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8-K - FORM 8-K - INSULET CORP | b84978e8vk.htm |
Exhibit 99.1
INSULET REPORTS FOURTH QUARTER AND FULL YEAR 2010 RESULTS
FY 2010 Revenue Increases 47% from FY 2009
Fourth Quarter 2010 Gross Margin Reaches 50%
CE Mark Submission Filed for Next Generation OmniPod
BEDFORD, MA, February 15, 2011 Insulet Corporation (NASDAQ: PODD), the leader in tubing-free
insulin pump technology with its OmniPod® Insulin Management System, today announced financial
results for the fourth quarter and full year ended December 31, 2010.
Fourth Quarter Results
Fourth quarter 2010 revenue increased 37% to $27.8 million, compared to $20.2 million in the fourth
quarter of 2009. On a sequential basis, revenue increased 9% from $25.5 million in the third
quarter of 2010. Gross profit for the fourth quarter of 2010 was $13.8 million, representing a 50%
gross margin, compared to a gross profit of $7.3 million, or a 36% gross margin, for the fourth
quarter of 2009. On a sequential basis, gross profit increased 19% from $11.6 million in the third
quarter of 2010.
Operating loss for the fourth quarter of 2010 was $9.7 million, a 19% improvement compared to
operating loss of $12.0 million in the fourth quarter of 2009. Total operating expenses were $23.6
million in the fourth quarter of 2010, compared to $19.3 million in the fourth quarter of 2009.
The fourth quarter of 2010 included a non-recurring impairment charge of $3.4 million related to
certain manufacturing equipment no longer in use. Net interest expense was $11.1 million in the
fourth quarter of 2010, compared to $3.6 million in the fourth quarter of 2009. The Company repaid
its facility agreement with Deerfield Partners in full in December 2010 and recorded approximately
$7 million of additional non-cash interest as part of the transaction. Net loss for the fourth
quarter of 2010 was $20.9 million, or $0.50 per share, compared to a net loss of $15.5 million, or
$0.44 per share, for the fourth quarter of 2009.
In 2010 we celebrated Insulets ten-year anniversary and marked the milestone by achieving our key
financial and commercial objectives for the year: strong revenue growth, impressive gross margin
expansion and international product launch, said Duane DeSisto, President and Chief Executive
Officer of Insulet. We ended 2010 with approximately 25,000 customers enjoying the freedom of our
easy-to-use, tubing-free insulin pump. In 2011, we look forward to continuing our track record of
market leading innovation as we
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work towards the approval and launch of our next generation OmniPod. We have already submitted
this smaller pod for CE Mark approval and expect to file for FDA approval in the coming months.
Full Year Results
For the year ended December 31, 2010, revenue increased 47% to $97.0 million from $66.0 million for
the year ended December 31, 2009. Gross profit for the full year
2010 was $43.7 million,
representing a 45% gross margin, as compared to $18.3 million, or a 28% gross margin, in 2009.
Operating loss for the year ended December 31, 2010 was $38.6 million, an improvement of 35% as
compared to an operating loss of $59.4 million in the year ended December 31, 2009. Total
operating expenses were $82.4 million for the full year 2010, compared to $77.7 million for the
full year 2009. Net interest expense was $22.5 million in 2010, compared to $13.0 million in 2009.
The increase mainly reflects the recording of $7 million of non-cash interest expense to write-off
remaining amortization of debt discounts and issuance costs in conjunction with the Companys early
repayment of its facility agreement with Deerfield Partners. Net loss for the year ended December
31, 2010 was $61.2 million, or $1.54 per share, compared to $72.3 million, or $2.43 per share, for
the year ended December 31, 2009.
As of December 31, 2010, the Company had cash and cash equivalents of $113.3 million compared to
$128.0 million at December 31, 2009.
Recent Highlights
| In December 2010, the Company sold 3.45 million shares of its common stock at a price of $13.27 per share resulting in net proceeds to the Company of approximately $45.5 million. Approximately $33.3 million of the proceeds were used to repay all amounts outstanding under the Companys facility agreement with Deerfield Partners approximately 21 months prior to its maturity. The early retirement of the facility agreement will result in a savings of about $5 million in cash interest expense. |
| The Companys international distribution partner, Ypsomed Distribution AG, has or will soon introduce the OmniPod System to people living with Type I diabetes in seven countries including Germany, United Kingdom, France, the Netherlands, Sweden, Norway and Switzerland. |
| In February 2011, the Company submitted for CE Mark approval of its next generation OmniPod. |
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Guidance
For the full year 2011, the Company is estimating revenue to be in the range of $123 to $133
million and its operating loss to be in the range of $20 to $28 million. The Company is estimating
revenue of $27.5 to $29.5 million in the first quarter of 2011.
