conference date: February 12, 2009 @ 2:00 PM Pacific Time
for quarter ending: December 31, 2008 (4th quarter 2008)
Overview: Still building on a small base, but not bad considering the economy.
Basic data (GAAP) :
Revenues were $7.3 million, up 74% from year-earlier.
Net loss was $14.9 million, up from a net loss of $23.9 million year-earlier
EPS (earnings per share) were negative $0.59, improved from negative $1.10 year-earlier.
Capital spending decisions have been impacted by economic downturn. Based on field activity, believes will sell 53 to 65 systems in 2009. Even the low end of range shows 30% growth over 2008.
Revenue was recognized on 10 Sensei Robotic Systems (6 in U.S.); one additional system was shipped. $601,000 average selling price, showing effects of distributor discounts and exchange rates from sales in Europe. 520 Artisan Control Catheters shipped, a record. Average price $1626. Nine CoHesion modules were sold.
Repeated previously announced partnership with Philips for electrophysiology (EP) market.
Installed base is now 55 systems, 36 in United States and 19 in Europe. This is after only 20 months of commercialization.
Ending cash and equivalents balance was $35.2 million. Net cash burn from operations in quarter moderated to approximately $9 million. Accounts receivable were $9.5 million, accounts payable $3.1 million, and inventories $6.7 million. Debt is $12.5 million.
Believes liquid enough to fund the company through 2009.
Looking to bring Sensei into new types of interventions. Growing body of clinical data shows benefits of the technology. Texas Cardiac Arrhythmia Institute showed 100% success for acute pulmonary vein isolation on 162 patients. Endovascular surgery first case positive results reported.
Making progress in developing a broader vascular platform.
Cost of goods sold was $5.2 million, leaving gross profit of $2.1 million. Operating expenses of $16.9 million included $6.8 million for R&D and $10.1 million for selling, general and administrative.
$3.6 million non-cash stock compensation expense.
Converted 15 customers to full service agreements as they came off warranty.
Co-marketing agreement with St. Jude resulted in 1 U.S. sale and 1 French sale.
Investments in 2008 will lead to better margins, particularly in 2010 when revenues start aligning with expenses. Will work to reduce expenses in 2009, including work force reduction and R&D trimming.
Interest expense will increase as a credit line is used to finance equipment sales.
Gary Restani has resigned as President but will remain on the board.
What did you see in January? We have seen customers remain serious about going forward on purchasing systems. It is good enough that we are reiterating guidance.
International in January? We are not seeing a lot of change in purchasing decisions internationally.
First quarter view? Years tend to be backloaded. It is real hard to tell.
Who will take on Gary's Restani's responsibilities? Sean Murphy will become senior VP of Operations. We will have a flatter organization under Fred Moll, the CEO. We feel very good about the team going forward.
No cancellations in January? None that we know of?
US/International mix in guidance? Believe will remain in same range as 2008.
Geographic clustering of machines tend to reflect demographics of patients.
Do you charge extra for CoHesion? Yes. List prices are different. But now most are being sold as integrated systems.
Ordered not shipped usually means we have not been able to sign off on installation and training, which is required for us to take revenue.
Philips partnership enhances the 3D imaging and placing technology. It should not involve a major R&D expense bump.
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