Hansen Medical's CEOs Discuss 1Q 2012 Financial Results - Earnings Call Transcript

May. 2.12 | About: Hansen Medical, (HNSN)

Call start: 17:00

Call End: 18:00

Hansen Medical, Inc. (NASDAQ:HNSN)

1Q 2012 Earnings Call

May 2, 2012 17:00 p.m. ET

Executives

Bruce J Barclay – President and Chief Executive Officer

Peter J. Mariani – Chief Financial Officer

Analysts

Bill Carlyle – Morgan Stanley

Brooks West – Piper Jaffray

Jeffrey Cohen – Ladenburg Thalmann & Co.

Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Hansen Medical 2012 First Quarter Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator instructions) This conference is being recorded today Wednesday, May 2, 2012.

I'd now like to turn the conference over to Mr. Pete Mariani, Chief Financial Officer. Please go ahead, sir.

Peter J. Mariani

Thank you, Operator, good afternoon everyone. Welcome to Hansen Medical's 2012 first quarter results conference call. With me today is Bruce Barclay, Hansen Medical's President and Chief Executive Officer.

As we begin today's call, please remember that our prepared remarks and responses to questions will contain forward-looking statements that are subject to a number of risks and uncertainties. All statements other than statements of historical fact could be deemed forward-looking statements, including statements containing the words; plan, expects, potential, believe, goal, estimate, anticipate and similar words.

These statements are based on the current estimates and assumptions of our management as of the date of this call and are subject to risks, uncertainties, changes and circumstances and other factors that may cause actual results to differ materially from the information expressed or implied by such forward-looking statements.

Examples of such statements include statements about the potential timing of FDA clearance of our Magellan Robotic System in the U.S., the timing of future clinical cases to be performed with the System, the potential benefits of the System on vascular procedures, and the timing of commercialization our Magellan System; as well as statements about the anticipated increase in adoption of our Sensei platform for electrophysiology procedures.

Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, among others: engineering, regulatory and sales challenges in developing new products and entering new markets; potential safety and regulatory issues that could slow or suspend our sales; the uncertain timelines, costs and results of pre-clinical and clinical trials; the rate of adoption of our systems and the rate of use of our catheters; the scope and validity of intellectual property rights applicable to our products; competition from other companies; our ability to maintain our remedial actions over previously reported material weaknesses in internal controls over financial reporting; the effect of credit, financial and economic conditions on capital spending by our potential customers; our ability to manage expenses and obtain additional financing; and other risks more fully described in the Risk Factors section of our Quarterly Report on Form 10-K filed for the quarter ended December 31st with the FCC on March 15th, 2012, and the risks discussed in our other reports filed with the SEC.

Given these uncertainties you should not place undue reliance on the forward-looking statements included in our remarks and responses to questions. We undertake no obligation to revise or update information herein to reflect events or circumstances in the future even if new information becomes available.

Bruce J. Barclay

Thank you, Pete. Good afternoon, everyone. Thank you all for joining us today for our first quarter 2012 conference call. In today's call I will provide an update on our strategic initiatives, discuss our achievements in the first quarter, and review our plans going forward. I'll then turn the call over to Pete who'll provide a review of our financial results. Finally, we'll open up the call to your questions.

As you've seen from today's press release, there is a growing level of interest and excitement for our Magellan Robotic System, as a result of positive growing and clinical experience in Europe and the progress we're making in the U.S. with our pending 5-PenK application.

In the first quarter revenues were $4.7 million which is down 12% from a year ago period. We shipped three systems, all in the U.S., two Sensei systems and one vascular research system and recognized revenue on four systems in total. As is the case for many companies doing business in Europe, the economic environment in that region has been challenging. Not surprisingly this is resulting in hospitals taking a more careful view of their capital investments.

We are experiencing longer sales cycles as hospitals consider the clinical and economic benefits for all capital outlays. Further, capital sales cycles have always been about 6 to 18 months even in the best of times. In spite of this we continue to see strong clinical interest in our Magellan system, and we are engaged with several hospitals to develop deal structures that address their economic needs and allow them to complete their internal approval process.

We continue to anticipate the completion of multiple deals over the coming quarters. Pete will provide more color on the first quarter financial results in a few minutes.

