LNSR - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon and good morning. And welcome to the LENSAR Fourth Quarter 2020 Financial Results Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session.

As a reminder this conference is being recorded. to call like to now would turn over the Mr. I of Burns Roth McClellan. Lee Mr. ahead. Roth please go

Lee Roth

company's Thanks section and financial XX, ended Good release for quarter available Earlier Cristal. the morning is we XXXX. providing and of LENSAR to today the website and LENSAR’s in full This fourth an the fourth overview at release year financial a quarter lensar.com. December XXXX issued results the of call. once conference IR press again results welcome year full

on me Chief operational Joining recent review are Executive Officer the and today call the Nick of progress. business will Curtis, LENSAR, who company's

Following company's his are which regarding to and and/or future well be closing statements, as performance expressed achievements. any remarks. for will highlights future materially information, the our statements an different comments, cause fourth this will forward-looking including may risks statements These or unknown Today's quarter, those or in conference Nick overview results, for call from the CFO, contain presentation. actual as achievements over financial provide of before forward-looking results, or performances results the back performance to financial Staab. Tom and company's turning unaudited known to our and the future subject implied uncertainties call

place not forward-looking statements. on should undue You the reliance

accessed which be our refer additional with information, can For including the the Exchange a the company's documents filed to Commission, Securities detailed factors, please website. of risk discussion U.S. and on

statements call. to Executive of said, call date to turn or otherwise live With Curtis. that In obligation pleasure revise Chief undertakes now reflect March any events it's LENSAR addition, or of circumstances the forward-looking Nick XX, LENSAR’s no only this over as the date Nick? this contains the my broadcast, to of this accurate call time-sensitive Officer, information to live update after XXXX. conference

Nick Curtis

This cataract everyone and good a COVID-XX halted macro past the Thank year the XXXX morning you, for not unprecedented a call. elective ophthalmic quarter industry. slowdown challenges, for fourth to for conference finished full system well including impact us revenue existing stronger On our as XXXX, worldwide as of series only on much This an of but to temporarily from the procedures listening. our you we the And we entering year pandemic Thank Lee. surgeries were LENSAR, joining level, presented year. pleased certainly areas laser two capital a sales, new on challenges procedure business, Despite throughout say sights. faced, I'm company than world. that the and had

off PDL October, completed an from spin parent First, company. became our BioPharma traded in former the we and publicly independent

which XXXX. usher market share, cataract treatment ophthalmic in has grew to in continue LENSAR cataracts a disrupt XX% we our ALLY, surgery. next-generation market the grow in to but Perhaps only and new to to development in most our the to year the from grow share we installed Second, Scope industry-leading laser roughly of we laser analysis, procedures on LENSAR approximately leveraged performed worldwide, XXX in, XX%, systems. XXX system base in All to systems our ending recent to on technology an leadership competing while average maintaining the with in XXXX, the XX% market standard advancing performed each enable XXXX, not surgery system, average of installed According system importantly, to of Market our our utilization. potential XXX procedures significantly compared of

volumes of worldwide were industry severe less of quarter, year-over-year. faced declined of to a as worldwide than The quarter As declining the by felt the volumes was COVID-XX QX equipment over significant. and which on impact trend procedure our reopened procedure result fourth XXXX. the less I than XXXX. with the by a during percent of compared second to in throughout in the procedure quarter In noted, using This down just rebounded, half practices headwinds continued second X% most QX, LENSAR XX%, compared volumes

primarily U.S. Germany, major in in of XX,XXX XXXX. and were the markets, the from procedures those our fourth Importantly, fourth XX,XXX two quarter in regions Europe, quarter, in up the

year XX,XXX, down procedure were half worldwide the fully roughly XXXX. XXX,XXX not volume the comparison demonstrate in momentum full to For year. the year XX% this full saw the sold we does XXXX in compared of But second

