Stereotaxis Reports 16% Revenue Increase in the Fourth Quarter 2009

ST. LOUIS, Feb. 25 /PRNewswire-FirstCall/ -- Stereotaxis, Inc. (Nasdaq: STXS) today reported its financial results for the quarter and the year ended December 31, 2009.  Revenue for the recent fourth quarter grew 16% to $14.1 million compared with $12.1 million in the same quarter a year ago.  The Company recognized revenue on six Niobe® Magnetic Navigation Systems, nine Odyssey™ systems and four Odyssey Cinema™ systems, totaling $9.0 million.  Disposables, services and accessories revenue set another record at $5.1 million, a 51% increase from the fourth quarter of 2008, attributable to favorable pricing and procedure growth.  The 2009 fourth quarter operating loss decreased 9% to $5.8 million from $6.4 million in 2008.

For the full year 2009, revenue grew 27% to $51.1 million compared with $40.4 million in 2008.  Recurring revenue increased 54% to $18.5 million from $12.0 million in 2008.  Gross margin for the year was up 30% to $34.1 million, or 66.7% of sales, compared with 64.9% of sales in 2008.  Operating expenses decreased 14%, resulting in a 42% reduction in the operating loss to $23.8 million in 2009 compared with the $41.0 million operating loss in 2008.  

Michael P. Kaminski, President and Chief Executive Officer, said, "We are very pleased with our financial performance in 2009.  Both systems revenue and revenue from disposables and services grew substantially during the year.  During the quarter, we generated new orders totaling $7.7 million, up from $6.3 million in the third quarter and just $5.0 million in the second.  The increase in orders is an indication that capital spending by hospitals is improving.  The Odyssey platform continues to gain recognition in the market.  There was substantial interest in the Odyssey platform at the Atrial Fibrillation Symposium in Boston last month.  Physicians recognize Odyssey's value in integration of diverse sources of diagnostic and other patient information into a single format, which provides improved efficiency, enhanced archiving and a unique opportunity to network labs and sites.  We anticipate significant Odyssey revenue in 2010 from non-magnetic labs. We anticipate the economic recovery in the U.S. to result in increased commitments from hospitals for new capital projects.  From a financial perspective, we are committed to driving revenue growth, generating solid gross profit margins and controlling our expenses," Mr. Kaminski concluded.

Fourth Quarter 2009 Financial Performance

Gross margin for the quarter was $9.5 million, or 67.3% of revenue, compared with $8.2 million, or 67.6% of revenue, in the fourth quarter of 2008.  Fourth quarter operating expenses increased 5% to $15.3 million from $14.6 million in the fourth quarter of the prior year as 2008 benefited from the reversal of certain non-cash compensation costs related to stock compensation programs.  Cash burn improved 36% to $2.9 million for the fourth quarter of 2009 compared with $4.5 million in the fourth quarter of 2008.

The operating loss in the fourth quarter decreased 9% to $(5.8) million compared with $(6.4) million in the prior year.  The Company reported a net loss for the fourth quarter of 2009 of $(6.7) million, or $(0.14) per share.  This compares with a net loss for the fourth quarter of 2008 of $(7.5) million, or $(0.20) per share.  The weighted average shares for the recent fourth quarter totaled 48.4 million compared with 36.7 million in the fourth quarter of last year.  The increase was due in large part to the issuance of 7,475,000 shares as part of the secondary stock offering completed in October 2009.

Cash and equivalents at December 31, 2009 totaled $30.5 million, compared with $30.4 million at December 31, 2008.  Included in the cash position at the end of 2009 was approximately $27.8 million in net proceeds received from the stock offering during the fourth quarter.  Total debt was $23.7 million, including $10 million drawn against the Company's $30 million line of credit.  As previously disclosed, in October 2009 the Company received a commitment to expand its line of credit from $25 million to $30 million and to extend the maturity date from March 31, 2010 to March 31, 2011.  

2010 Financial Guidance

The Company provided its outlook for 2010 as follows:

• New capital order growth in excess of 40%
• Total revenue growth in the mid-20% range
• Gross margins above 65%
• Operating expenses between $60 and $65 million

Conference Call Information

The Company has scheduled a conference call for 8:30 a.m. Eastern Time today to discuss its financial results for the fourth quarter.  To access the conference call, please dial (877) 941-9205. International participants can call (480) 629-9866.  An audio replay of the call will be available for seven days following the call at (800) 406-7325 for U.S. callers or (303) 590-3030 for those calling outside the U.S.  The password required to access the replay is 4207018#.  The call will also be available on the Internet live and for 90 days thereafter at the following URL:

http://www.videonewswire.com/event.asp?id=66045

About Stereotaxis

Stereotaxis designs, manufactures and markets an advanced cardiology instrument control system for use in a hospital's interventional surgical suite to enhance the treatment of coronary artery disease and arrhythmias. The Stereotaxis System is designed to enable physicians to complete more complex interventional procedures by providing image guided delivery of catheters and guidewires through the blood vessels and chambers of the heart to treatment sites. This is achieved using computer-controlled, externally applied magnetic fields that govern the motion of the working tip of the catheter or guidewire, resulting in improved navigation, shorter procedure time and reduced x-ray exposure. Stereotaxis' Odyssey solutions integrate and manage information from disparate information sources, eliminating the challenge of interacting simultaneously with many separate diagnostic systems, driving optimized workflow and improved productivity.  The core components of the Stereotaxis system have received regulatory clearance in the U.S., Europe and Canada.

