STXS - Earnings call transcript Q2 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. Thank you for joining us for Stereotaxis' Second Quarter 2020 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 may 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 At a listen-only our participants placed on have been mode. this time, The floor will the be open for questions presentation. and comments following

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

David Fischel

in one resources months The infection conserve everyone. faced have call risk and situation few March in return vital created of of up described Stereotaxis' down and in and but and COVID-XX more revenue quarter. quarter typically all many impact past mid-April. disruptions comes with beginning week equipment to procedure last second hope financial change. overall the remain was volumes healthy in Global very will with XX% and results you been XX% operator we down the this revenue I today year procedure. impact challenging the reduction to the as as regionally, broad COVID-XX significant disruption as normal normal and the focus prudence of similar challenges, royalties companies, June have attempted the cushioned challenges renewal. XX% from a to long-term Thank of invigorating well. and in volatile as of additional April, disposables macro times in throughout COVID-XX hospitals the numbers revenue reduction procedure most below of The in come Procedure to towards the between battling May, steep recurring and approximately in of experience acute in on normal volume and activity most deceleration be in half a saw a service consistent XX% the other in has saw in last contracts activities. timely XX% due on each continue was to stability our period our described risk, there Approximately Stereotaxis' of been July. in collect remains of creativity. May. with June. resilience, XX% these sold Despite globally customers earned pandemic. we good morning The lessen Despite compared progress payments a of for procedures nadir decline gradual previously positive reaching was from the Stereotaxis pronounced was dramatic a procedures. you're to service and in Consistent fashion renewing second We've and by they Disposable and been the their My line this service a commentary contracts. has successful flares to challenges ways of we

interest we While signing purchase anticipated double-digit an our growth of early and orders that in saw XXXX revenue Receipt March, revenue clearance stream first system recurring attractive of the robust for several quarter is the supported source stability, driven FDA sales. of we in Genesis by in hospitals two confidence. from had Stereotaxis

cancellations with lab cannot with and the advance multiple with to nearer-term pandemic have engage electrophysiology trying assess system extend interested robotic still new administrators been delayed. have for projects are delays impact their the to on not financial both continue unable but Most sales, We greenfield timelines These old their on been life and been replacement have orders practices to strain the caused asked hospital purchases hospitals renovations labs. hospitals budgets. are replacement delayed by indefinitely. as be Existing capital to the of

interested S completed systems installation first and increased orders from is pandemic. will are patients. serve Genesis with of PR X seeing creativity Imaging The interest new our sites A responded in very period demonstration milestones been current sites for and have being customer of or growth successfully We system the as oversight first excitement in commercialization reflects lack of has referral the treat highlights. and and specific activity the to progress uncertainty both are key in been delays see of orders, progress. procedures releases initial July any has making There and significant and for indicative These hospital of Stereotaxis. or disappointing, successfully a significant very the second we and several challenges feedback Genesis Genesis' Despite are or these While not Model procedures to sensitivities installations environment and procedure and speak. is Model dynamics other are in Stereotaxis during with these The technology positive system excited installed lack we're faced and this physicians. as are we press robotics.

powerful. Approximately hospital we is interactions from late been of viewing XXX active but I April, Genesis the to engage Each in customers, their unique being control to physicians First, engaged and greenfield hosted interest drives Since as hospitals. value. These effective, includes Genesis and and demonstration has and of test the creative office any prided presentation and with allow administrators and on XX tailored from hospitals I efficient a to highly physicians recent mentioned of tool telerobotic These telerobotic physician Genesis direct often physician with on last physicians myself represent has accommodate of incomparable test mission, home the on also technology or system the catheter clinical drives ways the live a and Stereotaxis' quality headquarters and receive a amazingly have launched tour period. system. XX% our customers drives other take our test with scope call, opportunities. Genesis.

telerobotic significantly. enhanced the utilized for procedure to surgery telerobotic being support accelerated a efforts our has physicians on novelties daily to globally. to provide basis from Stereotaxis Second, is broadly telerobotic support used ultimately advance and capabilities collaboration Telerobotic support, by team

been to quarantine due procedures. visiting During the on restricted rules, team recent how from his electrophysiologist commented been has support our virtual telerobotic [indiscernible] visit a well has prominent for

navigated hosted between And surgery. showcases procedures each dimension last operation of cardiac and is use dual physicians. effectively. Stereotaxis in month, unique We adds pioneering in of are value and physicians symposium these new In live telerobotic other's telerobotic electrophysiology potential our operational safely interest of Portugal observing we an patients the catheters patients, to physicians important growing and capabilities and hospitals. and in inaugural and collaboration the this robotics for that Italy initial an infrastructure

