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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Nxstage Medical, Inc. | NASDAQ:NXTM | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 30.00 | 29.99 | 30.00 | 0 | 01:00:00 |
|
þ
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the fiscal year ended December 31, 2017
|
¨
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the transition period from __________ to __________
|
Delaware
|
|
04-3454702
|
(State or Other Jurisdiction of Incorporation or Organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
350 Merrimack Street, Lawrence, MA
|
|
01843
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
Common Stock, $0.001 par value
|
|
Nasdaq Global Select Market
|
Large accelerated filer
þ
|
Accelerated filer
¨
|
Non-accelerated filer
£
|
Smaller reporting company
£
|
Emerging growth company
£
|
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|
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Page
|
Mine Safety Disclosures
|
||
|
|
|
|
|
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
|
Item 11.
|
Executive Compensation
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
|
Item 14.
|
Principal Accounting Fees and Services
|
|
|
|
|
|
||
|
•
|
our belief that the significant majority of our near-term revenues will come from sales of the System One in the U.S.;
|
•
|
estimates of the number of end-stage renal disease (ESRD) patients that could be treated at home with the System One;
|
•
|
our strategic initiatives to grow home hemodialysis adoption, expand globally and enhance our product offerings;
|
•
|
patients' access to home and more frequent hemodialysis;
|
•
|
our plans and the anticipated markets for, and expected design and functionality of, our next-generation hemodialysis system, next-generation critical care system and peritoneal dialysis system;
|
•
|
expectations with respect to future demand for our products and revenue growth, with components of such revenue growth including sales of disposable products;
|
•
|
future financial results for our System One, In-Center and Services segments and total company;
|
•
|
expectation of sustaining gross profit as a percentage of revenue in our System One segment above 50% and the underlying elements of such objective;
|
•
|
future selling and marketing, research and development, distribution, and general and administrative expenses and the drivers for such expenses;
|
•
|
our manufacturing operations and supply chain;
|
•
|
the scope, timing and impact of our research and development efforts;
|
•
|
impact of the adoption of new accounting standards and the Tax Cuts and Jobs Act of 2017 (Tax Reform);
|
•
|
the availability of, and impact of changes in, reimbursement for home and more frequent hemodialysis, and the expected impact of draft local coverage determinations on reimbursement for more frequent hemodialysis in the United States;
|
•
|
the anticipated timing and likelihood of completion of our proposed merger of us with a subsidiary of Fresenius (Merger);
|
•
|
disruptions to our business operations due to the pendency of the proposed Merger;
|
•
|
future realization of our deferred tax assets;
|
•
|
anticipated benefits of manufacturing dialyzers for sale to Asahi Kasei Kuraray Medical Co. (Asahi) and future sales to Asahi;
|
•
|
the scope and adequacy of patent protection with respect to our products; and
|
•
|
the financial, commercial and operational impact of any of the above.
|
Item 1.
|
Business
|
(in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Products Business (System One Segment, In-Center Segment & Other)
|
|
|
|
|
|
||||||
Revenues
|
$
|
379,464
|
|
|
$
|
359,127
|
|
|
$
|
332,845
|
|
Income (Loss) from operations
|
$
|
9,851
|
|
|
$
|
22,695
|
|
|
$
|
9,197
|
|
Services Segment
|
|
|
|
|
|
||||||
Revenues
|
$
|
19,539
|
|
|
$
|
14,781
|
|
|
$
|
6,412
|
|
Loss from operations
|
$
|
(23,702
|
)
|
|
$
|
(26,233
|
)
|
|
$
|
(23,826
|
)
|
Eliminations
|
|
|
|
|
|
||||||
Elimination of intersegment revenues
|
$
|
(5,062
|
)
|
|
$
|
(7,530
|
)
|
|
$
|
(3,134
|
)
|
Elimination of intersegment gross profit
|
$
|
—
|
|
|
$
|
(747
|
)
|
|
$
|
—
|
|
Total Company
|
|
|
|
|
|
||||||
Revenues
|
$
|
393,941
|
|
|
$
|
366,378
|
|
|
$
|
336,123
|
|
Loss from operations
|
$
|
(13,851
|
)
|
|
$
|
(4,285
|
)
|
|
$
|
(14,629
|
)
|
-
|
independence and the ability to better understand and take control of one’s care;
|
-
|
freedom from specific time constraints with greater ability to work and participate in “normal” life activities;
|
-
|
greater freedom to travel;
|
-
|
convenience of not driving to and from the dialysis center three times a week; and
|
-
|
privacy and comfort of being at home.
|
-
|
reduced risk of cardiovascular morbidity;
|
-
|
improved regulation of blood pressure and phosphorus and reduced need for related medications;
|
-
|
improved physical and mental quality of life; and
|
-
|
better therapy tolerance.
|
-
|
The NxStage Cartridge.
A disposable, integrated treatment cartridge that loads simply and easily into the System One. The cartridge incorporates a proprietary volumetric fluid management system and includes a pre-attached dialyzer.
|
-
|
PureFlow SL and Premixed Dialysate
. Our PureFlow SL accessory prepares on-site premixed dialysate fluid in batches before treatment in the patient’s home using ordinary tap water and dialysate concentrate. The volume of fluids used varies with treatment options, prescription and setting. To accommodate patient travel with the System One or in other circumstances in which the PureFlow SL is not available, we also supply premixed dialysate in sterile five liter bags.
|
-
|
Nx2me Connected Health.
Our Nx2me Connected Health platform leverages cloud-based computing and wireless communications by using an application we developed for the iPad. The Nx2me Connected Health application collects important System One cycler data, as well as patient information such as blood pressure and weight. Patients can review, confirm, and transmit this data to their dialysis centers after each treatment and dialysis center staff can access the transmitted data with their own clinician portal. This gives the staff enhanced capabilities to review and follow treatment adherence and progress as well as the ability to transfer this data directly into their electronic health records system.
|
•
|
control and mechanical features aimed at set-up including priming of blood circuits and preparation of fluids including dialysate for hemodialysis and peritoneal dialysis;
|
•
|
blood circuit improvements aimed at safety, cost effectiveness and convenience;
|
•
|
control technology aimed at reliability and safety of blood treatment machines;
|
•
|
sensor technology including temperature and pressure sensors; and
|
•
|
administration of peritoneal dialysis.
|
Expiration
|
Portion of Patent Portfolio
|
Within the next 5 years
|
38%
|
6-10 years
|
38%
|
11-15 years
|
21%
|
16-20 years
|
3%
|
•
|
Product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action;
|
•
|
Quality System Regulation, or QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process;
|
•
|
labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication;
|
•
|
clearance of product modifications that could significantly affect safety or efficacy or that would constitute a major change in intended use of one of our cleared devices;
|
•
|
approval of product modifications that affect the safety or effectiveness of one of our approved devices;
|
•
|
medical device reporting regulations, which require that manufacturers comply with FDA requirements to report if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to recur;
|
•
|
post-approval restrictions or conditions, including post-approval study commitments;
|
•
|
post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device;
|
•
|
the FDA's recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations;
|
•
|
regulations pertaining to voluntary recalls; and
|
•
|
notices of corrections or removals.
|
•
|
the Anti-Kickback Statute, which among other things prohibits the offer or payment of any remuneration for the purpose of inducing or rewarding patient referrals or the order, purchase or recommendation of items or services reimbursable by a federal healthcare program;
|
•
|
the False Claims Act, which prohibits the submission of false or otherwise improper claims for payment to a federally-funded healthcare program or causing such claims to be submitted; and
|
•
|
criminal healthcare fraud statutes that prohibit false statements and improper claims to any third-party payors.
|
Item 1A.
|
Risk Factors
|
•
|
Medicare and Medicaid payment rules, including coverage rules that limit the clinical circumstances under which payment will be made for more frequent dialysis treatments;
|
•
|
anti-kickback and related laws prohibiting payments and other remuneration intended to influence the referral of health care business or selection of a provider;
|
•
|
prohibitions on submitting false claims for government or commercial insurance reimbursement;
|
•
|
laws regulating the use and disclosure of patient health information; and
|
•
|
laws regulating the storage and administration of pharmaceuticals and medical devices.
|
•
|
offering products and services that are more widely recognized by physicians, patients and providers;
|
•
|
offering broader product lines which enable them to offer customers a single source for multiple products;
|
•
|
having significantly more financial and human resources, more established service and customer support infrastructures and spending more on product development and marketing;
|
•
|
having more established sales forces and distribution channels; and
|
•
|
having more established relationships with the providers of dialysis therapy, including DaVita and Fresenius which may at any time reduce their promotion of our dialysis products to their dialysis patients.
|
•
|
the new product may not perform as intended or may have safety concerns;
|
•
|
the costs associated with obtaining regulatory approval or in satisfying applicable regulatory requirements may be prohibitive and, even in markets where these costs are not prohibitive, the associated efforts may significantly lengthen projected timelines for new product introduction;
|
•
|
the FDA and other regulatory authorities may not approve the new product or the facilities in which it is manufactured in a timely manner or at all;
|
•
|
payors may not reimburse the new product sufficiently or at all;
|
•
|
competing products may be safer, more effective or easier to use; and
|
•
|
we may be unable to manufacture sufficient quantities of the new product for development or commercialization activities in a timely and cost-effective manner.
|
•
|
increase our manufacturing capacity to meet customer demand;
|
•
|
expand our sales and marketing and on-going development capabilities;
|
•
|
improve our information technology infrastructure, operational, financial and management controls and reporting systems and procedures; and
|
•
|
manage the increased complexity and scope of our relationships with various partners, distributors, suppliers, manufacturers and other organizations.
|
•
|
need for significant investment without assurance of success;
|
•
|
potential disruption of our ongoing business;
|
•
|
need for involvement of senior management to develop the acquired businesses, technologies or products, which will take away from the time they ordinarily spend on the remainder of our business;
|
•
|
entry into markets or types of businesses in which we have limited experience;
|
•
|
impairment of relationships with key partners, customers or suppliers of ours or any acquired business;
|
•
|
addition of new complex compliance obligations;
|
•
|
difficulty in managing geographically remote units both in the U.S. and internationally;
|
•
|
difficulty in successfully implementing, upgrading and deploying in a timely and effective manner new operational information systems and upgrades of our finance, accounting and product distribution systems;
|
•
|
difficulty in incorporating acquired technology and rights into our product and service offerings;
|
•
|
unanticipated expenses and delays in completing acquired development projects and technology integration;
|
•
|
difficulty in transitioning and integrating the operations and personnel of an acquired businesses, including with respect to differing and complex accounting and financial reporting systems;
|
•
|
customers delaying purchases of our products pending resolution of product integration between our existing and our newly acquired products;
|
•
|
loss of key employees of an acquired company; and
|
•
|
inaccurate assumptions of an acquired company's product or service quality.
