
multiple periods. The exclusion also enhances investors' ability to review
Thoratec's business from the same perspective as Thoratec management.
To enable investors to compare Thoratec's recurring core business operating
results to those of other companies and over multiple periods, Thoratec has
excluded Levitronix Medical FMV inventory adjustments and acquisition-related
costs as they are infrequent in nature.
There are a number of limitations related to the use of non-GAAP financial
measures. First, non-GAAP financial measures exclude some costs, namely
share-based compensation, that are recurring expenses. Second, share-based
compensation is part of an employee's compensation package and as such may be
useful for investors to consider. Third, the components of costs that we
exclude in our non-GAAP financial measures calculations may differ from
components that our peer companies exclude when they report their results from
operations.
Non-GAAP financial measures should not be considered as a substitute for
measures of financial performance in accordance with GAAP. However, these
measures may provide additional insight into Thoratec's financial results.
Investors and potential investors are strongly encouraged to review the
reconciliation of non-GAAP financial measures contained within this press
release with their most directly comparable GAAP financial results and not to
rely on any single financial measure to evaluate our business.
The reconciliations of the forward looking non-GAAP financial measures to the
most directly comparable GAAP financial measures in the tables below include
all information reasonably available to Thoratec at the date of this press
release. These tables include adjustments that we can reasonably predict.
Events that could cause the reconciliation to change include acquisitions and
divestitures of business, goodwill and other asset impairments and sales of
marketable equity securities.
The following table includes the GAAP income statement for continuing
operations for the three and twelve months ended December 29, 2012 and
December 31, 2011:
THORATEC CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, except for per share data)
Three Months Ended Twelve Months Ended
December 29, December 31, December 29, December
2012 2011 2012 31, 2011
Product sales $ 128,458 $ 109,378 $ 491,654 $ 422,713
Cost of product sales 38,966 36,012 150,037 135,062
Impairment of 50,242 0 50,242 0
intangible assets
Gross profit 39,250 73,366 291,375 287,651
Operating expenses:
Selling, general and 36,292 29,800 127,984 107,177
administrative
Research and 27,843 18,488 87,729 66,314
development
Total operating 64,135 48,288 215,713 173,491
expenses
Income (loss) from (24,885) 25,078 75,662 114,160
operations
Other income and
(expense):
Interest expense - (1) (3) (4,651)
Interest income and 257 835 1,658 2,362
other
Income (loss) before (24,628) 25,912 77,317 111,871
income taxes
Income tax expense (10,242) 10,567 21,154 39,296
(benefit)
Net income (loss) from (14,386) 15,345 56,163 72,575
continuing operations
Net loss from
discontinued - - - (1,031)
operations (net of
tax)
Net Income (loss) $ (14,386) $ 15,345 $ 56,163 $ 71,544
Net income (loss) per
share- Basic:
Continuing operations $ (0.25) $ $ $
0.26 0.96 1.23
Discontinued - - - (0.02)
operations
Net Income (loss) $ (0.25) $ $ $
0.26 0.96 1.21
Net income (loss) per
share- Diluted:
Continuing operations $ (0.25) $ $ $
0.25 0.94 1.20
Discontinued - - - (0.01)
operations
Net Income (loss) $ (0.25) $ $ $
0.25 0.94 1.19
Shares used to compute
net income (loss) per
share:
Basic 58,322 59,210 58,563 58,777
Diluted 58,322 60,111 59,580 62,524
The following table presents our quarterly and annual revenues by source for
fiscal 2011 and 2012:
THORATEC CORPORATION
Quarterly Revenue Analysis
(Unaudited)
(in millions)
Three Months Twelve
Ended Months
Ended
Apr 2, 2011 Jul 2, Oct 1, Dec 31, Dec 31,
2011 2011 2011 2011
Revenue by Product
Line
HeartMate $ $ $ $ $
87.3 97.6 87.6 93.8 366.3
PVAD & IVAD 7.3 7.6 7.2 6.1 28.2
CentriMag (1) 4.4 5.3 7.2 8.8 25.7
Other 0.5 0.7 0.6 0.7 2.5
Total $ $ $ $ $
99.5 111.2 102.6 109.4 422.7
Revenue by Category
Pump $ $ $ $ $
70.8 77.8 72.2 77.4 298.2
Non-Pump 28.2 32.7 29.8 31.3 122.0
Other 0.5 0.7 0.6 0.7 2.5
Total $ $ $ $ $
99.5 111.2 102.6 109.4 422.7
Revenue by Geography
United States $ $ $ $ $
82.5 93.0 83.9 88.2 347.6
International 17.0 18.2 18.7 21.2 75.1
Total $ $ $ $ $
99.5 111.2 102.6 109.4 422.7
Three Months Twelve
Ended Months
Ended
Mar 31, Jun 30, Sept 29, Dec 29, Dec 29,
2012 2012 2012 2012 2012
Revenue by Product
Line