robotic literature welcome documenting the you publications analysis comparable was to technology. of database robotic procedure were all of that manual It which Stereotaxis' of includes benefits efficacy to XXXth undeniable. Third, pleased were celebrate and we a the comprehensive XX-fold versus of the X,XXX than The complication publication of low. studies. is rates website, were We well the our clinical of described lower the as at over reported visit the XXX outcomes and Stereotaxis' patients treated remarkably on rates head-to-head manual The quantity now in Shanghai. x-ray technology clinical scientific usage publications milestone high with as studies, searchable the quality depending XX%

ablation from of efficiency. a Fourth storm. in and recurrence remind COVID-XX. pronounced and manufacturing robotically This our interesting recovered electrophysiologists scale the A We ultimate and are benefits treating our patient advanced cost suffering innovations strategic Milan most important the Stereotaxis' of physician Stereotaxis' electrical well. to at patients. when the producing processes for infrastructure. the catheter quality patient us efforts. from is of to highlighted our magnetic The navigated kept COVID-XX highly finalized and Another and design patient value all establishing protecting was progress success, refining now designed the high These and publication successfully be of robust process technology physician continue not in experience with publications safe catheters a treated of importance and COVID-XX the did manufacturing

with the this first Concurrently, completed on regulatory manufacturing trial. batch developed with have discussion initial will FDA be IDE preparing and we and been was had Europe refining of just the validating The of step coming weeks our process. U.S. strategy process spent the every testing our and for catheters

Stereotaxis' Beyond the of we that over continue [ph]. will years meaningful robust system give within XXXX. to ablation catheter our model Each navigation me dramatically proprietary efforts and expected on improve our that our the ways has in the was magnetic These new return multibillion-dollar is positive Genesis, their initial wave following increase launch XXXX expansion The with innovations creatively market robotic several made growth of and catheter strategy endoluminal opportunity. markets. growth succession. launch growth endovascular technology built the expand the and designed a coming progress our the robotic waves three confidence Genesis revenue commercial of revenue revenue to revenue rapid were of redefine have primary are increase and Gessler drivers: project structurally of into three highly in drive significant accretive. our accelerating to upon these and in DT with impacts NEP in in a BIP opportunity a as revenue significant disposable to

applications of launch still ablation in a we strategy U.S. contribute launch intact XXXX that wave commercially subsequent beyond Genesis. and in impact but to growth recognize This of expected proprietary the launch Europe Our is Clinical and catheter first the COVID-XX overall would remains is revenue in financial the with delaying and was commercial to EP follow. sound, a the

a comments transform call before robotic robust more financial sales as Kim? Stereotaxis yet detailed that financially now We pandemic we Q&A. make innovations discuss continue Kim opening those I'll these not return have in expect results to financial will and strategically. and that the confident few system of the remain with our along detail then to to a and recedes waves publicly will

Kim Peery

quarter prior quarter quarter for and $X.X million to million. second was will general approximately stock second to second $X.X cash driven hand by the Negative were various down decrease activities million flow and sales million in cash the At Stereotaxis procedure everyone. marketing of sales and expenses in projects, in reductions in stock-based, Operating volumes and XXXX by the increased the decrease of half was totaled driven primarily quarter disposables. cost were from net was timing second $XX of quarter the $X.X XX% of offset $X.X XX%. and end, David. free cost equivalents current and had were the back administrative These cash loss million. loss quarter $X.X first for non-cash, I was the million. Revenue lower by call R&D million partially $X.X David year the XXXX price. prior-year Operating $X.X higher margin second due Thanks to efficiencies. expenses morning XXXX of the pandemic-related the XX% associated Gross compared and the for quarter for and good to million with quarter. reductions the down of This year now

David Fischel

Thank did have delicate attention expense our macro Stereotaxis environment responded in challenging to you, prudence surgical with Kim. reductions improved not value. focus were fashion and financial The the shareholder a and or harm slow progress. to made

to and infrastructure success. continue projects the critical invest We for in that team are

in indices history in expect lower be sheet and second the cash of the at to no included greater support balance year also XXXX we June. of Russell pleased debt. the quarter. to million first We second its the strongest the $XX of and capital We appreciate end year to half cash constant and investment be of end were the has of and in the utilization with the in half the than than Stereotaxis

of growth revenue Operator, two For questions? prepared the year-over-year please third lines expects driven Genesis open to installations the systems. you our by remarks. That quarter, can completed concludes Stereotaxis