I'll start with a review of our vascular business. As we discussed in the past, flexible robotics in vascular applications is a key growth driver for the business. And we believe it will revolutionize the way endovascular procedures are performed. Our initial focus, the peripheral vasculature, presents a significant market opportunity one that we believe is anywhere from five to seven times larger than for electrophysiology. Peripheral vascular disease affects an estimated 27 million patients worldwide according to published industry studies.

Our next generation of flexible robotics technology offers several potential benefits over conventional techniques. Perhaps most importantly it allows for independent, individual robotic control of the distal tips of both the outer sheath and the inner leader catheter as well as robotic manipulation of standard guide wires. Its unique competitive advantages enable more precise and more predictable catheter navigation of peripheral vessels, and it reduces procedure time and lessens radiation exposure.

In addition to physicians and patients, we believe our Magellan Robotic System will provide important benefits to hospitals, with the opportunity to deliver therapies in an environment that is more predictable than conventional endovascular techniques, and thereby potentially expand the volume of patients through their centers. Additionally, by reducing procedure times, and streamlining endovascular interventions, physician procedural fatigue is reduced. Accordingly, our robotic technologies could help hospitals increase their Cath Lab and OR utilization, and throughput, and manage case scheduling more efficiently.

Let me now update you on the commercialization status of the Magellan system, first in the U.S., and then in Europe. As we announced on last quarter's earnings call, early February we submitted our response to all of FDA's outstanding questions regarding the five 10-K pre-market notification application, and provided additional non-clinical data for our Magellan system and Northstar catheter. We are still targeting receipt of FDA clearance and to begin our commercial launch in the U.S. this quarter.

In Europe, our commercialization plan has been the focus on a limited number of hospitals and physicians that can go through the necessary training and work with us in their clinical case selection, to make sure simpler cases are performed before more complex ones, and present the data generated at leading international symposium physicians performing endovascular and interventional procedures. The execution of this strategy is going very well at St. Mary's Hospital in London, under the direction of Professor Nick Cheshire.

Professor Cheshire and his multi-disciplinary team underwent extensive training late last year, and along the way we discovered a number of useful techniques to help in the clinical theater.

Next, they began their clinical experience with simple cases, lower extremity PAD, before progressing to more complex ones like stint graft procedures, specifically in the abdominal and thoracic aorta, and now have advanced their robotic skills to successfully treat very complex cases with difficult anatomy, some of which require fenestrated endografts.

Professor Cheshire and his team are presenting their clinical work at leading conferences worldwide, including the [inaudible] conference in London where four different physician presentations were made to some of the more than 1,000 physician attendees.

Clinical interest is strong, and gaining momentum, as more clinical data becomes known about the Magellan Robotic System's diverse use in the peripheral vasculature with good outcomes. The week following [inaudible], the clinical team at St. Mary's performed three patient procedures, all in difficult clinical anatomy, and the robot performed extremely well. As importantly, these three cases were observed by visiting physicians as part of their hospital's purchase programs to better understand the potential of the system, and to speak with the St. Mary's team about its clinical benefits.

In total, about 35 visiting physicians representing 9 different hospitals and 5 different countries observed these 3 cases, and we believe they left with a strong positive impression of the product.

I'll briefly describe some of the clinical cases performed that week and the excellent outcomes observed. Two of the cases were fenestrated endografts and one was an infrarenal endograft case. These three cases alone represented over ten cannulation or access targets inside the patients and yet only one Northstar Robotic catheter and one guidewire were used for each patient.

This is yet another advantage of the Magellan. It's quite common in manual cases for multiple catheters and multiple guide-wires to be used when there are multiple clinical targets in the patient, adding cost and time to the procedure.

Each case was difficult for the physicians to access vessels manually but overall, the cases were extremely successful with the robotic approach. Not only were these cases positively observed by the potential physician customers but the cases demonstrate superior robotic navigation to access the target vessels where manual catheter navigation repeatedly failed.

In the first fenestrated case, the right renal artery cannulation was attempted manually but was extremely challenging. It was attempted manually for approximately one hour, but the guidewire could not be placed into the target artery. During this manual attempt, three different conventional access catheters were used but all failed to allow guidewire access. The robotic approach was then tried and the guidewire was placed within five minutes.

The left renal artery cannulation was more straightforward and accomplished quickly with the robot.

In the second fenestrated case, the robotic approach was used to successfully cannulate both the right and the left renal arteries since the physicians did not even attempt manual as they believed the robotic technique was vastly superior. The left renal anatomy was very complex and according to the operating team, this cannulation would not have been possible by manual catheter navigation.

