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 3, 2015

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 3, 2015, NxStage Medical, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2015, 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 3, 2015





EXHIBIT INDEX

Exhibit No.
 
Description
99

 
NxStage Medical's press release dated November 3, 2015.







NXSTAGE REPORTS RECORD THIRD QUARTER FINANCIAL RESULTS AND INCREASES FINANCIAL GUIDANCE FOR 2015
•
Revenue Increases to $86.5 million, up 15% from Q3'14
•
Home Revenue Increases to $46.5 million, up 15% from Q3'14
•
Company Raises Full-Year 2015 Revenue Guidance to be between $332 and $333 million and Narrows Net Loss Guidance
•
Company Hosts Financial Analyst Day and Unveils Innovation Pipeline


LAWRENCE, Mass., November 3, 2015, --NxStage Medical, Inc. (Nasdaq: NXTM), a leading manufacturer of innovative dialysis products, today reported third quarter financial results above the top end of its guidance ranges.
Revenue for the third quarter of 2015 increased 15 percent to $86.5 million, compared with revenue of $75.3 million for the third quarter of 2014. The Company's revenue guidance range for the third quarter was $82.0 million to $83.0 million. The increase was driven by the System One segment which consists of Home and Critical Care.
Home revenue increased 15 percent to $46.5 million for the third quarter of 2015 compared with revenue of $40.4 million for the third quarter of 2014.

Critical Care revenue increased 23 percent to $16.3 million for the third quarter of 2015 compared with revenue of $13.3 million for the third quarter of 2014.
Consistent with the Company's guidance, In-center revenue was $19.4 million for the third quarter of 2015 compared with revenue of $19.4 million for the third quarter of 2014.

Net loss attributable to NxStage Medical, Inc.'s stockholders improved to $1.7 million for the third quarter of 2015 compared with a net loss of $6.7 million for the third quarter of 2014. NxStage Medical, Inc.'s net loss for the third quarter of 2015 was better than its guidance for a net loss of $4.5 million to $5.5 million and included $4.2 million of income from operations from the Products Business and $5.6 million in losses from operations from the Services segment, NxStage Kidney Care, less noncontrolling interest.

"Based on our performance and confidence around the fourth quarter, we are again raising our total revenue guidance for the year," said Jeffrey H. Burbank, Founder and CEO of NxStage. "We remain confident in our 15% annual home revenue growth target for 2015. We are also increasingly confident that 2016 will be another strong year for NxStage, consistent with our target of a sustainable 15% Home revenue growth rate."

Regarding the Company's innovation pipeline, Burbank showcased key elements of the products in development including new features and functionality designed to delight patients, reduce supplies, increase ease of use and expand clinical flexibility. Burbank also unveiled details of the Company's next generation fluid system designed for universal fluid delivery across both its existing and future therapy portfolio.

"A significant advantage of our innovations is that both our current and next generation fluid systems are fully interoperable with our current and next generation hemodialysis systems, our new peritoneal dialysis (PD) system and our next generation critical care system, and are specifically designed to easily build on investments our customers and patients have already made in our equipment. This simple, yet elegant a




pproach is expected to help customers bridge from our existing systems to our new technologies and access other modalities and therapy paradigms in a cost effective manner," said Burbank.
The Company reiterated its expectation that it would begin launching its next generation hemodialysis system late next year.


Guidance:
The Company now expects full-year revenue for 2015 to be between $332 and $333 million, versus its previously increased guidance for revenue to be at the high end of its range of $324 to $328 million. The Company now expects full-year net loss to be between $15 and $16 million, versus its previous guidance of $18 to $20 million, which was revised from its original guidance of $20 to $24 million.

For the fourth quarter of 2015, the Company expects revenue to be in a range of $86 and $87 million, and a net loss in the range of $2 to $3 million. The Company's net loss guidance reflects expectations for continued operating income from the Products Business offset by the Company's continued investment in NxStage Kidney Care.

