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di Philip Vardena
Mar
7
Stereotaxis, comments regarding the last conference call (Q4 & FY2009)
Filed Under Investimenti, Stereotaxis | Leave a Comment
Stereotaxis, comments regarding the last conference call (Q4 & FY2009)
ahrahr (99.12)
ahrahr beat the market on Friday
Rank: 610 out of 69556
With STXS, I’m down -20.56% since I selected it with CAPS, against a S&P -6.50%. My CAPS loss is -14.16.
This post is devoted to a review of Q4 and FY2009 numbers; and some comments regarding the last CC.
For a review of what Stereotaxis does and why I like the stock, please see my previous post.
On Thursday February 25, 2010, Stereotaxis reported: 16% revenue increase in the fourth quarter 2009; new orders up 22% sequentially; second consecutive quarterly increase; recurring revenue reached record $5.1 Million; cash burn declined to $2.9 Million; full year 2009 revenue up 27%; gross margin percentage of 67%; operating expenses decreased 14% .
There were many positive and constructive things said on the cc (transcript courtesy of SeekingAlpha):
#1 – “During the year, we saw our first placements of Odyssey and non-Niobe or standard labs, demonstrating its broadening appeal as well as its potential to be a significant driver of future growth.“ Odyssey is an EP lab information management system, designed to optimize workflow and improve productivity, that enables live case transmission, remote procedure sharing, and even remote training. An EP lab can use it without a Niobe. I think it’s a positive that labs are purchasing it as a standalone, because I believe it will lead future Niobe sales (An Odyssey system is less expensive to purchase than a Niobe).
#2 – “(…) patient demand to be treated on the Stereotaxis System is emerging as awareness of the safety and efficacy is becoming more widespread. A live procedure featuring the Niobe was broadcast on the Today’s Show on NBC early in the month and led to several hundred inquiries into the University of Cleveland, where the procedure was performed, within a 24-hour period following the broadcast.The hospitals who informed us to pick several patients throughout North America have been scheduled for the procedure. We also were featured in a BBC documentary and individual hospitals such as Henry Ford in Michigan have advertised the Stereotaxis procedure in the Wall Street Journal New York Times, generating inquiries in the scheduling of procedures.” This a big driver towards widespread adoption of Stereotaxis technology, as everybody can learn from the Intuitive Surgical (ISRG) experience.
#3 – “(…) a worldwide market of more than 12,000 electrophysiology interventional cardiology labs combined (…)” It is the first time I find an accurate estimate of how many EP labs there are around the world. Total Niobe installed base should be 145 (or a number very close to that). It’s actually something more than a 1% penetration. There are vast, green pastures ahead!
#4 – “It’s now about 20, it’s in the mid-20s, 22% to 23% of total sites in Europe and the US are using it (note: Niobes) more than three cases a week.“ That leaves 75% of sites that are using Niobes less than three cases a week. There’s substantial growth ahead, not just from new sites, but from sites that already have a Niobe system.
#5 – On break-even: “To us a break-even quarter is probably something like a $23 million revenue quarter (…) it probably looks like something like 10 Niobe, 20 Odyssey, you know, 10 Cinema, that’s what kind of the quarter would like for us.”
#6 – I’m paraphrasing now. Since Niobe systems are usually sold along with x-ray equipment (typically from Siemens or Philips), Charley Jones of Barrington Research asks a tangential question: Do you have any expectation about the number of X-ray systems that will go into EP labs or new EP labs or redone EP labs in 2010 either in the US, globally, or split up? Mike Kaminski (STXS CEO) answers that STXS is assuming a worldwide number still between 250 and 300, and they get that through their partners. Half of them in the US and the lion’s share of the rest is in Europe and then bounce sprinkle. And China is coming up obviously with a very strong market. In other words, this is how large is the yearly market.
All in all, a good (but not stellar) quarter, and quite a bright horizon ahead for STXS.
Disclosure: I’m long STXS shares.
Just my opinion, not investment advice of any sort.
di Philip Vardena
Feb
28
Stereotaxis Inc., my ten bagger candidate.
ahrahr (99.20)
ahrahr beat the market on Friday
CAPS Rank: 479 out of 69524
With STXS, I’m down -33.57% since I selected it with CAPS, against a S&P -9.38%. My CAPS loss is -24.19.
This post is going to be entirely devoted to Stereotaxis, Inc. (Nasdaq: STXS), which designs, manufactures, and markets cardiology instrument control system for use in hospital’s interventional surgical suite or interventional lab to treat arrhythmias and coronary artery disease.
Before delving into commentary and analysis of the company my background first.