The third endograftcase required cannulation of the infrarenal endograft. Robotic catheter navigation was chosen due to the complex angulation of the left common iliac artery. In this case both tip articulation and full support of the robotic catheter was necessary to get the guide-wire and catheter's leader into the targeted opening of the endograft.

Our experiences with the commercial launch in Europe has helped inform our approach for our initial commercial launch in the U.S. We continue to believe it would be most effective to employ a similar controlled launch in which we partner with influential physicians who are thought leaders in the space and generate positive clinical experiences and data to drive both interest and adoption among other physicians and hospitals.

As we previously announced, we have the preliminary success partnering with leading hospitals and physicians here in the U.S. to conduct pre-clinical research. Earlier this year we announced that two hospitals, the Methodist Hospital in Houston and the Hartford Hospital in Hartford Connecticut each purchased a vascular research robotic system to expand their flexible robotic technology capability.

Both hospitals previously owned multiple Hansen Medical flexible robotics systems and are creating an institutional focus on flexible robotics. We believe their recent purchases of vascular research systems not only validates the importance of flexible robotics in the future of vascular disease treatment it also reaffirms their confidence in the value proposition of our robotic technology.

We are investing in sales and marketing capabilities across key geographies including Europe, the Middle East and Asia. We are continuing to develop a sales team with a more extensive vascular and clinical sales background. We have actively engaged with hospitals in each of these regions and are tailoring our approach to these markets.

In particular, Pete and I have also spent considerable time in the field in Europe with these hospitals and our sales team. We have a very clear understanding of their needs. We will continue to play a significant role in this process.

Now moving on to our second imperative, I'll discuss our EP business.

In the first quarter physicians performed an estimated 336 procedures, up 1% sequentially and down 5% over the first quarter of 2011. Catheter sales were 574, down 20% sequentially and 17% year-over-year as customers adjusted inventory balances for the first time in 5 sequential quarters.

These results include a small number of vascular catheters sold and procedures performed in the first quarter at the St. Mary's Hospital. A bright spot for us is that procedures are growing incrementally across Europe as a record number of procedures were performed by physicians in the quarter.

However in the U.S., procedures performed continue to be negatively impacted as we hire and train new experienced sales and clinical personnel and introduce them to their accounts. Over the long term we believe these changes will provide significant benefit to our commercial capability. However, our first quarter procedures were negatively impacted by this transition in the U.S.

We are continuing to build momentum in EP and as of the of the quarter the number of the procedures since launch of the Sensei System is now over 8,000 cases as physicians are clearly experiencing the benefits of our Sensei System. Not only does our robot lessen procedure time and reduce radiation, this unique technology is powered by a highly accurate robotically controlled arm that allows for catheter navigation, catheter stability and positioning within the patient's heart.

Moreover, it changes the way physicians operate and in support of benefits associated with our Sensei System several leading heart centers now own more than one robot.

The body of Published Clinical Data establishing the safety and efficacy of Sensei continues to grow, the 1,028 robotic patient survey data which was presented at the AHA in November of 2011, and as I discussed in the last earnings call, has now been published in a major publication, "The Journal of Cardiovascular Electrophysiology."

As a reminder, the data presented is from a multicenter, worldwide survey evaluating the safety and efficacy of robotic navigation with the Sensei System in atrial fibrillation procedures compared to manual technique as a historical control. The overall complication rate across the entire survey was similar for robotic as compared to manual navigation.

In particular, the authors concluded, "The Hansen Robotic System can be used for AF ablation safely." After an average of follow-up of 18 months the success rate of robotic procedures was slightly superior at 67% compared to that of manual procedures at 64%. Most compelling in the survey data are the benefits that robotic navigation demonstrated in both safety and efficacy as AP's gained experience with the Sensei Robotic System with patients with cardiac arrhythmias.

Also a second publication was released in the quarter from a single center in South Africa of their first 100 procedures and again concluded that the Sensei was safe and effective for the treatment of A Fib. In total more than 20 clinical papers have been published on the Sensei System since its initial commercial launch.

Now I'll move to our third strategic imperative: operational excellence. This quarter we've strengthened our sales team internationally and enhanced our management team with the addition of Joe Guido as Vice President of Marketing and business development. Joe is a veteran of the medical device space, and has significant experience with sales and marketing with companies such as Intuitive Surgical, Abbott Vascular and Stryker.

