Intuitive Surgical Announces $19.4 Million Second Quarter Revenue -- Up 52% Over Prior Year

July 30, 2002 at 4:32 PM EDT
SUNNYVALE, Calif., Jul 30, 2002 (BUSINESS WIRE) -- Intuitive Surgical, Inc. (Nasdaq:ISRG), the leader in operative surgical robotics, today reported sales of $19.4 million in the second quarter of 2002, up 52% from $12.7 million reported in the second quarter of 2001. The sales increase was driven by higher da Vinci(TM) Surgical System placements and continued growth of recurring revenue. Intuitive shipped 16 da Vinci(TM) Surgical Systems during the second quarter of 2002 compared with 12 in the second quarter last year. Intuitive ended the quarter with 118 cumulative da Vinci(TM) Surgical System placements. Second quarter 2002 recurring revenue, consisting of instruments, accessories, and service was $3.8 million, up 111% from $1.8 million for the same period last year.

Total second quarter 2002 systems sales were $15.6 million, instruments and accessories $2.7 million, and service revenue $1.1 million. The following table compares second quarter and year-to-date 2002 revenue and da Vinci(TM) Surgical System placements to the prior year.

                          Second Quarter           Year-to-Date
                         ---------------           ------------
                      2002     2001    Incr.   2002     2001    Incr.
                     ------   ------   -----  ------   ------  ------
Revenue ($ Millions)
--------------------
da Vinci(TM)
 Surgical Systems    $15.6    $10.9    $4.7   $ 27.3   $21.8    $5.5
Instruments/Accys    $ 2.7    $ 1.4    $1.3   $  4.4   $ 2.3    $2.1
Service              $ 1.1    $ 0.4    $0.7   $  2.1   $ 0.7    $1.4
                     ------   ------   -----  ------   ------  ------
                     $19.4    $12.7    $6.7   $ 33.8   $24.8    $9.0
System Population
-----------------
Placements              16       12       4       29      24       5
Cumulative
 Placements            118       64      54      118      64      54
Intuitive's gross margin for the second quarter of 2002 was 52%, compared with 48% for the second quarter of 2001. Gross margin improvement resulted largely from increased sales and a higher average da Vinci(TM) Surgical System selling price.

Net loss for the second quarter of 2002 was $3.7 million, compared to a net loss of $4.2 million for the second quarter of 2001. Basic and diluted net loss per share was $0.10, compared to a net loss per share of $0.12 for the second quarter of 2001.

Commenting on the announcement, Lonnie Smith, President and CEO of Intuitive Surgical said: "We enjoyed a strong financial performance during the second quarter. We are very pleased with the continued revenue growth in all product areas. We are particularly upbeat about the improvement that we have made in gross margin, surpassing 50% for the first time."

The company will also announce these results at a conference call today at 1:30 p.m. PT. The dial-in numbers for this call are 877/909-3508 for U.S. calls and 484/630-4228 for international calls. The passcode is ISRG and the meeting leader is Mr. Lonnie Smith.

    About the da Vinci(TM) Surgical System:
The da Vinci(TM) Surgical System consists of a surgeon's viewing and control console having an integrated, high-performance InSite(TM) 3-D vision system, a patient-side cart consisting of three robotic arms that position and precisely maneuver endoscopic instruments and an endoscope, and a variety of articulating EndoWrist(TM) 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(TM) 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 statements contained in this release may be deemed to contain "forward-looking statements." Such statements are indicated by words or phrases such as "anticipate," "estimate," "projects," "believes," "intends," "expects" and similar words and phrases. Actual results may differ materially from those expressed or implied in any forward-looking statement as a result of certain risks and uncertainties, including, without limitation, competition and market acceptance of the Company's products, ability to obtain regulatory approvals and third-party reimbursement, ability to raise additional capital and other risks and uncertainties detailed in the Company's Securities and Exchange Commission filings. Prospective investors are cautioned not to place undue reliance on such forward-looking statements.

