NxStage Reports Record Revenue For The Second Quarter Of Fiscal 2013

     NxStage Reports Record Revenue For The Second Quarter Of Fiscal 2013

PR Newswire

LAWRENCE, Mass., July 25, 2013

LAWRENCE, Mass., July 25, 2013 /PRNewswire/ --

Highlights:

  oRevenue Increases to $65.5 million, up 11% from Q2'12
  oHome Revenue Increases to $32.7 million, up 6% from Q2'12
  oCompany Reaffirms Top Line Revenue Guidance for 2013
  oCompany Opens First Center of Excellence
  oCompany Expands into Canada

NxStage Medical, Inc. (Nasdaq: NXTM), a leading manufacturer of innovative
dialysis products, today reported second quarter financial results with total
revenue at the top end of its guidance range.

(Logo: http://photos.prnewswire.com/prnh/20110503/MM94799LOGO )

Revenue for the second quarter of 2013 increased 11% to a record $65.5
million, compared with revenue of $59.0 million for the second quarter of
2012. The higher revenues were driven by increased adoption of the NxStage^®
System One™.

Home revenue increased to $32.7 million for the second quarter of 2013
compared with revenue of $30.7 million for the second quarter of 2012.

Critical Care revenue increased to $10.8 million for the second quarter of
2013 compared with revenue of $9.4 million for the second quarter of 2012.
In-center revenue increased to $21.2 million for the second quarter of 2013
compared with revenue of $18.2 million for the second quarter of 2012.

NxStage reported a net loss of $3.4 million, or $(0.06) per share for the
second quarter of 2013 compared with a net loss of $5.1 million, or $(0.09)
per share for the second quarter of 2012. Net loss for the second quarter of
2013 includes a $1.2 million tax benefit related to the conclusion of a
foreign tax audit.

"Our results reflect solid progress and early benefit from our strategic
growth initiatives, including our new direct to patient marketing programs,"
stated Jeffrey H. Burbank, Founder and Chief Executive Officer of NxStage.
"We believe our efforts to further penetrate both the US and international
markets are on track to deliver 15 percent annual Home revenue growth in 2014
and beyond."

Burbank continued, "Based on our outlook and our continuing progress in key
areas, we are reaffirming both our top line revenue and net loss guidance for
2013. Perhaps more importantly, we believe we're setting the Company up for an
exciting new chapter of growth in 2014 and beyond."

Separately, the Company announced the opening of its first dialysis center in
St. Louis, MO, through its wholly owned subsidiary, NxStage Kidney Care, Inc.
The move is in line with the Company's strategic centers of excellence
initiative to expand patient access to home therapies and the life-changing
benefits possible with home and more frequent dialysis using the NxStage
System One.

The Company also announced its expansion into Canada through a newly
established entity, NxStage Medical Canada, Inc. Through this new entity,
NxStage is marketing and selling the System One and related products and
services directly in Canada. NxStage highlighted that its first Canadian
customer has initiated patient treatment with the System One.

Guidance:

For the third quarter of 2013, the Company is forecasting revenues to be
between $66.5 million and $68.0 million, and a net loss in the range of $4.5
million to $3.5 million, or $(0.07) to $(0.06) per share. The Company
reaffirmed its top line revenue and net loss guidance for 2013.

Conference Call:

NxStage will also host a conference call today, Thursday, July25, 2013 at
9:00 a.m. Eastern Time to discuss its second quarter financial results. To
listen to the conference call, please dial 877-392-9886 (domestic) or
707-287-9329 (international). The call will also be webcast LIVE and can be
accessed via the investor relations section of the Company's website at
www.nxstage.com.

A replay of the conference call will be available 2 hours after the completion
of the call through August 2, 2013. To access the replay, dial 855-859-2056
(domestic) or 404-537-3406 (international) and reference conference ID
98337588. An online archive of the conference call can be accessed via the
investor relations section of the Company's website at www.nxstage.com.

About NxStage

NxStage Medical, Inc. (Nasdaq: NXTM) is a medical device company,
headquartered in Lawrence, Massachusetts, USA, that develops, manufactures and
markets innovative products for the treatment of ESRD and acute kidney
failure. For more information on NxStage and its products, please visit the
Company's website at www.nxstage.com.

