Mazor Robotics reported second quarter net loss at $3.7 million on a non-GAAP basis, but company CEO Ori Hadmoi was positive about Mazor's development over the past quarter and anticipates growth in the future.
"During the second quarter, we continued to build a strong pipeline of sales activity in the United States and Asia, our key target markets," said Mr. Hadomi. "Clinical interest from surgeons is at an all-time high. However, during the quarter we faced extended administrative approval processes for system orders by potential U.S. customers."
Here are 11 things to know about Mazor Robotics' second quarter and six month financial results:
1. The company sold two Renaissance robotic spine surgery systems in the United States — including one with the brain module. There were two systems purchased in Asia, including the company's first system in Hong Kong.
2. The systems were sold to teaching hospitals, which is a huge part of the company's strategy. "Our expectations are exceeding the academic centers will positively influence the rest of the segments due to their competitiveness," said Mr. Hadomi in a conference call, reported by Seeking Alpha. "Furthermore, we believe that academic centers will support our effort to build awareness of the Renaissance technology within non-academic centers."
3. At the quarter's end, there were 72 systems globally, with 39 in the United States, a 34.5 percent increase over the same period last year. The company estimates their market penetration in the United States is still less than 2 percent. "It is a sizable and untapped market opportunity and we're having more discussions than every before with hospitals and other institutions," said Mr. Hadomi.
4. Second quarter revenue was $4.5 million in 2014, a decrease from $6.2 million a year ago. The United States sales were down by more than a million dollars — reaching only $3.1 million — primarily due to lower system sales.
5. International revenue experienced a more slight fall — $1.4 million as compared to $1.8 million last year — as one more international system was sold in the second quarter of 2013.
6. System kit sales and services revenue increased 17 percent to $2.1 million in the second quarter.
7. The gross margin for the second quarter was 79 percent, compared to 79.7 percent a year ago. Total operating expenses were $7.6 million, higher than the $5.7 million reported last year due to an increased sales, marketing, research and development investment.
8. For the first six months of 2014, the company reported $9.4 million in total revenue, compared with $11.1 million for the first half of last year. Recurring revenue reached $4.2 million, which was higher than the same period last year due to increased Renaissance system utilization globally and in the United States.
9. The company's net loss for the first half of the year was $7.7 million, down significantly from the $15 million reported in 2013. The gross margin was 78.9 percent at the six months end.
10. In the future, the company plans to expand their direct capital sales team to 20 members. For the rest of the year, the sales strategy includes increasing hospital administration interaction and focusing on major metropolitan areas. The company also plans to increase the clinical sales team's involvement to support the capital sales team and increase incentives for new installs.
11. The company also plans to become more involved in national conferences and has studies on the technology scheduled for presentations in the future.