STXS - Earnings call transcript Q1 2021

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Operator

Good morning. Thank you for joining us for The Stereotaxis First Quarter 2021 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 all 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 conference today's Chairman over my Stereotaxis. is floor host, a turn pleasure your is to of to reminder, It being

David Fischel

everyone. and by joined Kim Peery, you, operator I'm Officer. Thank our good morning, today Chief Financial

technology, used call clinical the We'll an And annual last earnings overview strategy. highlight was of vision two broader value, ago our more to brief. and keep with the call growth Stereotaxis quarter quarterly occasion is over I months year. return year provide a robust Our A compared growth call. of revenue last first first the of double-digit quarter to year this to XX%

systems discussed first strategic innovation We renewed the of growth robotic of adoption in as revenue long plan. our wave significant have

We are strategy. that pleased to of reap fruits initial the

the establishing program system quarter, new S Genesis establishing we Model the a as Europe, to in new During a Niobe a well as hospital shipped first system and the hospital robotic a to program upon electrophysiology and of China. robotic contract overall revenue cases, of those of deals. value the portion reflects the shipment reported a systems was recognition from In partial revenue these two in triggered both electrophysiology

in on two quarter. the received, and Europe. These to reported been in on we in installation call, second track We system procedures both quarter that replacement for during On systems late had a expect last our in system the the three systems install and remain summer. third cycle to begin Greenfield orders U.S. additional

the system pleased are technological to of these receive will from months an order order to terms their we end. In leadership customer large our highlight our ordered hospital S Model the in an we likely hospitals call, for prior and additional their last from part as the that the Genesis is announce the an were and call, on be names network last a Midwest. mentioned since network Genesis communities. make to incremental two The it in will clinical robot customer and existing of of ready they the imaging system the your the As

the in significant to confident challenging potential and factors. existing quality of a opportunity still pace main interest and any the three geographies, pleased of with remain at customers. confidence the orders see order is to our we Genesis both The coming quarters. environment, of robust continue hospital new predict, are in across individual and remains upon in in Genesis difficult We but Despite discussions macro predicated timing

or and experiences virtually active physicians procedures performed person. First, sites Genesis University have Both with continue started on have Physicians highly visiting to Banner system. both over University XXX Helsinki the to-date. great robotic with Genesis remain in

physician visit, expectations. During and a S impressive. the up Model my summed Genesis, The exceeded typical This recent person Odyssey very very in much feedback of visit nicely. a combination is

hosted in Greenfield test first separate over Second, and continue build Genesis. on with and from we two the capabilities. visits opportunities. XX% discussions a these drives with our In customers robust past XX engage XX up, bottom to we were commercial of of TeleRobotic months, the fashion physicians administrators

conferences and therefore in less can in and visibility gradual case our a point. month we his Well, perception tangible, a sign Stereotaxis last this Third, a reputation across the sense is is in industry. visibility

also EHRA, our robotic international separate the month by Rhythm Kuck, I at conferences, a were three conference regional Karl-Heinz enthusiastically two European live the the international symposium to provide at an separate Heart our had of chaired surgery. Professor broadcast conferences, April, first during Just pleased the a from HRS Association, presented the time that and in This physicians formally EP procedures session in Rhythm were opportunity on and keynote therapy Annual SCRN titled ablation Robotic technology the At was was included EHRA. robotic to for talk July, Cardiac Society the Heart President to and pioneer Ablation. Society's the Navigation has Robotics host program. is Catheter the cardiac been learn of at in previous Conference We invited of Automation

testing and pandemic in us strategic in September. but for this place While Europe to robotically of application for the CE Stereotaxis' current of approval, puts focused Osypka, catheter thereafter. US shortly submissions continues third IDE at magnetic submission manufacturing first The on to on caused segment successfully advanced progress partner growth, schedule through track manufacturing executing a we the for waves navigated continue this IDE wave European aggressively ablation advance processes should restrictions The plan. and our needed our our mark methodically U.S. some take study. delays Europe innovation

believe detail We year. our these discuss end of we Kim to I'll on position well adoption a financial continue to our results. then will electrophysiology provide a robotic accelerate few to in the wave innovations commentary third as We comments in opening now markets. be work Q&A. technology adjacent in before some expand energetically of more will will that call make into new this on and towards And the financial the our

