The Spectranetics Corporation (NASDAQ:SPNC) today reported
financial results for the three and nine months ended September 30,
2015. Highlights of the quarter, all compared with the three months
ended September 30, 2014 include:
- Revenue of $61.7 million increased 5% (7% constant
currency1)
- Vascular Intervention revenue of $40.4 million increased 10%
(12% constant currency)
- Lead Management revenue of $18.0 million increased 2% (5%
constant currency)
"We are pleased with our third quarter results, marked by solid
performance within our Vascular Intervention, Lead Management and
International businesses. We believe that our team, portfolio,
product pipeline and clinical data position us to capitalize on the
compelling growth opportunities ahead," said Scott Drake, President
and Chief Executive Officer.
Net loss for the three months ended September 30, 2015 was $14.5
million, or $0.34 per share, compared with net loss of $13.9
million, or $0.33 per share, for the three months ended September
30, 2014. Non-GAAP net loss1 for the three months ended September
30, 2015 was $7.2 million, or $0.17 per share, compared with
non-GAAP net loss of $1.9 million, or $0.05 per share, for the
three months ended September 30, 2014.
__________________________
1Constant currency and non-GAAP net loss are non-GAAP financial
measures. See "Reconciliation of Non-GAAP Financial Measures" later
in this release.
Year-To-Date Financial Results
Revenue for the nine months ended September 30, 2015 rose 27%
(30% constant currency) to $180.8 million from $142.0 million for
the nine months ended September 30, 2014. Total Vascular
Intervention revenue increased 49% (50% constant currency), to
$117.5 million. Lead Management revenue increased 7% (10% constant
currency) to $51.6 million. Laser system, service and other revenue
decreased 21% (18% constant currency) to $11.6 million.
AngioSculpt revenue was $42.6 million for the nine months ended
September 30, 2015. Excluding AngioSculpt revenue from the June 30,
2014 acquisition date, total revenue increased 9% (11% constant
currency) and Vascular Intervention revenue, excluding AngioSculpt,
increased 17% (18% constant currency).
Net loss during the nine months ended September 30, 2015 was
$49.0 million, or $1.16 per share, compared with net loss of $24.9
million, or $0.60 per share, for the nine months ended September
30, 2014. Non-GAAP net loss during the nine months ended September
30, 2015 was $28.9 million, or $0.68 per share, compared with
non-GAAP net loss of $9.6 million, or $0.23 per share, for the nine
months ended September 30, 2014.
2015 Financial Outlook
Spectranetics updates its projected 2015 revenue to be within a
range of $242 million to $248 million compared with $240 million to
$250 million previously projected.
Net loss is projected to be within a range of $65.0 million to
$69.0 million, or $1.53 to $1.62 per share, unchanged from previous
projections. Non-GAAP net loss is projected to be within a range of
$40.0 million to $44.0 million, or $0.94 to $1.04 per share,
compared with previous projections of $41 million to $45 million,
or $0.96 to $1.07 per share. See "Reconciliation of non-GAAP
Financial Measures" later in this release. Gross margin is
projected within a range of 73.5% to 74.0%, unchanged from previous
projections. Research, development and other technology expenses
are expected to be approximately 26.5% to 27.0%, compared with
26.5% to 27.5% previously projected.
Conference Call
Management will host an investment community conference call
today beginning at 2:30 p.m. MT / 4:30 p.m. ET. Individuals
interested in listening to the conference call may dial (877)
561-2747 for domestic callers, or (973) 409-9689 for international
callers, conference ID 48806203, or access the webcast on the
investor relations section of the Company's website at:
www.spectranetics.com. The webcast will be available on the
Company's website for 14 days following the completion of the
call.
About Spectranetics
The Spectranetics Corporation develops, manufactures, markets
and distributes medical devices used in minimally invasive
procedures within the cardiovascular system. The Company's products
are sold in over 65 countries and are used to treat arterial
blockages in the heart and legs and in the removal of pacemaker and
defibrillator leads.
The Company's Vascular Intervention (VI) products include a
range of laser catheters for ablation of blockages in arteries
above and below the knee, the AngioSculpt® scoring balloon used in
both peripheral and coronary procedures, and the Stellarex
drug-coated balloon peripheral angioplasty platform, which received
European CE mark approval in December 2014. The Company also
markets support catheters to facilitate crossing of peripheral and
coronary arterial blockages, and retrograde access and guidewire
retrieval devices used in the treatment of peripheral arterial
blockages, including chronic total occlusions. The Company markets
aspiration and cardiac laser catheters to treat blockages in the
heart.