Webcast Information:
NxStage will host its Financial Analyst Day today beginning at 9:00 a.m. Eastern Time to discuss its third quarter financial results and its latest breakthrough technologies. NxStage invites the public and media to view the presentation slides and listen to the live audio webcast of the event through the Investor Relations section of the Company's website at http://ir.nxstage.com. An audio replay of the webcast and a copy of the presentation slides will be available shortly after the end of the event at the same location. 


About the NxStage System One

The NxStage System One is the first and only truly portable hemodialysis system cleared specifically by the FDA for home hemodialysis and home nocturnal hemodialysis. 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, including while they are sleeping - at home or on vacation and at a medically appropriate treatment frequency. In addition, NxStage's Nx2Me Connected Health platform collects important System One and patient information for flexible viewing, monitoring and reporting that may improve patient management and simplify alternative site care. 


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 cash usage, anticipated success and timing of new product introductions, 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, unanticipated difficulties in developing and commercializing new products, 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 most recent quarterly or annual report.


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,
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
Revenues
$
86,521

 
$
75,286

 
$
246,319

 
$
221,590

Cost of revenues
51,803

 
46,699

 
150,611

 
136,539

Gross profit
34,718

 
28,587

 
95,708

 
85,051

Operating expenses:
 
 
 
 
 
 
 
Selling and marketing
14,445

 
13,873

 
43,511

 
40,680

Research and development
6,752

 
6,182

 
19,248

 
17,024

Distribution
6,514

 
6,427

 
19,140

 
19,462

General and administrative
8,642

 
8,379

 
26,139

 
25,599

Total operating expenses
36,353

 
34,861

 
108,038

 
102,765

Loss from operations
(1,635
)
 
(6,274
)
 
(12,330
)
 
(17,714
)
Other income (expense):
 
 
 
 
 
 
 
Interest expense
(312
)
 
(255
)
 
(795
)
 
(648
)
Other income (expense), net
235

 
(10
)
 
536

 
(4
)
Total other expense
(77
)
 
(265
)
 
(259
)
 
(652
)
Net loss before income taxes
(1,712
)
 
(6,539
)
 
(12,589
)
 
(18,366
)
Provision for income taxes
290

 
295

 
870

 
973

Net loss
(2,002
)
 
(6,834
)
 
(13,459
)
 
(19,339
)
Less: Net loss attributable to noncontrolling interests
(315
)
 
(128
)
 
(787
)
 
(245
)
Net loss attributable to stockholders of NxStage Medical, Inc.
$
(1,687
)
 
$
(6,706
)
 
$
(12,672
)
 
$
(19,094
)
 
 
 
 
 
 
 
 
Net loss per share, basic and diluted
$
(0.03
)
 
$
(0.11
)
 
$
(0.20
)
 
$
(0.31
)
Weighted-average shares outstanding, basic and diluted
63,528

 
61,804

 
63,215

 
61,507

 
 
 
 
 
 
 
 
Other comprehensive loss
(829
)
 
(1,150
)
 
(1,759
)
 
(795
)
Total comprehensive loss
(2,831
)
 
(7,984
)
 
(15,218
)
 
(20,134
)
Less: Comprehensive loss attributable to noncontrolling interests
(315
)
 
(128
)
 
(787
)
 
(245
)
Total comprehensive loss attributable to stockholders of NxStage Medical, Inc.
$
(2,516
)
 
$
(7,856
)
 
$
(14,431
)
 
$
(19,889
)




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

 
September 30,
 
December 31,
 
2015
 
2014
 
 
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
51,308

 
$
52,884

Accounts receivable, net
30,572

 
24,099

Inventory
42,576

 
45,401

Prepaid expenses and other current assets
7,054

 
6,767

Total current assets
131,510

 
129,151

Property and equipment, net
65,203

 
66,574

Field equipment, net
19,811

 
21,118

Deferred cost of revenues
33,739

 
34,039

Intangible assets, net
12,256

 
14,370

Goodwill
41,817

 
41,817

Other assets
2,525

 
2,657

Total assets
$
306,861

 
$
309,726

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
12,843

 
$
13,845

Accrued expenses
26,347

 
24,653

Current portion of long-term debt
251

 
93

Other current liabilities
4,919

 
6,165

Total current liabilities
44,360

 
44,756

Deferred revenues
52,346

 
52,943

Long-term debt
1,833

 
848

Other long-term liabilities
18,551

 
19,624

Total liabilities
117,090

 
118,171

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, 2015 and December 31, 2014
—

