conference date: February 20, 2014 @ 2:00 PM Pacific Time
for quarter ending: December 31, 2013 (Q4, fourth quarter 2013)
(at the time this is being written)
Overview: As expected from preliminary announcement, a slight improvement in revenue with lots of red ink.
Basic data (GAAP) :
Revenue was $5.62 million, up 10% sequentially from $5.1 million and up 29% from $4.34 million in the year-earlier quarter.
Net income was negative $11.9 million, down sequentially from negative $10.2 million and reversing positive $9.6 million year-earlier.
EPS (earnings per share) were negative $0.12 , up sequentially from negative $0.16 but down from postive $0.15 year-earlier.
Does not give formal guidance.
For 2014 Hansen Medical will prioritize increasing clinical experience, expanding physician awareness, growing the installed base of systems, and developing the product platform. The sales pipeline is being developed.
The 6Fr Magellan catheter was approved by the FDA after the quarter ended. It was developed in response to physician preferences and enables more procedure types. A larger, 10Fr catheter is under development.
4 Hansen Robotic Catheter Systems shipped in the quarter. Six systems were "Commercialized", one Sensei and five Magellan, in the quarter. 1 Magellan evaluation system remain in the field. 2 systems are now on rental agreements.
Y/y comparisons are skewed because in Q4 2012 Hansen had a $20 million gain on licensing to Intuitive Surgical (ISRG).
Artisan, Lynx or NorthStar Catheters sold was 600, down 24% sequentially 790 and down 29% y/y, due to customers' inventory management.
Product revenue for the quarter was $4.3 million, up from $2.9 million year-earlier.
Service revenue was $1.3 million, down from $1.4 million y/y.
Number of robotic procedures performed was 815, up 9% sequentially from 750, up up 8% y/y.
Making progress in establishing clinical reference regional centers in the U.S. and in Europe.
Cash and equivalents ended at $35.3 million, down sequentially from $47.1 million. Cash burn in the quarter was $11.3 million. Accounts receivable was $5.1 million. $3.1 million deferred revenue. Debt was $33.4 million.
Cost of goods sold was $4.5 million, leaving gross profit of $1.1million. Operating expenses were $11.8 million consisting of: $3.7 million for research and development and $8.0 million for selling, general and administrative. Operating profit was negative $10.7 million. Other expense was $1.2 million. Income taxes zero.
There was $1.6 million of non-cash stock compensation expense.
The FDA approval of the 6Fr catheter triggers the exercise of $14 million in series A warrants.
For the full year 2013 Hansen Medical commercialized 14 robotic systems, 9 Magellan and 5 Sensei.
2 Centers of Excellence were added in Q4, to a total of 4. These centers allow for demonstrations and physician training. Also equiped a mobile lab with a Magellan and Sensei to drive around the U.S. showing them to physicians.
$662,000 average system price for the full year 2013. Discounts were offered on 2 strategic placements in Q4. Catheter ASP increased 8% to $1784.
Is 1H vs. 2H in 2013 due to seasonality, or was it an inflection point? We hope to see more sales on a quarterly basis, but it is a lumpy business. We are pleased with the conversations we are having in a growing pipeline of deals.
Cash burn going forward, if sales are growing? We can hold spending in line, but we will continue to invest on the R&D side and on growing out our sales group. Hopefully the shift will be from G&A to R&D and S&M. Because most of the 6 systems sold in Q4 were sold near the end of the quarter, the cash from them will come in Q1.
Evaluation units vs. sales? Our aim was to get opinion leaders experienced with the system. We may do that again in 2014, if it looks helpful.
Systems shipped in quarter? Four. The two others were shipped in prior quarter.
Inventory issue? They were carrying 60 to 90 days, some hospitals decided to manage to 30 day levels to save cash. We are fine with that.
The share count was 99 million, with 14 million added from warrants, plus stock-based compensation. So 115 million shares by the end of February.
Viability of Sensei platform? The two platforms will not be merged. Both platforms are extremely important to us. Sensei has a large customer base and we want to drive utilization.
What type of clinical and economic data are hospitals requesting? We have a database collecting the results of all procedures performed. Data from that will be published at the right time. We are working on producing data on the economic benefits and reduction of radiation and time. We talk with hospitals about the vascular market size and profitability, which can be enlarged with a robotics program. Then we talk about ROI, drawing patients to the hospital, and utilization. In Europe we have seen patients drawn to the surgery by advertising.
All 5 sensei systems sold in 2013, all are generating revenue at this time? Yes.
We will be generating data on the 6Fr catheter for a few months, with a broader launch in the second half of the year. The important thing is the experiences that can be generated in smaller diameter vessels.
The 10Fr should be filed with the FDA in the second half of 2014.
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