UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
January 29, 2015
Date of Report (Date of earliest event reported)
CEPHEID
(Exact name of Registrant as specified in its charter)
California | 000-30755 | 77-0441625 | ||
(State or other jurisdiction of incorporation) |
(Commission file number) |
(I.R.S. Employer Identification No.) |
904 Caribbean Drive, Sunnyvale, CA | 94089 | |
(Address of principal executive offices) | (Zip Code) |
(408) 541-4191
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2 below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
The information in this report and the exhibit attached hereto are being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), nor shall they be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference to such filing.
On January 29, 2015, Cepheid issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2014 and certain other information. The press release is attached to this report as Exhibit 99.01.
In the press release and during a conference call and webcast regarding Cepheids quarterly results, Cepheid supplemented its reported GAAP financial information with non-GAAP measures that do not include stock compensation expense, a legal contingency charge, amortization of debt discount and transaction costs, amortization of purchased intangible assets and a restructuring charge (including impairment of certain assets) in the quarter ended December 31, 2013. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Cepheids management uses the non-GAAP information internally to evaluate its ongoing business, continuing operational performance and cash requirements, and believes these non-GAAP measures are useful to investors as they provide a basis for evaluating Cepheids cash requirements and additional insight into the underlying operating results and Cepheids ongoing performance in the ordinary course of its operations.
These non-GAAP measures may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Cepheid believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with its results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cepheids results of operations in conjunction with the corresponding GAAP measures.
As described above, Cepheid excludes the following items from one or more of its non-GAAP measures when applicable:
Stock-based Compensation Expense. This consists primarily of expenses for stock options and restricted stock under ASC 718 (formerly SFAS 123(R)). Cepheid excludes stock-based compensation expense from its non-GAAP measures primarily because it is a non-cash expense that Cepheid does not believe is reflective of ongoing operating results in the period incurred. Further, as Cepheid applies ASC 718, it believes that it is useful to investors to understand the impact of the application of ASC 718 on its results of operations.
Legal Contingency. In the fourth quarter of 2014, Cepheid recorded a charge for an estimated loss related to ongoing legal proceedings. Cepheid excluded this item as it believes it is not reflective of ongoing operating results in the period incurred.
Amortization of Debt Discount and Transaction Costs. Cepheid incurs amortization of debt discount and transaction costs in connection with the Convertible Senior Notes issued in February 2014. Cepheid excludes these amounts because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from Cepheids issuance of debt and have no direct correlation to the operation of Cepheids business.
2
Amortization of Purchased Intangible Assets. Cepheid incurs amortization of purchased intangible assets in connection with acquisitions. Cepheid excludes these amounts because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from Cepheids prior acquisitions and have no direct correlation to the operation of Cepheids business.
Restructuring. Cepheid excluded a restructuring charge and impairment of certain assets totaling $4.4 million in the fourth quarter of 2013. In connection with Cepheids preparation of its annual operating plan, whereby Cepheid routinely assesses its investments to align its operations with its highest potential opportunities, Cepheid terminated a small international research team, eliminated a non-GeneXpert clinical product line acquired in a 2007 acquisition, including the impairment of an intangible asset of approximately $1.1 million and the write-down of approximately $0.3 million of inventory, and wrote-off certain manufacturing capital assets totaling approximately $1.3 million that management concluded will not be utilized and therefore have no future realizable value. Cepheid excluded this item as it believes it was non-recurring in nature, and does not have a direct impact on the operation of Cepheids core business.
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit |
Exhibit Title | |
99.01 | Press release dated January 29, 2015 |
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CEPHEID | ||||||||
Date: January 29, 2015 | By: | /s/ Andrew D. Miller | ||||||
Name: | Andrew D. Miller | |||||||
Title: | Executive Vice President, Chief Financial Officer |
4
Exhibit List
Exhibit |
Exhibit Title | |
99.01 | Press release dated January 29, 2015 |
5
Exhibit 99.01
CONTACTS: | ||||||
![]() |
For Media Inquiries:
Jared Tipton Cepheid Corporate Communications Tel: (408) 400 8377 communications@cepheid.com
|
For Investor Inquiries:
Jacquie Ross, CFA Cepheid Investor Relations Tel: (408) 400
8329 |
Cepheid
904 Caribbean Drive
Sunnyvale, CA 94089
Telephone: (408) 541 4191
Fax: (408) 541 4192
CEPHEID REPORTS FOURTH QUARTER AND FULL YEAR 2014 RESULTS
Fourth Quarter Commercial Clinical Up 26% Driven by 29% Growth in Xpert® Reagents
SUNNYVALE, California, January 29, 2015 Cepheid (Nasdaq: CPHD) today reported revenue for the fourth quarter of 2014 of $131.5 million. Net loss was $23.8 million, or $(0.34) per share, which compares to revenue of $113.3 million and net loss of $10.3 million, or $(0.15) per share, in the fourth quarter of 2013. 2014 fourth quarter net loss included a legal contingency charge of $20 million, or $(0.28) per share.
