FRAMINGHAM, Mass., Feb. 27, 2014 /PRNewswire/ -- HeartWare
International, Inc. (NASDAQ: HTWR), a leading innovator of less
invasive, miniaturized circulatory support technologies that are
revolutionizing the treatment of advanced heart failure, today
announced revenue of $53.1 million
for the fourth quarter ended December 31,
2013, a 62% increase compared to $32.7 million in revenue for the same period of
2012. For the fiscal year 2013, the company generated revenue
of $207.9 million, an 87% increase
compared to revenue of $110.9 million
in fiscal year 2012.
"We experienced strong market adoption of the HeartWare®
Ventricular Assist System during our first full year of U.S.
commercialization, with nearly 1,000 units sold and a total of 96
U.S. customers at the close of the year," said Doug Godshall, President and Chief Executive
Officer. "In addition, we continue to receive enthusiastic
support from markets outside of the U.S., with the addition of 28
international customers in new and existing markets. We are
proud to have finished the year with 230 customers worldwide, an
increase of nearly 50% in 2013."
During the fourth quarter, 524 HeartWare Systems were sold
globally, a 52% increase from 345 units in the fourth quarter of
2012. U.S. revenue during the fourth quarter of 2013 was
$25.9 million, a 94% increase from
$13.4 million in the fourth quarter
of 2012. Revenue from international markets, generated
through the sale of 282 units, was $27.1
million, an increase of approximately 41% from $19.3 million in the fourth quarter of 2012.
"Our strong commercial growth was complemented by advances made
in the clinical development of the HeartWare System," added Mr.
Godshall. "During 2013, we initiated enrollment in the U.S.
for our supplemental cohort study for destination therapy, received
approval to commence enrollment in our trial in Japan, and we obtained conditional approval
from the FDA for our U.S. thoracotomy trial. We are eagerly
anticipating the upcoming initiation of first-in-human testing of
our next generation MVAD® pump and Pal™ peripherals,
which is expected to precede the commencement of a 63-patient, CE
Mark study at nine international hospital sites.
"The acquisition of CircuLite, developer of the SYNERGY®
Circulatory Support System, in December
2013, provides an opportunity for us to expand our core
business into the partial-support market segment, through the
treatment of heart failure patients who are less sick," Mr.
Godshall said. "Our team is working diligently to make refinements
to this device in order to position the SYNERGY System for
re-launch at select European sites and to enhance the
SYNERGY® Endovascular System when it enters the
clinic."
Currency fluctuations benefitted revenue growth by approximately
two percentage points in the fourth quarter, as well as on a
full-year basis, in 2013 compared to the same periods in 2012.
Total operating expenses for the fourth quarter of 2013 were
$53.3 million, as compared to
$35.4 million in the fourth quarter
of 2012. Total operating expenses included CircuLite's
results for the month of December.
Research and development expense was $30.3 million for the fourth quarter of 2013, as
compared to $22.2 million in the same
period of 2012. Development costs are primarily attributable
to clinical trials and research and development related to
advancing HeartWare's existing products and pipeline
technologies.
Selling, general and administrative expenses were $23.0 million in the fourth quarter of 2013,
compared to $13.3 million in the
fourth quarter of 2012. The increase in selling, general and
administrative expenses reflects expansion of sales and marketing
activities, particularly in the U.S., and an overall increase in
corporate infrastructure to support the company's significant
growth.
Net loss for the fourth quarter of 2013 was $22.0 million, or a $1.33 loss per basic and diluted share, compared
to a $21.1 million net loss, or a
loss of $1.46 per basic and diluted
share, in the fourth quarter of 2012. The fourth quarter
results included CircuLite's operations for the month of December,
as well as approximately $6.7 million
of non-recurring costs as set forth in this release under
"Reconciliation of GAAP to Non-GAAP Net Loss per Share." For
the fiscal year ended December 31,
2013, the company recorded a net loss of $59.3 million, or a $3.69 loss per basic and diluted share, compared
to an $87.7 million net loss, or a
loss of $6.15 per basic and diluted
share, in fiscal year 2012.
Non-GAAP net loss per share for the fourth quarter of 2013 was
$0.92 per basic and diluted share,
compared to a loss of $1.46 per basic
and diluted share in the fourth quarter of 2012. Non-GAAP net
loss per share for 2013 was $3.24
compared to a loss of $6.07 per basic
and diluted share in 2012. See "Use of Non-GAAP Financial Measures"
and "Reconciliation of GAAP to Non-GAAP Net Loss per Share."
At December 31, 2013, HeartWare
had $201.7 million of cash, cash
equivalents and investments.
Conference Call and Webcast Information
HeartWare will host a conference call on Thursday, February 27, 2014 at 8:00 a.m., U.S. Eastern Standard Time to discuss
its financial results from the fourth quarter, highlights from the
2013 fiscal year and the company's business outlook. The call
may be accessed by dialing 1-877-941-4774 five minutes prior to the
scheduled start time and referencing "HeartWare." Callers
outside the U.S. should dial +1-480-629-9760.