This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect" or similar expressions.  Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements.  Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance for the Company's products in the marketplace, the effect of global credit and economic conditions on the ability and willingness of customers to purchase our systems, competitive factors, changes in government reimbursement procedures, dependence upon third-party vendors, timing of regulatory approval and return of the irrigated catheter to the market, and other risks discussed in the Company's periodic and other filings with the Securities and Exchange Commission.  By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.  There can be no assurance that the Company will recognize revenue related to its purchase orders and other commitments in any particular period or at all because some of these purchase orders and other commitments are subject to contingencies that are outside of the Company's control.  In addition, these orders and commitments may be revised, modified or canceled, either by their express terms, as a result of negotiations, or by project changes or delays.

    
    
                                (Tables to follow)
    
    
    
                                STEREOTAXIS, INC.
                           STATEMENTS OF OPERATIONS (1)
                                   (Unaudited)
    
                          Three Months Ended        Twelve Months Ended
                             December 31,              December 31,
                           2009        2008         2009           2008
                           ----        ----         ----           ----
    Revenue
       System          $8,966,960   $8,743,693   $32,661,573   $28,375,880
       Disposables,
        service and
        accessories     5,114,431    3,382,791    18,487,982    11,989,293
                        ---------    ---------    ----------    ----------
    Total revenue      14,081,391   12,126,484    51,149,555    40,365,173
    
    Cost of revenue
       System           3,990,424    3,233,985    13,240,430    12,008,090
       Disposables,
        service and
        accessories       619,061      693,558     3,781,203     2,169,700
                          -------      -------     ---------     ---------
    Total cost of
     revenue            4,609,485    3,927,543    17,021,633    14,177,790
    
    Gross margin        9,471,906    8,198,941    34,127,922    26,187,383
    
    Operating expenses:
       Research and
        development     4,012,977    3,561,488    14,260,854    17,422,828
       Sales and
        marketing       7,269,738    5,363,663    28,694,540    28,660,663
       General and
        administration  4,003,449    5,663,051    15,010,490    21,121,164
                        ---------    ---------    ----------    ----------
    Total operating
     expenses          15,286,164   14,588,202    57,965,884    67,204,655
                       ----------   ----------    ----------    ----------
    Operating loss     (5,814,258)  (6,389,261)  (23,837,962)  (41,017,272)
    Other income/
     (expense)            845,470            -       911,977             -
    Interest income        10,699       29,205        44,768       194,870
    Interest expense   (1,752,762)  (1,131,965)   (4,613,240)   (3,063,572)
                       ----------   ----------    ----------    ----------
    Net loss          $(6,710,851) $(7,492,021) $(27,494,457) $(43,885,974)
                      ===========  ===========  ============  ============
    
       Net loss per
        common share:
         Basic and
          diluted          $(0.14)      $(0.20)       $(0.63)       $(1.20)
                           ======       ======        ======        ======
    
    Weighted average 
     shares used in
     computing net
     loss per common
     share:
       Basic and
        diluted        48,374,735   36,714,618    43,344,324    36,585,086
                       ==========   ==========    ==========    ==========
    
    (1) On September 23, 2009, the Financial Accounting Standards Board
        ratified Emerging Issues Task Force (EITF) Issue 08-1, creating
        Accounting Standards Update (ASU) 2009-13 "Multiple-Deliverable
        Revenue Arrangements".  The Company adopted this standard in the
        fourth quarter of 2009, effective for transactions occurring on or
        after January 1, 2009.  Since there were no material changes to any
        amounts previously reported in 2009 or 2008, these periods were not
        required to be restated.
    
    
    
                                STEREOTAXIS, INC.
                                 BALANCE SHEETS
                                                               
                                                December 31,    December 31,
                                                    2009             2008
                                                    ----             ----
                                                 (Unaudited)
    Assets
    Current Assets:
      Cash and cash equivalents                 $30,546,550      $30,355,657
      Accounts receivable, net of allowance
       of $322,463 and $328,307 in 2009 and
       2008, respectively                        11,152,648        9,739,008
      Current portion of long-term receivables       66,800          197,351
      Inventories                                 4,403,675        8,086,956
      Prepaid expenses and other current assets   3,872,535        2,966,510
                                                  ---------        ---------
    Total current assets                         50,042,208       51,345,482
    Property and equipment, net                   4,790,310        6,420,600
    Intangible assets                             1,144,445        1,277,778
    Long-term Receivables                           138,441          298,123
    Other assets                                      5,112           98,382
                                                      -----           ------
    Total assets                                $56,120,516      $59,440,365
                                                ===========      ===========
    
    Liabilities and stockholders' equity
    Current liabilities:
      Current maturities of long-term debt       $3,333,333       $3,901,491
      Accounts payable                            3,881,205        4,561,928
      Accrued liabilities                         8,615,287        9,873,818 
      Deferred contract revenue                   7,191,492        9,676,339
      Warrants                                    4,142,614                -
                                                  ---------              ---
    Total current liabilities                    27,163,931       28,013,576
    
    Long term debt, less current maturities      20,346,655       25,271,547
    Long term deferred contract revenue             948,574        1,225,656
    Other liabilities                                20,013          158,905
    
    Stockholders' equity:
      Preferred stock, par value $0.001;
       10,000,000 shares authorized at 2009
       and 2008; none outstanding at 2009
       and 2008                                           -                -
      Common stock, par value $0.001;
       100,000,000 shares authorized at 2009
       and 2008; 50,208,171 and 42,049,792
       issued at 2009 and 2008, respectively         50,208           42,050
      Additional paid-in capital                331,249,918      300,892,957
      Treasury stock, 40,151 shares at 2009
       and 2008                                    (205,999)        (205,999)
      Accumulated deficit                      (323,452,784)    (295,958,327)
                                               ------------     ------------
    Total stockholders' equity                    7,641,343        4,770,681
                                                  ---------        ---------
    Total liabilities and stockholders' equity  $56,120,516      $59,440,365
                                                ===========      ===========
    

SOURCE Stereotaxis, Inc.