Stereotaxis Reports 2020 Second Quarter Financial Results

Rhea-AI Summary

Stereotaxis (STXS) reported a 21% decline in second-quarter revenue, totaling $5.3 million, primarily due to a 38% drop in procedure volumes amid COVID-19 challenges. Despite this setback, the company achieved notable milestones, including the installation of the first Genesis RMN® System and advancements in its robotically-navigated ablation catheter. Operating expenses decreased 13% to $6.2 million, demonstrating prudent management. As of June 30, 2020, Stereotaxis held a cash balance of $44 million, positioning it strongly for future growth.

Positive

• Installation of the first Genesis RMN® System, successfully treating patients.
• Advanced the design and manufacturing process of a new ablation catheter.
• Reduced operating expenses by 13%, demonstrating cost management during the pandemic.
• Maintained a strong cash position with $44 million at the end of Q2.

Negative

• 21% year-over-year revenue decline due to a 38% reduction in procedure volumes.
• Operating loss of $1.9 million for the quarter.
• Negative free cash flow of $1.2 million.

ST. LOUIS, Aug. 06, 2020 (GLOBE NEWSWIRE) -- Stereotaxis (NYSE: STXS), the global leader in innovative robotic technologies for the treatment of cardiac arrhythmias, today reported financial results for the second quarter ended June 30, 2020.

“Stereotaxis responded to the challenges of COVID-19 with resilience, prudence and creativity. Despite a 21% year-over-year reduction in quarterly revenue caused by procedure declines, we have made significant progress in commercializing the Genesis RMN^® System, advancing strategic innovations, and protecting Stereotaxis’ financial strength,” said David Fischel, Chairman and CEO.

“The world’s first Genesis system was installed in July and has successfully treated patients. A second Genesis system is currently being installed. We continue to see significant interest in Genesis and have hosted 198 physicians and hospital administrators from 76 hospitals since April on TeleRobotic visits. Approximately 30% of these represent greenfield opportunities.”

“Stereotaxis is pioneering unique TeleRobotic connectivity solutions in electrophysiology and was pleased to host the Inaugural Symposium of the TeleRobotic Surgery Leadership Council. This adds an important new dimension to our operational capabilities and the value of robotics for patients, physicians and hospitals.”

“We finalized the design of Stereotaxis’ advanced robotically-navigated magnetic ablation catheter, produced the first batch of catheters with a newly established manufacturing process, and are now testing, refining and validating that process. Meaningful progress has been made on a wave of additional innovations within electrophysiology and beyond.”

“We responded prudently to the financial impact of COVID-19 by reducing expenses in a fashion that does not harm organizational capabilities or slow progress. The financing announced during the quarter leaves Stereotaxis in the strongest financial position in its history and reinforces our commitment to invest in impactful innovation and commercial activities.”

2020 Second Quarter Financial Results
Revenue for the second quarter of 2020 totaled $5.3 million, down 21% compared to $6.8 million in the prior year second quarter. This decrease was primarily due to a 38% reduction in procedure volumes versus the prior year. Procedure volumes improved during the quarter with declines compared to last year of 57% in April, 44% in May, and 13% in June. The impact of this decline on overall revenue was cushioned by the stability of Stereotaxis’ service revenue.

Gross margin for the second quarter was $4.3 million, or 80% of revenue. Operating expenses in the quarter of $6.2 million were 13% lower than the prior year second quarter. The reduction in operating expenses was predominantly driven by timing of R&D projects and pandemic-related reductions in sales and marketing activities, partially offset by increased non-cash general and administrative expenses. Operating loss and net loss in the second quarter were ($1.9) million. Negative free cash flow for the quarter was ($1.2) million.

Cash Balance and Liquidity
At June 30, 2020, Stereotaxis had cash and cash equivalents of $44.0 million.

Forward Looking Expectations
Stereotaxis expects to recognize revenue on the sale of two Genesis systems in the third quarter, driving year-over-year growth for the quarter. The continued uncertain duration and scope of the COVID-19 pandemic makes it difficult to confidently estimate recurring revenue or the timing of additional system sales. Despite the uncertainty, Stereotaxis continues to experience significant interest in Genesis and expects a resurgence of system sales to existing and new hospital customers as the pandemic recedes.

Cash utilization in the second half of the year is expected to be lower than in the first half of the year, and Stereotaxis anticipates ending 2020 with greater than $40 million cash and no debt. Stereotaxis’ balance sheet allows it to reach profitability without the need for additional financings.

Conference Call and Webcast
Stereotaxis will host a conference call and webcast today, August 6, 2020, at 10:00 a.m. Eastern Time. To access the conference call, dial 1-888-394-8218 (US and Canada) or 1-786-789-4776 (International) and give the participant pass code 6170258. Participants are asked to call 5-10 minutes prior to the start time. To access the live and replay webcast, please visit the investor relations section of the Stereotaxis website at www.Stereotaxis.com.

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. 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 continue to manage expenses and cash burn rate at sustainable levels, 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 policy in the United States, including changes in government reimbursement of procedures, dependence upon third-party vendors, timing of regulatory approvals, the impact of the recent coronavirus (COVID-19) pandemic and our response to it, 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.