 
—

Common stock: par value $0.001, 100,000,000 shares authorized; 64,489,990 and 63,429,005 shares issued as of September 30, 2015 and December 31, 2014, respectively
64

 
63

Additional paid-in capital
606,780

 
593,073

Accumulated deficit
(400,160
)
 
(387,488
)
Accumulated other comprehensive loss
(3,951
)
 
(2,192
)
Treasury stock, at cost: 815,779 and 772,273 shares as of September 30, 2015 and December 31, 2014, respectively
(13,734
)
 
(12,989
)
Total NxStage Medical, Inc. stockholders' equity
188,999

 
190,467

Noncontrolling interest
772

 
1,088

Total stockholders' equity
189,771

 
191,555

Total liabilities and stockholders’ equity
$
306,861

 
$
309,726

 
 
 
 





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

 
Nine Months Ended September 30,
 
2015
 
2014
 
 
 
 
Cash flows from operating activities:
 
 
 
Net loss
$
(13,459
)
 
$
(19,339
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
23,240

 
20,295

Stock-based compensation
9,590

 
9,296

Other
748

 
1,192

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(6,560
)
 
(7,054
)
Inventory
(10,977
)
 
(29,786
)
Prepaid expenses and other assets
(85
)
 
(1,013
)
Accounts payable
(613
)
 
8,297

Accrued expenses and other liabilities
(64
)
 
1,967

Deferred revenues
(204
)
 
(1,054
)
Net cash provided by (used in) operating activities
$
1,616

 
$
(17,199
)


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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2015
 
2014
 
2015
 
2014
System One segment
 
 
 
 
 
 
 
Home
$
46,473

 
$
40,364

 
$
134,760

 
$
115,347

Critical Care
16,347

 
13,271

 
47,060

 
40,385

Total System One segment
62,820

 
53,635

 
181,820

 
155,732

In-Center segment
19,440

 
19,441

 
55,870

 
59,360

Other
3,418

 
1,918

 
7,122

 
5,915

Products subtotal
85,678

 
74,994

 
244,812

 
221,007

Services segment
1,753

 
511

 
3,567

 
1,055

Elimination of intersegment revenues
(910
)
 
(219
)
 
(2,060
)
 
(472
)
     Total
$
86,521

 
$
75,286

 
$
246,319

 
$
221,590






NxStage Medical, Inc.
Segment Financial Performance
(in thousands)
(unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2015
 
2014
 
2015
 
2014
Products (System One, In-Center and Other)
 
 
 
 
 
 
 
Revenues
$
85,678

 
$
74,994

 
$
244,812

 
$
221,007

Gross profit
$
38,397

 
$
30,677

 
$
106,884

 
$
89,783

Gross margin percentage
45
%
 
41
%
 
44
%
 
41
%
Income (Loss) from operations
$
4,231

 
$
(2,148
)
 
$
5,389

 
$
(7,387
)
Services
 
 
 
 
 
 
 
Revenues
$
1,753

 
$
511

 
$
3,567

 
$
1,055

Gross profit
$
(3,679
)
 
$
(2,090
)
 
$
(11,176
)
 
$
(4,732
)
Gross margin percentage
n/a

 
n/a

 
n/a

 
n/a

Loss from operations
$
(5,866
)
 
$
(4,126
)
 
$
(17,719
)
 
$
(10,327
)
Eliminations
 
 
 
 
 
 
 
Elimination of intersegment revenues
$
(910
)
 
$
(219
)
 
$
(2,060
)
 
$
(472
)
Total Company
 
 
 
 
 
 
 
Revenues
$
86,521

 
$
75,286

 
$
246,319

 
$
221,590

Gross profit
$
34,718

 
$
28,587

 
$
95,708

 
$
85,051

Gross margin percentage
40
%
 
38
%
 
39
%
 
38
%
Loss from operations
$
(1,635
)
 
$
(6,274
)
 
$
(12,330
)
 
$
(17,714
)



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