The Lead Management (LM) product line includes excimer laser
sheaths, dilator sheaths, mechanical sheaths and accessories for
the removal of pacemaker and defibrillator cardiac leads.
For more information, visit www.spectranetics.com.
Safe Harbor Statement
This news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, Section 21E
of the Securities Exchange Act of 1934 and the Private Securities
Litigation Reform Act of 1995. You can identify these statements
because they do not relate strictly to historical or current facts.
Such statements may include words such as "anticipate," "will,"
"estimate," "expect," "look forward," "strive," "project,"
"intend," "should," "plan," "believe," "hope," "enable,"
"potential," and other words and terms of similar meaning in
connection with any discussion of, among other things, future
operating or financial performance, strategic initiatives and
business strategies, clinical trials, regulatory or competitive
environments, outcome of litigation, our intellectual property and
product development. These forward-looking statements include, but
are not limited to, statements regarding our competitive position,
product development and commercialization schedule, expectation of
continued growth and the reasons for that growth, growth rates,
strength, integration and product launches, and 2015 outlook
including projected revenue and expenses, net loss and gross
margin. Such statements are based on current assumptions that
involve risks and uncertainties that could cause actual outcomes
and results to differ materially. You are cautioned not to place
undue reliance on these forward-looking statements and to note they
speak only as of the date of this release. These risks and
uncertainties may include financial results differing from
guidance, inability to successfully integrate AngioScore and
Stellarex into our business, market acceptance of excimer laser
atherectomy technology and our vascular intervention and lead
removal products, lack of cash necessary to satisfy our cash
obligations under our outstanding 2.625% Convertible Senior Notes
due 2034, our debt adversely affecting our financial health and
preventing us from fulfilling our debt service and other
obligations, increasing price and product competition, increased
pressure on expense levels resulting from expanded sales,
marketing, product development and clinical activities, uncertain
success of our strategic direction, dependence on new product
development, loss of key personnel, uncertain success of or delays
in our clinical trials, adverse results in any ongoing legal
proceeding, or any legal proceeding in which we may become
involved, adverse impact to our business of the health care reform
and related legislation or regulations, including changes in
reimbursements, continued or worsening adverse conditions in the
general domestic and global economic markets and continued
volatility and disruption of the credit markets, which affects the
ability of hospitals and other health care systems to obtain credit
and may impede our access to capital, intellectual property claims
of third parties, availability of inventory from suppliers, adverse
outcome of inspections by the U.S. Food and Drug Administration
(FDA), the receipt of FDA approval to market new products or
applications and the timeliness of any approvals, market acceptance
of new products or applications, product defects, ability to
manufacture sufficient volumes to fulfill customer demand,
availability of vendor-sourced components at reasonable prices,
unexpected delays or costs associated with any planned improvements
to our manufacturing processes, and share price volatility due to
the initiation or cessation of coverage, or changes in ratings, by
securities analysts. For a further list and description of such
risks and uncertainties that could cause our actual results,
performance or achievements to materially differ from any
anticipated results, performance or achievements, please see our
previously filed reports with the Securities and Exchange
Commission, including those risks set forth in our Annual Report on
Form 10-K for the year ended December 31, 2014 and our Quarterly
Report on Form 10-Q for the three months ended June 30, 2015. We
disclaim any intention or obligation to update or revise any
financial or other projections or other forward-looking statements,
whether because of new information, future events or otherwise.
Use of Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements
prepared in accordance with U.S. generally accepted accounting
principles (GAAP), we use certain non-GAAP financial measures in
this release. Reconciliations of the non-GAAP financial measures
used in this release to the most directly comparable GAAP measures
for the respective periods, and an explanation of our use of these
non-GAAP measures, can be found in "Reconciliation of Non-GAAP
Financial Measures" immediately following the financial tables.
Non-GAAP financial measures have limitations as analytical tools
and should not be considered in isolation or as a substitute for
our financial results prepared in accordance with GAAP.
