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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                      

Commission file number: 001-09585

 

ABIOMED, INC.

(Exact name of registrant as specified in its charter)

 

 Delaware

 

04-2743260

(State or other jurisdiction of incorporation or organization)

 

(IRS Employer Identification No.)

22 CHERRY HILL DRIVE

DANVERS, Massachusetts 01923

(Address of principal executive offices, including zip code)

(978) 646-1400

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock, $0.01 par value

ABMD

The NASDAQ Stock Market LLC

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of October 24, 2019, 45,155,108 shares of the registrant’s common stock, $.01 par value, were outstanding.

 

 

 

 


 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION:

Page

 

 

 

Item 1.

Condensed Consolidated Financial Statements (unaudited)

3

 

 

 

 

Condensed Consolidated Balance Sheets as of September 30, 2019 and March 31, 2019

3

 

 

 

 

Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2019 and 2018

4

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income for the three and six months ended September 30, 2019 and 2018

5

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended September 30, 2019 and 2018

6

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2019 and 2018

7

 

 

 

 

Notes to Condensed Consolidated Financial Statements (unaudited)

8

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

34

 

 

 

Item 4.

Controls and Procedures

34

 

 

 

PART II - OTHER INFORMATION:

 

 

 

 

Item 1.

Legal Proceedings

35

 

 

 

Item 1A.

Risk Factors

35

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

36

 

 

 

Item 3.

Defaults Upon Senior Securities

37

 

 

 

Item 4.

Mine Safety Disclosures

37

 

 

 

Item 5.

Other Information

37

 

 

 

Item 6.

Exhibits

38

 

 

 

Signatures

39

 

 

EXPLANATORY NOTES

Pending Trademarks and Registered Marks

Throughout this quarterly report on Form 10-Q (the “Report”), we refer to various trademarks, service marks and trade names that we use in our business. ABIOMED, IMPELLA, IMPELLA 2.5, IMPELLA 5.0, IMPELLA LD, IMPELLA CP, IMPELLA RP, and IMPELLA CONNECT are registered trademarks of ABIOMED, Inc., and are registered in the U.S. and certain foreign countries. IMPELLA BTR, IMPELLA 5.5, IMPELLA ECP, CVAD StudyTM and SMARTASSIST are pending trademarks of ABIOMED, Inc. Other trademarks and service marks appearing in this Report are the property of their respective holders.

Company References

Throughout this Report, “ABIOMED, Inc.,” the “Company,” “we,” “us” and “our” refer to ABIOMED, Inc. and its consolidated subsidiaries.

Where You Can Find More Information

We make available, free of charge on our website located at www.abiomed.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after filing such reports with or furnishing such reports to the U.S. Securities and Exchange Commission (the “SEC”). We also use our website for the distribution of Company information. The information we post on our website may be deemed to be material information. Accordingly, investors should monitor our website, in addition to following our press releases, SEC filings and public conference calls and webcasts. The contents of our website are not incorporated by reference into this Report.  

 

2


 

PART I. FINANCIAL INFORMATION

ITEM 1: Condensed Consolidated Financial Statements

ABIOMED, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share data)

 

 

 

September 30, 2019

 

 

March 31, 2019

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

150,279

 

 

$

121,021

 

Short-term marketable securities

 

 

295,041

 

 

 

370,677

 

Accounts receivable, net

 

 

94,319

 

 

 

90,809

 

Inventories

 

 

90,295

 

 

 

80,942

 

Prepaid expenses and other current assets

 

 

17,498

 

 

 

13,748

 

Total current assets

 

 

647,432

 

 

 

677,197

 

Long-term marketable securities

 

 

106,025

 

 

 

21,718

 

Property and equipment, net

 

 

157,896

 

 

 

145,005

 

Goodwill

 

 

31,727

 

 

 

32,601

 

In-process research and development

 

 

14,800

 

 

 

15,208

 

Long-term deferred tax assets, net

 

 

67,277

 

 

 

77,502

 

Other assets

 

 

99,191

 

 

 

85,115

 

Total assets

 

$

1,124,348

 

 

$

1,054,346

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

31,736

 

 

$

32,185

 

Accrued expenses

 

 

57,907

 

 

 

57,420

 

Deferred revenue

 

 

19,322

 

 

 

16,393

 

Other current liabilities

 

 

3,264

 

 

 

-

 

Total current liabilities

 

 

112,229

 

 

 

105,998

 

Contingent consideration

 

 

10,236

 

 

 

9,575

 

Long-term deferred tax liabilities

 