HeartMate $ $ $ $ $
111.7 106.2 105.9 110.8 434.6
PVAD & IVAD 5.8 3.8 3.8 5.6 19.0
CentriMag (1) 8.7 8.0 7.5 11.5 35.7
Other 0.6 0.6 0.6 0.6 2.4
Total $ $ $ $ $
126.8 118.6 117.8 128.5 491.7
Revenue by Category
Pump $ $ $ $ $
92.6 85.7 85.0 93.0 356.3
Non-Pump 33.6 32.3 32.2 34.9 133.0
Other 0.6 0.6 0.6 0.6 2.4
Total $ $ $ $ $
126.8 118.6 117.8 128.5 491.7
Revenue by Geography
United States $ $ $ $ $
103.9 97.1 97.5 102.0 400.5
International 22.9 21.5 20.3 26.5 91.2
Total $ $ $ $ $
126.8 118.6 117.8 128.5 491.7
(1) CentriMag includes PediMag/PediVAS®
sales
The following table presents our quarterly and annual pump units by geography
for fiscal 2011 and 2012:
THORATEC CORPORATION
Quarterly Pump Units
(Unaudited)
Three Months Twelve
Ended Months
Ended
Units by Geography Apr 2, Jul 2, Oct 1, Dec 31, Dec 31,
2011 2011 2011 2011 2011
United States 677 753 665 704 2,799
International 182 193 188 213 776
Total (1) 859 946 853 917 3,575
Three Months Twelve
Ended Months
Ended
Units by Geography Mar 31, Jun 30, Sept 29, Dec 29, Dec 29,
2012 2012 2012 2012 2012
United States 838 773 781 812 3,204
International 219 212 208 254 893
Total (1) 1,057 985 989 1,066 4,097
(1) Excludes CentriMag and PediMag/PediVAS
units
The following table reconciles the specific items excluded from GAAP net
income from continuing operations in the calculation of non-GAAP net income
from continuing operations and diluted net income per share from continuing
operations for the periods shown below:
THORATEC CORPORATION
Reconciliation of GAAP to Non-GAAP Net Income
(Unaudited)
(in thousands, except for per share data)
Three Months Ended Twelve Months Ended
Net income (loss) December 29, December 31, December December
reconciliation 2012 2011 29, 31,
2012 2011
Net income (loss) from $ $ $ $
continuing operations on (14,386) 15,345 56,163 72,575
a GAAP basis
Share-based compensation
expense:
- Cost of product sales 605 424 2,130 1,505
- Selling, general and 3,406 2,810 13,235 10,387
administrative
- Research and 1,649 1,098 6,327 4,171
development
Amortization of
purchased intangibles
- Cost of product sales 2,070 2,075 8,279 8,081
- Selling, general and 697 700 2,486 1,802
administrative
- Research and 83 - 329 -
development
Intangibles impairment
charge related to PVAD 50,242 - 50,242 -
and IVAD
Impact of ASC 470-20 - - - 3,127
(Debt)
Levitronix Medical FMV 0 2,195 528 3,582
inventory adjustments
Acquisition related 705 724 705 3,583
transaction costs
Income tax effect of (22,513) (2,667) (31,250) (11,774)
non-GAAP adjustments
Net income from $ $ $ $
continuing operations on 22,558 22,704 109,174 97,039
a Non-GAAP basis
Three Months Ended Twelve Months Ended
Diluted net income December 29, December 31, December December
(loss)per share 2012 2011 29, 31,
reconciliation 2012 2011
Diluted net income (loss)
from continuing $ $ $ $
operations per share on a (0.25) 0.25 0.94 1.20
GAAP basis
Share-based compensation
expense:
- Cost of product sales 0.01 0.01 0.03 0.02
- Selling, general and 0.06 0.05 0.22 0.16
administrative
- Research and 0.03 0.02 0.11 0.07
development
Amortization of
purchased intangibles
- Cost of product sales 0.04 0.04 0.14 0.13
- Selling, general and 0.01 0.01 0.04 0.03
administrative
- Research and 0.00 - 0.01 -
development
Intangibles impairment
charge related to PVAD 0.85 - 0.84 -
and IVAD
Levitronix Medical FMV 0.00 0.04 0.01 0.06
inventory adjustments
Acquisition related 0.01 0.01 0.01 0.06
transaction costs
Income tax effect of (0.38) (0.05) (0.52) (0.17)
non-GAAP adjustments
Diluted net income from
continuing operations $ $ $ $
per share on a Non-GAAP 0.38 0.38 1.83 1.56
basis
Three Months Ended Twelve Months Ended
December 29, December 31, December December
2012 2011 29, 31,
2012 2011
Shares used to compute
diluted net income
(loss) per share
reconciliation
Shares used in
calculation of diluted 58,322 60,111 59,580 62,524
net income (loss) per
share -- GAAP
Dilutive effect of share
based compensation plans
included in Non-GAAP 1,044 - - -
diluted EPS for three
months ended December
29, 2012
Weighted average
unvested restricted - 71 13 100
stock awards (1)
Shares used in
calculation of diluted 59,366 60,182 59,593 62,624
net income per share --
Non-GAAP
The company adopted the two-class method in calculating net income per
share on a GAAP basis, which excludes the weighted average unvested
(1) restricted stock awards outstanding of 0 and 71,368 for the three months
ended December 29, 2012 and December 31, 2011, respectively and 12,693 and
99,870 for the twelve months ended December 29, 2012 and December 31,
2011, respectively.
