FRAMINGHAM, Mass., April 30, 2015 /PRNewswire/ -- HeartWare
International, Inc. (NASDAQ: HTWR), a leading innovator of less
invasive, miniaturized circulatory support technologies that are
revolutionizing the treatment of advanced heart failure, today
announced revenue of $70.0 million
for the first quarter ended March 31,
2015, a five percent increase compared to $66.5 million in revenue for the same period of
2014. Currency fluctuations negatively impacted total revenue
growth by approximately $5 million,
or nearly eight percentage points, in the first quarter of 2015, as
compared to the same period in 2014.
"Continued U.S. commercial expansion drove the second-largest
unit sales quarter for HeartWare, although year-over-year U.S.
growth was offset by a decrease in international unit sales when
compared to the exceptionally strong international sales we
achieved in the first quarter of 2014," said Doug Godshall, President and Chief Executive
Officer. "We continue to see enthusiastic support of the
HeartWare® System around the world, with the addition of
six international and six U.S. customers during the first quarter,
which increases our global customer base to more than 280
hospitals."
During the first quarter of 2015, 713 HeartWare®
Ventricular Assist Systems were sold globally, which represents a
seven percent increase from 665 units sold in the first quarter of
2014. During the quarter, U.S. revenue, generated through the
sale of 381 units, was $42.2 million,
a 25% increase from $33.8 million in
the first quarter of 2014. Revenue from international markets
was $27.8 million, a decrease of 15%
from $32.7 million in the first
quarter of 2014, while international unit sales decreased six
percent to 332 units in the first quarter of 2015.
International unit sales decreased primarily in distributor
territories, which have a greater tendency to fluctuate on a
quarterly basis.
"During the quarter, we continued to advance our clinical trials
for the HVAD® System, with enrollment in the
supplemental destination therapy study nearing completion;
follow-up concluded for our Japan
clinical trial; and commencement of HVAD LATERAL, a trial designed
to evaluate a less-invasive thoracotomy implant technique," noted
Mr. Godshall. "Regarding our pipeline, we recently completed
training with investigators and are eager to commence first
implants in the CE Mark study for our next-generation
MVAD® System later this quarter, and we plan to submit
our Investigational Device Exemption protocol to FDA for review in
the coming weeks."
"Earlier this month, at the 35th International
Society for Heart and Lung Transplantation (ISHLT) Annual Meeting,
investigators from HeartWare's first destination therapy clinical
trial cohort, ENDURANCE, announced that the trial successfully
achieved the primary endpoint," Mr. Godshall continued.
"Complementing this result, the volume and scope of other HVAD data
were impressive, as multi-center studies from the U.S. and abroad
presented more contemporary, real-world data, demonstrating
excellent outcomes with advanced heart failure patients."
Gross margin percentage improved to 68.5% in the first quarter
of 2015, compared to 65.5% in the first quarter of 2014, reflecting
lower cost of goods and efficiencies associated with increased
manufacturing throughput.
Total operating expenses for the first quarter of 2015 were
$55.3 million, as compared to
$60.0 million in the first quarter of
2014.
Research and development expense was $31.3 million for the first quarter of 2015, as
compared to $32.6 million for the
first quarter of 2014. The net decrease of $1.3 million for the three months ended
March 31, 2015, as compared to the
same period in 2014, resulted primarily from a decrease in overall
research and development project expenses of $5.0 million, offset by an increase in clinical
and regulatory expenses of $3.7
million, including $2.8
million of incremental outside costs associated with FDA
warning letter remediation efforts.
Selling, general and administrative expenses were $21.9 million for the first quarter of 2015,
compared to $24.2 million for the
first quarter of 2014. The $2.3
million net decrease included a $0.3
million increase in growth-driven headcount and other
expenses, offset by a $2.6 million
reduction in CircuLite restructuring charges.
Net loss for the first quarter of 2015 was $14.5 million, or a loss of $0.85 per basic and diluted share, compared to a
net loss of $19.4 million, or a loss
of $1.15 per basic and diluted share,
for the first quarter of 2014.
Non-GAAP net loss for the first quarter of 2015 was $9.4 million, or $0.55 per basic and diluted share, compared to a
loss of $11.9 million, or
$0.70 per basic and diluted share,
for the first quarter of 2014. See "Use of Non-GAAP Financial
Measures" and "Reconciliation of GAAP to Non-GAAP Net Loss per
Common Share."