Operator

Thank Please ahead. Jennings our Cowen. take We first from Josh from you, [Operator sir. go Instructions] question

Josh Jennings

visits big my start hospitals the hospitals non-adopters. Thanks about asking XX been have David. April off Genesis my It number. by are from for And taking math morning, you funnel. on Good sounds Genesis a introduced virtual just around via telerobotic questions. XX hoping what to I to Hi. detailed XX sales it's since was to that's

customers and you big a what of -- terms the new how types XQ of new just QX saw these accounts. customer terms in step between customers? just delta front in idea an in forward replacement you us Genesis and what of saw of And was how for in new getting so of in give of potential and that introductions Could you

David Fischel

for Yes. good morning. Hi, question. Josh, Thanks the

period. And dichotomy last some bit where that little of speaks of extent so to this question speaks a that's to them your --

fact disappointing. On expectations that of lack is our additional recognize revenue was and supposed year orders the are of Genesis that. up disappointing is the very growth one hand year the significant and be original a not And obviously we living this orders to to

it's interactions order near ever the that and on of and But what On the Greenfield been other quality but I've always than is also magnitude I've probably the customers side, had able some existing beyond with more Greenfield anything experienced. We amount have that both is much hand, have would customers higher. of the to even quality amount interaction. also normally I an the customers

very feel you at of where I levels interactions that are the It an when overall, they individuals hospitals so interesting at speak their about good has allowed budgets. types And to to given -- their highest the what hospital taking been even even is hospitals are unsure to dynamic do and sometimes place. or capable doing of

-- feel hospitals days internally quickly we haven't engagements changes determined tangible Does that sometimes, then than news question? hear level both or I still with the help the possible still from obviously with answer the but which a positive anticipated. few very is at activity those gone it's And with that hospitals what slower that engagement overall into and later, transitioning means we of the not.

Josh Jennings

had mute on I I Sorry David. unmute to one. you question. myself. I wanted that answered just That on didn't follow-up the apologize. I

of in of can change being of them provide mean not in of plays are terms number any Genesis provide there's in terms of -- of or again big but introduced increased just more quarantine very driving you incremental mean in community to introduction Genesis terms numbers or very, in terms interest? Just the physicians system. Anything the those with you've some that that in what's in can the insights in and it sure given Genesis? this clinical and element just any available April May. time, are traveling I you big Is that I being I'm more some physicians to small launch there? insight

David Fischel

Sure.

of think we've it of making could also described been external initiatives is drive type factors. interest. So be I internally to some many you it like But that

an amazing lower telerobotic the to the barriers so been having visits of And these types have tool to interactions.

a funnel that experimenting effort the it's has that of building ways to And So to one form kind beyond is commercial have we top of - that, a of of of been funnel extent innovation with of kind of just various innovation. potential customers. been some sort

And several of partnerships with the And have funnel build we the a proactively made hospital enable customers worked we kind database building have to so the on to hundred out work interesting in top field on reaching top out and of customer globally. out some others of base.

also Our new some clinical and with team has really stepped up driving and in participated capital customers. engagement adoption

in And so range a capital things to capability. ways funnel start out to build been we've to them kind of proactively reach of doing to customers to that build internally to of sales a there's database creative out and out out a build

we're know, we how you conservative things. as think I generally in build

are that out been them to us. start range of creatively we're kind There into again kind hiring XX customers ways for and we've to reps, to learning we doesn't mean waiting outreach a on a trying our hands that of So people process. creative just haven't hook been reaching that potential just them engaging and new to come but capital sitting of

Josh Jennings

you're and for question Thanks the And are that e-Content remaining for included to that trial? recently sensing. And for potential e-Contact making progress if the wanted on XXXX, through just FDA, question. just submission. just taking steps approval. that. us side then like the catheter. in your Mark help you the terms the we've trial I been for expecting against by up around could any on CE encouraged ablation great be the design. your how U.S. sounds we in technology done some contact to just think Thanks you infinis on matches have see that Will proprietary can checks It infinis see PMA FDA very that you're provide technology And Mark of magnetic last in CE of insights all approval the

David Fischel

Josh. lot a Thanks Sure.

