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 5, 2013
INSULET CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 001-33462 | 04-3523891 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File No.) |
(IRS Employer Identification No.) |
9 Oak Park Drive
Bedford, Massachusetts 01730
(Address of Principal Executive Offices, including Zip Code)
Registrant’s telephone number, including area code: (781) 457-5000
Not Applicable
(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(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 4.02(a). Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On February 5, 2013, management and the Audit Committee of the Board of Directors of Insulet Corporation (the “Company”) concluded that it is necessary to restate the Company’s audited consolidated financial statements for the year ended December 31, 2011 and for the unaudited quarterly financial reporting periods ended June 30, 2011, September 30, 2011, March 31, 2012, June 30, 2012 and September 30, 2012 and that the Company’s consolidated financial statements for these periods should no longer be relied upon. The Audit Committee made this determination following consultation with and upon the recommendation of management and following consultation with Ernst & Young LLP. Therefore, the Company plans to present the restated results for the fiscal year ended December 31, 2011, and the quarterly periods ended June 30, 2011 and September 30, 2011 in an amended Annual Report on Form 10-K/A. The Company plans to present the restated results for the quarterly periods ended March 31, 2012, June 30, 2012 and September 30, 2012 in amended Quarterly Reports on Form 10-Q/A. The Company expects to file these amended reports on or before February 28, 2012. The restatement is expected to result in a reduction of the Company’s net loss in the year ended December 31, 2011 and is not expected to affect the Company’s net loss for any period in 2012.
In June 2011, the Company acquired all of the outstanding shares of privately-held Neighborhood Diabetes and accounted for the acquisition as a business combination. In connection with the acquisition, the Company recognized net deferred tax liabilities of $11.3 million. The Company also reduced its preexisting valuation allowance and goodwill, accordingly, through purchase accounting. Upon subsequent review, the Company determined that the $11.3 million reduction of its preexisting valuation allowance should have been reported as an income tax benefit and not as an adjustment to goodwill.
In June 2011, the Company modified its outstanding convertible debt. Upon subsequent review, the Company determined that at the date of the modification it should have recognized approximately $5.5 million in additional deferred tax liability related to its debt. The recognition of this additional deferred tax liability would have resulted in a reduction of the Company’s preexisting valuation allowance and therefore had no effect on its statement of operations. The Company expects to correct certain balance sheet amounts with respect to the presentation of its deferred tax assets and liabilities related to the acquisition of Neighborhood Diabetes and the modification of the convertible debt in June 2011.
The following tables summarize the expected effect of the restatement by major financial statement line item in the three and six months ended June 30, 2011, the nine months ended September 30, 2011 and the year ended December 31, 2011. The restatement is expected to result in an increase in deferred tax assets (which are presented as a component of prepaid expenses and other current assets) of $1.2 million at June 30, 2011 and September 30, 2011 and $0.9 million at December 31, 2011, an increase in goodwill of $11.3 million at June 30, 2011 and September 30, 2011 and $10.9 million at December 31, 2011, and an increase in deferred tax liabilities (which are presented as a component of other long-term liabilities) of $1.2 million at June 30, 2011 and September 30, 2011 and $0.4 million at December 31, 2011. The restatement is expected to result in an increase in tax benefit of $11.3 million in the three and six months ended June 30, 2011, the nine months ended September 30, 2011 and the year ended December 31, 2011. The restatement is not expected to have any effect on amounts reported in periods prior to the quarter ended June 30, 2011.