Under the ahrahr nickname there’s a community pharmacist. Warren Buffett famously said that you should invest in what you understand. Thank you Mr. Buffett, my studies and my job allow me to understand most biotechnology and healthcare equipment and supplies companies.
Truth is, a cyberpal back in 2006 (if I recall correctly) alerted me — on a message board, that is — about this company. I studied it since then, and bought my first shares early in 2008.
The Stereotaxis main product, whose name is Niobe, is a proprietary Magnetic Navigation System that’s designed to allow physicians to more effectively navigate catheters, guidewires and other magnetic interventional devices, through the blood vessels and chambers of the heart to treatment sites and then to effect treatment. This is achieved using computer-controlled, externally applied magnetic fields that precisely and directly govern the motion of the internal working tip of the catheter, guidewire or other magnetic interventional devices.
What do I like about the company? Their equipment is superior both to the manual intervention technique and to the only competitor that now exists (it is Hansen Medical, Nasdaq: HNSN).
Why is it superior? Because:
#1 – It takes less time to navigate the catheter into the heart (times are commonly halved);
#2 – It allows physicians go in the cardiovascular system in places that are very difficult or impossible to reach with manual or robotic;
#3 – It is a safer procedure for the patient. Only one adverse event (not fatal) reported to date, against a 2-to-6 percent adverse event ratio with manual. Robotic procedures (i.e. those done with Hansen equipment) experience an adverse event ratio similar to manual.
#4 – It is a safer procedure for the physician. With either manual and robotic, the physician (with his/her heavy lead dress) has to stay close to the patient. Thus they are exposed to x-rays anyway. A Niobe machine is operated from a different, lead-shielded room. The physician gets zero x-rays. And his/her movements are without the heavy lead dress.
#5 – STXS actually has FDA approval to do procedures with Niobe equipment and both in-house and partnered catheters. HNSN product, the Sensei, only has FDA approval for mapping, but not for ablations. They are doing these off-label.
There are some hard facts I like about STXS as an investment. These are:
#1 – Intellectual Property rights. If you want to go magnetic, it’s Stereotaxis’ IP.
#2 – Companies that have magnetic catheters (Biosense Webster, a division of JNJ) or that are developing them (STJ), must use those catheters with Niobes. STXS gets a royalty every time those catheters are used.
#3 Leading international physicians are endorsing STXS. You can check this via PubMed and other peer-reviewed publications. Soon every EP lab will want to have a Niobe.
#4 There possibly is a bidding war for STXS on the horizon. If you want to be in the catheter business, STXS is what you must own. Remember, STXS has the Intellectual Property. A Niobe machine can now use catheters from JNJ, Biotronik and, in the near future, STJ. Just imagine that one of these players wants all the pie: one has to buy STXS and shuts all the competitors out. Bidders might also be GE, MDT, Siemens, Philips…
Next post will be a comment of the recently released Q4 and FY2009 data.
Disclosure: I’m long STXS shares.
di Philip Vardena
Feb
25
Stereotaxis Reports 16% Revenue Increase in the Fourth Quarter 2009
Filed Under Investimenti, Stereotaxis | Leave a Comment
from the press release
–New Orders Up 22% Sequentially; Second Consecutive Quarterly Increase
–Recurring Revenue Reaches Record $5.1 Million –Cash Burn Declines to $2.9 Million
–Full Year 2009 Revenue Up 27%; Gross Margin Percentage of 67%; Operating Expenses Decrease 14%
ST. LOUIS, Feb 25, 2010 /PRNewswire via COMTEX/ — Stereotaxis, Inc. (Nasdaq: STXS) today reported its financial results for the quarter and the year ended December 31, 2009. Revenue for the recent fourth quarter grew 16% to $14.1 million compared with $12.1 million in the same quarter a year ago. The Company recognized revenue on six Niobe(R) Magnetic Navigation Systems, nine Odyssey(TM) systems and four Odyssey Cinema(TM) systems, totaling $9.0 million. Disposables, services and accessories revenue set another record at $5.1 million, a 51% increase from the fourth quarter of 2008, attributable to favorable pricing and procedure growth. The 2009 fourth quarter operating loss decreased 9% to $5.8 million from $6.4 million in 2008.
For the full year 2009, revenue grew 27% to $51.1 million compared with $40.4 million in 2008. Recurring revenue increased 54% to $18.5 million from $12.0 million in 2008. Gross margin for the year was up 30% to $34.1 million, or 66.7% of sales, compared with 64.9% of sales in 2008. Operating expenses decreased 14%, resulting in a 42% reduction in the operating loss to $23.8 million in 2009 compared with the $41.0 million operating loss in 2008.
