Full Press Release Details
Stereotaxis Reports Second Quarter 2017 Financial Results
ST. LOUIS, MO, August 10,
2017 Stereotaxis, Inc. (OTCQX:STXS), a global leader in innovative robotic technologies for the treatment of cardiac arrhythmias, today reported financial results for the second quarter ended June 30, 2017.
David Fischel, Chairman and Acting CEO, commented, I am pleased with our progress in the quarter from a financial, operational and strategic
perspective. Our focus remains on supporting electrophysiologists build successful robotic ablation practices and identifying and initiating the strategic innovation paths that improve patient care, physician choice and our technology availability.
The combination of these should enable a future where robotic ablation is standard of care across a broad spectrum of cardiac arrhythmias.
During the quarter, we launched the e-Contact module in Europe, an important capability on the path to
robust automation software. Increased customer engagement led to annual growth in global procedure volumes. Improved expense management led to a meaningful reduction in operating loss. We are working on establishing additional capabilities,
relationships and innovation programs that will be announced when appropriate.
Second Quarter and First Half 2017 Financial Results
Revenue for the second quarter of 2017 totaled $8.5 million, up from $7.9 million in the prior year second quarter and up
sequentially from $7.0 million in the 2017 first quarter. Recurring revenue was $6.6 million in the second quarter, down from $6.9 million in the prior year quarter and $6.8 million in the first quarter. Recurring
revenue for the first half of 2017 of $13.4 million was essentially flat with the first half of 2016. Recurring revenue fluctuates with the timing of disposable shipments and field service projects, but benefited from 2% year-over-year growth
in global procedures. System revenue in the second quarter was $1.8 million, up from $0.9 million in the prior year quarter and $0.2 million in the first quarter. System revenue reflected the sale of a Niobe system to an international distributor in the second quarter as well as the sale of Odyssey systems. System revenue of $2.0 million
for the first half of 2017 was down from $3.0 million in the first half of 2016, primarily reflecting the expiration of an Odyssey distribution agreement and the timing of Niobe system installations in 2016. Ending capital backlog
for the 2017 second quarter was $3.2 million.
Gross margin in the quarter was $6.3 million, or 74% of revenue, versus $6.8 million, or 86%
of revenue, in the second quarter of 2016 and $5.7 million, or 82% of revenue, in the first quarter of 2017. The reduction in gross margin percentage does not reflect any fundamental changes in product pricing or costs but is primarily the
result of higher system sales in the second quarter of 2017 as well as the launch and installation of e-Contact technology at European hospitals. Gross margin of 78% for the first half of 2017 was essentially
equivalent to the gross margin recorded for the full year 2016.
Operating expenses in the second quarter were $6.7 million, down from $8.4
million in the prior year quarter and $7.6 million in the first quarter. The reduction in operating expenses reflects lower executive compensation and more efficient management of expenses across the organization, but does not represent
any material changes in the organization s personnel, infrastructure or capabilities. Operating loss in the second quarter was $(0.4) million, a significant reduction compared to $(1.6) million in the prior year second quarter
and $(1.9) million in the first quarter. Net loss for the second quarter was $(0.2) million, compared to a net loss of $(2.3) million in the second quarter of 2016. Excluding mark-to-market warrant revaluation, the Company would have reported a net loss of $(0.5) million for the quarter. Cash utilization for the second quarter was $(0.7) million. Cash utilization in the
quarter does not reflect the receipt of cash from the sale of the Niobe system, with which the Company would have had recorded positive free cash flow.
Cash Balance and Liquidity
2017, Stereotaxis had cash and cash equivalents of $5.0 million, no debt, and $3.9 million in unused borrowing capacity on its revolving credit facility, for total liquidity of $8.9 million.
Full Year 2017 Expectations
reaffirming each of the expectations for 2017 that were initially provided in May:
Stereotaxis is the global leader in innovative robotic technologies designed to enhance the treatment of arrhythmias and perform endovascular procedures. Its
mission is the discovery, development and delivery of robotic systems, instruments, and information solutions for the interventional laboratory. These innovations help physicians provide unsurpassed patient care with robotic precision and safety,
improved lab efficiency and productivity, and enhanced integration of procedural information. Over 100 issued patents support the Stereotaxis platform. The core components of Stereotaxis systems have received regulatory clearance in the United
States, European Union, Japan, Canada, China, and elsewhere. For more information, please visit www.stereotaxis.com.
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, the Company s
ability to raise additional capital on a timely basis and on terms that are acceptable, its ability to continue to manage expenses and cash burn rate at sustainable levels, its ability to continue to work with lenders to extend, repay or refinance
indebtedness, or to obtain
additional financing, in either case on acceptable terms, continued acceptance of the Company s products in the marketplace, the effect of global economic conditions on the ability and
willingness of customers to purchase its systems and the timing of such purchases, competitive factors, changes resulting from healthcare reform in the United States, including changes in government reimbursement procedures, dependence upon
third-party vendors, timing of regulatory approvals, 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, delayed or canceled, either by their express
terms, as a result of negotiations, or by overall project changes or delays.