|
•
|
foreign exchange risk, in particular with respect to the euro and peso, which has been amplified by the recent strength of the U.S. dollar and which could adversely affect our financial results and our ability to maintain mutually beneficial and profitable relationships with foreign vendors, distributors and customers, and increase our costs to attract and retain international personnel;
|
•
|
expropriation and other restrictive government actions;
|
•
|
changes in intellectual property legal protections and remedies;
|
•
|
costs and challenges associated with sourcing and shipping goods internationally and importing and exporting goods;
|
•
|
changes to U.S. and foreign trade policies, including enactment of tariffs or border-adjusted taxes on goods imported into the U.S.;
|
•
|
difficulty managing operations in multiple locations;
|
•
|
local regulations that may restrict or impair our ability to conduct our operations, increase compliance costs, and make it more expensive and complex to manage our workforce;
|
•
|
fluctuations in local economic conditions;
|
•
|
health issues, such as pandemic disease risk, and natural disasters, such as flooding, hurricanes and earthquakes, which could disrupt our manufacturing and logistical and import activities; and
|
•
|
in certain locations, risks associated with local instability, including threats of violence, which could lead to disruptions in supply at our manufacturing facilities or key vendors.
|
•
|
identify and anticipate physician and patient needs properly;
|
•
|
develop and introduce new products or product enhancements in a timely manner;
|
•
|
avoid infringing upon the intellectual property rights of third parties;
|
•
|
demonstrate, if required, the safety and efficacy of new products with data from preclinical and clinical studies;
|
•
|
obtain the necessary regulatory clearances or approvals for new products or product enhancements;
|
•
|
comply fully with FDA and foreign regulations on marketing of new products or modified products; and
|
•
|
provide adequate training to potential users of our products.
|
•
|
prevent our competitors from duplicating our products;
|
•
|
prevent our competitors from gaining access to our proprietary information and technology; or
|
•
|
permit us to gain or maintain a competitive advantage.
|
•
|
cease selling or using any of our products that incorporate the asserted intellectual property, which would adversely affect our revenues;
|
•
|
pay substantial damages for past use of the asserted intellectual property;
|
•
|
obtain a license from the holder of the asserted intellectual property, which license may not be available on reasonable terms, if at all and which could reduce profitability; and
|
•
|
redesign or rename, in the case of trademark claims, our products to avoid infringing the intellectual property rights of third parties, which may not be possible and could be costly and time consuming if it is possible to do so.
|
•
|
timing of commercial launch and acceptance of our products;
|
•
|
timing of achieving profitability from operations;
|
•
|
changes in estimates of our financial results or recommendations by securities analysts or the failure to meet or exceed securities analysts' expectations;
|
•
|
actual or anticipated variations in our quarterly operating results;
|
•
|
future debt or equity financings;
|
•
|
developments or disputes with key vendors or customers, or adverse changes to the purchasing patterns of key customers and distributors;
|
•
|
disruptions in product supply for any reason, our failure to appropriately forecast supply or demand, difficulties in moving products across international borders, or the failure of third party suppliers to produce needed products or components;
|
•
|
reports by officials or health, medical or regulatory authorities or the general media regarding the potential benefits of the System One, similar dialysis products distributed by other companies, or more frequent or home dialysis;
|
•
|
delays or failures to obtain marketing approval for new products or modifications to marketed products;
|
•
|
product recalls and withdrawals;
|
•
|
defaults under our material contracts, including without limitation our credit agreement;
|
•
|
regulatory developments in the U.S. and foreign countries;
|
•
|
changes in third-party healthcare reimbursements, particularly a decline in the level of Medicare reimbursement for dialysis treatments, or the willingness of Medicare contractors to pay for more than three treatments a week where medically justified;
|
•
|
regulatory changes that could affect our profitability, such as the imposition of import tariffs and border-adjusted taxes;
|
•
|
litigation involving our company or our industry;
|
•
|
announcements of technical innovations or new products by our competitors;
|
•
|
developments or disputes concerning our patents or other proprietary rights;
|
•
|
our ability to manufacture and supply our products to commercial standards;
|
•
|
significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;
|
•
|
departures of key personnel;
|
•
|
investors' general perception of our company, our products, the economy and general market conditions; and
|
•
|
the other risks and uncertainties described in these
“Risk Factors
.
”
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
High
|
|
Low
|
|
|
|
|
2017
|
|
|
|
First Quarter
|
$29.99
|
|
$25.04
|
Second Quarter
|
$30.80
|
|
$20.45
|
Third Quarter
|
$29.93
|
|
$22.74
|
Fourth Quarter
|
$28.00
|
|
$23.94
|
2016
|
|
|
|
First Quarter
|
$21.79
|
|
$13.49
|
Second Quarter
|
$21.69
|
|
$14.23
|
Third Quarter
|
$26.07
|
|
$21.35
|
Fourth Quarter
|
$26.83
|
|
$21.11
|
Item 6.
|
Selected Financial Data
|
|
Years Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Statement of Comprehensive Loss Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenues
|
$
|
393,941
|
|
|
$
|
366,378
|
|
|
$
|
336,123
|
|
|
$
|
301,501
|
|
|
$
|
263,429
|
|
Cost of revenues
|
225,653
|
|
|
214,393
|
|
|
204,652
|
|
|
185,598
|
|
|
160,926
|
|
|||||
Gross profit
|
168,288
|
|
|
151,985
|
|
|
131,471
|
|
|
115,903
|
|
|
102,503
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Selling and marketing
|
68,234
|
|
|
63,878
|
|
|
58,528
|
|
|
55,385
|
|
|
47,842
|
|
|||||
Research and development
|
39,608
|
|
|
31,032
|
|
|
26,237
|
|
|
22,635
|
|
|
18,887
|
|
|||||
Distribution
|
32,484
|
|
|
28,579
|
|
|
26,211
|
|
|
26,001
|
|
|
21,246
|
|
|||||
General and administrative
|
41,813
|
|
|
32,781
|
|
|
35,124
|
|
|
34,069
|
|
|
32,326
|
|
|||||
Total operating expenses
|
182,139
|
|
|
156,270
|
|
|
146,100
|
|
|
138,090
|
|
|
120,301
|
|
|||||
Loss from operations
|
(13,851
|
)
|
|
(4,285
|
)
|
|
(14,629
|
)
|
|
(22,187
|
)
|
|
(17,798
|
)
|
|||||
Other expense, net
|
(1,619
|
)
|
|
(1,930
|
)
|
|
(554
|
)
|
|
(873
|
)
|
|
(1,008
|
)
|
|||||
Net loss before income taxes
|
(15,470
|
)
|
|
(6,215
|
)
|
|
(15,183
|
)
|
|
(23,060
|
)
|
|
(18,806
|
)
|
|||||
(Benefit from) provision for income taxes
|
(145
|
)
|
|
1,102
|
|
|
1,077
|
|
|
1,253
|
|
|
(245
|
)
|
|||||
Net loss
|
(15,325
|
)
|
|
(7,317
|
)
|
|
(16,260
|
)
|
|
(24,313
|
)
|
|
(18,561
|
)
|
|||||
Less: Net loss attributable to noncontrolling interests
|
(1,333
|
)
|
|
(2,546
|
)
|
|
(918
|
)
|
|
(367
|
)
|
|
—
|
|
|||||
Net loss attributable to stockholders of NxStage Medical, Inc.
