SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: July 27, 2004
(Date of earliest event reported)
INTUITIVE SURGICAL, INC.
(exact name of registrant as specified in its charter)
Delaware | Commission File Number: | 77-0416458 | ||
(State or other jurisdiction of incorporation or organization) |
000-30713 | (I.R.S. Employer Identification No.) | ||
950 Kifer Road Sunnyvale, California 94086 (Address of Principal executive offices, including zip code)
(408) 523-2100 (Registrants telephone number, including area code) |
Item 5. Other Events and Required FD Disclosure.
On July 27, 2004, Intuitive Surgical, Inc. announced its financial results for the second quarter ended June 30, 2004. These financial results are attached hereto as Exhibit 99.1 and are incorporated by reference to this Item 5 for the purpose of causing such financial results to be filed under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Item 12. Results of Operations and Financial Condition.
The information in this Item, including that incorporated herein by reference, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in this Item, including that incorporated herein by reference, shall not be deemed incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
On July 27, 2004, Intuitive Surgical issued a press release announcing its financial results for the second quarter ended June 30, 2004. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated by reference into this Item 12.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
INTUITIVE SURGICAL, INC. | ||||||||
Date: July 27, 2004 | By | /s/ LONNIE M. SMITH | ||||||
Name: Lonnie M. Smith | ||||||||
Title: Chief Executive Officer |
EXHIBIT INDEX
Exhibit No. |
Description | |
99.1 | Financial Results for the Second Quarter Ended June 30, 2004. | |
99.2 | Press Release issued by Intuitive Surgical, dated July 27, 2004. |
Exhibit 99.1
INTUITIVE SURGICAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) Three Months Ended, Six Months Ended, 6/30/04 6/30/03 6/30/04 6/30/03 ------- ------- ------- ------- Sales: Products $ 25,850 $ 19,151 $ 48,321 $ 36,443 Services 5,207 2,302 9,795 4,245 -------- -------- -------- -------- Total sales 31,057 21,453 58,116 40,688 Cost of sales: Products 9,260 6,906 18,073 14,678 Services 2,169 1,859 4,579 3,581 -------- -------- -------- -------- Total cost of sales 11,429 8,765 22,652 18,259 -------- -------- -------- -------- Gross profit 19,628 12,688 35,464 22,429 Gross profit % 63.2% 59.1% 61.0% 55.1% Operating costs and expenses: Selling, general, and administrative 11,535 8,530 21,778 17,983 Research and development 3,626 3,627 8,936 7,050 -------- -------- -------- -------- Total operating costs and expenses 15,161 12,157 30,714 25,033 -------- -------- -------- -------- Income (loss) from operations 4,467 531 4,750 (2,604) Other income, net 626 347 1,232 1,189 -------- -------- -------- -------- Income (loss) before income tax provision 5,093 878 5,982 (1,415) Income tax provision 263 0 299 0 -------- -------- -------- -------- Net income (loss) $ 4,830 $ 878 $ 5,683 $ (1,415) ======== ======== ======== ======== Net earnings (loss) per share - Basic $ 0.14 $ 0.05 $ 0.17 $ (0.08) ======== ======== ======== ======== Diluted $ 0.14 $ 0.05 $ 0.17 $ (0.08) ======== ======== ======== ======== Weighted average shares outstanding used to compute net earnings (loss) per share - Basic 33,559 18,580 33,421 18,506 ======== ======== ======== ======== Diluted 34,210 18,973 34,170 18,506 ======== ======== ======== ======== INTUITIVE SURGICAL, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) Unaudited 6/30/04 12/31/03 (a) ------- ------------ Assets Current assets: Cash and cash equivalents 8,230 11,335 Short-term investments 98,184 101,614 Accounts receivable, net 24,705 26,820 Inventories, net 7,162 8,788 Prepaid expenses and other current assets 3,462 3,203 Restricted cash equivalents 204 188 --------- --------- Total current assets 