MAKO Surgical Corp. Reports Operating Results for the Fourth Quarter and Full Year 2012

MAKO Surgical Corp. Reports Operating Results for the Fourth Quarter and Full
Year 2012

Fourth Quarter and Full Year 2012 Highlights

Fourth quarter revenue totaled $30.2 million

Full year 2012 revenue totaled $102.7 million, a 22% increase over 2011

Fifteen RIO® systems sold in the fourth quarter, of which thirteen were sold
to domestic customers

A total of 45 RIO systems sold worldwide in 2012, increasing worldwide
commercial installed base to 156 RIO systems and domestic commercial installed
base to 151 RIO systems

2,904 MAKOplasty® procedures performed in the fourth quarter, a 29% increase
over the same period in 2011

Total of 10,204 MAKOplasty procedures performed in 2012, a 47% increase over
2011

Eleven MAKOplasty Total Hip Arthroplasty (THA) applications sold in the fourth
quarter, of which three were sold to existing customers

As of December 31, 2012, 62% of worldwide commercial installed base is
MAKOplasty THA enabled

2013 Annual Guidance

2013 RIO system sales estimated to be 45 to 48 systems

13,500 to 14,500 MAKOplasty procedures anticipated to be performed in 2013

FORT LAUDERDALE, Fla., Feb. 26, 2013 (GLOBE NEWSWIRE) -- MAKO Surgical Corp.
(Nasdaq:MAKO), a medical device company that markets its RIO® Robotic Arm
Interactive Orthopedic surgical platform, MAKOplasty® joint specific
applications and proprietary RESTORIS® implants that together enable
orthopedic surgeons to consistently, reproducibly and precisely treat patient
specific osteoarthritic disease, today announced its operating results for the
quarter and year ended December 31, 2012.

Recent Business Developments

RIO Systems – Fifteen RIO systems were sold during the fourth quarter, of
which thirteen were sold to domestic customers and two were sold through
international distributors to hospitals in Italy and Thailand. The revenue
associated with the two RIO systems sold to and customer accepted by the
international distributors will be deferred until all revenue recognition
criteria are satisfied. A total of 45 new RIO systems were sold worldwide in
2012, bringing MAKO's worldwide commercial installed base of RIO systems to
156 systems and domestic commercial installed base of RIO systems to 151
systems as of December 31, 2012.

MAKOplasty Procedure Volume – During the fourth quarter, 2,904 MAKOplasty
procedures were performed, of which 2,756 were performed at domestic sites and
395 were THA procedures. The 2,904 MAKOplasty procedures performed represent a
20% increase over the procedures performed in the third quarter of 2012 and a
29% increase over the procedures performed in the fourth quarter of 2011. The
395 THA procedures performed represent a 31% increase over the THA procedures
performed in the third quarter of 2012. The average monthly utilization per
system was 6.6 procedures during the fourth quarter of 2012, an increase from
6.2 procedures per system per month in the third quarter of 2012. A total of
10,204 MAKOplasty procedures were performed in 2012, representing a 47%
increase over the total procedures performed in 2011. Through December 31,
2012, approximately 23,000 procedures have been performed since the first
procedure in June 2006.

MAKOplasty Total Hip Arthroplasty Applications – In the fourth quarter, eleven
MAKOplasty THA applications were sold, eight of which were sold with RIO
systems sold during the quarter and three of which were sold as upgrades to
existing customers with knee-only commercial systems. As of December 31, 2012,
96 RIO systems, or 62% of the worldwide commercial installed base, were
MAKOplasty THA enabled.

Clinical Research and Marketing – During the fourth quarter, three papers were
published related to accuracy of knee and hip MAKOplasty, bringing the total
number of published peer-reviewed papers up to 31. The hip accuracy study
published in the Journal of Engineering in Medicine* compared MAKOplasty THA
with manual THA on six paired cadavers and showed that the MAKOplasty THA cups
were 100% in the safe zone compared to 30% of the manually placed cups. In
addition, MAKOplasty THA accuracy was shown in this study to be 4-6 times
greater than manual accuracy in both inclination and anteversion.

Equity Investment – In November 2012, MAKO completed a public offering of our
common stock, issuing 3,498,300 shares at a price per share of $13.15,
resulting in net proceeds to MAKO of $42.9 million after underwriting
commissions and expenses.

"We continued to make progress in the fourth quarter towards reestablishing
our growth trajectory in RIO system placements and putting the building blocks
in place to drive MAKOplasty procedure volume and utilization," said Maurice
R. Ferré, M.D., President and Chief Executive Officer of MAKO. "While 2012 was
a challenging year for MAKO, we believe that the sales process changes we
initiated in the second half of the year will position MAKO well for improved
performance in 2013 and ultimately assist us in achieving long term success."