|
$
|
(13,992
|
)
|
|
$
|
(4,771
|
)
|
|
$
|
(15,342
|
)
|
|
$
|
(23,946
|
)
|
|
$
|
(18,561
|
)
|
Add: Accretion to redemption value of noncontrolling interests
|
(481
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net loss attributable to common stockholders
|
$
|
(14,473
|
)
|
|
$
|
(4,771
|
)
|
|
$
|
(15,342
|
)
|
|
$
|
(23,946
|
)
|
|
$
|
(18,561
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss per share, basic and diluted
|
$
|
(0.22
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.39
|
)
|
|
$
|
(0.31
|
)
|
Weighted-average shares outstanding, basic and diluted
|
65,856
|
|
|
64,520
|
|
|
63,384
|
|
|
61,700
|
|
|
60,261
|
|
|
December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
64,928
|
|
|
$
|
59,632
|
|
|
$
|
59,065
|
|
|
$
|
52,884
|
|
|
$
|
84,134
|
|
Working capital
|
105,944
|
|
|
95,639
|
|
|
86,163
|
|
|
84,395
|
|
|
108,513
|
|
|||||
Total assets
|
325,629
|
|
|
317,207
|
|
|
306,874
|
|
|
309,726
|
|
|
306,962
|
|
|||||
Long-term liabilities
|
65,218
|
|
|
65,874
|
|
|
70,393
|
|
|
73,415
|
|
|
74,594
|
|
|||||
Accumulated deficit
|
(421,593
|
)
|
|
(407,601
|
)
|
|
(402,830
|
)
|
|
(387,488
|
)
|
|
(363,542
|
)
|
|||||
Total stockholders’ equity
|
$
|
213,146
|
|
|
$
|
202,023
|
|
|
$
|
193,520
|
|
|
$
|
191,555
|
|
|
$
|
194,761
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Twelve Months Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Products Business (System One Segment, In-Center Segment & Other)
|
|
|
|
|
|
||||||
Revenues
|
$
|
379,464
|
|
|
$
|
359,127
|
|
|
$
|
332,845
|
|
Gross profit
|
$
|
183,225
|
|
|
$
|
169,389
|
|
|
$
|
146,188
|
|
Gross margin percentage
|
48
|
%
|
|
47
|
%
|
|
44
|
%
|
|||
Income (Loss) from operations
|
$
|
9,851
|
|
|
$
|
22,695
|
|
|
$
|
9,197
|
|
Services Segment
|
|
|
|
|
|
||||||
Revenues
|
$
|
19,539
|
|
|
$
|
14,781
|
|
|
$
|
6,412
|
|
Gross profit
|
$
|
(14,937
|
)
|
|
$
|
(16,657
|
)
|
|
$
|
(14,717
|
)
|
Gross margin percentage
|
n/a
|
|
|
n/a
|
|
|
n/a
|
|
|||
Loss from operations
|
$
|
(23,702
|
)
|
|
$
|
(26,233
|
)
|
|
$
|
(23,826
|
)
|
Eliminations
|
|
|
|
|
|
||||||
Elimination of intersegment revenues
|
$
|
(5,062
|
)
|
|
$
|
(7,530
|
)
|
|
$
|
(3,134
|
)
|
Elimination of intersegment gross profit
|
$
|
—
|
|
|
$
|
(747
|
)
|
|
$
|
—
|
|
Total Company
|
|
|
|
|
|
||||||
Revenues
|
$
|
393,941
|
|
|
$
|
366,378
|
|
|
$
|
336,123
|
|
Gross profit
|
$
|
168,288
|
|
|
$
|
151,985
|
|
|
$
|
131,471
|
|
Gross margin percentage
|
43
|
%
|
|
41
|
%
|
|
39
|
%
|
|||
Loss from operations
|
$
|
(13,851
|
)
|
|
$
|
(4,285
|
)
|
|
$
|
(14,629
|
)
|
|
Years Ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
||||||||||
System One segment
|
|
|
|
|
|
|
|
|
|
|
|
||
Home
|
$
|
224,265
|
|
|
57
|
%
|
|
$
|
208,586
|
|
|
57
|
%
|
Critical Care
|
82,096
|
|
|
21
|
%
|
|
75,337
|
|
|
21
|
%
|
||
Total System One segment
|
306,361
|
|
|
78
|
%
|
|
283,923
|
|
|
78
|
%
|
||
In-Center segment
|
61,307
|
|
|
15
|
%
|
|
63,038
|
|
|
17
|
%
|
||
Other
|
11,796
|
|
|
3
|
%
|
|
12,166
|
|
|
3
|
%
|
||
Products subtotal
|
379,464
|
|
|
96
|
%
|
|
359,127
|
|
|
98
|
%
|
||
Services segment
|
19,539
|
|
|
5
|
%
|
|
14,781
|
|
|
4
|
%
|
||
Elimination of intersegment revenues
|
(5,062
|
)
|
|
(1
|
)%
|
|
(7,530
|
)
|
|
(2
|
)%
|
||
Total
|
$
|
393,941
|
|
|
100
|
%
|
|
$
|
366,378
|
|
|
100
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
||||||||
System One segment
|
$
|
165,731
|
|
54
|
%
|
|
$
|
149,770
|
|
53
|
%
|
In-Center segment
|
16,877
|
|
28
|
%
|
|
18,115
|
|
29
|
%
|
||
Subtotal
|
182,608
|
|
50
|
%
|
|
167,885
|
|
48
|
%
|
||
Other
|
617
|
|
n/a
|
|
|
1,504
|
|
n/a
|
|
||
Products subtotal
|
183,225
|
|
48
|
%
|
|
169,389
|
|
47
|
%
|
||
Services segment
|
(14,937
|
)
|
n/a
|
|
|
(16,657
|
)
|
n/a
|
|
||
Elimination of intersegment gross profit
|
—
|
|
n/a
|
|
|
(747
|
)
|
n/a
|
|
||
Gross profit
|
$
|
168,288
|
|
43
|
%
|
|
$
|
151,985
|
|
41
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
||||||||
System One segment
|
$
|
52,243
|
|
17
|
%
|
|
$
|
47,969
|
|
17
|
%
|
In-Center segment
|
7,226
|
|
12
|
%
|
|
6,333
|
|
10
|
%
|
||
Products subtotal
|
59,469
|
|
16
|
%
|
|
54,302
|
|
15
|
%
|
||
Services segment
|
8,765
|
|
n/a
|
|
|
9,576
|
|
n/a
|
|
||
Total Selling and marketing
|
$
|
68,234
|
|
17
|
%
|
|
$
|
63,878
|
|
17
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
||||||||
Research and development
|
$
|
39,608
|
|
10
|
%
|
|
$
|
31,032
|
|
8
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
||||||||
System One segment
|
$
|
30,903
|
|
10
|
%
|
|
$
|
26,889
|
|
9
|
%
|
In-Center segment
|
1,581
|
|
3
|
%
|
|
1,690
|
|
3
|
%
|
||
Total Distribution
|
$
|
32,484
|
|
8
|
%
|
|
$
|
28,579
|
|
8
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
||||||||
General and administrative
|
$
|
41,813
|
|
11
|
%
|
|
$
|
32,781
|
|
9
|
%
|
|
Years Ended December 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
System One segment
|
|
|
|
|
|
|
|
||||||
Home
|
$
|
208,586
|
|
|
57
|
%
|
|
$
|
182,572
|
|
|
54
|
%
|
Critical Care
|
75,337
|
|
|
21
|
%
|
|
65,203
|
|
|
20
|
%
|
||
Total System One segment
|
283,923
|
|
|
78
|
%
|
|
247,775
|
|
|
74
|
%
|
||
In-Center segment
|
63,038
|
|
|
17
|
%
|
|
74,768
|
|
|
22
|
%
|
||
Other
|
12,166
|
|
|
3
|
%
|
|
10,302
|
|
|
3
|
%
|
||
Products subtotal
|
359,127
|
|
|
98
|
%
|
|
332,845
|
|
|
99
|
%
|
||
Services segment
|
14,781
|
|
|
4
|
%
|
|
6,412
|
|
|
2
|
%
|
||
Elimination of intersegment revenues
|
(7,530
|
)
|
|
(2
|
)%
|
|
(3,134
|
)
|
|
(1
|
)%
|
||
Total
|
$
|
366,378
|
|
|
100
|
%
|
|
$
|
336,123
|
|
|
100
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
||||||||
System One segment
|
$
|
149,770
|
|
53
|
%
|
|
$
|
127,495
|
|
51
|
%
|
In-Center segment
|
18,115
|
|
29
|
%
|
|
20,278
|
|
27
|
%
|
||
Subtotal
|
167,885
|
|
48
|
%
|
|
147,773
|
|
46
|
%
|
||
Other
|
1,504
|
|
n/a
|
|
|
(1,585
|
)
|
n/a
|
|
||
Products subtotal
|
169,389
|
|
47
|
%
|
|
146,188
|
|
44
|
%
|
||
Services segment
|
(16,657
|
)
|
n/a
|
|
|
(14,717
|
)
|
n/a
|
|
||
Elimination of intersegment gross profit
|
(747
|
)
|
n/a
|
|
|
—
|
|
n/a
|
|
||
Gross profit
|
$
|
151,985
|
|
41
|
%
|
|
$
|
131,471
|
|
39
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
||||||||
System One segment
|
$
|
47,969
|
|
17
|
%
|
|
$
|
43,607
|
|
18
|
%
|
In-Center segment
|
6,333
|
|
10
|
%
|
|
5,812
|
|
8
|
%
|
||
Products subtotal
|
54,302
|
|
15
|
%
|
|
49,419
|
|
15
|
%
|
||
Services segment
|
9,576
|
|
n/a
|
|
|
9,109
|
|
n/a
|
|
||
Total Selling and marketing
|
$
|
63,878
|
|
17
|
%
|
|
$
|
58,528
|
|
17
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
||||||||
Research and development
|
$
|
31,032
|
|
8
|
%
|
|
$
|
26,237
|
|
8
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
||||||||
System One segment
|
$
|
26,889
|
|
9
|
%
|
|
$
|
24,140
|
|
10
|
%
|
In-Center segment
|
1,690
|
|
3
|
%
|
|
2,071
|
|
3
|
%
|
||
Total Distribution
|
$
|
28,579
|
|
8
|
%
|
|
$
|
26,211
|
|
8
|
%
|
|
Years Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
||||||||
General and administrative
|
$
|
32,781
|
|
9
|
%
|
|
$
|
35,124
|
|
10
|
%
|
|
Years Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Net cash provided by operating activities
|
$
|
4,802
|
|
|
$
|
4,587
|
|
Net cash used in investing activities
|
(11,794
|
)
|
|
(9,361
|
)
|
||
Net cash provided by financing activities
|
10,985
|
|
|
5,275
|
|
||
Foreign exchange effect on cash and cash equivalents
|
1,303
|
|
|
66
|
|
||
Net cash flow
|
$
|
5,296
|
|
|
$
|
567
|
|
|
Payments Due By Period
|
||||||||||||||||||
|
Total
|
|
Less Than
One Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years
|
||||||||||
Capital lease obligations, including interest
|
$
|
16,490
|
|
|
$
|
1,674
|
|
|
$
|
3,525
|
|
|
$
|
3,752
|
|
|
$
|
7,539
|
|
Operating leases
|
24,147
|
|
|
5,463
|
|
|
9,108
|
|
|
6,868
|
|
|
2,708
|
|
|||||
Debt, including interest
|
698
|
|
|
127
|
|
|
254
|
|
|
254
|
|
|
63
|
|
|||||
Purchase obligations
|
44,924
|
|
|
34,215
|
|
|
10,050
|
|
|
659
|
|
|
—
|
|
|||||
Total
|
$
|
86,259
|
|
|
$
|
41,479
|
|
|
$
|
22,937
|
|
|
$
|
11,533
|
|
|
$
|
10,310
