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): October 29, 2015
HEARTWARE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
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Delaware |
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001-34256 |
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26-3636023 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(I.R.S. Employer
Identification No.) |
500 Old Connecticut Path
Framingham, MA 01701
(Address of principal executive offices)
Registrants telephone number, including area code:
508.739.0950
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:
x |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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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 October 29, 2015, HeartWare International, Inc. (Nasdaq: HTWR) (HeartWare), issued a press release announcing financial results for
the quarter ended September 30, 2015. A copy of the release is included with this report as Exhibit 99.1.
The information in this
Item 2.02 and Exhibit 99.1 attached hereto shall be considered filed for purposes of Section 18 of the Securities Exchange Act of 1934 (the Exchange Act) and can be incorporated by reference in any
filing under the Securities Act of 1933, as amended (the Securities Act) or the Exchange Act.
Item 8.01 Other Events.
Reference is made to Item 2.02 above.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits
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Exhibit
No. |
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Description |
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99.1 |
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Press Release issued by HeartWare International, Inc. dated October 29, 2015, to be considered filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
Important Information
As previously disclosed, HeartWare intends to acquire Valtech as set forth in that certain Business Combination Agreement, dated as of September 1, 2015,
by and among HeartWare, Valtech Cardio Ltd., a private company incorporated under the laws of Israel (Valtech), HW Global, Inc., a Delaware corporation and a direct wholly owned subsidiary of HeartWare (Holdco),
HW Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of Holdco (US Merger Sub), Valor Merger Sub Ltd., a private company incorporated under the laws of Israel and a direct wholly owned subsidiary of
Holdco (ISR Merger Sub) and Valor Shareholder Representative, LLC, a Delaware limited liability company, pursuant to which, subject to satisfaction or waiver of the conditions therein, HeartWare and Valtech will effect a strategic
combination of their respective businesses under Holdco wherein (a) US Merger Sub shall merge with and into HeartWare, with HeartWare surviving the merger as a wholly owned subsidiary of Holdco (the US Merger), and
(b) ISR Merger Sub shall merge with and into Valtech, with Valtech surviving the merger as a subsidiary of Holdco (the ISR Merger, together with the US Merger and the other transactions contemplated by the Business
Combination Agreement, the Transactions).
Additional Information about the Transactions and Where to Find It
In connection with the proposed Transactions, Holdco has filed a Registration Statement on Form S-4 that contains a preliminary proxy statement/prospectus,
which is not yet final and will be amended. Holdco intends to file a final prospectus and other relevant materials and HeartWare intends to file a definitive proxy statement and other relevant materials with the SEC in connection with the proposed
Transactions. Investors and security holders of HeartWare and Valtech are urged to read these materials when they become available because they will contain important information about HeartWare, Valtech and the Transactions. The proxy
statement/prospectus and other relevant materials (when they become available), and any other documents filed by Holdco or HeartWare with the SEC, may be obtained free of charge at the SEC website at www.sec.gov. In addition, investors and security
holders may obtain free copies of the documents filed with the SEC by Holdco or HeartWare by directing a written request to HeartWares investor relations department at HeartWare International, Inc., 500 Old Connecticut Path, Framingham, MA
01701, Attention: Investor Relations. Investors and security holders are urged to read the proxy statement/prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the
Transactions.
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Participants in the
Solicitation
HeartWare, Valtech and their respective directors, executive officers, certain members of management and certain employees may be deemed
to be participants in the solicitation of proxies from the stockholders of HeartWare and Valtech in connection with the proposed transaction. Information regarding the special interests of HeartWares directors and executive officers in the
transaction is included in the proxy statement/prospectus referred to above. Additional information regarding the directors and executive officers of HeartWare is also included in the HeartWare Annual Report on Form 10-K for the year ended
December 31, 2014, which was filed with the SEC on March 2, 2015. This document is available free of charge at the SEC website (www.sec.gov) and from Investor Relations at HeartWare at the address described above.