He has a track record of developing and executing successful global marketing strategies, launching new products, capturing market share in both established and emerging markets, and forging long term partnerships with both hospitals and physicians. Though he has only been here for about a month he has already made a positive impact on our marketing strategy.

In addition we appointed two healthcare industry veterans, Mr. Bill Rohn and Mr. Mike Eagle, to our board of directors both with extensive operational, commercial and manufacturing experience as executives and on the boards of both public and private healthcare companies. We welcome them both to the board.

We also want to thank Mr. Joe Mandato for his years of advice, counsel and exceptional service on the board and wish him well.

In closing it is our belief that the unique and differentiated value proposition for our next generation robotic platforms will accelerate the overall market adoption of flexible robotics and generate significant shareholder value over the long term. We're developing excellent clinical experience in our initial cases at St. Mary's Hospital in London.

The level of clinical interest continues to grow. We are actively engaged with several hospitals considering a Magellan purchase. Further, we are able to leverage key learnings from our controlled launch strategy to fine tune our sales approach both in Europe and eventually in the U.S. And we are preparing for the imminent commercial launch in the U.S. of our robotic technology for vascular applications.

That concludes my prepared remarks. With that I'll pass the call over to Pete for his review of the financials. Pete?

Peter J. Mariani

Thank you, Bruce. As mentioned earlier, we recorded quarterly revenues of $4.7 million primarily on the recognition of revenue on four robotic systems and the sale of 574 catheters. The company shipped a total of three systems all of which were recognized as revenue in the quarter. Revenue declined 12% over the first quarter of 2011 where we recognized revenue on five systems and sold 693 catheters. Revenue was down 25% compared to the fourth quarter of 2011 where we recognized revenue on eight systems and sold 714 catheters. However, four of the eight systems recognized in revenue in the fourth quarter of 2011 were sold in previous quarters.

In the fourth quarter physicians conducted an estimated 636 procedures. This is up 1% compared to 633 procedures performed last quarter, and is down 5% when compared to the year ago period. The decrease in catheter sales in the first quarter is primarily due to customers adjusting their inventory levels resulting in a level of catheter sales which is below the number of procedures performed for the first time in five consecutive quarters.

As we discussed last quarter, given that our recently launched Magellan system has a much higher list price than the Sensei system, and in recognition of multiple ongoing customer conversations regarding the potential purchase of a system and the competitive nature of the marketplace, we are no longer breaking out ASP's for robotic systems shipments. We will also no longer break out ASP's for catheter shipments given the three different catheters we sell all with different ASP's.

Gross profit was $732,000 or 15.7% of first quarter revenues compared to gross profit of $817,000 or 15.5% of revenues of first quarter of 2011 and $1.6 million or 25.4% of revenues in the previous quarter. The decrease in margins compared to last quarter is primarily due to the decline in the number of systems recognized as revenue as well as variances in manufacturing activity as we build inventory in anticipation of U.S. commercial launch of our Magellan system.

Total operating expenses were $11.7 million in the first quarter compared to $12.2 million in the same quarter of last year and $10.8 million in the previous quarter. Operating expenses from last quarter and a year ago period include funded, research and development credits recorded as a reduction of expense from the company's now completed work under the joint development agreement with Phillips totaling $2 million in Q1 of 2011 and $3.7 million in Q4 of 2012. Additionally, total non cash stock compensation expense was $279,000 in the first quarter of 2012 compared to $2.3 million in the first quarter of 2011 and $1.2 million in the fourth quarter of 2011.

The reduction in the current quarter is primarily the result of lower equity awards compared to the first quarter of 2011, and a one-time adjustment of $740,000 related to previously recorded expenses for the company’s employee stock purchase program.

Net loss for the first quarter of 2012 was $11.8 million, or a loss of $0.20 per share.Net loss included the gain of the one-time non-cash adjustment noted above of $740,000 or $.01 per share, and interest expense of $891,000 or $0.01 per share.

In comparison, the company recorded a net profit for the first quarter of 2011 of $11.7 million or $0.21 per diluted share.

The net profit included a gain of $23 million or $.41 per diluted share on the sale of the non-robotic rights associated with the fossil technology, and gain from the Phillips credits of $2 million or $0.03 per diluted share.

Interest expense in Q1 of 2011 was only $123,000.

Also, net loss for the fourth quarter of 2011 was $9.5 million or a loss of $0.16 per share.

