Exhibit 99.1
FOR IMMEDIATE RELEASE | Contacts: | Ben Gong | 408-523-2175 | |||
Rae Covington | 408-523-2161 |
INTUITIVE SURGICAL ANNOUNCES $236 MILLION THIRD QUARTER REVENUE, UP 50%
SUNNYVALE, CALIF. October 16, 2008 – Intuitive Surgical, Inc. (NASDAQ: ISRG), the industry leader in surgical robotics, today reported third quarter 2008 revenue of $236.0 million, increasing 50% from $156.9 million for the third quarter of 2007. Third quarter 2008 revenue growth was driven by continued robotic procedure adoption and higherda Vinci® Surgical System sales.
Third quarter 2008 instruments and accessories revenue increased 53% to $76.0 million from $49.5 million during the third quarter of 2007. Third quarter 2008da Vinci® Surgical Systems revenue increased 48% to $126.3 million from $85.5 million during the third quarter of 2007. Third quarter 2008 service and training revenue increased 54% to $33.7 million from $21.9 million during the third quarter of 2007.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
Revenue ($Millions) | 2008 | 2007 | Increase | 2008 | 2007 | Increase | ||||||||||||
Instruments/Accessories | $ | 76.0 | $ | 49.5 | $ | 26.5 | $ | 211.4 | $ | 135.6 | $ | 75.8 | ||||||
Systems | 126.3 | 85.5 | 40.8 | 341.6 | 215.8 | 125.8 | ||||||||||||
Service/Training | 33.7 | 21.9 | 11.8 | 90.4 | 60.0 | 30.4 | ||||||||||||
$ | 236.0 | $ | 156.9 | $ | 79.1 | $ | 643.4 | $ | 411.4 | $ | 232.0 | |||||||
Third quarter 2008 operating income increased 58% to $85.0 million, compared with $54.0 million for the third quarter of 2007. Operating results for the third quarter of 2008 included $21.0 million of non-cash stock-based compensation expense in accordance with the Financial Accounting Standards Board SFAS 123R, compared with $8.7 million for the third quarter of 2007.
Third quarter 2008 net income increased 41% to $57.6 million, compared with $40.9 million for the third quarter of 2007. Diluted earnings per share increased to $1.44 for the third quarter of 2008 from $1.04 for the third quarter of 2007.
Intuitive ended the third quarter of 2008 with cash, cash equivalents and investments of $821 million, up $82 million from June 30, 2008 and up $186 million from December 31, 2007.
Commenting on the announcement, Lonnie Smith, Chairman and CEO of Intuitive Surgical, said, “We are pleased with our third quarter operating results. These results reflect the continued adoption of robotic surgery as a growing number of patients benefit from the improved clinical outcomes and reduced surgical trauma that ourda Vinci products enable.”
The Company will also announce these results at a conference call today at 1:30 pm PDT. The dial-in numbers for the call are 877-909-3508 for participants located in the U.S. and 517-645-6051 for participants located outside the U.S. The passcode is ISRG and the meeting leader is Mr. Lonnie Smith. To access financial information that will be discussed on the call, please visit Intuitive Surgical’s website at www.intuitivesurgical.com.
About Intuitive’s Products:
Theda Vinci® Surgical System consists of a surgeon’s viewing and control console having an integrated, high-performanceInSite® 3-D, high definition vision system, a patient-side cart consisting of three or four robotic arms that position and precisely maneuver endoscopic instruments and an endoscope, and a variety of articulatingEndoWrist® Instruments. By integrating computer-enhanced technology with surgeons’ technical skills, Intuitive believes that its system enables surgeons to perform better surgery in a manner never before experienced. Theda Vinci® Surgical System seamlessly and directly translates the surgeon’s natural hand, wrist and finger movements on instrument controls at the surgeon’s console outside the patient’s body into corresponding micro-movements of the instrument tips positioned inside the patient through small puncture incisions, or ports.
Intuitive®,da Vinci®,da Vinci®S™,InSite®, andEndoWrist® are trademarks or registered trademarks of Intuitive Surgical, Inc.
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This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are necessarily estimates reflecting the best judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. These forward-looking statements should, therefore, be considered in light of various important factors, including the following: timing and success of product development and market acceptance of developed products; regulatory approvals, clearances and restrictions; guidelines and recommendations in the health care and patient communities; intellectual property positions and litigation; competition in the medical device industry and in the specific markets of surgery in which Intuitive Surgical operates; the impact of the tightening credit market and its impact on health care spending; and unanticipated manufacturing disruptions; delays in regulatory approvals of new manufacturing facilities or the inability to meet demand for products. Words such as “estimate”, “project”, “plan”, “intend”, “expect”, “anticipate”, “believe” and similar expressions are intended to identify forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We undertake no obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.
