LAWRENCE, Mass., Nov. 5 NxStage Medical, Inc. (Nasdaq: NXTM), a leading manufacturer of innovative dialysis products, today posted strong third quarter results.
Net revenue for the third quarter of 2009 was $38.0 million, compared with the Company's guidance for third quarter revenue in the range of $32.5 to $34.5 million. The Company's third quarter revenue includes approximately $2.5 million of third quarter sales within the In-Center market that management had previously expected to be deferred to the fourth quarter of 2009. The Company further exceeded its guidance as a result of stronger than anticipated machine and disposable sales in the Critical Care market and core growth in the Home market.
The Company's third quarter revenue represents an increase of 25 percent when compared with revenue of $30.5 million for the third quarter of 2008.
"Our strategy to drive further improvements in both our operating and financial positions proved to be very effective during the third quarter. Our efforts led to better overall execution compared to our expectations, and stronger than anticipated demand across our three markets," stated Jeffrey H. Burbank, Chief Executive Officer of NxStage Medical. "The third quarter also continued our trend of solid sequential improvement in other key areas including gross margin, adjusted EBITDA and cash."
Revenue within the Company's Home market was $16.4 million for the third quarter of 2009, an increase of 32 percent when compared with revenues of $12.4 million for the third quarter of 2008. Revenue for the Company's Critical Care and In-Center markets was $5.7 million and $16.0 million, respectively, for the third quarter of 2009, representing an increase of 29 percent and 17 percent, respectively, when compared with revenue for the third quarter of 2008.
Gross margin improved to 25 percent in the third quarter of 2009 as compared to 16 percent in the third quarter of 2008.
Net loss for the third quarter of 2009 was $10.0 million, or ($0.22) per share. This compares to a net loss of $15.0 million, or ($0.33) per share for the third quarter of 2008, which included the negative impact of a $1.8 million change in fair value of financial instruments.
Cash and cash equivalents as of September 30, 2009 were $22.1 million. The Company's cash usage for the third quarter of 2009 was $2.4 million.
For the third quarter of 2009, the Company had an Adjusted EBITDA loss of $2.4 million, adjusted for stock-based compensation, deferred revenue recognized and other non-recurring expenses, compared with an Adjusted EBITDA loss of $7.3 million in the third quarter of 2008. These results were better than the Company's guidance for an Adjusted EBITDA loss of $3.0 to $4.0 million for the third quarter of 2009. (See the exhibits for a reconciliation of this non-GAAP measure.)
For the fourth quarter of 2009, the Company is forecasting revenue to be between $37.0 to $39.0 million, a net loss in the range of $8.5 to $9.5 million or ($0.18) to ($0.21) per share, and an Adjusted EBITDA loss in the range of $1.5 to $2.5 million.
Supported by its strong performance year to date in 2009, the Company now anticipates revenue for the 2009 fiscal year to be in a range of $145 to $147 million, compared with its prior guidance for revenue to be in a range of $135 to $145 million.
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.
NxStage will also host a conference call today at 9:00 a.m. Eastern Time to discuss its third quarter financial results. To listen to the conference call, please dial 866-761-0749 (domestic) or 617-614-2707 (international). The passcode is 89787973. 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 3 hours after the start of the call through November 19, 2009. To access the replay dial 888-286-8010 (domestic) or 617-801-6888 (international) and enter passcode 53620507. 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.
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.
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 anticipated operating results, including revenues, loss, and Adjusted EBITDA numbers, 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 June 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.
Non-GAAP Financial Measure
The Company discloses a certain 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-recurring expenses) to understand operational cash usage. The Company believes the non-GAAP financial measure provides useful and supplementary information allowing investors greater transparency to one measure used by management. The non-GAAP financial measure is meant to supplement, and to be viewed in conjunction with, GAAP financial measures. The non-GAAP financial measure is reconciled to the most comparable GAAP financial measure below.
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SOURCE NxStage Medical, Inc.