conference date: May 5, 2010 @ 2:00 PM Pacific Time
for quarter ending: March 31, 2010 (first quarter 2010)
(at the time this is being written)
Overview: Not profitable yet despite a $10 million gain from litigation settlement with Luna. Revenue recognition for robotic systems in the quarter well below what it would have been if shipped systems had been counted.
Basic data (GAAP) :
Revenues were $2.7 million, down 62% sequentially from $7.2 million, and down 64% from $7.5 million in the year-earlier quarter.
Net income was negative $3.8 million, up sequentially from negative $11.7 million, and also up from $14.1 million year-earlier.
EPS (earnings per share) were negative $0.10, up sequentially from negative $0.31 and up from negative $0.56 year-earlier.
2010 guidance confirmed. Systems shipped expected at 30 to 35 units. Research and development expenses will increase in 2010. Administrative expense to decrease due to lower legal expenses.
A gain of $10.0 million was recorded from the Luna Innovations settlement.
Seeing improved medical capital equipment electrophysiology (EP) market. Clinical data supporting Hansen technology keeps coming. Data shows Sensei system reduces radiation exposure. Philips Healthcare vascular platform hit a milestone.
2010 plan is to balance control of spending with development of the platform.
Just 1 Sensei Robotic Systems had recognized revenue, but seven shipped in the quarter. The system recognized was not one of the 7 shipped. 3 shipped in U.S., 4 outside U.S. All seven shipments were towards the end of the quarter. To the end of quarter 88 systems had been shipped, with revenue recognized on 70. Deferred revenue balance ended at $12.2 million.
637 Artisan Control Catheters were recognized for revenue, up sequentially from 539. Average sales price was $1,650. So over $1 million in catheters shipped.
Cash balance ended at $23.1 million. After the quarter ended, 16.1 million shares of stock were sold, generating $29.8 million in additional cash. Accounts receivable was 45.3 million. Debt is listed at $8.9 million. $6.6 million cash was used for operations, which is a lower burn rate.
A joint development agreement with Siemens Healthcare was signed in April.
Cost of goods sold was $3.6 million, leaving a gross loss of $0.9 million. Operating expenses of $4.8 million for research and development and $7.7 million for selling, general and administrative were offset by the $10 million Luna credit, reducing operating expense total to $2.5 million. Loss from operations was $3.4 million. Other expense was $0.5 million.
AF (atrial fibrillation) trial will get underway soon.
Ablation study timeline? Expect enrollment this year. Submission is probably a 2011 event, with 2012 probably correct for approval. But will submit 510K as soon as data is available, which could be approved as early as 2011. Sensei is already used for ablation off-label, but this could allow us to talk openly about this usage.
Catheters used in study? They will be sold, so will generate revenue.
The system with recognized revenue? Was outside the U.S.
How many were sold to distributors? Three went to distributors, all had hospitals ready as end clients.
Recent competitor data? Their efficacy rate was low. It does not look like it is a serious problem for us. The cryo data was unimpressive compared to our system.
What is the most significant barrier to adoption of Sensei systems? Getting the IDE off and running is encouraging. More data that we can share with the EP community is better for us. The ancillary benefits are very, very real.
Gross margins going forward? We are striving to hit 30%.
Guidance of 30 to 35? That is revenue recognized systems. We are painfully aware of the revenue recognition hurdle for systems shipped.
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