Intuitive Surgical Inc ISRG
Q2 2013 Earnings Call Transcript

Transcript Call Date 07/18/2013

Operator: Ladies and gentlemen, thank you for standing by and welcome to the Intuitive Surgical Q2 2013 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later will conduct the question-and-answer session and instructions will be given at that time. As a reminder, this conference is being recorded.

I would now like to turn the conference over to our host, Calvin Darling, Senior Director of Finance for Intuitive Surgical. Please go ahead, sir.

Calvin Darling - Senior Director of Finance: Thank you. Good afternoon, and welcome to Intuitive Surgical's second quarter earnings conference call. With me today, we have Gary Guthart, our President and CEO; Marshall Mohr, our Chief Financial Officer; and Aleks Cukic, our Vice President of Strategic Planning.

Before we begin, I would like to inform you that comments mentioned on today's call may be deemed to contain forward-looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail in the Company's Securities and Exchange Commission filings, including our most recent Form 10-K filed on February 4, 2013, and our Form 10-Q filed on April 19, 2013. These filings can be found through our website or at the SEC's EDGAR database. Prospective investors are cautioned not to place undue reliance on such forward-looking statements.

Please note that this conference call will be available for audio replay on our website at on the Audio Archive section under our Investor Relations page. In addition, today's press release has been posted to our website. Today's format will consist of providing you with highlights of our second quarter's results as described in our press release announced earlier today, followed by a question-and-answer session.

Gary will present the quarter's business and operational highlights. Marshall will provide a review of our second quarter financial results. Aleks will discuss marketing and clinical highlights then I will provide an update to our financial forecast for 2013 and finally, we will host a question-and-answer session.

With that, I'll turn it over to Gary.

Gary S. Guthart, Ph.D. - President and CEO: Thank you for joining us today. As we previously announced, our second quarter has been a challenging one. Capital sales fell 5% from the prior year, with the shortfall concentrated in the United States. We attribute the miss primarily to slower than expected da Vinci benign gynecology procedure growth in the United States. Taking globally overall procedure performance in the quarter was solid, rising 18% over prior year in the phase of several headwinds.

Summarizing procedures in the United States, strong general surgery growth continued centered within Single-site cholecystectomy and colorectal resections. In gynecology dVH for malignant conditions was solid, while dVH growth for benign indications grew more slowly than expected. Urologic procedures continue to be stable.

In Europe, procedures grew sequentially over Q1, led by urology an early growth in malignant dVH. Growth was strongest in the U.K. and Nordic countries, moderate in the core countries and weakest in the South. Procedure growth in Asia was strong off of a small base, but by growth in urology and general surgery with particular strength in Japan, Taiwan and China.

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