EX-99.1 2 exhibit_99-1.htm EXHIBIT 99.1
Exhibit 99.1
 
Mazor Robotics Inc.
 189 S. Orange Ave., Suite 1850
Orlando, FL  32801
Tel: 1 (800) 80-MAZOR
Fax: (407) 591-3560
usa@MazorRobotics-us.com
Mazor Robotics Ltd.
 PO Box 3104, 5 Shacham St.
North Industrial Park,       
Caesarea 3088900, Israel
Tel: +972 4 618-7100
 Fax: +972 4 618-7111
info@mazorrobotics.com
  

Mazor Robotics Reports Record Fourth Quarter & Full Year 2017 Financial Results

- Fourth Quarter Revenue Grew 36%; Full Year Revenue Increased 78% Year-over-Year -
 
- Q4 and FY Recurring Revenue Increased 107% and 65%, Respectively -
 
- Conference Call Today at 8:30 AM EST (3:30PM IST) -

CAESAREA, Israel – February 14, 2018 – Mazor Robotics Ltd. (TASE: MZOR; NASDAQGM: MZOR), a pioneer and a leader in the field of robotic guidance systems, reported record fourth quarter and full year revenues of $19.1 million and $64.9 million, respectively. As previously announced, the Company received purchase orders for 27 systems in the 2017 fourth quarter, including 24 Mazor X systems.  For the 2017 full year, the Company received 73 system orders, of which 64 were for the Mazor X system and nine were for the Renaissance system.

"Our effective execution during 2017 continued to strengthen our global leadership position in spine robotics and led to record systems sales and recurring revenue,” commented Ori Hadomi, Chief Executive Officer.  “2018 will be a year of transition during which we will emphasize synergy with Medtronic as well as procedure growth. Mazor is well positioned to benefit from the accelerating adoption of robotics for spine surgeries.”
 
FOURTH QUARTER 2017 FINANCIAL RESULTS ON IFRS BASIS ("GAAP")
 
Revenue for the three months ended December 31, 2017 increased 36% to $19.1 million compared to $14.0 million in the year-ago fourth quarter. U.S. revenue increased 38% to $17.4 million compared to $12.6 million in the year-ago fourth quarter, as the Company recognized revenue from 21 Mazor X systems, compared to 13 Mazor X and two Renaissance systems in the fourth quarter of 2016. International revenue was $1.7 million compared to $1.4 million in the year-ago fourth quarter. Recurring revenue from kit sales, services and other increased 107% to $9.3 million in the fourth quarter of 2017 compared to $4.5 million in the year-ago fourth quarter, which is primarily attributed to the higher system installed base. The Company ended the quarter with a backlog of 16 systems (14 Mazor X and two Renaissance systems).

The Company’s gross margin for the three months ended December 31, 2017 was 59.3% compared to 70.5% in the year-ago fourth quarter.  This expected decrease is attributed mainly to the higher manufacturing costs of the Mazor X system compared to the Renaissance system and the pricing terms with Medtronic. Total operating expenses were $11.4 million compared to $14.2 million in the year-ago fourth quarter, mainly due to lower operating expenses, following the transition to the global distribution phase of the Medtronic partnership.  Operating loss was $0.1 million compared to an operating loss of $4.3 million in the year-ago fourth quarter. Net income for the fourth quarter of 2017 was $0.4 million, or $0.01 per share, compared to a net loss of $4.3 million, or $0.09 per share, for the year-ago fourth quarter.
 

Cash generated by operating activities was $3.8 million compared to cash used in operating activities of $1.9 million in last year’s fourth quarter. The change is primarily a result of strong collections in the fourth quarter of 2017. As of December 31, 2017, cash, cash equivalents and investments totaled $108.3 million.