The following table reconciles the specific items excluded from GAAP gross
profit and gross margin from continuing operations in the calculation of
non-GAAP gross profit and gross margin from continuing operations for the
periods shown below:
THORATEC CORPORATION
Reconciliation of GAAP to Non-GAAP Gross Profit
(Unaudited)
(in thousands)
Three Months Ended Twelve Months Ended
December December December December
29, 31, 29, 31,
2012 2011 2012 2011
Gross profit on $ 39,250 30.6% $ 73,366 67.1% $ 291,375 59.3% $ 287,651 68.0%
a GAAP basis
Share-based
compensation 605 424 2,130 1,505
expense
Amortization of 2,070 2,075 8,279 8,081
intangibles
Intangibles
impairment 50,242 - 50,242 -
related to PVAD
and IVAD
Levitronix
Medical FMV 0 2,195 528 3,582
inventory
adjustments
Gross profit on
a Non-GAAP $ 92,167 71.7% $ 78,060 71.4% $ 352,554 71.7% $ 300,819 71.2%
basis
The following table reconciles the specific items excluded from GAAP operating
expenses from continuing operations in the calculation of non-GAAP operating
expenses from continuing operations for the periods shown below:
THORATEC CORPORATION
Reconciliation of GAAP to Non-GAAP Operating Expenses
(Unaudited)
(in thousands)
Three Months Ended Twelve Months Ended
December 29, December 31, December 29, December
2012 2011 2012 31,
2011
Operating expenses on a $ $ $ $
GAAP basis 64,135 48,288 215,713 173,491
Share-based compensation
expense:
- Selling, general and (3,406) (2,810) (13,235) (10,387)
administrative
- Research and development (1,649) (1,098) (6,327) (4,171)
Amortization of purchased
intangibles
- Selling, general and (697) (700) (2,486) (1,802)
administrative
- Research and development (83) - (329) -
Acquisition related (705) (724) (705) (3,583)
transaction costs
Operating expenses on a $ $ $ $
Non-GAAP basis 57,595 42,956 192,631 153,548
The following table reconciles the specific items excluded from GAAP other
income and expense from continuing operations in the calculation of non-GAAP
other income and expense from continuing operations for the periods shown
below:
THORATEC CORPORATION
Reconciliation of GAAP to Non-GAAP Other Income and Expense
(Unaudited)
(in thousands)
Three Months Ended Twelve Months Ended
December 29, December 31, December 29, December 31,
2012 2011 2012 2011
Other income $ $ $ $
(expense) on a GAAP 257 834 1,655 (2,289)
basis
Impact of ASC - - - 3,127
470-20 (Debt)
Other income on a $ $ $ $
Non-GAAP basis 257 834 1,655 838
The following table reconciles the GAAP tax expense (benefit) adjusted for the
tax effect of the adjustments from GAAP net income from continuing operations
to non-GAAP net income from continuing operations:
THORATEC CORPORATION
Reconciliation of GAAP to Non-GAAP Tax Expense
(Unaudited)
(in thousands)
Three Months Ended Twelve Months Ended
December December December December
29, 31, 29, 31,
2012 2011 2012 2011
Tax expense $
(benefit) on a (10,242) 41.6% $ 10,567 40.8% $ 21,154 27.4% $ 39,296 35.1%
GAAP basis
Share-based
compensation 2,394 1,681 8,666 5,765
expense
Amortization of
purchased 898 1,110 3,929 3,953
intangibles
Intangibles
impairment 19,269 - 19,269 -
related to PVAD
and IVAD
Impact of
adoption of ASC - - - 1,251
470-20 (Debt)
Excess
compensation (218) (150) (995) (918)
limitations and
other
Levitronix
Medical FMV (100) 879 111 1,433
inventory
adjustments
Acquisition
related 270 (854) 270 289
transaction costs
Tax expense on a $ 12,271 35.2% $ 13,233 36.8% $ 52,404 32.4% $ 51,069 34.5%
Non-GAAP basis
The following table reconciles 2013 guidance on a GAAP basis and non-GAAP
basis.
