UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 7, 2014

NxSTAGE MEDICAL, INC.
(Exact name of registrant as specified in its charter)

Delaware
000-51567
04-3454702
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
 
 
 
350 Merrimack Street, Lawrence, MA
 
01843
(Address of principal executive offices)
 
(Zip Code)

(978) 687-4700
(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))







Item 2.02
Results of Operations and Financial Condition.    

On August 7, 2014, NxStage Medical, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2014, which is furnished as Exhibit 99 to this report.

The information furnished in this report, including Exhibit 99, shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act.

Item 9.01    Financial Statements and Exhibits.

The exhibit listed in the Exhibit Index is furnished as part of this report.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

NxStage Medical, Inc.
 

By: /s/ Matthew W. Towse    
Matthew W. Towse
Chief Financial Officer    
Date: August 7, 2014    





EXHIBIT INDEX

Exhibit No.
 
Description
99

 
NxStage Medical's press release dated August 7, 2014.








NXSTAGE REPORTS RECORD SECOND QUARTER 2014 FINANCIAL RESULTS AND INCREASES FULL-YEAR REVENUE GUIDANCE
•
Revenue Increases to $74.1 million, up 13% from Q2'13
•
Home Revenue Increases to $38.5 million, up 18% from Q2'13
•
Company Expects to Top 15% Annual Growth Target for Home in 2014
•
Company Increases Full-Year 2014 Revenue Guidance to be between $290 and $293 million

LAWRENCE, Mass., August 7, 2014, --NxStage Medical, Inc. (Nasdaq: NXTM), a leading manufacturer of innovative dialysis products, today reported second quarter revenue that exceeds the top end of its guidance range.
Revenue for the second quarter of 2014 increased 13 percent to a record $74.1 million, compared with revenue of $65.5 million for the second quarter of 2013, and exceeded the Company's guidance range for the second quarter. The increase in revenue was driven by strong adoption of the NxStage® System OneTM hemodialysis machine within the Home, both within US and international markets, and the Critical Care market.
Home revenue increased 18 percent to $38.5 million for the second quarter of 2014 compared with revenue of $32.7 million for the second quarter of 2013.

Critical Care revenue increased 15 percent to $12.4 million for the second quarter of 2014 compared with revenue of $10.8 million for the second quarter of 2013.
In-center revenue was $21.0 million for the second quarter of 2014 compared with revenue of $21.2 million for the second quarter of 2013.

NxStage reported a net loss of $7.1 million, or $(0.12) per share for the second quarter of 2014 compared with a net loss of $3.4 million, or $(0.06) per share for the second quarter of 2013. Consistent with the Company's expectations, net loss for the second quarter of 2014 included $3.2 million in losses associated with the Company's market development activities with NxStage Kidney Care, which is designed to support the adoption of home hemodialysis.
"We are very pleased with our performance throughout the first half of the year which reflects continuing momentum with our strategic growth initiatives," stated Jeffrey H. Burbank, Founder and Chief Executive Officer of NxStage. "Home is tracking ahead of plan with second quarter revenue up 18%, representing the best year over year growth in Home since Q4 of 2011. Consistent with our plans, we are accelerating adoption of home hemodialysis with the System One and building a long-term sustainable growth path for NxStage. Based on our strong start to the year, as well as our increased confidence in the second half,we believe we are well positioned to top our 15% annual Home revenue growth target and exceed our previous guidance for total revenue."

Guidance:

The Company now expects full-year revenue for 2014 to be between $290 and $293 million, versus its previous guidance of $283 to $288 million. The Company's full-year net loss guidance remains unchanged at $23 to $27 million.





For the third quarter of 2014, the Company expects revenue to be in a range of $71.0 and $72.5 million, and a net loss in the range of $7.5 to $8.5 million.


Conference Call:
NxStage will also host a conference call today, Thursday, August 7, 2014 at 9:00 a.m. Eastern Time to discuss its second 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 http://ir.nxstage.com.
A replay of the conference call will be available two hours after the completion of the call through August 15, 2014. To access the replay, dial 855-859-2056 (domestic) or 404-537-3406 (international) and reference conference ID 75983589. 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 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. 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. http://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 the Company's NxStage




Kidney Care 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 March 31, 2014.

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.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands, except per share data)
(unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
 
 
Revenues
$
74,083

 
$
65,462

 
$
146,304

 
$
127,106

Cost of revenues
46,553

 
40,375

 
89,840

 
78,019

Gross profit
27,530

 
25,087

 
56,464

 
49,087

Operating expenses:
 
 
 
 
 
 
 
Selling and marketing
13,589

 
11,716

 
26,807

 
22,412

Research and development
5,708

 
4,366

 
10,842

 
9,474

Distribution
6,485

 
5,037

 
13,035

 
9,945

General and administrative
8,399

 
8,239

 
17,220

 
16,063

Total operating expenses
34,181

 
29,358

 
67,904

 
57,894

Loss from operations
(6,651
)
 
(4,271
)
 
(11,440
)
 
(8,807
)
Other expense:
 
 
 
 
 
 
 
Interest expense
(195
)
 
(150
)
 
(393
)
 
(300
)
Other (expense) income, net
(17
)
 