Excluding stock compensation expenses, a legal contingency charge, amortization of debt discount and transaction costs, and amortization of purchased intangible assets, non-GAAP net income for the fourth quarter of 2014 was $7.8 million, or $0.11 per share. This compares to non-GAAP net income of $2.3 million, or $0.03 per share, for the fourth quarter of 2013, which excluded stock compensation expenses, a restructuring charge (including impairment of certain assets), and amortization of purchased intangible assets.
Fiscal 2014 Overview
For the year ended December 31, 2014, Cepheid reported revenue of $470.1 million which compares to revenue of $401.3 million in 2013. Net loss for the year was $50.1 million, or $(0.72) per share, which compares to net loss of $18.0 million, or $(0.27) per share, in 2013. 2014 full year net loss included a legal contingency charge of $20 million, or $(0.29) per share.
Excluding stock compensation expenses, a legal contingency charge, amortization of debt discount and transaction costs, and amortization of purchased intangible assets, non-GAAP net income for the full year 2014 was $14.2 million, or $0.19 per share. This compares to a non-GAAP net income of $17.9 million, or $0.26 per share, for the full year 2013, which excluded stock compensation expenses, a restructuring charge (including impairment of certain assets), and amortization of purchased intangible assets.
2014 was a very strong year for Cepheid, marked by record revenue, record GeneXpert® System placements, and a record number of additions to our Xpert test menu, in addition to solid progress in further improving our gross margin, said John Bishop, Cepheids Chairman and Chief Executive Officer. While we are targeting Commercial Clinical growth of 20% or higher in 2015, we continue to invest strategically and aggressively in further test menu expansion, geographic expansion, and market segment expansion, which we believe sets the stage for a prolonged period of growth ahead for Cepheid.
Operational Overview
| Fourth quarter of 2014 total Clinical sales of $122.2 million grew 21% from $101.0 million in the fourth quarter of 2013. For the year ended December 31, 2014, total Clinical sales of $441.1 million grew 23% from $359.9 million in 2013. |
| By industry, sales were, in millions: |
Three Months Ended December 31, | Full Year Ended December 31, | |||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | |||||||||||||||||||
Clinical Systems |
$ | 22.1 | $ | 20.2 | 9 | % | $ | 84.7 | $ | 67.0 | 26 | % | ||||||||||||
Clinical Reagents |
100.1 | 80.8 | 24 | % | 356.4 | 292.9 | 22 | % | ||||||||||||||||
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Total Clinical |
122.2 | 101.0 | 21 | % | 441.1 | 359.9 | 23 | % | ||||||||||||||||
Non-Clinical |
9.3 | 12.3 | 24 | % | 29.0 | 41.4 | 30 | % | ||||||||||||||||
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Total Sales |
$ | 131.5 | $ | 113.3 | 16 | % | $ | 470.1 | $ | 401.3 | 17 | % | ||||||||||||
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| By geography, sales were, in millions: |
Three Months Ended December 31, | Full Year Ended December 31, | |||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | |||||||||||||||||||
North America |
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Clinical |
$ | 71.2 | $ | 58.6 | 21 | % | $ | 247.1 | $ | 212.4 | 16 | % | ||||||||||||
Other |
8.5 | 11.1 | 23 | % | 24.9 | 37.0 | 33 | % | ||||||||||||||||
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Total North America |
79.7 | 69.7 | 14 | % | 272.0 | 249.4 | 9 | % | ||||||||||||||||
International |
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Clinical |
51.0 | 42.4 | 20 | % | 194.0 | 147.5 | 31 | % | ||||||||||||||||
Other |
0.8 | 1.2 | 33 | % | 4.1 | 4.4 | 6 | % | ||||||||||||||||
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Total International |
51.8 | 43.6 | 19 | % | 198.1 | 151.9 | 30 | % | ||||||||||||||||
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Total Sales |
$ | 131.5 | $ | 113.3 | 16 | % | $ | 470.1 | $ | 401.3 | 17 | % | ||||||||||||
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| Commercial Clinical sales were $104.8 million in the fourth quarter of 2014 and $356.0 million for the full year 2014. Sales to High Burden Developing Countries (HBDC) in the fourth quarter of 2014 were $17.4 million and $85.1 million for the full year 2014. |