Conference Call
Insulet will host a conference call on Tuesday, February 15, 2011 at 5:00PM Eastern time to discuss
the Companys fourth quarter and full year 2010 results and present information concerning its
business, strategies and outlook. To listen to the conference call, please dial 800-510-9691 for
domestic callers and 617-614-3453 for international callers. The
passcode is 86943006. A replay of
the conference call will be available two hours after the start of the call through February 22,
2011 by dialing 888-286-8010 (domestic) and 617-801-6888 (international), passcode 57382597. An
online archive of the conference call will also be available by accessing the Investor Information
section of the companys website at http://investors.insulet.com.
Forward-Looking Statement
The 2010 financial results contained in this news release are subject to finalization in connection
with the preparation of the Companys Annual Report on Form 10-K for the year ended December 31,
2010. This press release contains forward-looking statements concerning Insulets expectations,
anticipations, intentions, beliefs or strategies regarding the future, including those related to
its expected revenue and operating losses, planned expansion in the U.S. and abroad, particularly
with respect to its agreement with Ypsomed, product demand, the impact of the OmniPod System on the
insulin pump market, regulatory matters and financial performance. These forward-looking statements
are based on its current expectations and beliefs concerning future developments and their
potential effects on it. There can be no assurance that future developments affecting it will be
those that it has anticipated. These forward-looking statements involve a number of risks,
uncertainties (some of which are beyond its control) or other assumptions that may cause actual
results or performance to be materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include, but are not limited to: risks
associated with the Companys dependence on the OmniPod System; Insulets ability to increase
customer orders and manufacturing volumes; adverse changes in general economic conditions; impact
of healthcare reform legislation; Insulets inability to raise additional funds in the future on
acceptable terms or at all; potential supply problems or price fluctuations with sole source or
other third-party suppliers on which Insulet is dependent; international business risks; Insulets
inability to obtain adequate coverage or reimbursement from third-party payors for the OmniPod
System and potential adverse changes in reimbursement rates or policies relating to the OmniPod;
potential adverse effects resulting from competition with competitors; technological innovations
adversely affecting the Companys business; potential termination of Insulets license to
incorporate a blood glucose meter into the OmniPod System; Insulets ability to protect its
intellectual property and other proprietary rights; conflicts with the intellectual property of
third parties, including claims that Insulets current or future products infringe the proprietary
rights of others; adverse regulatory or legal actions relating to the OmniPod System; failure of
Insulets contract manufacturers or component suppliers to comply with FDAs quality system
regulations, the potential violation of federal or state laws prohibiting kickbacks or protecting
patient health information, or any challenges to or investigations into Insulets practices under
these laws; product liability lawsuits that may be brought against Insulet; reduced retention
rates; unfavorable results of clinical studies relating to the OmniPod System or the products of
Insulets competitors; potential future publication of articles or announcement of positions by
physician associations or other organizations that are unfavorable to Insulets products; the
expansion, or attempted expansion, into foreign markets; the concentration of substantially all of
Insulets manufacturing capacity at a single location in China and substantially all of Insulets
inventory at a single location in Massachusetts; Insulets ability to attract and retain key
personnel; Insulets ability to manage its growth; fluctuations in quarterly results of operations;
risks associated with potential future acquisitions; Insulets
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ability to generate sufficient cash to service all of its indebtedness; the expansion of Insulets
distribution network; Insulets ability to successfully maintain effective internal controls; and
other risks and uncertainties described in its Annual Report on Form 10-K, as amended, which was
originally filed with the Securities and Exchange Commission on March 9, 2010 in the section
entitled Risk Factors, and in its other filings from time to time with the Securities and
Exchange Commission. Should one or more of these risks or uncertainties materialize, or should any
of its assumptions prove incorrect, actual results may vary in material respects from those
projected in these forward-looking statements. Insulet undertakes no obligation to publicly update
or revise any forward-looking statements.
About Insulet Corporation
Insulet Corporation is an innovative medical device company dedicated to improving the lives of
people with diabetes. The Companys OmniPod Insulin Management System is a revolutionary, discreet
and easy-to-use insulin infusion system that features two easy-to-use parts with no tubing and
fully-automated cannula insertion. Through the OmniPod System, Insulet seeks to expand the use of
continuous subcutaneous insulin infusion (CSII) therapy among people with insulin-dependent
diabetes. Founded in 2000, Insulet is based in Bedford, MA.