FOURTH QUARTER 2017 FINANCIAL RESULTS ON NON-GAAP BASIS

The tables below include reconciliations of the Company’s GAAP results to non-GAAP results. The reconciliations relate to non-cash expenses in the amount of $1.5 million with respect to share-based payments and amortization of intangible assets recorded in the fourth quarter of 2017. On a non-GAAP basis, the net income in the fourth quarter of 2017 was $1.9 million, or $0.03 per share, compared to net loss of $3.1 million, or $0.07 per share, for the year-ago fourth quarter.

FULL YEAR ENDED DECEMBER 31, 2017 FINANCIAL RESULTS ON IFRS BASIS (“GAAP”)
 
For the full year ended December 31, 2017, revenue increased 78% and totaled $64.9 million compared to $36.4 million for the full year ended December 31, 2016, due to higher system sales and an increase in recurring revenue. Recurring revenue totaled $27.8 million, an increase of 65% compared to $16.8 million in the full year ended December 31, 2016. The growth in recurring revenue is attributed to the increase in the installed base and high utilization of the Company’s robotic guidance systems.  Gross margin for the full year ended December 31, 2017 was 63.5% compared with 71.6% for the full year ended December 31, 2016. This expected decrease is attributed mainly to the higher manufacturing costs of the Mazor X system compared to the Renaissance system and to the pricing terms with Medtronic. Operating expenses for the full year ended December 31, 2017 were $55.1 million, compared to $45.1 million for the full year ended December 31, 2016. The Company’s sales and marketing expenses are now expected to decrease, as Medtronic assumed commercial responsibility for the Mazor X, effective September 18, 2017. Net loss for the full year ended December 31, 2017 was $12.4 million, or $0.25 per share, compared to a net loss of $18.7 million, or $0.42 per share for the full year ended December 31, 2016.
 
- 2 -
FULL YEAR ENDED DECEMBER 31, 2017 FINANCIAL RESULTS ON NON-GAAP BASIS

On a non-GAAP basis, the net loss for the full year ended December 31, 2017 was $5.7 million, or $0.12 per share, compared to a net loss of $16.1 million, or $0.36 per share for the full year ended December 31, 2016.

ADJUSTMENTS TO REPORTED THIRD QUARTER 2017 FINANCIAL RESULTS

As previously disclosed on January 8, 2018, the Company’s revenue for the third quarter ended September 30, 2017 was adjusted from $17.2 million to $18.6 million.  The corresponding cost of goods sold was also adjusted from $5.3 million to $5.9 million.  The increase is due to system deliveries to Medtronic which were incorrectly recorded as delivered after the third quarter ended September 30, 2017.

Following an additional analysis of the 2017 third quarter results, the Company is further adjusting its cost of goods sold by $1.1 million to $7.0 million due to the inaccurate recording of purchase of goods.

As a result of these adjustments, the gross margins for the three and nine months ended September 30, 2017 were adjusted from 69.2% and 68.0% to 62.3% and 65.3%, respectively.  The net loss for the same periods was increased by $0.3 million to $3.9 million and $12.9 million, respectively.

The amended financial results for three and nine months ended September 30, 2017 are available through the Company's website at
 https://www.mazorrobotics.com/index.php/investors-relations/financial-reports.

 
CONFERENCE CALL INFORMATION

The company will host a conference call to discuss these results on Wednesday, February 14, 2018, at 8:30 AM EST (3:30 PM IST).  Investors within the United States interested in participating are invited to call 800-289-0438.   Participants in Israel can use the toll-free dial-in number 1809 212 883. All other international participants can use the dial-in number +1 323-794-2423.
 
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 1-888-203-1112 and reference the Replay Access Code: 5797376. All international callers can dial +1 719-457-0820, using the same Replay Access Code. To access the webcast, please visit www.mazorrobotics.com and select ‘Investor Relations.’
 
