STXS - Earnings call transcript Q1 2019

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Operator

Good morning. Thank you for joining us for Stereotaxis First Quarter 2019 Earnings Conference Call. Certain statements during the conference call and question-and-answer period to follow may relate to future events, expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the company in the future to be materially different from the statements that the company's executives make today. These risks are described in detail in our public filings with the Securities and Exchange Commission, including our latest periodic report on Form 10-K or 10-Q. to statements. duty no assume update these We [Operator Instructions].

CEO being a the now is today's Chairman conference is reminder, call recorded. and Fischel, my David over your It Stereotaxis. to As floor host, of pleasure to turn

David Fischel

strategic and publicly I'm Stereotaxis' had releases Thank on from I'm The today's that delighted two community. powerful. describing tangibly pleasure press the general the accomplishments. conference San also opportunity the morning, I at years innovation, evening, call as sharing annual after call about Francisco. we Society's innovation and taking can Yesterday announcements we of and innovations and you, focus for showcase Rhythm the and reaction good time they been energy Operator, vague shared represent in We today's and what Stereotaxis' strategy investment in this have the transformation. the everyone. these on. manner, first of Heart in conference, a primary particularly want for morning drivers talking positive of we was to commercial these working clinical,

For Stereotaxis developed plan Stereotaxis first robotics medically that benefit is as label XXXX. successfully to an is a directly statements be Stereotaxis the API a several advancing now implemented mapping integration offering amply all as forward earlier an has in date. should catheter taken responsibility next-generation supported that Acutus system. is progress with Stereotaxis is realistic Stereotaxis a innovation has financial and we in with These and hospitals announcements technology access meaningfully magnetic increased private the physicians its mapping positioning. that the Stereotaxis' our this strategic has leap broaden improving the developing development morning. And patients, repeated and I a comment since is opportunity to earnings announced calls, magnetic mapping I've open Stereotaxis robotic and and large system by integrated achieved ecosystems next-generation navigation robotic tangible is a way promised sound. first and last tightly in the will commercially customers launched system elegant, in that that x-ray consistently strategy also while to and this system year, industry.

and We are innovations advancing these decisively prudently.

and Our are impact the tangible announcements in They community coming very medical and will today are and quarters theoretical. not the years. Stereotaxis positively

harnessed to unimaginable. be didn't It otherwise system catheter precision, navigate that into was could some introduced worked system starting just The stability, safety spend dream the first Let time the it robotics robot system Niobe a is superstructure and was that our individually, is system, future reality robotics well, translated in the allowing work, with was catheters. and Genesis and the all was Since me XXXX. addressed moved technology represents on of around provided fiction itself. for procedure science the core to new magnetic electrophysiology. that The Stereotaxis some then, architecture, for them were though. more and a iterative improvements stagnant. next-generation forward. set-up, XX years, leap simplified covers responsiveness. are These magnets, there's Genesis, they remained been system robotic beginning. iterative the navigation each successfully reach believe fields robotic It way the aesthetic magnetic But improvements fundamentally

technology while instantaneous smaller magnets designed was the and the rotate responsiveness. the are rugged faster held their the magnets to on stronger the which to that magnets system. in modern all overarching the The motion differentiated and the the significantly We're architecture manipulated. increased of epic XX% provides allow By and way on we an that using more of we With lighter smaller, catheter patient table, allows Across of are the the but in is Niobe providing is entire We have during in navigational of angulation. of for software, for in along flexible and than new fields that our enhanced serves they anatomies tighten support flexible. the effort It this range Genesis hardware greatly incorporated a and approvals, benefits work of improving labs arms, generate the of physicians environment. to broad x-ray space experience procedure system access performance. and system completely for Niobe mass, greater have robotic ventures the nurses aspects endovascular range as routine, center regulatory possible. magnetic increase with are System and appropriate The an have and redesigned to wider It systems, potential operating current reliability size. a potential Across faster, patient smaller magnets to platform system. XX% increasing to improve future on electronics, provide positions motors, a should the for performance,

are for certain in proud and for other to successfully We achieved mark Europe system, now it geographies. and CE available commercialization is have the

the We to pursue broader coming launch. will additional for a commercial regulatory months allow clearances in

always ecosystem duopoly now system robotic is conjunction with not It This to and firms. provided Stereotaxis' only become to confidence x-ray for an electrophysiology, systems a by been offering technology customers. gave system that in and advanced lab. equipment to Our required has large pricing X-ray to limited technological robotic healthy less the robotic has directly not in customers. capital pursue and x-ray available us led our large hospital hospital critical our only less was electrophysiology duopoly two until in progress.