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Financial statement lines on the consolidated balance sheets and consolidated statements of operations expected to be impacted as a result of the restatement are summarized below (in thousands):
Consolidated Balance Sheet
| June 30, 2011 | September 30, 2011 | December 31, 2011 | ||||||||||||||||||||||
| As Previously Reported |
As Restated | As Previously Reported |
As Restated | As Previously Reported |
As Restated | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||
| Prepaid expenses and other current assets |
$ | 4,770 | $ | 5,991 | $ | 3,653 | $ | 4,874 | $ | 2,802 | $ | 3,652 | ||||||||||||
| Total current assets |
147,834 | 149,055 | 137,857 | 139,078 | 131,785 | 132,635 | ||||||||||||||||||
| Goodwill |
26,727 | 38,066 | 26,164 | 37,503 | 26,647 | 37,536 | ||||||||||||||||||
| Total assets |
226,190 | 238,750 | 215,780 | 228,340 | 209,583 | 221,322 | ||||||||||||||||||
| Other long-term liabilities |
1,303 | 2,524 | 1,260 | 2,481 | 1,652 | 2,052 | ||||||||||||||||||
| Total liabilities |
132,091 | 133,312 | 132,340 | 133,561 | 138,187 | 138,587 | ||||||||||||||||||
| Accumulated deficit |
(413,122 | ) | (401,783 | ) | (426,684 | ) | (415,345 | ) | (441,023 | ) | (429,684 | ) | ||||||||||||
| Total stockholders’ equity |
94,099 | 105,438 | 83,440 | 94,779 | 71,396 | 82,735 | ||||||||||||||||||
| Total liabilities and stockholders’ equity |
226,190 | 238,750 | 215,780 | 228,340 | 209,583 | 221,322 | ||||||||||||||||||
Consolidated Statement of Operations
| Three Months Ended | Six Months Ended | Nine Months Ended | Year Ended | |||||||||||||||||||||||||||||
| June 30, 2011 | June 30, 2011 | September 30, 2011 | December 31, 2011 | |||||||||||||||||||||||||||||
| As Previously Reported |
As Restated | As Previously Reported |
As Restated | As Previously Reported |
As Restated | As Previously Reported |
As Restated | |||||||||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||||||||||
| Income tax benefit (expense) |
$ | — | $ | 11,339 | $ | — | $ | 11,339 | $ | — | $ | 11,339 | $ | (127 | ) | $ | 11,212 | |||||||||||||||
| Net loss |
(19,423 | ) | (8,084 | ) | (29,269 | ) | (17,930 | ) | (42,831 | ) | (31,492 | ) | (57,170 | ) | (45,831 | ) | ||||||||||||||||
| Net loss per share basic and diluted |
(0.42 | ) | (0.17 | ) | (0.64 | ) | (0.39 | ) | (0.92 | ) | (0.68 | ) | (1.22 | ) | (0.98 | ) | ||||||||||||||||
The following tables summarize the expected effect of the restatement by major financial statement line at March 31, 2012, June 30, 2012 and September 30, 2012. The restatement is expected to result in an increase in deferred tax assets (which are presented as a component of prepaid expenses and other current assets) of $0.9 million at March 31, 2012, June 30, 2012 and September 30, 2012, an increase in goodwill of $10.9 million at March 31, 2012, June 30, 2012 and September 30, 2012, and an increase in deferred tax liabilities (which are presented as a component of other long-term liabilities) of $0.4 million at March 31, 2012, June 30, 2012 and September 30, 2012. The restatement is expected to have no impact to the statements of operations during these periods.
Financial statement lines on the consolidated balance sheets expected to be impacted as a result of the restatement are summarized below (in thousands):
Consolidated Balance Sheet
| March 31, 2012 | June 30, 2012 | September 30, 2012 | ||||||||||||||||||||||
| As Previously Reported |
As Restated | As Previously Reported |
As Restated | As Previously Reported |
As Restated | |||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||||||||
| Prepaid expenses and other current assets |
$ | 3,463 | $ | 4,313 | $ | 3,454 | $ | 4,304 | $ | 4,717 | $ | 5,567 | ||||||||||||
| Total current assets |
127,369 | 128,219 | 115,615 | 116,465 | 113,394 | 114,244 | ||||||||||||||||||
| Goodwill |
26,647 | 37,536 | 26,647 | 37,536 | 26,647 | 37,536 | ||||||||||||||||||
| Total assets |
203,942 | 215,681 | 191,940 | 203,679 | 191,642 | 203,381 | ||||||||||||||||||
| Other long-term liabilities |
1,640 | 2,040 | 1,668 | 2,068 | 1,670 | 2,070 | ||||||||||||||||||
| Total liabilities |
145,064 | 145,464 | 144,190 | 144,590 | 152,529 | 152,929 | ||||||||||||||||||
| Accumulated deficit |
(455,803 | ) | (444,464 | ) | (470,279 | ) | (458,940 | ) | (482,696 | ) | (471,357 | ) | ||||||||||||
| Total stockholders’ equity |
58,878 | 70,217 | 47,750 | 59,089 | 39,113 | 50,452 | ||||||||||||||||||
| Total liabilities and stockholders’ equity |
203,942 | 215,681 | 191,940 | 203,679 | 191,642 | 203,381 | ||||||||||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized.
| INSULET CORPORATION | ||||
| February 8, 2013 | By: | /s/ Duane DeSisto | ||
| President and Chief Executive Officer | ||||
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