Insulet Corp. records 57% jump in 2Q revenues

July 30, 2010 by MassDevice staff

Tubeless insulin-infusion device manufacturer Insulet Corp. racks up $22.9 million in second-quarter revenues, $8.2 million higher than year-ago sales, but profits remain a distant goal

Insulet Corp. (Nasdaq:PODD) is moving into its second decade as a business looking at new markets for its OmniPod insulin infusion device, improving sales, better terms on its long-term debt and a little extra cash.

But it's still fighting a problem that's as old as the company: Net losses typically running out to eight digits.

Insulet on Thursday reported $22.9 million in revenues during the three months ended June 30, a 57 percent jump above year-ago levels and a 10 percent increase from the trailing quarter that ended in March. The Bedford, Mass.-based firm also said its international distribution partner is now selling OmniPod in Germany and the United Kingdom after securing reimbursement for the device. It also reworked parts of a March 2009 funding package with a San Francisco-area investment company, which in June exercised warrants generating $6.7 million in extra proceeds for Insulet.

However, those gains do not fully migrate to the bottom line. The $13.7 million net loss reported for the second quarter is the smallest loss at Insulet in nearly three years, dating to a time when quarterly revenues had yet to reach $4 million. The company now does that much business every two and a half weeks or so although it remains far short of the volume needed to finally erase all that red ink.

But the past two quarters have been notable in that sales bested total operating expenses, including a $3.1 million bulge during the second quarter. The operating loss -- which adds in the cost of revenues with operating expenses -- was $9.9 million, a $6.5 million improvement over the year-ago operating loss. The company three years offshored nearly all of its manufacturing to China, contracting with a subsidiary of Singapore-based Flextronics International in a bid to drive down per-unit production costs and steer the firm toward profitability.

Insulet executives reiterated their previous guidance for 2010, predicting it will end the year with sales between $90 million to $100 million, including at least $25 million in sales during the current quarter. That would infer as much as a 51 percent improvement for year-over-year sales and a 33 percent increase over third-quarter 2009 levels while sequential growth would accelerate from its recent 10-percent pace to around 14 percent in the quarter ending in September.

The 2010 operating loss should be in a range $5 million either side of $35 million, they said, down at least 25 percent from the $53.3 million loss reported in 2009.