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Stereotaxis Reports 2018 Third Quarter Financial Results

November 12, 2018

-- Continued progress on strategic innovation initiatives; expect to showcase in 1H 2019 -- 4% recurring revenue growth; reaffirming 2018 record recurring revenue expectations -- Conference call today at 10:00 a.m. Eastern Time

ST. LOUIS, Nov. 12, 2018 (GLOBE NEWSWIRE) -- Stereotaxis, Inc. (OTCQX: STXS), the global leader in innovative robotic technologies for the treatment of cardiac arrhythmias, today reported financial results for the third quarter ended September 30, 2018.

“We continue to make meaningful progress on our strategic innovation initiatives, and expect to be able to publicly showcase our progress in the first half of 2019,” said David Fischel, Chairman and CEO. “We are confident that our innovation strategy is clinically and commercially sound, will provide significant benefits to patients, physicians and hospitals, and will substantially increase Stereotaxis’ financial opportunity.”

“The recurring revenue growth in the quarter positions us to achieve record recurring revenue this year. The development of foundational commercial infrastructure to support the success of robotic electrophysiology practices is best reflected in the recent launch of www.RoboticEP.com, a platform by which our technology and clinical value can be presented in an organized and elegant fashion to the broader community.”

“While making significant investments in innovation and commercial infrastructure, our financial discipline has allowed us to reduce cash utilization. The negative free cash flow in the first nine months of 2018 is the closest to breakeven in the history of the Company.”

“The medical device industry and healthcare community are rapidly embracing robotics in laparoscopic, orthopedic, and spinal surgery. This was exemplified in the September acquisition of Mazor Robotics by Medtronic. As the pioneer and undisputed leader of robotics in endovascular surgery, Stereotaxis is excited and encouraged by these broader developments. We are confident that endovascular surgery will similarly be transformed by this wave of technological progress.”

Third Quarter and First Nine Months 2018 Financial ResultsRevenue for the third quarter of 2018 totaled $7.6 million. Recurring revenue was $6.8 million in the third quarter, up 4% from $6.5 million in the prior year quarter. Recurring revenue for the first nine months of 2018 of $21.0 million was up 5% from the first nine months of 2017. System revenue in the third quarter was $0.7 million, down from $1.6 million in the prior year quarter. System revenue in the prior year quarter primarily reflected the shipment of a Niobe® System to an international distributor.

Gross margin in the quarter was $5.9 million, or 78% of revenue, compared to $6.2 million and 76% of revenue in the third quarter of 2017. Operating expenses in the third quarter were $6.0 million, down from $6.1 million in the prior year quarter. Operating loss and net loss in the third quarter were $(0.1) million.

Negative free cash flow in the third quarter was ($0.4) million, compared to ($0.6) million in the year ago third quarter. Negative free cash flow for the first nine months of 2018 was ($2.0) million, compared to ($3.9) million in the first nine months of 2017. The negative free cash flow for the first nine months of 2018 represents the strongest performance in nearing breakeven for the company in its history.

Cash Balance and LiquidityAt September 30, 2018, Stereotaxis had cash and cash equivalents of $11.6 million, no debt, and $3.2 million in unused borrowing capacity on its revolving credit facility, for total net liquidity of $14.8 million.

Full Year 2018 ExpectationsThe Company is reaffirming its expectation of achieving record high annual recurring revenue of approximately $28 million for the full year 2018.

The Company continues to expect moderate increases in operating expenses as it invests in strategic innovation initiatives. The benefits of these initiatives are expected to meaningfully contribute to revenue in 2019 and beyond. Stereotaxis’ balance sheet will allow the Company to deliver on its commercial and innovation initiatives over the coming years and reach profitability without the need for additional financings.

Conference Call and WebcastStereotaxis will host a conference call and webcast today, November 12, 2018, at 10:00 a.m. Eastern Time. To access the conference call, dial 888-256-1007 (US and Canada) or 1-323-994-2093 (International) and give the participant pass code 5173966. Participants are asked to call 5-10 minutes prior to the start time. To access the live and replay webcast, please visit the investor relations section of the Stereotaxis website at www.stereotaxis.com.

About StereotaxisStereotaxis is the global leader in innovative robotic technologies designed to enhance the treatment of arrhythmias and perform endovascular procedures. Its mission is the discovery, development and delivery of robotic systems, instruments, and information solutions for the interventional laboratory. These innovations help physicians provide unsurpassed patient care with robotic precision and safety, improved lab efficiency and productivity, and enhanced integration of procedural information. Over 100 issued patents support the Stereotaxis platform. The core components of Stereotaxis’ systems have received regulatory clearance in the United States, European Union, Japan, Canada, China, and elsewhere. For more information, please visit www.stereotaxis.com.

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, the Company’s ability to raise additional capital on a timely basis and on terms that are acceptable, its ability to continue to manage expenses and cash burn rate at sustainable levels, its ability to continue to work with lenders to extend, repay or refinance indebtedness, or to obtain additional financing, in either case on acceptable terms, continued acceptance of the Company’s products in the marketplace, the effect of global economic conditions on the ability and willingness of customers to purchase its systems and the timing of such purchases, competitive factors, changes resulting from healthcare reform in the United States, including changes in government reimbursement procedures, dependence upon third-party vendors, timing of regulatory approvals, 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, delayed or canceled, either by their express terms, as a result of negotiations, or by overall project changes or delays.

