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Stereotaxis Reports Second Quarter Financial Results; Rebalances Investment Around Commercialization of Epoch™ and Odyssey™ -Q2 Revenue of $11.6 Million- -Recurring Revenue up 17.9% from Year Ago Quarter- -Gross Margin Increased 250 Basis Points to 69.7% from Year Ago Quarter- -Suspends 2011 Financial Guidance- -Plan includes 15-20% Quarterly Opex Reduction to Minimize Cash Burn- -Conference Call Today at 4:30 p.m. Eastern Time-
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Second Quarter 2011 Financial Results
Revenue for the second quarter was down 22.7% from $15.0 million for the second quarter of 2010. The Company recognized revenue on three Niobe® robotic systems and $1.6 million in Odyssey systems in the second quarter. Recurring revenue from disposables, services and accessories increased 17.9% to $6.6 million from the year-ago quarter, and reflects continued growth in clinical procedures.
Gross margin for the second quarter ended June 30, 2011 was $8.1 million, or 69.7% of net sales. Gross margin for the year ago quarter was $10.1 million, or 67.2% of net sales. Operating expenses for second quarter 2011 totaled $17.6 million.
The net loss for the second quarter 2011 was $(9.7) million, or $(0.18) per share, compared to a net loss of $(3.9) million, or $(0.08) per share, reported for the second quarter 2010. The weighted average shares for the second quarter of 2011 totaled 54.8 million compared with 49.9 million in the second quarter of 2010. The increase was due in large part to the issuance of 4.6 million shares as part of the stock offering completed in November 2010.
At June 30, 2011, Stereotaxis had cash and cash equivalents of $23.3 million, compared to $35.2 million on December 31, 2010. Total debt was $30.5 million, including $15.8 million drawn against the Company's $30 million line of credit. Cash burn for the second quarter of 2011 was $5.9 million.
"Our revenue and new capital order performance is being impacted by a slowdown in Niobe II momentum and the related impact on the Odyssey business due to delays of Odyssey installations in Niobe labs," said Michael P. Kaminski, President and Chief Executive Officer of Stereotaxis. "The slowdown in Niobe is due to the market's demand for a more efficient solution for complex ablation procedures. We successfully introduced our new Epoch platform, the Niobe II replacement, at our industry's most widely attended event, the Heart Rhythm Society annual meeting. The significant interest in Epoch's dramatically enhanced efficiency in electrophysiology (EP) procedures has intensified the market shift away from the current Niobe II."
Kaminski continued, "Epoch's technological improvements over Niobe II provide the foundation to accelerate broad adoption of our technology. We are encouraged by the significant market interest that Epoch is generating as a new potential standard of care for EP interventional medicine. Since Epoch's release, we have scheduled 36 site visits with Niobe customers and potential customers to review the next generation system. The early, very positive reaction among key opinion leaders suggests that Epoch enables a faster, more efficient and dynamic magnetic catheter control for all types of robotic-assisted EP procedures while maintaining Niobe's recognized benefits in safety, radiation reduction and clinical outcome. We are focused on converting the strong interest into orders as quickly as possible, and plan for initial shipments to customers in the fourth quarter 2011."
The Company generated global new capital orders of $4.4 million in the second quarter, which were comprised of two Niobe systems, as well as $1.7 million in orders related to Odyssey. Capital orders in the second quarter 2010 were $10.2 million.
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