However, these results also include the gain from Phillips credits of $3.7 million or $0.06 per share, and one-time expenses related to the company’s debt and equity financing in the quarter of $700,000 or $0.01 per share.

Interest expense in Q4 was only $262,000.

If I can summarize our P&L, in the quarter the company recorded lower revenue and margins due primarily to a reduced number of systems in revenue.

Additionally, our results are impacted by the elimination of the Phillips credit, and additional interest expense.

However, as we discussed in our year-end conference call, and as you can see from these results, I'm pleased that the company has taken steps in Q1 to reduce spending to offset a majority of the Phillips credits and the additional interest expense.

Turning to the balance sheets, cash, cash equivalents, and short term investments as of March 31st were $38.5 million, compared to $52.2 million balance at the end of the previous quarter.

As of March 31st we have $5.9 million of deferred revenue on the balance sheet, which included five robotic systems that have been shipped, but which have not completed the revenue recognition process, as well as deferred revenue on service contracts.

The major of the systems currently classified as deferred revenue are with international distributors with whom we cooperate.

However, the ultimate timing of revenue recognition is primarily dependent on their efforts in placing the systems with their end users.

Total debt in March 31st remained at $29.2 million, flat with the December 31 balance. In Q4 of 2011, the company repaid its previous $3.6 million loan balance and recorded a new debt facility of $30 million. This new facility allows for interest only payments through the first 12 months of the agreement, which will be extended an additional 6 months if we receive FDA clearance of the Magellan system by December 31st, 2012.

Finally, net cash used in the quarter was $13.7 million. In the fourth quarter of 2011, net cash used was $9.4 million, excluding the proceeds and direct costs of our financing activities. However, this amount also included a $3 million milestone payment earned and received from Philips in the quarter. Excluding this milestone payment, net cash used in the fourth quarter would have been $12.4 million.

By comparison, our Q1, 2012 cash flow has been negatively impacted by lower systems sales, inventory build in support of the anticipated U.S. Magellan launch, and the delayed collection of approximately $1.5 million of accounts receivable, which were due in the first quarter of 2012 but were not collected until April.

In summary, as we discussed, the company is taking steps that we believe will improve margins based on our volume assumptions of product sales for the year. We also continue to believe that operating expenses will increase only moderately over prior year, as we are taking steps to offset a majority of the Phillips credits.

Additionally, we continue to develop improvements in product design and material sourcing, implement lean manufacturing processes, make strategic investments to support the commercial success of our vascular and EP platforms, and chart our profitability. This path continues to be dependent upon clinical adoption and growth of these platforms and we believe that we are on the right track to support and drive this growth, and improve our financial results.

Finally, our cash position is expected to remain sufficient to fund the company's operations at least through the initial commercialization of Magellan.

That concludes our summary of the financials. I'd like to pass the call back to the operator for Q&A.

Question-and-Answer Session

Operator

Thank you, sir. Ladies and gentlemen, we'll now begin the question-and-answer session. (Operator Instructions)

Our first question is from the line of Brooks West with Piper Jaffray. Please go ahead.

Brooks West - Piper Jaffray

Hi guys. Can you hear me? Thanks for taking the questions. First, let me start with Magellan and then I want to go to the legacy EP business. You say you're still confident in a Q2 approval. Anything else that can be said there? Any other interaction with FDA, or are you still just kind of waiting for the facts?

Bruce J. Barclay

We have had questions from the FDA in an interactive format that they do use on occasion and from that process again nothing is finalized but it appears to us that we are answering their questions as asked and narrowing the issues and so as we said in our communications, we continue to feel good about a Q2 release.

Obviously nothing is certain until you actually have the release, the cleared statement in your hand, but we continue to feel good about that date.

Brooks West - Piper Jaffray

Okay. And then you mentioned that EU environment and obviously we all read the papers. It sounds like you're having some contract negotiations maybe drag out. Has that impacted your pricing strategy on the new robot? I know it's priced significantly higher than Sensei, maybe over $1 million. Any comments there about maybe changing that strategy given the environment to get some systems out there?

Bruce J. Barclay

Pricing certainly has come up. I would say we continue to feel like the Magellan is a premium price system compared to the Sensei. So it's hard to draw conclusions from where we are at this point with just the one system placement. But that certainly comes up so we're going to keep that in mind as we go forward but I don’t want to make any rash decisions because once you lower the price, it's hard to go back up from a total market perspective.

