Stereotaxis, Inc. ( STXS) Q3 2011 Earnings Call November 7, 2011 4:30 PM ET Executives Greg Gin – VP, EVC Group Mike Kaminski – President and CEO Sam Duggan – CFO Analysts Sameer Harish – ThinkEquity Tao Levy – Collins Stewart Presentation Operator
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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 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 expressed terms as a result of negotiations or by project changes or delays.And now, I’d like to turn the call over to Mike Kaminski, President and Chief Executive Officer of Stereotaxis. Mike? Mike Kaminski Thank you, Greg. Good afternoon, everyone, and thank you for joining us this afternoon on the third quarter 2011 conference call. With me today is Sam Duggan, who joined us as Chief financial Officer in early October. Before we begin, let me formally welcome Sam to the team. Sam brings 25 years of financial leadership experience with management responsibility for treasury, investor relations, financial analysis, budgeting and lease financing. His broad experience in senior strategic finance roles make him ideally suited to lead our finance function as we execute our strategy to establish our technology platform as a standard of care for treatment of complex arrhythmias and other cardiac diseases. So, Sam, welcome to your first Stereotaxis conference call. On today’s call, I’ll start by providing an overview of the third quarter and discuss our progress on preparing for the upcoming launch this quarter of the new Epoch platform. I’ll then discuss our progress with the Odyssey platform before Sam reviews the quarterly financial results. We’ll then open it up to your questions. Let’s get started. Revenue in the third quarter was $8.5 million, down 38% from a year-ago period. Global new capital orders were $2.2 million and were comprised of $1.6 million in Odyssey products, four Epoch upgrades and two Vdrive systems. Our top line performance and system orders, as we expected, were impacted by the transition from Niobe II to Epoch. These factors resulted in soft Niobe II revenue and the related impact on Odyssey installations in Niobe labs. The top line was also affected by the emergence of larger standard Odyssey deals, which will take longer to close but will significantly increase our growth.
Among the bright spots in the quarter, recurring revenue grew 13.8% and reflects continued growth in clinical procedures with our magnetic robotic platform. In addition, we continue to build market interest in Epoch ahead of its planned launch this quarter. We’ve designed Epoch to significantly enhance physician efficiency and experience for robotic-assisted EP procedures. We believe these clear benefits will regenerate market demand for our EP platform, resulting in renewed growth in systems revenue and new capital orders. We’re focused on driving rapid market adoption of Epoch and believe this will significantly contribute to the future growth and profitability.With respect to the Odyssey platform, we’re continuing our efforts through direct sales and with distribution partners to expand the potential market opportunity. We expect the expansion of the Odyssey business in 2012 as our distributor, Biosense Webster, builds momentum in non-Niobe standard EP labs. Company is very focused on achieving key milestones, which will accelerate us through this transition period. I’ve mentioned some of these in previous calls, but let me review with you what we’ve accomplished on the top five milestones. The milestones are: 1) restructuring operating costs and lowering them by 15% to 20%; 2) hiring our new CFO; 3) securing relief of our bank covenants; 4) secure non-equity financing; and then 5), begin installation of the Epoch platform. Read the rest of this transcript for free on seekingalpha.com