Company Contacts:                                                                         
David L. Fischel
Chairman and Chief Executive Officer

Kimberly R. Peery                                                                             
Chief Financial Officer

314-678-6100
investors@stereotaxis.com

STEREOTAXIS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)

		Three Months Ended June 30,										Six Months Ended June 30,
		2020				2019								2020				2019
Revenue:
Systems	$	12,769			$	-							$	12,769			$	58,051
Disposables, service and accessories		5,086,156				6,546,115								10,595,867				13,256,873
Sublease		246,530				251,996								493,060				493,061
Total revenue		5,345,455				6,798,111								11,101,696				13,807,985
Cost of revenue:
Systems		157,514				6,201								222,536				57,365
Disposables, service and accessories		680,937				894,760								1,320,800				2,009,119
Sublease		246,530				246,531								493,060				493,061
Total cost of revenue		1,084,981				1,147,492								2,036,396				2,559,545
Gross margin		4,260,474				5,650,619								9,065,300				11,248,440
Operating expenses:
Research and development		1,976,942				2,695,162								4,086,112				5,654,381
Sales and marketing		2,541,749				3,236,516								5,457,173				6,546,342
General and administrative		1,663,456				1,178,469								3,496,181				2,646,629
Total operating expenses		6,182,147				7,110,147								13,039,466				14,847,352
Operating loss		(1,921,673)				(1,459,528)								(3,974,166)				(3,598,912)
Interest income		567				31,810								81,529				48,374
Net loss	$	(1,921,106)			$	(1,427,718)					$			(3,892,637)			$	(3,550,538)
Cumulative dividend on convertible preferred stock		(342,126)				(357,194)								(685,849)				(710,704)
Loss attributable to common stockholders	$	(2,263,232)			$	(1,784,912)					$			(4,578,486)			$	(4,261,242)
Net loss per share attributable to common stockholders:
Basic	$	(0.03)			$	(0.03)					$			(0.06)			$	(0.07)
Diluted	$	(0.03)			$	(0.03)					$			(0.06)			$	(0.07)
Weighted average number of common shares and equivalents:
Basic		71,628,762				60,052,673								70,749,401				59,936,606
Diluted		71,628,762				60,052,673								70,749,401				59,936,606

STEREOTAXIS, INC.
BALANCE SHEETS

		June 30, 2020			December 31, 2019
Assets		(Unaudited)
Current assets:
Cash and cash equivalents	$	44,006,162		$		30,182,115
Accounts receivable, net of allowance of $412,813		3,041,100				5,329,577
and $380,212 at 2020 and 2019, respectively
Inventories, net		4,576,078				1,847,530
Prepaid expenses and other current assets		1,611,504				1,470,922
Total current assets		53,234,844				38,830,144
Property and equipment, net		263,039				250,443
Operating lease right-of-use assets		3,282,783				4,286,064
Other assets		269,542				218,103
Total assets	$	57,050,208		$		43,584,754
Liabilities and stockholders’ equity
Current liabilities:
Short-term debt	$	2,158,310		$		-
Accounts payable		1,571,679				2,099,097
Accrued liabilities		2,401,625				2,721,104
Deferred revenue		5,456,595				5,092,455
Current portion of operating lease liabilities		2,265,546				2,248,189
Total current liabilities		13,853,755				12,160,845
Long-term deferred revenue		508,772				554,258
Operating lease liabilities		1,069,090				2,089,537
Other liabilities		255,517				255,517
Total liabilities		15,687,134				15,060,157
Series A - Convertible preferred stock:
Convertible preferred stock, Series A, par value $0.001; 22,813 and
23,110 shares outstanding at 2020 and 2019, respectively		5,682,141				5,758,190
Stockholders’ equity:
Convertible preferred stock, Series B, par value $0.001; 10,000,000		5,610				5,610
shares authorized, 5,610,121 shares outstanding at 2020 and 2019
Common stock, par value $0.001; 300,000,000 shares authorized,
73,030,824 and 68,529,623 shares issued at 2020 and 2019, respectively		73,031				68,530
Additional paid in capital		521,013,702				504,211,040
Treasury stock, 4,015 shares at 2020 and 2019		(205,999)				(205,999)
Accumulated deficit		(485,205,411)				(481,312,774)
Total stockholders’ equity		35,680,933				22,766,407
Total liabilities and stockholders’ equity	$	57,050,208		$		43,584,754

FAQ

What were the revenue results for Stereotaxis (STXS) in Q2 2020?

Stereotaxis reported a revenue of $5.3 million for Q2 2020, down 21% compared to the previous year.

How did COVID-19 impact Stereotaxis' procedure volumes?

Procedure volumes decreased by 38% in Q2 2020, with April seeing a 57% decline, May 44%, and June 13%.

What is the current cash position of Stereotaxis (STXS)?

As of June 30, 2020, Stereotaxis had a cash balance of $44 million.

What were the main achievements reported by Stereotaxis in Q2 2020?

Key achievements included installing the first Genesis RMN® System and advancing the design of a new ablation catheter.