LAWRENCE, Mass., May 8 /PRNewswire-FirstCall/ -- NxStage Medical, Inc. , the manufacturer of the NxStage System One (TM) portable kidney dialysis machine, today announced its financial results for the first quarter ended March 31, 2007.
Revenues for the first quarter of 2007 were $8.4 million, compared to $3.4 million in the first quarter of 2006, an increase of 146%. Revenues in the chronic home dialysis market were $5.4 million for the first quarter of 2007, compared to $1.8 million in the first quarter of 2006. Revenues in the critical care market for the first quarter of 2007 were $2.9 million, compared to $1.6 million in the first quarter of 2006.
At the end of the first quarter of 2007, NxStage was working with 200 dialysis centers to provide home hemodialysis therapy with its System One to 1,295 end-stage renal disease (ESRD) patients. This compares to 174 centers and 1,022 patients at the end of 2006. NxStage also continued its successful roll-out of the PureFlow SL, a key element of its margin improvement strategy. At the end of the first quarter 2007, PureFlow penetration reached 47% of all System One machines in the chronic market.
“I am very pleased with our strategic accomplishments in the first quarter, as we focused on long-term initiatives to drive NxStage’s growth and increase the Company’s gross margins,” said Jeffrey H. Burbank, President & CEO of NxStage Medical. “We formed three long-term distribution collaborations with our top dialysis center partners, signed two key, long- term supply agreements, and established plans to begin manufacturing in Mexico. We expect that these initiatives will raise awareness of home hemodialysis, increase patient access to the System One and reduce our product costs, while advancing NxStage’s mission of transforming renal care.”
NxStage reported a net loss of $12.0 million, or ($0.41) per share, for the first quarter of 2007, compared with a net loss of $9.3 million, or ($0.44) per share, for the first quarter of 2006, reflecting increased sales and marketing and distribution expenses to support the Company’s commercialization efforts.
Cash, cash equivalents and short term investments as of March 31, 2007 were $70.7 million, compared to $61.8 million at the end of 2006. The balance at the end of the first quarter reflects the net proceeds of $20 million from the sale of 2,000,000 shares of common stock to DaVita Inc.
Recent Highlights
In the first quarter of 2007, NxStage announced multiple strategic initiatives designed to drive the growth of System One and increase the Company’s gross margins, including:
-- Long-term agreements with two of its key suppliers, Medisystems Corporation and Membrana GmbH, as part of a broad strategy to reduce product costs and secure supply to meet the growing demand for the System One; -- A multi-year, national distribution agreement, with certain market rights, for the System One with DaVita under which the two companies will collaborate on expanding the availability of home hemodialysis to patients. DaVita made a $20 million investment in the Company’s stock, purchased its existing base of System One machines for $5 million and agreed to purchase, rather than rent, the majority of its equipment requirements going forward; -- Multi-year distribution agreements for the System One with Wellbound and Renal Advantage, two other leading dialysis chains; and -- Plans to initiate manufacturing of certain System One products in Mexico as part of its ongoing efforts to reduce product costs and optimize operations. Beginning this month, NxStage expects to execute a phased relocation of the manufacture of its PureFlow SL disposables and System One cycler to a new facility in Mexico provided by The Entrada Group.
Guidance
For the second quarter of 2007, NxStage expects revenue to be in the range of $9.7 million to $10.3 million. The Company expects a net loss in the range of ($12.4) million to ($12.8) million or ($0.41) to ($0.43) per share, including estimated non-cash stock-based stock compensation charges of $750,000 to $850,000. The Company expects to add approximately 300 to 340 additional net patients and 30 to 40 new centers offering therapy with the NxStage System One during the second quarter.
For the full year 2007, the Company expects revenue to be in the range of $42.0 million to $45.0 million and to end the year with 2,200 to 2,400 patients at approximately 330 centers offering therapy with the NxStage System One.
Conference Call
NxStage will host a conference call at 9:00 a.m. Eastern Time on May 8, 2007 to discuss its first quarter financial results, including a review of the accounting treatment of its new distribution agreements. To listen to the conference call, please dial 800.706.7741 for domestic callers and 617.614.3471 for international callers. The passcode is 20637159. A replay of the conference call will be available two hours after the start of the call through May 15, 2007 by dialing 888.286.8010 (domestic) and 617.801.6888 (international), passcode 40695121. An online archive of the conference call will also be available by accessing the Investor Information section of the Company’s website at http://www.nxstage.com.