Forward-Looking Statements
This Current Report on Form
8-K contains forward-looking statements within the meaning of the Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve certain risks and
uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements, including, but not limited to, the ability of the parties to consummate the proposed Transactions; satisfaction of closing
conditions to the consummation of the proposed Transactions; the impact of the announcement of the proposed Transactions on HeartWares relationships with its employees, existing customers or potential future customers; and such other risks and
uncertainties pertaining to HeartWares business as detailed in its filings with the SEC on Forms 10-K and 10-Q, which are available on the SECs website at www.sec.gov. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date thereof. HeartWare assumes no obligation to update any forward-looking statement contained in this document.
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.
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HeartWare International, Inc. |
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Date: October 29, 2015 |
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By: |
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/s/ Lawrence J. Knopf |
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Name: Lawrence J. Knopf |
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Title: Senior Vice President, General Counsel and Secretary |
INDEX TO EXHIBITS
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Exhibit
No. |
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Description |
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99.1 |
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Press Release issued by HeartWare International, Inc. dated October 29, 2015, to be considered filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. |
Exhibit 99.1
HEARTWARE INTERNATIONAL REPORTS
THIRD QUARTER 2015 RESULTS
Total revenue of $65.2 million reflects completion of enrollment in destination therapy
clinical trial and international currency weakness
International unit sales
increased 18% from third quarter of 2014
697 HeartWare HVAD® Systems sold worldwide
Conference call today at 8:00 a.m. U.S. ET
Framingham, Mass., October 29, 2015 - 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 total revenue of $65.2 million for the quarter ended September 30, 2015, compared to $68.6 million for the third quarter of 2014. Currency
fluctuations impacted revenue growth by approximately $4.9 million, or seven percentage points, during the three months ended September 30, 2015, as compared to the same period in 2014. Third quarter global revenue increased 2.2% on a
constant-currency basis, compared to the same period in 2014.
Our financial performance during the third quarter demonstrated the underlying
strength of our business but was impacted by anticipated headwinds, including clinical trial activity and foreign currency fluctuation, said Doug Godshall, President and Chief Executive Officer. The HVAD® System drove strong, double-digit international unit sales growth for the second quarter in a row, signifying continued physician confidence in HVAD as the leading ventricular assist therapy for
end-stage heart failure.
In early August, we successfully completed enrollment in the 465-patient ENDURANCE2 destination therapy study of our HVAD
System. As a result, we sold 15 units for the destination therapy study in the third quarter of 2015, compared to 62 units sold for this study in the third quarter of 2014. Exclusive of ENDURANCE2 trial units, U.S. unit sales increased by
approximately 4% over the third quarter of 2014, added Mr. Godshall. We plan to complete the one-year patient follow-up for ENDURANCE2 next summer and prepare a Pre-Market Approval (PMA) application for submission late next year,
seeking a destination therapy indication.
During the third quarter, a total of 697 HeartWare HVAD Systems were sold globally, which represented a
3.3% increase from 675 units sold during the same period in 2014. U.S. revenue, generated through the sale of 327 units during the third quarter of 2015, was $35.6 million, or an 8.9% decrease from the third quarter of 2014, due to the completion of
ENDURANCE2 enrollment during the quarter. International revenue, generated through the sale of 370 units during the third quarter of 2015, was $29.6 million, compared to $29.5 million during the third quarter of 2014. On a constant-currency basis,
international sales improved approximately 17% on 18% unit sales growth.
Since pausing enrollment in the MVAD® System
CE Mark trial during the third quarter, we have made substantial progress toward resolving the manufacturing process issue with the MVAD Systems controller and expect to resume production next month, said Mr. Godshall. We are
also reviewing reported adverse events, which are typical of those seen in other clinical trials for ventricular assist devices, and we are confident that we will resolve the issues in order to resume the MVAD CE Mark clinical trial. The MVAD System
represents an important advancement in next-generation technology, and clinicians around the world remain eager to gain access to this innovative, novel device.
