Mazor Robotics Announces Third Quarter and Nine Month Financial Results

A replay of the event will be available for two weeks following the conclusion of the call. To access the replay, callers in the United States can call 877-660-6853 and reference the Replay Access Code: 13593070. All international callers can dial 201-612-7415, using the same Replay Access Code. To access the webcast, please visit www.mazorrobotics.com, click ‘Investor Relations.’

USE OF NON-GAAP MEASURES

In addition to disclosing financial results calculated in accordance with generally accepted accounting principles in conformity with International Financial Reporting Standards (GAAP), this press release contains non-GAAP financial measures for gross profit, operating expenses, operating loss, financing income, net income and basic and diluted earnings per share that exclude the effects of non-cash expense of amortization of intangible assets, stock-based compensation and revaluation of the fair value of the derivative instruments. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the Company’s performance that enhances management's and investors' ability to evaluate the Company's net income and earnings per share and to compare them to historical net income and earnings per share.

The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management uses both GAAP and non-GAAP measures when operating and evaluating the Company’s business internally and therefore decided to make these non-GAAP adjustments available to investors.

ABOUT MAZOR

Mazor Robotics is dedicated to the development and marketing of innovative surgical guidance systems and complementary products that provide a safer surgical environment for patients, surgeons, and operating room staff. Mazor Robotics’ flagship product, Renaissance®, is a state-of-the-art surgical guidance system that enables surgeons to conduct spine surgeries in an accurate and secure manner. Mazor Robotics systems have been successfully used in the placement of over 60,000 implants worldwide. Numerous peer-reviewed publications and presentations at leading scientific conferences have validated the accuracy, usability, and clinical advantages of Mazor Robotics technology. For more information, the content of which is not part of this press release, please visit  www.mazorrobotics.com.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Any statements in this release about future expectations, plans or prospects for the Company, including without limitation, statements regarding the increasing demand in the U.S. for the Renaissance system, that China is a key market and one of our largest opportunities in Asia, that we believe the data supporting the clinical and economic benefits of the Renaissance system along with the continued increase in customer utilization will drive greater adoption and expand Renaissance’s global install base, and other statements containing the words “believes,” “anticipates,” “plans,” “expects,” “will” and similar expressions are forward-looking statements. These statements are only predictions based on Mazor's current expectations and projections about future events. There are important factors that could cause Mazor's actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Those factors include, but are not limited to, the impact of general economic conditions, competitive products, product demand and market acceptance risks, reliance on key strategic alliances, fluctuations in operating results, and other factors indicated in Mazor's filings with the Securities and Exchange Commission (SEC) including those discussed under the heading "Risk Factors" in Mazor’s annual report on Form 20-F filed with the SEC on April 9, 2014 and in subsequent filings with the SEC. For more details, refer to Mazor's SEC filings. Mazor undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in our expectations, except as may be required by law.

 
Mazor Robotics Ltd.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
(in thousands, except per share data)
 
    Nine month period     Three month period
ended September 30, ended September 30,
   
2014     2013 2014     2013
Revenue $ 15,463 $ 14,259 $ 6,091 $ 3,109
 
Cost of revenue $ 3,153   $ 3,049   $ 1,180   $ 833  
 
Gross profit $ 12,310   $ 11,210   $ 4,911   $ 2,276  
 
Operating costs and expenses:
Research and development $ 4,526 $ 2,975 $ 1,564 $ 1,060
Selling and Marketing $ 15,828 $ 11,253 $ 5,519 $ 4,132
General and administrative $ 3,181   $ 1,843   $ 1,331   $ 608  
Total operating costs and expenses $ 23,535 $ 16,071 $ 8,414 $ 5,800
 
Loss from operations $ (11,225 ) $ (4,861 ) $ (3,503 ) $ (3,524 )
 
Financing income (expenses), net $ (225 ) $ (13,475 ) $ (286 ) $ 58  
 
Loss before taxes on income $ (11,450 ) $ (18,336 ) $ (3,789 ) $ (3,466 )
 
