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 December 31, 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 January 30, 2020, 45,062,665 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 December 31, 2019 and March 31, 2019	3
	Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2019 and 2018	4
	Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended December 31, 2019 and 2018	5
	Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended December 31, 2019 and 2018	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 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	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
PART II - OTHER INFORMATION:
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
Signatures		41

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, Impella 5.5, Impella Connect, and SmartAssist are registered trademarks of Abiomed, Inc., and are registered in the U.S. and certain foreign countries. Impella BTR, Impella ECP, CVAD Study, and Automated Impella Controller 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)

	December 31, 2019			March 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	117,970		$	121,021
Short-term marketable securities		309,569			370,677
Accounts receivable, net		100,994			90,809
Inventories		91,193			80,942
Prepaid expenses and other current assets		16,850			13,748
Total current assets		636,576			677,197
Long-term marketable securities		167,981			21,718
Property and equipment, net		162,060			145,005
Goodwill		32,594			32,601
In-process research and development		15,205			15,208
Long-term deferred tax assets, net		47,028			77,502
Other assets		135,167			85,115
Total assets	$	1,196,611		$	1,054,346
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	31,566		$	32,185
Accrued expenses		71,876			57,420
Deferred revenue		19,156			16,393
Other current liabilities		3,661			—
Total current liabilities		126,259			105,998
Contingent consideration		10,440			9,575
Long-term deferred tax liabilities		822			822
Other long-term liabilities		12,227			1,061
Total liabilities		149,748			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		451			451
Authorized - 100,000,000 shares; Issued - 47,498,385 shares at December 31, 2019 and 47,026,226 shares at March 31, 2019
Outstanding - 45,112,835 shares at December 31, 2019 and 45,122,985 shares    at March 31, 2019
Additional paid in capital		733,054			690,507
Retained earnings		570,683			399,473
Treasury stock at cost - 2,385,550 shares at December 31, 2019 and 1,903,241 shares at March 31, 2019		(240,330	)		(138,852	)
Accumulated other comprehensive loss		(16,995	)		(14,689	)
Total stockholders' equity		1,046,863			936,890
Total liabilities and stockholders' equity	$	1,196,611		$	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 December 31,					For the Nine Months Ended December 31,
	2019		2018			2019		2018
Revenue	$	221,584	$	200,563		$	634,225	$	562,351
Costs and expenses:
Cost of revenue		39,996		34,023			111,937		94,718
Research and development		25,655		23,965			73,413		67,955
Selling, general and administrative		85,674		80,220			257,708		240,254
		151,325		138,208			443,058		402,927
Income from operations		70,259		62,355			191,167		159,424
Other income (expenses):
Investment income, net		3,086		2,175			9,066		5,397
Other income (expense), net		23,671		(20	)		17,279		10
		26,757		2,155			26,345		5,407
Income before income taxes		97,016		64,510			217,512		164,831
Income tax provision (benefit)		27,799		19,648			46,301		(20,225	)
Net income	$	69,217	$	44,862		$	171,211	$	185,056
Basic net income per share	$	1.53	$	1.00		$	3.79	$	4.13
Basic weighted average shares outstanding		45,140		45,046			45,225		44,852
Diluted net income per share	$	1.51	$	0.97		$	3.73	$	4.01
Diluted weighted average shares outstanding		45,695		46,136			45,935		46,147

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 December 31,						For the Nine Months Ended December 31,
	2019			2018			2019			2018
Net income	$	69,217		$	44,862		$	171,211		$	185,056
Other comprehensive income (loss):
Foreign currency translation gain (loss)		1,945			(1,015	)		(1,436	)		(8,468	)
Unrealized loss on derivative instrument		(1,392	)		—			(1,392	)		—
Net unrealized gains on marketable securities		8			234			522			356
Other comprehensive income (loss)		561			(781	)		(2,306	)		(8,112	)
Comprehensive income	$	69,778		$	44,081		$	168,905		$	176,944

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
Restricted stock units issued		6,004			—			—		—			—			—		—			—
Stock options exercised		7,470			—			—		—			460			—		—			460
Return of common stock to pay withholding taxes on restricted stock		(2,159	)		—			2,159		(403	)		—			—		—			(403	)
Stock compensation expense		—			—			—		—			10,574			—		—			10,574
Stock repurchase program		(137,432	)		(1	)		137,432		(25,001	)		—			—		—			(25,002	)
Other comprehensive income		—			—			—		—			—			—		561			561
Net income		—			—			—		—			—			69,217		—			69,217
Balance, December 31, 2019		45,112,835		$	451			2,385,550	$	(240,330	)	$	733,054		$	570,683	$	(16,995	)	$	1,046,863

	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	$