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands, except share data)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
64,928
|
|
|
$
|
59,632
|
|
Accounts receivable, net
|
31,625
|
|
|
32,286
|
|
||
Inventory
|
49,212
|
|
|
46,845
|
|
||
Prepaid expenses and other current assets
|
7,609
|
|
|
6,136
|
|
||
Total current assets
|
153,374
|
|
|
144,899
|
|
||
Property and equipment, net
|
60,262
|
|
|
61,561
|
|
||
Field equipment, net
|
24,264
|
|
|
22,309
|
|
||
Deferred cost of revenues, net
|
31,410
|
|
|
33,165
|
|
||
Intangible assets, net
|
7,660
|
|
|
9,688
|
|
||
Goodwill
|
42,748
|
|
|
42,648
|
|
||
Other assets
|
5,911
|
|
|
2,937
|
|
||
Total assets
|
$
|
325,629
|
|
|
$
|
317,207
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
14,785
|
|
|
$
|
14,177
|
|
Accrued expenses
|
27,985
|
|
|
30,985
|
|
||
Current portion of long-term debt
|
101
|
|
|
328
|
|
||
Other current liabilities
|
4,559
|
|
|
3,770
|
|
||
Total current liabilities
|
47,430
|
|
|
49,260
|
|
||
Deferred revenues
|
46,874
|
|
|
49,001
|
|
||
Long-term debt
|
520
|
|
|
1,305
|
|
||
Other long-term liabilities
|
17,824
|
|
|
15,568
|
|
||
Total liabilities
|
112,648
|
|
|
115,134
|
|
||
Commitments and contingencies (Note 10)
|
|
|
|
|
|
||
Noncontrolling interests subject to put provisions
|
(165
|
)
|
|
50
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Undesignated preferred stock: par value $0.001 per share, 5,000,000 shares authorized; no shares issued and outstanding as of December 31, 2017 and 2016
|
—
|
|
|
—
|
|
||
Common stock: par value $0.001 per share, 100,000,000 shares authorized; 67,341,819 and 65,883,026 shares issued as of December 31, 2017 and 2016, respectively
|
67
|
|
|
65
|
|
||
Additional paid-in capital
|
657,640
|
|
|
631,219
|
|
||
Accumulated deficit
|
(421,593
|
)
|
|
(407,601
|
)
|
||
Accumulated other comprehensive loss
|
(3,673
|
)
|
|
(6,101
|
)
|
||
Treasury stock, at cost: 1,046,870 and 936,360 shares as of December 31, 2017 and 2016, respectively
|
(19,283
|
)
|
|
(16,184
|
)
|
||
Total NxStage Medical, Inc. stockholders’ equity
|
213,158
|
|
|
201,398
|
|
||
Noncontrolling interests not subject to put provisions
|
(12
|
)
|
|
625
|
|
||
Total stockholders’ equity
|
213,146
|
|
|
202,023
|
|
||
Total liabilities and stockholders’ equity
|
$
|
325,629
|
|
|
$
|
317,207
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Revenues
|
$
|
393,941
|
|
|
$
|
366,378
|
|
|
$
|
336,123
|
|
Cost of revenues
|
225,653
|
|
|
214,393
|
|
|
204,652
|
|
|||
Gross profit
|
168,288
|
|
|
151,985
|
|
|
131,471
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Selling and marketing
|
68,234
|
|
|
63,878
|
|
|
58,528
|
|
|||
Research and development
|
39,608
|
|
|
31,032
|
|
|
26,237
|
|
|||
Distribution
|
32,484
|
|
|
28,579
|
|
|
26,211
|
|
|||
General and administrative
|
41,813
|
|
|
32,781
|
|
|
35,124
|
|
|||
Total operating expenses
|
182,139
|
|
|
156,270
|
|
|
146,100
|
|
|||
Loss from operations
|
(13,851
|
)
|
|
(4,285
|
)
|
|
(14,629
|
)
|
|||
Other (expense) income:
|
|
|
|
|
|
||||||
Interest expense, net
|
(756
|
)
|
|
(1,000
|
)
|
|
(1,115
|
)
|
|||
Other (expense) income, net
|
(863
|
)
|
|
(930
|
)
|
|
561
|
|
|||
|
(1,619
|
)
|
|
(1,930
|
)
|
|
(554
|
)
|
|||
Net loss before income taxes
|
(15,470
|
)
|
|
(6,215
|
)
|
|
(15,183
|
)
|
|||
(Benefit from) provision for income taxes
|
(145
|
)
|
|
1,102
|
|
|
1,077
|
|
|||
Net loss
|
(15,325
|
)
|
|
(7,317
|
)
|
|
(16,260
|
)
|
|||
Less: Net loss attributable to noncontrolling interests
|
(1,333
|
)
|
|
(2,546
|
)
|
|
(918
|
)
|
|||
Net loss attributable to stockholders of NxStage Medical, Inc.
|
$
|
(13,992
|
)
|
|
$
|
(4,771
|
)
|
|
$
|
(15,342
|
)
|
Add: Accretion to redemption value of noncontrolling interests
|
(481
|
)
|
|
—
|
|
|
—
|
|
|||
Net loss attributable to common stockholders
|
$
|
(14,473
|
)
|
|
$
|
(4,771
|
)
|
|
$
|
(15,342
|
)
|
|
|
|
|
|
|
||||||
Net loss per share, basic and diluted
|
$
|
(0.22
|
)
|
|
$
|
(0.07
|
)
|
|
$
|
(0.24
|
)
|
Weighted-average shares outstanding, basic and diluted
|
65,856
|
|
|
64,520
|
|
|
63,384
|
|
|||
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Unrealized income (loss) on derivative instruments, net of income taxes
|
1,001
|
|
|
(802
|
)
|
|
(395
|
)
|
|||
Other income (loss)
|
1,427
|
|
|
(1,268
|
)
|
|
(1,444
|
)
|
|||
Total other comprehensive income (loss)
|
2,428
|
|
|
(2,070
|
)
|
|
(1,839
|
)
|
|||
Total comprehensive loss
|
(12,897
|
)
|
|
(9,387
|
)
|
|
(18,099
|
)
|
|||
Less: Comprehensive loss attributable to noncontrolling interests
|
(1,333
|
)
|
|
(2,546
|
)
|
|
(918
|
)
|
|||
Total comprehensive loss attributable to stockholders of NxStage Medical, Inc.
|
$
|
(11,564
|
)
|
|
$
|
(6,841
|
)
|
|
$
|
(17,181
|
)
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
Total NxStage
|
|
Noncontrolling
|
|
|
|||||||||||||||||
|
|
|
|
|
Additional
|
|
|
|
Comprehensive
|
|
|
|
Medical, Inc.
|
|
Interest
|
|
Total
|
|||||||||||||||||
|
Common Stock
|
|
Paid-In
|
|
Accumulated
|
|
Income
|
|
Treasury
|
|
Stockholders'
|
|
Not Subject to
|
|
Stockholders’
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
(Loss)
|
|
Stock
|
|
Equity
|
|
Put Provisions
|
|
Equity
|
|||||||||||||||||
|
(In thousands, except share data)
|
|||||||||||||||||||||||||||||||||
Balance at December 31, 2014
|
63,429,005
|
|
|
$
|
63
|
|
|
$
|
593,073
|
|
|
$
|
(387,488
|
)
|
|
$
|
(2,192
|
)
|
|
$
|
(12,989
|
)
|
|
$
|
190,467
|
|
|
$
|
1,088
|
|
|
$
|
191,555
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,342
|
)
|
|
—
|
|
|
—
|
|
|
(15,342
|
)
|
|
(918
|
)
|
|
(16,260
|
)
|
||||||||
Adjustments to other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,839
|
)
|
|
—
|
|
|
(1,839
|
)
|
|
—
|
|
|
(1,839
|
)
|
||||||||
Exercise of stock options
|
1,020,552
|
|
|
1
|
|
|
7,790
|
|
|
—
|
|
|
—
|
|
|
(875
|
)
|
|
6,916
|
|
|
—
|
|
|
6,916
|
|
||||||||
Shares issued under employee restricted stock plans
|
306,908
|
|
|
—
|
|
|
(943
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(943
|
)
|
|
—
|
|
|
(943
|
)
|
||||||||
Shares issued under employee bonus plans
|
66,230
|
|
|
—
|
|
|
1,103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,103
|
|
|
—
|
|
|
1,103
|
|
||||||||
Shares issued under employee stock purchase plan
|
50,343
|
|
|
—
|
|
|
690
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
690
|
|
|
—
|
|
|
690
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
10,774
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,774
|
|
|
—
|
|
|
10,774
|
|
||||||||
Changes in noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,524
|
|
|
1,524
|
|
||||||||
Balance at December 31, 2015
|
64,873,038
|
|
|
64
|
|
|
612,487
|
|
|
(402,830
|
)
|
|
(4,031
|
)
|
|
(13,864
|
)
|
|
191,826
|
|
|
1,694
|
|
|
193,520
|
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,771
|
)
|
|
—
|
|
|
—
|
|
|
(4,771
|
)
|
|
(2,378
|
)
|
|
(7,149
|
)
|
||||||||
Adjustments to other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,070
|
)
|
|
—
|
|
|
(2,070
|
)
|
|
—
|
|
|
(2,070
|
)
|
||||||||
Exercise of stock options
|
658,444
|
|
|
1
|
|
|
8,233
|
|
|
—
|
|
|
—
|
|
|
(2,320
|
)
|
|
5,914
|
|
|
—
|
|
|
5,914
|
|
||||||||
Shares issued under employee restricted stock plans
|
314,013
|
|
|
—
|
|
|
(687
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(687
|
)
|
|
—
|
|
|
(687
|
)
|
||||||||
Shares issued under employee stock purchase plan
|
37,531
|
|
|
—
|
|
|
767
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
767
|
|
|
—
|
|
|
767
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
10,419
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,419
|
|
|
—
|
|
|
10,419
|
|
||||||||
Changes in noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,309
|
|
|
1,309
|
|
||||||||
Balance at December 31, 2016
|
65,883,026
|
|
|
$
|
65
|
|
|
$
|
631,219
|
|
|
$
|
(407,601
|
)
|
|
$
|
(6,101
|
)
|
|
$
|
(16,184
|
)
|
|
$
|
201,398
|
|
|
$
|
625
|
|
|
$
|
202,023
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
Total NxStage
|
|
Noncontrolling
|
|
|
|||||||||||||||||
|
|
|
|
|
Additional
|
|
|
|
Comprehensive
|
|
|
|
Medical, Inc.
