FRAMINGHAM, Mass., Feb. 26, 2015 /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 $73.2 million
for the fourth quarter ended December 31,
2014, a 38% increase compared to $53.1 million in revenue for the same period of
2013. For the fiscal year 2014, the company generated revenue
of $278.4 million, a 34% increase
compared to revenue of $207.9 million
in 2013.
During the fourth quarter, 737 HeartWare® Ventricular
Assist Systems were sold globally, compared to 524 units in the
fourth quarter of 2013. U.S. revenue, generated through the
sale of 382 units during the fourth quarter of 2014, was
$41.5 million, a 60% increase from
$25.9 million in the fourth quarter
of 2013. Revenue from international markets, derived through
the sale of 355 units, was $31.7
million, an increase of 17% from $27.1 million in the fourth quarter of
2013. Currency fluctuations offset total revenue performance
in the fourth quarter by approximately $1.9
million, or 3.7 percentage points, compared to the fourth
quarter of 2013.
"With record unit sales in the fourth quarter contributing to
more than 2,750 units sold globally during 2014, as well as the
addition of more than 50 hospital centers around the world, we
continue to be encouraged by the growing adoption of the HeartWare
System," said Doug Godshall,
President and Chief Executive Officer. "During the year, we
completed enrollment in our Japan
bridge-to-transplant study, ramped enrollment in the supplemental
cohort of our U.S. Destination Therapy study, advanced our
technology pipeline, made significant upgrades to our quality
systems, improved our gross margin, and concluded the year by
initiating the submission process for our CE Marking Trial
Application for our next-generation MVAD® System."
"Looking ahead, 2015 promises to be a busy year as we initiate
our MVAD® System CE Marking trial, file our MVAD trial
protocol in the U.S., complete enrollment in our destination
therapy trial, present initial clinical data evaluating the
HeartWare System as a destination therapy, and advance our
HVAD® LATERAL study evaluating the thoracotomy implant
technique," Godshall added.
Gross margin percentage improved to 68.1% in the fourth quarter
of 2014, as compared to 63.6% in the fourth quarter of 2013.
The improvement compared to the same period in 2013 primarily
reflects efficiencies associated with increased manufacturing
throughput. For the year ended December 31, 2014, gross margin improved four
points over the same period in 2013.
Total operating expenses for the fourth quarter of 2014 were
$45.8 million, as compared to
$53.3 million in the fourth quarter
of 2013. Total operating expenses for the fourth quarter of
2014 include a $9.1 million reduction
in the estimated fair value of future contingent consideration
payments for CircuLite as a result of the Company's decision to
replace CircuLite's Synergy micro pump with a version of
HeartWare's MVAD for future development and
commercialization. Also related to this decision, HeartWare
recognized an impairment charge of $2.7
million with respect to in-process R&D acquired from
CircuLite in connection with the 2013 acquisition. Total operating
expenses for 2014 were $186.3
million, a four percent increase from the same period in
2013.
Research and development expense was $33.5 million for the fourth quarter of 2014,
which compared to $30.3 million in
the same period in 2013. The $3.2
million net increase was comprised of a $1.2 million increase in project spending, a
$3.0 million increase as a result of
FDA warning letter remediation costs, and a decrease of
$1.0 million in non-recurring
impairment charges compared to the fourth quarter of 2013.
Selling, general and administrative expenses were $21.4 million in the fourth quarter of 2014,
compared to $23.0 million in the
fourth quarter of 2013 which included approximately $2.9 million of CircuLite acquisition and
severance expenses. Net of these prior-year expenses,
selling, general and administrative expenses increased as a result
of revenue growth.
Net loss for the fourth quarter of 2014 was $0.9 million, or $0.05 per basic and diluted share, compared to a
net loss of $22.0 million, or a loss
of $1.33 per basic and diluted share,
in the fourth quarter of 2013. Net loss for the fourth
quarter of 2014 includes the benefit of the $9.1 million contingent consideration fair value
adjustment and the $2.7 million
in-process R&D charge which are discussed above. For the
fiscal year ended December 31, 2014,
the company recorded a net loss of $19.4
million, or a loss of $1.14
per basic and diluted share, compared to a $59.3 million net loss, or a loss of $3.69 per basic and diluted share, in fiscal year
2013.
