Revenue for the recent second quarter totaled $15.0 million, 19% above $12.6 million in revenue in the second quarter of 2009. The growth was driven by a 16% increase in revenue from capital equipment and higher recurring revenue. The Company recognized revenue on seven Niobe® Magnetic Navigation Systems and $2.5 million in Odyssey systems. Disposables, services and accessories revenue set another record at $5.6 million, 24% above recurring revenue in the second quarter last year, reflecting continued growth in clinical procedures.
For the first six months of 2010, revenue increased 8% to $25.6 million compared with $23.8 million in the first half of 2009. Gross margin grew 14% to $17.8 million, or 69.4% of revenue, compared with $15.7 million, or 65.8% of revenue in the first half of the prior year. Operating expenses were $29.7 million for the first six months of 2010 compared with $29.4 million in the same period of 2009. The operating loss decreased to $11.9 million for the first six months of 2010 compared with $13.8 million for the comparable period of 2009.
Michael P. Kaminski, President and Chief Executive Officer, said, This was a strong quarter for the Company and our results demonstrate that we are on track to hit our plan for 2010. The success of our focus on driving adoption in the installed base, especially in the U.S., was reflected in our financial results, characterized by higher utilization, growing recurring revenue, and increased capital orders. Of the $10.2 million in new orders, $5.1 million were generated in North America. New orders were comprised of seven Niobe systems, including three in the U.S., two in Europe and two for the rest of the world, as well as $2.6 million in orders related to Odyssey.
We remain focused on this key initiative, working closely with hospitals and clinicians to reinforce the safety and efficacy of our systems for complex EP procedures and to demonstrate the value that our technologies bring to patient care. We have begun to see progress in driving adoption; we are at the beginning of this effort and there is much opportunity ahead in both the U.S. and internationally.
The $10.1 million gross margin set another record and was a milestone for the company. It is an example of the leveragability of our model as we continue to drive revenue growth. We are committed to containing operating expenses and driving our bottom-line performance. We are excited about the momentum and reiterate our outlook for revenue and key financial metrics for 2010, concluded Mr. Kaminski.
Second Quarter 2010 Financial Performance
Gross margin for the quarter increased 26% to $10.1 million from $8.0 million in the second quarter of 2009. This represented 67.2% of total revenue compared with 63.1% a year ago. Second quarter operating expenses totaled $15.8 million, an increase of 8% compared with $14.6 million in the second quarter of 2009. Included in the recent operating expenses were increased severance costs and foreign exchange totaling $0.7 million.
The operating loss in the second quarter was $5.7 million compared with $6.7 million in the same quarter of the prior year. The Company reported a net loss for the 2010 second quarter of $3.9 million, or $0.08 per share. The net loss includes a positive adjustment in value for warrants issued in 2008 of $0.05 per share as a result of the decline in the Companys stock price at June 30, 2010 versus March 31, 2010. This compares with a net loss for the second quarter of 2009 of $7.4 million, or $0.18 per share. Excluding the effect of the repricing of the warrants in the recent second quarter, the net loss was $6.4 million, or $0.13 per share. The weighted average shares for the second quarter of 2010 totaled 49.9 million compared with 41.7 million in the second quarter of last year. The increase was due in large part to the issuance of 7.5 million shares as part of the stock offering completed in October 2009.
Cash burn for the first six months of 2010, including payments against the Biosense Webster advance, was $14.2 million compared with $17.3 million in the first six months of 2009. Cash and equivalents at June 30, 2010 totaled $22.0 million, compared with $30.5 million at December 31, 2009. Total debt was $26.7 million, including $15.5 million drawn against the Companys $30 million line of credit.