In September, we also announced our plan to acquire Valtech Cardio a strategic acquisition that will deepen our leadership in the heart failure
market. Valtechs differentiated mitral and tricuspid valve repair and replacement platforms augment our mechanical circulatory support business and will establish HeartWare as a dynamic player in two of the potentially largest categories in
heart failure device therapies. Valtechs flagship product, Cardioband® Mitral Reconstruction System, which received CE Mark approval for mitral valve repair during the third quarter, is
well-positioned to be a leading technology in the mitral repair market and represents one of several new technologies that comprise the Valtech portfolio. We are excited by the opportunity that the Valtech acquisition represents and look forward to
continuing to introduce Valtech to investors and completing the transaction.
For the nine months ended September 30, 2015, total revenue
increased by approximately $3.5 million to $208.8 million, compared to $205.2 million for the same period in 2014. This increase was primarily attributable to growth from new sites and increased utilization of the HVAD System in the U.S. during the
first half of 2015, offset by international revenue declines driven by currency fluctuation. Currency headwinds negatively impacted total year-to-date revenues by approximately $16 million, or 7.8%, compared to the same nine-month period in 2014,
reflecting a stronger U.S. dollar. Total revenue increased by 9.5% on a constant-currency basis compared to the first nine months of 2014. For the nine months ended September 30, 2015, HVAD System unit sales grew 12.7% in the U.S., excluding
destination therapy clinical trial units, and 8.2% internationally, compared to the same period in 2014.
Gross margin percentage declined to 49.4% during
the third quarter of 2015, from 65.7% during the second quarter of 2015 and 66.5% in the third quarter of 2014. This was attributable to a charge of $8.5 million primarily related to a previously announced voluntary corrective action related to
certain older batteries. Foreign exchange rates and geographic mix of revenue sources were other factors contributing to the decline.
Total operating
expenses for the third quarter of 2015 were $57.9 million, compared to $46.4 million for the third quarter of 2014 and $56.2 million for the second quarter of 2015. Total operating expenses for the third quarter of 2015 included Valtech acquisition
transaction costs of $3.6 million and a $6.0 million net change associated with accounting for the estimated fair value of the contingent consideration recorded in connection with the CircuLite acquisition, which was completed in 2013.
Research and development (R&D) expense was $30.4 million for the third quarter of 2015, compared to $29.5 million for the same period in 2014. This
increase in R&D expense was primarily attributable to increased clinical and regulatory expenses and quality system improvements.
Selling, general
and administrative (SG&A) expenses were $25.2 million for the third quarter of 2015, compared to $20.6 million for the third quarter of 2014. The increase in SG&A expenses was primarily attributable to Valtech acquisition transaction costs,
as well as additional headcount-related expenses.
Net loss for the third quarter of 2015 was $29.9 million, or a loss of $1.73 per basic and diluted share, compared to a net loss of $7.4 million, or $0.43 per basic and diluted share, for the
third quarter of 2014. Non-GAAP net loss for the third quarter of 2015 was $23.5 million, or a loss of $1.36 per basic and diluted share, compared to a non-GAAP net loss of $10.8 million, or a loss of $0.64 per basic and diluted share, for the third
quarter of 2014.
For the nine months ended September 30, 2015, the company recorded a net loss of $71.9 million, or a loss of $4.16 per basic and
diluted share, compared to a net loss of $18.5 million, or a loss of $1.09 per basic and diluted share, for the nine months ended September 30, 2014. Non-GAAP net loss for the nine months ended September 30, 2015 was $40.8 million, or a
loss of $2.36 per basic and diluted share, compared to a non-GAAP net loss of $27.6 million, or a loss of $1.63 per basic and diluted share, for the nine months ended September 30, 2014.
Items impacting comparability of operating results for the three- and nine-month periods ended September 30, 2015 to the same periods in 2014 include
purchase accounting amortization, restructuring charges, contingent consideration adjustments, loss on extinguishment of long-term debt and transaction-related expenses, as described later in this news release under Use of Non-GAAP Financial
Measures and Reconciliation of GAAP to Non-GAAP Net Loss per Common Share.
At September 30, 2015, HeartWare had approximately $249
million of cash, cash equivalents and investments. This compares to approximately $252 million of cash, cash equivalents and investments as of June 30, 2015, which included approximately $76 million in net proceeds from a convertible note
exchange and issuance executed during the second quarter of 2015.
