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MAKO Surgical AO Message Board

  • pcshanno pcshanno Jul 30, 2013 7:53 PM Flag

    My Take on 2Q13 Report

    The $19.7M loss was bigger than expected. Three parts of that loss were $6.9 for a charge for a credit facility, which I think means they drew down all of a loan (can someone else comment?), $6.1M charge for some old hip implant ($4.1M) & instrumentation ($2.0) and the new medical device tax (~$1.8M). So discounting the credit facility and inventory write-down yields a net loss of $6.7M which compares to a net loss of $8.5M in 2012. Being optimistic, there is some improvement, particularly considering the new medical device tax is included this year.

    Total cash on hand is $62.9M vs $73.3M at the end of last year which is a burn rate of about $20M per year. There is enough cash for a few more years.

    Machine utilization (procedures/month) grew from 6.6 1Q2013 to 7.0 in 2Q2013 which feels really low for a large investment. $1M (or whatever the machine costs) for 28 procedures per year? It is good that it is growing, but it just seems so low. It would be interesting to understand the total number of procedures the machine could have been used for vs the total number actually used (7/month) to have a feel for the bound for the upper limit.

    THA grew nicely, though it still only represents ~20% of all of the procedures on the machine. Given the low number of Hip procedures, I wonder why they had so much "old" instrumentation and hip inventory to write-down ($6.1M). It seems someone made a big mistake.

    Guidance for the year is still 13.5k to 14.5k procedures and seems intact. A 10% q/q increase would be 13.8k for the year.

    Overall I'm content with the results, particularly in comparison to the recent past. I was actually expecting bad news, though I still expect a lot of future bumpiness. The clinical data is very encouraging. Actually the clinical data is one of the best parts of the report as it indicates some clear advantages for RIO.

    I imagine it will still be a while before the stock appreciates much.

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