-Financial tables follow-
THE SPECTRANETICS
CORPORATION |
Condensed Consolidated
Statements of Operations |
(in thousands, except per share
data and percentages) |
(unaudited) |
|
|
|
|
|
|
Three Months Ended |
Nine Months Ended |
|
September
30, |
September
30, |
|
2015 |
2014 |
2015 |
2014 |
Revenue |
$ 61,660 |
$ 58,786 |
$ 180,759 |
$ 141,955 |
Cost of products sold |
15,809 |
14,686 |
46,525 |
35,526 |
Amortization of acquired inventory
step-up |
— |
1,014 |
251 |
1,014 |
Gross profit |
45,851 |
43,086 |
133,983 |
105,415 |
Operating expenses: |
|
|
|
|
Selling, general and
administrative |
34,116 |
35,490 |
106,620 |
91,682 |
Research, development and other
technology |
15,926 |
7,573 |
47,847 |
19,364 |
Medical device excise tax |
916 |
864 |
2,543 |
1,977 |
Acquisition transaction,
integration and other costs |
5,403 |
3,826 |
26,900 |
8,055 |
Acquisition-related intangible
asset amortization |
3,290 |
3,055 |
10,072 |
3,328 |
Contingent consideration
expense |
387 |
1,037 |
2,471 |
1,115 |
Change in fair value of
contingent consideration liability |
(4,256) |
(1,064) |
(22,056) |
(1,064) |
Intangible asset
impairment |
2,496 |
4,138 |
2,496 |
4,138 |
Total operating expenses |
58,278 |
54,919 |
176,893 |
128,595 |
Operating loss |
(12,427) |
(11,833) |
(42,910) |
(23,180) |
Other expense |
(1,890) |
(1,923) |
(5,661) |
(2,409) |
Loss before taxes |
(14,317) |
(13,756) |
(48,571) |
(25,589) |
Income tax expense
(benefit) |
176 |
188 |
443 |
(685) |
Net loss |
$ (14,493) |
$ (13,944) |
$ (49,014) |
$ (24,904) |
|
|
|
|
|
Net loss per common share: |
|
|
|
|
Basic and diluted |
$ (0.34) |
$ (0.33) |
$ (1.16) |
$ (0.60) |
Weighted average shares outstanding: |
|
|
|
|
Basic and diluted |
42,556 |
41,822 |
42,369 |
41,595 |
|
|
|
|
|
|
|
|
|
|
THE SPECTRANETICS
CORPORATION |
Condensed Consolidated Balance
Sheets |
(in thousands) |
(unaudited) |
|
|
|
|
September 30, |
December 31, |
|
2015 |
2014 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 41,721 |
$ 95,505 |
Accounts receivable, net |
40,072 |
41,090 |
Inventories, net |
27,540 |
25,446 |
Other current assets |
7,861 |
10,293 |
Total current assets |
117,194 |
172,334 |
Property and equipment,
net |
45,136 |
33,819 |
Debt issuance costs, net |
6,174 |
6,912 |
Goodwill and intangible
assets |
266,274 |
252,514 |
Other assets |
1,947 |
1,371 |
Total assets |
$ 436,725 |
$ 466,950 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Borrowings under revolving line
of credit |
$ 23,110 |
$ — |
Other current liabilities |
48,094 |
41,343 |
Convertible senior notes |
230,000 |
230,000 |
Other non-current
liabilities |
9,310 |
33,450 |
Stockholders' equity |
126,211 |
162,157 |
Total liabilities and stockholders'
equity |
$ 436,725 |
$ 466,950 |
|
|
|
|
|
|
THE SPECTRANETICS
CORPORATION |
Supplemental Financial
Information |
(Unaudited) |
|
|
|
|
|
|
Financial Summary |
2014 |
2015 |
(000's, except laser sales and
installed base amounts) |
3rd Qtr |
4th Qtr |
1st Qtr |
2nd Qtr |
3rd Qtr |
|
|
|
|
|
|
Disposable products revenue: |
|
|
|
|
|
Vascular Intervention |
36,576 |
39,055 |
36,513 |
40,630 |
40,370 |
Lead Management |
17,569 |
18,509 |
16,431 |
17,257 |
17,961 |
Total disposable
products |
54,145 |
57,564 |
52,944 |
57,887 |
58,331 |
|
|
|
|
|
|
Laser, service, and other |
4,641 |
5,395 |
4,478 |
3,790 |
3,329 |
|
|
|
|
|
|
Total revenue |
58,786 |