I would say more of the discussion really is around just the flexibility and structuring the payments and identifying the source of the funds within the hospitals whether it's within the hospital itself, or within foundations that oftentimes even in good times support hospitals with capital purchases or facility purchases. So we're working through those systems with a number of different accounts, trying to remain as flexible as we can but still keep the long-term prospects for the business and benefits for the business in mind going forward.

Brooks West - Piper Jaffray

Okay. Thanks for that. And let me shift then to the EP business. Procedures hanging in there, obviously, orders disappointing. Can you, Pete, maybe remind us what the split between the European and U.S. markets are in terms of procedure volumes?

Peter J. Mariani

Roughly, it's 50/50. But from time to time, one is higher than the other. And like we said in the first quarter of this year, Europe had a record quarter in procedures and the U.S. stepped back a bit.

Bruce J. Barclay

And again Brooks, I would just say just to remind you from the comments, this is the first quarter in five quarters where we've actually had procedures be higher than catheters and so we would have expected at some point there would be some slight adjustment but and obviously would have liked to have seen the catheters sales higher but again, we continue to see good trends going forward.

Brooks West - Piper Jaffray

And that actually is a good lead in to my follow up there. Is the weakness in orders also in the U.S., or the inventory management also in the U.S..

I'm trying to tease out, it sounds like the European market is doing just fine, but given the sales turnover you've had in the U.S. is there a concern that maybe that's a trend we're going to see for some time, given lack of orders, lack of procedures.

Peter J. Mariani

Yes, to answer your first question first, interestingly we saw inventory pulled back in both Europe and the U.S., so it wasn't one over the other.

What was the second part of your question?

Brooks West - Piper Jaffray

Just trying to, I mean, it was a back-up there. I was trying to relate the destocking to where the procedures, and should we be prepared for a trend of weakness in the U.S. until you get the sales fired up again, on a Sensei product.

Peter J. Mariani

I don't know. I don't think we know that for sure other than the fact of the matter is we continue to upgrade this U.S. force, we're doing the right things, in pockets we're having a good success. We continue to have a few issues that we resolved with the sales force after the end of this first quarter, and we're continuing to make changes.

I think as these folks come up to speed and work with their accounts, we're going to see the same type of strength that we're seeing in Europe.

Now, whether that begins in this quarter or over the next few quarters I think is still an open fair question.

Bruce J. Barclay

Yes, the comment that I would make too, Brooks, is that, if you take a step back we're continuing to sell in place Sensei systems every quarter. Political data, as I mentioned in my prepared remarks, continues to come out, continues to be very supportive of the value driven by the technology.

If you look at the higher level leading indicators, we continue to feel encouraged and optimistic about the EP business. We've also said that, that by itself isn't enough for us to get to where we want to be with our financial objectives for the company, therefore we're adding the second platform.

Again, I would what Pete said is right. We are investing in the U.S. sales organization, we've got the right management structure in place, we've got the right set of experiences that we're looking for to bring into the field force, and there is some transition along what (inaudible).

Brooks West - Piper Jaffray

Okay. Thanks for that Bruce. Maybe last question, I know you guys don't give guidance, but you've got consensus estimates kind of sitting just North of 30 million. Any feel you can give us there for appropriateness of that number, would be much appreciated. Thanks.

Bruce J. Barclay

Yes, we can't give guidance. We can't confirm or not that number that's out there.

Brooks West - Piper Jaffray

Right.

Bruce J. Barclay

As we said in the past, there's lots of moving parts to the business especially until we get that clearance from the FDA in our hands for Magellan, so that's where we'll leave it for now.

Brooks West - Piper Jaffray

Okay, guys, thanks for taking the questions.

Bruce J. Barclay

Yes. Thanks for the call.

Operator

Thank you. Our next question is from the line of Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.

Jeffrey Cohen - Ladenburg Thalmann & Co.

All right. Thanks for taking my questions; a few short ones. For the quarter there were four systems shipped. They were all U.S.?

Bruce J. Barclay

There were three systems shipments all U.S., four [inaudible].

Jeffrey Cohen - Ladenburg Thalmann & Co.

Okay. So the two Sensei's and one vascular developmental unit in the U.S. and then a fourth system that was recognized was also U.S.?

Peter J. Mariani

No, it was actually our European system.

Jeffrey Cohen - Ladenburg Thalmann & Co.

Okay. Got it. So you're no longer going to provide any guidance or metrics on any catheters?

