LAWRENCE, Mass., Nov. 3,
2016 /PRNewswire/ -- NxStage Medical, Inc. (Nasdaq: NXTM), a
leading medical technology company focused on advancing renal care,
today reported third quarter financial results above the top end of
its guidance.
Total revenue for the third quarter of 2016 increased 6 percent
to $92.0 million, above the high end
of its guidance range of $89 million to $91
million, compared with revenue of $86.5 million for the third quarter of 2015.
The Company's revenue performance was driven by the Products
Business, and more specifically, outperformance in NxStage's
largest segment, System One, which consists of the Home and
Critical Care markets. Home revenue increased 16 percent to
$53.8 million for the third quarter
of 2016 compared with revenue of $46.5
million for the third quarter of 2015. Critical Care revenue
increased 11 percent to $18.2 million
for the third quarter of 2016 compared with revenue of $16.3 million for the third quarter of 2015.
Net loss attributable to NxStage Medical, Inc.'s stockholders
improved to $0.2 million for the
third quarter of 2016 compared with a net loss of $1.7 million for the third quarter of 2015. The
net loss for the third quarter of 2016 was better than its guidance
for a net loss of $1 to $3 million and
included $6.6 million of income from operations from the
Products Business.
"With these solid results and continued positive momentum with
our growth drivers, we are raising full-year revenue guidance and
cutting our net loss projections in half," stated Jeffrey H. Burbank, Founder and CEO of NxStage.
"In addition to feeling good about a solid finish to the year, we
remain confident in our outlook for 2017 and beyond that includes
targets for increasing the Company's revenue growth and
profitability. I believe we have a solid foundation, compelling
growth drivers and an amazing technology pipeline."
The Company also announced that it expects to launch the next
sequence of features and capabilities of its next generation
hemodialysis system this quarter. "We continue to systematically
advance one of the industry's most innovative pipelines. We're
excited to be moving closer to our goals and bringing these
significant advancements in renal care to patients and their care
teams," stated Burbank.
Guidance:
For the full-year of 2016, the Company now expects revenue to be at
the high end of its previously increased guidance range
of $360 to $365 million, and a
net loss in a range of $4 to $5
million versus its previously revised guidance for a loss at
the better end of a range of $7 to $12
million.
For the fourth quarter of 2016, the Company expects revenue to
be approximately $92 million with a net loss in the range
of $1 to $2 million.
Conference Call:
NxStage will host a conference call
today, Thursday, November 3, 2016, 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 http://ir.nxstage.com.
A replay of the conference call will be available two hours
after the completion of the call through November 10, 2016. To access the replay,
dial 855-859-2056 (domestic) or 404-537-3406 (international) and
reference conference ID 94591098. 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 NxStage
NxStage Medical, Inc. (Nasdaq: NXTM) is
a leading medical technology company, headquartered in Lawrence, Massachusetts, USA, that develops,
manufactures and markets innovative products for the treatment of
end-stage renal disease (ESRD) and acute kidney failure. NxStage
has also established a small number of dialysis clinics committed
to the development of innovative care delivery models for patients
with ESRD. For more information on NxStage and its products and
services, please visit the Company's website at
http://www.nxstage.com and www.nxstagekidneycare.com.
About the NxStage System One
The NxStage System One is
the first and only truly portable hemodialysis system cleared
specifically by the 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 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, including while they are sleeping -
at home or on vacation and at a medically appropriate treatment
frequency. In addition, NxStage's Nx2me Connected Health platform
collects important NxStage System One and patient information for
flexible viewing, monitoring and reporting that may improve patient
management and simplify alternative site care. The System One is
also used to provide a range of flexible therapy options in more
traditional care settings such as hospitals and NxStage Kidney Care
dialysis centers. Its safety and efficacy have been demonstrated by
experience with more than 13 million treatments with thousands of
patients around the world. http://www.nxstage.com/.
Forward-Looking Statements
This release contains
forward-looking statements concerning our business, operations and
financial condition. 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, market opportunities, timing of our new product
launches, and our financial guidance for 2016 and beyond, including
anticipated revenues and net loss. 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, delays in product
development timelines, delays in obtaining regulatory approvals,
competition, 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
Kidney Care, 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, 2016.