62,959 |
57,422 |
61,677 |
61,660 |
Non-GAAP gross margin percentage (excluding
amortization of acquired inventory step-up) (1) |
75% |
75% |
74% |
74% |
74% |
|
|
|
|
|
|
Net loss |
(13,944) |
(14,731) |
(27,305) |
(7,216) |
(14,493) |
|
|
|
|
|
|
Cash flow used in operating activities |
(3,403) |
(7,576) |
(22,461) |
(10,082) |
(10,225) |
Total cash and cash equivalents at end of
quarter |
103,538 |
95,505 |
43,639 |
49,255 |
41,721 |
|
|
|
|
|
|
Laser sales summary: |
|
|
|
|
|
Laser sales from inventory |
7 |
11 |
6 |
2 |
1 |
Laser sales from
evaluation/rental units |
5 |
2 |
2 |
— |
1 |
Total laser
sales |
12 |
13 |
8 |
2 |
2 |
|
|
|
|
|
|
(1) Non-GAAP gross margin
percentage (excluding amortization of acquired inventory step-up)
is a non-GAAP financial measure and was recorded during the third
quarter of 2014 through the first quarter of 2015. Please refer to
the non-GAAP reconciliation tables following this table for the
reconciliation to the most comparable GAAP measure. |
|
|
|
|
|
|
Worldwide Installed Base
Summary: |
|
|
|
|
|
Laser sales from inventory |
7 |
11 |
6 |
2 |
1 |
Rental placements |
34 |
26 |
37 |
42 |
35 |
Evaluation placements |
11 |
8 |
11 |
5 |
5 |
Laser placements during quarter |
52 |
45 |
54 |
49 |
41 |
Buy-backs/returns during quarter |
(11) |
(10) |
(16) |
(11) |
(16) |
Net laser placements during quarter |
41 |
35 |
38 |
38 |
25 |
Total lasers placed at end of quarter |
1,236 |
1,271 |
1,309 |
1,347 |
1,372 |
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial
Measures
To supplement our condensed consolidated financial statements
prepared in accordance with GAAP, we use certain non-GAAP financial
measures in this release. Reconciliations of these non-GAAP
financial measures to the most directly comparable GAAP measures
for the respective periods can be found in the tables
below. An explanation of the manner in which our management
uses these non-GAAP measures to conduct and evaluate our business
and the reasons management believes these non-GAAP measures provide
useful information to investors are provided following the
reconciliation tables.
THE SPECTRANETICS
CORPORATION |
Reconciliation of revenue by
geography to non-GAAP revenue by geography |
on a constant currency
basis |
(in thousands, except
percentages) |
(unaudited) |
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
|
September 30, |
|
|
September 30,
2015 |
2014 |
% Change |
|
|
Foreign |
|
|
|
|
|
|
exchange |
Revenue on |
|
|
|
|
|
impact as |
a constant |
|
|
Constant |
|
Revenue, |
compared to |
currency |
Revenue, as |
|
currency |
|
as reported |
prior period |
basis |
reported |
As reported |
basis |
United States |
$ 51,936 |
$ — |
$ 51,936 |
$ 48,463 |
7% |
7% |
International |
9,724 |
1,066 |
10,790 |
10,323 |
(6)% |
5% |
Total revenue |
$ 61,660 |
$ 1,066 |
$ 62,726 |
$ 58,786 |
5% |
7% |
|
|
|
|
|
|
|
|
Nine Months
Ended |
|
|
|
|
September 30, |
|
|
September 30,
2015 |
2014 |
% Change |
|
|
Foreign |
|
|
|
|
|
|
exchange |
Revenue on |
|
|
|
|
|
impact as |
a constant |
|
|
Constant |
|
Revenue, |
compared to |
currency |
Revenue, as |
|
currency |
|
as reported |
prior period |
basis |
reported |
As reported |
basis |
United States |
$ 152,129 |
$ — |
$ 152,129 |
$ 115,089 |
32% |
32% |
International |
28,630 |
3,342 |
31,972 |
26,866 |
7% |
19% |
Total revenue |
$ 180,759 |
$ 3,342 |