About NxStage Medical
NxStage Medical, Inc. is a medical device company, headquartered in Lawrence, Massachusetts, USA, that develops, manufactures and markets innovative systems for the treatment of end-stage renal disease, or ESRD, and acute kidney failure. For more information on NxStage and its products, please visit the Company’s website at http://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 home and/or daily hemodialysis products, the anticipated market acceptance and demand for NxStage’s products, anticipated increases in the availability of, and market and patient awareness regarding, home hemodialysis, anticipated secure supply of products, anticipated reductions in cost of goods sold, anticipated margin improvements, anticipated patient numbers, expected production in Mexico, expected PureFlow SL adoption and 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 System One, growth in home and/or daily hemodialysis, 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 the Annual Report on Form 10-K for the year ended December 31, 2006.
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.
NxStage Medical, Inc. Consolidated Statements of Operations (unaudited) Three-months ended March 31, 2007 2006 Revenues (includes $1,884,166 and $456,394, respectively, from affiliate) $8,373,993 $3,400,722 Cost of revenues 9,917,161 4,857,254 Gross profit (deficit) (1,543,168) (1,456,532) Operating expenses: Selling and marketing 4,731,580 3,192,983 Research and development 1,435,806 1,778,894 Distribution 2,344,441 1,289,599 General and administrative 2,667,022 1,974,729 Total operating expenses 11,178,849 8,236,205 Loss from operations (12,722,017) (9,692,737) Other income (expense): Interest income 903,960 595,407 Interest expense (175,068) (157,640) 728,892 437,767 Net loss $(11,993,125) $(9,254,970) Net loss per share - basic and diluted $(0.41) $(0.44) Weighted average shares outstanding, basic and diluted 29,019,836 21,182,717 NxStage Medical, Inc. Consolidated Balance Sheets (unaudited) March 31, 2007 December 31, 2006 Assets Current assets: Cash and cash equivalents $53,189,692 $49,958,540 Short-term investments 17,481,298 11,843,275 Accounts receivable, net (including affiliate amounts of $2,106,395 and $769,040, respectively) 7,073,365 4,301,557 Inventory 13,302,342 10,419,030 Prepaid expenses and other current assets 719,419 1,014,688 Total current assets 91,766,116 77,537,090 Property and equipment, net 3,234,929 3,025,560 Field equipment, net 19,794,189 20,615,952 Other assets 6,779,118 546,178 Total assets $121,574,352 $101,724,780 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $8,993,380 $5,918,437 Accrued expenses 4,683,108 4,104,058 Current portion of long-term debt 2,800,000 2,800,000 Total current liabilities 16,476,488 12,822,495 Deferred rent obligation 633,409 648,604 Deferred revenue 10,468,349 228,542 Long-term debt 3,916,667 4,616,667 Total liabilities 31,494,913 18,316,308 Commitments and contingencies Stockholders’ equity: Undesignated preferred stock: par value $0.001, 5,000,000 shares authorized; zero shares issued and outstanding as of March 31, 2007 and December 31, 2006 - - Common stock: par value $0.001, 100,000,000 shares authorized; 29,923,695 and 27,806,543 shares issued and outstanding as of March 31, 2007 and December 31, 2006, respectively 29,924 27,807 Additional paid-in capital 225,505,287 206,848,097 Accumulated deficit (135,633,566) (123,640,441) Accumulated other comprehensive income (loss) 177,794 173,009 Total stockholders’ equity 90,079,439 83,408,472 Total liabilities and stockholders’ equity $121,574,352 $101,724,780 NxStage Medical, Inc. Revenue by Market: Three-months ended March 31, 2007 2006 Critical Care Market $2,939,297 $1,584,607 Chronic Care Market 5,434,696 1,816,115 Total $8,373,993 $3,400,722 Business Metrics: March 31, December 31, March 31, 2007 2006 2006 Chronic patients on therapy 1295 1022 459 Dialysis centers with System One 200 174 97
NxStage Medical, Inc.
CONTACT: Investor Relations: Stephanie Marks of NxStage, +1-888-698-6472,ir@nxstage.com
Web site: http://www.nxstage.com//