Company Contacts: David L. FischelChairman and Chief Executive Officer

Martin C. Stammer Chief Financial Officer

314-678-6100 investors@stereotaxis.com

STEREOTAXIS, INC. STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, ------------------------------ ------------------------------ 2018 2017 2018 2017 - ---------- - - ---------- - - ---------- - - ---------- - Revenue: Systems $ 715,484 $ 1,597,537 $ 1,043,510 $ 3,644,871 Disposables, service and accessories 6,839,995 6,546,198 21,035,002 19,943,562 - ---------- - - ---------- - - ---------- - - ---------- - Total revenue 7,555,479 8,143,735 22,078,512 23,588,433 Cost of revenue: Systems 596,869 888,800 1,257,980 2,029,760 Disposables, service and accessories 1,036,589 1,032,569 3,029,875 3,350,480 - ---------- - - ---------- - - ---------- - - ---------- - Total cost of revenue 1,633,458 1,921,369 4,287,855 5,380,240 Gross margin 5,922,021 6,222,366 17,790,657 18,208,193 Operating expenses: Research and development 2,000,780 1,619,749 5,995,800 4,976,892 Sales and marketing 2,819,101 3,079,562 9,911,514 10,479,626 General and administrative 1,215,920 1,355,258 3,753,703 4,921,513 Total operating expenses 6,035,801 6,054,569 19,661,017 20,378,031 - ---------- - - ---------- - - ---------- - - ---------- - Operating income (loss) (113,780 ) 167,797 (1,870,360 ) (2,169,838 ) Other income (expense) - (4,459,042 ) 2,590,361 (1,029,479 ) Interest expense (net) (2,515 ) (43,077 ) (33,271 ) (135,336 ) - ---------- - - ---------- - - ---------- - - ---------- - Net income (loss) $ (116,295 ) $ (4,334,322 ) $ 686,730 $ (3,334,653 ) Cumulative dividend on convertible preferred (361,447 ) (337,963 ) (1,072,553 ) (1,070,812 ) stock Net loss attributable to common stockholders $ (477,742 ) $ (4,672,285 ) $ (385,823 ) $ (4,405,465 ) - ---------- - - ---------- - - ---------- - - ---------- - Net loss per share attributed to common stockholder: Basic $ (0.01 ) $ (0.21 ) $ (0.01 ) $ (0.20 ) Diluted $ (0.01 ) $ (0.21 ) $ (0.01 ) $ (0.20 ) Weighted average number of common shares and equivalents: Basic 59,008,219 22,750,405 49,733,553 22,551,496 Diluted 59,008,219 22,750,405 49,733,553 22,551,496 Certain prior year amounts have been reclassified to conform to the 2018 presentation.

STEREOTAXIS, INC. BALANCE SHEETS September 30, December 31, 2018 2017 ---------------- ---------------- (Unaudited) Assets Current assets: Cash and cash equivalents $ 11,570,566 $ 3,686,302 Accounts receivable, net of allowance of $300,510 and $361,350 in 2018 and 5,088,111 4,287,255 2017, respectively Inventories, net 1,202,457 1,146,971 Prepaid expenses and other current assets 970,397 750,085 - ------------ - - ------------ - Total current assets 18,831,531 9,870,613 Property and equipment, net 452,639 592,688 Intangible assets, net 109,979 159,470 Other assets 226,939 44,432 - ------------ - - ------------ - Total assets $ 19,621,088 $ 10,667,203 - ------------ - - ------------ - Liabilities and stockholders’ equity (deficit) Current liabilities: Accounts payable $ 1,574,035 $ 1,654,101 Accrued liabilities 2,822,958 3,195,247 Deferred revenue 6,365,676 5,702,769 Warrants - 19,574,977 - ------------ - - ------------ - Total current liabilities 10,762,669 30,127,094 Long-term deferred revenue 502,893 611,863 Other liabilities 621,573 535,369 - ------------ - - ------------ - Total liabilities 11,887,135 31,274,326 Convertible preferred stock: Convertible preferred stock, par value $0.001; 10,000,000 shares 5,960,475 5,960,475 authorized, 23,900 shares outstanding at 2018 and 2017 Stockholders’ equity (deficit): Common stock, par value $0.001; 300,000,000 shares authorized, 59,044,164 59,044 22,806 and 22,805,731 shares issued at 2018 and 2017, respectively Additional paid-in capital 478,071,950 450,748,403 Treasury stock, 4,015 shares at 2018 and 2017 (205,999 ) (205,999 ) Accumulated deficit (476,151,517 ) (477,132,808 ) - ------------ - - ------------ - Total stockholders’ equity (deficit) 1,773,478 (26,567,598 ) - ------------ - - ------------ - Total liabilities and stockholders’ equity (deficit) $ 19,621,088 $ 10,667,203 - ------------ - - ------------ -

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