Intuitive Surgical Announces Fourth Quarter Earnings

Intuitive Surgical Announces Fourth Quarter Earnings

SUNNYVALE, Calif., Jan. 22, 2013 (GLOBE NEWSWIRE) -- Intuitive Surgical, Inc.
(Nasdaq:ISRG), the industry leader in surgical robotics, today reported fourth
quarter of 2012 revenue of $609 million, up approximately 23% compared with
$497 million for the fourth quarter of 2011. Fourth quarter of 2012 revenue
growth was driven by continued adoption of da Vinci surgery procedures and
higher da Vinci Surgical System sales.

Fourth quarter of 2012 instruments and accessories revenue increased 29% to
$254 million from $196 million in the fourth quarter of 2011. The growth in
instruments and accessories revenue is the result of growth in da Vinci
surgical procedures and the introduction of new products. da Vinci surgical
procedures grew approximately 25% in the fourth quarter of 2012 compared to
the fourth quarter of 2011, driven primarily by U.S. gynecology and general
surgery growth, and partially offset by a decline in U.S. prostatectomy
procedures.

Fourth quarter of 2012 systems revenue was $265 million, an increase of 18%,
compared with $225 million during the fourth quarter of 2011. The growth in
fourth quarter of 2012 systems revenue was driven by sales of 175 da Vinci
Surgical Systems compared with sales of 152 systems during the same period
last year. Fourth quarter of 2012 service revenue increased 20% to $91 million
from $75 million during the fourth quarter of 2011, reflecting growth in the
installed base of da Vinci Surgical Systems.

Fourth quarter of 2012 operating income increased to $248 million from $200
million in the fourth quarter of 2011. Operating results for the fourth
quarter of 2012 included $38 million of non-cash stock-based compensation
expense compared with $35 million for the fourth quarter of 2011.

Intuitive Surgical's income tax rate for the fourth quarter of 2012 was 30.5%
compared with 25.6% for the fourth quarter of 2011. The increase in the tax
rate reflects discrete tax benefits recorded during 2011, and the federal R&D
tax credit that expired on December 31, 2011.

Fourth quarter of 2012 net income was $175 million, or $4.25 per diluted
share, compared with $151 million, or $3.75 per diluted share, for the fourth
quarter of 2011.

Revenue for the year ended December 31, 2012 totaled $2,179 million,
increasing 24% from $1,757 million for the year ended December 31, 2011. Net
income for the year ended December 31, 2012 was $657 million, or $15.98 per
diluted share, compared to net income of $495 million, or $12.32 per diluted
share, for the year ended December 31, 2011.

Intuitive Surgical ended the fourth quarter of 2012 with $2.9 billion in cash,
cash equivalents and investments, reflecting an increase of $219 million
during the quarter. $53 million in cash was used to repurchase 102,000 shares
of Intuitive Surgical's common stock in the fourth quarter of 2012.

Commenting on the announcement, Dr. Gary Guthart, President and CEO of
Intuitive Surgical, said, "We are pleased with our fourth quarter procedure
performance and revenue growth. Our results reflect expanding da Vinci
Surgical System use across a broadening array of procedures and strong
execution by our team."

Intuitive Surgical will also announce these results at a conference call today
at 1:30 pm PST. The dial-in numbers for the call are (800) 230-1092 for
participants located in the United States and (612) 288-0337 for participants
located outside the United States. The host is Dr. Gary Guthart. To access
financial information that will be discussed on the call, please visit
Intuitive Surgical's website at www.intuitivesurgical.com.

About Intuitive Surgical's Products

Intuitive Surgical, Inc. (Nasdaq:ISRG), headquartered in Sunnyvale,
California, is the global technology leader in robotic-assisted, minimally
invasive surgery. Intuitive Surgical develops, manufactures and markets
robotic technologies designed to improve clinical outcomes and help patients
return more quickly to active and productive lives. Intuitive Surgical's
mission is to extend the benefits of minimally invasive surgery to the
broadest possible base of patients. Intuitive Surgical — Taking surgery beyond
the limits of the human hand™.

