I don't, but it will be a minority contribution at best. I suspect its around $50k per unit and around $10k gross margins per unit $5.4 m revenue, $1.1 m in gross margin contributions. This if my assumptions are correct would push the revenue estimates above the $12.1 analyst consensus and closer to my ~$15 m number. Half of them are "one time" events and if the analyst have sharp pencils may discount the up surprise. I suspect they will be "stunned" should the $15 million revenue # appear and there will be a subsequent $2 rise in the stock price. All of this is predicated on modeling and assumptions though...it is very hard to get reliable useful information on the progress of NVDQ sales.
Question still remains. We will see at 16:30 though.
Endo it should be even a greater benefit than the 109 new revenue sales, the 50 placed in the previous quarter had the expenses charged in Q2 and the revenue credited in Q3. At gross margins around 65% that should mean the equivalent of an additional ~25 sales as far as gross margin. Your number would then be not 109 but 134. Time will tell but there are a lot of stars lining up for this company. Some of them may show up this quarter but certainly by next quarter there will be "surprises" hence the confidence of Arun to meet the 40% annual grow target.
In looking at recent past press releases, Intuitive sold 50 Xi systems in the 2nd quarter and 59 Xi systems in the 3rd quarter. Since the royalty income in the 2nd quarter could not be recognized until FDA approval, the royalty income on all 109 systems will be recognized in the 3rd quarter. What royalty income are you placing into your model for each of these systems?
Since the 2nd quarter contained no such income, I am hoping all of this income now appearing in the 3rd quarter will help offset some of the shortfall in revenue that Arun discussed in the last CC.
The tax is 2.3% of the revenue...not income. This is the only tax I know of that in its effect hurts marginally profitable and especially start-up companies who have no earnings and are typically struggling with cash flow. The repeal of this ill thought out "tax" will take the "2.3%" directly to the bottom line earnings or in the case of start-ups the cash flow will be redirected from the government in Washington to the hiring of new marketing and R&D and manufacturing persons. For most established "generic" instrument suppliers this could increase earnings by ~25% not 2.3%! For start-ups like Novadaq it means positive earnings will be reached quarters, even as much as a year ahead of when it would with the tax. For share prices this could mean $28@ instead of $14@ at the end of say 2015.
Thank you all that voted for reason and growth and "fairness" in the recent elections.
I don't see how a small tax on us and the competition is going to make a bottom line difference on equipment a knowledgeable surgeon must have.
I'd guess the president is buying extra ink for his veto pen about now.
streetstalker and ironyworks
I would agree that it is not only possible but likely that revenues could come in around 30%. Such an event will temporarily hurt the stock unless Arun paints a very positive picture related to both the 4th quarter and 2015.
Bear in mind, when he mentioned in the last CC that 3rd quarter revenue could be 35%, he immediately also indicated that the 4th quarter was expected to exceed 40% growth by an amount sufficient to result in aggregate 2nd half growth of 40%.
Personally I will not at all be surprised if growth comes closer to 'only' 30%. There are undeniable challenges in getting a new salesforce up to speed. That was certainly major factor in what drove the stock down previously to just over 10. However, with all the latest developments we are better set for the longer term now than we were before, regardless of any hiccup in the coming quarter.
Let me interject a comment amidst the delightful erudition of this thread,
to caution that we are setting ourselves to be terribly disappointed if the earnings growth comes in at an admirable 30%.
Personally, i'd happily settle for that and invite the pundits/analysts to screw themselves.
Of course, they clearly don't require an invitation for that.
I wouldn't pack right away if I were you. The fast buck artists are in control for now. Any thing they can do to line their filthy pockets with somebody else's dime.
Endo, the revenue from Life Cell's SpyElite is currently around $20 million per year. Assuming the current quarter of ~20% breast reconstruction continues at these levels in the 4th quarter, that would be ~$5.0 million. Since that revenue is transferred to Novadaq starting today, we should get 2 of the three months revenue. That $3.3 million additional 4th quarter revenue at ~70% gross margins is about $2.33 million contribution to earnings...at ~50 million shares that's about a $.05 contribution. If my estimates for the 3rd quarter of $(0.04) per share are realized, we could see our first positive ongoing earnings in the 4th quarter! There may be some hysteresis during the transition, so I am not predicting break-even until the 1st quarter 2015 but we are going to be really close. Either way the "off to the races" comment is very likely.
The same type of scenario occurred to ISRG back in 2003 when you had the two former companies suing each other over "rights" to the technology. Hospitals were afraid to jump into a legal quagmire. In July 2003 they settled, merged and the stock then at $17@ took off...$500@ yesterday.
See you all at the $200 plus Novadaq stock price party.
Actually intraday pps 10.37 to 16.61...wild!
With so many balls in the the air, a revenue miss may get lost in the sauce.
Sentiment: Strong Buy
In what seems like a heart beat, the pps has jumped from $10.50 to $15.62. Our ability to maintain this upward momentum is going to be contigent on the revenue numbers for the third quarter that will be reported this coming Thursday. As importantly will be the comments that Arun makes at the CC related to fourth quarter revenue projections. The $12,000,000 in revenues would represent a 35% increase and in line with Arun's comments at the last CC. If the number is at $12 million or less, Arun will have to be extremely forecful in indicating that 4th quarter revenues are expected to exceed 40% enough to offset the shortfall in the 3rd quarter. Hopefully, he will also provide an indication that 2015 volume is expected to maintain a 40% growth rate.
If we surprise to the upside on revenues for the 3rd quarter and he fortifies that with an upbeat forecast for the 4th quarter and 2015, we could really be off to the races.
Quite frankly I was pleasantly surprised by how well the stock performed yesterday. The substantial increase was also supported by terrific volume. So let me expand on the reasons why I originally wrote excellent news.
First, as noted by others here, the time table for termination of the patnership arrangement has moded up by a full year. Since we now receive 100% of the revenue from Spy sales, the analyst have now modified upward their revenue projections for 2015.
Secondly, having full control of Spy sales should accelerate the percentage of breast reconstruction operations utilizing Spy equipment. This, in turn, will accelerate the equipment becoming standard of care for this type of operation.
Third, since part of the salesforce is responsible for increasing product utilization, we can now see a much greater push by the company to have hospitals that already have Spy equipment use the equipment for other type of operations as indicated by Arun in past conference calls. This was actually the fundamental reason why this partnership began to disintergrate.
I'll leave it to some other old hands here to expand on the above list.
This is a great company. Rode the stock and sold it at $22. Bought it back at $16 at what I thought was the bottom. Surprised to see it drop so much but fortunate we are almost back to my purchase price. Incredible technology and product line. Was contemplating doubling down when it was $13. Of course, disappointed I did not. Long term holder. Will purchase more even at this pps. Still a growing company. Good luck to all longs.
Sentiment: Strong Buy
There is nothing about this news that is bad for the shorts other than that the longs are bidding the stock up like crazy
Oh Baby, great news! A really bad day if you're short NVDQ...
This continues the string of all positive news since the last Conf Call, and removes one of the big unknowns. Can't wait for next week's call. Cheers to all NVDQ longs,