| During the fourth quarter of 2014, Cepheid placed a total of 261 GeneXpert systems in its commercial Clinical business. Additionally, Cepheid placed a total of 211 GeneXpert systems as part of its High Burden Developing Country (HBDC) program. For the year ended December 31, 2014, Cepheid placed a total of 773 GeneXpert systems in its commercial Clinical business and an additional 1,743 GeneXpert systems as part of its HBDC program. As of December 31, 2014, a cumulative total of 8,025 GeneXpert systems have been placed worldwide. |
| GAAP gross margin on sales was 54% and non-GAAP gross margin on sales was 56% in the fourth quarter of 2014, which compares to 47% and 50%, respectively, in the fourth quarter of 2013. GAAP gross margin on sales was 51% and non-GAAP gross margin on sales was 52% for the full year 2014, which compares to 48% and 50%, respectively, for the full year 2013. |
| Cash, cash equivalents and investments were $373.1 million as of December 31, 2014. |
| DSO was 48 days. |
Business Outlook
For the fiscal year ending December 31, 2015, the Company expects:
| Total revenue to be in the range of $538 to $553 million; |
| Net loss in the range of $(0.55) to $(0.51) per share; |
| Non-GAAP net income in the range of $0.19 to $0.23 per share. |
Expected non-GAAP net income excludes approximately $37 million related to stock compensation expense, approximately $10 million related to the amortization of debt discount and transaction costs, and approximately $6 million related to the amortization of purchased intangible assets. The fully diluted share count for the year is expected to be approximately 71 million in the case of a net loss, and approximately 74 million shares in the case of net income.
The following table reconciles net income (loss) per share to the non-GAAP net income per share range:
Guidance Range for Year Ending December 31, 2015 |
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Low | High | |||||||
Net Income (Loss) Per Share |
$ | (0.55 | ) | $ | (0.51 | ) | ||
Stock-Based Compensation Expense |
0.52 | 0.52 | ||||||
Amortization of Debt Discount and Transaction Costs |
0.14 | 0.14 | ||||||
Amortization of Purchased Intangible Assets |
0.08 | 0.08 | ||||||
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Non-GAAP Measure of Net Income Per Share |
$ | 0.19 | $ | 0.23 |
Accessing Cepheids Fourth Quarter and Full Year 2014 Results Conference Call
The Company will host a management presentation at 2 p.m. Pacific Time on Thursday, January 29, 2015, to discuss the results. To access the live webcast, please visit Cepheids website at http://ir.cepheid.com at least 15 minutes before the scheduled start time to download any necessary audio or plug-in software. A replay of the webcast will be available shortly following the call and will remain available for at least 90 days.
About Cepheid
Based in Sunnyvale, Calif., Cepheid (Nasdaq: CPHD) is a leading molecular diagnostics company that is dedicated to improving healthcare by developing, manufacturing, and marketing accurate yet easy-to-use molecular systems and tests. By automating highly complex and time-consuming manual procedures, the Companys solutions deliver a better way for institutions of any size to perform sophisticated genetic testing for organisms and genetic-based diseases. Through its strong molecular biology capabilities, the Company is focusing on those applications where accurate, rapid, and actionable test results are needed most, such as managing infectious diseases and cancer. For more information, visit http://www.cepheid.com.
Use of Non-GAAP Measures
The Company has supplemented its reported GAAP financial information with non-GAAP measures that do not include stock-based compensation expense, a legal contingency charge, amortization of purchased intangible assets, amortization of debt discount and transaction costs, and a restructuring charge in the quarter ended December 31, 2013. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. The Companys management uses the non-GAAP information internally to evaluate its ongoing business, continuing operational performance and cash requirements, and believes these non-GAAP measures are useful to investors as they provide a basis for evaluating the Companys cash requirements and additional insight into the underlying operating results and the Companys ongoing performance in the ordinary course of its operations.