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
91,951
|
|
$
|
86,521
|
|
$
|
273,365
|
|
$
|
246,319
|
Cost of
revenues
|
52,770
|
|
51,803
|
|
159,244
|
|
150,611
|
Gross
profit
|
39,181
|
|
34,718
|
|
114,121
|
|
95,708
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
16,024
|
|
14,445
|
|
47,394
|
|
43,511
|
Research and
development
|
8,278
|
|
6,752
|
|
23,393
|
|
19,248
|
Distribution
|
7,063
|
|
6,514
|
|
21,131
|
|
19,140
|
General and
administrative
|
7,792
|
|
8,642
|
|
24,334
|
|
26,139
|
Total operating
expenses
|
39,157
|
|
36,353
|
|
116,252
|
|
108,038
|
Income (loss) from
operations
|
24
|
|
(1,635)
|
|
(2,131)
|
|
(12,330)
|
Other
expense:
|
|
|
|
|
|
|
|
Interest expense,
net
|
(244)
|
|
(312)
|
|
(773)
|
|
(795)
|
Other (expense)
income, net
|
(346)
|
|
235
|
|
(987)
|
|
536
|
Total other
expense
|
(590)
|
|
(77)
|
|
(1,760)
|
|
(259)
|
Net loss before
income taxes
|
(566)
|
|
(1,712)
|
|
(3,891)
|
|
(12,589)
|
Provision for income
taxes
|
324
|
|
290
|
|
1,007
|
|
870
|
Net loss
|
(890)
|
|
(2,002)
|
|
(4,898)
|
|
(13,459)
|
Less: Net loss
attributable to noncontrolling interests
|
(724)
|
|
(315)
|
|
(1,724)
|
|
(787)
|
Net loss attributable
to stockholders of NxStage Medical, Inc.
|
$
|
(166)
|
|
$
|
(1,687)
|
|
$
|
(3,174)
|
|
$
|
(12,672)
|
Net loss per share,
basic and diluted
|
$
|
(0.00)
|
|
$
|
(0.03)
|
|
$
|
(0.05)
|
|
$
|
(0.20)
|
Weighted-average
shares outstanding, basic and diluted
|
64,638
|
|
63,528
|
|
64,414
|
|
63,215
|
Other comprehensive
loss, net of tax
|
(78)
|
|
(829)
|
|
(297)
|
|
(1,759)
|
Total comprehensive
loss
|
(968)
|
|
(2,831)
|
|
(5,195)
|
|
(15,218)
|
Less: Comprehensive
loss attributable to noncontrolling interests
|
(724)
|
|
(315)
|
|
(1,724)
|
|
(787)
|
Total comprehensive
loss attributable to stockholders of NxStage Medical,
Inc.
|
$
|
(244)
|
|
$
|
(2,516)
|
|
$
|
(3,471)
|
|
$
|
(14,431)
|
NxStage Medical,
Inc.
Condensed
Consolidated Balance Sheets
(in thousands,
except share data)
(unaudited)
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
2016
|
|
2015
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
60,817
|
|
$
|
59,065
|
Accounts receivable,
net
|
30,581
|
|
25,195
|
Inventory
|
46,877
|
|
38,391
|
Prepaid expenses and
other current assets
|
5,875
|
|
6,254
|
Total current
assets
|
144,150
|
|
128,905
|
Property and
equipment, net
|
65,004
|
|
66,711
|
Field equipment,
net
|
20,450
|
|
20,744
|
Deferred cost of
revenues
|
33,972
|
|
33,068
|
Intangible assets,
net
|
10,202
|
|
11,744
|
Goodwill
|
42,710
|
|
42,710
|
Other
assets
|
2,623
|
|
2,992
|
Total
assets
|
$
|
319,111
|
|
$
|
306,874
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
14,755
|
|
$
|
10,767
|
Accrued
expenses
|
29,335
|
|
27,266
|
Current portion of
long-term debt
|
330
|
|
315
|
Other current
liabilities
|
4,105
|
|
4,394
|
Total current
liabilities
|
48,525
|
|
42,742
|
Deferred
revenues
|
50,969
|
|
51,362
|
Long-term
debt
|
1,445
|
|
1,664
|
Other long-term
liabilities
|
16,829
|
|
17,367
|
Total
liabilities
|
117,768
|
|
113,135
|
Commitments and
contingencies
|
|
|
|
Noncontrolling
interests subject to put provisions
|
116
|
|
219
|
Stockholders'
equity:
|
|
|
|
Undesignated
preferred stock: par value $0.001, 5,000,000 shares
authorized; no shares issued and outstanding as of September
30,
2016 and December 31, 2015
|
—
|
|
—
|
Common stock: par
value $0.001, 100,000,000 shares authorized;
65,638,390 and 64,873,038 shares issued as of September 30,
2016
and December 31, 2015, respectively
|
65
|
|
64
|
Additional paid-in
capital
|
626,040
|
|
612,487
|
Accumulated
deficit
|
(406,004)
|
|
(402,830)
|
Accumulated other
comprehensive loss
|
(4,328)
|
|
(4,031)
|
Treasury stock, at
cost: 922,630 and 822,059 shares as of
September 30, 2016 and December 31, 2015, respectively
|
(15,827)
|
|
(13,864)
|
Total NxStage
Medical, Inc. stockholders' equity
|
199,946
|
|
191,826
|
Noncontrolling
interests not subject to put provisions
|
1,281
|
|
1,694
|
Total stockholders'
equity
|
201,227
|
|
193,520
|
Total liabilities and
stockholders' equity
|
$
|
319,111
|
|
$
|
306,874
|
|
|
|
|
NxStage Medical,
Inc.