*Volume 227, Issue 3, March 2013

2012 Fourth Quarter Financial Review

Revenue was $30.2 million in the fourth quarter of 2012 compared to $32.9
million in the fourth quarter of 2011, representing an 8% decrease. The
decrease in revenue was attributable to the recognition of revenue from
thirteen RIO systems and eleven MAKOplasty THA applications in the fourth
quarter of 2012, as compared to the recognition of revenue from eighteen RIO
systems and thirty-seven MAKOplasty THA applications (upon the commercial
release of the MAKOplasty THA application in September 2011) in the same
period in 2011, which was partially offset by an increase in procedure revenue
and service revenue.

Gross profit for the fourth quarter of 2012 was $20.3 million compared to a
gross profit of $22.4 million in the same period in 2011. Gross margin for the
fourth quarter of 2012 was 67%, consisting of a 66% margin on procedure
revenue, a 64% margin on RIO system revenue and an 83% margin on service
revenue. Procedure gross margin for the fourth quarter of 2012 was negatively
impacted by an inventory reserve adjustment of $1.2 million for excess
procedure inventory due to the anticipated future releases of enhancements to
certain of existing implant and disposable products. Excluding the $1.2
million inventory reserve adjustment, the margin on procedures would have been
74% and overall gross margin would have been 71% for the fourth quarter of
2012.

Operating expenses were $26.2 million in the fourth quarter of 2012 compared
to $28.0 million in the fourth quarter of 2011. The decrease in operating
expenses was primarily the result of compensation expense related to bonus
awards incurred in 2011, but not in 2012, and the timing of expenditures
associated with the continuous improvement of the RIO system platform and
associated applications and the development of potential future products.

Net loss for the three months ended December 31, 2012 was $5.7 million, or a
loss of $0.13 per basic and diluted share, based on average basic and diluted
shares outstanding of 44.5 million. This compares to a net loss for the same
period in 2011 of $5.6 million, or a loss of $0.14 per basic and diluted
share, based on average basic and diluted shares outstanding of 41.3 million.

Cash, cash equivalents and available-for-sale investments were $73.3 million
as of December 31, 2012 compared to $58.7 million as of December 31, 2011. As
of December 31, 2012, no amounts have been drawn under the credit facility
agreement with affiliates of Deerfield Management Company, L.P.

2012 Full Year Financial Review

Revenue was $102.7 million for the year ended December 31, 2012 compared to
$84.5 million for the year ended December 31, 2011, representing a 22%
increase. The increase in revenue was attributable to an increase in procedure
revenue and service revenue, which was partially offset by a decrease in RIO
system revenue attributable to the recognition of revenue from forty-two RIO
systems and forty-seven MAKOplasty THA applications in 2012, as compared to
the recognition of revenue from forty-eight RIO systems and forty-nine
MAKOplasty THA applications in 2011. In addition to the forty-two recognized
RIO system sales, the revenue associated with the sale of three international
systems was deferred until all revenue recognition criteria are satisfied.

The net loss for the year ended December 31, 2012 was $32.6 million, or a loss
of $0.76 per basic and diluted share, based on average basic and diluted
shares outstanding of 42.7 million. Included in net loss for the year ended
December 31, 2012 was non-cash and non-operating income of $3.7 million
associated with the change in fair value of a derivative asset related to a
credit facility agreement. This compares to a net loss for the same period in
2011 of $36.1 million, or a loss of $0.89 per basic and diluted share, based
on average basic and diluted shares outstanding of 40.8 million.

2013 Annual Guidance

MAKO anticipates that it will sell 45 to 48 RIO systems and that its customers
will perform 13,500 to 14,500 MAKOplasty procedures in 2013.

Conference Call

MAKO will host a conference call today at 4:30 pm ET to discuss its fourth
quarter and full year 2012 results. To listen to the conference call, please
dial 877-843-0414 for domestic callers and 914-495-8580 for international
callers approximately ten minutes prior to the start time. The participant
code is 86531216. To access the live audio broadcast or the subsequent
archived recording, visit the Investor Relations section of MAKO's website at
www.makosurgical.com.

About MAKO Surgical Corp.

MAKO Surgical Corp. is a medical device company that markets its RIO®
Robotic-Arm Interactive Orthopedic system, joint specific applications for the
knee and hip, and proprietary RESTORIS® implants for orthopedic procedures
called MAKOplasty®. The RIO is a surgeon-interactive tactile surgical platform
that incorporates a robotic arm and patient-specific visualization technology,
which enables precise, consistently reproducible bone resection for the
accurate insertion and alignment of MAKO's RESTORIS implants. The MAKOplasty
solution incorporates technologies enabled by an intellectual property
portfolio including more than 300 U.S. and foreign, owned and licensed,
patents and patent applications. Additional information can be found at
www.makosurgical.com.