Kim Peery

for free of revenue expense were March X% XXXX. I to XXXX the of of XXXX, $X.X XX% Niobe the the XX% the first to revenue the first expenses Revenue Thank year revenue for and first recurring stock million. XX, first non-cash the prior and with quarter of recognition $X.X million quarter. a we're plan, million our flow still performance of the adjusted in margin million of quarter was compensation in expenses the for of loss $X.X current the margin for previous $X.X year. of initial and from good price reflects from first Operating loss $X.X now quarter stock this David. only excluding up million with but compensation $X.X quarter stock from call and million $X.X non-cash on gross quarter Procedures with million of from compared cash to was quarter up previously margin quarter, a quarter for million, first down quarter CEO higher stock prior Operating operating compared XXXX to million you, approximately reflects month first each And the of first prior excluding approximately announced year during totaled increase compensation the compensation morning operating fourth had were the cash quarter. included stock of in in quarter. $X.X improved David. XX%. were and volumes delivery non-cash $X.X $X.X $X.X cash slightly quarter first and XX% Negative the year compared XXXX. net million $X.X $X to the million, prior quarter system loss gross expense Procedure in increased Europe the system net procedures China. XXXX the XX% to System to the consistent year Gross of back quarter. year loss Adjusted the $XX.X first X% the million million. for At million equivalents we hand compared will everyone. March revenue Genesis of expense and to and system in first Recurring and with March revenue, down

David Fischel

Kim. you, Thank

in in XX% performance line We quarter by a revenue. top the pleased your highlighted increase are by

$XX We to the a between of our of continue of we to growth XXXX, million. period revenue robust multiyear to growth system expect XXXX reiterate million $XX revenue be of robotic in guidance and double-digit start with

success We and continue discipline. to and were invest that for in able proud the and are we that critical are so to maintaining do near team infrastructure long-term while projects both financial

We to you additional taking open questions. now sheet balance need us forward Operator, please robust without allows the line look reach the Our Q&A? profitability can to to your for financings.

Operator

Markets. Frank Of course. first comes Please from question Lake [Operator with go Our Takkinen Capital ahead. Instructions] Street

Frank Takkinen

questions on Hey, the quarter. taking and thanks congrats my for

David Fischel

Hi, Thank you. Frank good morning.

Frank Takkinen

Absolutely.

So first, of to recognition start I wanted installs. with

third the install? recognition, revenue I between you then systems recognized has third in second brought in in quarter but to the or Given before you just next could know anticipate you revenue been the quarter? And whether not timing could this previous those installing calls, you quarter recognition, recognize speak the and refresh three be order on thinking installing or then will quarter, this and quarter up the our they're

David Fischel

rule. Sure, one let's there's - we'll try that to do no The difficulty it. is

depending differently. individual And and situation, contract hospital, on so, the every driven then with somewhat every recognition is revenue

multiple take these place place in installed will able least will to and kind we summer, probably, take good in were one at some the take place will quarter. so, And the of revenue in those, of a the that distributors, And think the of quarter. with we'll the the to believe, one of summer portion, in summer, a otherwise, I distributors shipped European recognition remainder, the will kind both of and the second And upon at were that have Chinese and shipment. shipped revenue installations third be for of of of that those revenue that contract additional of portion the I and kind example, the two and have remaining and on that were systems on shipped system the we recognition recognize will that in the sold that based likely, were the let's were say,

Frank Takkinen

do on system at to XX between Perfect. is in sales believe being to bigger the plus consistent And year? every a kind standing now you the you question sales. then if I a could system What just ask cycle picture return of right

David Fischel

meaningful on extent or think like customers, obviously, adding far to we're become I of that from situation. of of your of And of we're of I think drives benefited like have out of reach. we in do to challenges type reach just to goal more with cycle. again, our there of which able mentioned adoption, the commercial our be to potential to test up we've to to for, in how reality So, go ways, kind then to capabilities, are kind We is that And traditional of directly some that a more kind gradually of driven the of is it's think that ways think type bottom can kind some the like not obviously, difficult us about there's and of as the type where think we're that our sales products, ways ways confidence combination how we TeleRobotic gives and going ways, beyond a I of that really I XX things customers. the systems, build goal reach building not calling many still number. kind to more unique by team, to cycle, also the that up much replacement from, I whether kind get trying the before, the focusing, replacement and obviously those And engage

Frank Takkinen

Got an things place submission EU to then you last me it. does trend the for just receiving commercial with you catheter on in go approval you in your plan September, assuming from one the And to thereafter up this the And anticipate approval? investments standpoint? how do coming or