Taxes on income $ 157 $ 163 $ 84 $ 63
               
Net loss $ (11,607 ) $ (18,499 ) $ (3,873 ) $ (3,529 )
 
 
Net loss attributable to ordinary shareholders $ (11,607 ) $ (18,499 ) $ (3,873 ) $ (3,529 )
 
Net loss per share – Basic and diluted attributable to ordinary shareholders $ (0.28 ) $ (0.61 ) $ (0.09 ) $ (0.10 )
 
Weighted average common shares outstanding – Basic and diluted   41,713     30,481     42,059     35,140  
 
 
Mazor Robotics Ltd.
Consolidated Statements of Financial Position as of
(U.S. Dollars in thousands)
 
  September 30,   December 31,
2014 2013
Unaudited Audited
Current Assets
Cash and cash equivalents $ 24,014 $ 19,803
Investments in marketable securities $ 22,952 $ 45,014
Trade receivables $ 3,970 $ 1,974
Other accounts receivable $ 1,756 $ 655
Inventory $ 2,946 $ 2,480
Total Current Assets $ 55,638 $ 69,926
 
Non-Current Assets
Prepaid lease fees and deferred expenses $ 82 $ 78
Property and equipment, net $ 1,285 $ 792
Long-term investments $ 7,237 $ -
Intangible assets, net $ - $ 93
Total Non-Current Assets $ 8,604 $ 963
Total assets $ 64,242 $ 70,889
 
Current liabilities
Trade payables $ 2,267 $ 1,899
Other accounts payable $ 4,773 $ 4,565
Total current liabilities $ 7,040 $ 6,464
 
Non-Current Liabilities
Employee benefits $ 330 $ 311
Deferred tax liability $ 21 $ 21
Total Non-Current liabilities $ 351 $ 332
Total liabilities $ 7,391 $ 6,796
 
Equity
Share capital $ 110 $ 106
Share premium $ 135,013 $ 130,472
Amounts allocated to share options $ 77 $ 77
Capital reserve for share-based payment transactions $ 3,674 $ 3,854
Foreign currency translation reserve $ 2,119 $ 2,119
Accumulated loss $ (84,142 ) $ (72,535 )
Total equity $ 56,851 $ 64,093
Total liabilities and equity $ 64,242 $ 70,889
 
 
Mazor Robotics Ltd.
Reconciliations of GAAP to Non-GAAP Financial Measures
(U.S. Dollars in thousands, except per share data)
(UNAUDITED)
 
    Nine month period     Three month period
ended September 30, ended September 30,
   
2014     2013 2014     2013
GAAP gross profit $ 12,310 $ 11,210 $ 4,911 $ 2,276
Amortization of intangible assets $ 93 $ 221 $ - $ 75
Stock-based compensation $ 36   $ 14   $ 24   $ 9  
Non-GAAP gross profit $ 12,439 $ 11,445 $ 4,935 $ 2,360
GAAP gross profit as percentage of revenues   79.6 %   78.6 %   80.6 %   73.2 %
Non-GAAP gross profit as percentage of revenues 80.4 % 80.3 % 81.0 % 75.9 %
 
GAAP operating expenses $ 23,535 $ 16,071 $ 8,414 $ 5,800
Stock-based compensation:
Research and development $ 185 $ 89 $ 104 $ 40
Selling and marketing $ 783 $ 326 $ 366 $ 178
General and administrative $ 421   $ 250   $ 203   $ 90  
Non-GAAP operating expenses $ 22,146 $ 15,406 $ 7,741 $ 5,492
 
GAAP operating loss $ (11,225 ) $ (4,861 ) $ (3,503 ) $ (3,524 )
 
Non-GAAP operating loss $ (9,707 ) $ (3,961 ) $ (2,806 ) $ (3,132 )
 
GAAP Financing income (expense), net $ (225 ) $ (13,475 ) $ (286 ) $ 58
Change in fair value of derivative instruments $ -   $ 13,510   $ -   $ -  
Non-GAAP Financing expenses, net $ (225 ) $ 35 $ (286 ) $ 58
 