INTUITIVE SURGICAL, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||
Revenue: | ||||||||||||
Products | $ | 202,267 | $ | 135,053 | $ | 552,998 | $ | 351,387 | ||||
Services | 33,725 | 21,851 | 90,376 | 59,995 | ||||||||
Total revenue | 235,992 | 156,904 | 643,374 | 411,382 | ||||||||
Cost of revenue: | ||||||||||||
Products | 53,517 | 38,305 | 148,405 | 103,067 | ||||||||
Services | 12,900 | 10,129 | 39,532 | 29,229 | ||||||||
Total cost of revenue (1) | 66,417 | 48,434 | 187,937 | 132,296 | ||||||||
Gross profit | 169,575 | 108,470 | 455,437 | 279,086 | ||||||||
Operating expenses: | ||||||||||||
Selling, general and administrative | 62,692 | 40,163 | 168,830 | 112,989 | ||||||||
Research and development | 21,851 | 14,319 | 58,509 | 32,736 | ||||||||
Total operating expenses (1) | 84,543 | 54,482 | 227,339 | 145,725 | ||||||||
Income from operations | 85,032 | 53,988 | 228,098 | 133,361 | ||||||||
Interest and other income, net (2) | 4,594 | 12,220 | 18,843 | 22,060 | ||||||||
Income before income taxes | 89,626 | 66,208 | 246,941 | 155,421 | ||||||||
Provision for income taxes (3) | 32,032 | 25,289 | 93,384 | 60,037 | ||||||||
Net Income | $ | 57,594 | $ | 40,919 | $ | 153,557 | $ | 95,384 | ||||
Earnings per share: | ||||||||||||
Basic | $ | 1.48 | $ | 1.08 | $ | 3.96 | $ | 2.53 | ||||
Diluted | $ | 1.44 | $ | 1.04 | $ | 3.84 | $ | 2.46 | ||||
Shares used in computing earnings per share: | ||||||||||||
Basic | 39,015 | 38,033 | 38,790 | 37,653 | ||||||||
Diluted | 40,108 | 39,271 | 39,978 | 38,776 | ||||||||
(1) | Includes stock compensation expense of $3.1 million and $1.4 million in total cost of revenue and $17.9 million and $7.3 million in total operating expenses for the three months ended September 30, 2008 and 2007, respectively; $8.3 million and $4.1 million in total cost of revenue and $47.0 million and $22.1 million in total operating expenses for the nine months ended September 30, 2008 and 2007, respectively. |
(2) | Includes non-operating foreign exchange losses of $1.5 million and $1.8 million of foreign exchange gains during the three months ended September 30, 2008 and 2007, respectively, due to the impact of the strengthening of the US dollar on foreign currency denominated assets; and $4.1 million of non-recurring gains on sale of equity securities during the three and nine months ended September 30, 2007. |
(3) | Includes a $3.1 million increase in 2007 research and development credits recorded after the Company's 2007 tax returns were filed in September 2008. |
INTUITIVE SURGICAL, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
9/30/2008 | 6/30/2008 | 12/31/07 | |||||||
Cash, cash equivalents, and investments | $ | 821,431 | $ | 739,782 | $ | 635,381 | |||
Accounts receivable, net | 173,708 | 162,088 | 130,370 | ||||||
Inventory | 52,498 | 42,594 | 32,416 | ||||||
Property and equipment, net | 98,081 | 94,568 | 68,093 | ||||||
Goodwill | 110,740 | 110,740 | 110,740 | ||||||
Deferred tax assets | 38,973 | 32,459 | 24,577 | ||||||
Other assets | 69,240 | 49,156 | 38,421 | ||||||
Total assets | $ | 1,364,671 | $ | 1,231,387 | $ | 1,039,998 | |||
Accounts payable and other accrued liabilities | $ | 108,442 | $ | 91,347 | $ | 96,632 | |||
Deferred revenue | 72,801 | 66,053 | 54,692 | ||||||
Total liabilities | 181,243 | 157,400 | 151,324 | ||||||
Stockholders’ equity | 1,183,428 | 1,073,987 | 888,674 | ||||||
Total liabilities and stockholders’ equity | $ | 1,364,671 | $ | 1,231,387 | 1,039,998 | ||||