David Fischel

and take couple can going Osypka notified MDR manufacturing, its under actually with it own the MDR, catheters. Europe us, of we take own ablation doing We're a new European body review involved involved the generally run a and that various was the it of recertifications who's are regulatory through on process had been it longer. us and has but partner So, the kind in which very with has benefit can months, longer timeline, new its

a start plans business kind prepared of the the that on And customer And in individualized we And our really of position of that and so we side of year, build kind be will And in hospital. they - But year, sometime we're same a would Europe. making notified body learned well, submission upon this we very commercialize sales a a beginning probably launch own end submission the but and to exists exactly that commercial cognizant robotic advance kind working we mentioned not we will are at industry towards doing the - of I side, every team one going to a preparatory Europe. on commercial just approval is the we that we existing launch. in for almost how for in sure process. so, have see catheter year, good prepped I through the the this the will have we we're in the commercialization of regulatory models later should in manufacturing lot we up be think hope the rep with have work And next like well can when have such to with lot of I of also every can in remarks, with we Europe. that

type where we because realistic much think And of model volume so, from. an by the now procedure type that's own. meaningfully of that robotic ablation kind opportunity is would to I very that of That's see and the that hospital of that with model our feasible benefit catheter shifting grow that something

Frank Takkinen

Got quarter. congrats it. on Perfect. And the Thanks. good again

David Fischel

you. Thank

Operator

will to Please go ahead. go with Next, we Cowen. Josh Jennings

Josh Jennings

thoughts $XX Good be range color range you've Hi, your that the year. a meet thoughts and that and revenue I guidance given about in was to just nice on you're touch call. $XX hoping us to high track any updated sits would congratulations morning, level the million on the million, to incremental any on start to the out today? know system David, just But in the bunch range. that thanks. there shaping? how I funnel appreciated, range clearly confidence sales the to But

David Fischel

Good Josh. Hi, morning. Sure.

guidance, initially and we so, specificity still when And see orders timelines kind lumpiness when receive when those timely orders And early we an the revenue. is you of presented convert asked we think commented were in there launch. of is in and I the into that we difficult that

so, the And the bottom-up seemed of assessment set. range appropriate given opportunity

how still today the that know do it the a three It's few to months three kind orders. to exactly range, were range be nicely into months, us play translate in within And up so as feels out we those noted. And orders And more probably set hard as appropriate. that announced of to which you kind XXXX months receive of more could still can revenue. have we more will

that of that But I so, out. to million range million like feels $XX And of place still we'll how think be. good see kind the to to have plays $XX guidance

Josh Jennings

see replacement the intel do year can of it hoping Where just a you And said replacement could on how just orders up seeing Genesis order the just replacement over on you stands you opportunity that think opportunity today, some the replacement pretend on And could could more in couple the a to that eventually. plus last I that follow opportunity, replacement how of Excellent. you then your was maybe comments details And system you more U.S. to full you some share a received we evolving? in was as you're XX stride source just, on get But you hit be hoping when evolving? in opportunity? months

David Fischel

Sure.

want by that be And very get while Obviously, have macro So, of replacing hospitals traction did and the for of or the how, or replace in looking COVID. side. now relatively a discussions that planning. of kind are with our those the take various not on to was driven absolutely driver cycle I XXXX customers the on us get the replacement we're Greenfield to of existing capital hospitals the from place to more adoption it on the with was they kind for on our are halt Genesis, spending where think cycle, labs site. observation of engagement year side strategically necessary while off would sense took X-rays more again XXXX and time Greenfield us replacing building their spend last out see first kind labs, more it slow were ago most interesting a to we capital after call, And the new gate of to labs, that additional would budgets I kind harder that kind I it on new thought unless I the started on the to are cycle starting well environment And of be originally, hospital. for replacement replacement capabilities traction mentioned that would adoption open an sales of for

XXXX installed kind on we cycle So, think annualized I have we receive that year. of of kind revenue of based this might think might kind of our base. in level we think generally, that would would I of kind orders that, that additional very that replacement much But

Josh Jennings

sharing a new opportunity, my Great to now, thanks the system center. Niobe just for a last on China shipped you question that. And

helpful help I arms to China of just the think us opportunity. it might get kind around be our

maybe time? broad bit what's Maybe how questions. evolving? base updates? or pathway for remind Sorry, any but as big of taking any early And And of timing, timing, all too China Europe you little an do over you U.S. see Thanks for in or approval opportunity a a Genesis share the but installed channel or just the question, China? as the for the that could Can today? us be

David Fischel

a a still business, part China overall, And question. small a thanks small, great we've of Sure, is about systems five it's there. lot, actually overall our