|
|
Interest
|
|
Total
|
|||||||||||||||||
|
Common Stock
|
|
Paid-In
|
|
Accumulated
|
|
Income
|
|
Treasury
|
|
Stockholders'
|
|
Not Subject to
|
|
Stockholders’
|
|||||||||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
(Loss)
|
|
Stock
|
|
Equity
|
|
Put Provisions
|
|
Equity
|
|||||||||||||||||
|
(In thousands, except share data)
|
|||||||||||||||||||||||||||||||||
Balance at December 31, 2016
|
65,883,026
|
|
|
$
|
65
|
|
|
$
|
631,219
|
|
|
$
|
(407,601
|
)
|
|
$
|
(6,101
|
)
|
|
$
|
(16,184
|
)
|
|
$
|
201,398
|
|
|
$
|
625
|
|
|
$
|
202,023
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,992
|
)
|
|
—
|
|
|
—
|
|
|
(13,992
|
)
|
|
(1,440
|
)
|
|
(15,432
|
)
|
||||||||
Adjustments to other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,428
|
|
|
—
|
|
|
2,428
|
|
|
—
|
|
|
2,428
|
|
||||||||
Exercise of stock options
|
1,130,939
|
|
|
1
|
|
|
15,595
|
|
|
—
|
|
|
—
|
|
|
(3,099
|
)
|
|
12,497
|
|
|
—
|
|
|
12,497
|
|
||||||||
Shares issued under employee restricted stock plans
|
291,601
|
|
|
1
|
|
|
(1,350
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,349
|
)
|
|
—
|
|
|
(1,349
|
)
|
||||||||
Shares issued under employee stock purchase plan
|
36,253
|
|
|
—
|
|
|
855
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
855
|
|
|
—
|
|
|
855
|
|
||||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
11,802
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,802
|
|
|
—
|
|
|
11,802
|
|
||||||||
Changes in noncontrolling interest
|
—
|
|
|
—
|
|
|
(481
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(481
|
)
|
|
803
|
|
|
322
|
|
||||||||
Balance at December 31, 2017
|
67,341,819
|
|
|
$
|
67
|
|
|
$
|
657,640
|
|
|
$
|
(421,593
|
)
|
|
$
|
(3,673
|
)
|
|
$
|
(19,283
|
)
|
|
$
|
213,158
|
|
|
$
|
(12
|
)
|
|
$
|
213,146
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(15,325
|
)
|
|
$
|
(7,317
|
)
|
|
$
|
(16,260
|
)
|
Adjustments to reconcile net loss to net cash flow from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
33,754
|
|
|
32,637
|
|
|
30,715
|
|
|||
Stock-based compensation
|
11,537
|
|
|
10,117
|
|
|
12,598
|
|
|||
Other
|
2,131
|
|
|
2,445
|
|
|
1,302
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
1,056
|
|
|
(7,388
|
)
|
|
(1,130
|
)
|
|||
Inventory
|
(22,917
|
)
|
|
(31,069
|
)
|
|
(12,113
|
)
|
|||
Prepaid expenses and other assets
|
(1,045
|
)
|
|
(68
|
)
|
|
(77
|
)
|
|||
Accounts payable
|
(22
|
)
|
|
3,532
|
|
|
(2,775
|
)
|
|||
Accrued expenses and other liabilities
|
(1,774
|
)
|
|
4,141
|
|
|
635
|
|
|||
Deferred revenues
|
(2,593
|
)
|
|
(2,443
|
)
|
|
(2,353
|
)
|
|||
Net cash provided by operating activities
|
4,802
|
|
|
4,587
|
|
|
10,542
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Cash paid for acquisitions, net of cash acquired
|
(100
|
)
|
|
(513
|
)
|
|
—
|
|
|||
Purchase of cost method investment
|
(2,500
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sales of marketable securities
|
—
|
|
|
—
|
|
|
676
|
|
|||
Purchases of property and equipment
|
(9,194
|
)
|
|
(8,848
|
)
|
|
(11,537
|
)
|
|||
Net cash used in investing activities
|
(11,794
|
)
|
|
(9,361
|
)
|
|
(10,861
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Issuance of shares under stock incentive plans, net of payroll taxes paid
|
12,003
|
|
|
5,994
|
|
|
6,663
|
|
|||
Investment by noncontrolling interest holder
|
—
|
|
|
1,255
|
|
|
929
|
|
|||
Proceeds from loans, lines of credit and capital leases
|
452
|
|
|
—
|
|
|
1,275
|
|
|||
Repayments on loans and lines of credit
|
(164
|
)
|
|
(384
|
)
|
|
(143
|
)
|
|||
Repayments on capital leases
|
(1,306
|
)
|
|
(1,590
|
)
|
|
(1,391
|
)
|
|||
Net cash provided by financing activities
|
10,985
|
|
|
5,275
|
|
|
7,333
|
|
|||
Foreign exchange effect on cash and cash equivalents
|
1,303
|
|
|
66
|
|
|
(833
|
)
|
|||
Increase in cash and cash equivalents
|
5,296
|
|
|
567
|
|
|
6,181
|
|
|||
Cash and cash equivalents, beginning of year
|
59,632
|
|
|
59,065
|
|
|
52,884
|
|
|||
Cash and cash equivalents, end of year
|
$
|
64,928
|
|
|
$
|
59,632
|
|
|
$
|
59,065
|
|
1.
|
Nature of Operations, Proposed Merger, Basis of Presentation and Principles of Consolidation
|
2.
|
Summary of Significant Accounting Policies
|
Year Ended
|
|
Balance at Beginning of Year
|
|
Provision
|
|
Write-offs
|
|
Balance at End of Year
|
||||||||
December 31, 2017
|
|
$
|
535
|
|
|
$
|
471
|
|
|
$
|
(191
|
)
|
|
$
|
815
|
|
December 31, 2016
|
|
$
|
417
|
|
|
$
|
179
|
|
|
$
|
(61
|
)
|
|
$
|
535
|
|
December 31, 2015
|
|
$
|
425
|
|
|
$
|
20
|
|
|
$
|
(28
|
)
|
|
$
|
417
|
|
Level 1
|
Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.
|
Level 2
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
Level 3
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
|
Estimated
Useful Life
|
Buildings
|
30 years
|
Equipment and tooling
|
5 to 12 years
|
Leasehold improvements
|
Lesser of the lease term (including any renewal periods if appropriate) or estimated useful life of the asset
|
Computer and office equipment
|
3 to 5 years
|
Molds
|
5 to 7 years
|
Furniture
|
5 to 7 years
|
Field equipment
|
5 to 7 years
|
Year Ended
|
|
Balance at Beginning of Year
|
|
Provision
|
|
Usage
|
|
Balance at End of Year
|
||||||||
December 31, 2017
|
|
$
|
280
|
|
|
$
|
445
|
|
|
$
|
(432
|
)
|
|
$
|
293
|
|
December 31, 2016
|
|
$
|
389
|
|
|
$
|
457
|
|
|
$
|
(566
|
)
|
|
$
|
280
|
|
December 31, 2015
|
|
$
|
287
|
|
|
$
|
526
|
|
|
$
|
(424
|
)
|
|
$
|
389
|
|
3.
|
Inventory
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Purchased components
|
$
|
14,947
|
|
|
$
|
14,967
|
|
Work in process
|
13,433
|
|
|
13,939
|
|
||
Finished goods
|
20,832
|
|
|
17,939
|
|
||
|
$
|
49,212
|
|
|
$
|
46,845
|
|
4.
|
Property and Equipment, Field Equipment and Deferred Cost of Revenues
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Equipment and tooling
|
$
|
44,823
|
|
|
$
|
39,921
|
|
Leasehold improvements
|
34,812
|
|
|
35,146
|
|
||
Computer and office equipment
|
8,593
|
|
|
10,035
|
|
||
Molds
|
7,573
|
|
|
6,805
|
|
||
Furniture
|
3,612
|
|
|
3,561
|
|
||
Building
|
9,414
|
|
|
8,057
|
|
||
Land
|
1,091
|
|
|
956
|
|
||
Construction-in-process
|
7,138
|
|
|
4,237
|
|
||
|
117,056
|
|
|
108,718
|
|
||
Less accumulated depreciation
|
(56,794
|
)
|
|
(47,157
|
)
|
||
Property and equipment, net
|
$
|
60,262
|
|
|
$
|
61,561
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Manufacturing facility in Germany
|
$
|
24,135
|
|
|
$
|
21,007
|
|
Other assets subject to capital lease
|
4,453
|
|
|
3,024
|
|
||
Less accumulated depreciation
|
(8,979
|
)
|
|
(6,402
|
)
|
||
Assets subject to capital leases, net
|
$
|
19,609
|
|
|
$
|
17,629
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Field equipment
|
$
|
75,823
|
|
|
$
|
70,743
|
|
Less accumulated depreciation
|
(51,559
|
)
|
|
(48,434
|
)
|
||
Field equipment, net
|
$
|
24,264
|
|
|
$
|
22,309
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred costs of revenues
|
$
|
137,734
|
|
|
$
|
126,375
|
|
Less accumulated amortization
|
(106,324
|
)
|
|
(93,210
|
)
|
||
Deferred costs of revenues, net
|
$
|
31,410
|
|
|
$
|
33,165
|
|
5.
|
Intangible Assets
|
|
December 31, 2017
|
|
December 31, 2016
|
|
Estimated
|
||||||||||||
|
Cost
|
|
Accumulated
Amortization
|
|
Cost
|
|
Accumulated
Amortization
|
|
Useful
Life
|
||||||||
Bloodline, needle and other patented and unpatented technology
|
$
|
6,200
|
|
|
$
|
(6,200
|
)
|
|
$
|
6,200
|
|
|
$
|
(6,200
|
)
|
|
8 years
|
Trade names
|
2,300
|
|
|
(1,684
|
)
|
|
2,300
|
|
|
(1,520
|
)
|
|
14 years
|
||||
Customer relationships
|
26,151
|
|
|
(19,107
|
)
|
|
26,138
|
|
|
(17,230
|
)
|
|
10/14 years
|
||||
Intangible assets, net
|
$
|
34,651
|
|
|
$
|
(26,991
|
)
|
|
$
|
34,638
|
|
|
$
|
(24,950
|
)
|
|
|
2018
|
$
|
2,036
|
|
2019
|
2,036
|
|
|
2020
|
2,036
|
|
|
2021
|
1,552
|
|
|
|
$
|
7,660
|
|
6.
