NxStage Reports Third Quarter 2013 Financial Results

             NxStage Reports Third Quarter 2013 Financial Results

-- Revenue Increases to $66.9 million, up 9% from Q3'12

-- Home Revenue Increases to $33.7 million

-- Company Announces Regulatory Approval for Nx2me Connected Health Solution

-- Company Updates Full-Year Guidance for 2013

PR Newswire

LAWRENCE, Mass., Nov. 7, 2013

LAWRENCE, Mass., Nov.7, 2013 /PRNewswire/ --NxStage Medical, Inc. (Nasdaq:
NXTM), a leading manufacturer of innovative dialysis products, today reported
third quarter financial results with total revenue within its guidance range.

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

Revenue for the third quarter of 2013 increased 9% to a record $66.9 million,
compared with revenue of $61.2 million for the third quarter of 2012. The
higher revenues were driven by increased adoption of the NxStage^® System
One™.

Home revenue increased 5.5%  to $33.7 million for the third quarter of 2013
compared with revenue of $31.9 million for the third quarter of 2012. The
Company's domestic home revenue for the third quarter of 2013 increased 8.1%
over the prior year period, driving all of Home's annual and sequential
growth, and offsetting lower international revenue compared with the prior
year.

Critical Care revenue increased to $10.7 million for the third quarter of 2013
compared with revenue of $9.1 million for the third quarter of 2012. In-center
revenue increased to $21.3 million for the third quarter of 2013 compared with
revenue of $19.6 million for the third quarter of 2012.

NxStage reported a net loss of $5.0 million, or $(0.08) per share for the
third quarter of 2013 compared with a net loss of $2.6 million, or $(0.04) per
share for the third quarter of 2012.

"We continue to make solid progress in strategic areas that are focused on
accelerating growth over the longer term," stated Jeffrey H. Burbank, Founder
and Chief Executive Officer of NxStage. "We're seeing good momentum in the
domestic market and believe our growth opportunity here remains very robust.
In addition to our direct to patient marketing initiatives, we have a
significant opportunity to improve our patients' experiences and increase
adoption of our therapies with both our innovative product pipeline and our
centers of excellence. These initiatives remain solidly on track and we
believe they are positioning the Company toward our goal of 15% annual home
revenue growth in 2014 and beyond."

Separately, the Company announced that the U.S. Food and Drug Administration
(FDA) cleared the Company's Nx2me Connected Health™ solution. Nx2me Connected
Health provides new features and capabilities that are important to home
dialysis patients and nurses, including tools that automate a significant part
of flow sheet administrative paperwork. With this clearance, the Company
expects to begin offering Nx2me in the US later this year.

Guidance:

For the fourth quarter of 2013, the Company is forecasting revenues to be
between $67.0 million and $68.5 million, and a net loss in the range of $6.0
to $5.0 million, or ($0.10) to ($0.08) per share.

This translates to full-year 2013 revenue to be within a range of $261.0 to
$262.5 million and a net loss in the range of $19.5 to $18.5 million, or
($0.32) to ($0.31) per share, compared with the Company's previous guidance
for full-year 2013 revenue to be a range of $265 to $270 million and a net
loss in the range of $17 to $13 million, or ($0.28) to ($0.22) per share. The
Company's revised net loss for the full-year 2013 includes continued
investment in the Company's strategic growth initiatives, including centers of
excellence.

The components of the Company's revised full-year 2013 revenue guidance
include Home at 6.5% to 7.5%, Critical Care at approximately 10%, and
In-Center at 6% to 7% annual growth. The Company's guidance for $4 million in
sales to Asahi remains unchanged for the full-year 2013.

"The net change to our year end revenue guidance reflects a longer ramp of
international revenue growth and lower growth in critical care disposable
sales compared with our earlier projections," stated Matthew W. Towse, Chief
Financial Officer. "We remain committed to the investments that we believe
will drive growth in 2014 and beyond."

Conference Call:

NxStage will also host a conference call today, Thursday, November7, 2013 at
9:00 a.m. Eastern Time to discuss its third 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 November 15, 2013. To access the replay, dial
855-859-2056 (domestic) or 404-537-3406 (international) and reference
conference ID 76263079. 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 the NxStage System One

The NxStage System One is the first and only truly portable hemodialysis
system cleared for home use by the FDA. Its simplicity and revolutionary size
(just over a foot tall) are intended to allow convenient use in patients'
homes and give patients the freedom to travel with their therapy. When
combined with the NxStage Pureflow™ SL Dialysis Preparation System, patients
are able to further simplify, using ordinary tap water to create dialysis
fluid on demand. Unlike conventional hemodialysis systems, the System One
requires no special infrastructure to operate. Under the guidance of their
physician, patients can use the NxStage System One, with their trained
partners, where, how and when it best meets their needs, at home or on
vacation, and at a medically appropriate treatment frequency.
http://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 domestically and
internationally, 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 June 30, 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      Nine Months Ended

