Stereotaxis
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10-Q
STEREOTAXIS, INC. filed this Form 10-Q on 08/08/2018
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Research and Development Expenses. Research and development expenses increased from $1.8 million for the three months ended June 30, 2017 to $2.0 million for the three months ended June 30, 2018, an increase of approximately 16%. This increase was primarily due to spending for new projects.

 

Sales and Marketing Expenses. Sales and marketing expenses decreased from $3.6 million for the three months ended June 30, 2017 to $3.5 million for the three months ended June 30, 2018, a decrease of approximately 5%. This decrease was primarily due to a more efficient distribution of clinical adoption and marketing resources favorably impacting both headcount and contractor costs.

 

General and Administrative Expenses. General and administrative expenses include finance, information systems, legal, and general management. General and administrative expenses remained constant at $1.3 million for the three months ended June 30, 2017 and June 30, 2018.

 

Other Income (Expense). Other income (expense) represents the non-cash change in market value of certain warrants classified as a derivative and recorded as a current liability under general accounting principles for determining whether an instrument (or embedded feature) is indexed to an entity’s own stock.

 

Interest Expense. Interest expense was relatively unchanged at less than $0.1 million for the three months ended June 30, 2017 and June 30, 2018.

 

Comparison of the Six Months Ended June 30, 2018 and 2017

 

Revenue. Revenue decreased from $15.4 million for the six months ended June 30, 2017 to $14.5 million for the six months ended June 30, 2018, a decrease of approximately 6%. Revenue from the sale of systems decreased from $2.0 million to $0.3 million, a decrease of approximately 84%, primarily due to lower Niobe and Odyssey sales volumes. We recognized a total of $0.3 million for Odyssey and Cinema systems during the 2018 period. System revenue for the prior year period included revenue on one Niobe system and a total of $1.0 million on Odyssey and Odyssey Cinema systems. Revenue from sales of disposable interventional devices, service and accessories increased to $14.2 million for the six months ended June 30, 2018 from $13.4 million for the six months ended June 30, 2017, an increase of approximately 6% primarily due to increased service revenue from time-and-material billings.

 

Cost of Revenue. Cost of revenue decreased from $3.5 million for the six months ended June 30, 2017 to $2.7 million for the six months ended June 30, 2018, a decrease of approximately 23%. As a percentage of our total revenue, overall gross margin increased to 82% for the six months ended June 30, 2018 compared to 78% during the same six month period of the prior year due to change in product mix and lower costs incurred on service contracts in the current year period. Cost of revenue for systems sold decreased from $1.1 million for the six months ended June 30, 2017 to $0.7 million for the six months ended June 30, 2018, a decrease of approximately 42%, primarily due to decreased system sales volumes and installations across all product lines. Gross margin for systems decreased from $0.9 million for the six months ended June 30, 2017 to ($0.3) million for the six months ended June 30, 2018 due to lower production and sales volumes. Cost of revenue for disposables, service and accessories decreased to $2.0 million during the 2018 period from $2.3 million during the 2017 period, resulting in an increase in gross margin to 86% from 83% between these periods driven by lower expenses incurred under service contracts in the current year period.

 

Research and Development Expenses. Research and development expenses increased from $3.4 million for the six months ended June 30, 2017 to $4.0 million for the six months ended June 30, 2018, an increase of approximately 19%. This increase was due to higher project-based expenses.

 

Sales and Marketing Expenses. Sales and marketing expenses decreased from $7.4 million for the six months ended June 30, 2017 to $7.1 million for the six months ended June 30, 2018, a decrease of approximately 4%. This decrease was primarily due to a more efficient distribution of clinical adoption and marketing resources favorably impacting both headcount and contractor costs.

 

General and Administrative Expenses. General and administrative expenses include finance, information systems, legal, and general management. General and administrative expenses decreased to $2.5 million for the six months ended June 30, 2018 from $3.6 million for the six months ended June 30, 2017, a decrease of 29%. This decrease was primarily driven by reduced executive headcount costs, including severance, as well as lower professional fees.

 

Other Income (Expense). Other income (expense) represents the non-cash change in market value of certain warrants classified as a derivative and recorded as a current liability under general accounting principles for determining whether an instrument (or embedded feature) is indexed to an entity’s own stock.

 

Interest Expense. Interest expense was relatively unchanged at less than $0.1 million for the six months ended June 30, 2017 and June 30, 2018.

 

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