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NxStage Reports Record Fourth Quarter and Full-Year 2015 Revenue
PR Newswire

LAWRENCE, Mass., Feb. 10, 2016 /PRNewswire/ --  

Highlights:

  • Full-Year Revenue Increases to $336 million, up 11% from 2014
  • Full-Year Home Revenue Increases to $183 million, up 16% from 2014
  • Full-Year Operating Income from Products Business Increases to $9 million
  • Company Highlights Significant Product Introductions for the Next Three Years
  • For Third Consecutive Year, Company Targets 15% Annual Home Revenue Growth

NxStage Medical, Inc. (Nasdaq: NXTM), a leading medical technology company focused on advancing renal care, today reported record revenue for the fourth quarter and fiscal year ended December 31, 2015, topping its recent upwardly revised revenue guidance.

NxStage Medical, Inc. (PRNewsFoto/NxStage Medical, Inc.) (PRNewsFoto/)

Fourth Quarter Financial Results

Total revenue for the fourth quarter of 2015 increased 12 percent from 2014 to a record $89.8 million, which exceeded the top end of the Company's revenue guidance range of $86 to $87 million. Net loss attributable to NxStage Medical, Inc.'s stockholders was $2.7 million for the fourth quarter of 2015, compared with a net loss of $4.9 million for the fourth quarter of 2014. The net loss included $3.8 million of income from operations from the Products Business.

Fiscal Year 2015 Financial Results

Total revenue for the full-year 2015 increased 11 percent from 2014 to a record $336.1 million, which exceeded the top end of the Company's revenue guidance range of $332 to $333 million. Net loss attributable to NxStage Medical, Inc.'s stockholders was $15.3 million for the full-year 2015, compared with a net loss of $23.9 million for the full-year 2014. The net loss for the full-year included $9.2 million of income from operations from the Products Business.

The Company's performance improvements in both periods were driven by the Products Business, and more specifically, outperformance in NxStage's largest segment, the System One segment which consists of Home and Critical Care markets. For the full-year 2015, System One revenue increased 16 percent to $247.8 million. Home revenue increased 16 percent to $182.6 million, exceeding the Company's target for 15 percent annual growth. Critical Care revenue increased 17 percent to $65.2 million.

"It was a strong year for NxStage. We're very pleased to again exceed our guidance on revenue, narrow our net loss and deliver a year of increasing profitability in our Products Business," said Jeff Burbank, Founder and Chief Executive Officer of NxStage. "We have a rich portfolio of current products that are expected to drive continued growth within Home and Critical Care, our largest high growth markets, in 2016 and beyond."

Burbank continued, "In addition, we continue to advance our innovative pipeline, including our next generation hemodialysis system, our new peritoneal dialysis (PD) system and our next generation critical care system. As we are beginning pilot production of our next generation hemodialysis system, we continue to align our assets and focus our execution in support of these tremendous long-term growth opportunities."

Guidance

The Company is forecasting revenue to be between $355 million and $360 million for the full fiscal year 2016, and between $87 million and $89 million for the first quarter of 2016. The Company also expects a net loss in the range of $7 million to $12 million for the full fiscal year 2016, and a net loss in the range of $2 million to $4 million for the first quarter of 2016. The Company's net loss guidance for both periods reflects expectations for continued operating income from the Products Business offset by the Company's continued investment in NxStage Kidney Care.

"Our guidance for the full fiscal year 2016 includes continued strong performance from our System One segment, with expectations for annual growth within Home and Critical Care of 15 percent and 9 percent, respectively, and a modest increase in our Services segment. We've also guided to a much lower revenue level for our low margin In-Center segment," stated Matt Towse, Chief Financial Officer.  "As we continue to scale the higher margin System One segment and align our business in support of our growth opportunities, we remain on track to achieve our long-term growth and profitability targets."

Conference Call:

NxStage will also host a conference call today, Wednesday, February 10, 2016, at 9:00 a.m. Eastern Time to discuss its fourth quarter and full-year 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 February 17, 2016.  To access the replay, dial 855-859-2056 (domestic) or 404-537-3406 (international) and reference conference ID 26460722.  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 dialysis centers. Its safety and efficacy have been demonstrated by experience with more than 12 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, 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 September 30, 2015.

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.

Consolidated Statements of Comprehensive Loss

(in thousands, except per share data)

(unaudited)

 



Three Months Ended December 31,



Twelve Months Ended December 31,



2015



2014



2015



2014














Revenues

$

89,804



$

79,911



$

336,123



$

301,501


Cost of revenues

54,041



49,059



204,652



185,598


Gross profit

35,763



30,852



131,471



115,903


Operating expenses:












Selling and marketing

15,017



14,705



58,528



55,385


Research and development

6,989



5,611



26,237



22,635


Distribution

7,071



6,539



26,211



26,001


General and administrative

8,985



8,470



35,124



34,069


Total operating expenses

38,062



35,325



146,100



138,090


Loss from operations

(2,299)



(4,473)



(14,629)



(22,187)


Other income (expense):












Interest expense

(320)



(215)



(1,115)



(863)


Other income (expense), net

25



(6)



561



(10)


Total other expense

(295)



(221)



(554)



(873)


Net loss before income taxes

(2,594)



(4,694)



(15,183)



(23,060)


Provision for (benefit from) income taxes

207



280



1,077



1,253


Net loss

(2,801)



(4,974)



(16,260)



(24,313)


Less: Net loss attributable to noncontrolling interests

(131)



(122)



(918)



(367)


Net loss attributable to stockholders of NxStage Medical, Inc.