These non-GAAP measures may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. The Company believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with its results of operations as determined in accordance with U.S. GAAP and that these measures should only be used to evaluate the Companys results of operations in conjunction with the corresponding GAAP measures.
As described above, the Company excludes the following items from one or more of its non-GAAP measures when applicable:
Stock-based Compensation Expense. This consists primarily of expenses for stock options and restricted stock under ASC 718 (formerly SFAS 123(R)). The Company excludes stock-based compensation expense from its non-GAAP measures primarily because it is a non-cash expense that the Company does not believe is reflective of ongoing operating results in the period incurred. Further, as the Company applies ASC 718, it believes that it is useful to investors to understand the impact of the application of ASC 718 on its results of operations.
Legal Contingency. In the fourth quarter of 2014, the Company recorded a charge for an estimated loss related to ongoing legal proceedings. The Company excluded this item as it believes it is not reflective of ongoing operating results in the period incurred.
Amortization of Debt Discount and Transaction Costs. The Company incurs amortization of debt discount and transaction costs in connection with the Convertible Senior Notes issued in February 2014. The Company excludes these amounts because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from the Companys issuance of debt and have no direct correlation to the operation of the Companys business.
Amortization of Purchased Intangible Assets. The Company incurs amortization of purchased intangible assets in connection with acquisitions. The Company excludes these amounts because these expenses are not reflective of ongoing operating results in the period incurred. These amounts arise from the Companys prior acquisitions and have no direct correlation to the operation of the Companys business.
Restructuring. The Company excluded a restructuring charge and impairment of certain assets totaling $4.4 million in the fourth quarter of 2013. In connection with the Companys preparation of its annual operating plan, whereby the Company routinely assesses its investments to align its operations with its highest potential opportunities, the Company terminated a small international research team, eliminated a non-GeneXpert clinical product line acquired in a 2007 acquisition, including the impairment of an intangible asset of approximately $1.1 million and the write-down of approximately $0.3 million of inventory, and wrote-off certain manufacturing capital assets totaling approximately $1.3 million that management concluded will not be utilized and therefore have no future realizable value. The Company excluded this item as it believes it was non-recurring in nature, and does not have a direct impact on the operation of the Companys core business.
Forward-Looking Statements
This press release contains forward-looking statements that are not purely historical regarding Cepheids or its managements intentions, beliefs, expectations and strategies for the future, including those relating to the scale and sustainability of future growth, future revenues and future net loss/income and profitability, including on a non-GAAP basis, strategic investments, the breadth and speed of test menu expansion, geographic expansion and market segment expansion. Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results could differ materially from the Companys current expectations. Factors that could cause actual results to differ materially include risks and uncertainties such as those relating to: long sales cycles and variability in systems placements and reagent pull-through in the Companys HBDC program; our success in increasing commercial and HBDC sales and the effectiveness of our sales personnel; the relative mix of commercial and HBDC sales; the performance and market acceptance of new products; sufficient customer demand, customer confidence in product availability and available customer budgets for our customers; our ability to develop new products and complete clinical trials successfully in a timely manner for new products; uncertainties related to the FDA regulatory and international regulatory processes; the level of testing at clinical customer sites, including for Healthcare Associated Infections (HAIs); the Companys ability to successfully introduce and sell products in clinical markets other than HAIs; the rate of environmental biothreat testing conducted by the USPS, which will affect the amount of consumable products sold to the USPS; unforeseen supply, development and manufacturing problems; our ability to manage our inventory levels; our ability to successfully complete and bring on additional manufacturing lines; the potential need for additional intellectual property licenses for tests and other products and the terms of such licenses; the Companys reliance on distributors in some regions to market, sell and support its products; the occurrence of unforeseen expenditures, acquisitions or other transactions; costs associated with litigation; the impact of competitive products and pricing; the Companys ability to manage geographically-dispersed operations; and underlying market conditions worldwide. Readers should also refer to the section entitled Risk Factors in Cepheids Annual Report on Form 10-K, its most recent Quarterly Report on Form 10-Q, and its other reports filed with the Securities and Exchange Commission.
All forward-looking statements and reasons why results might differ included in this release are made as of the date of this press release, based on information currently available to Cepheid, and Cepheid assumes no obligation to update any such forward-looking statement or reasons why results might differ.
