May 6 2010
Stereotaxis, Inc. (Nasdaq: STXS) today reported financial results for the first quarter ended March 31, 2010 highlighted by recurring revenue and gross margin achieving record levels while operating losses continued to decline. In addition, the Company reported that its efforts to drive clinical adoption within the U.S. market are favorably impacting utilization rates.
Revenue for the recent first quarter was $10.6 million compared with $11.1 million in the same quarter a year ago. Deferred revenue of $8.1 million at March 31, 2010 increased by $0.9 million from December 31, 2009. The increase was principally due to the deferral of one Niobe system where title was transferred, however other revenue recognition criteria were not met by March 31, 2010. The Company recognized revenue on four Niobe® Magnetic Navigation Systems. Disposables, services and accessories revenue set another record at $5.4 million, 26% above recurring revenue in the first quarter of 2009, largely due to growth in clinical procedures. Recurring revenue comprised 51% of the total revenue in the quarter.
Michael P. Kaminski, President and Chief Executive Officer, said, "Our strategy to drive deeper penetration into the U.S. market is progressing as planned on all fronts. The organizational, clinical adoption and training elements of this strategy are all designed to drive utilization of Niobe for the treatment of complex cardiac arrhythmias. Growth in U.S. utilization is on plan, which is a direct result of our refocused approach. We are working closely with institutions and clinicians to provide continual learning, and realize full value of the magnetic navigation platform. The significant growth in clinical utilization demonstrates the success of this approach and we believe it will be the catalyst for driving market adoption of our technology."
Mr. Kaminski continued. "During the quarter, we generated new orders totaling $7.3 million. $5.8 million of the new orders are related to five Niobe systems, one in the U.S., three in Europe and one in Asia Pacific, as well as $1.5 million in orders for Odyssey. As U.S. customers realize the full value of the system and reference sites strengthen, we are confident that sales of the Niobe platform will increase. At the same time, Odyssey continues to represent an important avenue for growth in 2010, in both Niobe and traditional non-magnetic labs. Outside of the U.S., in both Europe and Asia, our Niobe sales remain strong. In addition, revenue per patient continues to trend favorably as our first quarter 2010 results exceeded 2009 levels.
"For the remainder of the year, our top priorities continue to be driving clinical utilization and adoption for complex EP procedures, increasing U.S. Niobe order rates, and building Odyssey orders through internal sales efforts as well as with potential channel partners. At the same time, we are generating very strong gross margins, achieving another record in the first quarter, as recurring revenue comprised over 50% of total revenue. With our continued focus on operating expenses, we believe we can leverage revenue growth to substantially enhance our bottom-line performance during the year," concluded Mr. Kaminski.
First Quarter 2010 Financial Performance
Gross margin for the quarter was $7.7 million, or 72.5% of revenue, flat with gross margin dollars but an increase from the 68.9% of revenue in the first quarter of 2009. First quarter operating expenses decreased 6% to $14 million from $14.8 million in the first quarter of the prior year. Cash burn improved 44% to $6.4 million for the first quarter of 2010 compared with $11.5 million in the first quarter of 2009.
The operating loss in the first quarter was $6.3 million compared with $7.1 million in the prior year. The Company reported a net loss for the first quarter of 2010 of $8.4 million, or $0.17 per share. The net loss includes an adjustment in value for warrants issued in 2008 of $0.03 per share that results from the appreciation in the Company's stock price at March 31, 2010 versus December 31, 2009. This compares with a net loss for the first quarter of 2009 of $7.5 million, or $0.18 per share. The weighted average shares for the recent first quarter totaled 49.6 million compared with 41.3 million in the first quarter of last year. The increase was due in large part to the issuance of 7,475,000 shares as part of the stock offering completed in October 2009.
Cash and equivalents at March 31, 2010 totaled $24.5 million, compared with $30.5 million at December 31, 2009. Total debt was $22.7 million, including $10 million drawn against the Company's $30 million line of credit.
2010 Financial Guidance
The Company reaffirmed its outlook for 2010 as follows:
- New capital order growth in excess of 40%
- Total revenue growth in the mid-20% range
- Gross margins above 65%
- Operating expenses between $60 and $65 million
SOURCE Stereotaxis, Inc.