THORATEC CORPORATION
Reconciliation of GAAP to Non-GAAP Forward-Looking Guidance
(Unaudited)
(in thousands, except for per share data)
Gross margin For the Fiscal Year
Ended 2013
Gross margin on a GAAP basis 68.5%
Amortization of purchased intangibles 1.5%
Share-based compensation expense 0.5%
Gross margin on a Non-GAAP basis 70.5%
Net income per diluted share For the Fiscal Year Ended 2013
reconciliation
From To
Net income from continuing operations $ 1.32 $ 1.42
per diluted share on a GAAP basis
Share-based compensation expense 0.32 0.31
Amortization of purchased intangibles 0.13 0.13
Tax rate effect on Non-GAAP earnings (0.01) -
Net income from continuing operations $ 1.76 $ 1.86
per diluted share on a Non-GAAP basis
Shares used in calculation of net
income per diluted share - GAAP and 59,000 59,000
Non-GAAP
About Thoratec
Thoratec is the world leader in mechanical circulatory support with the
broadest product portfolio to treat the full range of clinical needs for
patients suffering from advanced heart failure. The company's products include
the HeartMate LVAS and Thoratec VAD, with more than 20,000 devices implanted
in patients suffering from heart failure. Thoratec also manufactures and
markets the CentriMag and PediMag / PediVAS product lines. Thoratec is
headquartered in Pleasanton, California. For more information, visit
www.thoratec.com.
Thoratec, the Thoratec logo, HeartMate and HeartMate II are registered
trademarks of Thoratec Corporation and HeartMate PHP and IVAD are trademarks
of Thoratec Corporation. CentriMag and PediMag are registered trademarks of
Thoratec LLC, and PediVAS is a registered trademark of Thoratec Switzerland
GmbH.
Many of the preceding paragraphs, particularly but not exclusively those
addressing guidance for fiscal 2012 financial results or future performance
contain forward-looking statements within the meaning of Sections 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These statements can be identified by the words, "believes," "views,"
"expects," "plans," "projects," "hopes," "could," "will," "estimates," and
other similar words. Actual results, events or performance could differ
materially from these forward-looking statements based on a variety of
factors, many of which are beyond Thoratec's control. Therefore, readers are
cautioned not to put undue reliance on these statements. Investors are
cautioned that all such statements involve risks and uncertainties, including
risks related to regulatory approvals, the development of new products,
including development and clinical trial timing, and new markets including
Destination Therapy, the growth of existing markets for our products, customer
and physician acceptance of Thoratec products, changes in the mix of existing
markets for our products and related gross margin for such product sales, the
ability to improve financial performance, the effects of FDA regulatory
requirements, our ability to address issues raised by FDA inspections
adequately and on a timely basis without a resulting recall of products or
interruption of manufacturing or shipment of products, the effects of
healthcare reimbursement and coverage policies, the effects of seasonality on
Thoratec product sales, the effects of competition and the effects of any
merger, acquisition and divestiture related activities. Forward-looking
statements contained in this press release should be considered in light these
factors and those factors discussed from time to time in Thoratec's public
reports filed with the Securities and Exchange Commission, such as those
discussed under the heading, "Risk Factors," in Thoratec's most recent annual
report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form
8-K and other SEC filings. These forward-looking statements speak only as of
the date hereof. Thoratec undertakes no obligation to publicly release the
results of any revisions to these forward-looking statements that may be made
to reflect events or circumstances after the date hereof, or to reflect the
occurrence of unanticipated events.
SOURCE Thoratec Corporation
Website: http://www.thoratec.com
Contact: Taylor Harris, Vice President and Chief Financial Officer, Thoratec
Corporation, +1-925-738-0047
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