Q4 Financial Highlights
– Gross Margin: 20%, up from 2% in Q4’07
Net revenue for the fourth quarter of 2008 increased 19 percent to
Through continued execution against initiatives to drive broader market adoption, the Company increased annual revenue in the Home market by 62 percent. Home revenues grew to
The Company also increased annual revenue in the Critical Care market by 29 percent. Critical Care revenues grew to
As a result of strong end customer demand and distributor inventory growth, revenues in the In-Center market, from the Company’s Medisystems business, increased to
Despite the economic backdrop, we made meaningful progress in improving NxStage’s financial performance, stated
Consistent with the Company’s guidance, gross margin improved to 20 percent in the fourth quarter of 2008, compared to 2 percent in the fourth quarter of 2007 and 16 percent in the third quarter of 2008.
NxStage reported a net loss of
Cash and cash equivalents as of
For the fourth quarter of 2008, the Company had a
As a result of the Company’s ability to achieve greater than 3,100 end-stage renal disease patients prescribed to receive therapy using the NxStage System One as of
Our business is centered on life sustaining treatments for patients with end-stage renal disease. With demand expected to remain strong within each of our businesses, we believe NxStage should be well positioned to withstand the current economic conditions, continued Burbank. Still, we are exposed to certain factors outside of our influence including, the length and severity of the current economic conditions and the impact it could have on our critical care customers’ and distributors’ purchasing decisions in 2009. Generally speaking, as we are operating in a more conservative environment so we are being conservative and cautious in how we forecast and run our business.
For the first quarter of 2009, the Company is forecasting revenues to be between
For the full fiscal year 2009, the Company is forecasting revenues to be between
This release contains non-GAAP financial measures, a reconciliation of the Company’s non-GAAP financial measures to their most comparable GAAP financial measure is in the exhibits to this press release.
NxStage will also host a conference call today,
A replay of the conference call will be available 3 hours after the start of the call through
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, beliefs as to whether the Company, based on current projections, has the required resources to fund projected operating requirements, anticipated ability to restructure the Company’s GE credit facility, beliefs as to the expected impact of current economic conditions on our business, 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 unanticipated difficulties in amending the terms of the Company’s GE credit facility, 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
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.
VP, Investor Relations
Non-GAAP Financial Measures
The Company discloses certain non-GAAP financial measures to supplement the Company’s consolidated financial statements presented on a GAAP basis. These non-GAAP measures are not in accordance with, or an alternative for, generally accepted accounting principles in the
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, 2008 2007 2008 2007 Revenues $35,676 $29,934 $128,763 $59,964 Cost of revenues 28,515 29,377 108,387 65,967 Gross profit (deficit) 7,161 557 20,376 (6,003) Operating expenses: Selling and marketing 7,028 6,354 27,965 21,589 Research and development 2,416 2,014 8,890 6,335 Distribution 4,065 4,237 14,267 13,111 General and administrative 4,796 5,206 19,239 13,046 Total operating expenses 18,305 17,811 70,361 54,081 Loss from operations (11,144) (17,254) (49,985) (60,084) Other income (expense): Interest income 191 527 489 2,855 Interest expense (969) (608) (3,877) (1,105) Change in fair value of financial instruments 2,285 - 2,536 - 1,507 (81) (852) 1,750 Net loss before income taxes (9,637) (17,335) (50,837) (58,334) Provision for income taxes 126 62 374 62 Net loss $(9,763) $(17,397) $(51,211) $(58,396) Net loss per share, basic and diluted $(0.21) $(0.47) $(1.23) $(1.86) Weighted-average shares outstanding, basic and diluted 46,492 36,678 41,803 31,426 NxStage Medical, Inc. Consolidated Balance Sheets (amounts in thousands, except share data) (unaudited) December 31, December 31, 2008 2007 ASSETS Current assets: Cash and cash equivalents $26,642 $33,245 Short-term investments - 1,100 Accounts receivable, net 11,886 7,990 Due from affiliate - 435 Inventory 30,862 29,965 Prepaid expenses and other current assets 2,011 2,455 Total current assets 71,401 75,190 Property and equipment, net 12,254 12,146 Field equipment, net 30,445 30,885 Deferred cost of revenues 23,711 14,850 Intangible assets, net 31,004 33,801 Goodwill 42,698 41,457 Other assets 553 2,057 Total assets $212,066 $210,386 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $17,183 $21,887 Accrued expenses 10,746 9,820 Due to affiliates - 2,774 Current portion of long-term debt 9,110 54 Total current liabilities 37,039 34,535 Deferred revenue 29,634 19,530 Long-term debt 21,054 25,170 Other long-term liabilities 1,892 1,434 Total liabilities 89,619 80,669 Commitments and contingencies Stockholders' equity: Undesignated preferred stock: par value
$0.001, 5,000,000 shares authorized; zero shares issued and outstanding, as of December 31, 2008 and 2007 - - Common stock: par value $0.001, 100,000,000 shares authorized; 46,548,585 and 36,771,893 shares issued and outstanding, as of December 31, 2008and 2007, respectively 47 37 Additional paid-in capital 355,266 311,172 Accumulated deficit (233,247) (182,036) Accumulated other comprehensive income 381 544 Total stockholders' equity 122,447 129,717 Total liabilities and stockholders' equity $212,066 $210,386 NxStage Medical, Inc. Cash Flows from Operating Activities (amounts in thousands) (unaudited) Years Ended December 31, 2008 2007 Cash flows from operating activities: Net loss $(51,211) $(58,396) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 19,201 9,277 Amortization of inventory step-up 52 1,520 Stock-based compensation 5,842 3,449 Change in fair value of financial instruments (2,536) - Other 1,038 248 Changes in operating assets and liabilities: Accounts receivable (4,761) (3,597) Inventory (23,431) (41,344) Prepaid expenses and other current assets 747 405 Accounts payable (4,626) 10,202 Accrued expenses (3,641) 2,305 Deferred revenue 10,104 16,302 Net cash used in operating activities $(53,222) $(59,629) NxStage Medical Inc. Revenue by Segment (amounts in thousands) Three Months Twelve Months Ended Ended December 31, December 31, 2008 2007 2008 2007 System One segment Home $13,512 $9,337 $48,319 $29,835 Critical Care 5,447 4,869 18,554 14,401 Total System One segment 18,959 14,206 66,873 44,236 In-Center segment 16,717 15,728 61,890 15,728 Total $35,676 $29,934 $128,763 $59,964 NxStage Medical Inc. Non-GAAP Financial Measures (amounts in millions) Three Months Twelve Months Ended Ended December 31, December 31, 2008 2007 2008 2007 Net loss $9.8 $17.4 $51.2 $58.4 Less: Depreciation amortization, interest, and taxes (6.0) (3.8) (23.0) (7.6) Less: Adjusting items* 2.2 (1.9) 1.0 (3.1) Adjusted EBITDA loss $6.0 $11.7 $29.2 $47.7 * Adjusting items include stock-based compensation, deferred revenue recognized and other non-recurring expenses NxStage Medical Inc. Non-GAAP Financial Guidance (amounts in millions) Three Months Ended Twelve Months Ended March 31, 2009 December 31, 2009 Low High Low High Estimate Estimate Estimate Estimate Net loss $12.5 $13.5 $42.0 $47.0 Less: Depreciation amortization, interest, and taxes (5.9) (5.9) (25.2) (25.2) Less: Adjusting items* (0.6) (0.6) (3.8) (3.8) Adjusted EBITDA loss $6.0 $7.0 $13.0 $18.0 * Adjusting items include stock-based compensation, deferred revenue recognized and other non-recurring expenses