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Insulet Corp. Reports Operating Results (10-K)

February 28, 2012 | About:

Insulet Corp. (NASDAQ:PODD) filed Annual Report for the period ended 2011-12-31.

Insulet Corp has a market cap of $970.6 million; its shares were traded at around $20.3 with and P/S ratio of 6.4.

Highlight of Business Operations:

We focus our sales efforts towards key diabetes practitioners, academic centers and clinics specializing in the treatment of diabetes patients, as well as individual diabetes patients. Our total revenue was $152.3 million, $97.0 million and $66.0 million for the years ended December 31, 2011, 2010 and 2009, respectively.

Our total revenue was $152.3 million for the year ended December 31, 2011, as compared to $97.0 million for the year ended December 31, 2010. The increase in revenue is due to continued adoption of the OmniPod System by patients in the United States and internationally, as well as $35.3 million of revenue related to pharmacy, testing supplies, insulin pumps and pump supplies serviced by Neighborhood Diabetes.

Cost of revenue was $53.2 million for the year ended December 31, 2010, as compared to $47.7 million for the year ended December 31, 2009. The increase is due to increased sales volume partially offset by lower per-unit costs. Lower per-unit cost is a result of cost savings on raw materials, volume discounts from our suppliers and increased production volumes. Revenue increased by 46.8% from the year ended December 31, 2009 to the year ended December 31, 2010, while cost of revenue increased by only 11.5% in the same period mainly due to the efficiencies realized in OmniPod per-unit cost.

We commenced operations in 2000 and to date we have financed our operations primarily through private placements of common and preferred stock, secured indebtedness, public offerings of our common stock and issuances of convertible debt. On June 1, 2011, we acquired all of the outstanding shares of Neighborhood Diabetes. The aggregate purchase price of approximately $62.4 million included approximately $37.9 million in cash paid at closing. As of December 31, 2011, we had $94.0 million in cash and cash equivalents. We believe that our current cash and cash equivalents, together with the cash expected to be generated from product sales, will be sufficient to meet our projected operating and debt service requirements for at least the next twelve months.

Net cash used in operating activities in the years ended December 31, 2011, 2010 and 2009, primarily represents amounts utilized to fund operating losses. The decrease of $10.2 million of cash used in operating activities for the year ended December 31, 2011 compared to the year ended December 31, 2010 was due primarily to the increase in revenue combined with our ability to maintain our gross margins at approximately 45% as well as cost containment initiatives we implemented as we strive to become profitable. Cash used in operating activities in the year ended December 31, 2011 is primarily a result of our net loss of $57.2 million offset by non-cash expenses of $29.1 million such as amortization of debt discount, non-cash interest, depreciation and amortization, stock-based compensation and bad debt expense. Cash used in operating activities in the year ended December 31, 2011 includes an increase in accounts payable and accrued expenses of $4.7 million, an increase in net accounts receivable of $3.6 million and a reduction of deferred revenue of $1.7 million. These increases are mainly attributable to our acquisition of Neighborhood Diabetes and were offset by a decrease in inventory of $1.9 million.

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