FINANCIAL TABLES FOLLOW
CEPHEID
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended December 31, |
Years Ended December 31, |
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2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenues: |
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System and other sales |
$ | 24,177 | $ | 22,263 | $ | 90,849 | $ | 76,763 | ||||||||
Reagent and disposable sales |
107,345 | 90,998 | 379,292 | 324,529 | ||||||||||||
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Total sales |
131,522 | 113,261 | 470,141 | 401,292 | ||||||||||||
Costs and operating expenses: |
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Cost of sales |
59,885 | 60,483 | 229,327 | 207,933 | ||||||||||||
Collaboration profit sharing |
1,923 | 2,567 | 5,154 | 7,512 | ||||||||||||
Research and development |
27,572 | 25,340 | 96,851 | 80,197 | ||||||||||||
Sales and marketing |
26,975 | 21,922 | 97,848 | 79,941 | ||||||||||||
General and administrative |
13,971 | 12,854 | 55,047 | 41,719 | ||||||||||||
Legal contingencies and settlements |
20,000 | | 20,000 | | ||||||||||||
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Total costs and operating expenses |
150,326 | 123,166 | 504,227 | 417,302 | ||||||||||||
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Loss from operations |
(18,804 | ) | (9,905 | ) | (34,086 | ) | (16,010 | ) | ||||||||
Other expense, net |
(4,272 | ) | (264 | ) | (13,506 | ) | (807 | ) | ||||||||
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Loss before income taxes |
(23,076 | ) | (10,169 | ) | (47,592 | ) | (16,817 | ) | ||||||||
Provision for income taxes |
(692 | ) | (148 | ) | (2,557 | ) | (1,148 | ) | ||||||||
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Net loss |
$ | (23,768 | ) | $ | (10,317 | ) | $ | (50,149 | ) | $ | (17,965 | ) | ||||
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Basic net loss per share |
$ | (0.34 | ) | $ | (0.15 | ) | $ | (0.72 | ) | $ | (0.27 | ) | ||||
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Diluted net loss per share |
$ | (0.34 | ) | $ | (0.15 | ) | $ | (0.72 | ) | $ | (0.27 | ) | ||||
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Shares used in computing basic net loss per share |
70,689 | 68,230 | 70,069 | 67,485 | ||||||||||||
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Shares used in computing diluted net loss per share |
70,689 | 68,230 | 70,069 | 67,485 | ||||||||||||
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CEPHEID
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
December 31, 2014 |
December 31, 2013 |
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ASSETS | ||||||||
Current assets: |
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Cash and cash equivalents |
$ | 96,663 | $ | 66,072 | ||||
Short-term investments |
196,729 | 8,837 | ||||||
Accounts receivable, net |
68,809 | 52,202 | ||||||
Inventory |
132,635 | 103,866 | ||||||
Prepaid expenses and other current assets |
24,274 | 13,037 | ||||||
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Total current assets |
519,110 | 244,014 | ||||||
Property and equipment, net |
115,765 | 84,886 | ||||||
Investments |
79,731 | 9,820 | ||||||
Other non-current assets |
7,847 | 958 | ||||||
Intangible assets, net |
31,440 | 15,245 | ||||||
Goodwill |
39,681 | 39,681 | ||||||
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Total assets |
$ | 793,574 | $ | 394,604 | ||||
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LIABILITIES AND SHAREHOLDERS EQUITY | ||||||||
Current liabilities: |
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Accounts payable |
$ | 50,435 | $ | 52,609 | ||||
Accrued compensation |
33,760 | 22,009 | ||||||
Accrued royalties |
5,443 | 5,245 | ||||||
Accrued and other liabilities |
34,761 | 7,440 | ||||||
Current portion of deferred revenue |
13,447 | 8,183 | ||||||
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Total current liabilities |
137,846 | 95,486 | ||||||
Long-term portion of deferred revenue |
4,532 | 3,424 | ||||||
Convertible senior notes, net |
278,213 | | ||||||
Other liabilities |
18,768 | 10,454 | ||||||
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Total liabilities |
