Intuitive Surgical Announces Fourth Quarter Results

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Feb. 1, 2001--Intuitive Surgical, Inc. (Nasdaq:ISRG), the leader in precision surgical robotics, today reported sales of $10.7 million in the fourth quarter of 2000, up 227% from $3.3 million in sales reported in the fourth quarter of 1999. Sales increased by $2.8 million, or 36%, compared with $7.9 million reported in the third quarter 2000. The sale and installation of 11 da Vinci(TM) Surgical Systems drove this growth in revenue in the fourth quarter of 2000, compared with 4 da Vinci(TM) Surgical Systems in the fourth quarter of 1999 and 8 da Vinci(TM) Surgical Systems in the third quarter of 2000. Full fiscal year 2000 sales of $26.6 million, increased $16.4 million, or 161%, compared to fiscal year 1999 sales of $10.2 million.

Gross margin for the fourth quarter of 2000 was 41%, excluding the impact of a $1 million non-routine royalty charge taken during the quarter, compared with 5% for the fourth quarter of 1999 and 40% for the third quarter of 2000. This improvement resulted from higher sales and increased manufacturing efficiencies. Including the non-routine royalty charge, fourth quarter 2000 gross margin was 32%.

Net loss for the fourth quarter of 2000 was $5.0 million, compared to a net loss of $5.2 million for the fourth quarter of 1999 and $4.0 million for the third quarter of 2000. Excluding the impact of the non-routine royalty charge, fourth quarter 2000 net loss would have been $4.0 million. Basic and diluted net loss per share was $0.14 for the fourth quarter of 2000, compared to a net loss per share of $0.98 for the fourth quarter of 1999 and $0.12 for the third quarter of 2000. Excluding the impact of the non-routine royalty charge, fourth quarter 2000 net loss would have been $0.11 per share. Net Loss for the fiscal year ending December 31, 2000 was $18.5 million compared to a net loss of $18.4 million for fiscal year 1999. Net loss per share for the fiscal year ending December 31, 2000 was ($0.78) compared to a net loss per share of ($3.81) in fiscal year 1999.

The company will also announce these results at a conference call today at 1:30 p.m. PST. The toll-free dial-in numbers for this call are 800/369-1714 for U.S. calls and 312/470-0009 for international calls. The passcode is ISRG and the meeting leader is Lonnie Smith.

Commenting on the announcement, Lonnie Smith, president and CEO of Intuitive Surgical said: "We are very pleased with our fourth quarter financial results and our continued revenue growth. We have enjoyed continued system usage and procedure growth while expanding our field support organization to better serve all of our customers."

About the da Vinci(TM) Surgical System:

The da Vinci(TM) Surgical System consists of a surgeon's viewing and control console having an integrated, high-performance InSite(TM) 3-D vision system, a patient-side cart consisting of three robotic arms that position and precisely maneuver endoscopic instruments and an endoscope, and a variety of articulating EndoWrist(TM) Instruments. By integrating computer-enhanced technology with surgeons' technical skills, Intuitive believes that its System enables surgeons to perform better surgery in a manner never before experienced. The da Vinci(TM) Surgical System seamlessly and directly translates the surgeon's natural hand, wrist and finger movements on instrument controls at the surgeon's console outside the patient's body into corresponding micro-movements of the instrument tips positioned inside the patient through small puncture incisions, or ports.

The statements contained in this release may be deemed to contain "forward-looking statements." Such statements are indicated by words or phrases such as "anticipate," "estimate," "projects," "believes," "intends," "expects" and similar words and phrases. Actual results may differ materially from those expressed or implied in any forward-looking statement as a result of certain risks and uncertainties, including, without limitation, competition and market acceptance of the Company's products, ability to obtain regulatory approvals and third-party reimbursement, ability to raise additional capital and other risks and uncertainties detailed in the Company's Securities and Exchange Commission filings. Prospective investors are cautioned not to place undue reliance on such forward-looking statements.

                   INTUITIVE SURGICAL, INCORPORATED
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                 (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                Three months ended
                                                Dec. 31,      Dec. 31,
                                                  2000          1999

Sales                                            10,706         3,277
Cost of sales                                     7,289         3,103
     Gross profit                                 3,417           174

Operating costs and expenses:
     Research and development                     3,110         2,988
     Selling, general and
      administrative                              6,626         2,674
         Total operating costs
          and expenses                            9,736         5,662

Loss from operations                             (6,319)       (5,488)

Interest income                                   1,429           389
Interest expense                                    (92)         (113)

Net loss                                       $ (4,982)     $ (5,212)

Weighted average shares outstanding
 used to compute net loss per share              35,139         5,335

Loss per share -- basic and diluted            $  (0.14)     $  (0.98)


                   INTUITIVE SURGICAL, INCORPORATED
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                 (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                  Year ended
                                                  Dec. 31,    Dec. 31,
                                                    2000        1999

Sales                                             26,624       10,192
Cost of sales                                     18,031        9,273
     Gross profit                                  8,593          919

Operating costs and expenses:
     Research and development                     11,734       11,130
     Selling, general and
      administrative                              19,136        9,338
         Total operating costs
          and expenses                            30,870       20,468

Loss from operations                             (22,277)     (19,549)

Interest income                                    4,158        1,540
Interest expense                                    (404)        (406)

Net loss                                        $(18,523)    $(18,415)

Weighted average shares outstanding
     used to compute net loss per share           23,797        4,837

Loss per share -- basic and diluted             $  (0.78)    $  (3.81)


                   INTUITIVE SURGICAL, INCORPORATED
                      CONSOLIDATED BALANCE SHEETS
                            (IN THOUSANDS)

                                               Dec. 31,      Dec. 31,
                                                 2000          1999

Assets
Current assets:
    Cash, cash equivalents and
     short-term investments                      89,441        26,260
    Accounts receivable                           6,444         2,044
    Inventories                                   6,075         2,861
    Prepaid expenses                              1,705           581
      Total current assets                      103,665        31,746

Property and equipment, net                       4,669         2,709
Other assets                                      4,086          --

Total assets                                    112,420        34,455

Liabilities and stockholders' equity
Current Liabilities:
    Accounts payable                              7,127         2,722
    Accrued compensation and employee
     benefits                                     2,609         1,325
    Warranty provision                            1,494           812
    Accrued liabilities                           3,028         1,116
    Deferred revenue                              3,552         2,130
    Current portion of notes payable              2,019         1,618
      Total current liabilities                  19,829         9,723

Notes payable                                     1,861         2,521

Stockholders' equity
    Preferred stock                                --
                                                                   19
    Common stock                                     36
                                                                    7
    Additional paid-in capital                  186,713        98,508
    Deferred compensation                        (2,483)         (943)
    Accumulated deficit                         (93,670)      (75,147)
    Accumulated other comprehensive
     income                                         134          (233)
      Total stockholders' equity                 90,730        22,211

Total liabilities and stockholders'
 equity                                         112,420        34,455