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): February 20, 2015
 
 
DexCom, Inc.
(Exact Name of the Registrant as Specified in Its Charter)
 
 
Delaware
(State or Other Jurisdiction of Incorporation)
 
000-51222
 
33-0857544
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
6340 Sequence Drive, San Diego, CA
 
92121
(Address of Principal Executive Offices)
 
(Zip Code)
(858) 200-0200
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, If Changed Since Last Report)
 
 
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 (see General Instruction A.2. below):
¨
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)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2)
¨
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 February 25, 2015, DexCom, Inc. (“DexCom”) issued a press release announcing its financial results for the year ended December 31, 2014 and certain other information. This press release has been furnished as Exhibit 99.01 to this report and is incorporated herein by this reference.
The information in this Item 2.02, including Exhibit 99.01 hereto, is furnished pursuant to Item 2.02 of Form 8-K, and is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. The information contained herein and in the accompanying exhibit is not incorporated by reference in any filing of DexCom under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings. 
ITEM 5.02.
DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
(e) On February 20, 2015, the Board of Directors of DexCom, Inc. approved a bonus plan for fiscal 2015 (the “2015 Plan”) for the Company’s management and select individual contributors, including its chief executive officer, chief financial officer and its other named executive officers (together, the “Named Executive Officers”) pursuant to which the Company’s management, including its Named Executive Officers, are eligible for cash bonus awards if the Company attains specified financial and performance targets. The target bonus for each of the Executive Chairman and Chief Executive Officer (the “CEO”) is 125% of their respective base salaries; the target bonus for the Company’s Executive Vice Presidents is 75% of their respective base salaries; the target bonus for the Company’s Senior Vice Presidents is 50% of their respective base salaries; the target bonus for the Company’s Vice Presidents is 40% of their respective base salaries, and the target bonus for the remainder of the Company’s management employees and select contributors are various amounts up to 30% of their respective base salaries.
For the Company’s eligible employees, the amount of any bonus awarded under the 2015 Plan will be predicated on achieving targeted revenue goals, targeted operating income goals, and performance milestones. Generally speaking, 60% of any bonus paid under the 2015 Plan is based on achieving certain annual revenue goals (the “Revenue Component”), 20% is based on achieving targeted operating income goals (the “Operating Results Component”) and 20% is based on achieving certain performance milestones (the “Performance Component”).
Under the 2015 Plan, no portion of the Revenue Component shall be paid unless the Company meets a specified minimum revenue target for fiscal 2015. Upon achievement of this minimum revenue target, each eligible participant will receive a bonus award of 100% of their targeted Revenue Component. If the Company exceeds its fiscal 2015 revenue target, the Named Executive Officers will receive bonuses at various stepped up amounts up to a maximum of 175% of their targeted Revenue Component.
Under the 2015 Plan, no portion of the Operating Results Component shall be paid unless the Company meets a specified operating income result for fiscal 2015. Upon achievement of this operating income target, each eligible participant will receive a bonus award of 100% of their targeted Operating Results Component. If the Company achieves operating income results that are more favorable in fiscal 2015 than its operating income target, the Named Executive Officers will receive bonuses at various stepped up amounts up to a maximum of 175% of their targeted Operating Results Component.
Under the Performance Component, bonus amounts will also be paid to the Named Executive Officers for achieving specified corporate milestones. Eligible participants will receive a portion of their targeted Performance Component for achievement of corporate milestones by the Company during fiscal 2015. 
In addition, any amount paid out under the 2015 Plan may be increased by up to 25% if the Company achieves various additional performance milestones.   












ITEM 9.01.
FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
 
 
 
 
Number
  
Description
 
 
99.01
  
Press release dated February 25, 2015 announcing the financial results for the year ended December 31, 2014 and certain other information.







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 thereunto duly authorized.
 
 
 
 
DEXCOM, INC.
 
 
By:
 
/s/  Steven R. Pacelli
Steven R. Pacelli
Executive Vice President, Strategy and Corporate Development
Date: February 25, 2015







Exhibit Index
 
 
 
 
Number
  
Description
 
 
99.01
  
Press release dated February 25, 2015 announcing the financial results for the year ended December 31, 2014 and certain other information.






Exhibit 99.01
DexCom, Inc. Reports Fourth Quarter and Full Year 2014 Financial Results

SAN DIEGO, CA - (BUSINESS WIRE-February 25, 2015) - DexCom, Inc. (Nasdaq: DXCM) today reported its audited financial results as of and for the quarter and fiscal year ended December 31, 2014.

For the full-year ended December 31, 2014, product revenue grew to $257.1 million, an increase of 64% from the $157.1 million in product revenue reported for 2013, and total revenue grew to $259.2 million, an increase of 62% from 2013. Product revenue grew to $84.3 million for the fourth quarter of 2014, an increase of 64% from the $51.3 million in product revenue reported for the comparable period in 2013. Total fourth quarter 2014 revenue, which included development grant and other revenue, grew to $84.3 million, an increase of 63% from the comparable period in 2013. Product gross profit totaled $59.4 million and $174.8 million for the three and twelve months ended December 31, 2014, compared to a product gross profit of $34.1 million and $99.0 million for the three and twelve months ended December 31, 2013. The Company reported net income of $1.3 million, or $0.02 per share, and a net loss of $22.4 million, or $0.30 per share, for the three and twelve months ended December 31, 2014, compared to a net loss of $2.6 million, or $0.04 per share, and $29.8 million, or $0.42 per share, for the three and twelve months ended December 31, 2013. The net loss for 2014 included $58.8 million in non-cash expenses, comprised primarily of share-based compensation, depreciation, and amortization.

