NxStage Reports Record Second Quarter Financial Results And Improves Financial Guidance For 2015

- Revenue Increases to $80.3 million, up 8% from Q2'14

- Home Revenue Increases to $44.8 million, up 16% from Q2'14

- Products Business Achieves Profitability Goal Ahead of Plan

- Company to Begin Launching Innovative Pipeline Next Year

- Company Renews Blood Tubing Distribution Agreement

Aug 06, 2015, 07:42 ET from NxStage Medical, Inc.

LAWRENCE, Mass., Aug. 6, 2015 /PRNewswire/ -- NxStage Medical, Inc. (Nasdaq: NXTM), a leading manufacturer of innovative dialysis products, today reported second quarter financial results at and above the top end of its guidance ranges.

Revenue for the second quarter of 2015 increased 8 percent to $80.3 million, compared with revenue of $74.1 million for the second quarter of 2014. The Company's revenue guidance range for the second quarter was $79.0 million to $80.5 million. The increase was driven by the System One segment which consists of Home and Critical Care.

Home revenue increased 16 percent to $44.8 million for the second quarter of 2015 compared with revenue of $38.5 million for the second quarter of 2014. 

Critical Care revenue increased 18 percent to $14.6 million for the second quarter of 2015 compared with revenue of $12.4 million for the second quarter of 2014.

Consistent with the Company's guidance, In-center revenue was $18.6 million for the second quarter of 2015 compared with revenue of $21.0 million for the second quarter of 2014.

Net loss attributable to NxStage Medical, Inc.'s stockholders improved to $5.3 million for the second quarter of 2015 compared with a net loss of $7.1 million for the second quarter of 2014. NxStage Medical, Inc.'s net loss for the second quarter of 2015 was better than its guidance for a net loss of $5.5 million to $7.0 million and included $1.0 million of income from operations from the Products Business and $5.8 million in losses from operations from the Services segment, NxStage Kidney Care, less noncontrolling interest.

Separately, the Company announced that its blood tubing distribution agreement with Baxter International, Inc. has been renewed through December of 2016.

"NxStage's solid performance proves our commitment to strong, profitable long-term growth," stated Jeffrey H. Burbank, Founder and Chief Executive Officer of NxStage. "Consistent with our growth strategy, we are driving increased demand for our therapy options and giving patients and clinicians more flexibility to meet both their clinical and lifestyle needs. In turn, we have been able to successfully execute on key financial metrics and strategic initiatives. We expect to surprise and delight our patients and customers with the launch of new game-changing technology starting next year that we believe will further extend our market leadership and fuel long-term growth."

Guidance:

"After a strong first half of the year, we expect to achieve the top end of our annual revenue guidance which was originally set to be between $324 million and $328 million," stated Matthew W. Towse, Chief Financial Officer. "Since early 2014, we have indicated that one of our key financial goals was to achieve sustainable operating income in the Products Business.  Q2 marks our third consecutive quarter of profitable operations in that business and we remain confident in our ability to sustain this performance moving forward.   Taken together with our expectations for the remainder of the year, we are improving and narrowing our annual net loss guidance to be in a range of $18.0 million to $20.0 million versus our previous guidance for a net loss in the range of $20.0 million to $24.0 million, and dramatically reducing our targeted annual cash usage to approximately $10 million, which is about half our original projection and one-third of our cash usage in 2014."

For the third quarter, the Company expects revenue to be between $82 million and $83 million, and a net loss in the range of $4.5 million to $5.5 million. The Company's net loss guidance reflects expectations for continued operating income from the Products Business offset by the Company's continued investment in NxStage Kidney Care.

Conference Call:

NxStage will also host a conference call today 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 http://ir.nxstage.com.

A replay of the conference call will be available two hours after the completion of the call through August 14, 2015. To access the replay, dial 855-859-2056 (domestic) or 404-537-3406 (international) and reference conference ID 77465339.  An online archive of the conference call can be accessed via the investor relations section of the Company's website at http://ir.nxstage.com.

About the NxStage System One

The NxStage System One is the first and only portable hemodialysis machine cleared specifically by the U.S. Food & Drug Administration (FDA) for home hemodialysis and home nocturnal hemodialysis. 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. 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, including while they are sleeping - at home or on vacation and at a medically appropriate treatment frequency. The System One is also used to provide a range of flexible therapy options in more traditional care settings such as hospitals and dialysis centers. Its safety and efficacy have been demonstrated by experience with more than 10 million treatments with thousands of patients around the world. 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 cash usage, anticipated success and timing of new product introductions, 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 the Company's NxStage Kidney Care initiative, unanticipated difficulties in developing and commercializing new products, 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 most recent quarterly or annual report.

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

 

NxStage Medical, Inc. Condensed Consolidated Statements of Comprehensive Loss (in thousands, except per share data) (unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Revenues

$

80,316

$

74,083

$

159,798

$

146,304

Cost of revenues

49,452

46,553

98,808

89,840

Gross profit

30,864

27,530

60,990

56,464

Operating expenses:

Selling and marketing

14,518

13,589

29,066

26,807

Research and development

6,622

5,708

12,496

10,842

Distribution

6,255

6,485

12,626

13,035

General and administrative

8,585

8,399

17,497

17,220

Total operating expenses

35,980

34,181

71,685

67,904

Loss from operations

(5,116)

(6,651)

(10,695)

(11,440)

Other expense:

Interest expense

(242)

(195)

(483)

(393)

Other income (expense), net

37

(17)

301

6

(205)

(212)

(182)

(387)

Net loss before income taxes

(5,321)

(6,863)

(10,877)

(11,827)

Provision for income taxes

273

332

580

678

Net loss

(5,594)

(7,195)

(11,457)

(12,505)

Less: Net loss attributable to noncontrolling interests

(267)

(82)

(472)

(117)

Net loss attributable to stockholders of NxStage Medical, Inc.

