Intuitive Surgical Announces $87 Million Second Quarter Revenue, Up 65%
SUNNYVALE, CA, Jul 26, 2006 (MARKET WIRE via COMTEX News Network) -- Intuitive Surgical, Inc. (NASDAQ: ISRG), the industry leader in surgical robotics, today reported second quarter 2006 sales of $87.0 million, increasing 65% from $52.8 million for the second quarter of 2005. Higher sales were driven by increased da Vinci(R) Surgical System sales and continued growth in recurring revenue.
Intuitive sold 39 da Vinci(R) Surgical Systems during the second quarter of 2006, compared to 26 in the second quarter of 2005. Second quarter 2006 system revenue increased to $48.1 million from $28.5 million during the second quarter of 2005.
Second quarter 2006 instrument and accessory revenue increased 61% to $26.1 million from $16.2 million during the second quarter of 2005. Instrument and accessory revenue growth resulted from a larger installed base of da Vinci(R) Surgical Systems and increased system usage.
Net sales for the six months ended June 30, 2006 totaled $164.3 million, increasing 74% from 94.4 million for the first half of 2005.
Three Months Ended, Six Months Ended,
----------------------------- -----------------------------
6/30/06 6/30/05 Increase 6/30/06 6/30/05 Increase
--------- --------- --------- --------- --------- ---------
Revenue
($Millions)
Systems $ 48.1 $ 28.5 $ 19.6 $ 90.5 $ 49.8 $ 40.7
Instruments/
Accessories 26.1 16.2 9.9 49.4 29.1 20.3
Service/
Training 12.8 8.1 4.7 24.4 15.5 8.9
--------- --------- --------- --------- --------- ---------
$ 87.0 $ 52.8 $ 34.2 $ 164.3 $ 94.4 $ 69.9
========= ========= ========= ========= ========= =========
da Vinci(R)
Surgical
System Unit
Sales 39 26 13 74 45 29
========= ========= ========= ========= ========= =========
Second quarter 2006 operating income was $24.5 million compared with $15.3 million for the second quarter of 2005. Operating results for the second quarter of 2006 included $6.5 million of stock compensation expense in accordance with Financial Accounting Standards Board "SFAS" 123R. Excluding the $6.5 million of non-cash stock compensation expense, second quarter 2006 operating income was $31.0 million, up 102% compared with the second quarter of 2005.
Second quarter 2006 net income, including non-cash stock compensation expense, was $16.7 million, or $0.44 per diluted share, compared with $14.8 million, or $0.40 per diluted share for the second quarter of 2005. Excluding the impact of stock compensation expenses, second quarter 2006 net income was $21.1 million, or $0.55 per share, up 42% compared with the second quarter of 2005. A complete reconciliation between GAAP and results excluding stock compensation is provided in the attached tables.
Intuitive ended the second quarter of 2006 with cash, cash equivalents and investments of $243.8 million, up $22.3 million from the previous quarter end. Cash provided by operations for the second quarter of 2006 was $19.7 million, net of $5.7 million utilized during the quarter to fund working capital requirements.
Net income for the first half of 2006, including non-cash stock compensation expense, was $31.1 million, or $0.82 per diluted share, compared with $23.9 million, or $0.64 per diluted share for the first half of 2005. Excluding the impact of stock compensation expenses, first half 2006 net income was $38.6 million, or $1.02 per share.
Commenting on the announcement, Lonnie Smith, Chairman and CEO of Intuitive Surgical said, "We are pleased with our second quarter revenue and bottom line growth, which were driven by higher procedure volume across all of our targeted surgical specialties. Adoption of da Vinci Surgery continues as we remain dedicated to providing the most effective, least invasive surgical treatment option available."
The company will also announce 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(R) Surgical System consists of a surgeon's viewing and control console having an integrated, high-performance InSite(R) 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(R) 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(R) 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(R) 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(R) 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(R), da Vinci(R), da Vinci(R) S(TM), InSite(R), EndoWrist(R), Hermes(R), and Aesop(R) are trademarks or registered trademarks of Intuitive Surgical, Inc.