A live webcast of the call will also be available in the
Investor section of the company's website
(http://ir.heartware.com/). A replay of the conference call
will be available through the above weblink immediately following
completion of the call.
Use of Non-GAAP Financial Measures
HeartWare management supplements its GAAP financial reporting
with certain non-GAAP financial measures for financial and
operational decision making. For example, we use "non-GAAP
net loss" and "non-GAAP net loss per share" to refer to GAAP loss
per share excluding certain adjustments such as amortization of
intangible assets, impairment charges, purchase accounting and
acquisition related transaction costs, and restructuring and
severance costs. These are non-GAAP financial measures under
Section 101 of Regulation G under the Securities Exchange Act of
1934, as amended. Management believes that providing this
additional information enhances investors' understanding of the
financial performance of the Company's operations and increases
comparability of its current financial statements to prior
periods. Non-GAAP measures should not be considered as a
substitute for measures in accordance with financial performance in
accordance with GAAP, and they should be reviewed in comparison
with their most directly comparable GAAP financial results.
Reconciliations of HeartWare's GAAP to non-GAAP financial measures
are provided at the end of this release under "Reconciliation of
GAAP to Non-GAAP Net Loss per Share."
About HeartWare International
HeartWare International develops and manufactures miniaturized
implantable heart pumps, or ventricular assist devices, to treat
Class IIIB / IV patients suffering from advanced heart failure.
The HeartWare® Ventricular Assist System features the HVAD®
pump, a small full-support circulatory assist device designed to be
implanted next to the heart, avoiding the abdominal surgery
generally required to implant competing devices. The HeartWare
System is approved in the United
States for the intended use as a bridge to cardiac
transplantation in patients who are at risk of death from
refractory end-stage left ventricular heart failure, has received
CE Marking in the European Union and has been used to treat
patients in 37 countries. The device is also currently the subject
of a U.S. clinical trial for destination therapy. For additional
information, please visit the Company's website at
www.heartware.com.
HeartWare International, Inc. is a member of the Russell
2000® and its securities are publicly traded on The NASDAQ Stock
Market.
HEARTWARE, HVAD, MVAD, PAL, SYNERGY, CIRCULITE and HeartWare
logos are registered trademarks of HeartWare, Inc.
Forward-Looking Statements
This announcement contains forward-looking statements that are
based on management's beliefs, assumptions and expectations and on
information currently available to management. All statements
that address operating performance, events or developments that we
expect or anticipate will occur in the future are forward-looking
statements, including without limitation our expectations with
respect to the commercialization of the HeartWare® Ventricular
Assist System, continued support from international customers,
progress of clinical trials and post-approval studies, regulatory
status, research and development activities and our ability to take
advantage of acquired and pipeline technology.
Management believes that these forward-looking statements are
reasonable as and when made. However, you should not place
undue reliance on forward-looking statements because they speak
only as of the date when made. HeartWare does not assume any
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required by federal securities laws
and the rules and regulations of the Securities and Exchange
Commission. HeartWare may not actually achieve the plans,
projections or expectations disclosed in forward-looking
statements, and actual results, developments or events could differ
materially from those disclosed in the forward-looking
statements. Forward-looking statements are subject to a
number of risks and uncertainties, including without limitation
those described in Part I, Item 1A. "Risk Factors" in HeartWare's
Annual Report on Form 10-K filed with the Securities and Exchange
Commission. HeartWare may update risk factors from time to
time in Part II, Item 1A "Risk Factors" in Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K, or other filings with the
Securities and Exchange Commission.
For further information:
Christopher Taylor
HeartWare International, Inc.