Cash Flows from
Operating Activities
(in
thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
2016
|
|
2015
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
Net loss
|
$
|
(4,898)
|
|
$
|
(13,459)
|
Adjustments to
reconcile net loss to net cash flow from operating
activities:
|
|
|
|
Depreciation and
amortization
|
23,974
|
|
23,240
|
Stock-based
compensation
|
7,688
|
|
9,590
|
Other
|
(886)
|
|
748
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(5,501)
|
|
(6,560)
|
Inventory
|
(22,026)
|
|
(10,977)
|
Prepaid expenses and
other assets
|
621
|
|
(85)
|
Accounts
payable
|
3,930
|
|
(613)
|
Accrued expenses and
other liabilities
|
3,015
|
|
(64)
|
Deferred
revenues
|
(924)
|
|
(204)
|
Net cash provided by
operating activities
|
$
|
4,993
|
|
$
|
1,616
|
NxStage Medical,
Inc.
Revenues by
Segment
(in
thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
System One
segment
|
|
|
|
|
|
|
|
Home
|
$
|
53,759
|
|
$
|
46,473
|
|
$
|
154,397
|
|
$
|
134,760
|
Critical
Care
|
18,182
|
|
16,347
|
|
56,694
|
|
47,060
|
Total System One
segment
|
71,941
|
|
62,820
|
|
211,091
|
|
181,820
|
In-Center
segment
|
14,493
|
|
19,440
|
|
47,990
|
|
55,870
|
Other
|
3,601
|
|
3,418
|
|
9,190
|
|
7,122
|
Products
subtotal
|
90,035
|
|
85,678
|
|
268,271
|
|
244,812
|
Services
segment
|
3,846
|
|
1,753
|
|
10,647
|
|
3,567
|
Elimination of
intersegment revenues
|
(1,930)
|
|
(910)
|
|
(5,553)
|
|
(2,060)
|
Total
|
$
|
91,951
|
|
$
|
86,521
|
|
$
|
273,365
|
|
$
|
246,319
|
NxStage Medical,
Inc.
Segment Financial
Performance
(in
thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Products Business
(System One Segment,
In-Center Segment & Other)
|
|
|
|
|
|
|
|
Revenues
|
$
|
90,035
|
|
|
$
|
85,678
|
|
|
$
|
268,271
|
|
|
$
|
244,812
|
|
Gross
profit
|
$
|
43,455
|
|
|
$
|
38,397
|
|
|
$
|
126,888
|
|
|
$
|
106,884
|
|
Gross margin
percentage
|
48
|
%
|
|
45
|
%
|
|
47
|
%
|
|
44
|
%
|
Income from
operations
|
$
|
6,615
|
|
|
$
|
4,231
|
|
|
$
|
17,820
|
|
|
$
|
5,389
|
|
Services
|
|
|
|
|
|
|
|
Revenues
|
$
|
3,846
|
|
|
$
|
1,753
|
|
|
$
|
10,647
|
|
|
$
|
3,567
|
|
Gross
profit
|
$
|
(4,067)
|
|
|
$
|
(3,679)
|
|
|
$
|
(12,170)
|
|
|
$
|
(11,176)
|
|
Gross margin
percentage
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
Loss from
operations
|
$
|
(6,384)
|
|
|
$
|
(5,866)
|
|
|
$
|
(19,354)
|
|
|
$
|
(17,719)
|
|
Eliminations
|
|
|
|
|
|
|
|
Elimination of
intersegment revenues
|
$
|
(1,930)
|
|
|
$
|
(910)
|
|
|
$
|
(5,553)
|
|
|
$
|
(2,060)
|
|
Elimination of
intersegment gross profit
|
$
|
(207)
|
|
|
$
|
—
|
|
|
$
|
(597)
|
|
|
$
|
—
|
|
Total
Company
|
|
|
|
|
|
|
|
Revenues
|
$
|
91,951
|
|
|
$
|
86,521
|
|
|
$
|
273,365
|
|
|
$
|
246,319
|
|
Gross
profit
|
$
|
39,181
|
|
|
$
|
34,718
|
|
|
$
|
114,121
|
|
|
$
|
95,708
|
|
Gross margin
percentage
|
43
|
%
|
|
40
|
%
|
|
42
|
%
|
|
39
|
%
|
Income (loss) from
operations
|
$
|
24
|
|
|
$
|
(1,635)
|
|
|
$
|
(2,131)
|
|
|
$
|
(12,330)
|
|
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SOURCE NxStage Medical, Inc.