Stereotaxis Contacts:
Chairman and Acting Chief Executive Officer
Chief Financial Officer
STATEMENTS OF OPERATIONS
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenue: | ||||||||||||||||
| Systems | $ | 1,828,439 | $ | 935,978 | $ | 2,047,334 | $ | 3,010,997 | ||||||||
| Disposables, service and accessories | 6,638,587 | 6,938,645 | 13,397,364 | 13,511,632 | ||||||||||||
| Total revenue | 8,467,026 | 7,874,623 | 15,444,698 | 16,522,629 | ||||||||||||
| Cost of revenue: | ||||||||||||||||
| Systems | 920,517 | 395,898 | 1,140,961 | 1,478,996 | ||||||||||||
| Disposables, service and accessories | 1,281,729 | 699,173 | 2,317,911 | 1,796,888 | ||||||||||||
| Total cost of revenue | 2,202,246 | 1,095,071 | 3,458,872 | 3,275,884 | ||||||||||||
| Gross margin | 6,264,780 | 6,779,552 | 11,985,826 | 13,246,745 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 1,281,264 | 1,421,380 | 2,439,697 | 2,894,465 | ||||||||||||
| Sales and marketing | 3,472,619 | 4,211,706 | 7,098,219 | 8,105,819 | ||||||||||||
| General and administrative | 1,945,676 | 2,786,046 | 4,785,546 | 5,372,838 | ||||||||||||
| Total operating expenses | 6,699,559 | 8,419,132 | 14,323,462 | 16,373,122 | ||||||||||||
| Operating loss | (434,779 | ) | (1,639,580 | ) | (2,337,636 | ) | (3,126,377 | ) | ||||||||
| Other income | 300,255 | 135,370 | 3,429,563 | 166,664 | ||||||||||||
| Interest income | 1 | 140 | 9 | 362 | ||||||||||||
| Interest expense | (42,776 | ) | (829,046 | ) | (92,267 | ) | (1,648,066 | ) | ||||||||
| Net income (loss) | $ | (177,299 | ) | $ | (2,333,116 | ) | $ | 999,669 | $ | (4,607,417 | ) | |||||
| Cumulative dividend on convertible preferred stock | (369,661 | ) | (732,849 | ) | ||||||||||||
| Net income attributable to convertible preferred stock | (167,539 | ) | ||||||||||||||
| Earnings (net loss) attributable to common stockholders | $ | (546,960 | ) | $ | (2,333,116 | ) | $ | 99,281 | $ | (4,607,417 | ) | |||||
| Earnings (net loss) per common share: | ||||||||||||||||
| Basic | $ | (0.02 | ) | $ | (0.11 | ) | $ | 0.00 | $ | (0.21 | ) | |||||
| Diluted | $ | (0.02 | ) | $ | (0.11 | ) | $ | 0.00 | $ | (0.21 | ) | |||||
| Weighted average shares used in computing earnings (net loss) per common share: | ||||||||||||||||
| Basic | 22,581,330 | 21,793,583 | 22,450,392 | 21,702,597 | ||||||||||||
| Diluted | 22,581,330 | 21,793,583 | 22,458,479 | 21,702,597 |
| June 30, 2017 | December 31, 2016 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 5,035,463 | $ | 8,501,392 | ||||
| Accounts receivable, net of allowance of $603,588 and $379,817 in 2017 and 2016, respectively | 4,876,716 | 4,665,959 | ||||||
| Inventories | 4,984,115 | 5,381,103 | ||||||
| Prepaid expenses and other current assets | 617,412 | 855,295 | ||||||
| Total current assets | 15,513,706 | 19,403,749 | ||||||
| Property and equipment, net | 792,367 | 1,086,244 | ||||||
| Intangible assets, net | 336,908 | 436,569 | ||||||
| Other assets | 41,047 | 39,241 | ||||||
| Total assets | $ | 16,684,028 | $ | 20,965,803 | ||||
| Liabilities and stockholders deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,737,247 | $ | 2,623,010 | ||||
| Accrued liabilities | 3,887,511 | 4,491,164 | ||||||
| Deferred revenue | 8,101,667 | 8,751,336 | ||||||
| Warrants | 16,357,444 | 19,787,007 | ||||||
| Total current liabilities | 30,083,869 | 35,652,517 | ||||||
| Long-term deferred revenue | 377,076 | 522,329 | ||||||
| Other liabilities | 321,316 | 320,409 | ||||||
| Total liabilities | 30,782,261 | 36,495,255 | ||||||
| Convertible preferred stock: | ||||||||
| Convertible preferred stock, par value $0.001; 10,000,000 shares authorized, 23,900 shares outstanding at 2017 and 2016 | 5,960,475 | 5,960,475 | ||||||
| Stockholders deficit: | ||||||||
| Common stock, par value $0.001; 300,000,000 shares authorized, 22,612,043 and 22,063,582 shares issued at 2017 and 2016, respectively | 22,612 | 22,064 | ||||||
| Additional paid-in capital | 450,370,408 | 449,939,406 | ||||||
| Treasury stock, 4,015 shares at 2017 and 2016 | (205,999 | ) | (205,999 | ) | ||||
| Accumulated deficit | (470,245,729 | ) | (471,245,398 | ) | ||||
| Total stockholders deficit | (20,058,708 | ) | (21,489,927 | ) | ||||
| Total liabilities and stockholders deficit | $ | 16,684,028 | $ | 20,965,803 |