HeartWare Sees Narrower Loss but Misses Ests - Analyst Blog

HeartWare International, Inc. ( HTWR ) posted a narrower loss of $15.3 million or 92 cents per share for the fourth quarter of 2013 compared with $21.1 million or $1.46 per share for the same quarter of 2012. However, the loss was broader than the Zacks Consensus Estimate of 80 cents. Due to the narrower loss, shares of the company rose 0.5% after the market closed on Feb 28.

For full year 2013, HeartWare's loss was also narrower at $52.0 million or $3.24 per share compared with $86.6 million or $6.07 per share in 2012.

Revenue for the fourth quarter surged 62% to $53.1 million. For full year 2013, revenues were $207.9 million, up sharply by 87% from 2012. The revenue growth can be attributable to commercial development of the company's HeartWare System.

In 2013, the company has initiated enrollment for its supplemental cohort study for destination therapy in the U.S., received approval to commence enrollment in its trial in Japan, and obtained conditional approval for its U.S. thoracotomy trial from the FDA. Currently, HeartWare is waiting for the initiation of first-in-human testing of its next generation MVAD pump and Pal peripherals,

In the reported quarter, HeartWare sold 524 HeartWare Systems, reflecting a 52% rise from 345 units in the fourth quarter of 2012. Revenues from the U.S. spiked 94% to $25.9 million, while revenues from international markets, where 282 units were sold, grew 41% to $27.1 million in the quarter.

Gross profit in the quarter more than doubled to $33.8 million from $16.1 million in the fourth quarter of 2012. Gross margin rose significantly by 1440 basis points to 63.6% from 49.2% in the 2012-quarter.

Research and development expense in the quarter rose 36.5% to $30.3 million due to clinical trials and research and development related to advancing HeartWare's existing products and pipeline technologies.

Selling, general and administrative expenses escalated 72.9% to $23.0 million in the quarter driven by increased sales and marketing activities, particularly in the U.S., and an overall rise in corporate infrastructure to support the company's significant growth.

HeartWare ended the year with cash and cash equivalents of $162.9 million, up 89.6% from $85.9 million at the end of 2012. Current liabilities increased 56.2% to $53.2 million as of Dec 31, 2013 from $34.0 million as of Dec 31, 2012.

Although HeartWare has not provided any earnings and revenues guidance, it believes the acquisition of CircuLite - developer of the SYNERGY Circulatory Support System - in Dec 2013, will help the company expand its core business into the partial-support market segment, through the treatment of less risky heart failure patients.

Miami Lakes, FL-based HeartWare International is a medical device company that develops small implantable pumps for the treatment of chronic and end-stage heart failure. Its principle product is HeartWare Ventricular Assist System. Currently, the stock retains a Zacks Rank #3 (Hold).

Some better-ranked stocks in the medical instruments industry include Cynosure, Inc. ( CYNO ), Natus Medical Inc. ( BABY ), and Syneron Medical Ltd. ( ELOS ). All of them carry a Zacks Rank #1 (Strong Buy).

NATUS MEDICAL (BABY): Free Stock Analysis Report

CYNOSURE INC-A (CYNO): Free Stock Analysis Report

SYNERON MED LTD (ELOS): Free Stock Analysis Report

HEARTWARE INTL (HTWR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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