2010 Financial Outlook
The Company reaffirmed its outlook for 2010 as follows:
- New capital order growth in excess of 40%
- Total revenue growth in the mid-20% range
- Gross margins above 65%
- Operating expenses between $60 and $65 million
Conference Call Information
The Company has scheduled a conference call for 4:30 p.m. Eastern Time today to discuss its financial results for the second quarter. To access the conference call, please dial (877) 941-9205. International participants can call (480) 629-9835. An audio replay of the call will be available for seven days following the call at (800) 406-7325 for U.S. callers or (303) 590-3030 for those calling outside the U.S. The password required to access the replay is 4329312#. The call will also be available on the Internet live and for 90 days thereafter at the following URL:
http://www.videonewswire.com/event.asp?id=70601
About Stereotaxis
Stereotaxis designs, manufactures and markets an advanced cardiology instrument control system for use in a hospital's interventional surgical suite to enhance the treatment of coronary artery disease and arrhythmias. The Stereotaxis System is designed to enable physicians to complete more complex interventional procedures by providing image guided delivery of catheters and guidewires through the blood vessels and chambers of the heart to treatment sites. This is achieved using computer-controlled, externally applied magnetic fields that govern the motion of the working tip of the catheter or guidewire, resulting in improved navigation, shorter procedure time and reduced x-ray exposure. Stereotaxis' Odyssey solutions integrate and manage information from disparate information sources, eliminating the challenge of interacting simultaneously with many separate diagnostic systems, driving optimized workflow and improved productivity. The core components of the Stereotaxis system have received regulatory clearance in the U.S., Europe and Canada.
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, continued acceptance for the Companys products in the marketplace, the effect of global credit and economic conditions on the ability and willingness of customers to purchase our systems, competitive factors, changes in government reimbursement procedures, dependence upon third-party vendors, timing of regulatory approval and return of the irrigated catheter to the market, and other risks discussed in the Companys 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 Companys control. In addition, these orders and commitments may be revised, modified or canceled, either by their express terms, as a result of negotiations, or by project changes or delays.
STEREOTAXIS, INC. | ||||
BALANCE SHEETS | ||||
June 30, | December 31, | |||
(Unaudited) | ||||
Assets | ||||
Current Assets: | ||||
Cash and cash equivalents | $ 22,014,249 | $ 30,546,550 | ||
Accounts receivable, net of allowance of $294,368 and $322,463 in 2010 and 2009, respectively | 14,147,775 | 11,152,648 | ||
Current portion of long-term receivables | 63,800 | 66,800 | ||
Inventories | 4,272,702 | 4,403,675 | ||
Prepaid expenses and other current assets | 3,024,675 | 3,872,535 | ||
Total current assets | 43,523,201 | 50,042,208 | ||
Property and equipment, net | 4,445,477 | 4,790,310 | ||
Intangible assets | 2,742,778 | 1,144,445 | ||
Long-term Receivables | 146,425 | 138,441 | ||
Other assets | 5,112 | 5,112 | ||
Total assets | $ 50,862,993 | $ 56,120,516 | ||
Liabilities and stockholders' equity | ||||
Current liabilities: | ||||
Current maturities of long-term debt | $ 19,499,999 | $ 3,333,333 | ||
Accounts payable | 5,766,991 | 3,881,205 | ||
Accrued liabilities | 7,698,627 | 8,615,287 | ||
Deferred contract revenue | 7,606,228 | 7,191,492 | ||
Warrants | 3,172,562 | 4,142,614 | ||
Total current liabilities | 43,744,407 | 27,163,931 | ||
Long term debt, less current maturities | 7,154,045 | 20,346,655 | ||
Long term deferred contract revenue | 789,381 | 948,574 | ||
Other liabilities | 14,134 | 20,013 | ||
Stockholders' equity: | ||||
Preferred stock, par value $0.001; 10,000,000 shares authorized at 2010 and 2009; none outstanding at 2010 and 2009 | - | - | ||
Common stock, par value $0.001; 100,000,000 shares authorized at 2010 and 2009; 50,356,233 and 50,208,171 issued at 2010 and 2009, respectively | 50,356 | 50,208 | ||
Additional paid-in capital | 335,058,197 | 331,249,918 | ||
Treasury stock, 40,151 shares at 2010 and 2009 | (205,999) | (205,999) | ||
Accumulated deficit | (335,741,528) | (323,452,784) | ||
Total stockholders' equity | (838,974) | 7,641,343 | ||
Total liabilities and stockholders' equity | $ 50,862,993 | $ 56,120,516 | ||
STEREOTAXIS, INC. | ||||||||
STATEMENTS OF OPERATIONS | ||||||||
(Unaudited) | ||||||||
Three Months Ended | Six Months Ended | |||||||