439,359 | 109,364 | ||||||
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Shareholders equity: |
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Common stock |
422,151 | 383,379 | ||||||
Additional paid-in capital |
225,529 | 145,900 | ||||||
Accumulated other comprehensive income (loss) |
247 | (476 | ) | |||||
Accumulated deficit |
(293,712 | ) | (243,563 | ) | ||||
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Total shareholders equity |
354,215 | 285,240 | ||||||
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Total liabilities and shareholders equity |
$ | 793,574 | $ | 394,604 | ||||
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CEPHEID
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Years Ended December 31, | ||||||||
2014 | 2013 | |||||||
Cash flows from operating activities: |
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Net loss |
$ | (50,149 | ) | $ | (17,965 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: |
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Depreciation and amortization of property and equipment |
21,604 | 17,769 | ||||||
Amortization of intangible assets |
4,739 | 5,418 | ||||||
Unrealized foreign exchange differences |
1,836 | 419 | ||||||
Amortization of debt discount and transaction costs |
8,600 | | ||||||
Impairment of acquired intangible assets, licenses, property and equipment |
| 2,855 | ||||||
Stock-based compensation expense |
32,207 | 27,635 | ||||||
Excess tax benefits from stock-based compensation |
(66 | ) | ||||||
Changes in operating assets and liabilities: |
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Accounts receivable |
(16,606 | ) | (6,960 | ) | ||||
Inventory |
(29,346 | ) | (32,638 | ) | ||||
Prepaid expenses and other current assets |
(5,184 | ) | (5,263 | ) | ||||
Other non-current assets |
(2 | ) | 150 | |||||
Accounts payable and other current and non-current liabilities |
3,438 | 17,334 | ||||||
Accrued expense for estimated legal contingency |
20,000 | | ||||||
Accrued compensation |
11,751 | 5,421 | ||||||
Deferred revenue |
6,372 | 837 | ||||||
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Net cash provided by operating activities |
9,194 | 15,012 | ||||||
Cash flows from investing activities: |
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Capital expenditures |
(46,979 | ) | (47,526 | ) | ||||
Payments for technology licenses |
| (1,125 | ) | |||||
Cost of acquisitions, net |
(18,000 | ) | (3,669 | ) | ||||
Proceeds from sales of marketable securities and investments |
115,881 | 2,503 | ||||||
Proceeds from maturities of marketable securities and investments |
102,733 | 1,347 | ||||||
Purchases of marketable securities and investments |
(477,485 | ) | (22,511 | ) | ||||
Transfer to restricted cash |
(1,875 | ) | | |||||
|
|
|
|
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Net cash used in investing activities |
(325,725 | ) | (70,981 | ) | ||||
Cash flows from financing activities: |
||||||||
Net proceeds from the issuance of common shares and exercise of stock options |
38,615 | 27,512 | ||||||
Excess tax benefits from stock-based compensation |
66 | | ||||||
Proceeds from borrowings of convertible senior notes, net of issuance costs |
335,789 | | ||||||
Purchase of convertible note capped call hedge |
(25,082 | ) | | |||||
Principal payments of notes payable |
(180 | ) | (874 | ) | ||||
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|
|
|
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Net cash provided by financing activities |
349,208 | 26,638 | ||||||
Effect of foreign exchange rate change on cash and cash equivalents |
(2,086 | ) | (376 | ) | ||||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents |
30,591 | (29,707 | ) | |||||
Cash and cash equivalents at beginning of period |
66,072 | 95,779 | ||||||
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|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 96,663 | $ | 66,072 | ||||
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|
|
|
CEPHEID
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(in thousands, except per share data)
(unaudited)
Three Months Ended December 31, |
Years Ended December 31, |
|||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Cost of sales |
