Intuitive Surgical Announces $219.2 Million Second Quarter Revenue, Up 56 Percent

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| Source: Intuitive Surgical, Inc.

SUNNYVALE, Calif., July 22, 2008 (PRIME NEWSWIRE) -- Intuitive Surgical, Inc. (Nasdaq:ISRG), the industry leader in surgical robotics, today reported second quarter 2008 revenue of $219.2 million, increasing 56% from $140.2 million for the second quarter of 2007. Second quarter 2008 revenue growth was driven by continued robotic procedure adoption and higher da Vinci(r) Surgical System sales.

Second quarter 2008 instruments and accessories revenue increased 61% to $73.6 million from $45.8 million during the second quarter of 2007. Second quarter 2008 da Vinci(r) Surgical Systems revenue increased 57% to $116.2 million from $74.1 million during the second quarter of 2007. Second quarter 2008 service and training revenue increased 44% to $29.4 million from $20.3 million during the second quarter of 2007.



                     Three Months Ended           Six Months Ended
                           June 30,                    June 30,
                   ------------------------   ------------------------
 Revenue
  ($Millions)       2008     2007   Increase   2008     2007   Increase
 -------------     ------   ------   ------   ------   ------   ------
 Instruments/
  Accessories      $ 73.6   $ 45.8   $ 27.8   $135.5   $ 86.1   $ 49.4
 Systems            116.2     74.1     42.1    215.3    130.3     85.0
 Service/
  Training           29.4     20.3      9.1     56.6     38.1     18.5
                   ------   ------   ------   ------   ------   ------
                   $219.2   $140.2   $ 79.0   $407.4   $254.5   $152.9
                   ======   ======   ======   ======   ======   ======

Second quarter 2008 operating income increased 74% to $78.2 million, compared with $45.0 million for the second quarter of 2007. Operating results for the second quarter of 2008 included $19.7 million of non-cash stock-based compensation expense in accordance with the Financial Accounting Standards Board SFAS 123R, compared with $9.4 million for the second quarter of 2007.

Second quarter 2008 net income increased 67% to $51.2 million, compared with $30.7 million for the second quarter of 2007. Diluted earnings per share increased to $1.28 for the second quarter of 2008 from $0.79 for the second quarter of 2007.

Intuitive ended the second quarter of 2008 with cash, cash equivalents and investments of $740 million, up $104 million from December 31, 2007.

Commenting on the announcement, Lonnie Smith, Chairman and CEO of Intuitive Surgical, said, "We are pleased with our second quarter revenue and earnings growth. These results reflect the continued adoption of the da Vinci Surgical System platform across a broadening group of surgical procedures."

The Company will also announce these results at a conference call today at 1:30 pm PDT. The dial-in numbers for the call are 877-909-3508 for participants located in the U.S. and 517-645-6051 for participants located outside the U.S. The passcode is ISRG and the meeting leader is Mr. Lonnie Smith. To access financial information that will be discussed on the call, please visit Intuitive Surgical's website at www.intuitivesurgical.com.

About Intuitive's Products:

The da Vinci(r) Surgical System consists of a surgeon's viewing and control console having an integrated, high-performance InSite(r) 3-D, high definition vision system, a patient-side cart consisting of three or four robotic arms that position and precisely maneuver endoscopic instruments and an endoscope, and a variety of articulating EndoWrist(r) Instruments. By integrating computer-enhanced technology with surgeons' technical skills, Intuitive believes that its system enables surgeons to perform better surgery in a manner never before experienced. The da Vinci(r) Surgical System seamlessly and directly translates the surgeon's natural hand, wrist and finger movements on instrument controls at the surgeon's console outside the patient's body into corresponding micro-movements of the instrument tips positioned inside the patient through small puncture incisions, or ports.

Intuitive(r), da Vinci(r), da Vinci(r) S, InSite(r), and EndoWrist(r) 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: timing and success of product development and market acceptance of developed products; 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 Intuitive Surgical operates; and unanticipated manufacturing disruptions; delays in regulatory approvals of new manufacturing facilities or the inability to meet demand for products. Words such as "estimate", "project", "plan", "intend", "expect", "anticipate", "believe" and similar 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 Consolidated Statements of Income
 (In Thousands, Except Per Share Data)

                                Three Months Ended   Six Months Ended
                                      June 30,            June 30,
                                ------------------  ------------------
                                  2008      2007      2008      2007
                                --------  --------  --------  --------
 Revenue:
  Products                      $189,780  $119,885  $350,731  $216,334
  Services                        29,409    20,364    56,652    38,144
                                --------  --------  --------  --------
   Total revenue                 219,189   140,249   407,383   254,478

 Cost of revenue:
  Products                        50,036    35,656    94,888    64,762
  Services                        13,097    10,485    26,632    19,100
                                --------  --------  --------  --------
   Total cost of revenue *        63,133    46,141   121,520    83,862

  Gross profit                   156,056    94,108   285,863   170,616

 Operating expenses:
  Selling, general and
   administrative                 57,504    38,883   106,138    72,828
  Research and development        20,357    10,192    36,658    18,416
                                --------  --------  --------  --------
   Total operating expenses *     77,861    49,075   142,796    91,244

 Income from operations           78,195    45,033   143,067    79,372

 Interest and other income, net    5,707     5,232    14,248     9,840
                                --------  --------  --------  --------

 Income before income taxes       83,902    50,265   157,315    89,212
 Provision for income taxes       32,720    19,602    61,352    34,747
                                --------  --------  --------  --------
 Net lncome                     $ 51,182  $ 30,663  $ 95,963  $ 54,465
                                ========  ========  ========  ========
 Earnings per share:
   Basic                        $   1.32  $   0.81  $   2.48  $   1.45
                                ========  ========  ========  ========
   Diluted                      $   1.28  $   0.79  $   2.40  $   1.41
                                ========  ========  ========  ========
 Shares used in computing
  earnings per share:
   Basic                          38,773    37,636    38,677    37,463
                                ========  ========  ========  ========
   Diluted                        39,980    38,657    39,914    38,528
                                ========  ========  ========  ========

  * Includes stock compensation expense of $2.9 million and $1.5
    million in total cost of revenue and $16.8 million and $7.8
    million in total operating expenses for the three months ended
    June 30, 2008 and 2007, respectively; $5.2 million and $2.7
    million in total cost of revenue and $29.1 million and $14.8
    million in total operating expenses for the six months ended June
    30, 2008 and 2007, respectively.


 Intuitive Surgical, Inc.
 Unaudited Condensed Consolidated Balance Sheets
 (In Thousands)

                                                6/30/2008   12/31/2007
                                               ----------   ----------
 Cash, cash equivalents, and investments       $  739,782   $  635,381
 Accounts receivable, net                         162,088      130,370
 Inventory                                         42,594       32,416
 Property and equipment, net                       94,568       68,093
 Goodwill                                         110,740      110,740
 Deferred tax assets                               32,459       24,577
 Other assets                                      49,156       38,421
                                               ----------   ----------
  Total assets                                 $1,231,387   $1,039,998
                                               ==========   ==========

 Accounts payable and other
  accrued liabilities                          $   91,347   $   96,632
 Deferred revenue                                  66,053       54,692
                                               ----------   ----------
  Total liabilities                               157,400      151,324
 Stockholders' equity                           1,073,987      888,674
                                               ----------   ----------
  Total liabilities and stockholders' equity   $1,231,387   $1,039,998
                                               ==========   ==========
Intuitive Surgical, Inc.
Ben Gong
 408-523-2175
Rae Covington
 408-523-2161