EX-99.1 2 b79791exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
NXSTAGE REPORTS FOURTH QUARTER AND FULL-YEAR 2009 FINANCIAL RESULTS
THAT EXCEED COMPANY GUIDANCE
Highlights:
  •   Full-Year Revenue Increases to $148.7 million, 15% Annual Growth
 
  •   Full-Year Home Revenue Increases to $63.5 million, 31% Annual Growth
 
  •   Q4 Gross Margin Improves to 28%, Up 300 bps Sequentially
 
  •   2010 Outlook Signals Continuing Momentum in Home Market and Improved Cash Flow
LAWRENCE, Mass., February 25, 2010 — NxStage Medical, Inc. (Nasdaq: NXTM), a leading manufacturer of innovative dialysis products, today reported financial results for the three months and twelve months ended December 31, 2009, that include revenue and Adjusted EBITDA results above the top end of its guidance ranges.
Net revenue for the twelve months ended December 31, 2009, increased 15 percent to $148.7 million compared with revenue of $128.8 million for the full-year 2008. Revenue for the fourth quarter of 2009 increased 14 percent to a record $40.5 million compared with revenue of $35.7 million for the fourth quarter of 2008. The increase in both periods was driven by better than expected performance within the Company’s Home and Critical Care markets, which experienced annual growth of 31 percent and 20 percent, respectively, over 2008.
Home revenues grew to $63.5 million for the full-year 2009 compared with revenues of $48.3 million for the full-year 2008. Home revenues increased to $17.5 million in the fourth quarter of 2009 compared with revenue of $13.5 million in the fourth quarter of 2008, representing a 30 percent increase.
Critical Care revenues grew to $22.3 million for the full-year 2009 compared with revenues of $18.6 million for the full-year 2008. Revenues in the Critical Care market increased to $7.0 million in the fourth quarter of 2009, compared with revenue of $5.4 million in the fourth quarter of 2008, representing a 28 percent increase.
Annual revenues in the In-Center market, from the Company’s Medisystems business, were $62.9 million for the full-year 2009, compared with revenues of $61.9 million for the full-year 2008. Fourth quarter revenues were $16.0 million, in line with the Company’s expectations and compared with $16.7 million in the fourth quarter of 2008.
“We are very pleased with the performance of the Company operationally, financially and strategically,” stated Jeffrey H. Burbank, Chief Executive Officer of NxStage Medical, Inc. “As a result of many successful activities during 2009, our business is strikingly different than it was a year ago at this time. We believe the systematic execution against our strategic initiatives throughout the past year positions us well for future growth and improved cash flow.”
NxStage reported a net loss of $43.5 million or ($0.93) per share for the full-year 2009 compared with a net loss of $51.2 million or ($1.23) per share for the full-year 2008. The Company reported a net loss of $8.7

 

 