About the da Vinci® Surgical System

The da Vinci® Surgical System is a breakthrough surgical platform designed to
enable complex surgery using a minimally invasive approach. The da Vinci®
Surgical System consists of an ergonomic surgeon console or consoles, a
patient-side cart with three or four interactive robotic arms, a
high-performance vision system and proprietary EndoWrist® instruments. Powered
by state-of-the-art robotic and computer technology, the da Vinci® Surgical
System is designed to scale, filter and seamlessly translate the surgeon's
hand movements into more precise movements of the EndoWrist® instruments. The
net result is an intuitive interface with breakthrough surgical capabilities.
By providing surgeons with superior visualization, enhanced dexterity, greater
precision and ergonomic comfort, the da Vinci® Surgical System makes it
possible for more surgeons to perform minimally invasive procedures involving
complex dissection or reconstruction. This ultimately has the potential to
raise the standard of care for complex surgeries, translating into numerous
potential patient benefits, including less pain, a shorter recovery and
quicker return to normal daily activities.

Intuitive®, Intuitive Surgical®, da Vinci®, da Vinci S®, da Vinci® S HD
Surgical System, da Vinci® Si, da Vinci® Si-e^TM Surgical System, EndoWrist®,
EndoWrist^® One™, Single-Site^TM, DVSTAT®, Firefly™ and InSite® are trademarks
or registered trademarks of Intuitive Surgical, Inc.

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are necessarily estimates reflecting the best judgment of our
management and involve a number of risks and uncertainties that could cause
actual results to differ materially from those suggested by the
forward-looking statements. These forward-looking statements should,
therefore, be considered in light of various important factors, including the
following: the impact of global and regional economic and credit market
conditions on health care spending; health care reform legislation in the
United States and its implications on hospital spending, reimbursement and
fees which will be levied on certain medical device revenues; timing and
success of product development and market acceptance of developed products;
procedure counts; regulatory approvals, clearances and restrictions;
guidelines and recommendations in the health care and patient communities;
intellectual property positions and litigation; competition in the medical
device industry and in the specific markets of surgery in which we operate;
unanticipated manufacturing disruptions or the inability to meet demand for
products; the results of legal proceedings to which we are or may become a
party; our ability to expand into foreign markets; and other risk factors
under the heading "Risk Factors"' in our report on Form 10-K for the year
ended December 31, 2011, as updated from time to time by our quarterly reports
on Form 10-Q and our other filings with the Securities and Exchange
Commission. Statements concerning forecasts, revenue growth, procedure growth,
future financial results and statements using Words such as "estimates,"
"projects," "believes," "anticipates," "plans," "expects," "intends," "may,"
"will," "could," "should," "would," "targeted" and similar words and
expressions are intended to identify forward-looking statements. You are
cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date of this press release. We undertake no
obligation to publicly update or release any revisions to these
forward-looking statements to reflect events or circumstances after the date
of this press release or to reflect the occurrence of unanticipated events.


INTUITIVE SURGICAL, INC.
UNAUDITED QUARTERLY CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
                                                             
                               Three months ended
                               December 31,    September 30,   December 31,
                               2012            2012            2011
                                                             
Revenue:                                                      
Instruments and accessories     $253.8        $218.0        $196.4
Systems                         264.9          232.0          225.0
Services                        90.6           87.8           75.4
Total revenue                  609.3           537.8           496.8
                                                             
Cost of revenue:                                              
Product                         141.4           119.3           107.8
Service                         30.0            28.4            26.1
Total cost of revenue (1)       171.4           147.7           133.9
                                                             
Gross profit                    437.9           390.1           362.9
                                                             
Operating expenses:                                           
Selling, general, and           148.1           129.0           122.0
administrative
Research and development        41.7            49.7            41.4
Total operating expenses (1)    189.8           178.7           163.4
                                                             
Income from operations (2)      248.1          211.4          199.5
                                                             
Interest and other income       3.7             4.3             3.6
(expense), net
                                                             