INTUITIVE SURGICAL, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Revenue:
Products $ 74,211 $ 44,651 $ 139,880 $ 78,834
Services 12,814 8,105 24,403 15,536
--------- --------- --------- ---------
Total revenue 87,025 52,756 164,283 94,370
Cost of revenue:
Products 21,869 13,649 41,791 24,804
Services 6,179 3,480 11,835 6,676
--------- --------- --------- ---------
Total cost of revenue 28,048 17,129 53,626 31,480
--------- --------- --------- ---------
Gross profit 58,977 35,627 110,657 62,890
Operating costs and expenses:
Selling, general, and
administrative 27,265 15,934 51,075 30,138
Research and development 7,205 4,355 13,351 8,500
--------- --------- --------- ---------
Total operating costs and
expenses 34,470 20,289 64,426 38,638
--------- --------- --------- ---------
Income from operations 24,507 15,338 46,231 24,252
Interest and other income, net 3,255 954 5,458 1,677
--------- --------- --------- ---------
Income before taxes 27,762 16,292 51,689 25,929
Income tax expense 11,080 1,508 20,549 2,041
--------- --------- --------- ---------
Net income $ 16,682 $ 14,784 $ 31,140 $ 23,888
--------- --------- --------- ---------
Net income per share:
Basic $ 0.45 $ 0.42 $ 0.85 $ 0.69
========= ========= ========= =========
Diluted $ 0.44 $ 0.40 $ 0.82 $ 0.64
========= ========= ========= =========
Shares used in computing net income
per share:
Basic 36,684 34,790 36,532 34,655
========= ========= ========= =========
Diluted 38,124 37,244 37,974 37,133
========= ========= ========= =========
INTUITIVE SURGICAL, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three
months
ended
Three months ended June 30, June 30,
2006 2005
------------------------------- ---------
123R As
GAAP Impact Pro Forma Reported
--------- --------- --------- ---------
Sales:
Products $ 74,211 $ - $ 74,211 $ 44,651
Services 12,814 - 12,814 8,105
--------- --------- --------- ---------
Total sales 87,025 - 87,025 52,756
Cost of sales:
Products 21,869 (650) 21,219 13,649
Services 6,179 (360) 5,819 3,480
--------- --------- --------- ---------
Total cost of sales 28,048 (1,010) 27,038 17,129
--------- --------- --------- ---------
Gross profit 58,977 1,010 59,987 35,627
% Sales 67.8% 1.1% 68.9% 67.5%
Operating costs and expenses:
Selling, general, and
administrative 27,265 (4,092) 23,173 15,934
Research and development 7,205 (1,359) 5,846 4,355
--------- --------- --------- ---------
Total operating costs and
expenses 34,470 (5,451) 29,019 20,289
--------- --------- --------- ---------
Income from operations 24,507 6,461 30,968 15,338
% Sales 28.2% 7.4% 35.6% 29.1%
Other income, net 3,255 - 3,255 954
--------- --------- --------- ---------
Income before income tax
provision 27,762 6,461 34,223 16,292
Income tax provision 11,080 2,087 13,167 1,508
--------- --------- --------- ---------
Net income $ 16,682 $ 4,374 $ 21,056 $ 14,784
========= ========= ========= =========
Net income per share:
Basic $ 0.45 $ 0.12 $ 0.57 $ 0.42
========= ========= ========= =========
Diluted $ 0.44 $ 0.11 $ 0.55 $ 0.40
========= ========= ========= =========
Shares used in computing net
income per share:
Basic 36,684 36,684 34,790
========= ========= =========
Diluted 38,124 38,124 37,244
========= ========= =========
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 RECONCILIATION OF GAAP TO NON-GAAP CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Six
months
ended
Six months ended June 30,