U.S. So and to of the part will trial. the as with in in come e-Contact perspective the technology the it catheter from be a -- included yes, will of market the IDE design new catheter

pleased two And that reviewed we have peer that we very in shown are They technology Europe will again the technology in available. on we've And well. with very, itself. so dozen been yes actually publications first We're publications use has robust feedback fashion. navigating know pleased has that now a the also the also just that technology's had our over And have way the by a again these the telerobotic physicians been catheter physicians have through that very positive. And consistently very are visits.

close. as of a it's And though So even confident supported to and we confidence that's internally pretty that nice relief feel -- customers. have then it physician by the was that was you -- always kind

And so for we're launch. the excited

we as terms described manufacturing next of have of designed real process process are like -- the for you test the that obviously robust final the the the then to in validate on process step In I product. commercialization, you process steps remarks manufacturing regulatory prepared every and a and establish

combine During going to you're confirm and step individual that either analyses document steps to reduce validation various that for any you're validate process reduce -- statistical that to risk going your to those and reduce the your variances steps cost then study. with some in refining be testing and to those working data Europe in just data for clinical submission. for some a post-market along appropriate as required steps that proposal -- a you are all likely a together regulatory with into preclinical data they And purposes. a of then And

XXXX in our a little kind from think back designs. think then our back we'll Europe the the plans few months. that's the proposals a on revenue dialogue to that do there's I sure to We what with going of good premature. few side, it's we had initial next and the us and bit come trial but that in and I'm is are there FDA. to Europe. from yes, waiting that U.S. And plan be contribution for on our over still so, focused have expect proposed overall And we forth. We We FDA some be And discussions

goes. And the a so look IDE of clearer we'll see picture have hopefully And much will like. what we'll how an next call trial by that

Josh Jennings

Sounds good. David. Thanks

Operator

And now Lake question Markets. Capital our ahead. take Takkinen next you. Street from we from Please go Thank Frank

Frank Takkinen

Genesis first Hey on guys, question thanks my taking for the congrats and install.

David Fischel

Frank. morning, Hi thanks. Good

Frank Takkinen

me. from few a Just

the On rebound procedural the figured to a procedural continued you bit basis. of side to a or guess even territory even I June have on I similar Could that? talk kind commentary. little maybe heard about procedural being commentary July your about July I on trend in positive the territory would

you the the a on July what procedural in in just the if give So feel us for front? field can little seeing you're month,

David Fischel

Yeah.

July on a almost no basis. still We preliminary like have exactly numbers. June, So year-over-year was only

get So comes procedure more automated geographies there's in with always where And sites some bit a don't of a delay. data. we little distant that

almost arose. buckled actually So complete and the had year, continuing additional earlier in were what harmed hospital due its own physicians restrictions. been they've seeing procedures, on COVID-XX preliminary have that have -- have seems but -- doing again, stopping dynamics. procedures then every procedures we're of kind have are But to our that a restrictions in to their flare-ups. patients to -- number because mess is, other have to hospitals documented that cardiovascular and due there additional world, issue do some where We've to June. the against by that those the identical And everywhere is then where And we restrictions

there's across forced when not stop We've event of playing But type So they're region. the they're at then enough sometimes out do hospitals, continuing every again. procedures. so to beds, seen hospital to

suddenly few that's which are a of some means few still down a year-over-year. very weeks environment. again, guidance. very, also -- And And by And very difficult have growing kind on so it hospitals we extent, is then regions it's pause. why or weeks, are to that driven often give had a We've it to by dynamic momentary where a we are

you for we continue can of then, some it sometimes to to But try in to a to So transparency it, you do the for to wavy best we drive data will progress. we're just tried however some a just everyone. I feels have as and and provide And ocean. And kind the and takes extent, boat like, it you. small extent to in ride to

are considerations, macro our Some beyond of these control. things

Frank Takkinen

disposables for installs. into genesis in, some secondly we as Got as And those go service for of as as get can with new you hopefully installs, the just That's period a Thank you that. Genesis us helpful. of ramp-up it. very frame-up associated then, contracts more well systems the

we that's have how a understanding just item? So to revenue going on of that good ramp line

David Fischel

Sure.

that And -- let's a typically revenue, if just from you of to And of on install we've expect, being per at start we you genesis install, variability an XX% sale per we Obviously have will kind you And do if procedures, then talked there's annual perspective, service a basis. will the math also in warranty high-level a to passes. about after X% about site, high-level So there. should period start a say -- system year. Greenfield hospital, XXX generate you once if about the service about have revenue. a level, on year the average

from install. procedures start less. from you the disposable relatively would hospital. more, Some of some after But around revenue many hospitals expect immediately level hospitals that that would do do And