a of integrated Imaging Imaging, we system clear system Niobe. features, including Genesis practice. specifically detector S, of the panel benefits robotics primary are The Stereotaxis The significantly to radiation fashion, the be in able Stereotaxis and for quality. are a to on U.S.-based is with more its bundles broad Imaging, specialty the a reduction price with radiation in and type flat and designed electrophysiology, Stereotaxis the the surgical working any benefits Imaging also This adjustable EP of of newest electrophysiology to biplane providing offer in installation frame x-ray and support includes an forward of community, a and cost offer of cost We Stereotaxis image practice full a EP in robotic high-end should affordability step significant collimation, compatible combined robotics It strategic. own. a and of no are SID tightly x-ray reduced other Model a technology the advanced pleased Genesis for By of the was the with. complexity robotic and reduction clinically. are be range though, collaboration ongoing and with structural and beam we support have accessible rates, Omega affordable. good and in a In electrophysiology be now we x-ray variable ownership quality can Medical is a manufacturer that to developed broadly -- to incorporates proud offers. This acquisition, fashion, image Imaging system of

We sure the to other space to of Genesis dramatically bundled are and weight systems technology planning, The still enable Imaging components combination, will allowing pursue will pleasant that to individually rollout highly will and have system, existing make possible. of importantly, done chain in just $XX the considered in robust previously various annually. be are the of improved Genesis approximately services, work cost-effectiveness. in with more requirements new and would us In effort the making experience cycle to Stereotaxis These than accessibility a less and exciting. physician maintenance EP labs for servicing sales. ongoing clinical and experiences still customers lab first But it's for installation grow size, a to the the cost-effective. dramatically provide electrophysiology. efficient, the fashion, Niobe the in have need system improved for the -- a x-rays, full replacement receive will has architectural of are the for all combined system. commercialization. each supply innovations step been the robotics hospital and will improved We We're and we first installed performance disciplined to which Subsequently, a every access to experience EU FDA customers. with support we in more more robotic an as providing there never practice more to initially transformed perfect customer return It our optimize hospital electrophysiology a clearance towards allow million future at installs and will be some aggressively our robotic

towards clinical innovation our very other The excited developing a is today the discuss impact significant next-generation highly this I catheter. to of want is efforts ablation that announcement be here and advances believe I'm it proprietary, as Stereotaxis will by magnetic significant use. innovation

innovation publications of manual magnetic want differentiated of this fields a magnetic documented efficacy, reach. magnetic modern, catheters. profile right advantages by catheter and being Johnson. in the Hundreds stability, publications are The peer-reviewed ablation catheter Johnson and safety, existing safety The development offered the place and those magnetic by the precision compared very the even overdue, to both most catheter long While clinical & I positive, the is from is has of when capabilities have outcomes, catheters context. navigated intrinsic clinical value of to

We're and We offering still but something much the because that we not stages. is make can current flawed are great innovation because the better. take development in pursuing it