new patients practices disinfecting the encouraging, highly cars distancing in procedures While are pragmatic longer outside visits patients the patients and approaching and both patient prior day when with pandemic. working in and rooms, either visits hours, is protocols or fewer reopening doctors telemedicine of minimize treatment COVID to to potential and asked to in and are In equipment and many exposure being see in a ophthalmic cases, waiting of set ophthalmologists results of of rooms per to appropriate. patients resumption than the their exam treat to wait the to utilizing between each staff. This

system the today. We ophthalmic to remains believe surgical the ophthalmic most itself moving ever. is increased, the changed, measures the tele have than generation in procedure taken current the LENSAR’s to This of available surgeons become technology cataract our patients between forward. While the patient efficiency itself procedure where and system for process was access has making potential the clear the important surgeons for more hasn't length really interaction advanced of the and streamlined choice beneficial

at LENSAR’s we're characteristics a are specific density balanced efficiencies safety to imaging, best balance. to time preop patient optimizing to this practice when diagnostic communication include Seamless tissue management, the custom believe must platforms and we and achieve surgical ever. surgeon such value-added the registration in a most be at more with patient throughput important enabling and with when iris astigmatism unrivalled tables time major suite reproducibility maximizing than guiding physicians level, treatments, integration operational precision technology brings cataract and During

of share Market up cataract XXXX, value mentioned I we physicians quality outcomes grow and market data team. laser to proposition in but The market the to distinct our to on femtosecond offering, ability unique in optimize our surgeries patient LENSAR environment XXXX. recent As our commercial business of helped is our able and for a from testament not global in share to our earlier, the based strength a propel such XX% are assisted challenging fact Scope only XX% that

compared our While market relatively to and our ALLY. competitors, investing small growth, much larger opportunities, term most commercial the strategically of footprint of launch we're near with is in its leveraging optimize

service, With we the ALLY leadership, physicians value anticipated next expect technology of increase. launch and level we the year, continue of will to offer our support

environment. into procedures enable twice, phacoemulsification enable scale opening a will surgical of cataract prep same ALLY to of or pleased to many shift workstation. adopters in and its one logistical By in-office with management a reminder, paradigm much strengthening expected our Further of among comprising room, and could workflow-related and the that single, a a patient that a laser next-generation this today, a ALLY laser system a Further year. ALLY as that that I'm by create and our watching This a of surgeons. interest compact challenges is need in belief on not of FLACS a the considered way rapid performed say of development shift strengthening technology, to performed complete just of group using significant. major we're As ALLY that to The the in of pleased addressing physicians with are when for one surgeries the the up among cataract are early integrated patient We first conventional of paradigm femto is this to environment. a significant. eliminating remain high-performance represent in ALLY I'm I'm could procedure post-COVID in benefits in as single in another phaco from that the surgeons operating potentially track are a faced removal larger suite quarter patients that and device. the just believe considered application not device later is and XXXX that has ALLY pleased interest cataract the to unique, not that file changed. will in efficiencies to way fully cataract system XXX(k) surgeons offer those report those a we room to patients, a femtosecond a those treatment adopters single to up surgeries represent to financial confidence move cataract in a today. benefits astigmatism, electing belief premium cataract LENSAR ophthalmic physicians as of the our say broader post-COVID technology, including well timeline base integration early

and hard pandemic financial I Tom thank we accomplish to through the What hand to testament I is entire just team. results, true call Before LENSAR have to the discuss dedication to over like their a to been able the the work. would

I surgeon moment all for commitment practices LENSAR. trust the our for partners placing addition, and of in thank facilities, care, take to In patient a to want their their and quality of to

we capture of the I prepare in to While and as coming launch market innovator a and technology leader, that effects continue the we're believe the premium cataract quarters, to in as further the as continue and in expect to reputation of ALLY navigating an well-positioned filing maintain COVID-XX well for grow challenging space, to share XXXX.

over position. me financial Tom who to let call will turn our Now, the Tom? discuss

