Analyst Conference Summary

Hansen Medical
HNSN

conference date: February 23, 2010 @ 2:00 PM Pacific Time
for quarter ending: December 31, 2009 (fourth quarter 2009)

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

Overview: Much improved quarter both sequentially and year/year, but still deep in the red.

Basic data (GAAP) :

Revenues were $7.2 million, up 56% sequentially from $4.6 million and up 33% from $5.4 million in the year-earlier quarter.

Net loss was $11.7 million, improved slightly sequentially from $11.9 million loss, and considerably from loss of $15.9 million year-earlier.

EPS (earnings per share) were negative $0.31, improved slightly sequentially from negative $0.32, and diminishing the loss of $0.63 year-earlier.

[Year-earlier data is from the restatements]

Guidance:

Systems placed in 2010 estimated at 30 to 35 units shipped for revenue. SG&A expenses should decrease from 2009 levels.

Conference Highlights:

Conditions believed to be improving, although 2009 was a difficult year. "Our pipeline of potential customers is healthy." Changes have been made in strategy and execution based on experiences in 2009. Our technology was improved during 2009. New features are believed to represent significant new market opportunities.

Nine Sensei Robotic Systems had recognized revenue, and six systems were shipped in the quarter. Total systems shipped since launch reached 81, and revenue has been recognized on 69. $615,000 average selling price per system.

539 Artisan Control Catheters were recognized for revenue. This is up only 4% from the 520 sold year-earlier. $1662 average selling price. Will focus on utilization within installed base for EP (electrophysiology) market during 2010.

The Luna Innovations settlement agreement was executed in January 2010. Hansen received 9.9% of Luna's common stock and a $5 million secured promissory note. However, Luna licenses were granted to Hansen that will approximately offset payments on the promissory note.

A joint Development Agreement with Philips Medical Systems for collaboration on the new Hansen vascular platform was signed.

The deferred revenue balance ended at $9.5 million, for 12 Sensei systems.

Cash and equivalents ended at $28.3 million. The company has $9.8 million in debt, after paying off $0.9 million in the quarter.

Cost of goods sold was $4.8 million, leaving gross profit of $2.4 million. Operating expenses of $13.7 million included $4.3 million for research and development and $9.4 million for selling, general and administrative. Loss from operations was $11.3 million, other expense was $0.4 million.

Especially pleased with European sales team.

48 customers now have extended service agreements.

Enrollment in U.S. study for atrial fibrillation will start in the second quarter. In second half of 2010 will start the vascular clinical program enrollment. Initial target is peripheral vascular disease, which has a large procedure volume. Philips will partially fund the development and will provide advanced imaging technology.

Working on controlling spending, but needs money to develop the new vascular system.

Q&A:

U.S. study? It will be for paroxysmal patients, and randomized against standard manual procedure.

Guidance for systems sold? We were way off for a couple of quarters last year. Our sales team has a higher projection. We believe we are being conservative in our estimate, which is based on what we are hearing from customers.

Cash use, funding needs? Cash will take us though 2010. We are evaluating strategic options for funding moving forward.

Length of selling cycle? It seems to be getting measurably better.

Legal expense reductions in 2010? We spend about $6 million on Luna litigation in 2009, which should not recur.

The twelve units in deferred revenue are mostly international units.

Academic v. community hospital mix? We don't see it changing much in 2010.

U.S. v. international systems sold in quarter? Of 9 systems recognized for revenue, 5 were U.S., 4 were international systems. Of 6 shipped, 3 were international.

Seasonality? This business is typically second-half loaded, and we expect that to the the pattern.

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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 2010 William P. Meyers