MAKO Surgical Corp's CEO Discusses Q2 2012 Results - Earnings Call Transcript

MAKO Surgical Corp. (MAKO)

Q2 2012 Earnings Call

August 01, 2012 04:30 pm ET

Executives

Mark Klausner - Westwicke Partners

Maurice Ferré - Chairman, President & CEO

Fritz LaPorte - SVP, Finance Administration, CFO & Treasurer

Analysts

Kim Gailun - JPMorgan

Matt Miksic - Piper Jaffray

Matthew O'Brien - William Blair

David Lewis - Morgan Stanley

Bill Plovanic - Canaccord

Michael Matson - Mizuho Securities

Presentation

Operator

Good afternoon ladies and gentlemen, and welcome to the MAKO Surgical Corporation 2012 second quarter results conference call. As a reminder, this conference is being recorded and will be available for replay on the company’s website www.makosurgical.com under the Investor Relations section after the completion of this call.

It is now my pleasure to introduce your host Mr. Mark Klausner of Westwicke Partners.

Mark Klausner

Thank you, operator. Joining us on today’s call are MAKO’s President and CEO, Dr. Maurice Ferré; and the company’s Senior VP and Chief Financial Officer, Fritz LaPorte. The company’s press release of the financial results has been released via GlobeNewswire. Mr. LaPorte will detail the contents of the release following remarks by Dr. Ferré. If you have not received a copy of the press release, it is available on the Investor Relations section of MAKO’s website, www.makosurgical.com.

I would also like to remind you that this call is being webcast live and recorded. A replay of the event will be available later today on our website and will be available for at least 7 days following the call.

Before we begin, I would like to caution listeners that certain information discussed by management during this conference call including answers to your questions will include forward-looking statements covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the company’s business.

For a discussion of risks and uncertainties associated with MAKO’s business, I encourage you to review the company’s periodic reports filed from time to time with the Securities and Exchange Commission including the Form 10-K for the fiscal year ended December 31, 2011 and the Form 8-K filed with our earnings release. MAKO disclaims any obligation to update any forward-looking statements made during the course of this call.

In respect of your time, we tend to limit today’s call to one hour. With that, it's my pleasure to turn the call over to MAKO’s President and CEO, Maurice Ferré.

Maurice Ferré

Thank you, Mark and good afternoon and thank you for joining us to discuss MAKO’s 2012 second quarter results. As a follow up to our selected Q2 operating results call on July 09, on today’s call, I'll provide you with some additional details on the operating results for the second quarter and Fritz will review the details of our financial results.

I'd like to devote the balance of the call to discuss the current perspective on the business and operating priorities for the remainder of 2012. In the second quarter, we sold nine RIO systems of which eight were sold to domestic customers and one was sold for a customer to use to a prominent hospital in Hong Kong by our distributor in China.

These nine RIO systems brings MAKO’s commercial installed base of RIO systems as of June 30, 2012, to 126 worldwide of which 123 systems are domestic. Of note, two of the systems sold in this quarter were sold to hospitals that are part of the Tenet Healthcare corporation, two are part of the Adventist Health Systems and one is part of the Community Health Systems.

In the second quarter, we sold nine MAKOplasty hip applications, seven of which were sold with domestic RIO system sales during the quarter and two of which were sold as upgrades to existing commercial systems.

As of June 30, 2012, 71 RIO systems or 58% of our domestic installed base have purchased the MAKOplasty hip application. Worldwide, through the second quarter, our customers performed 2,590 MAKOplasty procedures, of which 2,494 were performed at domestic sites. Of the 2,494 domestic procedures, 281 were hip MAKOplasty procedures.

The 2,590 MAKOplasty procedures performed represents a 13% increase over the procedures performed in the first quarter of 2012 and a 66% increase over the procedures performed in the second quarter of 2011.

The average monthly utilization per system was 7.2 procedures per system, per month during the second quarter of 2012, an increase from 6.6 in the first quarter of 2012 and 6.4 in the second quarter of 2011. Through June 30, 2012, approximately 17,700 procedures have been performed since the first procedure in June of 2006.

We had five abstracts accepted to upcoming conferences and attended four conferences in the quarter. At the annual CAOS UK meeting Dr. [Mark Blight] presented data on the first 50 patients in the MAKO sponsored randomized control trial being conducted at the Royal Glasgow Infirmary in conjunction with the University of Strathclyde.

The study compared unique compartmental knee implant alignment error between two groups of patients. Those receiving the makeover stores MCK unicompartmental implant delivered by the RIO system and those received the Oxford Partial Knee mobile bearing unicompartmental implant using manual non-robotic instrumentations.

The results are statistically significant and indicate more accurate alignment using RIO system. Specifically the tibial internal and external rotation, 70% of the MAKOplasty procedures showed less than a two degree of error against their target value, while only 20% of the Oxford cases were less than two degrees of error.

Read the rest of this transcript for free on seekingalpha.com

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