Total cost of sales for the twelve months ended December 31, 2014 totaled $82.9 million compared to $59.9 million for 2013. The increase was primarily due to additional product sales. Research and development expense totaled $69.4 million in 2014 compared to $44.8 million in 2013. Changes in research and development expense included additional payroll costs, consulting costs and $8.5 million in additional non-cash share-based compensation. Selling, general and administrative expense totaled $128.4 million in 2014 compared to $84.2 million in 2013, with the change primarily due to additional payroll costs, commissions and $15.0 million in additional non-cash share-based compensation. As of December 31, 2014, the Company had $83.6 million in cash, cash equivalents and marketable securities.

Conference Call

Management will hold a conference call today starting at 4:30 p.m. (Eastern Time). The conference call will be concurrently webcast. The link to the webcast will be available on the DexCom, Inc. website at www.dexcom.com by navigating to "Our Company," then "Investor Relations," and then "Events and Webcasts," and will be archived for future reference. To listen to the conference call, please dial (888) 771-4371 (US/Canada) or (847) 585-4405 (International) and use the confirmation number "38766435" approximately five minutes prior to the start time.









About DexCom, Inc.

DexCom, Inc., headquartered in San Diego, California, is developing and marketing continuous glucose monitoring systems for ambulatory use by people with diabetes and by healthcare providers in the hospital.

Cautionary Statement Regarding Forward Looking Statements

DexCom is a medical device company with a limited operating history. Successful commercialization of the company’s products is subject to numerous risks and uncertainties, including a lack of acceptance in the marketplace by physicians and people with diabetes, the inability to manufacture products in commercial quantities at an acceptable cost, possible delays in the company’s development programs, the inability of people with diabetes to receive reimbursement from third-party payors and inadequate financial and other resources. Certain of these risks and uncertainties, in addition to other risks, are more fully described in the company's annual report on Form 10-K for the period ended December 31, 2014, as filed with the Securities and Exchange Commission on February 25, 2015.

FOR MORE INFORMATION:
Steven R. Pacelli
Executive Vice President, Strategy and Corporate Development
(858) 200-0200
www.dexcom.com





DexCom, Inc.
Consolidated Balance Sheets
(In millions—except par value data)
 
December 31, 2014
 
December 31, 2013
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
71.8

 
$
43.2

Short-term marketable securities, available-for-sale
11.8

 
11.4

Accounts receivable, net
42.4

 
26.1

Inventory
16.0

 
9.0

Prepaid and other current assets
3.9

 
3.4

Total current assets
145.9

 
93.1

Property and equipment, net
31.2

 
20.7

Restricted cash
1.0

 
1.0

Intangible assets, net
2.7

 
3.6

Goodwill
3.2

 
3.2

Other assets
0.6

 
0.9

Total assets
$
184.6

 
$
122.5

Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable and accrued liabilities
$
20.4

 
$
14.1

Accrued payroll and related expenses
17.2

 
15.1

Current portion of long-term debt
2.3

 
2.2

Current portion of deferred revenue
0.7

 
0.7

Total current liabilities
40.6

 
32.1

Other liabilities
1.5

 
1.7

Long-term debt, net of current portion
2.3

 
4.6

Total liabilities
44.4

 
38.4

Commitments and contingencies
 
 
 
Stockholders’ equity:
 
 
 
Preferred stock, $0.001 par value, 5.0 shares authorized; no shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively

 

Common stock, $0.001 par value, 100.0 authorized; 77.6 and 77.3 issued and outstanding, respectively, at December 31, 2014; and 72.8 and 72.5 shares issued and outstanding, respectively, at December 31, 2013
0.1

 
0.1

Additional paid-in capital
638.0

 
559.5

Accumulated other comprehensive loss
(0.1
)
 
(0.1
)
Accumulated deficit
(497.8
)
 
(475.4
)
Total stockholders’ equity
140.2

 
84.1

Total liabilities and stockholders’ equity
$
184.6

 
$
122.5






DexCom, Inc.
Consolidated Statements of Operations
(In millions—except per share data)

 

 
Three Months Ended 
 December 31,
 
Twelve Months Ended 
 December 31,
 
2014
 
2013
 
2014
 
2013
Product revenue
$
84.3

 
$
51.3

 
$
257.1

 
$
157.1

Development grant and other revenue

 
0.4

 
2.1

 
2.9

Total revenue
84.3

 
51.7

 
259.2

 
160.0

Product cost of sales
24.9

 
17.2

 
82.3

 
58.1

Development and other cost of sales

 
0.4

 
0.6

 
1.8

Total cost of sales
24.9

 
17.6

 
82.9

 
59.9

Gross profit
59.4

 
34.1

 
176.3

 
100.1

Operating expenses
 
 
 
 
 
 
 
Research and development
21.6

 
12.6

 
69.4

 
44.8

Selling, general and administrative
36.2

 
23.8

 
128.4

 
84.2

Total operating expenses
57.8

 
36.4

 
197.8

 
129.0

Operating income (loss)
1.6

 
(2.3
)
 
(21.5
)
 
(28.9
)
Interest expense
(0.2
)
 
(0.3
)
 
(0.8
)
 
(0.9
)
Income (loss) before income taxes
1.4

 
(2.6
)
 
(22.3
)
 
(29.8
)
Income tax expense
0.1

 

 
0.1

 

Net income (loss)
$
1.3

 
$
(2.6
)
 
$
(22.4
)
 
$
(29.8
)
Basic net income (loss) per share
$
0.02

 
$
(0.04
)
 
$
(0.30
)
 
$
(0.42
)
Shares used to compute basic net income (loss) per share
76.8

 
72.0

 
75.2

 
71.1

Diluted net income (loss) per share
$
0.02

 
$
(0.04
)
 
$
(0.30
)
 
$
(0.42
)
Shares used to compute diluted net income (loss) per share
81.7

 
72.0

 
75.2

 
71.1




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