At March 31, 2015, HeartWare had
approximately $174 million of cash,
cash equivalents and investments, compared to approximately
$180 million at December 31, 2014.
Conference Call and Webcast Information
HeartWare will
host a conference call on Thursday, April
30, 2015 at 8:00 a.m., U.S.
Eastern Time to discuss its financial results, highlights from the
first quarter and the company's business outlook. The call may be
accessed by dialing 1-877-407-0789 five minutes prior to the
scheduled start time and referencing "HeartWare." Callers
outside the U.S. should dial +1-201-689-8562.
A live webcast of the call will also be available in the
Investors section of 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 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 42 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.
HEARTWARE, HVAD, MVAD, PAL, SYNERGY, CIRCULITE and HeartWare
logos are trademarks of HeartWare, Inc. or its affiliates.
Use of Non-GAAP Financial Measures
HeartWare management supplements its GAAP financial reporting with
certain non-GAAP financial measures for financial and operational
decision making. For example, we use "non-GAAP adjusted net
loss" and "non-GAAP adjusted net loss per common share" to refer to
GAAP loss per share excluding certain adjustments such as
amortization of intangible assets, impairment charges, purchase
accounting and acquisition-related transaction costs, and
restructuring and severance costs. These are non-GAAP financial
measures under Section 101 of Regulation G under the Securities
Exchange Act of 1934, as amended. Management believes that
providing this additional information enhances investors'
understanding of the financial performance of the Company's
operations and increases comparability of its current financial
statements to prior periods. Non-GAAP measures should not be
considered a substitute for measures of financial performance in
accordance with GAAP, and they should be reviewed in comparison
with their most directly comparable GAAP financial results.
Reconciliations of HeartWare's GAAP to non-GAAP financial measures
are provided at the end of this news release under "Reconciliation
of GAAP to Non-GAAP Net Loss per Common Share."
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: commercialization of the HeartWare®
Ventricular Assist System; timing, progress and outcomes of
clinical trials; regulatory and quality compliance; research and
development activities and our ability to take advantage of
acquired and pipeline technology. 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, except as may be required
by federal securities laws and the rules and regulations of the
Securities and Exchange Commission. 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@heartware.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 March
31,
|
|
2015
|
|
2014
|
|
|
|
|
Revenue,
net
|
$ 70,021
|
|
$ 66,472
|
Cost of
revenue
|
22,040
|
|
22,915
|
Gross
profit
|
47,981
|
|
43,557
|
|
|
|
|
Operating
expenses:
|
|
|
|
Selling, general and
administrative
|
21,929
|
|
24,232
|
Research and
development
|
31,267
|
|
32,590
|
Change in fair value
of contingent consideration
|
2,100
|
|
3,140
|
Total operating
expenses
|
55,296
|
|
59,962
|
|
|
|
|
Loss from
operations
|
(7,315)
|
|
(16,405)
|
|
|
|
|
Other expense,
net
|
(6,988)
|
|
(2,816)
|
Loss before
taxes
|
(14,303)
|
|
(19,221)
|
Income tax (benefit)
expense
|
232
|
|
223
|
Net loss
|
$ (14,535)
|
|
$ (19,444)
|
|
|
|
|
Net loss per common
share - basic and diluted
|
$ (0.85)
|
|
$ (1.15)
|
|
|
|
|
Weighted average
shares outstanding - basic and diluted
|
17,193
|
|
16,934
|
|
|
|
|
HEARTWARE
INTERNATIONAL, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
thousands) (unaudited)
|
|
|
|
March 31,
2015
|
|
December 31,
2014
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
102,525
|
|
$
102,946
|
Short-term
investments
|
70,354
|
|
75,535
|
Accounts receivable,
net
|
36,566
|
|
38,041
|
Inventories
|
52,356
|
|
54,046
|
Prepaid expenses and
other current assets
|
7,259
|
|
5,975
|
Total current
assets
|
269,060
|
|
276,543
|
Property, plant and
equipment, net
|
17,020
|
|
19,036
|
Other assets,
net
|
127,640
|
|
128,234
|
Total