                              September 30,           September 30,
                              2013        2012        2013         2012
Revenues                      $ 66,873    $ 61,152    $ 193,979    $ 177,112
Cost of revenues              41,345      37,404      119,364      109,663
Gross profit                  25,528      23,748      74,615       67,449
Operating expenses:
Selling and marketing         12,374      10,168      34,786       30,006
Research and development      4,450       4,274       13,924       12,421
Distribution                  5,326       4,731       15,271       13,845
General and administrative    7,791       6,921       23,854       20,473
Total operating expenses      29,941      26,094      87,835       76,745
Loss from operations          (4,413)     (2,346)     (13,220)     (9,296)
Other expense:
Interest expense              (162)       (26)        (462)        (2,675)
Other (expense) income, net   (142)       13          (328)        (118)
                              (304)       (13)        (790)        (2,793)
Net loss before income taxes  (4,717)     (2,359)     (14,010)     (12,089)
Provision for (benefit from)  269         223         (625)        700
income taxes
Net loss                      $ (4,986)   $ (2,582)   $ (13,385)   $ (12,789)
Net loss per share, basic and $ (0.08)    $ (0.04)    $ (0.22)     $ (0.22)
diluted
Weighted-average shares
outstanding, basic and        60,675      58,945      60,029       57,482
diluted
Other comprehensive income    257         711         (302)        587
(loss)
Total comprehensive loss      $ (4,729)   $ (1,871)   $ (13,687)   $ (12,202)





NxStage Medical, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share data)

(unaudited)
                                                   September 30,  December 31,
                                                   2013           2012
ASSETS
Current assets:
Cash and cash equivalents                          $  83,159      $  106,439
Accounts receivable, net                           22,523         18,990
Inventory                                          37,097         33,504
Prepaid expenses and other current assets          5,024          2,534
Total current assets                               147,803        161,467
Property and equipment, net                        47,106         36,320
Field equipment, net                               13,670         10,101
Deferred cost of revenues                          33,692         38,028
Intangible assets, net                             17,894         19,819
Goodwill                                           42,329         42,421
Other assets                                       2,108          3,793
Total assets                                       $  304,602     $  311,949
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                   $  16,798      $  16,645
Accrued expenses                                   18,160         20,400
Other current liabilities                          2,516          2,187
Total current liabilities                          37,474         39,232
Deferred revenues                                  52,361         59,262
Other long-term liabilities                        19,676         15,864
Total liabilities                                  109,511        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 September 30,
2013 and December 31, 2012
Common stock: par value $0.001, 100,000,000 shares
authorized; 61,333,363 and

59,850,117 shares issued as of September 30, 2013  61             59
and December 31, 2012,

respectively
Additional paid-in capital                         563,191        551,594
Accumulated deficit                                (358,366)      (344,981)
Accumulated other comprehensive income             168            470
Treasury stock, at cost: 575,895 and 541,584
shares as of September 30, 2013                    (9,963)        (9,551)

and December 31, 2012, respectively
Total stockholders' equity                         195,091        197,591
Total liabilities and stockholders' equity         $  304,602     $  311,949





NxStage Medical, Inc.

Cash Flows from Operating Activities

(in thousands)

(unaudited)
                                               Nine Months Ended September 30,
                                               2013             2012
Cash flows from operating activities:
Net loss                                       $  (13,385)      $  (12,789)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depreciation and amortization                  18,430           17,495
Stock-based compensation                       7,830            9,213
Other                                          2,251            3,047
Changes in operating assets and liabilities:
Accounts receivable                            (3,473)          (3,753)
Inventory                                      (14,498)         (11,638)
Prepaid expenses and other assets              (2,549)          (384)
Accounts payable                               49               (863)
Accrued expenses and other liabilities         (3,847)          3,691
Deferred revenues                              (5,707)          (3,449)
Net cash (used in) provided by operating       $  (14,899)      $  570
activities





NxStage Medical, Inc.

Revenues by Segment

(in thousands)

(unaudited)
                         Three Months Ended    Nine Months Ended

                         September 30,         September 30,
                         2013       2012       2013        2012
System One segment
Home                     $ 33,666   $ 31,925   $ 97,796    $ 92,171
Critical Care            10,671     9,099      32,207      28,257
Total System One segment 44,337     41,024     130,003     120,428
In-Center segment        21,269     19,637     61,207      55,477
Other                    1,267      491        2,769       1,207
Total                    $ 66,873   $ 61,152   $ 193,979   $ 177,112





NxStage Medical, Inc.

Non-GAAP Financial Measures

(in millions)

(unaudited)
                         Three Months Ended          Nine Months Ended

                         September 30,               September 30,
                         2013          2012          2013           2012
Net loss                 $  (5.0)      $  (2.6)      $  (13.4)      $  (12.8)
Less: Depreciation,
amortization, interest,  6.7           6.2           18.6           21.0
and taxes
Less: Adjusting items*   (1.8)         (1.2)         (4.4)          (2.3)
Adjusted EBITDA          $  (0.1)      $  2.4        $  0.8         $  5.9
* 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 K. Sheppard, Esq., +1-978-332-5923
 
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