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Stereotaxis Reports Second Quarter 2017 Financial Results

  • Stable recurring revenue and 2% year-over-year growth in global procedures
  • Reduced operating expenses and operating loss
  • Launch of e-Contact™ module in EU and progress in development of strategic innovation plans
  • Reaffirming 2017 expectations
  • Conference call today at 10:00 a.m. Eastern Time

/EIN News/ -- ST. LOUIS, Aug. 10, 2017 (GLOBE NEWSWIRE) -- 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
At June 30, 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
The Company is reaffirming each of the expectations for 2017 that were initially provided in May:

  • Full year 2017 expected revenue to exceed $30 million
  • Approximately cash flow neutral for the last three quarters of 2017
  • Development and initiation of long term product innovation plan

About Stereotaxis
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.

This press release 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, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
               
  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  
               


STEREOTAXIS, INC.
BALANCE SHEETS
 
 
  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  


Stereotaxis Contacts:
David Fischel
Chairman and Acting Chief Executive Officer

Martin C. Stammer						
Chief Financial Officer

investors@stereotaxis.com

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