- 3 -
 
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 profit (loss), net income (loss) and basic and diluted earnings per share that exclude the effects of capitalization of development costs, non-cash expense of amortization of intangible assets and share-based payments. 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 (TASE: MZOR; NASDAQGM: MZOR) believes in healing through innovation by developing and introducing revolutionary technologies and products aimed at redefining the gold standard of quality care. Mazor Robotics Guidance System enables surgeons to conduct spine and brain procedures in an accurate and secure manner. For more information, 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 that 2018 will be a year of transition for Mazor, Mazor benefitting from the accelerating adoption of robotics for spine surgery, the expected decrease in sales and marketing expenses, 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 May 1, 2017 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

U.S. Contacts: EVC Group
Michael Polyviou/Doug Sherk - Investors
mpolyviou@evcgroup.com; dsherk@evcgroup.com
212.850.6020; 646.445.4800

- 4 -
 
Mazor Robotics Ltd.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(in thousands, except per share data)

   
Twelve month period
    
Three month period
  
   
ended December 31,
    
ended December 31,
  
   
2017
(Unaudited)
    
2016
(Audited)
    
2017
(Unaudited)
    
2016
(Unaudited)
  
Revenue
  
$
64,947
    
$
36,379
    
$
19,149
    
$
14,043
  
 
                                
Cost of revenue
  
$
23,684
    
$
10,330
    
$
7,789
    
$
4,148
  
 
                                
Gross profit
  
$
41,263
    
$
26,049
    
$
11,360
    
$
9,895
  
 
                                
Operating expenses:
                                
Research and development, net
  
$
8,192
    
$
5,736
    
$
2,500
    
$
1,709
  
Selling and marketing, net
  
$
39,499
    
$
33,637
    
$
6,861
    
$
10,856
  
General and administrative
  
$
7,375
    
$
5,697
    
$
2,065
    
$
1,625
  
Total operating cost and expenses
  
$
55,066
    
$
45,070
    
$
11,426
    
$
14,190
  
 
                                
Operating loss
  
$
(13,803
)
  
$
(19,021
)
  
$
(66
)
  
$
(4,295
)
 
                                
Financing income, net
  
$
1,228
    
$
397
    
$
597
    
$
52
  
 
                                
Profit (loss) before taxes on income
  
$
(12,575
)
  
$
(18,624
)
  
$
531
    
$
(4,243
)
 
                                
Income tax expense (benefit)
  
$
(156
)
  
$
44
    
$
94
    
$
23
  
 
                                
Net income (loss)
  
$
(12,419
)
  
$
(18,668
)
  
$
437
    
$
(4,266
)
 
                                
Net earnings (loss) per share - Basic and diluted
  
$
(0.25
)
  
$
(0.42
)
  
$
0.01
    
$
(0.09
)
                                 
Weighted average common shares outstanding - Basic
    
49,154
      
44,881
      
51,588
      
47,560
  

Weighted average common shares outstanding - Diluted
    
49,154
      
44,881
      
57,572
      
47,560
  
 
- 5 -
 
Mazor Robotics Ltd.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF
(U.S. Dollars in thousands)

   
December 31,
    
December 31,
  
   
2017
    
2016
  
   
(Unaudited)
    
(Audited)
  
Current assets
            
Cash and cash equivalents
  
$
46,376
    
$
14,954
  
Short-term investments
    
56,708
      
37,862
  
Trade receivables
    
5,460
      
8,225
  
Other current assets
    
2,054
      
1,728
  
Inventory
    
7,864
      
4,715
  
Total current assets
    
118,462
      
67,484
  
 
                
Non-current assets
                
Long-term investments
    
5,171
      
9,017
  
Property and equipment, net
    
4,323
      
3,615
  
Intangible assets, net
    
1,925
      
2,258
  
Other non-current assets
    
1,115
      
351
  
Total non-current assets
    
12,534
      
15,241
  
                 
Total assets
  
$
130,996
    
$
82,725
  
 
                
Current liabilities
                
Trade payables
  
$
3,474
    
$
5,018
  
Deferred revenue
    
3,471
      
4,031
  
Other current liabilities
    
9,874
      
8,462
  
Total current liabilities
    
16,819
      
17,511
  
                 
Non-current liabilities
                
Employee benefits
    
414
      
325
  
Total non-current liabilities
    
414
      
325
  
                 
Total liabilities
    
17,233
      
17,836
  
                 
 Equity
                
Share capital
    
136
      
124
  
Share premium
    
225,678
      
174,647
  
Amounts allocated to warrants
    
9,629
      
-
  
Capital reserve for share-based payment  transactions
    
10,480
      
9,859
  
Foreign currency translation reserve
    
2,119
      
2,119
  
Accumulated loss
    
(134,279
)
    