Non-GAAP net loss for the fourth quarter of 2014 was
$6.9 million, or $0.41 per basic and diluted share, compared to a
loss of $15.2 million, or
$0.92 per basic and diluted share in
the fourth quarter of 2013. Non-GAAP net loss for 2014 was
$34.6 million, or $2.03 per basic and diluted share, compared to a
loss of $51.9 million, or
$3.23 per basic and diluted share, in
2013. See "Use of Non-GAAP Financial Measures" and
"Reconciliation of GAAP to Non-GAAP Net Loss per Common Share."
At December 31, 2014, HeartWare
had $179.7 million of cash, cash
equivalents and investments, a $1.8
million reduction from the end of the third quarter
2014.
Conference Call and Webcast Information
HeartWare
will host a conference call on Thursday,
February 26, 2015 at 8:00
a.m., U.S. Eastern Time to discuss its financial results,
highlights from the fourth quarter and the company's business
outlook. The call may be accessed by dialing 1-877-407-0789
five minutes prior to the scheduled start time and referencing
"HeartWare." Callers outside the U.S. should dial
+1-201-689-8562.
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.
About HeartWare International
HeartWare International
develops and manufactures miniaturized implantable heart pumps, or
ventricular assist devices, to treat 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 41 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.
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 adjusted net
loss" and "non-GAAP adjusted net loss per common 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 Common
Share."
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, progress and outcomes of clinical
trials, regulatory and quality compliance, 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@heartware.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,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
Revenue,
net
|
$ 73,209
|
|
$ 53,054
|
|
$ 278,420
|
|
$ 207,929
|
Cost of
revenue
|
23,349
|
|
19,293
|
|
92,195
|
|
76,468
|
Gross
profit
|
49,860
|
|
33,761
|
|
186,225
|
|
131,461
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
21,412
|
|
22,976
|
|
87,177
|
|
76,524
|
Research and
development
|
33,451
|
|
30,281
|
|
122,432
|
|
102,483
|
Change in fair value
of contingent consideration
|
(9,080)
|
|
—
|
|
(23,260)
|
|
—
|
Total operating
expenses
|
45,783
|
|
53,257
|
|
186,349
|
|
179,007
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
4,077
|
|
(19,496)
|
|
(124)
|
|
(47,546)
|
|
|
|
|
|
|
|
|
Other expense,
net
|
(5,096)
|
|
(1,926)
|
|
(18,682)
|
|
(11,298)
|
Loss before
taxes
|
(1,019)
|
|
(21,422)
|
|
(18,806)
|
|
(58,844)
|
Income tax (benefit)
expense
|
(103)
|
|
626
|
|
560
|
|
467
|
Net loss
|
$ (916)
|
|
$ (22,048)
|
|
$ (19,366)
|
|
$ (59,311)
|
|
|
|
|
|
|
|
|
Net loss per common
share -
|
|
|
|
|
|
|
|
basic and diluted
|
$ (0.05)
|
|
$ (1.33)
|
|
$ (1.14)
|
|
$ (3.69)
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding -
|
|
|
|
|
|
|
|
basic and diluted
|
17,037
|
|
16,574
|
|
16,992
|
|
16,066
|
|
|
|
|
|
|
|
|
HEARTWARE
INTERNATIONAL, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
thousands)
(unaudited)
|
|
|
|
December 31,
2014
|
|
December 31,
2013
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
102,946
|
|
$
162,880
|
Short-term
investments
|
75,535
|
|
37,596
|
Accounts receivable,
net
|
38,041
|
|
28,052
|
Inventories
|
54,046
|
|
40,876
|
Prepaid expenses and
other current assets
|
5,975
|
|
11,205
|
Total current
assets
|
276,543
|
|
280,609
|
Property, plant and
equipment, net
|
19,036
|
|
18,562
|
Other assets,
net
|
128,234
|
|
130,656
|
Total
assets
|
$
423,813
|
|
$
429,827
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
13,322
|
|
$
