NxStage Reports Third Quarter 2013 Financial Results

LAWRENCE, Mass., Nov. 7, 2013 /PRNewswire/ — NxStage Medical, Inc. (Nasdaq: NXTM), a leading manufacturer of innovative dialysis products, today reported third quarter financial results with total revenue within its guidance range.

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Revenue for the third quarter of 2013 increased 9% to a record $66.9 million, compared with revenue of $61.2 million for the third quarter of 2012. The higher revenues were driven by increased adoption of the NxStage^&reg System One™.

Home revenue increased 5.5% to $33.7 million for the third quarter of 2013 compared with revenue of $31.9 million for the third quarter of 2012. The Company’s domestic home revenue for the third quarter of 2013 increased 8.1% over the prior year period, driving all of Home’s annual and sequential growth, and offsetting lower international revenue compared with the prior year.

Critical Care revenue increased to $10.7 million for the third quarter of 2013 compared with revenue of $9.1 million for the third quarter of 2012. In-center revenue increased to $21.3 million for the third quarter of 2013 compared with revenue of $19.6 million for the third quarter of 2012.

NxStage reported a net loss of $5.0 million, or $(0.08) per share for the third quarter of 2013 compared with a net loss of $2.6 million, or $(0.04) per share for the third quarter of 2012.

We continue to make solid progress in strategic areas that are focused on accelerating growth over the longer term, stated Jeffrey H. Burbank, Founder and Chief Executive Officer of NxStage. We’re seeing good momentum in the domestic market and believe our growth opportunity here remains very robust. In addition to our direct to patient marketing initiatives, we have a significant opportunity to improve our patients’ experiences and increase adoption of our therapies with both our innovative product pipeline and our centers of excellence. These initiatives remain solidly on track and we believe they are positioning the Company toward our goal of 15% annual home revenue growth in 2014 and beyond.

Separately, the Company announced that the U.S. Food and Drug Administration (FDA) cleared the Company’s Nx2me Connected Health™ solution. Nx2me Connected Health provides new features and capabilities that are important to home dialysis patients and nurses, including tools that automate a significant part of flow sheet administrative paperwork. With this clearance, the Company expects to begin offering Nx2me in the US later this year.

Guidance:

For the fourth quarter of 2013, the Company is forecasting revenues to be between $67.0 million and $68.5 million, and a net loss in the range of $6.0 to $5.0 million, or ($0.10) to ($0.08) per share.

This translates to full-year 2013 revenue to be within a range of $261.0 to $262.5 million and a net loss in the range of $19.5 to $18.5 million, or ($0.32) to ($0.31) per share, compared with the Company’s previous guidance for full-year 2013 revenue to be a range of $265 to $270 million and a net loss in the range of $17 to $13 million, or ($0.28) to ($0.22) per share. The Company’s revised net loss for the full-year 2013 includes continued investment in the Company’s strategic growth initiatives, including centers of excellence.

The components of the Company’s revised full-year 2013 revenue guidance include Home at 6.5% to 7.5%, Critical Care at approximately 10%, and In-Center at 6% to 7% annual growth. The Company’s guidance for $4 million in sales to Asahi remains unchanged for the full-year 2013.

The net change to our year end revenue guidance reflects a longer ramp of international revenue growth and lower growth in critical care disposable sales compared with our earlier projections, stated Matthew W. Towse, Chief Financial Officer. We remain committed to the investments that we believe will drive growth in 2014 and beyond.

Conference Call:

NxStage will also host a conference call today, Thursday, November 7, 2013 at 9:00 a.m. Eastern Time to discuss its third quarter 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 www.nxstage.com.

A replay of the conference call will be available 2 hours after the completion of the call through November 15, 2013. To access the replay, dial 855-859-2056 (domestic) or 404-537-3406 (international) and reference conference ID 76263079. An online archive of the conference call can be accessed via the investor relations section of the Company’s website at www.nxstage.com.

About the NxStage System One

The NxStage System One is the first and only truly portable hemodialysis system cleared for home use by the FDA. 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, at home or on vacation, and at a medically appropriate treatment frequency. https://www.nxstage.com/.

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 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 domestically and internationally, growth in home and/or more frequent hemodialysis, 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’s new centers of excellence initiative, 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 June 30, 2013.

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 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, manufacturing transition costs and other non-cash 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.

SOURCE NxStage Medical, Inc.