Print Page  |  Close Window

SEC Filings

10-Q
HEARTWARE INTERNATIONAL, INC. filed this Form 10-Q on 11/02/2015
Entire Document
 


Table of Contents

In the three months ended September 30, 2015, interest expense was approximately $3.6 million, which included $1.3 million of interest incurred on the principal amount of the convertible notes at the stated coupon rates and $2.3 million of non-cash amortization of the discount and deferred financing costs. In the three months ended September 30, 2014, interest expense was approximately $3.3 million, which included $1.3 million of interest incurred on the principal amount of the convertible notes at the stated coupon rate and $2.0 million of non-cash amortization of the discount and deferred financing costs.

In the nine months ended September 30, 2015, interest expense was approximately $10.6 million, which included $3.8 million of interest incurred on the principal amount of the convertible notes at the stated coupon rates and $6.8 million of non-cash amortization of the discount and deferred financing costs. In the nine months ended September 30, 2014, interest expense was approximately $9.8 million, which included $3.8 million of interest incurred on the principal amount of the convertible notes at the stated coupon rate and $6.0 million of non-cash amortization of the discount and deferred financing costs.

Investment Income, net

Investment income is primarily derived from investments and cash and short-term deposit accounts held in the U.S. The amortization of premium on our investments is also included in investment income, net. Investment income, net was approximately $0.2 million and $0.4 million, respectively, in the three and nine months ended September 30, 2015, compared to $0.1 million and $0.5 million, respectively, in the same periods in the prior year. We continue to experience low interest rates on our deposits and available-for-sale investments.

Income Taxes

We are subject to taxation in the United States and jurisdictions outside of the United States. These jurisdictions have different marginal tax rates. Foreign earnings are considered to be permanently reinvested in operations outside the U.S. and therefore we have not provided for U.S. income taxes on these unrepatriated foreign earnings. We have incurred significant U.S. losses since inception, however, changes in issued capital and share ownership, as well as other factors, may limit our ability to utilize any net operating loss carry-forwards, and therefore a 100% valuation allowance has been recorded against our net deferred tax assets. For the three and nine months ended September 30, 2015, our tax provision includes estimated foreign taxes in jurisdictions where wholly-owned subsidiaries may be subject to current taxes.

Liquidity and Capital Resources

As of September 30, 2015, our cash and cash equivalents combined with short term available-for-sale investments were approximately $248.3 million as compared to $178.5 million at December 31, 2014.

Following is a summary of our cash flow activities for the nine months ended September 30, 2015 and 2014:

 

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

Net cash provided by (used in) operating activities

   $ 887       $ (15,046

Net cash provided by (used in) investing activities

     3,047         (36,860

Net cash provided by financing activities

     75,540         837   

Effect of exchange rate changes on cash and cash equivalents

     2,462         1,837   
  

 

 

    

 

 

 

Net increase (decrease) in cash and cash equivalents

   $ 81,936       $ (49,232
  

 

 

    

 

 

 

Cash Provided By (Used in) Operating Activities

For the nine months ended September 30, 2015, cash used in operating activities included a net loss of approximately $71.9 million, adjustments for non-cash items totaling $57.4 million and cash from changes in working capital of $15.3 million. The net loss was driven by normal operating activities including the sale of the HVAD System in the United States and abroad, the loss on extinguishment of long-term debt, planned field actions, a charge for the increase in the fair value of contingent consideration, interest expense and foreign exchanges losses. Adjustments for non-cash items primarily consisted of $18.8 million of share-based compensation, $6.6 million of depreciation and amortization on long-lived assets,

 

40