Michael P. Kaminski, President and Chief Executive Officer, said, “We are very pleased with our financial performance in 2009. Both systems revenue and revenue from disposables and services grew substantially during the year. During the quarter, we generated new orders totaling $7.7 million, up from $6.3 million in the third quarter and just $5.0 million in the second. The increase in orders is an indication that capital spending by hospitals is improving. The Odyssey platform continues to gain recognition in the market. There was substantial interest in the Odyssey platform at the Atrial Fibrillation Symposium in Boston last month. Physicians recognize Odyssey’s value in integration of diverse sources of diagnostic and other patient information into a single format, which provides improved efficiency, enhanced archiving and a unique opportunity to network labs and sites. We anticipate significant Odyssey revenue in 2010 from non-magnetic labs. We anticipate the economic recovery in the U.S. to result in increased commitments from hospitals for new capital projects. From a financial perspective, we are committed to driving revenue growth, generating solid gross profit margins and controlling our expenses,” Mr. Kaminski concluded.
Fourth Quarter 2009 Financial Performance
Gross margin for the quarter was $9.5 million, or 67.3% of revenue, compared with $8.2 million, or 67.6% of revenue, in the fourth quarter of 2008. Fourth quarter operating expenses increased 5% to $15.3 million from $14.6 million in the fourth quarter of the prior year as 2008 benefited from the reversal of certain non-cash compensation costs related to stock compensation programs. Cash burn improved 36% to $2.9 million for the fourth quarter of 2009 compared with $4.5 million in the fourth quarter of 2008.
The operating loss in the fourth quarter decreased 9% to $(5.8) million compared with $(6.4) million in the prior year. The Company reported a net loss for the fourth quarter of 2009 of $(6.7) million, or $(0.14) per share. This compares with a net loss for the fourth quarter of 2008 of $(7.5) million, or $(0.20) per share. The weighted average shares for the recent fourth quarter totaled 48.4 million compared with 36.7 million in the fourth quarter of last year. The increase was due in large part to the issuance of 7,475,000 shares as part of the secondary stock offering completed in October 2009.
Cash and equivalents at December 31, 2009 totaled $30.5 million, compared with $30.4 million at December 31, 2008. Included in the cash position at the end of 2009 was approximately $27.8 million in net proceeds received from the stock offering during the fourth quarter. Total debt was $23.7 million, including $10 million drawn against the Company’s $30 million line of credit. As previously disclosed, in October 2009 the Company received a commitment to expand its line of credit from $25 million to $30 million and to extend the maturity date from March 31, 2010 to March 31, 2011.
2010 Financial Guidance
The Company provided its outlook for 2010 as follows:
- New capital order growth in excess of 40%
- Total revenue growth in the mid-20% range
- Gross margins above 65%
- Operating expenses between $60 and $65 million
Conference Call Information
The Company has scheduled a conference call for 8:30 a.m. Eastern Time today to discuss its financial results for the fourth quarter. To access the conference call, please dial (877) 941-9205. International participants can call (480) 629-9866. An audio replay of the call will be available for seven days following the call at (800) 406-7325 for U.S. callers or (303) 590-3030 for those calling outside the U.S. The password required to access the replay is 4207018#. The call will also be available on the Internet live and for 90 days thereafter at the following URL:
http://www.videonewswire.com/event.asp?id=66045
About Stereotaxis
Stereotaxis designs, manufactures and markets an advanced cardiology instrument control system for use in a hospital’s interventional surgical suite to enhance the treatment of coronary artery disease and arrhythmias. The Stereotaxis System is designed to enable physicians to complete more complex interventional procedures by providing image guided delivery of catheters and guidewires through the blood vessels and chambers of the heart to treatment sites. This is achieved using computer-controlled, externally applied magnetic fields that govern the motion of the working tip of the catheter or guidewire, resulting in improved navigation, shorter procedure time and reduced x-ray exposure. Stereotaxis’ Odyssey solutions integrate and manage information from disparate information sources, eliminating the challenge of interacting simultaneously with many separate diagnostic systems, driving optimized workflow and improved productivity. The core components of the Stereotaxis system have received regulatory clearance in the U.S., Europe and Canada.
This press release includes statements that may constitute “forward-looking” statements, usually containing the words “believe,” “estimate,” “project,” “expect” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance for the Company’s products in the marketplace, the effect of global credit and economic conditions on the ability and willingness of customers to purchase our systems, competitive factors, changes in government reimbursement procedures, dependence upon third-party vendors, timing of regulatory approval and return of the irrigated catheter to the market, and other risks discussed in the Company’s periodic and other filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release. 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 the Company’s 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.
