Biotech Values

[microcapfun]

>>If the procedure count is the metric of all metrics by which investors should be evaluating ISRG’s business, doesn’t it seem odd that this isn’t disclosed on a quarterly basis?<<

Intuitive has always discussed annual guidance and targets, rarely quarterly numbers beyond revenue, revenue breakdown and a few others. So this is not something new that they are hiding because their business is self-destructing and they want to hide that for another quarter or two. Quite the contrary. Intuitive has hardly ever given quarterly procedure numbers, but they did give the number for 1Q09. Nevertheless they do emphasize procedure count as a key metric and have for many years.


>>There should be no seasonal slowdown whatsoever in Q1, so it makes perfect sense to compare the 1Q09 procedure count to the 4Q08 procedure count.<<

I was talking about comparing I&A revenue, NOT the procedure count. Let me explain why it does not make perfect sense to compare the 1Q09 I&A revenue to the 4Q08 I&A revenue.

As I said in a previous post, da Vinci system sales tend to peak in Q4. (This is apparently due to the sales force wanting to make their quotas in order to get their huge bonuses - which depends on the number of systems sold by December 31 of each year. It also may depend on hospital administrators wanting to spend their cap ex budget before the end of the year and not have anything left which might reduce their following-year allocation.) With each system purchased by a hospital is an order for an inventory of instruments - typically several months worth, I think. That's why it doesn't make perfect sense to compare the 1Q09 I&A revenue to the 4Q08 I&A revenue - although you can certainly do it.

Comparing 1Q09 procedure count to 4Q08 procedure count would make perfect sense. I just don't know the 4Q08 procedure count.


I realize most companies tend to hide the bad and flaunt the good, but if you followed Intuitive for a decade you'd know that they are an unusually conservative company. They often guide to 'hits' which do not come to pass - an expected dip in gross margin due to a change in manufacturing or the introduction of a new da Vinci model, for example. So not having followed the company you are absolutely right to have quivering antennas and look for dirt under every rock. But as one who has followed the company since the IPO in the year 2000, I am here to tell you that Intuitive is the rare company which will lift up the rocks for you and show you the dirt and even tell you about potential dirt which doesn't materialize.

micro