And, So, it's what and digit engagement in more they of that's in a ablation from And kind and ablation highly share we've seen complex terms do procedure kind highly, partially didn't active. base customers less the there. of perspective. in physicians their they for cardiac kind And at didn't the think receive also have robotics, of still is volumes, market the an electrophysiology. the There they U.S. installed single they're there refined of China do many procedures but both are of procedures by physicians I the otherwise driven training lot where to with program training, didn't or cardiac have - Europe. ability or to enabling

other us kind we've high in systems also utilization And of with And kind interested so, in seen our working we've of China. are companies very in of seen kind China. of which

a will we a kind sense overall, a we're don't And be others. robust with to fashion in of of business to of we very in and hope there prudent quarters. provide advance of coming anything collaborate to good kind to be actually I kind that updates so, grow of But opportunities kind of going in things there. - kind the prudent And kind able We to are in China we'll more do.

Operator

[Operator you. Instructions]. Thank

take go We our next will Please Northland. from Jason ahead. question with Wittes

Jason Wittes

question. for thanks Hi, the

an mentioned First have they off, for what that's old Genesis an replacement. existing a their Niobe I are system. you a an correct? order with And that Do That's system? that you sounds customer had addition. like doing It had not

David Fischel

No.

replacement. that a is So

Jason Wittes

that So replacement. is

Okay, year so then this be clear. you thus one replacement far, booked just do to have is And,

David Fischel

of discussed now one second is this the in U.S. replacement we cycle, replacement first order one cycle which one have a the the Europe, we - five time and is in that orders was And replacement last the

Jason Wittes

Okay. Thanks that for additional said like that sounds they're system. correct? to add clarifying. And you to hear related Did then an I also it looking

David Fischel

There's makes that will robot language contract it year. this additional in hospital likely an system the which the acquire

Jason Wittes

related to was then and this quarter. it mentioned think visits contacts Okay, XX you XX and this, I

In sense look breakout, existing terms of what in customers what our can a give of of new terms what that us our customers, might like?

David Fischel

so separate XX% individuals Sure, was drive XX visits. TeleRobotic visits, on yeah, of XX it test at those and

seven So, were like with discussions Greenfield first of I think opportunities. was them that it

Jason Wittes

Okay.

to it is I were slightly year, different? similar last think or you that's what seeing

David Fischel

overall is similar, rate the Yeah,

Jason Wittes

then mentioned kind you plan. And of your strategy longer-term

Curious what looking I think think current Stereotaxis's reputation users. to? build. third you're And it what to move the amongst is terms of point, you in reputation

David Fischel

success. and robotic reputation to existing kind the able part few at of over making years in in that done So, showcase of, the I to I sure the think disposal have be highly the think few they of be and our on we've a last customers, practices, to rebuilding our effort big tools well was users. and our years And relation support among really in reputation existing successful their last re-engaging their kind side, with with

still market a is the our anything, with engagement we've I - But disparity than We so, with well. existing there. think obviously opinions us share. highly have big our X% less we're overall done that gone in well The for have of like challenge has and wide in And out reengage we customers. wide field, existing company a customers a differentiated while I we're think like overall

have might for any what of but good the benefits so, know feeling the how And or understanding the works, don't have clinical our just do, don't name vast or we us heard Stereotaxis, of majority technology people really it. actually

that the part awareness so, where that's visibility think community our work. and And in generating broader is of in visibility a big I

of community. the Robotic use it talks, And The the do. of like which us all kind been live really have physicians about to those bunched so their multiple granted know by to the and And multiple beneficial are being Heart April, robotic working a either kind what Society up how introducing things Conference, kind session I invited procedures there, at to Annual Navigation And kind that's by of I of was kind we've also of think have in or all for but just don't of Society technology. that technology fact Stereotaxis's Cardiac speak our broader to Rhythm of electrophysiology

Jason Wittes

helpful. direct be Okay, model? with question going procedure still term of you when equipment you're capital a would And work to the in instead minimum you get into - catheters the is thank - maybe and Or it? capital it That's just that position? it's way capital considering doing plus the premature sort large are a still be sell, And basically, Does you. I'm looking of is play? but this, whether equipment is lumping in your volume business answer bundling that you on to sure at orders catheter equipment not approved,

