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SEC Filings

10-Q
HEARTWARE INTERNATIONAL, INC. filed this Form 10-Q on 11/02/2015
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Table of Contents

Results of Operations

Three and nine months ended September 30, 2015 and 2014

Revenue, net

In the three and nine months ended September 30, 2015 and 2014, we generated revenue through commercial sales and clinical trials.

 

     Three Months Ended
September 30,
           Nine Months Ended
September 30,
        
     2015      2014      Change     2015      2014      Change  
     (in thousands)            (in thousands)         

United States

   $ 35,578       $ 39,068         -9   $ 120,689       $ 109,801         10

International

     29,588         29,540         0     88,067         95,410         -8
  

 

 

    

 

 

      

 

 

    

 

 

    

Total

   $ 65,166       $ 68,608         -5   $ 208,756       $ 205,211         2
  

 

 

    

 

 

      

 

 

    

 

 

    

The following table presents our HVAD pump unit sales by geography for the three and nine months ended September 30, 2015 and 2014:

 

     Three Months Ended
September 30,
           Nine Months Ended
September 30,
        
     2015      2014      Change     2015      2014      Change  

United States

     327         361         -9     1,099         1,012         9

International

     370         314         18     1,084         1,002         8
  

 

 

    

 

 

      

 

 

    

 

 

    

Total

     697         675         3     2,183         2,014         8
  

 

 

    

 

 

      

 

 

    

 

 

    

Revenue in the United States, where our HVAD System is labeled for bridge-to-transplantation, reflects the completion of enrollment in the Company’s ENDURANCE2 clinical trial. U.S. revenue included 15 and 108 HVAD Systems sold under the Company’s ENDURANCE2 clinical trial in the three and nine months ended September 30, 2015, respectively. International revenue decreased due to the impact of currency fluctuations, which negated the potential benefit from the increased unit sales. The international unit sales expansion was attributable to further adoption of the HVAD System in less penetrated markets.

Currency changes negatively impacted total revenue growth by approximately $4.9 million and $16.0 million, or 7% and 8%, in the three and nine months ended September 30, 2015, respectively, compared to the same periods in 2014. In the three and nine months ended September 30, 2015, approximately 40% and 38% of our net revenue was denominated in foreign currencies including principally the Euro and British pound compared to 40% and 44% in the same periods of 2014. This geographic mix shift results in a partial offset of the impact of foreign currency declines. Movements in foreign currency exchange rates have had an effect on our reported revenue amounts in the past and could have a significant favorable or unfavorable impact on our reported revenue amounts in the future.

We expect to continue to generate and grow commercial revenue from product sales as we further expand our sales and marketing efforts on a global basis. Future product sales are dependent on many factors, including perception of product performance and market acceptance among physicians, patients, health care payers and the medical community as well as our capacity to meet customer demand by manufacturing sufficient quantities of our products. Our quarterly revenue and market share may be subject to greater volatility in future periods due to several HeartWare and competitive product clinical trials either ongoing, or expected to be ongoing, in the course of 2015 and 2016, expected commercial launch of competitive products, enrollment completion of ENDURANCE2, increased mix of international sales resulting in lower average selling prices due to currency fluctuations and growing unrest in the middle east, which is an important market for us, as we anticipate that the current state of affairs in that region of the world could dampen international sales.

 

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