Peter J. Mariani

That's right.

Jeffrey Cohen - Ladenburg Thalmann & Co.

And no breakout from the revenue number between disposable revenue or Sensei's or Magellan’s?

Peter J. Mariani

That's correct. We're not going to do that right now.

Jeffrey Cohen - Ladenburg Thalmann & Co.

Okay. The cases that you talked about out of St. Mary's were they all femoral access?

Bruce J. Barclay

Yes, they were, the clinical cases. Yes.

Jeffrey Cohen - Ladenburg Thalmann & Co.

Okay. And were they fenestrated stents delivered or fenestrated access?

Bruce J. Barclay

They were delivered. Access first and then ultimately delivered, right.

Jeffrey Cohen - Ladenburg Thalmann Co.

Okay. Were they delivered with the robot?

Bruce J. Barclay

Not in all cases. I think in some cases there was a size mismatch that wouldn't have allowed that, but not in all cases.

Jeffrey Cohen - Ladenburg Thalmann & Co.

Okay. Can you say anything about Q2 thus far, as far as backlog of catheters? I mean I know you have a backlog that has always been out there except this is the first quarter I've seen in the past couple of years where it has been worked off. Have you seen a continuation of that trend in Q2, or not yet? Or is it too early to tell?

Bruce J. Barclay

Yes, it's too early to say, Jeff, at this point. I wouldn't want to comment too soon. The quarter's really just begun.

Jeffrey Cohen - Ladenburg Thalmann & Co.

Okay. Any ramifications of stereotaxis from Q1?

Bruce J. Barclay

You mean relative to their current financial position? Or what are you referring to?

Jeffrey Cohen - Ladenburg Thalmann & Co.

Yes, their financial position or their sales position versus yours for the quarter in the EP space.

Bruce J. Barclay

I'm not going to comment specifically about stereotaxis currently other than what I typically say which is that our primary objective, and I would think their primary objective, is to convert more manual conventional technique into remote access technique. And if we can do that and find accounts that want to convert, then I feel very good about our position in terms of convincing them that Hansen is the right technology but beyond that I won't comment.

Jeffery Cohen

Okay. All right. Pete, at the end of your remarks you were talking about this $5 million receivable that you said was collected in April. So, we should expect a receivable number from you to be lowered? That is what you work with.

Peter J. Mariani

I'm not sure about your question, Jeffery. I thought you said $5 million. My comments said $1.5 million of receivable that were due in the first quarter were actually collected in April.

Jeffrey Cohen - Ladenburg Thalmann & Co.

Okay. It was 1.5. Okay. I got it.

Peter J. Mariani

That's right.

Jeffrey Cohen - Ladenburg Thalmann & Co.

Okay. And I think that does it for me. Let me just, yes. That's good. Thanks a lot guys. I appreciate it.

Bruce J. Barclay

Okay. Thanks for the call Jeff.

Operator

Thank you. (Operator instructions)

The next question is from line of Dave Lewis. Morgan Stanley. Please go ahead.

Bill Carlyle - Morgan Stanley

Good afternoon, gentlemen. This is Bill Carlyle on for David.

Bruce J. Barclay

Hi, Bill.

Peter J. Mariani

Hi Bill.

Bill Carlyle - Morgan Stanley

First, I want to follow-up on the customer inventory reduction a little bit. We did get similar reports from other market competitors. I was hoping maybe you could elaborate on what's riding those reductions. Whether it be industry factors, or something more specific such as the sales circle.

Bruce J. Barclay

Not at all. I think to compare between other companies. I'm not sure which ones you're referring to, would be I think unfair, given the fact we've had five consecutive quarters where we sold more catheters then procedures. And so, to some extent this is simply an expected adjustment. We continue to see a strong interest in the technology, quarterly placement of systems, of Sensei systems on the EP side, and strong and informatory data that's published routinely.

As I said, most recently from 1,728 robotic patients most recently published in this tier one publication. We continue to see positive high-level trends. And I think for us the adjustment is just to some extent not unexpected.

Bill Carlyle - Morgan Stanley

Okay. That's very helpful and that's it for me.

Operator

Thank you. And I'm showing no further questions in the queue at this time. Please continue with closing remarks.

Bruce J. Barclay

Thanks very much, Operator. Thanks to everyone who joined us today for the call. We look forward to providing you with the results of our second quarter results in August.

Operator

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.

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Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

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