141,947 151,948 Property and equipment, net 29,012 10,288 Restricted cash equivalents 319 642 Intangible assets, net 7,155 8,089 Goodwill 143,332 143,106 Other assets 695 921 --------- --------- Total assets $ 322,460 $ 314,994 ========= ========= Liabilities and stockholders' equity Current liabilities: Accounts payable 4,311 5,894 Accrued compensation and employee benefits 5,186 5,267 Warranty accrual 152 702 Restructuring accrual 902 971 Other accrued liabilities 7,240 8,432 Deferred revenue 13,385 11,345 Current portion of notes payable 904 1,030 --------- --------- Total current liabilities 32,080 33,641 Long-term debt 230 695 Deferred revenue 1,166 1,148 Other accrued liabilities 57 553 Stockholders' equity Common stock 34 33 Preferred stock - - Additional paid-in capital 421,911 416,559 Deferred compensation - (99) Accumulated deficit (132,731) (138,414) Accumulated other comprehensive income (287) 878 --------- --------- Total stockholders' equity 288,927 278,957 --------- --------- Total liabilities and stockholders' equity $ 322,460 $ 314,994 ========= =========(a) - Derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2003 but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
Exhibit 99.2
Intuitive Surgical Announces Record $31.1 Million Second Quarter Revenue, Up 45% and $4.8 Million Net Income, $0.14 Per ShareSUNNYVALE, CA -- 07/27/2004 -- Intuitive Surgical, Inc. (NASDAQ: ISRG), the leader in operative surgical robotics, today reported record second quarter 2004 sales of $31.1 million, increasing 45% from $21.5 million for the second quarter of 2003. Higher sales were driven by continued recurring revenue growth and higher da Vinci® Surgical System shipments. Second quarter 2004 recurring revenue, consisting of instrument, accessory, service and training revenue, totaled $13.0 million, up 102% over the prior year. Second quarter 2004 recurring revenue increased to 42% of total sales from 30% during the second quarter of 2003.
Second quarter 2004 system revenue increased to $18.1 million from $15.0 million during the second quarter 2003. Intuitive sold 19 da Vinci® Surgical Systems during the second quarter of 2004, compared to 14 in the second quarter of 2003. Intuitive ended the second quarter 2004 with 243 cumulative da Vinci® Surgical Systems sold, compared to 177 at the end of the second quarter 2003.
Three Months Ended, Six Months Ended, ------------------- ------------------- 6/30/04 6/30/03 Increase 6/30/04 6/30/03 Increase ------- ------- -------- ------- ------- -------- Revenue ($Millions) Systems $18.1 $15.0 $3.1 $32.6 $28.7 $3.9 Instruments/ Accessories $7.8 $4.2 $3.6 $15.7 $7.8 $7.9 Service/Training $5.2 $2.3 $2.9 $9.8 $4.2 $5.6 ------- ------- -------- ------- ------- -------- $31.1 $21.5 $9.6 $58.1 $40.7 $17.4 ======= ======= ======== ======= ======= ======== Cumulative da Vinci(R) Surgical System Unit Sales Shipments 19 14 5 33 28 5 Cumulative Shipments 243 177 66 243 177 66Gross profit increased to $19.6 million, or 63.2% of sales, for the second quarter 2004, compared to $12.7 million, or 59.1% of sales for the second quarter 2003. Higher second quarter 2004 gross profit margin resulted from primarily lower product costs and leveraging service overhead costs across a larger revenue base of installed systems.
Second quarter 2004 operating expenses of $15.2 million were $3.0 million higher than the second quarter 2003.
Intuitive reported second quarter 2004 net income of $4.8 million, or $0.14 per diluted share, compared to $0.9 million, or $0.05 per diluted share for the second quarter 2003.
Intuitive ended the second quarter 2004 with $106.4 million in cash and short-term investments. During the second quarter 2004, Intuitive purchased, for $20.0 million, their Sunnyvale, California facility, that was previously being leased. Excluding the investment in the Sunnyvale facility, Intuitive was $10.6 million cash flow positive for the second quarter 2004.
