First quarter 2006 instrument and accessory revenue increased
81% to $23.3
million from $12.9 million during the first quarter of 2005.
Instrument
and accessory revenue growth resulted from a larger installed
base of da
Vinci® Surgical Systems and increased system usage.
Quarter Ended,
--------------------------------
3/31/06 3/31/05 Increase
---------- ---------- ----------
Revenue ($Millions)
-------------------
Systems $ 42.4 $ 21.3 $ 21.1
Instruments/Accessories 23.3 12.9 10.4
Service/Training 11.6 7.4 4.2
---------- ---------- ----------
$ 77.3 $ 41.6 $ 35.7
========== ========== ==========
da Vinci® Surgical System Unit Sales 35 19 16
========== ========== ==========
First quarter 2006 operating income was $21.7 million compared
with $8.9
million for the first quarter of 2005. The results for the
first quarter
of 2006 included $5.1 million of stock compensation expense
in accordance
with Statement of Financial Accounting Standards "SFAS"
number 123R.
Excluding this expense, first quarter 2006 operating income
was $26.8
million.
As anticipated, during the first quarter of 2006, Intuitive
began to report
results on a fully taxed basis. The company's first quarter,
2006
effective tax rate was 39.6%, compared with 5.5% reported
for the first
quarter of 2005. Although the company has moved to fully
taxed reporting,
only a small portion of 2006 reported tax expense will result
in cash
outlay due to the anticipated utilization of net operating
loss carry
forwards.
Reported net income on a generally accepted accounting principles
(GAAP)
basis, which includes non-cash stock compensation expense,
was $14.5
million, or $0.38 per diluted share, compared with $9.1
million, or $0.25
per diluted share, for the first quarter of 2005. Excluding
the impact of
stock compensation expenses, first quarter 2006 net income
was $17.5
million, or $0.46 per share. A complete reconciliation between
GAAP results
and results excluding stock compensation is provided in
the attached
tables.
Intuitive ended the first quarter of 2006 with cash, cash
equivalents and
investments of $221.5 million, up $18.8 million from the
previous quarter
end. Cash provided by operations for the first quarter of
2006 was $16.1
million, net of $13.5 million utilized during the quarter
to fund working
capital requirements.
Commenting on the results Lonnie Smith, Chairman and CEO
of Intuitive
Surgical said, "We are very pleased with our first quarter
revenue growth
and the positive market response to our da Vinci® S(TM)
System. We
remain dedicated to taking surgery beyond the limits of
the human hand(TM)
and believe that our technology has broad and significant
implications for
the future of healthcare."
The company will report these results at a conference call
today at 1:30 pm
PDT. The dial-in numbers for the call are 877-909-3508 for
participants
located in the U.S. and 517-645-6051 for participants located
outside the
U.S. The passcode is ISRG and the meeting leader is Mr.
Lonnie Smith. To
access financial information that will be discussed on the
call, please
visit Intuitive Surgical's website at www.intuitivesurgical.com.
About Intuitive's Products:
The da Vinci® Surgical System consists of a surgeon's
viewing and control
console having an integrated, high-performance InSite®
3-D vision system,
a patient-side cart consisting of three or four robotic
arms that position
and precisely maneuver endoscopic instruments and an endoscope,
and a
variety of articulating EndoWrist® Instruments. By
integrating
computer-enhanced technology with surgeons' technical skills,
Intuitive
believes that its system enables surgeons to perform better
surgery in a
manner never before experienced. The da Vinci® Surgical
System
seamlessly and directly translates the surgeon's natural
hand, wrist and
finger movements on instrument controls at the surgeon's
console outside
the patient's body into corresponding micro-movements of
the instrument
tips positioned inside the patient through small puncture
incisions, or
ports.
The Aesop® Endoscope Positioner is a voice-activated
robotic arm that
automates the critical task of endoscope positioning, providing
the surgeon
with direct control over a smooth, precise and stable view
of the internal
surgical field.
The Hermes® Control Center is a centralized system
designed to voice
control a series of networked "smart" medical devices.
This press release contains forward-looking statements within
the meaning
of the Private Securities Litigation Reform Act of 1995.
These
forward-looking statements are necessarily estimates reflecting
the best
judgment of our management and involve a number of risks
and uncertainties
that could cause actual results to differ materially from
those suggested
by the forward-looking statements. These forward-looking
statements should,
therefore, be considered in light of various important factors,
including
the following: timing and success of product development
and market
acceptance of developed products; regulatory approvals,
clearances and
restrictions; guidelines and recommendations in the health
care and patient
communities; intellectual property positions and litigation;
competition in
the medical device industry and in the specific markets
of surgery in which
Intuitive Surgical operates; and unanticipated manufacturing
disruptions,
delays in regulatory approvals of new manufacturing facilities
or the
inability to meet demand for products. Words such as "estimate,"
"project,"
"plan," "intend," "expect," "anticipate," "believe" and
similar expressions
are intended to identify forward-looking statements. You
are cautioned not
to place undue reliance on these forward-looking statements,
which speak
only as of the date of this press release. We undertake
no obligation to
publicly update or release any revisions to these forward-looking
statements to reflect events or circumstances after the
date of this press
release or to reflect the occurrence of unanticipated events.
Intuitive®, da Vinci®, da Vinci® S(TM) InSite®,
EndoWrist®,
Hermes®, and Aesop® are trademarks or registered
trademarks of
Intuitive Surgical, Inc.