$ 184,101 |
$ 141,955 |
27% |
30% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE SPECTRANETICS
CORPORATION |
Reconciliation of revenue by
product line to non-GAAP revenue by product line |
on a constant currency
basis |
(in thousands, except
percentages) |
(unaudited) |
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
|
|
|
|
September 30, |
|
|
|
September 30,
2015 |
2014 |
% Change |
|
|
Foreign |
|
|
|
|
|
|
exchange |
|
|
|
|
|
|
impact as |
Revenue on |
|
|
|
|
|
compared |
a constant |
|
|
Constant |
|
Revenue, |
to prior |
currency |
Revenue, as |
|
currency |
|
as reported |
period |
basis |
reported |
As reported |
basis |
Vascular Intervention |
$ 40,370 |
$ 433 |
$ 40,803 |
$ 36,576 |
10% |
12% |
Lead Management |
17,961 |
518 |
18,479 |
17,569 |
2% |
5% |
Laser System, Service & Other |
3,329 |
115 |
3,444 |
4,641 |
(28)% |
(26)% |
Total revenue |
$ 61,660 |
$ 1,066 |
$ 62,726 |
$ 58,786 |
5% |
7% |
|
|
|
|
|
|
|
|
Nine Months
Ended |
|
|
|
|
|
|
September 30, |
|
|
|
September 30,
2015 |
2014 |
% Change |
|
|
Foreign |
|
|
|
|
|
|
exchange |
|
|
|
|
|
|
impact as |
Revenue on |
|
|
|
|
|
compared |
a constant |
|
|
Constant |
|
Revenue, |
to prior |
currency |
Revenue, as |
|
currency |
|
as reported |
period |
basis |
reported |
As reported |
basis |
Vascular Intervention, ex-AngioSculpt |
$ 74,899 |
$ 938 |
$ 75,837 |
$ 64,151 |
17% |
18% |
AngioSculpt |
42,614 |
480 |
43,094 |
14,942 |
185% |
188% |
Total Vascular Intervention |
$ 117,513 |
$ 1,418 |
$ 118,931 |
$ 79,093 |
49% |
50% |
Lead Management |
51,649 |
1,524 |
53,173 |
48,153 |
7% |
10% |
Laser System, Service & Other |
11,597 |
400 |
11,997 |
14,709 |
(21)% |
(18)% |
Total revenue |
$ 180,759 |
$ 3,342 |
$ 184,101 |
$ 141,955 |
27% |
30% |
Total revenue
ex-AngioSculpt |
$ 138,145 |
$ 2,862 |
$ 141,007 |
$ 127,013 |
9% |
11% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE SPECTRANETICS
CORPORATION |
|
|
|
|
|
|
Reconciliation of gross margin
to non-GAAP gross margin |
excluding amortization of
acquired inventory step-up |
(in thousands, except
percentages) |
(unaudited) |
|
|
|
|
|
|
|
Three Months
Ended |
|
Sept. 30, |
Dec. 31, |
March 31, |
June 30, |
Sept. 30, |
|
2014 |
2014 |
2015 |
2015 |
2015 |
Gross profit, as reported |
$ 43,086 |
$ 46,040 |
$ 42,369 |
$ 45,763 |
$ 45,851 |
Amortization of acquired inventory step-up
(1) |
1,014 |
1,060 |
251 |
— |
— |
Adjusted gross profit, excluding amortization
of acquired inventory step-up |
$ 44,100 |
$ 47,100 |
$ 42,620 |
$ 45,763 |
$ 45,851 |
|
|
|
|
|
|
Gross margin, as reported |
73% |
73% |
74% |
74% |
74% |
Non-GAAP gross margin, excluding amortization
of acquired inventory step-up |
75% |
75% |
74% |
74% |
74% |
|
|
|
|
|
|
Footnote explanations
can be found following the last non-GAAP tables. |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Loss to
Non-GAAP Net Loss |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30, |
September 30, |
September 30, |
September 30, |
|
2015 |
2014 |
2015 |
2014 |
Net loss, as reported |
$ (14,493) |
$ (13,944) |
$ (49,014) |
$ (24,904) |
Acquisition transaction, integration and
other costs (2) |
5,403 |
3,826 |
26,900 |
8,055 |
Amortization of acquired inventory step-up
(1) |
— |
1,014 |
251 |
1,014 |
Acquisition-related intangible asset
amortization (3) |
3,290 |
3,055 |
10,072 |
3,328 |
Contingent consideration expense (4) |
