Analyst Conference Summary

Hansen Medical

conference date: November 17, 2009 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2009 (third quarter 2009)

(at the time this is being written)
Forward-looking statements

Overview: Sequential revenue improvement still left Hansen well below year-ago levels and profitability. I believe cash balances may not be sufficient to last them until they become profitable.

Basic data (GAAP) :

Revenues were $4.6 million, up 39% sequentially from $3.3 million, but down 52% from $9.6 million in the year-earlier quarter.

Net loss was $11.9 million, improved sequentially from a loss of $14.6 million and from a loss of $12.9 million year-earlier.

EPS (earnings per share) were negative $0.32, improved sequentially from negative $0.42 and also improved from negative $0.51 year-earlier.

[Year-earlier data is from the new restatements]


Recent performance is not indicative of long term demand for the company's products. Timing of customer orders is unpredictable.

Conference Highlights:

The economy makes this a difficult time to introduce new capital equipment. Operational focus is on reducing expenses.

Completed restatement of financials and filed 10Q with SEC. Revenues recognition affected 24 systems sold between and Q4 2007 and Q2 2009. For 13 systems revenue should have been deferred and recognized in a later period. 10 systems remained on our balance sheets as deferred revenue at the end of Q3 2009. Revenue on one system was reversed pending clarification. All systems were shipped under valid purchase orders to legitimate custmers and full payment was made on all but one of the systems. So the restatement is cash neutral. We expect to recognize the revenues now held in deferred revenue once outstanding obligations are met. The problem occurred outside the accounting department and steps have been taken to prevent future occurences. In the future sales through distributors will be recognized only when installation and training of clinicians is completed.

Five Sensei Robotic Systems had recognized revenue, and five systems were shipped. All systems sold were configured with the CoHesion module. $601 thousand average selling price. To date revenue has been recognized on 60 systems (43 in the U.S., 17 international). The pipeline of potential customers is healthy.

497 Artisan Control Catheters were recognized for revenue, down sequentially. $1700 average selling price. Utilization rates, however, rose. 46 customers now have extended service agreements.

At the end of the quarter the company had $10.3 million in deferred revenue corresponding to 15 Sensei systems. This is up considerably from prior quarters because of the financial restatement this quarter.

Cash and equivalents ended at $40.4 million. Debt is $10.7 million.

The FDA approved the next generation Sensei X Robotic Catheter System, which has key electrophysiology (EP) enhancements. The Artisan Extend Control Catheter was introduced. The Lynx Robotic Ablation Catheter is expected to be approved for the European market in the first quarter of 2010.

Atrial defibrilation study should get underway this quarter and be completed in 2010.

Vascular system is being tested and has had its first successful procedure; human trials will take place in 2010 and revenues may start as early as 2011.

Cost of goods sold was $3.3 million, leaving gross profit of $1.3 million. Operating expenses of $13.0 million included $4.9 million for research and development and $8.2 million for selling, general and administrative expense. Loss from operations was $11.7 million, and other expense was $0.2 million.

Research and development expenses should continue to decline. Cost of goods sold could fluctuate due to a variety of factors. SG&A expense was impacted by the restatement investigation; expected to decline in Q4.

$1.6 million of expenses was non-cash, stock-based compensation.


None asked.

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Disclaimer: Our analyst summaries may include both our condensations of statements made by company representatives and our own analysis. They are not covered by any warranty. We cannot guarantee anything said by company representatives is true. We try not to make errors, but it is possible. Before making or terminating an investment you should always verify any factual basis of your decision.

Copyright 2009 William P. Meyers