 

800

 

 

 

822

 

Other long-term liabilities

 

 

9,626

 

 

 

1,061

 

Total liabilities

 

 

132,891

 

 

 

117,456

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Class B Preferred Stock, $.01 par value

 

 

 

 

 

 

Authorized - 1,000,000 shares; Issued and outstanding - none

 

 

 

 

 

 

 

 

Common stock, $.01 par value

 

 

452

 

 

 

451

 

Authorized - 100,000,000 shares; Issued - 47,484,911 shares at September 30, 2019 and 47,026,226 shares at March 31, 2019

 

 

 

 

 

 

 

 

Outstanding - 45,238,952 shares at September 30, 2019 and 45,122,985 shares

   at March 31, 2019

 

 

 

 

 

 

 

 

Additional paid in capital

 

 

722,020

 

 

 

690,507

 

Retained earnings

 

 

501,467

 

 

 

399,473

 

Treasury stock at cost - 2,245,959 shares at September 30, 2019 and 1,903,241 shares at March 31, 2019

 

 

(214,926

)

 

 

(138,852

)

Accumulated other comprehensive loss

 

 

(17,556

)

 

 

(14,689

)

Total stockholders' equity

 

 

991,457

 

 

 

936,890

 

Total liabilities and stockholders' equity

 

$

1,124,348

 

 

$

1,054,346

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited)

 

3


 

ABIOMED, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share data)

 

 

 

For the Three Months Ended September 30,

 

 

For the Six Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Revenue

 

$

204,974

 

 

$

181,778

 

 

$

412,640

 

 

$

361,788

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

34,867

 

 

 

29,846

 

 

 

71,940

 

 

 

60,696

 

Research and development

 

 

23,969

 

 

 

22,717

 

 

 

47,759

 

 

 

43,990

 

Selling, general and administrative

 

 

85,956

 

 

 

78,895

 

 

 

172,034

 

 

 

160,034

 

 

 

 

144,792

 

 

 

131,458

 

 

 

291,733

 

 

 

264,720

 

Income from operations

 

 

60,182

 

 

 

50,320

 

 

 

120,907

 

 

 

97,068

 

Other (expenses) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income, net

 

 

2,932

 

 

 

1,671

 

 

 

5,981

 

 

 

3,222

 

Other (expense) income, net

 

 

(45,756

)

 

 

(158

)

 

 

(6,392

)

 

 

30

 

 

 

 

(42,824

)

 

 

1,513

 

 

 

(411

)

 

 

3,252

 

Income before income taxes

 

 

17,358

 

 

 

51,833

 

 

 

120,496

 

 

 

100,320

 

Income tax provision (benefit)

 

 

4,287

 

 

 

1,706

 

 

 

18,502

 

 

 

(39,873

)

Net income

 

$

13,071

 

 

$

50,127

 

 

$

101,994

 

 

$

140,193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 

$

0.29

 

 

$

1.11

 

 

$

2.25

 

 

$

3.13

 

Basic weighted average shares outstanding

 

 

45,319

 

 

 

44,961

 

 

 

45,267

 

 

 

44,754

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share

 

$

0.28

 

 

$

1.09

 

 

$

2.22

 

 

$

3.04

 

Diluted weighted average shares outstanding

 

 

45,912

 

 

 

46,153

 

 

 

46,031

 

 

 

46,164

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited)

 

4


 

ABIOMED, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)

 

 

 

For the Three Months Ended September 30,

 

 

For the Six Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net income

 

$

13,071

 

 

$

50,127

 

 

$

101,994

 

 

$

140,193

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation losses

 

 

(5,716

)

 

 

(600

)

 

 

(3,382

)

 

 

(7,452

)

Net unrealized (losses) gains on marketable securities

 

 

(85

)

 

 

(22

)

 

 

515

 

 

 

121

 

Other comprehensive loss

 

 

(5,801

)

 

 

(622

)

 

 

(2,867

)

 

 

(7,331

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income

 

$

7,270

 

 

$

49,505

 

 

$

99,127

 

 

$

132,862

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements (unaudited)

 

 

 

 

5


 

ABIOMED, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

(in thousands, except share data)

 

 

 

Common Stock

 

 

Treasury Stock

 

 

Additional Paid

 

 

Retained

 

 

Accumulated Other

 

 

Total Stockholders'

 

 

 

Shares

 

 

Par value

 

 

Shares

 

 

Amount

 

 

in Capital

 

 

Earnings

 

 

Comprehensive Loss

 

 

Equity

 