Note to Editors: Intuitive(R), da Vinci(TM), InSite(TM), and EndoWrist(TM) are trademarks of Intuitive Surgical, Inc.

                   INTUITIVE SURGICAL, INCORPORATED
           CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                 (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                 Three months ended
                                                ---------------------
                                                June 30,     June 30,
                                                  2002         2001
                                                ---------   ---------
Sales                                           $ 19,387    $ 12,720
Cost of sales                                      9,225       6,659
                                                ---------   ---------
      Gross profit                                10,162       6,061
Operating costs and expenses:
      Research and development                     4,645       3,336
      Selling, general and administrative          9,784       7,666
                                                ---------   ---------
        Total operating costs and expenses        14,429      11,002
Loss from operations                              (4,267)     (4,941)
Other income/(expense)                               527         697
                                                ---------   ---------
Net loss                                        $ (3.740)   $ (4,244)
                                                =========   =========
Weighted average shares outstanding
 used to compute net loss per share               36,383      35,655
Loss per share - basic and diluted              $  (0.10)   $  (0.12)
                   INTUITIVE SURGICAL, INCORPORATED
           CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                 (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                  Six months ended
                                                ---------------------
                                                 June 30,     June 30,
                                                   2002        2001
                                                ---------   ---------
Sales                                           $ 33,796    $ 24,799
Cost of sales                                     16,732      13,222
                                                ---------   ---------
      Gross profit                                17,064      11,577
Operating costs and expenses:
      Research and development                     8,877       6,567
      Selling, general and administrative         18,569      14,500
                                                ---------   ---------
         Total operating costs and expenses       27,446      21,067
Loss from operations                             (10,382)     (9,490)
Other income/(expense)                             1,025       1,840
                                                ---------   ---------
Net loss                                        $ (9,357)   $ (7,650)
                                                =========   =========
Weighted average shares outstanding
 used to compute net loss per share               36,345      35,528
Loss per share - basic and diluted              $  (0.26)   $  (0.22)
                   INTUITIVE SURGICAL, INCORPORATED
                      CONSOLIDATED BALANCE SHEETS
                            (IN THOUSANDS)
                                            (Unaudited)
                                              June 30,    December 31,
                                                2002        2001 (a)
                                             ----------   -----------
Assets
Current assets:
   Cash, cash equivalents
    and short-term investments               $  55,371    $  66,661
   Accounts receivable, net                     15,213       13,248
   Inventories, net                              7,230        6,182
   Prepaid expenses                              1,699        3,128
                                             ----------   -----------
     Total current assets                       79,513       89,219
Property and equipment, net                     11,104        7,834
Other assets                                     2,918        3,308
                                             ----------   -----------
Total assets                                 $  93,535    $ 100,361
                                             ==========   ===========
Liabilities and stockholders' equity
Current Liabilities:
   Accounts payable                          $   8,033    $   8,300
   Accrued compensation and
    employee benefits                            3,506        2,537
   Warranty provision                            2,194        1,831
   Accrued liabilities                           3,575        3,128
   Deferred revenue                              3,706        3,870
   Current portion of notes payable              1,022        1,631
                                             ----------   -----------
     Total current liabilities                  22,036       21,297
Notes payable                                      971          771
Stockholders' equity
   Common stock                                     36           36
   Additional paid-in capital                  190,050      188,962
   Deferred compensation                          (491)        (886)
   Accumulated deficit                        (119,727)    (110,370)
   Accumulated other comprehensive income          660          551
                                             ----------   -----------
     Total stockholders' equity                 70,528       78,293
                                             ----------   -----------
Total liabilities and stockholders' equity   $  93,535    $ 100,361
                                             ==========   ===========
(a) - Derived from the audited financial statements included in our annual report on Form 10-K for the fiscal year ended December 31, 2001.

CONTACT:          Intuitive Surgical, Inc.
                  Ben Gong, 408/523-2175
                  Sarah Norton, 408/523-2161

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