Income before taxes (3)         251.8          215.7          203.1
Income tax expense              76.9            32.4            51.9
Net income                      $174.9        $183.3        $151.2
                                                             
Net income per share:                                         
Basic                           $4.37         $4.59         $3.86
                                                             
Diluted                        $4.25         $4.46         $3.75
                                                             
Shares used in computing net                                  
income per share:
Basic                           40.0           39.9           39.2
                                                             
Diluted                         41.2           41.1           40.3
                                                             
(1) Includes stock-based
compensation expense as                                       
follows:
Total cost of revenue           $6.9          $8.4          $5.9
Total operating expenses        $31.4         $38.9         $28.7
                                                             
(2) Includes amortization of
purchased intangibles as                                      
follows:
Income from operations          $5.9          $5.4          $4.7
                                                             
(3) The third quarter of 2012 tax provision includes discrete tax benefits of
$38.0 million associated with the reversal of unrecognized tax benefits in
conjunction with the expiration of certain statutes of limitations.



INTUITIVE SURGICAL, INC.
UNAUDITED TWELVE MONTHS ENDED CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
                                                           
                                         Twelve Months Ended
                                         December 31,
                                         2012               2011
                                                           
Revenue:                                                    
Instruments and accessories               $903.3           $701.1
Systems                                   932.9             777.8
Services                                  342.6             278.4
Total revenue                             2,178.8            1,757.3
                                                           
Cost of revenue:                                            
Product                                   495.3              382.3
Service                                   113.2              101.2
Total cost of revenue (1)                 608.5              483.5
                                                           
Gross profit                              1,570.3            1,273.8
                                                           
Operating expenses:                                         
Selling, general, and administrative      522.2              438.8
Research and development                  170.0              140.2
Total operating expenses (1)              692.2              579.0
                                                           
Income from operations (2)                878.1             694.8
                                                           
Interest and other income (expense), net  15.8               14.9
                                                           
Income before taxes (3)                   893.9             709.7
Income tax expense                        237.3              214.6
                                                           
Net income                                $656.6           $495.1
                                                           
Net income per share:                                       
Basic                                     $16.50           $12.63
                                                           
Diluted                                  $15.98           $12.32
                                                           
Shares used in computing net income per                     
share:
Basic                                     39.8              39.2
                                                           
Diluted                                   41.1              40.2
                                                           
(1) Includes stock-based compensation                       
expense as follows:
Total cost of revenue                     $27.0            $23.3
Total operating expenses                  $126.3           $113.1
                                                           
(2) Includes amortization of purchased                      
intangibles as follows:
Income from operations                    $23.1            $17.8
                                                           
(3) The 2012 tax provision includes discrete tax benefits totaling $46.5
million, which is comprised of $38.0 million associated with the third quarter
reversal of unrecognized tax benefits in conjunction with the expiration of
certain statutes of limitations, and $8.5 million of benefits associated with
certain previously unrecognized tax benefits as a result of a new IRS guidance
issued in the first quarter. The 2012 tax provision excludes a federal R&D tax
credit due to its expiration at the end of 2011.



INTUITIVE SURGICAL, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(IN MILLIONS)
                                                           
                                          December 31, 2012 December 31, 2011
Cash, cash equivalents and investments     $2,920.5        $2,171.8
Accounts receivable, net                   370.3            297.9
Inventory                                  121.5            112.1
Property, plant and equipment, net         241.8            197.2
Goodwill                                   138.1            116.9
Deferred tax assets                        96.3             75.3
Other assets                               170.7            91.9
Total assets                               $4,059.2        $3,063.1
                                                           
Accounts payable and other accrued         $292.7          $262.3
liabilities
Deferred revenue                           186.4            155.2
Total liabilities                          479.1            417.5
Stockholders' equity                       3,580.1          2,645.6
Total liabilities and stockholders' equity $4,059.2        $3,063.1

CONTACT: Investor Relations
         (408) 523-2161
 
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