Stereotaxis, Inc. (STXS)
Q1 2010 Earnings Call Transcript
May 6, 2010 8:30 am ET
Doug Sherk – IR, EVC Group
Mike Kaminski – President and CEO
Dan Johnston – CFO
Imran Zafar – Deutsche Bank
Mimi Pham – Soleil Securities
Sameer Harish – Needham & Company
Spencer Nam – Summer Street Research
Charley Jones – Barrington Research
Chris Nix – UBS
Previous Statements by STXS
» Stereotaxis, Inc. Q4 2009 Earnings Call Transcript
» Stereotaxis Inc. Q2 2009 Earnings Call Transcript
» Stereotaxis Inc. Q1 2009 Earnings Call Transcript
Good morning, ladies and gentlemen and thank you for standing by, and welcome to the Stereotaxis first quarter 2010 financial results conference call. At this time, all participants are in a listen-only mode and following the presentation, instructions will be given for the question-and-answer session. (Operator Instructions) And as a reminder, this conference is being recorded today, May 6, 2010.
At this time, I would now like to turn the conference over to Mr. Doug Sherk, who is with EVC Group. Please go ahead.
Thank you, Craig and good morning everyone. Thank you for joining us for the Stereotaxis conference call and webcast to review the financial results for the first quarter of 2010, which ended on March 31, 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 the future events or the future financial performance of the company, including without limitation, statements regarding future operating results, growth opportunities and other statements that refer to 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 backlog, 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 of 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.
Thank you, Doug and good morning everybody. On the call with me this morning is Dan Johnston, our CFO. Total revenue for the first quarter was $10.6 million, comprised of four Niobes, $5.2 million in capital revenue and $5.4 million in recurring revenue.
For the quarter, there were several highlights. First, another record quarterly revenue quarter which reflects the success of our ongoing focus on clinical adoption. Second, record gross margins of 72.5%, third continued expense control resulting in the improved bottom line and fourth, backlog grew for the first quarter and over a year.
Even though, we reduced our operating loss by nearly $1million – $1billion over last year, we acknowledged that we still have work to do to drive improvements in the company’s bottom line and achieve breakeven. We pass through this milestone and it’s clear delineated and it's with moving current Niobe users to this option curve and leveraging them to increase the penetration of magnetic platforms, more specifically in North America.
These specific steps we have taken include, beginning in the first half over the last half of 2009, we transformed the commercial team in the U.S. to accelerate utilization growth. This includes adding new – key new talent in training, site support and management, to understand how to move customers through a disruptive technological learning curve.
Second, we have focused our resources on key sites which can be leveraged as advanced training sites. We have now identified three sites in U.S. where we will host advanced training courses. Third, we’ve developed the North American reference sites, which are capable of host perspective customers and demonstrate the full value of Niobe platform.
All of these points are reflected in our recurring revenue growth but more importantly provide the foundation for our rebound in North American Capital Sales. Our number one initiative remains driving adoption of the Niobe platform throughout the installed base.
Previously, we discussed the strong usage of our system in Europe and the relatively weaker pattern in North America. This morning, I’m very pleased to share with you that the program we discussed at late February to build the utilization in the U.S. is beginning to show signs of success.
We transformed our approach to clinical adoption in the U.S. to a comprehensive effort inclusive of a clearly defined clinical plan which focuses on continual learning, clinical and marketing support and a mutual commitment to build a Stereotaxis magnetic treatment program.
Our goal is to drive our step improvement in the number of sites embracing our technology while we collectively drive patient awareness and substantially increase the number of procedures using Niobe systems. Under this new program, we’ve seen a significant and meaningful increase in the U.S. Niobe utilization rate.