Zacks_Analysts' Blog : Stereotaxis' 2Q Loss Widens - Analyst Blog

Medical equipment maker Stereotaxis Inc’s (STXS) second-quarter fiscal 2011 loss per share of 18 cents was higher than the Zacks Consensus Estimate of a loss of 13 cents and the year-ago loss of 8 cents. The Missouri-based company’s loss widened two-and-half-fold year over year in the quarter to $9.7 million, hurt by a double-digit decline in sales.

Revenues for the second quarter slid 22.7% year over year to $11.6 million, missing the Zacks Consensus Estimate of $15 million. Softness in the company’s Niobe business and delays associated with the installation of its Odyssey systems hurt revenues in the quarter.

Stereotaxis offers the Niobe Magnetic Navigation System, which allows physicians to perform complex interventional procedures. Moreover, its Odyssey Enterprise Solution integrates and records all lab data allowing physicians to focus on the patient for optimal procedure efficiency. The company, in April 2011, introduced its new Epoch electrophysiology platform.

Systems sales tumbled 46.8% year over year to roughly $5 million in the second quarter. Recurring sales from disposables, services and accessories jumped 17.9% to $6.6 million, buoyed by higher clinical procedures.

New capital orders dipped 57% year over year in the quarter to $4.4 million and comprised two Niobe systems orders and $1.7 million in Odyssey system orders.

Gross margin improved to 69.7% from 67.2% a year-ago owing to lower cost of sales. Operating expenses climbed 11.7% year over year to $17.6 million.

Stereotaxis ended the second quarter with cash and cash equivalents of $23.3 million, up roughly 6% year over year. Total debt increased 14% year over year to $30.5 million.

Stereotaxis withdrew its previously-announced financial guidance for fiscal 2011 and momentarily suspended providing its outlook for the year based on an uncertain business environment.

Stereotaxis develops and markets advanced cardiology instrument control system for use in cardiac catheterization labs for the treatment of coronary artery disease and arrhythmias. The company’s competitors include Boston Scientific (BSX) and Edwards Lifesciences (EW).

Among other developments, Stereotaxis announced the resignation of its Chief Financial Officer Dan Johnston effective August 15. Separately, the company chalked out an operating plan for the commercialization of its new Epoch and Odyssey platforms. The plan includes realignment and reduction of operating expenses by roughly 15%-20% aimed at minimizing cash burn.

Moreover, Stereotaxis is exploring options to boost cash with minimal or no shareholder dilution. The impact of these efforts is expected to begin in fourth-quarter 2011.