Balance, April 1, 2019

 

 

45,122,985

 

 

$

451

 

 

 

1,903,241

 

 

$

(138,852

)

 

$

690,507

 

 

$

399,473

 

 

$

(14,689

)

 

$

936,890

 

Restricted stock units issued

 

 

373,430

 

 

 

4

 

 

 

 

 

 

 

 

 

(4

)

 

 

 

 

 

 

 

 

 

Stock options exercised

 

 

36,289

 

 

 

1

 

 

 

 

 

 

 

 

 

1,260

 

 

 

 

 

 

 

 

 

1,261

 

Return of common stock to pay withholding taxes on restricted stock

 

 

(158,426

)

 

 

(2

)

 

 

158,426

 

 

 

(40,534

)

 

 

 

 

 

 

 

 

 

 

 

(40,536

)

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,121

 

 

 

 

 

 

 

 

 

13,121

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,934

 

 

 

2,934

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

88,923

 

 

 

 

 

 

88,923

 

Balance, June 30, 2019

 

 

45,374,278

 

 

$

454

 

 

 

2,061,667

 

 

$

(179,386

)

 

$

704,884

 

 

$

488,396

 

 

$

(11,755

)

 

$

1,002,593

 

Restricted stock units issued

 

 

12,039

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options exercised

 

 

21,268

 

 

 

 

 

 

 

 

 

 

 

 

1,445

 

 

 

 

 

 

 

 

 

1,445

 

Return of common stock to pay withholding taxes on restricted stock

 

 

(3,363

)

 

 

 

 

 

3,363

 

 

 

(668

)

 

 

 

 

 

 

 

 

 

 

 

(668

)

Stock issued under employee stock purchase plan

 

 

15,659

 

 

 

 

 

 

 

 

 

 

 

 

2,368

 

 

 

 

 

 

 

 

 

2,368

 

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,323

 

 

 

 

 

 

 

 

 

13,323

 

Stock repurchase program

 

 

(180,929

)

 

 

(2

)

 

 

180,929

 

 

 

(34,872

)

 

 

 

 

 

 

 

 

 

 

 

(34,874

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,801

)

 

 

(5,801

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,071

 

 

 

 

 

 

13,071

 

Balance, September 30, 2019

 

 

45,238,952

 

 

$

452

 

 

 

2,245,959

 

 

$

(214,926

)

 

$

722,020

 

 

$

501,467

 

 

$

(17,556

)

 

$

991,457

 

 

 

 

 

Common Stock

 

 

Treasury Stock

 

 

Additional Paid

 

 

Retained

 

 

Accumulated Other

 

 

Total Stockholders'

 

 

 

Shares

 

 

Par value

 

 

Shares

 

 

Amount

 

 

in Capital

 

 

Earnings

 

 

Comprehensive Loss

 

 

Equity

 

Balance, April 1, 2018

 

 

44,375,337

 

 

$

444

 

 

 

1,725,312

 

 

$

(67,078

)

 

$

619,905

 

 

$

140,457

 

 

$

(4,204

)

 

$

689,524

 

Restricted stock units issued

 

 

384,887

 

 

 

4

 

 

 

 

 

 

 

 

 

(4

)

 

 

 

 

 

 

 

 

 

Stock options exercised

 

 

282,368

 

 

 

3

 

 

 

 

 

 

 

 

 

5,795

 

 

 

 

 

 

 

 

 

5,798

 

Stock issued to directors

 

 

80

 

 

 

 

 

 

 

 

 

 

 

 

33

 

 

 

 

 

 

 

 

 

33

 

Return of common stock to pay withholding taxes on restricted stock

 

 

(166,401

)

 

 

(2

)

 

 

166,401

 

 

 

(67,596

)

 

 

 

 

 

 

 

 

 

 

 

(67,598

)

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,245

 

 

 

 

 

 

 

 

 

12,245

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,709

)

 

 

(6,709

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

90,066

 

 

 

 

 

 

90,066

 

Balance, June 30, 2018

 

 

44,876,271

 

 

$

449

 

 

 

1,891,713

 

 

$

(134,674

)

 

$

637,974

 

 

$

230,523

 

 

$

(10,913

)

 

$

723,359

 

Restricted stock units issued

 

 

18,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options exercised

 

 

142,978

 

 

 

1

 

 

 

 

 

 

 

 

 

4,814

 

 

 

 

 

 

 

 

 

4,815

 

Stock issued to directors

 

 

74

 

 

 

 

 

 

 

 

 

 

 

 

34