$ | 59,885 | $ | 60,483 | $ | 229,327 | $ | 207,933 | ||||||||
Stock-based compensation expense |
(796 | ) | (1,084 | ) | (4,087 | ) | (2,927 | ) | ||||||||
Restructuring charge including impairment of intangibles |
| (2,651 | ) | | (2,651 | ) | ||||||||||
Amortization of purchased intangible assets |
(1,157 | ) | (345 | ) | (1,826 | ) | (2,349 | ) | ||||||||
|
|
|
|
|
|
|
|
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Non-GAAP measure of cost of sales |
$ | 57,932 | $ | 56,403 | $ | 223,414 | $ | 200,006 | ||||||||
Gross margin on sales per GAAP |
54 | % | 47 | % | 51 | % | 48 | % | ||||||||
Gross margin on sales per Non-GAAP |
56 | % | 50 | % | 52 | % | 50 | % | ||||||||
Operating expenses |
$ | 88,518 | $ | 60,116 | $ | 269,746 | $ | 201,857 | ||||||||
Stock-based compensation expense |
(6,756 | ) | (6,534 | ) | (28,120 | ) | (24,708 | ) | ||||||||
Restructuring charge including impairment of intangibles |
| (1,783 | ) | | (1,783 | ) | ||||||||||
Legal contingencies and settlements |
(20,000 | ) | | (20,000 | ) | | ||||||||||
Amortization of purchased intangible assets |
(435 | ) | (458 | ) | (1,731 | ) | (1,715 | ) | ||||||||
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|
|
|
|
|
|
|
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Non-GAAP measure of operating expenses |
$ | 61,327 | $ | 51,341 | $ | 219,895 | $ | 173,651 | ||||||||
Loss from operations |
$ | (18,804 | ) | $ | (9,905 | ) | $ | (34,086 | ) | $ | (16,010 | ) | ||||
Stock-based compensation expense |
7,552 | 7,618 | 32,207 | 27,635 | ||||||||||||
Restructuring charge including impairment of intangibles |
| 4,434 | | 4,434 | ||||||||||||
Legal contingencies and settlements |
20,000 | | 20,000 | | ||||||||||||
Amortization of purchased intangible assets |
1,592 | 803 | 3,557 | 4,064 | ||||||||||||
|
|
|
|
|
|
|
|
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Non-GAAP measure of income from operations |
$ | 10,340 | $ | 2,950 | $ | 21,678 | $ | 20,123 | ||||||||
Net loss |
$ | (23,768 | ) | $ | (10,317 | ) | $ | (50,149 | ) | $ | (17,965 | ) | ||||
Stock-based compensation expense |
7,552 | 7,618 | 32,207 | 27,635 | ||||||||||||
Restructuring charge including impairment of intangibles |
| 4,201 | | 4,201 | ||||||||||||
Legal contingencies and settlements |
20,000 | | 20,000 | | ||||||||||||
Amortization of debt discount and transaction cost |
2,453 | | 8,600 | | ||||||||||||
Amortization of purchased intangible assets |
1,592 | 803 | 3,557 | 4,064 | ||||||||||||
|
|
|
|
|
|
|
|
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Non-GAAP measure of net income |
$ | 7,829 | $ | 2,305 | $ | 14,215 | $ | 17,935 | ||||||||
Basic net loss per share |
$ | (0.34 | ) | $ | (0.15 | ) | $ | (0.72 | ) | $ | (0.27 | ) | ||||
Stock-based compensation expense |
0.11 | 0.11 | 0.46 | 0.41 | ||||||||||||
Restructuring charge including impairment of intangibles |
| 0.06 | | 0.07 | ||||||||||||
Legal contingencies and settlements |
0.28 | | 0.29 | | ||||||||||||
Amortization of debt discount and transaction cost |
0.04 | | 0.12 | | ||||||||||||
Amortization of purchased intangible assets |
0.02 | 0.01 | 0.05 | 0.06 | ||||||||||||
|
|
|
|
|
|
|
|
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Non-GAAP measure of net income per share |
$ | 0.11 | $ | 0.03 | $ | 0.20 | $ | 0.27 | ||||||||
Diluted net loss per share |
$ | (0.34 | ) | $ | (0.15 | ) | $ | (0.72 | ) | $ | (0.27 | ) | ||||
Stock-based compensation expense |
0.11 | 0.11 | 0.45 | 0.41 | ||||||||||||
Restructuring charge including impairment of intangibles |
| 0.06 | | 0.06 | ||||||||||||
Legal contingencies and settlements |
0.28 | | 0.28 | | ||||||||||||
Amortization of debt discount and transaction cost |
0.04 | | 0.13 | | ||||||||||||
Amortization of purchased intangible assets |
0.02 | 0.01 | 0.05 | 0.06 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP measure of net income per share |
$ | 0.11 | $ | 0.03 | $ | 0.19 | $ | 0.26 | ||||||||
Shares used in computing basic net income (loss) per share |
70,689 | 68,230 | 70,069 | 67,485 | ||||||||||||
Shares used in computing diluted net income (loss) per share |
73,469 | 70,644 | 72,901 | 69,928 |
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