Conference Call and Webcast Information
HeartWare will host a conference call on Thursday, October 29, 2015 at 8:00 a.m., U.S. Eastern Time to discuss its financial results, highlights from the
third quarter and the companys 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 Investors section of the companys website (http://ir.heartware.com/). A replay of
the conference call will be available through the above link 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 47 countries. The device is also currently the subject of a U.S.
clinical trial for destination therapy. For additional information, please visit 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 trademarks of HeartWare, Inc. or its
affiliates. VALTECH, CARDIOBAND, CARDINAL, CARDIOVALVE, V-CHORDAL and Valtech logos are trademarks of Valtech Cardio, Ltd.
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 companys operations and increases comparability of its current financial statements to prior periods.
Non-GAAP measures should not be considered a substitute for measures of financial performance in accordance with GAAP, and they should be reviewed in comparison with their most directly comparable GAAP financial results. Reconciliations of
HeartWares GAAP to non-GAAP financial measures are provided at the end of this news release under Reconciliation of GAAP to Non-GAAP Net Loss per Common Share.
Participants in the Solicitation
HeartWare, Valtech and
their respective directors, executive officers, certain members of management and certain employees may be deemed to be participants in the solicitation of proxies in connection with the proposed acquisition of Valtech Cardio, Ltd. A description of
the interests in HeartWare of its directors and executive officers is set forth in HeartWares proxy statement for its 2015 Annual Meeting of Shareholders, which was filed with the Securities and Exchange Commission (the SEC) on
April 30, 2015. This document is available free of charge at the SECs website at www.sec.gov or by going to HeartWares Investors page on its corporate website at www.heartware.com. Additional information regarding the persons
who may, under the rules of the SEC, be deemed participants in the solicitation of proxies in connection with the proposed transaction, and a description of their direct and indirect interests in the proposed transaction, which may differ from the
interests of HeartWare stockholders or Valtech shareholders generally, will be set forth in a proxy statement/prospectus when it is filed with the SEC.
Additional Information and Where To Find It
In
connection with the proposed Transactions, HW Global, Inc. (Holdco), has filed a Registration Statement on Form S-4 that contains a preliminary proxy statement/prospectus, which is not yet final and will be amended. Holdco intends to
file a final prospectus and other relevant materials and HeartWare intends to file a definitive proxy statement and other relevant materials with the SEC in connection with the proposed Transactions. Investors and security holders of HeartWare and
Valtech are urged to read these materials when they become available because they will contain important information about HeartWare, Valtech and the Transactions. The proxy statement/prospectus and other relevant materials (when they become
available), and any other documents filed by Holdco or HeartWare with the SEC, may be obtained free of charge at the SEC website at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with
the SEC by Holdco or HeartWare by directing a written request to HeartWares investor relations department at HeartWare International, Inc., 500 Old Connecticut Path, Framingham, MA 01701, Attention: Investor Relations. Investors and security
holders are urged to read the proxy statement/prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the Transactions.
This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor
shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended (the Securities Act).
Forward-Looking Statements
This announcement contains forward-looking statements that are based on managements 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 HVAD System and introduction of the MVAD System; timing, progress and outcomes of clinical trials; regulatory and quality compliance; research and development activities; consummation of our proposed
acquisition of Valtech 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 HeartWares 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.