GAAP net loss $ (11,607 ) $ (18,499 ) $ (3,873 ) $ (3,529 )
Stock-based compensation $ 1,425 $ 679 $ 697 $ 317
Amortization of intangible assets $ 93 $ 221 $ - $ 75
Change in fair value of derivative instruments $ -   $ 13,510   $ -   $ -  
Non-GAAP net loss $ (10,089 ) $ (4,089 ) $ (3,176 ) $ (3,137 )
 
GAAP basic and diluted loss per share $ (0.28 ) $ (0.61 ) $ (0.09 ) $ (0.10 )
 
Non-GAAP basic and diluted loss per share $ (0.24 ) $ (0.13 ) $ (0.08 ) $ (0.09 )
 
 
Mazor Robotics Ltd.
CONSOLIDATED CASH FLOW STATEMENTS
(U.S. Dollars in thousands)
 
    Nine months ended     Three months ended
September 30, September 30,
2014     2013 2014     2013
Cash flows from operating activities:
Loss for the period $ (11,607 ) $ (18,499 ) $ (3,873 ) $ (3,529 )
 
Adjustments:
Depreciation and amortization $ 416 $ 449 $ 144 $ 157
Change in fair value of derivative liability
on account of warrants $ - $ 13,510 $ - $ -
Finance (income) expenses, net $ 63 $ (36 ) $ 97 $

(23

)
Share-based payment $ 1,425 $ 679 $ 697 $ 317
Taxes on income $ 157 $ 163 $ 84 $ 63
$ 2,061 $ 14,765 $ 1,022 $ 514
 
Change in inventory $ (876 ) $ (1,111 ) $ (108 ) $ (721 )
Change in trade and other accounts receivable $ (3,100 ) $ (536 ) $ (1,780 ) $ 1,854
Change in prepaid lease fees $ (4 ) $ (9 ) $ 1 $ (3 )
Change in trade and other accounts payable $ 1,054 $ 1,485 $ 757 $ (96 )
Change in employee benefits $ 19 $ 107 $ (19 ) $ (2 )
$ (2,907 ) $ (64 ) $ (1,149 ) $ 1,032
 
Interest received $ 61 $ 58 $ 20 $ -
Income tax paid $ (28 ) $ (51 ) $ (14 ) $ (16 )
$ 33 $ 7 $ 6 $ (16 )
Net cash used in operating activities $ (12,420 ) $ (3,791 ) $ (3,994 ) $ (1,999 )
 
Cash flows from investing activities:
Proceeds from short-term investments and deposits, net $ 14,825 $ 4,177 $ 1,499 $ 2
Purchase of property and equipment $ (407 ) $ (223 ) $ (166 ) $ (72 )
Net cash provided by (used in) investing activities $ 14,418 $ 3,954 $ 1,333 $ (70 )
 
Cash flows used in financing activities:
Proceeds from exercise of share options and warrants, net $ -

$

10,199 $ - $ 6,916
Issuance Expenses $ (294 )

$

- $ - $ -
Proceeds from exercise of share options by employees $ 2,940 $ 402 $ 52 $ 143
Repayment of loans to the OCS $ (324 ) $ (637 ) $ - $ (390 )
Net cash provided by financing activities $ 2,322 $ 9,964 $ 52 $ 6,669
 
Net increase (decrease) in cash and cash equivalents $ 4,320 $ 10,127 $ (2,609 ) $ 4,600
 
Cash and cash equivalents at the beginning of the period $ 19,803 $ 12,797 $ 26,734 $ 18,332
Effect of exchange rate differences on balances of cash and cash equivalents $ (109 ) $ 60 $ (111 ) $ 52
 
Cash and cash equivalents at the end of the period $ 24,014 $ 22,984 $ 24,014 $ 22,984
 
Supplementary cash flows information:
Transfer of inventory to fixed assets $ 410 $ 67 $ 410 $ -
 




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