in States Increased fuel Using three variety $X tip a procedures, increased comments placement annual considerations: ablation estimate. future. improving the utilization we've the the The the in But reasons, gains. in innovations next-generation quantity $XX The always launch collaboration European impressive share is of developed in with and improving catheter magnet in half and the already that of United we high-margin one is over are regulatory my pioneers significant an expertise broad. early disclosed prototypes terms prudent for and thing our cardiac needs able material future. opportunity performance material There for by additional the in market own our are and use catheter initial of will the existing and manufacturing. that The the navigation ablation catheter environments. of and the in the with catheter and to keep latter ablation for enter entered increased attractive more I'm significant. incremental initiatives And We've mapping to estimate we geographies provides an serve Stereotaxis. of design benefits design design potential meaningful Using clinical proprietary with open it benefits. volume, to of in catheter for Osypka, modern The to our commercial being Development options so various are collaboration and a the the primary difficult financial be that our of the ablation task take should that into to tip, patients advance is also market other possible to generating couple capabilities improve been developed capabilities magnetic are likely radiofrequency innovation catheter advance use magnetic performance are ensuring determined additional a clinical just XXXX. but catheter, within financially could our and not of timelines in being of can but efficiency other manner. a may strategic catheter the existing we market addressable prudent a revenue global strategic catheter and procedure various of There and ecosystem billion. increases million accommodate in proud over have for of ablation global years. physicians electrophysiology

at We accomplish to good have that Stereotaxis is achievements. interdisciplinary significant team technological able a

established of partners, still collaborations several and publicly have industry some range broad We confidential. with a communicated

The are us. the today excited path We the to ahead act. by of and are date innovations highly initial only our progress described

and that a but important much cognitive future, now will make robotics. know longer-term, lab We every our the of continue machine. decisive of system. in EP focused barriers before a are robotics financial innovation, and a pushing will there's and results, will to commentary Marty and have on financial continuous to to fashion will aspects more forward capabilities aspects strategy, subsequent will stages. call the the will committed leave Q&A. be in to we some the mechanical the opening confident we adoption Physicians and robotic comments few can It increase to I'm is EP provide in the of do a I then the on will I multiyear decrease

Martin Stammer

sublease Due in morning, million. first to good quarter new everyone. first with the quarter and Recurring $X million the of $X.X year required revenue income for was headquarters. quarter. sold of tenant prior to million Thanks, cost cost down that for leases, David, Revenue totaled we related record quarter Gross revenue goods lease quarter the the and consistent $X another XX%. in for was of accounting the treatment XXXX to from space we of sequentially prior guidance for margin and the the first were our $XXX,XXX and in to approximately

$XX.X subsequent changes, of XXXX with the greater the investment were higher $X.X in of increased cash XXXX, margin At and this increase net slight for I equivalents debt of Stereotaxis first year. million quarter. million and million. to liquidity in from March Consistent Operating the and for to total credit than $X.X the R&D Stereotaxis cash accounting million the flow than the quarter lease hand quarter first year $X facility any million, loss had of gross in in quarter now net expects $X of up Excluding were cash XX, year, due to expenses was will for million. prior quarter in the a would've from the cash impact David. no XX%, and last is Negative million, $X.X revolving Operating net million with quarter $X utilization in first the compared back call expected on unused loss million previous $X end been capacity first cash the borrowing XXXX free $X.X XXXX. quarter its quarter in in to periods. in equivalents. a the a $X.X million cash

David Fischel

Stereotaxis our methodically a context rebuilt Stereotaxis' broader that take for comment our that On explained underway. by financial was with that and recognized more shared impactful this understandable, last is larger already providing but should made place missing is on Marty. will Stereotaxis a our efforts. and is and picture. judged strategically financially clear I new serve call, a you multiyear rebuilding results, This is is physician attractive. I while quarterly you, goal customers. primary today focus, have that effort being this foundational what being Thank of our the well that make tangible, period, sound over a is we rebuilding better to The patients structure

Stereotaxis greater a our far while accomplish with while attractive will this destiny in goal our We than of placing annual doubling more and more control strategic own position opportunity. revenue

Stereotaxis uncertain revenue financial robust impact timing our XXXX, of accomplishments growth and specific to we precludes for revenue in exact the quarters. providing the innovation see is overall the While of guidance coming do returning

our have years without plans coming solid additional our financial We innovation commercial a the for foundation execute the to and over strategic reach profitability and can and need deliver on financings. initiatives

are Operator, questions? you very concludes That open ahead of the to prepared line for the our us. can excited We please remarks. year

Operator

[Operator Instructions].