387 |
1,037 |
2,471 |
1,115 |
Change in fair value of contingent
consideration liability (5) |
(4,256) |
(1,064) |
(22,056) |
(1,064) |
Intangible asset impairment (5) |
2,496 |
4,138 |
2,496 |
4,138 |
Release of valuation allowance related to
AngioScore acquisition (6) |
— |
— |
— |
(1,266) |
Non-GAAP net loss |
$ (7,173) |
$ (1,938) |
$ (28,880) |
$ (9,584) |
|
|
|
|
|
|
|
|
|
|
THE SPECTRANETICS
CORPORATION |
Reconciliation of Net Loss Per
Share to Non-GAAP Net Loss Per Share |
(unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30, |
September 30, |
September 30, |
September |
|
2015 |
2014 |
2015 |
30, 2014 |
Net loss per share, as reported |
$ (0.34) |
$ (0.33) |
$ (1.16) |
$ (0.60) |
Acquisition transaction, integration and
other costs (2) |
0.13 |
0.09 |
0.63 |
0.19 |
Amortization of acquired inventory step-up
(1) |
— |
0.02 |
0.01 |
0.02 |
Acquisition-related intangible asset
amortization (3) |
0.08 |
0.07 |
0.24 |
0.08 |
Contingent consideration expense (4) |
0.01 |
0.02 |
0.06 |
0.03 |
Change in fair value of contingent
consideration liability (5) |
(0.10) |
(0.03) |
(0.52) |
(0.03) |
Intangible asset impairment (5) |
0.06 |
0.10 |
0.06 |
0.10 |
Release of valuation allowance related to
AngioScore acquisition (6) |
— |
— |
— |
(0.03) |
Non-GAAP net loss per share (7) |
$ (0.17) |
$ (0.05) |
$ (0.68) |
$ (0.23) |
|
|
|
|
|
|
|
|
|
|
Reconciliation of 2015
Projected Net Loss to Non-GAAP Projected Net Loss |
(in millions) |
(unaudited) |
|
Projected
Range |
|
Twelve Months Ending |
|
December 31,
2015 |
|
Low |
High |
Net loss, GAAP |
$ (69.0) |
$ (65.0) |
Acquisition transaction, integration and
other costs (8) |
28.4 |
28.4 |
Acquisition-related amortization and
contingent consideration expense (9) |
16.2 |
16.2 |
Change in fair value of contingent
consideration liability and intangible asset impairment, net
(5) |
(19.6) |
(19.6) |
Non-GAAP net loss |
$ (44.0) |
$ (40.0) |
|
|
|
Reconciliation of 2015
Projected Net Loss Per Share to Non-GAAP Projected Net Loss Per
Share |
(unaudited) |
|
Projected
Range |
|
Twelve Months Ending |
|
December 31,
2015 |
|
Low |
High |
Net loss per share, GAAP |
$ (1.62) |
$ (1.53) |
Acquisition transaction, integration and
other costs (8) |
0.67 |
0.67 |
Acquisition-related amortization and
contingent consideration expense (9) |
0.38 |
0.38 |
Change in fair value of contingent
consideration liability and intangible asset impairment, net
(5) |
(0.46) |
(0.46) |
Non-GAAP net loss per share (7) |
$ (1.04) |
$ (0.94) |
|
|
|
1) Amortization of acquired inventory step-up relates to the
inventory acquired in the AngioScore acquisition.
2) Acquisition transaction, integration and other costs relate
to the AngioScore and Stellarex acquisitions, which closed on June
30, 2014 and January 27, 2015, respectively, and included
investment banking fees, accounting, consulting, and legal fees,
severance and retention costs, and non-recurring costs associated
with establishing manufacturing operations to support the Stellarex
program. In addition, these costs included $1.2 million in the
three months ended September 30, 2014, and $2.5 million and $18.9
million in the three and nine months ended September 30, 2015,
respectively, for legal fees, including legal fees and costs
advanced, associated with a patent and breach of fiduciary duty
matter in which AngioScore is the plaintiff.