Contact:
Stephanie Marks for Insulet Corporation
ir@insulet.com
877-PODD-IR1 (877-763-3471)
Stephanie Marks for Insulet Corporation
ir@insulet.com
877-PODD-IR1 (877-763-3471)
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INSULET CORPORATION
Selected Financial Data
Selected Financial Data
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
Three months ended | Year ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
Revenue |
$ | 27,767 | $ | 20,211 | $ | 96,966 | $ | 66,032 | ||||||||
Cost of revenue |
13,941 | 12,877 | 53,240 | 47,735 | ||||||||||||
Gross profit |
13,826 | 7,334 | 43,726 | 18,297 | ||||||||||||
Operating expenses: |
||||||||||||||||
Research and development |
5,459 | 3,350 | 16,566 | 13,231 | ||||||||||||
General and administrative |
6,288 | 7,267 | 26,667 | 26,842 | ||||||||||||
Sales and marketing |
8,394 | 8,677 | 34,695 | 37,583 | ||||||||||||
Impairment of assets |
3,410 | | 4,431 | | ||||||||||||
Total operating
expenses |
23,551 | 19,294 | 82,359 | 77,656 | ||||||||||||
Operating loss |
(9,725 | ) | (11,960 | ) | (38,633 | ) | (59,359 | ) | ||||||||
Net interest expense |
(11,133 | ) | (3,578 | ) | (22,526 | ) | (12,985 | ) | ||||||||
Net loss |
$ | (20,858 | ) | $ | (15,538 | ) | $ | (61,159 | ) | $ | (72,344 | ) | ||||
Net loss per share basic and
diluted |
$ | (0.50 | ) | $ | (0.44 | ) | $ | (1.54 | ) | $ | (2.43 | ) | ||||
Weighted-average number of
shares used in calculating net
loss per share |
42,050,678 | 35,164,348 | 39,607,899 | 29,727,106 | ||||||||||||
As a result of the early extinguishment of our Facility Agreement entered into in March 2009
and amended in September 2009 and June 2010, net interest expense in the three months and year
ended December 31, 2010 includes approximately $7.0 million related to the write-off of the debt
discount and deferred financing costs and $0.7 million related to an early payment penalty.
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CONDENSED CONSOLIDATED BALANCE SHEET DATA:
As of | ||||||||
December 31, | ||||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
(In thousands, except share and per share data) | ||||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash |
$ | 113,274 | $ | 127,996 | ||||
Accounts receivable, net |
16,841 | 14,962 | ||||||
Inventories |
11,430 | 10,086 | ||||||
Prepaid expenses and other current assets |
912 | 1,260 | ||||||
Total current assets |
142,457 | 154,304 | ||||||
Property and equipment, net |
12,522 | 15,482 | ||||||
Other assets |
1,254 | 3,072 | ||||||
Total assets |
$ | 156,233 | $ | 172,858 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current Liabilities |
||||||||
Accounts payable |
$ | 4,895 | $ | 5,870 | ||||
Accrued expenses |
9,808 | 9,973 | ||||||
Deferred revenue |
4,247 | 3,970 | ||||||
Total current liabilities |
18,950 | 19,813 | ||||||
Long-term debt, net of current portion |
69,433 | 89,136 | ||||||
Other long-term liabilities |
1,619 | 1,999 | ||||||
Total liabilities |
90,002 | 110,948 | ||||||
Stockholders equity |
||||||||
Preferred stock, $.001 par value: |
||||||||
Authorized: 5,000,000 shares at December
31, 2010 and 2009.
Issued: zero shares at December 31, 2010
and 2009 |
| | ||||||
Common stock, $.001 par value: |
||||||||
Authorized: 100,000,000 shares at December
31, 2010 and 2009. |
||||||||
Issued: 45,440,839 and 37,755,254 shares at
December 31, 2010 and 2009, respectively |
45 | 39 | ||||||
Additional paid-in capital |
450,039 | 384,565 | ||||||
Accumulated deficit |
(383,853 | ) | (322,694 | ) | ||||
Total stockholders equity |
66,231 | 61,910 | ||||||
Total liabilities and
stockholders equity |
$ | 156,233 | $ | 172,858 | ||||
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