Edgar Filing: INSULET CORP

Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): February 5, 2013

INSULET CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

001-33462

04-3523891

(State or Other Jurisdiction

of Incorporation)

(Commission

File No.)

(IRS Employer

Identification No.)

9 Oak Park Drive

Bedford, Massachusetts 01730

(Address of Principal Executive Offices, including Zip Code)

Registrant’s telephone number, including area code: (781) 457-5000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 4.02(a). Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.

On February 5, 2013, management and the Audit Committee of the Board of Directors of Insulet Corporation (the “Company”) concluded that it is necessary to restate the Company’s audited consolidated financial statements for the year ended December 31, 2011 and for the unaudited quarterly financial reporting periods ended June 30, 2011, September 30, 2011, March 31, 2012, June 30, 2012 and September 30, 2012 and that the Company’s consolidated financial statements for these periods should no longer be relied upon. The Audit Committee made this determination following consultation with and upon the recommendation of management and following consultation with Ernst & Young LLP. Therefore, the Company plans to present the restated results for the fiscal year ended December 31, 2011, and the quarterly periods ended June 30, 2011 and September 30, 2011 in an amended Annual Report on Form 10-K/A. The Company plans to present the restated results for the quarterly periods ended March 31, 2012, June 30, 2012 and September 30, 2012 in amended Quarterly Reports on Form 10-Q/A. The Company expects to file these amended reports on or before February 28, 2012. The restatement is expected to result in a reduction of the Company’s net loss in the year ended December 31, 2011 and is not expected to affect the Company’s net loss for any period in 2012.

In June 2011, the Company acquired all of the outstanding shares of privately-held Neighborhood Diabetes and accounted for the acquisition as a business combination. In connection with the acquisition, the Company recognized net deferred tax liabilities of $11.3 million. The Company also reduced its preexisting valuation allowance and goodwill, accordingly, through purchase accounting. Upon subsequent review, the Company determined that the $11.3 million reduction of its preexisting valuation allowance should have been reported as an income tax benefit and not as an adjustment to goodwill.

In June 2011, the Company modified its outstanding convertible debt. Upon subsequent review, the Company determined that at the date of the modification it should have recognized approximately $5.5 million in additional deferred tax liability related to its debt. The recognition of this additional deferred tax liability would have resulted in a reduction of the Company’s preexisting valuation allowance and therefore had no effect on its statement of operations. The Company expects to correct certain balance sheet amounts with respect to the presentation of its deferred tax assets and liabilities related to the acquisition of Neighborhood Diabetes and the modification of the convertible debt in June 2011.

The following tables summarize the expected effect of the restatement by major financial statement line item in the three and six months ended June 30, 2011, the nine months ended September 30, 2011 and the year ended December 31, 2011. The restatement is expected to result in an increase in deferred tax assets (which are presented as a component of prepaid expenses and other current assets) of $1.2 million at June 30, 2011 and September 30, 2011 and $0.9 million at December 31, 2011, an increase in goodwill of $11.3 million at June 30, 2011 and September 30, 2011 and $10.9 million at December 31, 2011, and an increase in deferred tax liabilities (which are presented as a component of other long-term liabilities) of $1.2 million at June 30, 2011 and September 30, 2011 and $0.4 million at December 31, 2011. The restatement is expected to result in an increase in tax benefit of $11.3 million in the three and six months ended June 30, 2011, the nine months ended September 30, 2011 and the year ended December 31, 2011. The restatement is not expected to have any effect on amounts reported in periods prior to the quarter ended June 30, 2011.

Financial statement lines on the consolidated balance sheets and consolidated statements of operations expected to be impacted as a result of the restatement are summarized below (in thousands):

Consolidated Balance Sheet


	June 30, 2011						September 30, 2011						December 31, 2011
	As Previously Reported			As Restated			As Previously Reported			As Restated			As Previously Reported			As Restated
	(unaudited)						(unaudited)						(unaudited)
Prepaid expenses and other current assets	$	4,770		$	5,991		$	3,653		$	4,874		$	2,802		$	3,652
Total current assets		147,834			149,055			137,857			139,078			131,785			132,635
Goodwill		26,727			38,066			26,164			37,503			26,647			37,536
Total assets		226,190			238,750			215,780			228,340			209,583			221,322
Other long-term liabilities		1,303			2,524			1,260			2,481			1,652			2,052
Total liabilities		132,091			133,312			132,340			133,561			138,187			138,587
Accumulated deficit		(413,122	)		(401,783	)		(426,684	)		(415,345	)		(441,023	)		(429,684	)
Total stockholders’ equity		94,099			105,438			83,440			94,779			71,396			82,735
Total liabilities and stockholders’ equity		226,190			238,750			215,780			228,340			209,583			221,322

Consolidated Statement of Operations


	Three Months Ended						Six Months Ended						Nine Months Ended						Year Ended
	June 30, 2011						June 30, 2011						September 30, 2011						December 31, 2011
	As Previously Reported			As Restated			As Previously Reported			As Restated			As Previously Reported			As Restated			As Previously Reported			As Restated
	(unaudited)						(unaudited)						(unaudited)						(unaudited)
Income tax benefit (expense)	$	—		$	11,339		$	—		$	11,339		$	—		$	11,339		$	(127	)	$	11,212
Net loss		(19,423	)		(8,084	)		(29,269	)		(17,930	)		(42,831	)		(31,492	)		(57,170	)		(45,831	)
Net loss per share basic and diluted		(0.42	)		(0.17	)		(0.64	)		(0.39	)		(0.92	)		(0.68	)		(1.22	)		(0.98	)

The following tables summarize the expected effect of the restatement by major financial statement line at March 31, 2012, June 30, 2012 and September 30, 2012. The restatement is expected to result in an increase in deferred tax assets (which are presented as a component of prepaid expenses and other current assets) of $0.9 million at March 31, 2012, June 30, 2012 and September 30, 2012, an increase in goodwill of $10.9 million at March 31, 2012, June 30, 2012 and September 30, 2012, and an increase in deferred tax liabilities (which are presented as a component of other long-term liabilities) of $0.4 million at March 31, 2012, June 30, 2012 and September 30, 2012. The restatement is expected to have no impact to the statements of operations during these periods.

Financial statement lines on the consolidated balance sheets expected to be impacted as a result of the restatement are summarized below (in thousands):

Consolidated Balance Sheet


	March 31, 2012						June 30, 2012						September 30, 2012
	As Previously Reported			As Restated			As Previously Reported			As Restated			As Previously Reported			As Restated
	(unaudited)						(unaudited)						(unaudited)
Prepaid expenses and other current assets	$	3,463		$	4,313		$	3,454		$	4,304		$	4,717		$	5,567
Total current assets		127,369			128,219			115,615			116,465			113,394			114,244
Goodwill		26,647			37,536			26,647			37,536			26,647			37,536
Total assets		203,942			215,681			191,940			203,679			191,642			203,381
Other long-term liabilities		1,640			2,040			1,668			2,068			1,670			2,070
Total liabilities		145,064			145,464			144,190			144,590			152,529			152,929
Accumulated deficit		(455,803	)		(444,464	)		(470,279	)		(458,940	)		(482,696	)		(471,357	)
Total stockholders’ equity		58,878			70,217			47,750			59,089			39,113			50,452
Total liabilities and stockholders’ equity		203,942			215,681			191,940			203,679			191,642			203,381

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized.


	INSULET CORPORATION

February 8, 2013	By:	/s/ Duane DeSisto
		President and Chief Executive Officer