Market Reacts Negatively to Results From Stereotaxis, Inc. (OTCMKTS:STXS) 2016 Third Quarter Financial Results

Global leader in innovative robotic technologies, Stereotaxis, Inc. (OTCMKTS:STXS), announces its financial results from Q3, 2016.

  1. LOUIS, Nov. 07, 2016 (GLOBE NEWSWIRE) — Stereotaxis, Inc. (STXS), a global leader in innovative robotic technologies for the treatment of cardiac arrhythmias, today reported financial results for the third quarter ended September 30, 2016.

“During the quarter, we completed a transformative financing that significantly strengthened our financial position, enabled us to retire in full all of our outstanding debt at a considerable discount and supports the execution of our strategic growth initiatives,” said William C. Mills, Stereotaxis Chief Executive Officer and Chairman.

“For many years, our vision has been to provide a completely new approach to arrhythmia ablation that would change people’s lives. Today, hundreds of physicians worldwide are utilizing our innovative technologies and have performed more than 90,000 procedures with improved safety, acute success and long-term patient outcomes. Our immediate and long-term strategic goals remain centered on putting our advancing technologies into the hands of more physicians across the globe to bring the substantial benefits of robotics to patients and clinicians. 

“We are seeing continued progress and procedure growth in our newest market, Japan, where we shipped our fifth Niobe® ES system during the third quarter. We also continue to gain market share across the globe in ventricular tachycardia (VT) ablation, a challenging and complex procedure that represents a significant and largely untapped market opportunity for the Company. During the quarter, VT procedures increased by 25% representing our fifth consecutive quarter of double-digit growth in VT volume and we saw our largest overall procedures increase in nearly two years.

“Going forward, we are excited to work with three new members of our board of directors, who bring proven expertise in commercializing clinically meaningful technologies and building businesses that create value for patients, clinicians and shareholders,” Mr. Mills concluded.

Third Quarter 2016 Financial Results

Revenue for the third quarter of 2016 totaled $8.3 million, a 10% decrease from $9.3 million in the prior year third quarter and a 6% increase sequentially from $7.9 million in the second quarter 2016. System revenue was $1.9 million, down 15% from $2.3 million in the prior year quarter and up 109% sequentially from $0.9 million in the second quarter. During the third quarter, the Company recognized revenue of $1.2 million on one Niobe ES system and $0.7 million in Odyssey® solution sales. Recurring revenue was $6.4 million in the third quarter, down from $7 million in the prior year quarter and $6.9 million in the preceding second quarter. Total procedures were up 3%, with VT procedures increasing 25% year over year.

The Company generated new capital orders of $0.9 million, compared to $3.1 million in the prior year third quarter and $0.8 million in new capital orders in the second quarter. Ending capital backlog for the 2016 third quarter was $2.3 million.

Gross margin in the quarter was $6.1 million, or 73.0% of revenue, versus $6.8 million, or 73.6% of revenue, in the third quarter of 2015 and $6.8 million, or 86.1% of revenue, in the second quarter of 2016. Operating expenses in the third quarter were $7.3 million, down from $7.7 million in the prior year quarter and $8.4 million in the second quarter.

Operating loss in the third quarter was $(1.2) million, compared to $(0.9) million in the prior year third quarter and $(1.6) million in the second quarter. Interest expense was $0.8 million in all three quarters.

Net loss for the third quarter was significantly impacted by several non-cash items. Net loss for the third quarter was $(6.2) million, or $(0.56) per share, compared to a net loss of $(1.0) million, or $(0.05) per share, in the third quarter of 2015. Excluding mark-to-market warrant revaluation, fees associated with warrant issuance, the gain on debt extinguishment and the value of implied conversion features, the Company would have reported a net loss of $(2.0) million, or $(0.09) per share, for the 2016 third quarter compared to $(1.7) million, or $(0.08) per share, for the 2015 third quarter. The weighted average diluted shares outstanding for the third quarters of 2016 and 2015 totaled 21.9 million and 21.1 million, respectively.

Cash burn for the third quarter was $1.8 million, compared to less than $0.1 million in the year ago third quarter and $0.7 million in the preceding second quarter.

