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 firstname.lastname@example.org 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
NxStage Reports Record Revenue For The Second Quarter Of Fiscal 2013
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