|
Net Loss per Share
|
|
Years Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Options to purchase common stock
|
1,100
|
|
|
785
|
|
|
732
|
|
Unvested restricted stock
|
224
|
|
|
361
|
|
|
350
|
|
Total
|
1,324
|
|
|
1,146
|
|
|
1,082
|
|
7.
|
Accrued Expenses, Other Current Liabilities, and Other Long Term Liabilities
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Payroll, compensation and related benefits
|
$
|
13,195
|
|
|
$
|
14,086
|
|
Distribution expenses
|
4,914
|
|
|
4,804
|
|
||
General and administrative expenses
|
1,670
|
|
|
4,415
|
|
||
Other
|
8,206
|
|
|
7,680
|
|
||
Total
|
$
|
27,985
|
|
|
$
|
30,985
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Capital lease obligations
|
$
|
2,131
|
|
|
$
|
1,840
|
|
Deferred revenue, current portion
|
1,473
|
|
|
1,035
|
|
||
Other
|
955
|
|
|
895
|
|
||
Total
|
$
|
4,559
|
|
|
$
|
3,770
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Capital lease obligations
|
$
|
11,589
|
|
|
$
|
9,991
|
|
Lease incentive obligations
|
2,652
|
|
|
3,059
|
|
||
Benefit plan obligations
|
2,060
|
|
|
1,678
|
|
||
Other
|
1,523
|
|
|
840
|
|
||
Total
|
$
|
17,824
|
|
|
$
|
15,568
|
|
8
.
|
Debt and Capital Lease Obligations
|
2018
|
$
|
1,674
|
|
2019
|
1,733
|
|
|
2020
|
1,792
|
|
|
2021
|
1,932
|
|
|
2022
|
1,820
|
|
|
Thereafter (1)
|
7,539
|
|
|
Total minimum lease payments
|
16,490
|
|
|
Less: Amount representing interest
|
(2,770
|
)
|
|
Present value of future minimum lease payments
|
$
|
13,720
|
|
9.
|
Business Segment and Geographic Information
|
|
System One
|
|
In-Center
|
|
Other
|
|
Services
|
|
Intersegment Elimination
|
|
Total
|
||||||||||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenues from external customers
|
$
|
301,299
|
|
|
$
|
61,307
|
|
|
$
|
11,796
|
|
|
$
|
19,539
|
|
|
$
|
—
|
|
|
$
|
393,941
|
|
Intersegment Revenues
|
5,062
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,062
|
)
|
|
—
|
|
||||||
Revenues
|
306,361
|
|
|
61,307
|
|
|
11,796
|
|
|
19,539
|
|
|
(5,062
|
)
|
|
393,941
|
|
||||||
Segment profit (loss)
|
82,585
|
|
|
8,070
|
|
|
(80,804
|
)
|
|
(23,702
|
)
|
|
—
|
|
|
(13,851
|
)
|
||||||
Depreciation and amortization
|
22,166
|
|
|
2,121
|
|
|
4,349
|
|
|
5,217
|
|
|
(99
|
)
|
|
33,754
|
|
||||||
Segment assets
|
134,825
|
|
|
25,225
|
|
|
146,737
|
|
|
19,712
|
|
|
(870
|
)
|
|
325,629
|
|
||||||
Year Ended December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenues from external customers
|
$
|
276,393
|
|
|
$
|
63,038
|
|
|
$
|
12,166
|
|
|
$
|
14,781
|
|
|
$
|
—
|
|
|
$
|
366,378
|
|
Intersegment Revenues
|
7,530
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,530
|
)
|
|
—
|
|
||||||
Revenues
|
283,923
|
|
|
63,038
|
|
|
12,166
|
|
|
14,781
|
|
|
(7,530
|
)
|
|
366,378
|
|
||||||
Segment profit (loss)
|
74,912
|
|
|
10,092
|
|
|
(62,309
|
)
|
|
(26,233
|
)
|
|
(747
|
)
|
|
(4,285
|
)
|
||||||
Depreciation and amortization
|
23,671
|
|
|
2,003
|
|
|
4,427
|
|
|
4,781
|
|
|
(2,245
|
)
|
|
32,637
|
|
||||||
Segment assets
|
135,038
|
|
|
21,246
|
|
|
138,273
|
|
|
23,620
|
|
|
(970
|
)
|
|
317,207
|
|
||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenues from external customers
|
$
|
244,641
|
|
|
$
|
74,768
|
|
|
$
|
10,302
|
|
|
$
|
6,412
|
|
|
$
|
—
|
|
|
$
|
336,123
|
|
Intersegment Revenues
|
3,134
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,134
|
)
|
|
—
|
|
||||||
Revenues
|
247,775
|
|
|
74,768
|
|
|
10,302
|
|
|
6,412
|
|
|
(3,134
|
)
|
|
336,123
|
|
||||||
Segment profit (loss)
|
59,748
|
|
|
12,395
|
|
|
(62,946
|
)
|
|
(23,826
|
)
|
|
—
|
|
|
(14,629
|
)
|
||||||
Depreciation and amortization
|
20,554
|
|
|
1,835
|
|
|
5,004
|
|
|
3,322
|
|
|
—
|
|
|
30,715
|
|
||||||
Segment assets
|
120,253
|
|
|
24,232
|
|
|
142,842
|
|
|
19,547
|
|
|
—
|
|
|
306,874
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Total segment assets
|
$
|
179,762
|
|
|
$
|
179,904
|
|
Intersegment elimination
|
(870
|
)
|
|
(970
|
)
|
||
Corporate assets:
|
|
|
|
||||
Cash and cash equivalents
|
64,927
|
|
|
59,632
|
|
||
Accounts Receivable, net
|
949
|
|
|
632
|
|
||
Inventory
|
305
|
|
|
—
|
|
||
Property and equipment, net
|
16,628
|
|
|
16,600
|
|
||
Intangible assets, net
|
7,660
|
|
|
9,688
|
|
||
Goodwill
|
42,748
|
|
|
42,648
|
|
||
Prepaid and other assets
|
13,520
|
|
|
9,073
|
|
||
Total assets
|
$
|
325,629
|
|
|
$
|
317,207
|
|
|
December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
United States
|
$
|
42,610
|
|
|
$
|
46,724
|
|
|
$
|
46,551
|
|
Mexico
|
16,790
|
|
|
13,431
|
|
|
14,233
|
|
|||
Other Americas
|
1,630
|
|
|
571
|
|
|
825
|
|
|||
Total Americas
|
61,030
|
|
|
60,726
|
|
|
61,609
|
|
|||
Germany
|
18,270
|
|
|
17,574
|
|
|
19,053
|
|
|||
Other Europe
|
5,226
|
|
|
5,754
|
|
|
6,793
|
|
|||
Total Europe
|
23,496
|
|
|
23,328
|
|
|
25,846
|
|
|||
Total
|
$
|
84,526
|
|
|
$
|
84,054
|
|
|
$
|
87,455
|
|
10.
|
Commitments and Contingencies
|
2018
|
$
|
5,463
|
|
2019
|
4,811
|
|
|
2020
|
4,297
|
|
|
2021
|
3,694
|
|
|
2022
|
3,174
|
|
|
Thereafter
|
2,708
|
|
|
|
$
|
24,147
|
|
11.
|
Income Taxes
|
|
Years Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Federal statutory rate
|
34.0
|
%
|
|
34.0
|
%
|
|
34.0
|
%
|
Stock compensation
|
25.7
|
%
|
|
(1.5
|
)%
|
|
(2.5
|
)%
|
State income tax, net of federal tax benefit
|
2.3
|
%
|
|
(2.3
|
)%
|
|
(2.8
|
)%
|
U.S. research credits
|
6.7
|
%
|
|
18.9
|
%
|
|
(0.3
|
)%
|
Foreign income inclusion in the U.S.
|
(4.7
|
)%
|
|
(10.4
|
)%
|
|
(5.0
|
)%
|
Valuation allowance
|
149.4
|
%
|
|
(47.4
|
)%
|
|
(25.8
|
)%
|
Change in tax reserves
|
(1.4
|
)%
|
|
(0.5
|
)%
|
|
(0.5
|
)%
|
Minority Interest
|
(1.6
|
)%
|
|
(15.9
|
)%
|
|
(0.9
|
)%
|
Tax Reform impact
|
(344.6
|
)%
|
|
—
|
%
|
|
—
|
%
|
Intraperiod tax allocation
|
8.2
|
%
|
|
—
|
%
|
|
—
|
%
|
ASU 2016-09
|
126.7
|
%
|
|
—
|
%
|
|
—
|
%
|
Other, net
|
0.2
|
%
|
|
7.4
|
%
|
|
(3.3
|
)%
|
Effective tax rate
|
0.9
|
%
|
|
(17.7
|
)%
|
|
(7.1
|
)%
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
92,315
|
|
|
$
|
115,151
|
|
Tax credits
|
12,706
|
|
|
11,180
|
|
||
Stock-based compensation
|
4,922
|
|
|
7,339
|
|
||
Capitalized research and development
|
1,126
|
|
|
2,167
|
|
||
Financing liabilities
|
5,531
|
|
|
5,161
|
|
||
Other
|
7,613
|
|
|
8,349
|
|
||
Total deferred tax assets
|
124,213
|
|
|
149,347
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Fixed assets
|
(5,485
|
)
|
|
(5,754
|
)
|
||
Intangible assets
|
(1,902
|
)
|
|
(3,606
|
)
|
||
Other
|
(222
|
)
|
|
(187
|
)
|
||
Total deferred tax liabilities
|
(7,609
|
)
|
|
(9,547
|
)
|
||
|
|
|
|
||||
Net deferred tax assets before valuation allowance
|
116,604
|
|
|
139,800
|
|
||
Less valuation allowance
|
(115,035
|
)
|
|
(138,795
|
)
|
||
Net deferred tax assets
|
$
|
1,569
|
|
|
$
|
1,005
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of the year
|
$
|
517
|
|
|
$
|
379
|
|
|
$
|
347
|
|
Increase in unrecognized tax benefits as a result of tax positions taken during the current year
|
275
|
|
|
89
|
|
|
66
|
|
|||
Increase (decrease) in unrecognized tax benefits as a result of tax positions taken during a prior year
|
50
|
|
|
115
|
|
|
(34
|
)
|
|||
Reductions due to lapse of applicable statute of limitations
|
(78
|
)
|
|
(66
|
)
|
|
—
|
|
|||
Balance at end of year
|
$
|
764
|
|
|
$
|
517
|
|
|
$
|
379
|
|
12.