Commenting on the announcement, Lonnie Smith, Chairman and CEO of Intuitive Surgical said, "We are pleased with our record second quarter revenue and earnings. These results reflect the continued adoption of the da Vinci® Surgical System and our ability to execute to our business plan."
The company will also announce these results at a conference call today at 10:00 am PDT. The dial-in numbers for the call are 877-909-3508 for participants located in the U.S. and 484-630-4228 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®, InSite®, EndoWrist®, Hermes®, and Aesop®
are registered trademarks of Intuitive Surgical, Inc.
INTUITIVE SURGICAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) Three Months Ended, Six Months Ended, 6/30/04 6/30/03 6/30/04 6/30/03 ------- ------- ------- ------- Sales: Products $ 25,850 $ 19,151 $ 48,321 $ 36,443 Services 5,207 2,302 9,795 4,245 -------- -------- -------- -------- Total sales 31,057 21,453 58,116 40,688 Cost of sales: Products 9,260 6,906 18,073 14,678 Services 2,169 1,859 4,579 3,581 -------- -------- -------- -------- Total cost of sales 11,429 8,765 22,652 18,259 -------- -------- -------- -------- Gross profit 19,628 12,688 35,464 22,429 Gross profit % 63.2% 59.1% 61.0% 55.1% Operating costs and expenses: Selling, general, and administrative 11,535 8,530 21,778 17,983 Research and development 3,626 3,627 8,936 7,050 -------- -------- -------- -------- Total operating costs and expenses 15,161 12,157 30,714 25,033 -------- -------- -------- -------- Income (loss) from operations 4,467 531 4,750 (2,604) Other income, net 626 347 1,232 1,189 -------- -------- -------- -------- Income (loss) before income tax provision 5,093 878 5,982 (1,415) Income tax provision 263 0 299 0 -------- -------- -------- -------- Net income (loss) $ 4,830 $ 878 $ 5,683 $ (1,415) ======== ======== ======== ======== Net earnings (loss) per share - Basic $ 0.14 $ 0.05 $ 0.17 $ (0.08) ======== ======== ======== ======== Diluted $ 0.14 $ 0.05 $ 0.17 $ (0.08) ======== ======== ======== ======== Weighted average shares outstanding used to compute net earnings (loss) per share - Basic 33,559 18,580 33,421 18,506 ======== ======== ======== ======== Diluted 34,210 18,973 34,170 18,506 ======== ======== ======== ======== INTUITIVE SURGICAL, INC. CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) Unaudited 6/30/04 12/31/03 (a) ------- ------------ Assets Current assets: Cash and cash equivalents 8,230 11,335 Short-term investments 98,184 101,614 Accounts receivable, net 24,705 26,820 Inventories, net 7,162 8,788 Prepaid expenses and other current assets 3,462 3,203 Restricted cash equivalents 204 188 --------- --------- Total current assets 141,947 151,948 Property and equipment, net 29,012 10,288 Restricted cash equivalents 319 642 Intangible assets, net 7,155 8,089 Goodwill 143,332 143,106 Other assets 695 921 --------- --------- Total assets $ 322,460 $ 314,994 ========= ========= Liabilities and stockholders' equity Current liabilities: Accounts payable 4,311 5,894 Accrued compensation and employee benefits 5,186 5,267 Warranty accrual 152 702 Restructuring accrual 902 971 Other accrued liabilities 7,240 8,432 Deferred revenue 13,385 11,345 Current portion of notes payable 904 1,030 --------- --------- Total current liabilities 32,080 33,641 Long-term debt 230 695 Deferred revenue 1,166 1,148 Other accrued liabilities 57 553 Stockholders' equity Common stock 34 33 Preferred stock - - Additional paid-in capital 421,911 416,559 Deferred compensation - (99) Accumulated deficit (132,731) (138,414) Accumulated other comprehensive income (287) 878 --------- --------- Total stockholders' equity 288,927 278,957 --------- --------- Total liabilities and stockholders' equity $ 322,460 $ 314,994 ========= =========(a) - Derived from the audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2003 but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.
Contacts: Ben Gong 408-523-2175 Sarah Norton 408-523-2161