17,914
|
Other accrued
liabilities
|
36,589
|
|
35,276
|
Total current
liabilities
|
49,911
|
|
53,190
|
Convertible senior
notes, net
|
114,803
|
|
107,125
|
Other long-term
liabilities
|
50,565
|
|
70,905
|
Stockholders'
equity
|
208,534
|
|
198,607
|
Total liabilities and
stockholders' equity
|
$
423,813
|
|
$
429,827
|
Reconciliation of
GAAP to Non-GAAP Net Loss per Common Share (unaudited) (see
explanation of adjustments below) (in thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$ (916)
|
|
$ (22,048)
|
|
$ (19,366)
|
|
$ (59,311)
|
|
|
|
|
|
|
|
|
|
GAAP net loss per
common share – basic and diluted
|
|
$ (0.05)
|
|
$ (1.33)
|
|
$ (1.14)
|
|
$ (3.69)
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Amortization
and impairment of purchased intangible assets and
goodwill
|
(a)
|
|
|
|
|
|
|
|
-Selling,
general and administrative
|
|
84
|
|
28
|
|
337
|
|
28
|
-Research
and development
|
|
2,998
|
|
3,806
|
|
3,719
|
|
3,868
|
Acquisition-related transaction costs
|
(b)
|
—
|
|
2,349
|
|
—
|
|
2,849
|
Contingent
consideration adjustments
|
(c)
|
(9,080)
|
|
—
|
|
(23,260)
|
|
—
|
Restructuring
costs
|
(d)
|
|
|
|
|
|
|
|
-Selling,
general and administrative
|
|
(22)
|
|
649
|
|
2,962
|
|
649
|
-Research
and development
|
|
—
|
|
—
|
|
1,032
|
|
—
|
Total
adjustments
|
|
(6,020)
|
|
6,832
|
|
(15,210)
|
|
7,394
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net
loss
|
|
$ (6,936)
|
|
$ (15,216)
|
|
$ (34,576)
|
|
$ (51,917)
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net
loss per common share – basic and diluted
|
|
$ (0.41)
|
|
$ (0.92)
|
|
$ (2.03)
|
|
$ (3.23)
|
|
|
|
|
|
|
|
|
|
Shares used in
computing non-GAAP adjusted net loss per common share – basic and
diluted
|
|
17,037
|
|
16,574
|
|
16,992
|
|
16,066
|
|
|
|
|
(a)
|
Represents
amortization of purchased intangible assets related to CircuLite
and WorldHeart.
|
(b)
|
Represents
transaction costs associated with the acquisition of CircuLite in
December 2013.
|
(c)
|
Represents the change
in fair value of contingent consideration associated with the
acquisition of CircuLite in December 2013.
|
(d)
|
Represents certain
restructuring costs, as follows (in thousands):
|
|
|
|
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
Lease exit charge for
HeartWare's
former Massachusetts
corporate offices
|
|
$ (13)
|
|
—
|
|
$ 359
|
|
—
|
|
|
|
|
|
|
|
|
|
Charges related to
CircuLite acquisition:
|
|
|
|
|
|
|
|
|
Lease exit
charge for former
N.J.
corporate
offices
|
|
16
|
|
—
|
|
1,730
|
|
—
|
Contract
termination costs
|
|
—
|
|
—
|
|
688
|
|
—
|
Employee
severance
|
|
(25)
|
|
649
|
|
588
|
|
649
|
Abandoned
fixed assets
|
|
—
|
|
—
|
|
629
|
|
—
|
Total
|
|
(9)
|
|
649
|
|
3,635
|
|
649
|
|
|
|
|
|
|
|
|
|
Total restructuring
costs
|
|
$ (22)
|
|
$ 649
|
|
$ 3,994
|
|
$ 649
|
The terms "non-GAAP adjusted net loss" and "non-GAAP adjusted
net loss per common share" refer to GAAP net loss and GAAP net loss
per common share excluding certain adjustments such as amortization
of purchased intangible assets, impairment charges, purchase
accounting and acquisition-related transaction costs, and
restructuring and severance costs as follows:
- We exclude amortization of purchased intangible assets and
periodic impairment charges related to long-lived assets from this
measure because such 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.
- 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 value adjustments.
- 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.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/heartware-international-reports-732-million-in-fourth-quarter-2014-revenue-38-increase-from-fourth-quarter-2013-300041866.html
SOURCE HeartWare International, Inc.