INTUITIVE SURGICAL, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Quarter Ended March 31,
--------------------------
2006 2005
------------ ------------
Revenue:
Products $ 65,668 $ 34,183
Services 11,590 7,431
------------ ------------
Total revenue 77,258 41,614
Cost of revenue:
Products 19,921 11,155
Services 5,656 3,196
------------ ------------
Total cost of revenue 25,577 14,351
------------ ------------
Gross profit 51,681 27,263
Operating costs and expenses:
Selling, general, and administrative 23,810 14,204
Research and development 6,145 4,145
------------ ------------
Total operating costs and expenses 29,955 18,349
------------ ------------
Income from operations 21,726 8,914
Other income, net 2,201 723
------------ ------------
Income before income tax provision 23,927 9,637
Income tax provision 9,469 533
------------ ------------
Net income $ 14,458 $ 9,104
============ ============
Net earnings per share -
Basic $ 0.40 $ 0.26
============ ============
Diluted $ 0.38 $ 0.25
============ ============
Weighted average shares outstanding
used to compute net earnings
per share -
Basic 36,379 34,517
============ ============
Diluted 37,824 37,021
============ ============
INTUITIVE SURGICAL, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Quarter Ended March 31, 2006
--------------------------------------
Quarter
Ended
Non-GAAP March 31,
(Pro Forma) Non-GAAP 2005
Reported Entries * (Pro Forma) As Reported
------------ ----------- ------------ ------------
Revenue:
Products $ 65,668 $ - $ 65,668 $ 34,183
Services 11,590 - 11,590 7,431
------------ ----------- ------------ ------------
Total revenue 77,258 - 77,258 41,614
Cost of revenue:
Products 19,921 (471) 19,450 11,155
Services 5,656 (296) 5,360 3,196
------------ ----------- ------------ ------------
Total cost of revenue 25,577 (767) 24,810 14,351
------------ ----------- ------------ ------------
Gross profit 51,681 767 52,448 27,263
Operating costs and
expenses:
Selling, general,
and administrative 23,810 (3,199) 20,611 14,204
Research and
development 6,145 (1,098) 5,047 4,145
------------ ----------- ------------ ------------
Total operating
costs and
expenses 29,955 (4,297) 25,658 18,349
------------ ----------- ------------ ------------
Income from operations 21,726 5,064 26,790 8,914
Other income, net 2,201 - 2,201 723
------------ ----------- ------------ ------------
Income before income
tax provision 23,927 5,064 28,991 9,637
Income tax provision 9,469 2,004 11,473 533
------------ ----------- ------------ ------------
Net income $ 14,458 $ 3,060 $ 17,518 $ 9,104
============ =========== ============ ============
Net earnings per share -
Basic $ 0.40 $ 0.08 $ 0.48 $ 0.26
============ =========== ============ ============
Diluted $ 0.38 $ 0.08 $ 0.46 $ 0.25
============ =========== ============ ============
Weighted average shares
outstanding used to
compute net earnings
per share -
Basic 36,379 36,379 34,517
============ ============ ============
Diluted 37,824 37,824 37,021
============ ============ ============
* Non-GAAP (Pro forma) entries are to eliminate the impact of stock
option expenses.
Note - To supplement our consolidated financial statements presented
in accordance with generally accepted accounting principles (GAAP), we have
presented “Non-GAAP (pro forma)” information, which reflects our results
based on GAAP excluding stock compensation expense under SFAS 123R.
This “Non-GAAP” information is provided to enhance the user's overall
understanding of our current financial performance and our prospects for
the future. Specifically, we believe the “Non-GAAP” results provide useful
information to both management and investors by excluding SFAS 123R
compensation charges that we believe are not indicative of our core
operating results. Further, these “Non-GAAP” results are one of the primary
indicators management uses for assessing our performance, allocating
resources and planning and forecasting future periods. These measures
should be considered in addition to results prepared in accordance with
GAAP, but should not be considered a substitute for, or superior to, GAAP
results.
INTUITIVE SURGICAL, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
3/31/06 12/31/05
------------ ------------
Cash, cash equivalents, and investments $ 221,491 $ 202,739
Accounts receivable, net 56,975 52,849
Inventory, net 20,368 15,170
Property and equipment, net 53,861 52,225
Goodwill 124,638 124,638
Deferred tax assets 32,760 40,758
Other assets 14,410 13,208
------------ ------------
Total Assets $ 524,503 $ 501,587
============ ============
Accounts payable and other accrued liabilities $ 28,015 $ 33,485
Deferred revenue 27,797 25,511
------------ ------------
Total liabilities 55,812 58,996
Stockholders' equity 468,691 442,591
------------ ------------
Total liabilities and stockholders' equity $ 524,503 $ 501,587
============ ============
INTUITIVE SURGICAL, INC.
UNAUDITED SELECTED CONSOLIDATED STATEMENT OF CASH FLOWS DATA
(IN THOUSANDS)
Three months ended
-------------------------
3/31/06 3/31/05
----------- -----------
Net Income $ 14,458 $ 9,104
Depreciation and amortization 2,174 1,667
Deferred income tax 7,999 -
Stock option expense 5,064 -
Changes in operating assets and liabilities (13,490) 1,635
Other, net (89) (58)
----------- -----------
Net cash provided by operating activities $ 16,116 $ 12,348
=========== ===========
----------- -----------
Acquisition of property and equipment ($ 3,204) ($ 1,001)
=========== ===========
----------- -----------
Proceeds from issuance of common stock $ 6,501 $ 6,958
=========== =========== Contacts:
Ben Gong
408-523-2175
Sarah Norton
408-523-2161