|
Stock Plans and Stock-Based Compensation
|
Stock Options
|
|
Shares
|
|
Weighted
Average
Exercise Price
|
|
Aggregate Intrinsic Value
|
|
Average
Remaining Contractual Life
|
|||||
|
|
|
|
|
|
(In thousands)
|
|
(In years)
|
|||||
Outstanding at beginning of year
|
|
4,656,405
|
|
|
$
|
15.02
|
|
|
|
|
|
|
|
Granted
|
|
675,358
|
|
|
$
|
26.87
|
|
|
|
|
|
|
|
Exercised
|
|
(1,130,939
|
)
|
|
$
|
13.79
|
|
|
|
|
|
|
|
Forfeited or expired
|
|
(83,627
|
)
|
|
$
|
20.50
|
|
|
|
|
|
|
|
Outstanding at end of year
|
|
4,117,197
|
|
|
$
|
17.19
|
|
|
$
|
30,825
|
|
|
6.75
|
Fully vested and exercisable
|
|
2,684,405
|
|
|
$
|
15.90
|
|
|
$
|
22,730
|
|
|
6.05
|
Fully vested, exercisable and expected to vest
|
|
4,002,574
|
|
|
$
|
17.12
|
|
|
$
|
30,177
|
|
|
6.71
|
|
Shares
|
|
Weighted Average
Grant-date
Fair Value
|
|
Aggregate
Intrinsic Value
|
|
Weighted Average
Remaining
Contractual Life
|
|||||
|
|
|
|
|
(In thousands)
|
|
(In years)
|
|||||
Unvested at December 31, 2016
|
1,143,800
|
|
|
$
|
15.57
|
|
|
|
|
|
|
|
Granted
|
407,279
|
|
|
$
|
25.10
|
|
|
|
|
|
|
|
Vested
|
(339,496
|
)
|
|
$
|
14.24
|
|
|
|
|
|
|
|
Forfeited
|
(499,253
|
)
|
|
$
|
16.26
|
|
|
|
|
|
|
|
Unvested at December 31, 2017
|
712,330
|
|
|
$
|
21.17
|
|
|
$
|
17,260
|
|
|
2.14
|
|
Years Ended December 31,
|
||||
|
2017
|
|
2016
|
|
2015
|
Expected life (in months)
|
6
|
|
6
|
|
6
|
Risk-free interest rate
|
0.65% to 1.13%
|
|
0.37% to 0.49%
|
|
0.11% to 0.13%
|
Expected stock price volatility
|
36.4% to 39.2%
|
|
39.6% to 48.2%
|
|
18.4% to 22.4%
|
Expected dividend yield
|
—
|
|
—
|
|
—
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cost of revenues
|
$
|
1,201
|
|
|
$
|
1,371
|
|
|
$
|
1,068
|
|
Selling and marketing
|
3,933
|
|
|
3,304
|
|
|
4,458
|
|
|||
Research and development
|
1,539
|
|
|
1,536
|
|
|
1,979
|
|
|||
General and administrative
|
4,864
|
|
|
3,906
|
|
|
5,093
|
|
|||
Total stock-based compensation expense
|
$
|
11,537
|
|
|
$
|
10,117
|
|
|
$
|
12,598
|
|
13.
|
Employee Benefit Plans
|
14.
|
Stockholders' Equity
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Balance at beginning of period
|
$
|
625
|
|
|
$
|
1,694
|
|
|
$
|
1,088
|
|
Capital contributions by noncontrolling interest
|
—
|
|
|
630
|
|
|
1,316
|
|
|||
Sales of noncontrolling interests
|
—
|
|
|
679
|
|
|
208
|
|
|||
Add: Accretion to redemption value of noncontrolling interests
|
481
|
|
|
—
|
|
|
—
|
|
|||
Reclassification of noncontrolling interest subject to put provision
|
322
|
|
|
—
|
|
|
—
|
|
|||
Net loss attributable to noncontrolling interest in consolidated subsidiary
|
(1,440
|
)
|
|
(2,378
|
)
|
|
(918
|
)
|
|||
Balance at end of period
|
$
|
(12
|
)
|
|
$
|
625
|
|
|
$
|
1,694
|
|
|
|
Gain (Loss) Recognized in OCI
(Effective Portion)
|
|
Gain (Loss) Reclassified from OCI into Income
(Effective Portion)
|
|
Classification within the Condensed Consolidated Statement of Comprehensive Loss
|
||||
Year Ended December 31, 2017
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
|
$
|
3,433
|
|
|
$
|
1,163
|
|
|
Cost of revenues
|
Year Ended December 31, 2016
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
|
$
|
(2,712
|
)
|
|
$
|
(1,910
|
)
|
|
Cost of revenues
|
Year Ended December 31, 2015
|
|
|
|
|
|
|
||||
Foreign exchange forward contracts
|
|
$
|
(2,140
|
)
|
|
$
|
(1,745
|
)
|
|
Cost of revenues
|
|
|
Unrealized gain (loss) on derivative instruments
|
|
Other (2)
|
|
Total
|
||||||
Balance, net of tax, as of December 31, 2014
|
|
$
|
(1,088
|
)
|
|
$
|
(1,104
|
)
|
|
$
|
(2,192
|
)
|
Other comprehensive income before reclassifications
|
|
(2,140
|
)
|
|
(1,444
|
)
|
|
(3,584
|
)
|
|||
Loss reclassified to earnings (1)
|
|
1,745
|
|
|
—
|
|
|
1,745
|
|
|||
Total other comprehensive income (loss)
|
|
(395
|
)
|
|
(1,444
|
)
|
|
(1,839
|
)
|
|||
Balance, net of tax, as of December 31, 2015
|
|
$
|
(1,483
|
)
|
|
$
|
(2,548
|
)
|
|
$
|
(4,031
|
)
|
Other comprehensive income before reclassifications
|
|
(2,712
|
)
|
|
(1,268
|
)
|
|
(3,980
|
)
|
|||
Gain reclassified to earnings (1)
|
|
1,910
|
|
|
—
|
|
|
1,910
|
|
|||
Total other comprehensive income (loss)
|
|
(802
|
)
|
|
(1,268
|
)
|
|
(2,070
|
)
|
|||
Balance, net of tax, as of December 31, 2016
|
|
$
|
(2,285
|
)
|
|
$
|
(3,816
|
)
|
|
$
|
(6,101
|
)
|
Other comprehensive income before reclassifications, net of $1,269 tax during 2017
|
|
2,164
|
|
|
1,427
|
|
|
3,591
|
|
|||
Gain/Loss reclassified to earnings (1)
|
|
(1,163
|
)
|
|
—
|
|
|
(1,163
|
)
|
|||
Total other comprehensive income (loss)
|
|
1,001
|
|
|
1,427
|
|
|
2,428
|
|
|||
Balance, net of tax, as of December 31, 2017
|
|
$
|
(1,284
|
)
|
|
$
|
(2,389
|
)
|
|
$
|
(3,673
|
)
|
December 31, 2017
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total Fair Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Money market funds (1)
|
|
$
|
35,020
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35,020
|
|
Foreign exchange forward contracts (2)
|
|
—
|
|
|
690
|
|
|
—
|
|
|
690
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts (2)
|
|
$
|
—
|
|
|
$
|
661
|
|
|
$
|
—
|
|
|
$
|
661
|
|
December 31, 2016
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1) |
|
Significant Other Observable Inputs
(Level 2) |
|
Significant Unobservable Inputs
(Level 3) |
|
Total Fair Value
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Money market funds (1)
|
|
$
|
34,804
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34,804
|
|
Foreign exchange forward contracts (2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts (2)
|
|
$
|
—
|
|
|
$
|
1,771
|
|
|
$
|
—
|
|
|
$
|
1,771
|
|
(2)
|
Foreign exchange forward contracts are included within prepaid expenses and other current assets or accrued expenses depending on the gain (loss) position.
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Supplemental Disclosures:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
638
|
|
|
$
|
639
|
|
|
$
|
703
|
|
Cash paid for taxes
|
1,258
|
|
|
983
|
|
|
919
|
|
|||
Noncash Investing and Financing Activities:
|
|
|
|
|
|
||||||
Transfers from inventory to field equipment
|
$
|
19,257
|
|
|
$
|
20,920
|
|
|
$
|
16,675
|
|
Transfers from field equipment to deferred cost of revenues
|
11,026
|
|
|
13,400
|
|
|
11,638
|
|
|||
Payment of corporate bonus plan in common stock
|
—
|
|
|
—
|
|
|
1,103
|
|
|||
Market value of shares received in payment for exercise of stock options
|
3,100
|
|
|
2,320
|
|
|
875
|
|
|||
Construction-in-process financed by construction liability
|
142
|
|
|
187
|
|
|
1,332
|
|
|||
Redemption of noncontrolling interest
|
481
|
|
|
—
|
|
|
—
|
|
|||
Property and equipment acquired under capital lease
|
—
|
|
|
127
|
|
|
354
|
|
|||
Acquisition of business
|
—
|
|
|
—
|
|
|
513
|
|
|||
Increase in deferred revenues related to the new manufacturing facility in Germany
|
—
|
|
|
—
|
|
|
663
|
|
|||
Capital contributions by noncontrolling interest
|
—
|
|
|
54
|
|
|
325
|
|
|
Three Months Ended
|
||||||||||||||
|
March 31,
2017 |
|
June 30,
2017 |
|
September 30,
2017 |
|
December 31,
2017 |
||||||||
Revenues
|
$
|
96,829
|
|
|
$
|
96,216
|
|
|
$
|
97,295
|
|
|
$
|
103,601
|
|
Gross profit
|
41,190
|
|
|
41,166
|
|
|
40,607
|
|
|
45,325
|
|
||||
Loss from operations
|
(1,681
|
)
|
|
(2,056
|
)
|
|
(8,283
|
)
|
|
(1,831
|
)
|
||||
Net loss
|
(1,541
|
)
|
|
(2,579
|
)
|
|
(8,894
|
)
|
|
(2,311
|
)
|
||||
Net loss attributable to stockholders of NxStage Medical, Inc.
