NxStage Medical reports strong results for the third quarter of 2009

NxStage Medical, Inc. (Nasdaq: NXTM), a leading manufacturer of innovative dialysis products, today posted strong third quarter results.

Net revenue for the third quarter of 2009 was $38.0 million, compared with the Company's guidance for third quarter revenue in the range of $32.5 to $34.5 million. The Company's third quarter revenue includes approximately $2.5 million of third quarter sales within the In-Center market that management had previously expected to be deferred to the fourth quarter of 2009. The Company further exceeded its guidance as a result of stronger than anticipated machine and disposable sales in the Critical Care market and core growth in the Home market.

The Company's third quarter revenue represents an increase of 25 percent when compared with revenue of $30.5 million for the third quarter of 2008.

"Our strategy to drive further improvements in both our operating and financial positions proved to be very effective during the third quarter. Our efforts led to better overall execution compared to our expectations, and stronger than anticipated demand across our three markets," stated Jeffrey H. Burbank, Chief Executive Officer of NxStage Medical. "The third quarter also continued our trend of solid sequential improvement in other key areas including gross margin, adjusted EBITDA and cash."

Revenue within the Company's Home market was $16.4 million for the third quarter of 2009, an increase of 32 percent when compared with revenues of $12.4 million for the third quarter of 2008. Revenue for the Company's Critical Care and In-Center markets was $5.7 million and $16.0 million, respectively, for the third quarter of 2009, representing an increase of 29 percent and 17 percent, respectively, when compared with revenue for the third quarter of 2008.

Gross margin improved to 25 percent in the third quarter of 2009 as compared to 16 percent in the third quarter of 2008.

Net loss for the third quarter of 2009 was $10.0 million, or ($0.22) per share. This compares to a net loss of $15.0 million, or ($0.33) per share for the third quarter of 2008, which included the negative impact of a $1.8 million change in fair value of financial instruments.

Cash and cash equivalents as of September 30, 2009 were $22.1 million. The Company's cash usage for the third quarter of 2009 was $2.4 million.

For the third quarter of 2009, the Company had an Adjusted EBITDA loss of $2.4 million, adjusted for stock-based compensation, deferred revenue recognized and other non-recurring expenses, compared with an Adjusted EBITDA loss of $7.3 million in the third quarter of 2008. These results were better than the Company's guidance for an Adjusted EBITDA loss of $3.0 to $4.0 million for the third quarter of 2009. (See the exhibits for a reconciliation of this non-GAAP measure.)