assets
|
$
413,720
|
|
$
423,813
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
10,674
|
|
$
13,322
|
Other accrued
liabilities
|
33,671
|
|
36,589
|
Total current
liabilities
|
44,345
|
|
49,911
|
Convertible senior
notes, net
|
116,871
|
|
114,803
|
Other long-term
liabilities
|
52,538
|
|
50,565
|
Stockholders'
equity
|
199,966
|
|
208,534
|
Total liabilities and
stockholders' equity
|
$
413,720
|
|
$
423,813
|
Reconciliation of
GAAP to Non-GAAP Net Loss per Common Share (unaudited) (see
explanation of adjustments below)
|
(in thousands,
except per share data)
|
|
|
|
Three Months
Ended March
31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
GAAP net
loss
|
|
$ (14,535)
|
|
$ (19,444)
|
GAAP net loss per
common share – basic and diluted
|
|
$ (0.85)
|
|
$ (1.15)
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
Amortization
of purchased intangible assets
|
(a)
|
|
|
|
-Selling,
general and administrative
|
|
84
|
|
331
|
-Research
and development
|
|
327
|
|
-
|
Acquisition-related contingent consideration adjustments
|
(b)
|
2,100
|
|
3,140
|
Restructuring
costs
|
(c)
|
|
|
|
-Selling,
general and administrative
|
|
467
|
|
3,026
|
-Research
and development
|
|
2,164
|
|
1,026
|
Total
adjustments
|
|
5,142
|
|
7,523
|
|
|
|
|
|
Non-GAAP adjusted net
loss
|
|
$ (9,393)
|
|
$ (11,921)
|
Non-GAAP adjusted net
loss per common share - basic and diluted
|
|
$ (0.55)
|
|
$ (0.70)
|
|
|
|
|
|
Shares used in
computing non-GAAP adjusted net loss per common share - basic and
diluted
|
|
17,193
|
|
16,934
|
|
|
(a)
|
Represents
amortization of purchased intangible assets related to CircuLite
and WorldHeart during the quarters ended March 31, 2015 and March
31, 2014.
|
(b)
|
Represents the change
in fair value of contingent consideration associated with the
acquisition of CircuLite in December 2013.
|
(c)
|
Represents certain
restructuring costs incurred during the quarter ended March 31,
2015 as follows (in thousands):
|
|
|
Three Months
Ended
March
31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
Lease exit charge for
HeartWare's former Massachusetts
corporate offices
|
|
$ 2
|
|
$ 528
|
|
|
|
|
|
Charges related to
CircuLite acquisition:
|
|
|
|
|
Lease exit
charge for former N.J. corporate offices
|
|
465
|
|
1,667
|
Lease exit
charge for Aachen, Germany facility
|
|
139
|
|
—
|
Contract
termination costs
|
|
310
|
|
688
|
Employee
severance
|
|
598
|
|
562
|
Abandoned
fixed assets
|
|
1,117
|
|
607
|
Total
|
|
$ 2,629
|
|
$ 3,524
|
|
|
|
|
|
Total restructuring
costs
|
|
$ 2,631
|
|
$ 4,052
|
The terms "non-GAAP adjusted net loss" and "non-GAAP adjusted
net loss per common share" refer to GAAP net loss and GAAP net loss
per common share excluding certain adjustments such as amortization
of purchased intangible assets, impairment charges, purchase
accounting and acquisition-related transaction costs, and
restructuring and severance costs as follows:
1)
|
We exclude
amortization of purchased intangible assets and periodic impairment
charges related to long-lived assets from this measure because such
charges do not represent what our management believes are the costs
of developing, producing, supporting and selling our products and
the costs to support our internal operating structure.
|
2)
|
We exclude purchase
accounting adjustments and acquisition-related costs from this
measure because they occur as a result of specific events and are
not reflective of our internal investments and the ongoing costs to
support our operating structure. Purchase accounting
adjustments include contingent consideration fair market value
adjustments.
|
3)
|
We exclude
restructuring and severance costs from this measure because they
tend to occur as a result of specific events such as acquisitions,
divestitures, repositioning our business or other unusual events
that could make comparisons of long-range trends difficult and are
not reflective of our internal investments and the costs to support
our operating structure.
|
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visit:http://www.prnewswire.com/news-releases/heartware-international-reports-700-million-in-first-quarter-2015-revenue-300074892.html
SOURCE HeartWare International, Inc.