(121,860
)
Total equity
    
113,763
      
64,889
  
                 
Total liabilities and equity
  
$
130,996
    
$
82,725
  

- 6 -
Mazor Robotics Ltd.
CONSOLIDATED CASH FLOW STATEMENTS
 (U.S. Dollars in thousands)

   
Twelve Month ended
    
Three month ended
  
   
December 31,
    
December 31,
  
 
  
2017
(Unaudited)
    
2016
(Audited)
    
2017
(Unaudited)
    
2016
(Unaudited)
  
Cash flows from operating activities:
                        
Loss (income) for the period
  
$
(12,419
)
  
$
(18,668
)
  
$
437
    
$
(4,266
)
Adjustments:
                                
Depreciation and amortization
  
$
1,522
    
$
822
    
$
415
    
$
346
  
Gain from sale of property and equipment
  
$
-
    
$
(6
)
  
$
-
    
$
-
  
Finance expense (income), net
  
$
(291
)
  
$
(275
)
  
$
37
    
$
38
  
Share-based expenses
  
$
6,370
    
$
4,439
    
$
1,395
    
$
1,061
  
Income tax expense (benefit)
  
$
(156
)
  
$
44
    
$
94
    
$
23
  
 
  
$
7,445
    
$
5,024
    
$
1,941
    
$
1,468
  
                                 
Change in inventory
  
$
(3,224
)
  
$
(1,938
)
  
$
126
    
$
(650
)
Change in trade and other accounts receivable
  
$
1,852
    
$
(3,512
)
  
$
1,498
    
$
(5,588
)
Change in prepaid lease fees
  
$
(39
)
  
$
(20
)
  
$
(9
)
  
$
(2
)
Change in trade and other accounts payable
  
$
(138
)
  
$
8,723
    
$
(297
)
  
$
7,088
  
Change in employee benefits
  
$
89
    
$
26
    
$
(34
)
  
$
(13
)
 
  
$
(1,460
)
  
$
3,279
    
$
1,284
    
$
835
  
 
                                
Interest received
  
$
554
    
$
301
    
$
122
    
$
66
  
Income tax paid
  
$
(11
)
  
$
(38
)
  
$
4
    
$
-
  
 
  
$
543
    
$
263
    
$
126
    
$
66
  
                                 
Net cash provided by (used in) operating activities
  
$
(5,891
)
  
$
(10,102
)
  
$
3,788
    
$
(1,897
)
                                 
Cash flows from investing activities:
                                
Proceeds from (investment in) short-term investments and deposits, net
  
$
(10,463
)
  
$
(11,094
)
  
$
(11,879
)
  
$
523
  
Purchase of long-term investments
  
$
(4,537
)
  
$
(9,823
)
  
$
(249
)
  
$
(917
)
Proceeds in long-term investments
  
$
-
    
$
748
    
$
-
    
$
250
  
Purchase of property and equipment
  
$
(2,364
)
  
$
(2,361
)
  
$
(807
)
  
$
(626
)
Capitalization of development costs
  
$
-
    
$
(1,902
)
  
$
-
    
$
(385
)
Net cash used in investing activities
  
$
(17,364
)
  
$
(24,432
)
  
$
(12,935
)
  
$
(1,155
)
                                 
Cash flows from financing activities:
                                
Proceeds from issuance of ADRs, net
  
$
39,988
    
$
31,416
    
$
(12
)
  