$

(2,670)



$

(4,852)



$

(15,342)



$

(23,946)














Net loss per share, basic and diluted

$

(0.04)



$

(0.08)



$

(0.24)



$

(0.39)


Weighted-average shares outstanding, basic and diluted

63,871



62,271



63,384



61,700














Other comprehensive loss, net of tax

(80)



(1,609)



(1,839)



(2,404)


Total comprehensive loss

(2,881)



(6,583)



(18,099)



(26,717)


Less: Comprehensive loss attributable to noncontrolling interests

(131)



(122)



(918)



(367)


Total comprehensive loss attributable to stockholders of NxStage Medical, Inc.

$

(2,750)



$

(6,461)



$

(17,181)



$

(26,350)


 

 

 


 

NxStage Medical, Inc.

Consolidated Balance Sheets

(in thousands, except share data)

(unaudited)

 



December 31,



2015



2014








ASSETS






Current assets:






Cash and cash equivalents

$

59,065



$

52,884


Accounts receivable, net

25,195



24,099


Inventory

38,391



45,401


Prepaid expenses and other current assets

6,254



6,767


Total current assets

128,905



129,151


Property and equipment, net

66,711



66,574


Field equipment, net

20,744



21,118


Deferred cost of revenues

33,068



34,039


Intangible assets, net

11,744



14,370


Goodwill

42,710



41,817


Other assets

2,992



2,657


Total assets

$

306,874



$

309,726


LIABILITIES AND STOCKHOLDERS' EQUITY






Current liabilities:






Accounts payable

$

10,767



$

13,845


Accrued expenses

27,266



24,653


Current portion of long-term debt

315



93


Other current liabilities

4,394



6,165


Total current liabilities

42,742



44,756


Deferred revenues

51,362



52,943


Long-term debt

1,664



848


Other long-term liabilities

17,367



19,624


Total liabilities

113,135



118,171


Commitments and contingencies (Note 10)






Noncontrolling interests subject to put provisions

219




Stockholders' equity:






Undesignated preferred stock: par value $0.001 per share, 5,000,000 shares authorized; no shares issued and outstanding as of December 31, 2015 and 2014




Common stock: par value $0.001 per share, 100,000,000 shares authorized; 64,873,038 and  63,429,005 shares issued as of December 31, 2015 and 2014, respectively

64



63


Additional paid-in capital

612,487



593,073


Accumulated deficit

(402,830)



(387,488)


Accumulated other comprehensive loss

(4,031)



(2,192)


Treasury stock, at cost: 822,059 and 772,273 shares as of December 31, 2015 and 2014, respectively

(13,864)



(12,989)


Total NxStage Medical, Inc. stockholders' equity

191,826



190,467


Noncontrolling interests not subject to put provisions

1,694



1,088


Total stockholders' equity

193,520



191,555


Total liabilities and stockholders' equity

$

306,874



$

309,726


 

 

 


 

NxStage Medical, Inc.

Cash Flows from Operating Activities

(in thousands)

(unaudited)

 



Twelve Months Ended December 31,



2015



2014








Cash flows from operating activities:






Net loss

$

(16,260)



$

(24,313)


Adjustments to reconcile net loss to net cash provided by (used in) operating activities:






Depreciation and amortization

30,715



27,697


Stock-based compensation

12,598



12,881


Other

1,302



1,877


Changes in operating assets and liabilities:






Accounts receivable

(1,130)



(4,188)


Inventory

(12,113)



(35,063)


Prepaid expenses and other assets

(77)



(2,214)


Accounts payable

(2,775)



(212)


Accrued expenses and other liabilities

635



4,235


Deferred revenues

(2,353)



(973)


Net cash provided by (used in) operating activities

$

10,542



$

(20,273)


 

 

 


 

NxStage Medical, Inc.

Revenues by Segment

(in thousands)

(unaudited)

 



Three Months Ended December 31,



Twelve Months Ended December 31,



2015



2014



2015



2014


System One segment












Home

$

47,812



$

42,475



$

182,572



$

157,822


Critical Care

18,143



15,224



65,203



55,609


Total System One segment

65,955



57,699



247,775



213,431


In-Center segment

18,898



19,525



74,768



78,885


Other

3,180



2,367



10,302



8,282


Products subtotal

88,033



79,591



332,845



300,598


Services segment

2,845



694



6,412



1,749


Elimination of intersegment revenues

(1,074)



(374)



(3,134)



(846)


     Total

$

89,804



$

79,911



$

336,123



$

301,501


 

 

 

 

NxStage Medical, Inc.

Segment Financial Performance

(in thousands)

(unaudited)

 


Twelve Months Ended December 31,


2015


2014


2013

Products business (System One Segment, In-Center Segment and Other)






Revenues

$

332,845



$

300,598



$

263,077


Gross profit

$

146,188



$

123,011



$

103,295


Gross margin percentage

44

%


41

%


39

%

Income (Loss) from operations

$

9,197



$

(7,261)



$

(12,108)


Services Segment






Revenues

$

6,412



$

1,749



$

352


Gross profit

$

(14,717)



$

(7,108)



$

(792)


Gross margin percentage

n/a


n/a


n/a

Loss from operations

$

(23,826)



$

(14,926)



$

(5,690)


Eliminations






Elimination of intersegment revenues

$

(3,134)



$

(846)



$


Total Company






Revenues

$

336,123



$

301,501



$

263,429


Gross profit

$

131,471



$

115,903



$

102,503


Gross margin percentage

39

%


38

%


39

%

Loss from operations

$

(14,629)



$

(22,187)



$

(17,798)


 

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SOURCE NxStage Medical, Inc.

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