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): November 6, 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 November 6, 2014, NxStage Medical, Inc. issued a press release announcing its financial results for the quarter ended September 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: November 6, 2014    





EXHIBIT INDEX

Exhibit No.
 
Description
99

 
NxStage Medical's press release dated November 6, 2014.








NXSTAGE REPORTS RECORD THIRD QUARTER 2014 FINANCIAL RESULTS AND RAISES FULL-YEAR REVENUE GUIDANCE
•
Revenue Increases to $75.3 million, up 13% from Q3'13
•
Home Revenue Increases to $40.4 million, up 20% from Q3'13
•
Company Raises Full-Year 2014 Revenue Guidance to be between $296 and $298 million
•
New Data Demonstrates Significant Improvement in Mortality, Hospitalization, and Patient Dropout with Home Hemodialysis when Compared with Peritoneal Dialysis

LAWRENCE, Mass., November 6, 2014, --NxStage Medical, Inc. (Nasdaq: NXTM), a leading manufacturer of innovative dialysis products, today reported third quarter revenue that exceeds the top end of its guidance range.
Revenue for the third quarter of 2014 increased 13 percent to a record $75.3 million, compared with revenue of $66.9 million for the third quarter of 2013, and exceeded the Company's guidance range for the third 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 20 percent to $40.4 million for the third quarter of 2014 compared with revenue of $33.7 million for the third quarter of 2013.

Critical Care revenue increased 24 percent to $13.3 million for the third quarter of 2014 compared with revenue of $10.7 million for the third quarter of 2013.
Consistent with the Company's expectations, in-center revenue was $19.4 million for the third quarter of 2014 compared with revenue of $21.3 million for the third quarter of 2013.

NxStage reported a net loss of $6.7 million, or $(0.11) per share for the third quarter of 2014 compared with a net loss of $5.0 million, or $(0.08) per share for the third quarter of 2013. The Company's net loss for the third quarter of 2014 was better than its guidance and included $4.1 million in expected losses associated with the Company's market development activities with NxStage Kidney Care, which is designed to support the adoption of home hemodialysis.
"We continue to build solid momentum with our strategic initiatives and deliver strong year-over-year revenue growth ahead of our expectations. Importantly, this consistent outperformance is being driven by increasing adoption of the System One within our largest and fastest growing market opportunities," stated Jeffrey H. Burbank, Founder and Chief Executive Officer of NxStage. "Based on our performance and increasing confidence around the fourth quarter, we expect to exceed our 15% Home revenue growth target for 2014, and we're again raising our total revenue guidance for the year. We are also increasingly confident that 2015 will be another strong year for NxStage, consistent with our target of a sustainable 15% Home revenue growth rate."
Burbank also commented on new data to be presented at the American Society of Nephrology (ASN) meeting in Philadelphia next week.  "Peritoneal dialysis (PD) has historically been the most prevalent therapy in the home.  New data to be presented at this meeting show that mortality, hospitalization and patient dropout are significantly improved with frequent home hemodialysis (HHD) with the System One versus PD.  This data shows that HHD therapy is not just another home alternative, but a differentiated therapy with significant clinical advantages."





Guidance:

The Company now expects full-year revenue for 2014 to be between $296 and $298 million, versus its previous guidance of $290 to $293 million. The Company now expects full-year net loss to be between $24 and $26 million, versus its previous guidance of $23 to $27 million.

For the fourth quarter of 2014, the Company expects revenue to be in a range of $74.5 and $76.5 million, and a net loss in the range of $5 to $7 million.

Conference Call:
NxStage will also host a conference call today, Thursday, November 6, 2014 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 http://ir.nxstage.com.
A replay of the conference call will be available two hours after the completion of the call through November 14, 2014. To access the replay, dial 855-859-2056 (domestic) or 404-537-3406 (international) and reference conference ID 14534785. 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. 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 June 30, 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 September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
 
 
Revenues
$
75,286

 
$
66,873

 
$
221,590

 
$
193,979

Cost of revenues
46,699

 
41,345

 
136,539

 
119,364

Gross profit
28,587

 
25,528

 
85,051

 
74,615

Operating expenses:
 
 
 
 
 
 
 
Selling and marketing
13,873

 
12,374

 
40,680

 
34,786

Research and development
6,182

 
4,450

 
17,024

 
13,924

Distribution
6,427

 
5,326

 
19,462

 
15,271

General and administrative
8,379

 
7,791

 
25,599

 
23,854

Total operating expenses
34,861

 
29,941

 
102,765

 
87,835

Loss from operations
(6,274
)
 
(4,413
)
 
(17,714
)
 
(13,220
)
Other expense:
 
 
 
 
 
 
 
Interest expense
(255
)
 
(162
)
 
(648
)
 
(462
)
Other expense, net
(10
)
 
