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HeartWare International Reports $50.8 Million In Second Quarter 2013 Revenue; 75% Increase From Second Quarter Of 2012



HeartWare International Reports $50.8 Million In Second Quarter 2013 Revenue;
                   75% Increase From Second Quarter Of 2012

- U.S. Revenues of $25.1 million, up from $4.2 million in Second Quarter of
2012; Reflects Strong Initial Commercialization of HVAD® Pump in U.S. -

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

PR Newswire

FRAMINGHAM, Mass. and SYDNEY, Aug. 8, 2013

FRAMINGHAM, Mass. and SYDNEY, Aug. 8, 2013 /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 $50.8 million for the second quarter ended June 30, 2013, a 75%
increase compared to $29.1 million in revenue for the same period of 2012.

"Our results for the second quarter reflect positive initial trends in the
commercial launch of the HeartWare^® Ventricular Assist System in the U.S.,
following approval from the Food and Drug Administration (FDA) late last year,
as well as continued strong support from our international customers," said
Doug Godshall, President and Chief Executive Officer.  "During the second
quarter, 523 HVAD^® pumps were sold globally, an increase from 318 units in
the second quarter of 2012 and more than our previous high quarterly total of
482 units in the first quarter of 2013."

During the second quarter of 2013, U.S. revenue, which reflects the Company's
second full quarter of U.S. commercialization, was $25.1 million, an increase
of approximately 500% from $4.2 million in the second quarter of 2012. 
Revenue from international markets, generated through the sale of 288 units,
was $25.7 million, an increase of approximately 4% from $24.9 million in the
second quarter of 2012.  

"With more than 200 customers around the world, including 120 outside of the
U.S., at the end of the second quarter, it continues to be quite gratifying to
see such strong interest from new hospital centers thus far in our commercial
launch," added Mr. Godshall.  "Our team has been focused on facilitating the
training of additional U.S. hospitals as part of the continued commercial
launch, and with 33 new sites trained between FDA approval and the end of the
second quarter, we finished the first half of 2013 with 83 customers in the
U.S."

For the six months ended June 30, 2013, revenues increased approximately 81%
to $100.1 million, compared to $55.4 million in the first six months of 2012. 

Currency fluctuations had a less than 1% favorable impact on revenue growth
for both the three and six months ended June 30, 2013 compared to the same
period in 2012.

Total operating expenses for the second quarter of 2013 were $41.4 million, as
compared to $34.2 million in the second quarter of 2012. 

Research and development expense was $24.2 million for the second quarter of
2013, as compared to $20.0 million in the same period of 2012.  Development
costs are primarily attributable to clinical trial costs and research and
development costs related to advancing HeartWare's pipeline technologies,
including the MVAD^® platform, PAL™ controller and a fully-implantable system,
as well as other early research initiatives.

Selling, general and administrative expenses were $17.2 million in the second
quarter of 2013, compared to $14.2 million in the second quarter of 2012.  The
increase in selling, general and administrative expenses reflects expansion of
sales and marketing activities, particularly in the U.S., an overall increase
in corporate infrastructure to support the Company's significant growth, and
implementation of the 2.3% excise tax on the U.S. sales of certain medical
devices which became effective January 1, 2013.

Net loss for the second quarter of 2013 was $12.9 million, or a $0.79 loss per
basic and diluted share, compared to a $22.8 million net loss, or a loss of
$1.61 per basic and diluted share, in the second quarter of 2012.  For the six
months ended June 30, 2013, the Company recorded a net loss of $25.9 million,
or a $1.66 loss per basic and diluted share, compared to a $41.6 million net
loss, or a loss of $2.94 per basic and diluted share, in the first six months
of 2012.

At June 30, 2013, the Company had $222.4 million of cash, cash equivalents and
investments, reflecting a net cash decrease from the end of the first quarter
2013 of approximately $6.5 million.

HeartWare will host a conference call on Thursday, August 8, 2013 at 8:00
a.m., U.S. Eastern Daylight Time to discuss the Company's financial results,
highlights from the second quarter and business outlook.  The call may be
accessed by dialing 1-877-941-2321 five minutes prior to the scheduled start
time and referencing "HeartWare."  For callers outside the U.S., please dial
+1-480-629-9666.

A live webcast of the call will also be available in the Investor section at
the Company's website (http://ir.heartware.com/).  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 designed to be implanted next to the heart, avoiding the abdominal
surgery generally required to implant competing devices. The HeartWare System
is approved in the United States for the intended use as a bridge to cardiac
transplantation in patients who are at risk of death from refractory end-stage
left ventricular heart failure, has received CE Marking in the European Union
and has been used to treat patients in 35 international countries. The device
is also currently the subject of a U.S. clinical trial for destination
therapy. For additional information, please visit the Company's website at
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 commercial launch of the HeartWare^®
Ventricular Assist System in the U.S., continued support from international
customers, progress of clinical trials and post-approval studies, regulatory
status, research and development activities and commercialization strategies. 
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
those described in Part I, Item 1A. "Risk Factors" in HeartWare's Annual
Report on Form 10-K filed with the Securities and Exchange Commission. 
HeartWare may update risk factors from time to time in Part II, Item 1A "Risk
Factors" in 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      Six Months Ended

                             June 30,                June 30,
                             2013        2012        2013         2012
Revenue, net                 $   50,836  $   29,053  $            $    55,398
                                                      100,075
Cost of revenue              18,866      12,665      37,646       23,493
Gross profit                 31,970      16,388      62,429       31,905
Operating expenses:
Selling, general and         17,217      14,204      33,704       26,920
administrative
Research and development     24,188      20,005      46,330       40,012
Total operating expenses     41,405      34,209      80,034       66,932
Loss from operations         (9,435)     (17,821)    (17,605)     (35,027)
Other expense, net           (3,499)     (4,961)     (8,288)      (6,600)
Net loss                     $           $           $  (25,893)  $  (41,627)
                              (12,934)    (22,782)
Net loss per common share —  $           $           $            $    
basic and diluted            (0.79)      (1.61)       (1.66)       (2.94)
Weighted average shares
outstanding — basic and      16,370      14,157      15,619       14,139
diluted....

 

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

(unaudited)
                                         June 30, 2013       December 31, 2012
ASSETS
Current assets:
   Cash and cash equivalents            $          190,024   $          85,921
   Short-term investments               31,148               16,887
   Accounts receivable, net             33,596               25,225
   Inventories, net                     36,926               38,443
   Prepaid expenses and other current   7,031                5,925
assets
      Total current assets              298,725              172,401
Property, plant and equipment, net      18,103               19,380
Other assets, net                       16,093               14,718
      Total assets                      $        332,921     $        206,499
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                     $            10,836  $          12,024
   Other accrued liabilities            19,386               22,020
      Total current liabilities         30,222               34,044
Convertible senior notes, net           103,618              100,315
Other long-term liabilities             3,889                3,929
Stockholders' equity                    195,192              68,211
      Total liabilities and             $          332,921   $        206,499
stockholders' equity

SOURCE HeartWare International, Inc.

Website: http://www.heartware.com
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