which will be implanted collaboratively by cardiologists and surgeons in a hybrid catheterization (cath) lab setting, offers an interventional approach to circulatory support. While
our HVAD and MVAD Systems offer minimally invasive treatment to end-stage heart failure patients, the SYNERGY Circulatory Support System offers even less invasive and ultimately interventional options to earlier-stage heart failure patients.
FDA Warning Letter
received a warning letter from the FDA, dated June 2, 2014, following an inspection of our Miami Lakes, Florida facility conducted in January 2014. The FDA letter cited four categories for us to address: (1) procedures for validating
device design, including device labeling; (2) procedures for implementing corrective and preventive action (CAPA); (3) maintaining records related to investigations; and (4) validation of computer software used as part of
production or quality systems. The warning letter did not require any action by physicians or patients and did not restrict the use of our devices.
We sent the FDA our initial response to the warning letter within the required fifteen business days of receipt, and committed to undertaking
certain quality system improvements and providing the FDA with periodic updates. During 2014 and 2015, we commenced implementing systemic changes and organizational enhancements to address the four warning letter items and related quality systems.
We established teams to review and address the items cited by the FDA and engaged external subject matter experts to assist in assessment and remediation efforts. We have developed an overall corporate quality plan and individual quality plans which
govern our quality improvement efforts. As we complete this comprehensive review of our quality systems, it is possible that we may need to take additional actions including the possibility of voluntary product recalls when necessary to ensure
patient safety and effective performance of the HVAD System.
On September 9, 2015, we announced plans to implement voluntary corrective actions as part of HeartWares ongoing Warning Letter
remediation efforts and quality system enhancements. These corrective actions include the planned replacement of certain older batteries in the field as a further action to previous field actions targeted to address battery performance issues
including complaints related to earlier-than-expected battery depletion and routine battery handling. These plans also include a field safety corrective action to identify and replace certain HeartWare AC Adapters designed for use outside of the
United States which have a higher risk of failing in case of a power surge compared to other HeartWare AC Adapters. The combination of these field actions resulted in a charge of approximately $8.5 million during the third quarter of 2015.
During the first quarter of 2015, we recorded charges aggregating to $0.5 million for previous field actions addressing different types of
complaints reviewed as part of our ongoing product performance monitoring. These previous actions were related to performance improvements or corrections affecting the HVAD System for issues such as continuous power supply, worn alignment guides,
planned software improvements, driveline care, and susceptibility to electrostatic discharge.
As we continue to make quality systems
improvements, there may be additional field safety corrections identified in the future which could have an impact on our financial position, liquidity or results of operations.
Summary of Recent Financial Performance
Total revenue decreased 5%, to $65.2 million for the quarter ended September 30, 2015 compared to $68.6 million during the third quarter
of 2014. Currency changes negatively impacted total revenue growth by approximately $4.9 million, or 7%, during the third quarter of 2015 compared to the third quarter of 2014. International unit sales increased by 18% compared to the third quarter
of 2014, while U.S. unit sales decreased by 9% compared to the same period, the latter resulting primarily from the completion of patient enrollment of the ENDURANCE2 clinical trial. We added six new U.S. customer sites and five new international
customer sites during the third quarter of 2015, modestly contributing to our results. A total of 697 HVAD Systems were sold during the third quarter of 2015, including 327 U.S. units and 370 international units.
With several HeartWare and competitive product clinical trials either ongoing, or expected to be ongoing throughout 2015 and 2016, we
anticipate that our quarterly revenue and market share may be subject to greater volatility. As of September 30, 2015, the Company had 126 customers in the United States and 180 customers internationally.