Nine-Month Financial Results

Revenue for the first nine months of 2016 was $24.9 million, down 13% compared to $28.5 million in the first nine months of 2015. System revenue was $5.0 million, compared to $8.2 million in the same period of 2015, a 40% decrease. Recurring revenue was $19.9 million, compared to $20.2 million in the prior year period. Total procedures increased 1% from the same period last year, with VT procedures increasing 26%.

Gross margin was $19.3 million, or 77.8% of revenue, compared with $20.4 million, or 71.8% of revenue, in the first nine months of the prior year. Operating expenses were $23.6 million, a 4% decrease from $24.5 million in the same period of 2015. Operating loss was $(4.3) million for the first nine months of 2016, compared to $(4.0) million in the comparable 2015 period.

Interest expense was $2.5 million in both the first nine months of 2016 and 2015.

Net loss for the first nine months was significantly impacted by several non-cash items. Net loss for the first nine months of 2016 was $(10.8) million, or $(0.78) per share, compared to a net loss of $(5.7) million, or $(0.27) per share, for the comparable period in 2015. Excluding mark-to-market warrant revaluation, fees associated with warrant issuance, the gain on debt extinguishment and the value of implied conversion features, net loss for the first nine months would have been $(6.8) million, or $(0.31) per share, compared to a net loss of $(6.5) million, or $(0.31) per share, in the same period of 2015.

At September 30, 2016, Stereotaxis had cash and cash equivalents of $9.2 million and $4.0 million in unused borrowing capacity on its revolving credit facility, for total liquidity of $13.2 million. During the third quarter, the Company completed a $24 million private placement equity financing with a select group of new and existing investors. Stereotaxis used $13 million of the proceeds from the sale of the preferred shares and warrants to satisfy in full all amounts outstanding under the Company’s loan agreement with Healthcare Royalty Partners. 

Conference Call and Webcast

Stereotaxis will host a conference call and webcast today, November 7, 2016, at 4:30 p.m. Eastern Time, to discuss third quarter results. To access the conference call, dial 888-349-9582 (US and Canada) or 1-719-457-2506 (International) and give the participant pass code 3880603. Participants are asked to call 5-10 minutes prior to the start time. To access the live and replay webcast, please visit the investor relations section of the Stereotaxis website at www.stereotaxis.com.

About Stereotaxis

Stereotaxis is a healthcare technology and innovation leader in the development of robotic cardiology instrument navigation systems designed to enhance the treatment of arrhythmias and coronary disease, as well as information management solutions for the interventional lab. Over 100 issued patents support the Stereotaxis platform, which helps physicians around the world provide unsurpassed patient care with robotic precision and safety, improved lab efficiency and productivity, and enhanced integration of procedural information. Stereotaxis’ core Epoch® Solution includes the Niobe® magnetic navigation system, the Odyssey® portfolio of lab optimization, networking and patient information management solutions, and the Vdrive® robotic navigation system and consumables.

The core components of Stereotaxis’ systems have received regulatory clearance in the United States, European Union, Canada, China, Japan, and elsewhere. The V-Sono™ ICE catheter manipulator, V-Loop™ variable loop catheter manipulator, and V-CAS™ catheter advancement system have received clearance in the United States, Canada, and the European Union. The V-CAS Deflect™ catheter advancement system is available for use in the European Union. For more information, please visit www.stereotaxis.com.

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Stereotaxis, Inc. (OTCMKTS:STXS) shares have moved -11.11% on the news thus far today and have traded in the range of $0.51 – 0.69 during the current session. In order to take a look at where the stock might be headed longer term, investors often look to research firms that cover the stock. Sell-side research firms currently have a consensus one-year price target of $6.00 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.  The sell-side analysts are projecting earnings per share of $0.00 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $-2.03 per share according to First Call.

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In looking at where the stock is trading on a technical level, the stock is trading -26.05% away from its 50-day moving average of $0.76.  Based on the most recent available data, the equity is -71.28% off of its 52-week high of $1.95 and +9.80% away from its 52-week low which is $0.51.

Today, the stock opened at $0.61 and the last bid at the time of writing stood at $0.56.  During the session thus far, the equity dipped down to $0.51 and touched $0.69 as the high point.  Stereotaxis, Inc. (OTCMKTS:STXS) has a market cap of $12.23M and has seen an average daily volume of 60,666 over the past three months.

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