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. All statements contained in
this release that are not clearly historical in nature are forward-looking,
and the words "anticipate," "believe," "expect," "estimate," "plan," and
similar expressions are generally intended to identify forward-looking
statements. Examples of these forward-looking statements include statements as
to the anticipated demand for the Company's products, anticipated operating
results, including revenues, loss, gross margin, and other expectations as to
future operating results. All forward-looking statements involve risks,
uncertainties and contingencies, many of which are beyond NxStage's control,
which may cause actual results, performance, or achievements to differ
materially from anticipated results, performance or achievements, including
market acceptance and demand for NxStage's products, growth in home and/or
more frequent hemodialysis, unanticipated difficulties in achieving
operational efficiencies and cost reductions, changes in reimbursement for
home and more frequent hemodialysis, changes in the regulatory environment,
changes in the historical purchasing patterns and preferences of our
customers, including DaVita Healthcare Partners Inc. and Fresenius Medical
Care, including in response to NxStage's new centers of excellence initiative,
and certain other factors that may affect future operating results and which
are detailed in NxStage's filings with the Securities and Exchange Commission,
including its Quarterly Report on Form 10-Q for the quarter ended March 31,
2013.

In addition, the statements in this press release represent NxStage's
expectations and beliefs as of the date of this press release. NxStage
anticipates that subsequent events and developments may cause these
expectations and beliefs to change. However, while NxStage may elect to update
these forward-looking statements at some point in the future, it specifically
disclaims any obligation to do so, whether as a result of new information,
future events, or otherwise. These forward-looking statements should not be
relied upon as representing NxStage's expectations or beliefs as of any date
subsequent to the date of this press release.

Contact:
Kristen K. Sheppard, Esq.
VP, Investor Relations
ksheppard@nxstage.com

Non-GAAP Financial Measure

The Company discloses a certain non-GAAP financial measure to supplement the
Company's consolidated financial statements presented on a GAAP basis. This
non-GAAP measure is not in accordance with, or an alternative for, generally
accepted accounting principles in the United States and may be different from
similar non-GAAP financial measures used by other companies. The non-GAAP
financial measure disclosed by the Company is not meant to be considered
superior to or a substitute for results of operations prepared in accordance
with GAAP. Management uses Adjusted EBITDA (EBITDA adjusted for stock
based-compensation, deferred revenue recognized, manufacturing transition
costs and other non-cash expenses) to understand operational cash usage. The
Company believes the non-GAAP financial measure provides useful and
supplementary information allowing investors greater transparency to one
measure used by management. The non-GAAP financial measure is meant to
supplement, and to be viewed in conjunction with, GAAP financial measures.
The non-GAAP financial measure is reconciled to the most comparable GAAP
financial measure below.



NxStage Medical, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands, except per share data)

(unaudited)
                               Three Months Ended      Six Months Ended

                               June 30,                June 30,
                               2013        2012        2013        2012
Revenues                       $ 65,462    $ 59,009    $ 127,106   $ 115,960
Cost of revenues               40,375      36,620      78,019      72,259
Gross profit                   25,087      22,389      49,087      43,701
Operating expenses:
Selling and marketing          11,716      9,918       22,412      19,838
Research and development       4,366       4,250       9,474       8,147
Distribution                   5,037       4,582       9,945       9,114
General and administrative     8,239       6,930       16,063      13,552
 Total operating expenses 29,358      25,680      57,894      50,651
Loss from operations           (4,271)     (3,291)     (8,807)     (6,950)
Other expense:
Interest expense               (150)       (1,456)     (300)       (2,649)
Other expense, net             (10)        (79)        (186)       (131)
                               (160)       (1,535)     (486)       (2,780)
Net loss before income taxes   (4,431)     (4,826)     (9,293)     (9,730)
(Benefit from) provision for   (1,026)     237         (894)       477
income taxes
Net loss                       $ (3,405)   $ (5,063)   $ (8,399)   $ (10,207)
Net loss per share, basic and  $ (0.06)    $ (0.09)    $ (0.14)    $ (0.18)
diluted
Weighted-average shares        60,036      57,733      59,706      55,319
outstanding, basic and diluted
Other comprehensive loss       (704)       (297)       (559)       (124)
 Total comprehensive loss $ (4,109)   $ (5,360)   $ (8,958)   $ (10,331)