David Fischel

the field. more broadly So, interventional labs surgery robotic make we of robotic and want value defined to and there establishing systems. a and clearly in has much to affordable. the And robotic said, been value that electrophysiology accelerate being that by robotic adoption healthcare field, other accessible With players is also in more robotics

so, bucket procedure, there it's through for should difficult of or can want and ways use you their disposable of the so, do that if you our are have But go value. all while SP instead I at to they types that given making finances it to current cycles, the hospitals be to enable retain think one as discount kind budget ablation to definitely that to from easier another catheter, that's available that while with done. And or don't you revenue value, And models those of then an adoption something bucket, models. have

that in a as accelerate And so, have to something we'll mind that's adoption. definitely way

Jason Wittes

tech Okay, this quarter. are maybe question, I asked that's being helpful, this companies med most requisite think,

In volumes, terms month-to-month you monthly improvement of see how procedure in of would progressed? sort month you the the did of an month as as trend performance COVID improves? this characterize Or terms

David Fischel

Yep.

of Kim her did of So, with March January X%, And remarks, mention prepared it improvement down, in I kind to that kind March from from March. obviously being we February about did an of see versus think XXXX, XXXX. to

We down versus growth was of volumes, or expect March XXXX, in growth XXXX procedure high but X%. good

I so, we're But of filling was caused over if levels. over know pre to gradually growth gap back the the kind get And last we'll year. yet don't pandemic that

Jason Wittes

you much. Thank very

Operator

you. Thank

[indiscernible] next ahead. question Our is coming from Company. Steven Please go

Unidentified Analyst

quarter. the on Hi, gentlemen, growth. nice Congratulations

side on And clarification just things. of so revenue the excited. wanted And

million $XX That's that $XX in million for to revenue. mentioned You XXXX?

David Fischel

Yeah, revenue that's XXXX. system for

in for guidance XXXX. system So that's revenue

Unidentified Analyst

Okay, system correct? owning, that so

David Fischel

Yes.

Unidentified Analyst

of Okay. very And or and company performance flow methods since do I what that asked lot. I claims imagine outstanding. know what a no that's out have the It's you a lawsuit been this regarding on one don't their any else have of I'll can are generic just color statement. insecure what cash there. Anyway, - their been or asked,

here? So, you be what folks, might after do comment can you on they

David Fischel

Sure.

aligned and and particularly board alignment that a and more stock in step, And the time being that not its it the think performance with the standard than market many shareholder And the to kind disappointed board. kind earlier But place. - shareholders, tied that and more better fully so to obviously year for of board's is thing, by a the corporate lawsuit that running plan been transparency. focus it that public great, increased couple for kind is have focused makes is if, commendable with and in compensation And stated, there with has record. and a whenever And with in shareholder And it's I additional executive and that I on of stock me the focus calling is at ways, performance. this in And thing. reflects And lawsuit. was the upcoming information implementing period is being is in of we're Stereotaxis - compensation the are interest so that that of are ahead that we think values of do kind we're in aligned for view, kind they governance weeks. in in did shareholders fashion. It's kind that the for better they of where something my limited to make the that is I'm up there guess that placed on throughout shareholders, plan was shareholders is a transparent the feel is around in even and proper in it done think to of you view, in process. of standard vote see I I sure was to tied meeting performance. our ultimately And much

drives whenever type that of differs the sometimes kind do you something from behavior. of think I it norm, that

resolve focus, doesn't this it is that will of And treat detract we'll but and of a from the hope better. - disappointing, us issue. sure that it side can which physicians patients kind it's make I technology, to kind so And we enabling again, is our obviously core advancing

Unidentified Analyst

side the you And puts concerned not same solid long your on compensation Okay, same like that like structure, that's the would it as great. it. about investors the agree you're this, guess, accurate? I and this I is that And turn what on that clarification I normal this you're understand terms that maybe this if is of from saying a compensation, to bit in out of sounds one

David Fischel

you in thank to majority kind That's know that's stages, what from see deed some heard phrase, still we'll like your it unpunished. what no the the But again, what seems goes. it early like. feeling of how good like. it ways I we on goes of this the the And have plan. shareholders I've and in I seems matches But yeah, commentary so We're have

much different I to something think have sometimes friendly. we But that very the different in was people again, establish views. tried board shareholder

Unidentified Analyst

that. answering And and again, forward great look you - together thank Okay, [Indiscernible]. quarter, working to

David Fischel

Thank you.

Operator

question Fischel turn time, at conference will answer this today's any final concludes That I back remarks. session. and the you Mr. for to

David Fischel

interest next very months your Stereotaxis. the and look behalf continued to questions Thank support you. your your working you much coming hard forward and again and speaking in We Thank for in on quarter. for

Operator

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

You now may disconnect.

Stereotaxis (STXS) 10 May 212021 Q1 Earnings call transcript