After pre-announcing selected results last month, MAKO Surgical Corp. (NASDAQ:MAKO) is set to report its fourth-quarter and full-year earnings on Tuesday. Needless to say, after a shockingly volatile 2012 during which shares of MAKO fell by nearly 50%, weary long-term investors are hoping the report will contain good tidings for the coming year.
What we already know
Before we dig further, let’s recap what MAKO told us last month.
First, the company placed 15 new RIO systems during the fourth quarter, bringing its total number sold in 2012 to 45. Of the 15 new systems, eight opted to include MAKO’s $150,000 Total Hip Arthroplasty add-on with another three THA solutions sold to existing customers. All told, MAKO’s worldwide installed base at the end of 2012 was comprised of 156 commercial RIO systems, with 62% of the installed base currently “MAKOPlasty THA enabled.”
Second, 2,904 procedures were performed using MAKO’s robots during the fourth quarter, of which 395 were THA surgeries. In all, that brought the total number of MAKOplasty procedures in 2012 to 10,204, a 47% increase over 2011.
Third, monthly per-system utilization in the fourth quarter rose to 6.6 procedures. While the number did increase from 6.2 in the third quarter, investor enthusiasm remained tempered as the number represented MAKO’s first ever year-over-year decline from 7.2 in the fourth quarter of 2011.
While it was nice of MAKO to throw investors a bone to chew for a while, it’s safe to say we’re itching for something new. Now that we’ve had the chance to dissect every word in last month’s release, then, here are four questions for MAKO going into next week’s announcement.
How many robots?
At time of the release, MAKO will have wrapped up nearly two-thirds of its first quarter. Keeping in mind that the first three months of each year are historically MAKO’s slowest, you can bet we’ll expect fresh full-year guidance for the company’s all-important RIO system sales. Unfortunately, because MAKO’s recurring revenue stream remains relatively small, the high-priced RIO systems still tend to make overall revenue look chunky and unpredictable. And while the 15 robots sold last quarter helped reassure investors all isn’t lost, if management’s forward sales estimates for 2013 don’t reflect significantly increased adoption for the system… well, we all know how that turned out last year.
Do they like to travel?
Investors should also watch for any signs of increased global adoption of MAKO’s robots. Indeed, of its 156 “worldwide” installed system base, only five are currently placed outside the United States. Of those five systems, two were sold in the last quarter alone. When we note that Intuitive Surgical, Inc. (NASDAQ:ISRG) has placed nearly one third of its more than 2,500 da Vinci robots in other countries, it’s evident that MAKO is only beginning to address its enormous market potential abroad.