|
(1,189
|
)
|
|
(2,089
|
)
|
|
(8,445
|
)
|
|
(2,269
|
)
|
||||
Net loss attributable to common stockholders
|
(1,189
|
)
|
|
(2,089
|
)
|
|
(8,926
|
)
|
|
(2,269
|
)
|
||||
Net loss per share, basic and diluted
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
||||||||||||||
|
March 31,
2016 |
|
June 30,
2016 |
|
September 30,
2016 |
|
December 31,
2016 |
||||||||
Revenues
|
$
|
89,207
|
|
|
$
|
92,207
|
|
|
$
|
91,951
|
|
|
$
|
93,013
|
|
Gross profit
|
36,517
|
|
|
38,423
|
|
|
39,181
|
|
|
37,864
|
|
||||
Loss from operations
|
(975
|
)
|
|
(1,180
|
)
|
|
24
|
|
|
(2,154
|
)
|
||||
Net loss
|
(1,783
|
)
|
|
(2,225
|
)
|
|
(890
|
)
|
|
(2,419
|
)
|
||||
Net loss attributable to stockholders of NxStage Medical, Inc.
|
(1,276
|
)
|
|
(1,732
|
)
|
|
(166
|
)
|
|
(1,597
|
)
|
||||
Net loss attributable to common stockholders
|
(1,276
|
)
|
|
(1,732
|
)
|
|
(166
|
)
|
|
(1,597
|
)
|
||||
Net loss per share, basic and diluted
|
$
|
(0.02
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.02
|
)
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
•
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
|
Item 9B.
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Other Information
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
Item 16.
|
Form 10-K Summary
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|
|
NXSTAGE MEDICAL, INC.
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|
|
|
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By:
|
/s/ Jeffrey H. Burbank
|
|
|
Jeffrey H. Burbank
|
|
|
Chief Executive Officer
|
|
|
February 16, 2018
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Jeffrey H. Burbank
|
|
Chief Executive Officer and Director
|
|
February 16, 2018
|
Jeffrey H. Burbank
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Matthew W. Towse
|
|
Chief Financial Officer and Senior Vice President
|
|
February 16, 2018
|
Matthew W. Towse
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Robert G. Funari
|
|
Chairman of the Board of Directors
|
|
February 16, 2018
|
Robert G. Funari
|
|
|
|
|
|
|
|
|
|
/s/ Heyward R. Donigan
|
|
Director
|
|
February 16, 2018
|
Heyward R. Donigan
|
|
|
|
|
|
|
|
|
|
/s/ Daniel A. Giannini
|
|
Director
|
|
February 16, 2018
|
Daniel A. Giannini
|
|
|
|
|
|
|
|
|
|
/s/ Earl R. Lewis
|
|
Director
|
|
February 16, 2018
|
Earl R. Lewis
|
|
|
|
|
|
|
|
|
|
/s/ Jean K. Mixer
|
|
Director
|
|
February 16, 2018
|
Jean K. Mixer
|
|
|
|
|
|
|
|
|
|
/s/ Craig W. Moore
|
|
Director
|
|
February 16, 2018
|
Craig W. Moore
|
|
|
|
|
|
|
|
|
|
/s/ Reid S. Perper
|
|
Director
|
|
February 16, 2018
|
Reid S. Perper
|
|
|
|
|
|
|
|
|
|
/s/ James J. Peters
|
|
Director
|
|
February 16, 2018
|
James J. Peters
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Incorporated by Reference to^
|
|||
Exhibit
Number
|
|
Description
|
|
Form or Schedule
|
|
Exhibit No.
|
|
Filing Date with SEC
|
|
2.1
|
|
Agreement and Plan of Merger, dated as of August 7, 2017, by and among Fresenius Medical Care Holdings, Inc., Broadway Renal Services, Inc., and NxStage Medical, Inc.
|
|
8-K
|
|
2.1
|
|
8/7/2017
|
|
3.1
|
|
Restated Certificate of Incorporation
|
|
S-1/A
|
|
3.4
|
|
10/7/2005
|
|
3.2
|
|
Second Amended and Restated By-Laws
|
|
10-Q
|
|
3
|
|
8/7/2017
|
|
4.1
|
|
Specimen certificate evidencing shares of common stock
|
|
S-1/A
|
|
4.1
|
|
10/7/2005
|
|
10.1#
|
|
2005 Stock Incentive Plan, as amended
|
|
DEF 14A
|
|
Appendix B
|
|
4/28/2011
|
|
10.2#
|
|
Forms of Incentive Stock Option Agreement and Nonstatutory Stock Option Agreement under the 2005 Stock Incentive Plan
|
|
S-1/A
|
|
10.22
|
|
10/20/2005
|
|
10.3#
|
|
Form of Restricted Stock Unit Agreement under the 2005 Stock Incentive Plan
|
|
10-Q
|
|
10.3
|
|
5/8/2014
|
|
10.4#
|
|
2014 Omnibus Incentive Plan
|
|
DEF 14A
|
|
Appendix B
|
|
4/24/2014
|
|
10.5#
|
|
Form of Stock Option Agreement under the 2014 Omnibus Incentive Plan
|
|
10-K
|
|
10.5
|
|
2/28/2017
|
|
10.6#
|
|
Form of Restricted Stock Unit Agreement under the 2014 Omnibus Incentive Plan
|
|
10-K
|
|
10.6
|
|
2/28/2017
|
|
10.7#
|
|
Form of Performance Share Award Agreement under the 2014 Omnibus Incentive Plan
|
|
10-K
|
|
10.7
|
|
2/28/2017
|
|
10.8#
|
|
2005 Employee Stock Purchase Plan, as amended
|
|
DEF 14A
|
|
Appendix A
|
|
4/23/2015
|
|
10.9#
|
|
Employment Agreement dated October 19, 2005 between the Registrant and Jeffrey H. Burbank
|
|
S-1/A
|
|
10.12
|
|
10/20/2005
|
|
10.10#
|
|
Third Amendment to Employment Agreement, dated August 5, 2017, between the Registrant and Jeffrey H. Burbank.
|
|
8-K
|
|
10.1
|
|
8/7/2017
|
|
10.11#
|
|
Employment Agreement dated October 18, 2005 between the Registrant and Joseph E. Turk, Jr.
|
|
S-1/A
|
|
10.15
|
|
10/20/2005
|
|
10.12#
|
|
Third Amendment to Employment Agreement, dated August 5, 2017, between the Registrant and Joseph E. Turk, Jr.
|
|
8-K
|
|
10.2
|
|
8/7/2017
|
|
10.13#
|
|
Employment Agreement dated October 18, 2005 between the Registrant and Winifred L. Swan
|
|
S-1/A
|
|
10.16
|
|
10/20/2005
|
|
10.14#
|
|
Employment Agreement dated November 27, 2006 between the Registrant and Robert S. Brown
|
|
10-K
|
|
10.10
|
|
3/16/2007
|
|
10.15#
|
|
Employment Agreement dated as of July 15, 2013 between the Registrant and Matthew W. Towse
|
|
10-Q
|
|
10.2
|
|
11/7/2013
|
|
10.16#
|
|
Form of Indemnification Agreement entered into between the Registrant and each of its directors and executive officers
|
|
S-1/A
|
|
10.21
|
|
9/21/2005
|
|
|
|
|
|
|
|
|
|
||
10.18
|
|
Credit Agreement dated as of June 9, 2014 among the Registrant and certain of its subsidiaries, Capital One Financial Corporation and Silicon Valley Bank
|
|
10-Q
|
|
10.1
|
|
8/7/2014
|
|
10.19†
|
|
Second Amended and Restated National Service Provider Agreement dated as of March 1, 2013 between the Registrant and DaVita Healthcare Partners Inc.
|
|
10-Q
|
|
10.1
|
|
7/25/2013
|
|
10.20†
|
|
Amendment to Second Amended and Restated National Service Provider Agreement dated as of June 13, 2016 between the Registrant and DaVita Healthcare Partners, Inc.
|
|
10-Q
|
|
10.1
|
|
8/4/2016
|
|
10.21†
|
|
Chronic Outpatient Therapy Agreement, as amended through January 10, 2014, between the Registrant and Fresenius USA Marketing, Inc.
|
|
10-Q/A
|
|
10.1
|
|
10/1/2014
|
|
10.22†
|
|
Supply Agreement dated as of January 5, 2007 between the Registrant and Membrana GmbH
|
|
10-K
|
|
10.27
|
|
3/16/2007
|
|
10.23†
|
|
Supply Agreement dated April 10, 2009 between the Registrant and Laboratorios PiSA SA de C.V.
|
|
10-Q/A
|
|
10.45
|
|
10/19/2009
|
|
10.24†
|
|
Amendment to Supply Agreement dated as of July 22, 2013 between Medisystems Corporation and Laboratorios PiSA SA de C.V.
|
|
10-Q
|
|
10.1
|
|
11/7/2013
|
|
10.25†
|
|
Technology and Trademark License Agreement effective June 15, 2009 between the Registrant and Asahi Kasei Kuraray Medical Co., Ltd.
|
|
10-Q
|
|
10.48
|
|
8/7/2009
|
|
10.26†
|
|
Lease dated as of June 22, 2011 between Registrant and 350 Riverwalk, LLC
|
|
10-Q/A
|
|
10.33
|
|
10/7/2011
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
*101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
*101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
|
|
|
|
*101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
|
|
|
|
*101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
|
|
|
|
*101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
|
|
|
|
*101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
|
|
|
^
|
|
Exhibits previously filed with the Securities and Exchange Commission as exhibits to Form S-1 or S-1/A were filed under Commission File Number 333-126711. All other previously filed exhibits were filed under Commission File Number 0-51567.
|
*
|
|
Filed herewith.
|
**
|
|
Furnished herewith.
|
†
|
|
Confidential treatment has been granted or requested with respect to portions of this exhibit. Confidential portions are omitted and filed separately with the Securities and Exchange Commission.
|
#
|
|
Management contract or compensatory plan or arrangement.
|
1 Year Nxstage Medical Chart |
1 Month Nxstage Medical Chart |
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