Contact:
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)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2015 |
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2014 |
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2015 |
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2014 |
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Revenue, net |
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$ |
65,166 |
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$ |
68,608 |
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$ |
208,756 |
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$ |
205,211 |
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Cost of revenue |
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32,990 |
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22,977 |
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80,258 |
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68,846 |
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Gross profit |
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32,176 |
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45,631 |
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128,498 |
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136,365 |
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Operating expenses: |
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Selling, general and administrative |
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25,171 |
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20,584 |
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69,347 |
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65,765 |
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Research and development |
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30,386 |
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29,477 |
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93,355 |
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88,981 |
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Change in fair value of contingent consideration |
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2,360 |
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(3,620 |
) |
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6,700 |
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(14,180 |
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Total operating expenses |
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57,917 |
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46,441 |
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169,402 |
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140,566 |
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Loss from operations |
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(25,741 |
) |
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(810 |
) |
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(40,904 |
) |
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(4,201 |
) |
Other expense, net |
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(3,914 |
) |
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(6,472 |
) |
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(30,142 |
) |
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(13,586 |
) |
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Loss before taxes |
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(29,655 |
) |
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(7,282 |
) |
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(71,046 |
) |
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(17,787 |
) |
Income tax (benefit) expense |
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272 |
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88 |
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809 |
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663 |
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Net loss |
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$ |
(29,927 |
) |
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$ |
(7,370 |
) |
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$ |
(71,855 |
) |
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$ |
(18,450 |
) |
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Net loss per common share basic and diluted |
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$ |
(1.73 |
) |
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$ |
(0.43 |
) |
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$ |
(4.16 |
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$ |
(1.09 |
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Weighted average shares outstanding basic and diluted |
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17,303 |
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17,007 |
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17,256 |
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16,977 |
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HEARTWARE INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
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September 30, 2015 |
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December 31, 2014 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
184,882 |
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$ |
102,946 |
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Short-term investments |
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63,391 |
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75,535 |
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Accounts receivable, net |
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34,968 |
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38,041 |
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Inventories |
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47,245 |
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54,046 |
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Prepaid expenses and other current assets |
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6,744 |
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5,975 |
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Total current assets |
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337,230 |
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276,543 |
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Property, plant and equipment, net |
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15,711 |
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19,036 |
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Other assets, net |
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135,525 |
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128,234 |
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Total assets |
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$ |
488,466 |
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$ |
423,813 |
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
12,731 |
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$ |
13,322 |
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Other accrued liabilities |
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47,463 |
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36,589 |
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
60,194 |
|
|
|
49,911 |
|
Convertible senior notes, net |
|
|
188,790 |
|
|
|
114,803 |
|
Other long-term liabilities |
|
|
55,120 |
|
|
|
50,565 |
|
Stockholders equity |
|
|
184,362 |
|
|
|
208,534 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
488,466 |
|
|
$ |
423,813 |
|
|
|
|
|
|
|
|
|
|
Reconciliation to Constant Currency Revenue Growth (unaudited) (see explanation below)
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Reported $ chg |
|
|
Reported % chg |
|
|
FX impact |
|
|
Constant Currency $ chg |
|
|
Constant Currency % chg |
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total U.S. Revenue |
|
|
35,578 |
|
|
|
39,068 |
|
|
|
(3,490 |
) |
|
|
-8.9 |
% |
|
|
|
|
|
|
(3,490 |
) |
|
|
-8.9 |
% |
Total Intl Revenue |
|
|
29,588 |
|
|
|
29,540 |
|
|
|
48 |
|
|
|
0.2 |
% |
|
|
4,936 |
|
|
|
4,984 |
|
|
|
16.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue |
|
|
65,166 |
|
|
|
68,608 |
|
|
|
(3,442 |
) |
|
|
-5.0 |
% |
|
|
4,936 |
|
|
|
1,494 |
|
|
|
2.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
Reported $ chg |
|
|
Reported % chg |
|
|
FX impact |
|
|
Constant Currency $ chg |
|
|
Constant Currency % chg |
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total U.S. Revenue |
|
|
120,689 |
|
|
|
109,801 |
|
|
|
10,888 |
|
|
|
9.9 |
% |
|
|
|
|
|
|
10,888 |
|
|
|
9.9 |
% |
Total Intl Revenue |
|
|
88,068 |
|
|
|
95,410 |
|
|
|
(7,343 |
) |
|
|
-7.7 |
% |
|
|
16,013 |
|
|
|
8,671 |
|
|
|
9.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue |
|
|
208,756 |
|
|
|
205,211 |
|
|
|
3,545 |
|
|
|
1.7 |
% |
|
|
16,013 |
|
|
|
19,558 |
|
|
|
9.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant currency changes in the tables above take into consideration the foreign exchange rates in effect during the three-
and nine-month periods ended September 30, 2015 and 2014.