million or ($0.19) per share for the fourth quarter of 2009 compared with a net loss of $9.8 million, or ($0.21) per share for the fourth quarter of 2008.
For the full-year 2009, the Company reported an Adjusted EBITDA loss, adjusted for stock-based compensation, deferred revenue recognized and other non-cash and non-recurring expenses, of $12.7 million, compared with an Adjusted EBITDA loss of $29.2 million for the full-year 2008. For the fourth quarter of 2009, the Company had a $1.2 million Adjusted EBITDA loss, compared with an Adjusted EBITDA loss of $6.0 million in the fourth quarter of 2008. Both the annual and quarterly results were better than the Company’s guidance for an Adjusted EBITDA loss of $13 to $18 million and $1.5 to $2.5 million for the full-year and fourth quarter of 2009, respectively. (See the exhibits for a reconciliation of this non-GAAP measure.)
Guidance:
For the first quarter of 2010, the Company is forecasting revenues to be between $38 million and $39.5 million, a net loss in the range of $9.0 to $10.0 million or ($0.19) to ($0.21) per share, and an Adjusted EBITDA loss in the range of $1 to $2 million.
For the full fiscal year 2010, the Company is forecasting revenues to be between $163 to $170 million, a net loss in the range of $28 to $33 million or ($0.60) to ($0.71) per share, and for Adjusted EBITDA to be in the range of a positive $1 million to ($3.0) million. The Company expects to achieve consolidated gross margins of between 33 percent to 37 percent in the fourth quarter of 2010.
This release contains a non-GAAP financial measure, a reconciliation of the Company’s non-GAAP financial measure to its most comparable GAAP financial measure is in the exhibits to this press release.
Conference Call:
NxStage will also host a conference call today, February 25, 2010 at 9:00 a.m. Eastern Time to discuss its fourth quarter and full year 2009 financial results. To listen to the conference call, please dial 866-356-4441 (domestic) or 617-597-5396 (international). The passcode is 53221195. 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/ir.cfm.
A replay of the conference call will be available 2 hours after the start of the call through March 11, 2010. To access the replay dial 888-286-8010 (domestic) or 617-801-6888 (international) and enter passcode 89582057. An online archive of the conference call can be accessed via the investor relations section of the Company’s website at www.nxstage.com/ir.cfm.
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 Adjusted EBITDA numbers, expectations regarding achievement of improved cash flow, 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, growth in home and/or daily hemodialysis, unanticipated difficulties in achieving operational efficiencies and cost reductions, changes in reimbursement for home and daily hemodialysis, changes in the regulatory environment, changes in the historical purchasing patterns and preferences of our major customers, including DaVita Inc., 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 period ended September 30, 2009.
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 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, and other non-cash and non-recurring expenses) to understand operational cash usage. The Company believes this non-GAAP financial measure provides useful and supplementary information allowing investors greater transparency to one measure used by management. This non-GAAP financial measure is meant to supplement, and to be viewed in conjunction with, GAAP financial measures. This non-GAAP financial measure is reconciled to the most comparable GAAP financial measure below.

 

 

NxStage Medical, Inc.
Consolidated Statements of Operations
(amounts in thousands, except per share data)
(unaudited)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2009     2008     2009     2008  
 
                                
Revenues
   $ 40,510     $ 35,676     $ 148,676     $ 128,763  
Cost of revenues
     29,063       28,515       111,812       108,387  
 
                        
Gross profit
     11,447       7,161       36,864       20,376  
 
                        
 
                                
Operating expenses:
                                
Selling and marketing
     7,956       7,028       30,047       27,965  
Research and development
     2,434       2,416       9,814       8,890  
Distribution
     3,442       4,065       13,918       14,267  
General and administrative
     5,020       4,796       19,532       19,239  
 
                        
Total operating expenses
     18,852       18,305       73,311       70,361  
 
                        
Loss from operations
     (7,405 )     (11,144 )     (36,447 )     (49,985 )
 
                        
 
                                
Other income (expense):
                                
Interest income
     3       191       35       489  
Interest expense
     (1,308 )     (969 )     (6,790 )     (3,877 )
Change in fair value of financial instruments
     —       2,285       —       2,536  
 
                        
 
     (1,305 )     1,507       (6,755 )     (852 )
 
                        
 
                                
Net loss before income taxes
     (8,710 )     (9,637 )     (43,202 )     (50,837 )
 
                                
Provision for income taxes
     (33 )     126       265       374  
 
                                
 
                        
Net loss
   $ (8,677 )   $ (9,763 )   $ (43,467 )   $ (51,211 )
 
                        
 
                                
Net loss per share, basic and diluted
   $ (0.19 )   $ (0.21 )   $ (0.93 )   $ (1.23 )
 
                        
 
                                
Weighted-average shares outstanding, basic and diluted
     46,704       46,492       46,627       41,803  
 
                        

 

 

NxStage Medical, Inc.
Consolidated Balance Sheets
(amounts in thousands, except share data)
(unaudited)
                 
    December 31,     December 31,  
    2009     2008  
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 21,720     $ 26,642  
Accounts receivable, net
     14,238       11,886  
Inventory
     28,117       30,862  
Prepaid expenses and other current assets
     1,227       2,011  
 
            
Total current assets
     65,302       71,401  
 
Property and equipment, net
     10,336       12,254  
Field equipment, net
     21,726       30,445  
Deferred cost of revenues
     27,799       23,711  
Intangible assets, net
     28,208       31,004  
Goodwill
     42,698       42,698  
Other assets
     909       553  
 
            
 
                
Total assets
   $ 196,978     $ 212,066  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
Accounts payable
   $ 19,827     $ 17,183  
Accrued expenses
     9,377       10,746  
Current portion of long-term debt
     61       9,110  
 