3) Acquisition-related intangible asset amortization
relates primarily to intangible assets acquired in the AngioScore
acquisition in June 2014 and the Stellarex acquisition in January
2015.
4) Contingent consideration expense represents the
accretion of the estimated contingent consideration liability
related to future amounts payable to former AngioScore stockholders
primarily based on sales of the AngioScore products and achievement
of regulatory milestones.
5) During the three months ended September 30, 2015,
we remeasured the contingent consideration liability related to the
AngioScore regulatory milestones to its fair value and reduced it
by approximately $4.3 million. The intangible asset impairment of
$2.5 million was to record a partial impairment of the
in-process research and development intangible assets acquired as
part of the AngioScore acquisition.
During the three months ended June 30, 2015, we remeasured
the contingent consideration liability related to the future
AngioScore revenue-related payments to its fair value and reduced
it by approximately $17.8 million. This reduction was the result of
a decrease in our revenue estimates for the AngioSculpt
products.
6) Income tax benefit for the nine months ended September
30, 2014 included a tax benefit of $1.3 million resulting from a
reduction in the valuation allowance against our deferred tax
assets related to the acquisition of AngioScore.
7) Per share amounts may not add due to rounding.
8) Acquisition transaction, integration and other costs
consist of integration costs for the Stellarex and AngioScore
acquisitions of $8.9 million and legal fees of $19.5 million,
which includes legal fees and costs advanced, associated with a
patent and breach of fiduciary duty matter in which AngioScore is
the plaintiff.
9) Acquisition-related intangible asset amortization
relates primarily to intangible assets acquired in the AngioScore
acquisition in June 2014 and the Stellarex acquisition in January
2015. Contingent consideration expense represents the accretion of
the estimated contingent consideration liability related to future
amounts that may be payable to former AngioScore stockholders
primarily based on sales of the AngioScore products and achievement
of regulatory milestones.
Management uses the non-GAAP financial measures as supplemental
measures to analyze the underlying trends in our business, assess
the performance of our core operations, establish operational goals
and forecasts that are used in allocating resources and evaluate
our performance period over period and in relation to our
competitors' operating results.
The impact of foreign exchange rates is highly variable and
difficult to predict. We use a constant currency basis to show the
impact from foreign exchange rates on current period revenue
compared to prior period revenue using the prior period's foreign
exchange rates. In order to properly understand the underlying
business trends and performance of our ongoing operations, we
believe that investors may find it useful to consider the impact of
excluding changes in foreign exchange rates from our revenue.
We believe presenting the non-GAAP financial measures used in
this release provides investors greater transparency to the
information used by our management for financial and operational
decision-making and allows investors to see our results "through
the eyes" of management. We also believe providing this information
better enables our investors to understand our operating
performance and evaluate the methodology used by management to
evaluate and measure such performance.
Non-GAAP financial measures have limitations as analytical tools
and should not be considered in isolation or as a substitute for
our financial results prepared in accordance with GAAP. Some
limitations associated with using these non-GAAP financial measures
are provided below:
- Management exercises judgment in determining which types of
charges or other items should be excluded from the non-GAAP
financial measures used.
- Amortization expense, while not requiring cash settlement, is
an ongoing and recurring expense and has a material impact on GAAP
net income or loss and reflects costs to us not reflected in
non-GAAP net loss. The intangible asset impairment, while not
requiring cash settlement, reflects an economic cost to us not
reflected in non-GAAP net loss.
- Items such as the acquisition transaction and integration
costs, contingent consideration expense and the change in fair
value of contingent consideration liability excluded from non-GAAP
net loss can have a material impact on cash flows and GAAP net loss
and reflect economic costs to us not reflected in non-GAAP net
loss.
- Revenue growth rates stated on a constant currency basis, by
their nature, exclude the impact of changes in foreign currency
exchange rates, which may have a material impact on GAAP
revenue.
- Non-GAAP financial measures are not based on any comprehensive
set of accounting rules or principles and therefore other companies
may calculate similarly titled non-GAAP financial measures
differently than we do, limiting the usefulness of those measures
for comparative purposes.
CONTACT: Investor Relations Contacts
Guy Childs
Investor.relations@spnc.com
(719) 447-2415
Lynn Pieper
Investor.relations@spnc.com
(415) 202-5678
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