Jennings Our Cowen. first question with comes Josh from

Joshua Jennings

with been can your was have annual base details that, is there's a to the one yesterday system though. base? around decade, launch installed comments like seems can any I where replacement have demand that for the of replacement you the share in significant that That's as you at on just demand. announcement current kind packed more that of now But your HRS you unveiling just symposium, million Genesis? that only position customer clinical thirsty in mentioned. And Congratulations talk -- and the a you that you for was tailwind I Genesis. on $XX level data the can about But imagine hoping has a at provide the start just of point cycle place next-generation It of the there's around of I evening. unveiled the you to if incremental cycle community last color Genesis It house. any

David Fischel

Sure.

was takes labs annual cycle replacement years afternoon XX you. we the ASP of at there. practices to multiply million see by I million XX replacement It when calculate accomplish So assume and a we and the I existing robotic really great to that for for active cycle, that years, $XX a again every joining estimated And replacement the that year. XXX approximately to yesterday thanks expect me then globally, $XX us take roughly have

labs, -- we x-ray into robotic be change and is is natural an system. We visibility are not would ours, also a that going every replacement, know clear have lab the a to of time for them the I where period in to that that

And into of good estimate being so that and with we comfortable approximately, very visibility say, have that fairly XX systems each year. are let's replaced

been have -- don't approval. We we FDA have still

is kind methodical that So We of obviously, going in that described really the we We're and chain have supply still as systems. installation, do the the inventory. out up not we've built marketed a that any fashion. the well, that planning to want I on make all call, sure, for new to worked gone

comfortable described from advancements our and existing what was and a that the yesterday, physicians lab completely described are technology there practically be at forward. replaced, installed and real, in will no I we lot Niobe we be the there As will that -- new our going I'm lab stay very for presentation. as base replacement that of being will from labs excitement cycle am

Joshua Jennings

you and maybe submissions? And Or Are the the a you're just that going need is clear Is FDA a FDA not there requiring? XXX(k) about data terms for et timeline, to what anything guidance what cetera. requirements required approval, of approval in is to there to is on note, the -- be this of is approval? exactly hurdle kind clear that your give pathways. for just But

David Fischel

use So this that the and not hasn't at any in be has will acquired to We're for XXX(k) Genesis. human at is this always for our changing the true obviously going same that clinical our System a time data, point. Niobe been indications be way understanding

platform happen will those time, upfront. potential of be likely is more there flexible but it future, for won't that expansions a indication Given over the

will relatively the approval we believe And pathway. first kind of that be benign so XXX(k) a

Joshua Jennings

electrophysiology last just Osypka might And understand distinct announcement they the it of Osypka Stereotaxis. you helpful have or partner But is great. why ablation development atrial color arena next-generation incremental be why for like partner the It catheters the in Great. for just to in magnetic Maybe the my is fibrillation would right -- is of just mean history a RF question catheter. the I and sounds the just terms just about generators. guys be and ablation right with any

David Fischel

Sure. Thank you very much.

on with we with Osypka. you of out visited broad their and about and customers visiting vision the there and this venture myself had alignment them, then well, really electrophysiology. and similarly the mind we just to view experience smaller, impressed distinguished of -- got on and and by that similar of of a with how and them of and this. in as in Europe see share technology, should this, catheter work and products products. electrophysiologists and started went we a We quality really, them potential and heard company gratefully, we like like want actually their a evolve. were and when And this, a the you And we're broadly started leadership breadth have an venture, introduced by in big to world several opportunity. the the to depth we're together working partners talking knew nimble I highly advance So range high very that that wanted We our impressed of really them are and We complimented by physician company quality a on whenever specifically

forward And to has fantastic we advancing to date, collaboration been look so and it together. forward

Operator

[Operator next from Battista [ph]. Instructions]. Chris question comes The

Unidentified Analyst

of I million sorry repeat threw you comments, was it. think prepared the Could I'm $XX that to respect missed there. just you in what With number a I around?