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 September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
GAAP net loss |
|
|
|
$ |
(29,927 |
) |
|
$ |
(7,370 |
) |
|
$ |
(71,855 |
) |
|
$ |
(18,450 |
) |
GAAP net loss per common share basic and diluted |
|
|
|
$ |
(1.73 |
) |
|
$ |
(0.43 |
) |
|
$ |
(4.16 |
) |
|
$ |
(1.09 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of purchased intangible assets and goodwill |
|
(a) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Selling, general and administrative |
|
|
|
|
84 |
|
|
|
84 |
|
|
|
252 |
|
|
|
252 |
|
-Research and development |
|
|
|
|
327 |
|
|
|
247 |
|
|
|
981 |
|
|
|
721 |
|
Acquisition-related transaction costs |
|
(b) |
|
|
3,641 |
|
|
|
|
|
|
|
3,941 |
|
|
|
|
|
Contingent consideration adjustments |
|
(c) |
|
|
2,360 |
|
|
|
(3,620 |
) |
|
|
6,700 |
|
|
|
(14,180 |
) |
Loss on extinguishment of long-term debt |
|
(d) |
|
|
|
|
|
|
|
|
|
|
16,588 |
|
|
|
|
|
Restructuring costs |
|
(e) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-Selling, general and administrative |
|
|
|
|
13 |
|
|
|
(79 |
) |
|
|
436 |
|
|
|
2,985 |
|
-Research and development |
|
|
|
|
|
|
|
|
(66 |
) |
|
|
2,213 |
|
|
|
1,032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total adjustments |
|
|
|
|
6,425 |
|
|
|
(3,434 |
) |
|
|
31,111 |
|
|
|
(9,190 |
) |
Non-GAAP adjusted net loss |
|
|
|
$ |
(23,502 |
) |
|
$ |
(10,804 |
) |
|
$ |
(40,744 |
) |
|
$ |
(27,640 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net loss per common share basic and diluted |
|
|
|
$ |
(1.36 |
) |
|
$ |
(0.64 |
) |
|
$ |
(2.36 |
) |
|
$ |
(1.63 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in computing non-GAAP adjusted net loss per common share basic and diluted |
|
|
|
|
17,303 |
|
|
|
17,007 |
|
|
|
17,256 |
|
|
|
16,977 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Represents amortization of purchased intangible assets related to CircuLite and WorldHeart during the three and nine months ended September 30, 2015 and 2014. |
(b) |
Represents transaction costs associated with the possible business combination with Valtech. |
(c) |
Represents the change in fair value of contingent consideration associated with the acquisition of CircuLite in December 2013. |
(d) |
Represents the loss on extinguishment of 3.5% convertible notes. |
(e) |
Represents certain restructuring costs incurred during the three and nine months ended September 30, 2015 and 2014 as follows (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
Lease exit charge for HeartWares former Massachusetts corporate offices |
|
$ |
|
|
|
$ |
(98 |
) |
|
$ |
(28 |
) |
|
$ |
373 |
|
Charges related to CircuLite acquisition: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease exit charge for former N.J. corporate offices |
|
|
13 |
|
|
|
19 |
|
|
|
464 |
|
|
|
1,709 |
|
Lease exit charge for Aachen, Germany office |
|
|
|
|
|
|
|
|
|
|
139 |
|
|
|
|
|
Contract termination costs |
|
|
|
|
|
|
|
|
|
|
340 |
|
|
|
688 |
|
Employee severance |
|
|
|
|
|
|
(66 |
) |
|
|
598 |
|
|
|
618 |
|
Abandoned fixed assets |
|
|
|
|
|
|
|
|
|
|
1,137 |
|
|
|
629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
13 |
|
|
|
(47 |
) |
|
|
2,677 |
|
|
|
3,644 |
|
Total restructuring costs |
|
$ |
13 |
|
|
$ |
(145 |
) |
|
$ |
2,649 |
|
|
$ |
4,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The terms non-GAAP adjusted net loss and non-GAAP adjusted net loss per common share
refer to GAAP net (loss)/income and GAAP net (loss)/income 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:
|
1) |
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. |
|
2) |
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 market value adjustments. |
|
3) |
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. |
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