Stereotaxis's CEO Discusses Q4 2011 Results - Earnings Call Transcript

Stereotaxis, Inc. (STXS)

Q4 2011 Earnings Call

March 5, 2012 04:30 pm ET


Gregory Gin - Vice President, EVC Group

Michael P. Kaminski – Chief Executive Officer

Samuel W. Duggan II – Chief Financial Officer


Jose Haresco – JMP Securities

Steve M. Lichtman – Oppenheimer Securities



Good day, ladies and gentlemen and welcome to the Fourth Quarter 2011 Stereotaxis Inc’s Earnings Conference Call. My name is Keith and I’ll be your operator for today. At this time, all participants are in a listen-only mode. Later on, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, today’s conference is being recorded for replay purposes.

And I would now like to turn the conference over to your host for today Mr. Greg Gin of EVC Group. Please go ahead, sir.

Greg Gin

Thank you, Keith, and good afternoon, everyone. Thank you for joining us for the Stereotaxis conference call and webcast to review the financial results for the fourth quarter and full-year 2011, which ended on December 31, 2011.

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 reflect 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 that qualify the forward-looking statements made on this call, we refer you to the company’s periodic and other public filings filed with the SEC, including the Form 10-K for the fiscal year ended December 31, 2010 and the quarterly filings for 2011. 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 some of these purchase orders and other commitments are subject to contingencies that are outside of our control. In addition, these orders and commitments maybe 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.

Michael P. Kaminski

Thank you, Greg. Good afternoon, everyone, and thank you for joining us for the review of our fourth quarter and full year 2011 performance. With me today is our Chief Financial Officer, Sam Duggan. Following our prepared remarks, we will open up the call for your questions.

Before we begin a more detailed discussion of our 2011 performance and strategic priorities for 2012, I’d like to address some broader topics. Clearly, 2011 was a challenging year for us in which we experienced both successes and set backs.

During 2011 as we recognized the impact of our robotic platform transition on our financial results, we took immediate actions including significantly reducing operating expenses, raising capital, and executing on the Epoch platform commercial launch, while we’re confident these actions will lead to improved operating performance beginning in 2012, we know we have much work to do.

We’re determined to lead this company to profitability and we’ll continue to take the necessary steps to improve on our financial position as we execute on our current business plan and growth strategies. To that end, our immediate priority is to address the capital needs of the company. Specifically, we’re working to first extend our debt facility with Silicon Valley Bank, which we expect in the upcoming weeks and second, to secure additional capital through one of several options we’re considering.

As Sam will discuss later, these steps are fundamental to our continuing to be able to drive our business model forward. We’re optimistic that we’ll be able to complete both of these in the relative near-term. However, we’re limited in what we can disclose at this time as to both the nature of these transactions for the specific timetable. We’ll keep everyone informed when we’re able to report more.

Now, let me discuss our performance in 2011. Among our successes was the introduction of the fourth generation magnetic robotic system, the Niobe ES or Epoch system in mid-December. Niobe ES provides exceptional advancements and operational response time and a shorter learning curve along with expanded capabilities that position the product to address the needs of the large community hospital market, which often has a single physician operator performing complex ablations.

We’re encouraged by the early very favorable response, which we believe indicates that our new robotic platform meets the needs and provides us strong competitive advantage in terms of safety and now efficiency.

Secondly, utilization continues to increase as evidenced by 15% growth in recurring revenue in 2011 over 2010 and we achieved a record high $7.4 million in the fourth quarter. This performance reflects a strong growth we continue to see in clinical procedures on the magnetic platform, which drives disposable sales and service contracts. Company-wide nearly 10,000 procedures were performed in 2011, an increase of a 11% over the prior year.

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