conference date: August 7, 2013 @ 2:00 PM Pacific Time
for quarter ending: June 30, 2013 (Q2, second quarter 2013)
(at the time this is being written)
Overview: As expected due to Hansen Medical Q2 2013 Preliminary Results press release
Basic data (GAAP) :
Revenue was $3.3 million, up 14% sequentially from $2.9 million, but down 6% from $3.5 million in the year-earlier quarter.
Net income was negative $13.4 million, improved sequentially from negative $17.2 million, but worse than negative $11.5 million year-earlier.
EPS (earnings per share) were negative $0.20, improved sequentially from negative $0.26, but worse than negative $0.19 year-earlier.
Expects commercialization of 14 to 17 systems in 2013.
Expects full number of procedures in 2013 between 3,200 and 3,400.
Operating expenses in the second half of 2013 should be less than in the first half.
The growth in procedures demonstrates the validity of Hansen Medical's technology.
First patients were enrolled in a study of Artisan catheters with the Sensei system for treatment of atrial fibrillation, after approval of trial design by the FDA in May.
The launch of the 6F Magellan catheter is now expected in late 2013 or early 2014.
2 Hansen Robotic Catheter Systems shipped in the quarter, 1 Magellan in the U.S. and 1 Sensei outside the U.S. Revenue was recognized on the one Sensei system shipped. "Commercialized" 3 systems, 1 Sensei and 2 Magellan. The 3rd commercialized system was a conversion of an evaluation system to monthly rental payments. There have been 6 evaluation Magellan systems shipped, including the one converted to rental. One system that had its evaluation period lapse due to lack of funding in for the client in 2013 was returned. So there are 4 evaluation systems still in the field.
Artisan, Lynx or NorthStar Catheters sold was 875, up 48% sequentially from 592, up 24% y/y. As in 2012, this is partly the result of a Q2 inventory build. ASPs
Number of robotic procedures performed was 864 (an estimate), up 11% sequentially from 781 and up 36% y/y. Over 200 vascular procedures have been performed with Magellan since its introduction.
Cash and equivalents ended at $21.1 million, down $10.2 million in the quarter. Accounts receivable increased to $4.4 million. $30.2 million deferred revenue. Debt was $29.6 million.
After the quarter ended made a private placement of stock and warrants that should net $36 million, with potential for another $54 million from warrants. The financing includes a lock-up preventing the sale of the new stock on the market for one year. The agreement is scheduled to close and fund on August 9. For details on warrants see the Hansen July 31, 2013 funding 8-K.
The Magellan system was certified for use with Royal Philips' Allura interventional x-ray systems.
Cost of goods sold was $2.8 million, leaving gross profit of $0.6 million. Operating expenses were $13.1 million consisting of: $4.5 million for research and development and $8.6 million for selling, general and administrative. Operating profit was negative $12.5 million. Other expense was $0.9 million. Income taxes
Has been growing and improving the sales team, which is in budget discussions with key accounts. Also seeking to establish regional training and reference centers. Intends to continue to grow the sales team in 2013, up about 40% in year.
14 to 17 placements guidance, what counts, what has already counted? We have 4 commercialized systems in the first half, including the rental. If we sell a system but can't recognize revenue in 2013, we would still count that as commercialized.
More rentals? It was driven by timing of capital dollar availability. They are a strong user. It could be appropriate a couple more times, but would not expect it as a long-term feature.
Capital budget feedback from customers? Hospitals are managing capital spend very carefully. 6 to 18 months from initial interest seems to be the timeframe. That is part of the basis for the system guidance. We are seeing systems advance through the pipeline.
Competitive threat of MediGuide navigation system? The St. Jude system has been out for a while. We have not seen a roadblock in our client negotiations. Several companies talk about reducing radiation, which is an advantage of our products as well.
Does not break out disposables vs. system revenue. But most of the revenue is related to the disposables.
Should we assume disposables will drive the majority of revenue near term? No, the growth would be from system units in the second half.
One source of cost savings in the second half is legal, which had some one-time costs in the first half.
Share count should be around 96 million at the end of the year. With warrant exercises could increase to over 107 million.
Any feedback on negative press on Intuitive Surgical? We are not getting that level of feedback. We hear about the client's capital availability and prioritization.
The reports on Magellan procedures are very positive, and we track each procedure at this point to help in training. The robot has been credited for helping access difficult locations or with very diseased ostia and with reduced radiation exposure and procedure time. We need to roll this data up and get it into presentations; what we are seeing is very encouraging.
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