Email: ctaylor@heartwareinc.com
Phone: +1 508 739 0864
- Tables to Follow-
HEARTWARE
INTERNATIONAL, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands, except
per share data)
|
(unaudited)
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Revenue,
net
|
$
53,054
|
|
$
32,662
|
|
$
207,929
|
|
$
110,922
|
|
Cost of
revenue
|
19,293
|
|
16,606
|
|
76,468
|
|
51,023
|
|
Gross
profit
|
33,761
|
|
16,056
|
|
131,461
|
|
59,899
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
22,976
|
|
13,257
|
|
76,524
|
|
53,945
|
|
Research and
development
|
30,281
|
|
22,157
|
|
102,483
|
|
83,548
|
|
Total operating
expenses
|
53,257
|
|
35,414
|
|
179,007
|
|
137,493
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(19,496)
|
|
(19,358)
|
|
(47,546)
|
|
(77,594)
|
|
Other expense,
net
|
(1,926)
|
|
(1,747)
|
|
(11,298)
|
|
(10,124)
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
(21,422)
|
|
(21,105)
|
|
(58,844)
|
|
(87,718)
|
|
Provision for income
taxes
|
626
|
|
–
|
|
467
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
(22,048)
|
|
$
(21,105)
|
|
$
(59,311)
|
|
$
(87,718)
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share — basic and diluted
|
$
(1.33)
|
|
$
(1.46)
|
|
$
(3.69)
|
|
$
(6.15)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding — basic and diluted
|
16,574
|
|
14,451
|
|
16,066
|
|
14,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HEARTWARE
INTERNATIONAL, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
thousands)
(unaudited)
|
|
|
|
December
31,
2013
|
|
December
31,
2012
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
162,880
|
|
$
85,921
|
Short-term
investments
|
37,596
|
|
16,887
|
Accounts receivable,
net
|
28,052
|
|
25,225
|
Inventories
|
40,876
|
|
38,443
|
Prepaid expenses and
other current assets
|
11,205
|
|
5,925
|
Total current
assets
|
280,609
|
|
172,401
|
Property, plant and
equipment, net
|
18,562
|
|
19,380
|
Goodwill
|
61,596
|
|
1,190
|
In-process research
and development
|
35,500
|
|
2,536
|
Other intangible
assets, net
|
15,975
|
|
5,258
|
Other assets,
net
|
17,585
|
|
5,734
|
Total
assets
|
$
429,827
|
|
$
206,499
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
17,914
|
|
$
12,024
|
Other accrued
liabilities
|
35,276
|
|
22,020
|
Total current
liabilities
|
53,190
|
|
34,044
|
Convertible senior
notes, net
|
107,125
|
|
100,315
|
Contingent
liabilities
|
67,000
|
|
–
|
Other long-term
liabilities
|
3,905
|
|
3,929
|
Stockholders'
equity
|
198,607
|
|
68,211
|
Total liabilities and
stockholders' equity
|
$
429,827
|
|
$
206,499
|
Reconciliation of GAAP to Non-GAAP Net Loss per Share
(unaudited) (see explanation of adjustments below)
(in thousands except per share data)
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
(22,048)
|
|
$
(21,105)
|
|
$
(59,311)
|
|
$
(87,718)
|
GAAP EPS – basic and
diluted
|
|
$
(1.33)
|
|
$
(1.46)
|
|
$
(3.69)
|
|
$
(6.15)
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Amortization
and impairment of purchased intangible assets and
goodwill
|
(a)
|
3,747
|
|
21
|
|
3,809
|
|
35
|
Acquisition
related transaction costs
|
(b)
|
2,349
|
|
-
|
|
2,849
|
|
1,100
|
Restructuring
and severance costs
|
(c)
|
649
|
|
-
|
|
649
|
|
-
|
Total
adjustments
|
|
6,745
|
|
21
|
|
7,307
|
|
1,135
|
|
|
|
|
|
|
|
|
|
Per share effect of
adjustments - basic and diluted
|
|
$
0.41
|
|
$
0.00
|
|
$
0.45
|
|
$
0.08
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
loss
|
|
$
(15,303)
|
|
$
(21,084)
|
|
$
(52,004)
|
|
$
(86,583)
|
Non-GAAP net loss per
share - basic and diluted
|
|
$
(0.92)
|
|
$
(1.46)
|
|
$
(3.24)
|
|
$
(6.07)
|
|
|
|
|
|
|
|
|
|
Shares used in
computing non-GAAP loss per share - basic and diluted
|
|
16,574
|
|
14,451
|
|
16,066
|
|
14,252
|
|
|
(a)
|
Represents
amortization of purchased intangible assets related to WorldHeart
and CircuLite as well as $3.7 million related to goodwill and
in-process research and development impairment charges related to
WorldHeart during the quarter ended December 31, 2013.
|
(b)
|
Represents
acquisition transaction costs associated with the purchase of
WorldHeart in August 2012 and CircuLite in December
2013.
|
(c)
|
Represents separation
costs incurred in connection with the termination of certain
employees of CircuLite during the quarter ended December 31,
2013.
|
The terms "non-GAAP net loss" and "non-GAAP net loss per share"
refer to GAAP loss per share excluding certain adjustments such as
amortization of intangible assets, impairment charges, purchase
accounting and acquisition related transaction costs, and
restructuring and severance costs as follows:
1)
|
We exclude
amortization of purchased intangible assets and periodic impairment
charges related to long-lived assets from this measure
because these charges do not represent what our management believes
are the costs of developing, producing, supporting and selling our
products and the costs to support our internal operating
structure.
|
2)
|
We exclude purchase
accounting adjustments and acquisition related costs from this
measure because they occur as a result of specific events and are
not reflective of our internal investments and the ongoing costs to
support our operating structure. Purchase accounting
adjustments include contingent consideration fair market value
adjustments.
|
3)
|
We exclude
restructuring and severance costs from this measure because they
tend to occur as a result of specific events such as acquisitions,
divestitures, repositioning our business or other unusual events
that could make comparisons of long-range trends difficult and are
not reflective of our internal investments and the costs to support
our operating structure.
|
Non-GAAP net loss per share is calculated by subtracting the
total per share effect of these adjustments from GAAP EPS.
SOURCE HeartWare International, Inc.