On the procedure front, a total of 3,274 MAKOplasty procedures were performed in Q2, representing a 10% sequential increase and 26% growth from the same year-ago period.
Most impressive, however, is that 577 were THA surgeries, good for a 26% sequential increase over last quarter’s 467 and a 106% boost in hip procedures over the same period in 2012. This indicates, at least in part, that the company’s new Hip 2.0 application seems to be well-received so far as hospitals increasingly utilize MAKO’s hip capabilities.
Finally, the average monthly utilization last quarter came in at 7.0 MAKOplasty procedures per site, a marginal improvement over last quarter’s 6.6 procedures.
On earnings, expenses, and cash burn
MAKO’s net loss, on the other hand, came in at $19.7 million, or $0.42 per share, badly missing analysts’ expectations of a net loss of $0.20 per share.
That said, however, included in this loss was a non-cash, non-operating expense of $6.9 million associated with the expected expiration of MAKO’s credit facility with Deerfield Management, as well as a $4.1 million non-cash inventory adjustment for excess hip implant inventory — the latter of which was caused by greater-than-expected adoption of MAKO’s RESTORIS PST implant system over other available implants.
When we back out those expenses, MAKO’s net loss would have been a much more respectable $0.19 per share.
In addition, operating expenses increased $4.1 million year-over-year to $29.6 million, due to a combination of the new 2.3% medical device tax from the recently enacted Affordable Care Act, and a $2 million asset impairment charge for excess hip implant instrumentation.
As of June 30, 2013, MAKO had no debt and $62.9 million in cash, equivalents, and short-term investments remaining on its balance sheet, compared with $71 million at the end of March and $73.3 million at the end of 2012. All in all, that keeps them in-line with management’s previous expectations of ending 2013 with around $46 million in cash on the books.
Foolish takeaway
In the end, MAKO bulls should be plenty happy about this solid report as it represents yet another quarter of management actually delivering on their promises, contrary to MAKO’s two horrifying earnings misses early last year.
As it stands, then, I’m cautiously optimistic that MAKO Surgical management finally has a grasp on where they’re headed as they continue their stubborn march toward profitability, so I believe them when they say they’re confident holding steady existing 2013 guidance of selling 45 to 48 systems with 13,500 to 14,500 procedures performed.
That doesn’t mean they don’t have their work cut out for them, but if they can indeed meet those numbers, MAKO shareholders stand to be handsomely rewarded in the process.
The article It’s Official: MAKO Surgical Is Back on Track originally appeared on Fool.com is written by Steve Symington.
Fool contributor Steve Symington owns shares of MAKO Surgical. The Motley Fool recommends MAKO Surgical. It recommends and owns shares of Intuitive Surgical.
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