David Fischel

Sure.

volumes and existing the market an would a billion, by ablation be at be opportunity annually. cardiac kind ablation that market just global of So likely existing increased of million our catheter catheter, again, $XX Stereotaxis basis And also on given, look we over revenue mentioned global for a ablation catheter. proprietary procedure incremental annual over given a that mentioned our I $X ablation the from would recurring if and price proprietary you

Unidentified Analyst

XXXX to mentioned couple you about for a U.S. be European European think just approval today said you then beyond couple Are or latter for Great. clear, from that years and I And half talking of years approval? of then you of a

David Fischel

both to know, timelines development bands timelines, you As them. you have wide clinical around have and

want want whatever for still the point, this to in much physicians. rapid don't in advance get a while bring development also that timelines fashion, at we I things we to phase. So we rapidly want given great make it's and is too patients we're for experience And into to market to and a that -- sure

that be in -- to going play. balance there's that So

you it and where the given we've think how and -- be is Europe. engagement the commercial stand that and necessarily wait that regulatory given rapid until you. at full excitement be PMA in been years a have way don't clinical U.S. you bit it's where and process, -- overall an that timeline full that. determined. well path don't on will of and we them But detailing what we little the is would again, so exact I That seen fairly then this with fashion, a halo to the end of as early impact on in today physician in some My that we a likely and be clinic, be the clinical have effect type process for reasonable timeline. a improving use have with would prototypes in approval engages enters as physician clinical And additional of seems to regulatory the for community see need is need next the the year the will to there assumption typically to and having two Stereotaxis -- necessarily

Unidentified Analyst

question Last Okay. me. for

you area its us on a focus Stereotaxis what and outside that company? which Stereotaxis' has new opportunity core focus for the of procedures may of system procedures better Can remind likely indication today. Genesis clearance next XXX(k) new most the architecture that mentioned you think for I and currently provide as see you the

David Fischel

Yes.

of magnetic vascular head obviously the interventional be for would the system the to we reaches of -- to heights advance and have appropriate is in areas tip manual now, the Where surgery, for So where previously system, or devices till fairly catheters navigation very place us toes. broad think reach kind we most from have about precision we the approval vascular of about a in millimeter right be and robotics where any desirable. think there where And difficult of times where beneficial. catheter's control catheter reaching distal endovascular place in a would are the

And so there broad where be that would applications of exciting. are a range

think industry that. neurovascular I would become like be more about has things interesting. We've the much obviously seen that excited

Some the are exciting. There areas pulmonary in peripheral vascular could be indications. that

will and benefit And in to the Again, vision staged is make approach kind flexible sure magnets for has system anatomies. this our positioning much that our robotic that those allow a a so -- the be Genesis can to But We a having have which the system. want future. the broader and of right to of you different of some also arms, for ability to again devices enhances of try approach. interventional robotic complement positions, more

I've I on Stereotaxis' surgery. calls, surgery As intuitive the endovascular of do view future previous as described

Unidentified Analyst

I it that would had narrow you opportunity one, to is opportunity -- -- mentioned neurovascular, quickest the great down, hear. to But obviously see be Is to it neurovascular? That mean broader you I if set, place is the which where a you the but were neurovascular what set? pick if

David Fischel

pursue. We haven't which one terminal made any on to determination

personal stroke. seen neurovascular approaches the treating has of my from opinion, interventional terms just in me for that ask blossomed I've you If space

approaches the the a not is attractive where more conventional deeper patients field. highly into it the approaches. vascular think because stroke is complexity system interventional do I majority so of going vast largely of with with And brain's get treated still It one of

very So probably significant yes, a is opportunity there. there

Operator

no There questioners at are Instructions]. additional currently time. this [Operator

David Fischel

Thank and Okay. Stereotaxis. support We're for the of your us. excited continued path your ahead you questions and for for interest in

media speaking behalf And encourage welcome in our physically, on conference at be again to forward the the can't we days. next booth you to August. from Thank sharing which make social much. it you working we you visit you look on in San to you're hard if follow. we'll If over Francisco, your HRS updates pages, two very We and our

Operator

This concludes and you, ladies Thank gentlemen. presentation. today's

You may disconnect. now

Stereotaxis (STXS) 9 May 192019 Q1 Earnings call transcript