NxStage Medical, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share data)

(unaudited)
                                                      June 30,    December 31,
                                                      2013        2012
ASSETS
Current assets:
Cash and cash equivalents                             $ 94,297    $  106,439
Accounts receivable, net                              20,835      18,990
Inventory                                             39,349      33,504
Prepaid expenses and other current assets             4,966       2,534
 Total current assets                            159,447     161,467
Property and equipment, net                           42,470      36,320
Field equipment, net                                  13,082      10,101
Deferred cost of revenues                             34,305      38,028
Intangible assets, net                                18,587      19,819
Goodwill                                              42,313      42,421
Other assets                                          2,241       3,793
 Total assets                                    $ 312,445   $  311,949
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                      $ 18,503    $  16,645
Accrued expenses                                      22,015      20,400
Other current liabilities                             2,443       2,187
 Total current liabilities                       42,961      39,232
Deferred revenues                                     53,401      59,262
Other long-term liabilities                           19,434      15,864
 Total liabilities                               115,796     114,358
Commitments and contingencies
Stockholders' equity:
Undesignated preferred stock: par value $0.001,
5,000,000 shares authorized; no
                                                      —           —
shares issued and outstanding as of June 30, 2013 and
December 31, 2012
Common stock: par value $0.001, 100,000,000 shares
authorized; 61,149,562 and
                                                      61          59
59,850,117 shares issued as of June 30, 2013 and
December 31, 2012, respectively
Additional paid-in capital                            560,020     551,594
Accumulated deficit                                   (353,380)   (344,981)
Accumulated other comprehensive (loss) income         (89)        470
Treasury stock, at cost: 575,895 and 541,584 shares
as of June 30, 2013 and December                      (9,963)     (9,551)

31, 2012, respectively
 Total stockholders' equity                      196,649     197,591
 Total liabilities and stockholders' equity      $ 312,445   $  311,949



NxStage Medical, Inc.

Cash Flows from Operating Activities

(in thousands)

(unaudited)
                                                     Six Months Ended June 30,
                                                     2013          2012
Cash flows from operating activities:
Net loss                                             $  (8,399)    $ (10,207)
Adjustments to reconcile net loss to net cash (used
in) provided by operating

activities:
Depreciation and amortization                        12,259        11,580
Stock-based compensation                             5,435         6,252
Other                                                1,226         2,345
Changes in operating assets and liabilities:
 Accounts receivable                            (1,853)       (1,851)
 Inventory                                      (12,067)      (7,809)
 Prepaid expenses and other assets              (2,584)       (170)
 Accounts payable                               1,955         (946)
 Accrued expenses and other liabilities         (1,565)       3,038
 Deferred revenues                              (4,439)       (1,346)
 Net cash (used in) provided by operating       $  (10,032)   $ 886
activities



NxStage Medical, Inc.

Revenues by Segment

(in thousands)

(unaudited)
                         Three Months Ended    Six Months Ended

                         June 30,              June 30,
                         2013       2012       2013        2012
System One segment
Home                     $ 32,671   $ 30,693   $ 64,130    $ 60,246
Critical Care            10,826     9,371      21,536      19,158
Total System One segment 43,497     40,064     85,666      79,404
In-Center segment        21,238     18,229     39,938      35,840
Other                    727        716        1,502       716
Total                    $ 65,462   $ 59,009   $ 127,106   $ 115,960



NxStage Medical, Inc.

Non-GAAP Financial Measures

(in millions)

(unaudited)
                        Three Months Ended June 30,  Six Months Ended June 30,
                        2013            2012         2013          2012
Net loss                $   (3.4)       $  (5.1)     $  (8.4)      $  (10.2)
Less: Depreciation,
amortization, interest, 5.3             7.6          11.9          14.7
and taxes
Less: Adjusting items*  (1.4)           (0.8)        (2.6)         (1.0)
Adjusted EBITDA         $   0.5         $  1.7       $  0.9        $  3.5
* Adjusting items include stock-based compensation, deferred revenue
recognized, manufacturing transition costs and other non-cash expenses



SOURCE NxStage Medical, Inc.

Website: http://www.nxstage.com
Contact: Kristen Sheppard, 978-332-5923
 
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