(Tables to follow)
STEREOTAXIS, INC. STATEMENTS OF OPERATIONS (1) (Unaudited)
Three Months Ended Twelve Months Ended December 31, December 31, 2009 2008 2009 2008 ---- ---- ---- ---- Revenue System $8,966,960 $8,743,693 $32,661,573 $28,375,880 Disposables, service and accessories 5,114,431 3,382,791 18,487,982 11,989,293 --------- --------- ---------- ---------- Total revenue 14,081,391 12,126,484 51,149,555 40,365,173
Cost of revenue System 3,990,424 3,233,985 13,240,430 12,008,090 Disposables, service and accessories 619,061 693,558 3,781,203 2,169,700 ------- ------- --------- --------- Total cost of revenue 4,609,485 3,927,543 17,021,633 14,177,790
Gross margin 9,471,906 8,198,941 34,127,922 26,187,383
Operating expenses: Research and development 4,012,977 3,561,488 14,260,854 17,422,828 Sales and marketing 7,269,738 5,363,663 28,694,540 28,660,663 General and administration 4,003,449 5,663,051 15,010,490 21,121,164 --------- --------- ---------- ---------- Total operating expenses 15,286,164 14,588,202 57,965,884 67,204,655 ---------- ---------- ---------- ---------- Operating loss (5,814,258) (6,389,261) (23,837,962) (41,017,272) Other income/ (expense) 845,470 - 911,977 - Interest income 10,699 29,205 44,768 194,870 Interest expense (1,752,762) (1,131,965) (4,613,240) (3,063,572) ---------- ---------- ---------- ---------- Net loss $(6,710,851) $(7,492,021) $(27,494,457) $(43,885,974) =========== =========== ============ ============
Net loss per common share: Basic and diluted $(0.14) $(0.20) $(0.63) $(1.20) ====== ====== ====== ======
Weighted average shares used in computing net loss per common share: Basic and diluted 48,374,735 36,714,618 43,344,324 36,585,086 ========== ========== ========== ==========
(1) On September 23, 2009, the Financial Accounting Standards Board ratified Emerging Issues Task Force (EITF) Issue 08-1, creating Accounting Standards Update (ASU) 2009-13 "Multiple-Deliverable Revenue Arrangements". The Company adopted this standard in the fourth quarter of 2009, effective for transactions occurring on or after January 1, 2009. Since there were no material changes to any amounts previously reported in 2009 or 2008, these periods were not required to be restated.
STEREOTAXIS, INC. BALANCE SHEETS
December 31, December 31, 2009 2008 ---- ---- (Unaudited) Assets Current Assets: Cash and cash equivalents $30,546,550 $30,355,657 Accounts receivable, net of allowance of $322,463 and $328,307 in 2009 and 2008, respectively 11,152,648 9,739,008 Current portion of long-term receivables 66,800 197,351 Inventories 4,403,675 8,086,956 Prepaid expenses and other current assets 3,872,535 2,966,510 --------- --------- Total current assets 50,042,208 51,345,482 Property and equipment, net 4,790,310 6,420,600 Intangible assets 1,144,445 1,277,778 Long-term Receivables 138,441 298,123 Other assets 5,112 98,382 ----- ------ Total assets $56,120,516 $59,440,365 =========== ===========
Liabilities and stockholders' equity Current liabilities: Current maturities of long-term debt $3,333,333 $3,901,491 Accounts payable 3,881,205 4,561,928 Accrued liabilities 8,615,287 9,873,818 Deferred contract revenue 7,191,492 9,676,339 Warrants 4,142,614 - --------- --- Total current liabilities 27,163,931 28,013,576
Long term debt, less current maturities 20,346,655 25,271,547 Long term deferred contract revenue 948,574 1,225,656 Other liabilities 20,013 158,905
Stockholders' equity: Preferred stock, par value $0.001; 10,000,000 shares authorized at 2009 and 2008; none outstanding at 2009 and 2008 - - Common stock, par value $0.001; 100,000,000 shares authorized at 2009 and 2008; 50,208,171 and 42,049,792 issued at 2009 and 2008, respectively 50,208 42,050 Additional paid-in capital 331,249,918 300,892,957 Treasury stock, 40,151 shares at 2009 and 2008 (205,999) (205,999) Accumulated deficit (323,452,784) (295,958,327) ------------ ------------ Total stockholders' equity 7,641,343 4,770,681 --------- --------- Total liabilities and stockholders' equity $56,120,516 $59,440,365 =========== ===========
SOURCE: Stereotaxis, Inc.
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