Frank Takkinen

ask impact inadvertent inadvertent I QX. But creating KOL use. may could a beyond? demand And professionals, Genesis, that one further I next of if rollout earlier is one if and over last say. to value to potential Stereotaxis symposium, your the year And I the -- just value of right of and Perfect. how board guess not in on value, Can the then, or could you posted the word the telerobotics just talk

David Fischel

Sure.

broadly and of determine, And that working support, to very with there the collaboration in better And physicians technology of to the us broader try and more can to what community interventional that value So And reality. were from that more we're in And educating electrophysiology need that. many telerobotic to interested a grateful were surgery, a us telerobotic medicine. telerobotic perspective, perspective, in were that bigger do from they have daily make on, educating regulatory educating and a a we how impact. in themselves. interested

currently. that reality can physicians And a benefiting in increases good so hospitals, internally has it from also There to small helpful of is the it. aspect additional expand physician candidates dozens it And is again precision we some be the still are think of very And to things, that that can there's works are additional that together one make is a of newer reality support it And capabilities, that have of safety and physicians collaboration patient about stability, dimension the reality. there part that physicians for fortunately, I working it we use And terms in telerobotic passionate expect fairly in we wouldn't to to and -- The a of therapy. been things kind an clear the coming that over but adoption surgery of on a the done that telerobotic and that very to make the otherwise things patients telemedicine scale, part think of current bigger us positive of for benefit. to obviously focus are it I both tangible it's largely the And do value. as is impact decision. the but community months. still aspect these, do that are significant in future, additional starts us a the safety and one physician procedure can telerobotic future. robotic And adds is to And aspect, outcomes. ways there aspects, it in that. that is with with that become that, the their having be just treat that more for the just And something staff. ability the of And

Frank Takkinen

Perfect. Thanks for taking my questions.

David Fischel

Frank. Thanks,

Operator

question Our Mike from comes investor. ahead. Hammer Please Instructions] next [ph], [Operator private go

Unidentified Analyst

this I through you. say comment One navigating time. and Thank great want two just leadership to questions.

I've a long system, doing the job. been great and guys genesis You since speak. XXXX of are watching so thrilled to Genesis

is, you for system? the reasonable distribution how a and in alluded amount kind So the to of time a little Genesis also of this a be, what's one question, and second my first you street? question of are then prior prepared And the would bit from but sale manufacturing to

David Fischel

Sure.

terms did you one thanks remember, the in we lot a for discuss So, Genesis, process. its was, for chain of commercialization manufacturing the earlier of the being critical year focuses a supply major capability of if the part comment. in as And that and

types And higher volumes. to accommodate or add dozen few kind I systems office would year, without think we of our a changes. volumes, year hiccup. that accommodate a the can manufacturing worked that the without well St. those earlier we in Louis reach I the manufacturing challenges has any of some of as emerged beautifully and in in And, any managing supply team could of chain believe, additional shifts our reorganized capabilities really parts

good there. easier do also additional capabilities feel I And overall, that innovations So, for we that our becomes over the future. time, can there's about where things and long-term

systems to process. palatable of a that with additional of do more year, can out sell reality obviously hundreds a about longer-term look a make much you we you there's as things think view to So wanting a and

think a you clinical about team. and If commercial commercial relatively We primarily with the customers working have adoption. existing still lean focused team, on

cycle things advance there There's I think done our have that to a replacement I like to And a try well creative of earlier one mentioned can we've top with to I also adoption with opportunity. obviously, ways towards sales. very questions, itself, existing bodes the earlier their clinical by external And bit line overall own our that customers little can impact that, team the territories. are think that, support companies, Stereotaxis' on revenue. partners, in significant the capital engagement capital that just

our limited really I being at so, capabilities. by this we're that commercial And think, time, team's don't

some there, with very existing side, out growth is from to be the think significant world. team. the should in capabilities revenue And drive just challenge on again, I I our able macro there and challenges we Genesis size, just think, our

Unidentified Analyst

great. That's

job. Good it. do will guys You

David Fischel

you, Mike. Thank

Operator

no further time. have We at questions this

David Fischel

Thank for months. in speaking look you much Thank successful questions hard for We'll to again We a behalf. very on to support. Okay. you wish you forward coming continued healthy continue and And we working and November. your your your you.

Operator

This you concludes your today's call. Thank participation. for

disconnect. You may now

Stereotaxis (STXS) 9 Aug 202020 Q2 Earnings call transcript