Forward-Looking Statements

This press release contains forward-looking statements regarding, among other
things, statements related to expectations, goals, plans, objectives and
future events. MAKO intends such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained in Section
21E of the Securities Exchange Act of 1934 and the Private Securities Reform
Act of 1995. In some cases, forward-looking statements can be identified by
the following words: "may," "will," "could," "would," "should," "expect,"
"intend," "plan," "anticipate," "believe," "estimate," "predict," "project,"
"potential," "continue," "ongoing," or the negative of these terms or other
comparable terminology, although not all forward-looking statements contain
these words. These statements are based on the current estimates and
assumptions of our management as of the date of this press release and are
subject to risks, uncertainties, changes in circumstances, assumptions and
other factors that may cause actual results to differ materially from those
indicated by forward-looking statements, many of which are beyond MAKO's
ability to control or predict. Such factors, among others, may have a material
adverse effect on MAKO's business, financial condition and results of
operations and may include the potentially significant impact of a continued
economic downturn or delayed economic recovery on the ability of MAKO's
customers to secure adequate funding, including access to credit, for the
purchase of MAKO's products or cause MAKO's customers to delay a purchasing
decision, changes in general economic conditions and credit conditions,
changes in the availability of capital and financing sources for our company
and our customers, unanticipated changes in the timing of the sales cycle for
MAKO's products or the vetting process undertaken by prospective customers,
changes in competitive conditions and prices in MAKO's markets, changes in the
relationship between supply of and demand for our products, fluctuations in
costs and availability of raw materials and labor, changes in other
significant operating expenses, slowdowns, delays, or inefficiencies in MAKO's
product research and development cycles, unanticipated issues relating to
intended product launches, decreases in sales of MAKO's principal product
lines, decreases in utilization of MAKO's principal product lines or in
procedure volume, increases in expenditures related to increased or changing
governmental regulation or taxation of MAKO's business, both nationally and
internationally, unanticipated issues in complying with domestic or foreign
regulatory requirements related to MAKO's current products, including
initiating and communicating product actions or product recalls and meeting
Medical Device Reporting requirements and other required reporting to the
United States Food and Drug Administration, or securing regulatory clearance
or approvals for new products or upgrades or changes to MAKO's current
products, developments adversely affecting our potential sales activities
outside the United States, increases in cost containment efforts by group
purchasing organizations, the impact of the United States healthcare reform
legislation enacted in March 2010 on hospital spending, reimbursement,
unanticipated changes in reimbursement to our customers for our products, and
the taxing of medical device companies, any unanticipated impact arising out
of the securities class action or any other litigation, inquiry, or
investigation brought against MAKO, loss of key management and other personnel
or inability to attract such management and other personnel, increases in
costs of retaining a direct sales force and building a distributor network,
unanticipated issues related to, or unanticipated changes in or difficulties
associated with, the recruitment of agents and distributors of our products,
and unanticipated intellectual property expenditures required to develop,
market, and defend MAKO's products. These and other risks are described in
greater detail under Item 1A, "Risk Factors," in MAKO's periodic filings with
the Securities and Exchange Commission, including MAKO's annual report on Form
10-K for the year ended December 31, 2011 filed on March 8, 2012. Given these
uncertainties, undue reliance should not be placed on these forward-looking
statements. MAKO does not undertake any obligation to release any revisions to
these forward-looking statements publicly to reflect events or circumstances
after the date of this press release or to reflect the occurrence of
unanticipated events.

"MAKOplasty®," "RESTORIS®," "RIO®," as well as the "MAKO" logo, whether
standing alone or in connection with the words "MAKO Surgical Corp." are
trademarks of MAKO Surgical Corp.

                                                       
Condensed Statements of Operations
(unaudited)                        Three Months Ended    Years Ended
(in thousands, except per share    December 31,          December 31,
data)
                                  2012       2011       2012       2011
Revenue:                                                         
Procedures                         $14,298  $ 11,387  $ 50,920  $ 34,638
Systems                            12,752    19,774    41,219    43,927
Service                            3,178     1,727     10,580    5,942
Total revenue                      30,228    32,888    102,719   84,507
Cost of revenue:                                                 
Procedures                         4,844     2,795     16,845    8,793
Systems                            4,592     7,196     15,289    16,695
Service                            539       484       1,666     1,395
Total cost of revenue              9,975     10,475    33,800    26,883
Gross profit                       20,253    22,413    68,919    57,624
Operating costs and expenses:                                    
Selling, general and
administrative (exclusive of       19,039    20,208    76,992    67,965
depreciation and amortization)
Research and development
(exclusive of depreciation and     5,185     6,329     20,256    20,592
amortization)
Depreciation and amortization      1,944     1,499     7,188     5,350
Total operating costs and expenses 26,168    28,036    104,436   93,907
Loss from operations               (5,915)   (5,623)   (35,517)  (36,283)
Other income (expense), net        184       84        3,051     245
Loss before income taxes           (5,731)   (5,539)   (32,466)  (36,038)
Income tax expense                 1         45        85        105
Net loss                           $(5,732) $ (5,584) $ (32,551) $ (36,143)
Net loss per share - Basic and     $(0.13)  $ (0.14)  $ (0.76)  $ (0.89)
diluted
Weighted average common shares                                   
outstanding --
Basic and diluted                  44,455    41,297    $ 42,658  40,752