(10
)
 
6

 
(186
)
 
(212
)
 
(160
)
 
(387
)
 
(486
)
Net loss before income taxes
(6,863
)
 
(4,431
)
 
(11,827
)
 
(9,293
)
Provision for (benefit from) income taxes
332

 
(1,026
)
 
678

 
(894
)
Net loss
(7,195
)
 
(3,405
)
 
(12,505
)
 
(8,399
)
Less: Net loss attributable to noncontrolling interests
(82
)
 
—

 
(117
)
 
—

Net loss attributable to stockholders of NxStage Medical, Inc.
$
(7,113
)
 
$
(3,405
)
 
$
(12,388
)
 
(8,399
)
 
 
 
 
 
 
 
 
Net loss per share, basic and diluted
$
(0.12
)
 
$
(0.06
)
 
$
(0.20
)
 
$
(0.14
)
Weighted-average shares outstanding, basic and diluted
61,469

 
60,036

 
61,484

 
59,706

 
 
 
 
 
 
 
 
Other comprehensive income (loss)
173

 
(704
)
 
355

 
(559
)
Total comprehensive loss
(7,022
)
 
(4,109
)
 
(12,150
)
 
(8,958
)
Less: Comprehensive loss attributable to noncontrolling interests
(82
)
 
—

 
(117
)
 
—

Total comprehensive loss attributable to stockholders of NxStage Medical, Inc.
$
(6,940
)
 
$
(4,109
)
 
$
(12,033
)
 
$
(8,958
)





NxStage Medical, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)

 
June 30,
 
December 31,
 
2014
 
2013
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
62,079

 
$
84,134

Accounts receivable, net
31,086

 
20,158

Inventory
43,350

 
37,801

Prepaid expenses and other current assets
4,537

 
4,027

Total current assets
141,052

 
146,120

Property and equipment, net
60,629

 
52,478

Field equipment, net
17,808

 
13,041

Deferred cost of revenues
33,097

 
34,730

Intangible assets, net
15,802

 
17,194

Goodwill
41,817

 
41,817

Other assets
2,573

 
1,582

Total assets
$
312,778

 
$
306,962

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
22,525

 
$
14,610

Accrued expenses
21,195

 
21,025

Current portion of long-term debt
103

 
102

Other current liabilities
1,870

 
1,870

Total current liabilities
45,693

 
37,607

Deferred revenues
51,831

 
53,277

Long-term debt
1,004

 
1,044

Other long-term liabilities
24,030

 
20,273

Total liabilities
122,558

 
112,201

Commitments and contingencies
 
 
 
Stockholders’ equity:
 
 
 
Undesignated preferred stock: par value $0.001, 5,000,000 shares authorized; no shares issued and outstanding as of June 30, 2014 and December 31, 2013
—

 
—

Common stock: par value $0.001, 100,000,000 shares authorized; 62,185,421 and 61,666,048 shares issued as of June 30, 2014 and December 31, 2013, respectively
62

 
61

Additional paid-in capital
575,123

 
567,468

Accumulated deficit
(375,930
)
 
(363,542
)
Accumulated other comprehensive income
567

 
212

Treasury stock, at cost: 579,121 and 575,895 shares as of June 30, 2014 and December 31, 2013, respectively
(10,010
)
 
(9,963
)
Total NxStage Medical, Inc. stockholders' equity
189,812

 
194,236

Noncontrolling interest
408

 
525

Total stockholders' equity
190,220

 
194,761

Total liabilities and stockholders’ equity
$
312,778

 
$
306,962

 
 
 
 





NxStage Medical, Inc.
Cash Flows from Operating Activities
(in thousands)
(unaudited)

 
Six Months Ended June 30,
 
2014
 
2013
 
 
 
 
Cash flows from operating activities:
 
 
 
Net loss
$
(12,505
)
 
$
(8,399
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
Depreciation and amortization
13,343

 
12,259

Stock-based compensation
5,740

 
5,435

Other
450

 
1,226

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(10,927
)
 
(1,853
)
Inventory
(17,523
)
 
(12,067
)
Prepaid expenses and other assets
(550
)
 
(2,584
)
Accounts payable
7,948

 
1,955

Accrued expenses and other liabilities
1,206

 
(1,270
)
Deferred revenues
(1,395
)
 
(4,439
)
Net cash used in operating activities
$
(14,213
)
 
$
(9,737
)


NxStage Medical, Inc.
Revenues by Segment
(in thousands)
(unaudited)

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
System One segment
 
 
 
 
 
 
 
Home
$
38,488

 
$
32,671

 
$
74,983

 
$
64,130

Critical Care
12,422

 
10,826

 
27,114

 
21,536

Total System One segment
50,910

 
43,497

 
102,097

 
85,666

In-Center segment
21,003

 
21,238

 
39,919

 
39,938

Other
1,943

 
727

 
3,997

 
1,502

Products subtotal
73,856

 
65,462

 
146,013

 
127,106

Services segment
428

 
—

 
544

 
—

Elimination of intersegment revenues
(201
)
 
—

 
(253
)
 
—

     Total
$
74,083

 
$
65,462

 
$
146,304

 
$
127,106




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