ST. LOUIS, May 6 Stereotaxis, Inc. (Nasdaq: STXS) today reported financial results for the first quarter ended March 31, 2010 highlighted by recurring revenue and gross margin achieving record levels while operating losses continued to decline. In addition, the Company reported that its efforts to drive clinical adoption within the U.S. market are favorably impacting utilization rates.
Revenue for the recent first quarter was $10.6 million compared with $11.1 million in the same quarter a year ago. Deferred revenue of $8.1 million at March 31, 2010 increased by $0.9 million from December 31, 2009. The increase was principally due to the deferral of one Niobe system where title was transferred, however other revenue recognition criteria were not met by March 31, 2010. The Company recognized revenue on four Niobe® Magnetic Navigation Systems. Disposables, services and accessories revenue set another record at $5.4 million, 26% above recurring revenue in the first quarter of 2009, largely due to growth in clinical procedures. Recurring revenue comprised 51% of the total revenue in the quarter.
Michael P. Kaminski, President and Chief Executive Officer, said, "Our strategy to drive deeper penetration into the U.S. market is progressing as planned on all fronts. The organizational, clinical adoption and training elements of this strategy are all designed to drive utilization of Niobe for the treatment of complex cardiac arrhythmias. Growth in U.S. utilization is on plan, which is a direct result of our refocused approach. We are working closely with institutions and clinicians to provide continual learning, and realize full value of the magnetic navigation platform. The significant growth in clinical utilization demonstrates the success of this approach and we believe it will be the catalyst for driving market adoption of our technology."
Mr. Kaminski continued. "During the quarter, we generated new orders totaling $7.3 million. $5.8 million of the new orders are related to five Niobe systems, one in the U.S., three in Europe and one in Asia Pacific, as well as $1.5 million in orders for Odyssey. As U.S. customers realize the full value of the system and reference sites strengthen, we are confident that sales of the Niobe platform will increase. At the same time, Odyssey continues to represent an important avenue for growth in 2010, in both Niobe and traditional non-magnetic labs. Outside of the U.S., in both Europe and Asia, our Niobe sales remain strong. In addition, revenue per patient continues to trend favorably as our first quarter 2010 results exceeded 2009 levels.
"For the remainder of the year, our top priorities continue to be driving clinical utilization and adoption for complex EP procedures, increasing U.S. Niobe order rates, and building Odyssey orders through internal sales efforts as well as with potential channel partners. At the same time, we are generating very strong gross margins, achieving another record in the first quarter, as recurring revenue comprised over 50% of total revenue. With our continued focus on operating expenses, we believe we can leverage revenue growth to substantially enhance our bottom-line performance during the year," concluded Mr. Kaminski.
First Quarter 2010 Financial Performance
Gross margin for the quarter was $7.7 million, or 72.5% of revenue, flat with gross margin dollars but an increase from the 68.9% of revenue in the first quarter of 2009. First quarter operating expenses decreased 6% to $14 million from $14.8 million in the first quarter of the prior year. Cash burn improved 44% to $6.4 million for the first quarter of 2010 compared with $11.5 million in the first quarter of 2009.
The operating loss in the first quarter was $6.3 million compared with $7.1 million in the prior year. The Company reported a net loss for the first quarter of 2010 of $8.4 million, or $0.17 per share. The net loss includes an adjustment in value for warrants issued in 2008 of $0.03 per share that results from the appreciation in the Company's stock price at March 31, 2010 versus December 31, 2009. This compares with a net loss for the first quarter of 2009 of $7.5 million, or $0.18 per share. The weighted average shares for the recent first quarter totaled 49.6 million compared with 41.3 million in the first quarter of last year. The increase was due in large part to the issuance of 7,475,000 shares as part of the stock offering completed in October 2009.
Cash and equivalents at March 31, 2010 totaled $24.5 million, compared with $30.5 million at December 31, 2009. Total debt was $22.7 million, including $10 million drawn against the Company's $30 million line of credit.
2010 Financial Guidance
The Company reaffirmed its outlook for 2010 as follows:
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 first quarter. To access the conference call, please dial (877) 941-2930. International participants can call (480) 629-9690. 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 4284791#. The call will also be available on the Internet live and for 90 days thereafter at the following URL:
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.
-- 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
SOURCE Stereotaxis, Inc.