(142
)
 
(4
)
 
(328
)
 
(265
)
 
(304
)
 
(652
)
 
(790
)
Net loss before income taxes
(6,539
)
 
(4,717
)
 
(18,366
)
 
(14,010
)
Provision for (benefit from) income taxes
295

 
269

 
973

 
(625
)
Net loss
(6,834
)
 
(4,986
)
 
(19,339
)
 
(13,385
)
Less: Net loss attributable to noncontrolling interests
(128
)
 
—

 
(245
)
 
—

Net loss attributable to stockholders of NxStage Medical, Inc.
$
(6,706
)
 
$
(4,986
)
 
$
(19,094
)
 
(13,385
)
 
 
 
 
 
 
 
 
Net loss per share, basic and diluted
$
(0.11
)
 
$
(0.08
)
 
$
(0.31
)
 
$
(0.22
)
Weighted-average shares outstanding, basic and diluted
61,804

 
60,675

 
61,507

 
60,029

 
 
 
 
 
 
 
 
Other comprehensive (loss) income
(1,150
)
 
257

 
(795
)
 
(302
)
Total comprehensive loss
(7,984
)
 
(4,729
)
 
(20,134
)
 
(13,687
)
Less: Comprehensive loss attributable to noncontrolling interests
(128
)
 
—

 
(245
)
 
—

Total comprehensive loss attributable to stockholders of NxStage Medical, Inc.
$
(7,856
)
 
$
(4,729
)
 
$
(19,889
)
 
$
(13,687
)





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

 
September 30,
 
December 31,
 
2014
 
2013
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
54,578

 
$
84,134

Accounts receivable, net
27,069

 
20,158

Inventory
47,874

 
37,801

Prepaid expenses and other current assets
4,841

 
4,027

Total current assets
134,362

 
146,120

Property and equipment, net
62,270

 
52,478

Field equipment, net
19,318

 
13,041

Deferred cost of revenues
33,680

 
34,730

Intangible assets, net
15,080

 
17,194

Goodwill
41,817

 
41,817

Other assets
2,687

 
1,582

Total assets
$
309,214

 
$
306,962

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
22,557

 
$
14,610

Accrued expenses
22,100

 
21,025

Current portion of long-term debt
97

 
102

Other current liabilities
1,954

 
1,870

Total current liabilities
46,708

 
37,607

Deferred revenues
51,763

 
53,277

Long-term debt
921

 
1,044

Other long-term liabilities
23,439

 
20,273

Total liabilities
122,831

 
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 September 30, 2014 and December 31, 2013
—

 
—

Common stock: par value $0.001, 100,000,000 shares authorized; 62,594,563 and 61,666,048 shares issued as of September 30, 2014 and December 31, 2013, respectively
62

 
61

Additional paid-in capital
580,516

 
567,468

Accumulated deficit
(382,636
)
 
(363,542
)
Accumulated other comprehensive income
(583
)
 
212

Treasury stock, at cost: 673,875 and 575,895 shares as of September 30, 2014 and December 31, 2013, respectively
(11,256
)
 
(9,963
)
Total NxStage Medical, Inc. stockholders' equity
186,103

 
194,236

Noncontrolling interest
280

 
525

Total stockholders' equity
186,383

 
194,761

Total liabilities and stockholders’ equity
$
309,214

 
$
306,962

 
 
 
 





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

 
Nine Months Ended September 30,
 
2014
 
2013
 
 
 
 
Cash flows from operating activities:
 
 
 
Net loss
$
(19,339
)
 
$
(13,385
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
Depreciation and amortization
20,295

 
18,430

Stock-based compensation
9,296

 
7,830

Other
1,192

 
2,251

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(7,054
)
 
(3,473
)
Inventory
(29,786
)
 
(14,498
)
Prepaid expenses and other assets
(1,013
)
 
(2,549
)
Accounts payable
8,297

 
49

Accrued expenses and other liabilities
1,967

 
(2,882
)
Deferred revenues
(1,054
)
 
(5,707
)
Net cash used in operating activities
$
(17,199
)
 
$
(13,934
)


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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
System One segment
 
 
 
 
 
 
 
Home
$
40,364

 
$
33,666

 
$
115,347

 
$
97,796

Critical Care
13,271

 
10,671

 
40,385

 
32,207

Total System One segment
53,635

 
44,337

 
155,732

 
130,003

In-Center segment
19,441

 
21,269

 
59,360

 
61,207

Other
1,918

 
1,267

 
5,915

 
2,769

Products subtotal
74,994

 
66,873

 
221,007

 
193,979

Services segment
511

 
—

 
1,055

 
—

Elimination of intersegment revenues
(219
)
 
—

 
(472
)
 
—

     Total
$
75,286

 
$
66,873

 
$
221,590

 
$
193,979




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