            
Total current liabilities
     29,265       37,039  
 
                
Deferred revenue
     38,490       29,634  
Long-term debt
     37,854       21,054  
Other long-term liabilities
     1,923       1,892  
 
            
Total liabilities
     107,532       89,619  
 
                
Commitments and contingencies
                
Stockholders’ equity:
                
Undesignated preferred stock: par value $0.001, 5,000,000 shares authorized; no shares issued and outstanding as of December 31, 2009 and 2008
     —       —  
 
Common stock: par value $0.001, 100,000,000 shares authorized; 46,795,859 and 46,548,585 shares issued and outstanding as of December 31, 2009 and 2008, respectively
     47       47  
Additional paid-in capital
     365,548       355,266  
Accumulated deficit
     (276,714 )     (233,247 )
Accumulated other comprehensive income
     565       381  
 
            
 
                
Total stockholders’ equity
     89,446       122,447  
 
            
 
                
Total liabilities and stockholders’ equity
   $ 196,978     $ 212,066  
 
            

 

 

NxStage Medical, Inc.
Cash Flows from Operating Activities
(amounts in thousands)
(unaudited)
                 
    Years Ended  
    December 31,  
    2009     2008  
Cash flows from operating activities:
                
Net loss
   $ (43,467 )   $ (51,211 )
Adjustments to reconcile net loss to net cash used in operating activities:
                
Depreciation and amortization
     20,778       19,201  
Amortization of inventory step-up
     —       52  
Stock-based compensation
     9,226       5,842  
Change in fair value of financial instruments
     —       (2,536 )
Other
     2,690       1,038  
Changes in operating assets and liabilities:
                
Accounts receivable
     (2,208 )     (4,761 )
Inventory
     (9,209 )     (23,431 )
Prepaid expenses and other current assets
     1,513       747  
Accounts payable
     2,568       (4,626 )
Accrued expenses and other liabilities
     (119 )     (3,641 )
Deferred revenue
     5,071       10,104  
 
            
 
                
Net cash used in operating activities
   $ (13,157 )   $ (53,222 )
 
            

 

 

NxStage Medical Inc.
Revenue by Segment
(amounts in thousands)
(unaudited)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2009     2008     2009     2008  
 
                                
System One segment
                                
Home
   $ 17,547     $ 13,512     $ 63,461     $ 48,319  
Critical Care
     6,959       5,447       22,340       18,554  
 
                        
Total System One segment
     24,506       18,959       85,801       66,873  
In-Center segment
     16,004       16,717       62,875       61,890  
 
                        
Total
   $ 40,510     $ 35,676     $ 148,676     $ 128,763  
 
                        

 

 

NxStage Medical Inc.
Non-GAAP Financial Measures
(amounts in millions)
(unaudited)
                                 
    Three Months Ended     Twelve Months Ended  
    December 31,     December 31,  
    2009     2008     2009     2008  
 
                                
Net loss
   $ 8.7     $ 9.8     $ 43.5     $ 51.2  
Less: Depreciation, amortization, interest, and taxes
     (6.7 )     (6.0 )     (27.9 )     (23.0 )
Less: Adjusting items*
     (0.8 )     2.2       (2.9 )     1.0  
 
                                
 
                        
Adjusted EBITDA loss
   $ 1.2     $ 6.0     $ 12.7     $ 29.2  
 
                        
 
*   Adjusting items include stock-based compensation, deferred revenue recognized and other non-cash and non-recurring expenses

 

 

NxStage Medical Inc.
Non-GAAP Financial Guidance
(amounts in millions)
(unaudited)
                                 
    Three Months Ending     Twelve Months Ending  
    March 31, 2010     December 31, 2010  
    Low     High     Low     High  
    Estimate     Estimate     Estimate     Estimate  
 
                                
Net loss
   $ 9.0     $ 10.0     $ 28.0     $ 33.0  
Less: Depreciation amortization, interest, and taxes
     (7.0 )     (7.0 )     (27.0 )     (27.5 )
Less: Adjusting items*
     (1.0 )     (1.0 )     (2.0 )     (2.5 )
 
                                
 
                        
Adjusted EBITDA loss
   $ 1.0     $ 2.0     $ (1.0 )   $ 3.0  
 
                        
 
*   Adjusting items include stock-based compensation, deferred revenue recognized and other non-cash and non-recurring expenses