- Full Year Revenue Increased 39% to $36.4 Million; Record 62 System Orders Received in 2016 -

- Fourth Quarter Revenue increased 59% to $14.0 Million -

- Full Year Recurring Revenue Increased 32%; Fourth Quarter Recurring Revenue Increased 29% -

- Total Procedures Performed to Date Surpassed 23,000 -

- Year-end Backlog of 21 Systems in the U.S. -

- Conference Call Today at 8:30 AM ET (3:30PM IST) -

CAESAREA, Israel — (BUSINESS WIRE) — February 16, 2017 — Mazor Robotics Ltd. (TASE:MZOR; NASDAQGM:MZOR), a pioneer and a leader in the field of surgical guidance systems, reported record revenue for the fourth quarter and full year ended December 31, 2016. As previously announced, the Company received purchase orders for 21 systems in the fourth quarter and ended the year with a backlog of 21 systems, including 18 Mazor X systems, its transformative platform for spine surgeries, which was commercially launched in October.

“Our record performance in the fourth quarter and success throughout the year reinforces 2016 as a strategic turning point for the Company,” commented Ori Hadomi, Chief Executive Officer. “We have greatly enhanced our leadership position in the spine market with the implementation of the Medtronic co-marketing and co-promotional agreement and the launch of the transformational Mazor X system. While our systems order growth is impressive, our high utilization rate and recurring revenue growth illustrates the benefits Mazor is bringing to both surgeon and patient. With a strong backlog, we enter 2017 with momentum to continue our growth.”

FOURTH QUARTER 2016 FINANCIAL RESULTS ON IFRS BASIS ("GAAP")

Revenue for the three months ended December 31, 2016 increased 59% to $14.0 million compared to $8.8 million in the year-ago fourth quarter. U.S. revenue increased 88% to $12.6 million compared to $6.7 million in the year-ago fourth quarter, as the Company recognized revenue from 13 Mazor X and two Renaissance systems, compared to ten Renaissance systems in the year-ago fourth quarter. The Company ended the quarter with a backlog of 21 systems; revenue from these systems is expected to be recorded in 2017, generally, when the systems are supplied. International revenue was $1.4 million compared to $2.1 million in the year-ago fourth quarter, as the Company recognized revenue from three Renaissance systems, compared to four Renaissance systems in the year-ago fourth quarter. Recurring revenue from system kit sales, services and other increased 29% to $4.5 million in the fourth quarter of 2016, compared to $3.5 million in the year-ago fourth quarter. The increase is attributed to high utilization rates and increase of the install base.

The Company’s gross margin for the three months ended December 31, 2016 was 70.5% compared to 78.0% in the year-ago fourth quarter. The decrease is attributed mainly to discounted price to our distribution partner, Medtronic, and the higher manufacturing costs of the Mazor X, compared to the Renaissance system. Total operating expenses were $14.2 million compared to $9.8 million in the year-ago fourth quarter, primarily reflecting the Company’s increased investments in sales and marketing activities. Operating loss was $4.3 million compared to an operating loss of $2.9 million in the year-ago fourth quarter. Net loss for the fourth quarter of 2016 was $4.3 million, or $0.09 per share, compared to a net loss of $2.9 million, or $0.07 per share, for the year-ago fourth quarter.

Cash used in operating activities was $1.9 million compared to $4.3 million used in last year’s fourth quarter. The decrease is mainly due to high collection from customers, offset by higher payments to suppliers. As of December 31, 2016, cash, cash equivalents and investments totaled $61.8 million.

FOURTH QUARTER 2016 FINANCIAL RESULTS ON NON-GAAP BASIS

The tables below include reconciliation of the Company’s GAAP results to non-GAAP results. The reconciliation relates to non-cash expenses in the amount of $1.1 million with respect to amortization of intangible assets and to share-based expenses recorded in the fourth quarter of 2016. On a non-GAAP basis, the net loss in the fourth quarter of 2016 was $3.1 million, or $0.07 per share, compared to $2.1 million, or $0.05 per share, for the year-ago fourth quarter.

FULL YEAR ENDED DECEMBER 31, 2016 FINANCIAL RESULTS ON IFRS BASIS (“GAAP”)

For the full year ended December 31, 2016, revenue increased 39% to $36.4 million compared to $26.1 million for the full year ended December 31, 2015. U.S. revenue increased 51% to $30.7 million compared to $20.3 million in the full year ended December 31, 2015, as the Company recognized revenue from 30 systems, compared to 16 systems in the full year ended December 31, 2015. International revenue was $5.7 million compared to $5.8 million in the full year ended December 31, 2015, as the Company recognized revenue from 11 Renaissance systems, compared to eight Renaissance systems in the full year ended December 31, 2015. Recurring revenue totaled $16.8 million compared to $12.7 million for the full year ended December 31, 2015. The growth in recurring revenue is attributed to the increase of the install base of the Company’s Renaissance system in the U.S. and globally.