Stereotaxis CEO Discusses Q3 2010 Results - Earnings Call Transcript
Stereotaxis, Inc. (
)
Q3 2010 Earnings Call
November 01, 2010 04:30 pm ET
Executives
Greg Gin - IR
Pierre Rivaux - Vice President, Europe
Mike Kaminski - President and CEO
Dan Johnston - CFO
Analysts
Steven Lichtman - Oppenheimer & Company
Sameer Harish - Needham & Company
Jose Haresco - JMP Securities
Ben Forrest - Madison Williams
Presentation
Operator
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Stereotaxis Inc. Q2 2009 Earnings Call Transcript
Good afternoon ladies and gentlemen, thank you for standing by. Welcome to the Stereotaxis third quarter 2010 financial results conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions). This conference is being recorded today, Monday, November 1, 2010.
And I would now like to turn the conference over to Mr. Greg Gin. Please go ahead sir.
Greg Gin
Thank you, Brittney and good afternoon everyone. Thank you for joining us for the Stereotaxis conference call and webcast to review the financial results for the third quarter 2010, which ended on September 30, 2010. Before we get started, we'd like to remind you that during the course of this conference call, the company may make projections and other forward-looking statements regarding future events or the future financial performance of the company, including without limitation, statements regarding future operating results, growth opportunities and other statements that reflex Stereotaxis' plans, prospects, expectations, strategies, intentions and beliefs. These statements are subject to many risks and uncertainties that could cause actual results to differ materially from expectations.
For a detailed discussion of the risks and uncertainties that affect the company's business and qualify the forward-looking statements made in this call, we refer you to the company's recent public filings filed with the SEC, specifically the Form 10-K for the fiscal year ended December 31, 2009. The company's projections and forward-looking statements are based on factors that are subject to change and therefore these statements speak only as of the date they are given. The company assumes no obligation to update any projections or forward-looking statements.
In addition, regarding orders and backlogs, there can be no assurance that the company will recognize revenue related to its purchase orders and other commitments in any particular period or at all because some of these purchase orders and other commitments are subject to contingencies that are outside of our control. In addition, these orders and commitments may be revised, modified or canceled either by their express terms as a result of negotiations or by project changes or delays.
Now, I'd like to turn the call over to Mike Kaminski, President and Chief Executive Officer of Stereotaxis.
Mike Kaminski
Thank you, Greg good afternoon everybody. Thank you for joining us today on our third quarter conference call. With me today is Dan Johnston, our Chief Financial Officer and Pierre Rivaux our new VP of Europe, Middle East and Africa. Let me start by introducing Pierre who comes to us from Intuitive Surgical where he was responsible for their European, Middle East and Africa business for the past five years. We are excited to Pierre join the team and today marks his first day with Stereotaxis. Pierre will give everybody a quick overview of your background please.
Pierre Rivaux
Thank you Mike and good afternoon everyone. I am very happy to become a member of the senior leadership team at the Stereotaxis. I am very excited by the Stereotaxis technology and the opportunity today with my past experience gained through what I believe was a very similar business model. What I started with Intuitive in Europe, the revenue and organization was a very similar in size and scope to where Stereotaxis is today. Over our five year period, we reached world class organization with stronger processes that delivered superior results. I am confident that we at Stereotaxis can do the same with the Niobe and Odyssey platforms which are well positioned for adoption for EP relations.
Mike Kaminski
Thank you Pierre and welcome. Our results for the third quarter, particularly for our leading indicators were very positive. These indicators include new capital orders, record recurring revenues, strong gross margin and reductions in both operating loss and operating cash. I want to highlight this last point specifically that in the quarter we used 1.7 million of cash and paid down the Biosense debt by 1.6 million. Without the paydown of Biosense debt, we would have consumed only 100,000 in cash from operation.
Let me restate that. We consumed only 100,000 in cash from our operation. Clearly utilization of cash during the quarter was at the lowest for any quarterly period since we became public and as an indication of how focused we are at getting to breakeven in the next phase of our growth. Total revenue for the quarter was 13.9 million, a 5% increase from the 13.3 million reported in third quarter 2009.
As we released in the pre-announcement a couple of weeks ago, we experienced some lumpiness in the systems originally planned to go to revenue in Q3 and Q4, due to hospitals construction cycle we're spending in the next year and a temporary delay in the imaging partners of (inaudible) 3rd replay 1:19 installed system. We fully expect to see any system delayed from this year to convert to revenue next year. Even though our revenue experiences delay we achieved significant progress on many fronts.
First, new capital orders for the quarter totaled 12.2 million, a 94% increase from the third quarter 2009. Second, the continued growth of standard lab sales for the Odyssey product line accounting for one third of the Odyssey orders. Third, recurring revenue hit another record high despite the expected summer seasonality for ablation procedures. Fourth, gross margins reached 72% even though the higher margin recurring revenue was only 41% of the total revenue. This gross margin performance demonstrates the strength of our capital value to customers.
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