conference date: August 4, 2009 @ 2:00 PM Pacific Time
for quarter ending: June 30, 2009 (2nd quarter 2009)
(at the time this is being written)
Overview: As previously announced, a very weak quarter. I believe cash balances may not be sufficient to last them until they become profitable.
Basic data (GAAP) :
Revenues were $3.3 million, down 54% sequentially from $7.1 million and down 43% from $5.8 million year-earlier.
Net loss was $14.6 million, down sequentially from a loss of $14.3 million, but slightly better than the $14.9 million loss year-earlier.
EPS (earnings per share) were negative $0.42, improved sequentially from negative $0.57 per share, and from negative $0.60 per share year earlier. [improvement was due to share dilution]
No guidance, but does not feel Q2 is representative of the demand for Hansen technology.
Despite low revenues the pipeline of potential customers was described as "healthy." Market for hospital capital spending is difficult. Sales cycle extended, moving sales outside the quarter. Clinical data continues to come in that supports our technology.
Believes current cash, with current debt facility, will fund the company through cash flow break even.
Cash and equivalents ended at $51.4 million, up largely because of the $35.3 million public offering in the quarter. Debt ended at $11.6 million.
Only three Sensei Robotic Systems had recognized revenue, although three additional systems were shipped. One sold system was configured with the CoHesion module. All sold systems went outside the U.S. Total systems sold to date is 68. $556,000 average selling price, down due to discounting and unfavorable exchange rates.
626 Artisan Control Catheters were shipped in the quarter, but about 100 went to a single medical center. Fourth quarter of increasing services and catheter sales. $1580 average selling price.
Electrophysiology (EP) enhancements are being developed. FDA approval of enhanced products is expected by the tend of Q3 2009. Smaller ablation catheter for European market should be approved in 2010. Vascular platform also under development.
Cost of goods sold was $2.9 million. Gross profit was $0.4 million. Operating expenses of $14.9 million included $5.0 million for research and $9.9 million for sales, general, and administrative expense. Loss from operations was $14.5 million. Other income was negative $0.1 million.
Non-cash stock compensation expense recorded was $1.9 million.
Data shows utilization rate is currently about 1 case per week. Some users can do three procedures per day.
Cost reduction initiative continues. Headcount down 20% from year-earlier. 2009 operating expenses should be lower than 2008's.
Selling, general and administrative expense should decline in future quarters, partly because of winding down of Luna litigation expense.
Operating expenses looking ahead? We can modify our plan for limiting operating expense if necessary. We have no current plans to decrease headcount further.
Have any of the slipped Q2 orders materialized yet? No systems that we expected to sell have dropped out. So we expect to see some of that revenue in Q3, or mayber later.
We are extemely excited about the vascular platform. We expect to be in clinical trials in 2010.
What we saw was angst about paying for capital equipment; we were surprised at what happened in Q2.
Were the 2 international sales to distributors sold through? We believe both sales were installed and in use in July.
Vascular surgeons don't do cardiac surgery. This is a customer base in a specialty that really has to convert to minimal invasive techniques. Giving them a catheter technology will give them the skills to do minimally invasive surgery.
Cash at end of year? Confidence in getting to break even? No specific guidance, but of course we have revenue assumptions for 2009 and 2010. Even after Q2 events we feel comfortable that we can get to cash flow break even with current funds.
Pipeline versus backlog? A backlog would suggest you had orders that were waiting to be shipped and installed. We can ship and install in short order. Pipeline is healthy.
Has pipeline changed in last few months? No.
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