June 30, 2006 2005
------------------------------- ---------
123R As
GAAP Impact Pro Forma Reported
--------- --------- --------- ---------
Sales:
Products $ 139,880 $ - $ 139,880 $ 78,834
Services 24,403 - 24,403 15,536
--------- --------- --------- ---------
Total sales 164,283 - 164,283 94,370
Cost of sales:
Products 41,791 (1,121) 40,670 24,804
Services 11,835 (657) 11,178 6,676
--------- --------- --------- ---------
Total cost of sales 53,626 (1,778) 51,848 31,480
--------- --------- --------- ---------
Gross profit 110,657 1,778 112,435 62,890
% Sales 67.4% 1.0% 68.4% 66.6%
Operating costs and expenses:
Selling, general, and
administrative 51,075 (7,291) 43,784 30,138
Research and development 13,351 (2,456) 10,895 8,500
Total operating costs and
expenses 64,426 (9,747) 54,679 38,638
--------- --------- --------- ---------
Income from operations 46,231 11,525 57,756 24,252
% Sales 28.1% 7.1% 35.2% 25.7%
Other income, net 5,458 - 5,458 1,677
--------- --------- --------- ---------
Income before income tax
provision 51,689 11,525 63,214 25,929
Income tax provision 20,549 4,091 24,640 2,041
--------- --------- --------- ---------
Net income $ 31,140 $ 7,434 $ 38,574 $ 23,888
========= ========= ========= =========
Net income per share:
Basic $ 0.85 $ 0.21 $ 1.06 $ 0.69
========= ========= ========= =========
Diluted $ 0.82 $ 0.20 $ 1.02 $ 0.64
========= ========= ========= =========
Shares used in computing net
income per share:
Basic 36,532 36,532 34,655
========= ========= =========
Diluted 37,974 37,974 37,133
========= ========= =========
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)
6/30/06 12/31/05
--------- ---------
Cash, cash equivalents, and investments $ 243,775 $ 202,739
Accounts receivable, net 70,530 52,849
Inventory, net 24,638 15,170
Property and equipment, net 58,841 52,225
Goodwill 124,035 124,638
Deferred tax assets 27,864 40,758
Other assets 16,155 13,208
--------- ---------
Total Assets $ 565,838 $ 501,587
========= =========
Accounts payable and other accrued liabilities $ 31,993 $ 33,485
Deferred revenue 30,775 25,511
--------- ---------
Total liabilities 62,768 58,996
Stockholders' equity 503,070 442,591
--------- ---------
Total liabilities and stockholders' equity $ 565,838 $ 501,587
========= =========
INTUITIVE SURGICAL, INC.
UNAUDITED SELECTED CONSOLIDATED STATEMENTS OF CASH FLOWS DATA
(IN THOUSANDS)
Three months ended Six months ended
------------------ ------------------
6/30/06 6/30/05 6/30/06 6/30/05
-------- -------- -------- --------
Net Income $ 16,682 $ 14,784 $ 31,140 $ 23,888
Depreciation and amortization 2,189 1,630 4,363 3,297
Deferred income tax 4,895 - 12,894 -
Stock option expense 6,461 - 11,525 -
Tax benefits from acquisition and
employee stock option plans 603 1,454 603 1,454
Excess tax benefits from
stock-based compensation (5,533) - (5,533) -
Changes in operating assets and
liabilities (5,670) (7,431) (19,160) (5,796)
Other, net 98 (20) 9 (78)
-------- -------- -------- --------
Net cash provided by operating
activities $ 19,725 $ 10,417 $ 35,841 $ 22,765
======== ======== ======== ========
Acquisition of property and
equipment $ 6,772 $ 3,603 $ 9,975 $ 4,604
======== ======== ======== ========
Proceeds from issuance of common
stock $ 5,152 $ 2,237 $ 11,653 $ 9,195
======== ======== ======== ========
Contacts:
Ben Gong
408-523-2175
Sarah Norton
408-523-2161
SOURCE: Intuitive Surgical, Inc.