Mazor Robotics (MZOR) reported its third-quarter results on Nov. 6. There wasn't a lot of fanfare involved with the earnings release since the company is currently waiting for its takeover by Medtronic (MDT -0.76%) to close. The agreement to buy out Mazor for $1.64 billion, or $58.50 per share, is expected to be completed in the next few of months.

Mazor's sales and margins took a big step backward while the company's attention is focused on finalizing the agreement. What's more, the company booked a number of one-time expenses related to the deal. The combination caused its net loss to balloon.

Mazor Robotics Q3 results: The raw numbers


Q3 2018

Q3 2017

Year-Over-Year Change


$10.1 million

$18.6 million


GAAP net income

($16.9 million) 

($3.9 million)


GAAP earnings per share




Data source: Mazor Robotics. GAAP = Generally accepted accounting principles.

What happened with Mazor Robotics this quarter?

  • The huge fall in sales was caused by the double whammy of a lower number of system placements and lower pricing due to its distribution agreement with Medtronic. Revenue from consumables also declined 1% to $6.9 million.
  • The huge loss of sales leverage and lower pricing terms caused gross margin to decline 1,500 basis points to 47.3%.
  • Operating expenses grew 42% to $22.3 million. The huge jump was mostly attributable to the $10.8 million in extra costs related to the acquisition.
  • On a non-GAAP basis, net loss was $4.4 million, or $0.08 per share.
  • Cash balance at quarter end was $108 million. 
Businessmen looking over a contract.

Image source: Getty Images.

What management had to say

Management didn't hold a conference call with investors or offer up any commentary on the company's quarterly performance. However, the company did state that the Mazor X Stealth Edition system, which utilizes technology that was developed by both Medtronic and Mazor, received FDA clearance on Nov. 2. 

Looking forward

Mazor is scheduled to hold a shareholder meeting on Nov. 19, at which time a vote will take place to officially approve the merger. The odds of getting the thumbs-up look very favorable, considering that Medtronic already owns a sizable portion of Mazor's stock and both companies' boards of directors have already unanimously approved the transaction. 

If Mazor's shareholders approve the merger, then the deal is expected to close before the end of Medtronic's third fiscal quarter, which ends on Jan. 25, 2019.