$

(5,327)

$

(7,113)

$

(10,985)

$

(12,388)

Net loss per share, basic and diluted

$

(0.08)

$

(0.12)

$

(0.17)

$

(0.20)

Weighted-average shares outstanding, basic and diluted

63,288

61,469

63,059

61,484

Other comprehensive (loss) income

(154)

173

(930)

355

Total comprehensive loss

(5,748)

(7,022)

(12,387)

(12,150)

Less: Comprehensive loss attributable to noncontrolling interests

(267)

(82)

(472)

(117)

Total comprehensive loss attributable to stockholders of NxStage Medical, Inc.

$

(5,481)

$

(6,940)

$

(11,915)

$

(12,033)

 

 

NxStage Medical, Inc. Condensed Consolidated Balance Sheets (in thousands, except share data) (unaudited)

June 30,

December 31,

2015

2014

ASSETS

Current assets:

Cash and cash equivalents

$

48,350

$

52,884

Accounts receivable, net

26,401

24,099

Inventory

43,372

45,401

Prepaid expenses and other current assets

6,254

6,767

Total current assets

124,377

129,151

Property and equipment, net

64,443

66,574

Field equipment, net

21,104

21,118

Deferred cost of revenues

33,821

34,039

Intangible assets, net

12,950

14,370

Goodwill

41,817

41,817

Other assets

2,875

2,657

Total assets

$

301,387

$

309,726

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

12,790

$

13,845

Accrued expenses

22,961

24,653

Current portion of long-term debt

249

93

Other current liabilities

4,858

6,165

Total current liabilities

40,858

44,756

Deferred revenues

51,716

52,943

Long-term debt

1,841

848

Other long-term liabilities

18,522

19,624

Total liabilities

112,937

118,171

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, 2015 and December 31, 2014

Common stock: par value $0.001, 100,000,000 shares authorized; 64,232,634 and 63,429,005 shares issued as of June 30, 2015 and December 31, 2014, respectively

64

63

Additional paid-in capital

602,628

593,073

Accumulated deficit

(398,473)

(387,488)

Accumulated other comprehensive loss

(3,122)

(2,192)

Treasury stock, at cost: 815,779 and 772,273 shares as of June 30, 2015 and December 31, 2014, respectively

(13,734)

(12,989)

Total NxStage Medical, Inc. stockholders' equity

187,363

190,467

Noncontrolling interest

1,087

1,088

Total stockholders' equity

188,450

191,555

Total liabilities and stockholders' equity

$

301,387

$

309,726

 

 

NxStage Medical, Inc. Cash Flows from Operating Activities (in thousands) (unaudited)

Six Months Ended June 30,

2015

2014

Cash flows from operating activities:

Net loss

$

(11,457)

$

(12,505)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

15,473

13,343

Stock-based compensation

6,590

5,740

Other

813

450

Changes in operating assets and liabilities:

Accounts receivable

(2,315)

(10,927)

Inventory

(8,023)

(17,523)

Prepaid expenses and other assets

169

(550)

Accounts payable

(641)

7,948

Accrued expenses and other liabilities

(2,036)

1,206

Deferred revenues

(957)

(1,395)

Net cash used in operating activities

$

(2,384)

$

(14,213)

 

 

NxStage Medical, Inc. Revenues by Segment (in thousands) (unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

System One segment

Home

$

44,789

$

38,488

$

88,287

$

74,983

Critical Care

14,631

12,422

30,713

27,114

Total System One segment

59,420

50,910

119,000

102,097

In-Center segment

18,563

21,003

36,430

39,919

Other

1,857

1,943

3,704

3,997

Products subtotal

79,840

73,856

159,134

146,013

Services segment

1,144

428

1,814

544

Elimination of intersegment revenues

(668)

(201)

(1,150)

(253)

     Total

$

80,316

$

74,083

$

159,798

$

146,304

 

 

NxStage Medical, Inc. Segment Financial Performance (in thousands) (unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Products (System One, In-Center and Other)

Revenues

$

79,840

$

73,856

$

159,134

$

146,013

Gross profit

$

34,781

$

28,925

$

68,487

$

59,106

Gross margin percentage

44

%

39

%

43

%

40

%

Income (Loss) from operations

$

955

$

(3,405)

$

1,158

$

(5,239)

Services

Revenues

$

1,144

$

428

$

1,814

$

544

Gross profit

$

(3,917)

$

(1,395)

$

(7,497)

$

(2,642)

Gross margin percentage

n/a

n/a

n/a

n/a

Loss from operations

$

(6,071)

$

(3,246)

$

(11,853)

$

(6,201)

Eliminations

Elimination of intersegment revenues

$

(668)

$

(201)

$

(1,150)

$

(253)

Total Company

Revenues

$

80,316

$

74,083

$

159,798

$

146,304

Gross profit

$

30,864

$

27,530

$

60,990

$

56,464

Gross margin percentage

38

%

37

%

38

%

39

%

Loss from operations

$

(5,116)

$

(6,651)

$

(10,695)

$

(11,440)

 

 

Logo - http://photos.prnewswire.com/prnh/20110503/MM94799LOGO Logo - http://photos.prnewswire.com/prnh/20150624/225341

SOURCE NxStage Medical, Inc.



RELATED LINKS

http://www.nxstage.com