Depreciation expense for certain property and equipment was reclassified from
selling, general and administrative expense to depreciation and amortization
expense in the prior period's statement of operations to conform to the
current period's presentation. This change in presentation only affects the
components of operating costs and expenses and does not affect total operating
costs and expenses, revenue, cost of revenue, net loss or cash flows.

                                                      
Condensed Balance Sheets (unaudited)                   
(in thousands)                             December 31, December 31,
                                          2012         2011
ASSETS                                                 
Current Assets:                                        
Cash and cash equivalents                  $ 61,367    $13,438
Short-term investments                     11,899      36,354
Accounts receivable                        22,389      20,783
Inventory                                  25,080      19,529
Deferred cost of revenue                   967         160
Financing commitment asset                 7,608       –
Prepaid and other current assets           1,972       1,800
Total current assets                       131,282     92,064
Long-term investments                      –           8,902
Cost method investment                     4,181       –
Property and equipment, net                22,996      19,389
Intangible assets, net                     5,657       7,284
Other assets                               2,786       132
Total assets                               $ 166,902   $127,771
                                                      
LIABILITIES AND STOCKHOLDERS' EQUITY                   
Current Liabilities:                                   
Accounts payable                           $2,267     $4,231
Accrued compensation and employee benefits 4,298       7,579
Other accrued liabilities                  8,727       10,622
Deferred revenue                           9,973       4,826
Total current liabilities                  25,265      27,258
Deferred revenue, non-current              800         75
Total liabilities                          26,065      27,333
Stockholders' Equity:                                  
Common stock                               47          41
Additional paid-in capital                 362,364     289,352
Accumulated deficit                        (221,576)   (189,025)
Accumulated other comprehensive gain       2           70
Total stockholders' equity                 140,837     100,438
Total liabilities and stockholders' equity $166,902   $127,771

                                                     
                                                     
Condensed Statements of Cash Flows (unaudited)        
(in thousands)                                        Years Ended December 31,
                                                     2012         2011
Operating activities:                                             
Net loss                                              $(32,551)  $(36,143)
Adjustments to reconcile net loss to net cash used in             
operating activities:
Depreciation                                          5,909       4,352
Amortization of intangible assets                     1,692       1,446
Stock-based compensation                              13,137      9,901
Provision for inventory reserve                       4,484       256
Amortization of premium on investment securities      335         476
Loss on asset impairment                              1,033       146
Provision for doubtful accounts                       266         158
Issuance of restricted stock under development        907        1,691
agreement
Non-cash changes under credit facility                (3,998)     –
Changes in operating assets and liabilities:                      
Accounts receivable                                   (1,872)     (9,381)
Inventory                                             (12,699)    (11,619)
Deferred cost of revenue                              (807)       (160)
Prepaid and other current assets                      (172)       (517)
Other assets                                          (331)       66
Accounts payable                                      (1,964)     2,713
Accrued compensation and employee benefits            (3,281)     2,033
Other accrued liabilities                             (1,895)     5,558
Deferred revenue                                      5,872       1,721
Net cash used in operating activities                 (25,935)    (27,303)
Investing activities:                                             
Purchase of investments                               (9,615)     (33,131)
Proceeds from sales and maturities of investments     42,545      57,252
Acquisition of property and equipment                 (7,885)     (12,337)
Acquisition of intangible assets                      (65)        (1,200)
Net cash provided by investing activities             24,980      10,584
Financing activities:                                             
Proceeds from issuance of common stock in equity      43,243      –
financing, net of underwriting fees
Equity financing costs                                (356)       –
Proceeds from employee stock purchase plan            1,885       1,168
Exercise of common stock options and warrants for     4,315       2,932
cash
Payment of payroll taxes relating to vesting of       (203)       (1,051)
restricted stock
Net cash provided by financing activities             48,884      3,049
Net decrease in cash and cash equivalents             47,929      (13,670)
Cash and cash equivalents at beginning of period      13,438      27,108
Cash and cash equivalents at end of period            $61,367    $13,438

CONTACT: Investors:
         MAKO Surgical Corp.
         954-628-1706
         investorrelations@makosurgical.com
        
         or
        
         Westwicke Partners
         Mark Klausner
         443-213-0500
         makosurgical@westwicke.com