$
-
  
Proceeds from exercise of share options by employees
  
$
14,945
    
$
4,100
    
$
6,652
    
$
513
  
Proceeds from exercise of warrants by investors
  
$
-
    
$
481
    
$
-
    
$
-
  
Net cash provided by financing activities
  
$
54,933
    
$
35,997
    
$
6,640
    
$
513
  
                                 
Net increase (decrease) in cash and cash equivalents
  
$
31,678
    
$
1,463
    
$
(2,507
)
  
$
(2,539
)
Cash and cash equivalents at the beginning of the period
  
$
14,954
    
$
13,519
    
$
49,028
    
$
17,597
  
Effect of exchange rate differences on balances of cash and cash equivalents
  
$
(256
)
  
$
(28
)
  
$
(145
)
  
$
(104
)
Cash and cash equivalents at the end of the period
  
$
46,376
    
$
14,954
    
$
46,376
    
$
14,954
  
                                 
Supplementary cash flows information:
                                
Purchase of property and equipment in credit
  
$
(24
)
  
$
(566
)
  
$
(24
)
  
$
(566
)
Issuance costs in credit
  
$
(10
)
  
$
-
    
$
(10
)
  
$
-
  
Capitalization of development expenses on credit
  
$
-
    
$
(20
)
  
$
-
    
$
(20
)
Classification of inventory to fixed assets, net
  
$
75
    
$
-
    
$
75
    
$
-
  
 
- 7 -
 
Mazor Robotics Ltd.
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
 (U.S. Dollars in thousands, except per share data)
 (UNAUDITED)

   
Twelve month period
    
Three month period
  
   
ended December 31,
    
ended December 31,
  
   
2017
    
2016
    
2017
    
2016
  
GAAP gross profit
  
$
41,263
    
$
26,049
    
$
11,360
    
$
9,895
  
Amortization of intangible assets
    
333
      
74
      
83
      
74
  
Share-based payments
    
355
      
207
      
107
      
37
  
Non-GAAP gross profit
  
$
41,951
    
$
26,330
    
$
11,550
    
$
10,006
  
GAAP gross profit as percentage of revenues
    
63.5
%
    
71.6
%
    
59.3
%
    
70.5
%
Non-GAAP gross profit as percentage of revenues
    
64.6
%
    
72.4
%
    
60.3
%
    
71.3
%
 
                                
GAAP operating expenses
  
$
55,066
    
$
45,070
    
$
11,426
    
$
14,190
  
Share-based payments:
                                
   Research and development
  
$
875
    
$
783
    
$
234
    
$
88
  
   Selling and marketing
  
$
2,969
    
$
2,435
    
$
606
    
$
463
  
   General and administrative
  
$
2,171
    
$
1,444
    
$
448
    
$
473
  
Development costs capitalization
  
$
-
    
$
(2,332
)
  
$
-
    
$
-
  
Non-GAAP operating expenses
  
$
49,051
    
$
42,740
    
$
10,138
    
$
13,166
  
 
                                
GAAP operating loss
  
$
(13,803
)
  
$
(19,021
)
  
$
(66
)
  
$
(4,295
)
Non-GAAP operating profit (loss)
  
$
(7,100
)
  
$
(16,410
)
  
$
1,412
    
$
(3,160
)
                                 
GAAP net income (loss)
  
$
(12,419
)
  
$
(18,668
)
  
$
437
    
$
(4,266
)
Amortization of intangible assets
  
$
333
    
$
74
    
$
83
    
$
74
  
Share-based payments
  
$
6,370
    
$
4,869
    
$
1,395
    
$
1,061
  
Development costs capitalization
  
$
-
    
$
(2,332
)
  
$
-
    
$
-
  
Non-GAAP net income (loss)
  
$
(5,716
)
  
$
(16,057
)
  
$
1,915
    
$
(3,131
)
 
                                
GAAP basic and diluted earnings (loss) per share
  
$
(0.25
)
  
$
(0.42
)
  
$
0.01
    
$
(0.09
)
 
                                
Non-GAAP basic and diluted earnings (loss) per share
  
$
(0.12
)
  
$
(0.36
)
  
$
0.03
    
$
(0.07
)
 
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