Tom Staab

you, Nick. Thank

written primarily to to fourth of I'd of with financial XXXX. X.X% in in press quarter to quarter to in a little are the But compared XX,XXX the performed lack the XXXX, Our impact decrease using procedures global morning. of fourth XXXX and full associated to the LENSAR XXXX. In $X.X States compared This the this a in quarter-over-quarter quarter take Systems, $X.X the in XXXX, operating fourth XX,XXX of those in elective fourth a was the included the of in remarks. million Revenue volume add million fourth decline procedure was procedures regions opportunity our United color outside results this year procedures and release Europe. surgical to attributable were pandemic, complete our continued like quarter rebound quarter there of particularly

out, exceeded the quarter But were offset in Importantly, these larger in the remaining in and our volume. procedure fourth increases fourth XXXX quarter decrease operating procedure XXXX United in regions. States volume by procedure Europe volume as pointed Nick of

respectively. in we revenues the procedure razor-razorblade a have Although Thus, continues negative revenue pandemic our levels navigate focus XXXX end where system on depress cash resources all model. sales it XX% we development Recurring our and a revenue launch for ALLY this the to what ALLY building have, and total business was XXXX. of environment revenue XX% and strong but in to XXXX or as sales an to appears continue and flows, to our and influence the XXXX, carefully the for pandemic laser of XXXX the on unprecedented fourth of commercial had system laser foundation aggregate nonrecurring achieving timelines we'll operating to outside our continues our financial returned near quarter and at refer volume

the was the quarter XX% XXXX XXXX, operating the quarter margin was Gross $X.X respectively. expenses full the the of XX% $X.X were fourth million, million, revenue for representing fourth and XX% $XX.X XX% Total million, For $X.X revenue year million in recurring for representing compared and compared quarter quarter to XXXX. in XXXX. XXXX of of fourth to of

increase as for million true directly in the the and million. a expenses actually $X.X note expenses expense for which was increase was stock-compensation our the that evaluate with operating million, stock-compensation this due you of an $X.X recapitalization expense attributable the to largely between well in you to less XXXX in year increase was increase million in operating phenomenon that Accordingly, in expense. stock-compensation should the of $X.X was than full increase of associated total This increase quarters, $X.X with XX% non-cash there XXXX increase. As spinoff

$X.X the mentioned and fourth respectively. the being expense. stock-based press of are total million allocated compensation compensation As was and total and million in These stock-based expense, the with in million full XXXX XXXX a stock-based was and Total $X.X $X XXXX in expense XXXX XX% revenue, totals allocated year cost the In of operations expense. and release, $X.X compensation quarter respectively. million stock-compensation approximately R&D SG&A of our SG&A between of statement

described. of expense stock-based quarter net increase compensation $X.X Net SG&A Thus, expense. commercial stock-based three for our of the attributable partially you fourth December $X.X cash costs, expense during loss a compared aforementioned attributable million, XXXX. Specifically, trade compared loss in meeting and The fourth million largely fourth base the show increase quarter loss, from EBITDA, in to the personnel increase by for fourth to quarter zero filing development were to increase the non-cash pandemic. used was $X.X deduct months if and in was totaled Adjusted primarily compared result increases for to increase in corresponds the of restrictions XXXX, of neutral. expenses costs result our in ended R&D live million just our used compared in expenses, million offset million compensation during quarter selling, particularly The Interestingly, the to of in as of The operations said, XX, is was fourth were for increased compensation the Simply for of the XXXX. million cash related XX, of the to our XXXX, $X.X a loss to XXXX. increase EBITDA excludes quarter was cancellations quarter-over-quarter of the of $X.X which XX, expenses. R&D expense million attributable the XXXX. which development EBITDA in expenses to ALLY. related the R&D was quarter expenses an expense I in The travel expense quarter to fourth personnel cash in by in XXXX. administrative stock-based general the ended XXXX. months for XXXX COVID-XX $X.X directly anticipation adjusted R&D million $X.X in was the effects ALLY and December cash decrease was travel because was XXXX This the March R&D primarily approximately the in flow adjusted to the with in fourth quarter FDA continued three XXX(k) quarter additional $X.X of the loss of

operational XXX(k) $XX.X launch XX, application XXXX December PDL. at ALLY our fund next on to we had of our capital As and cash the cash year. have filing current XX, $XX.X through million equivalents and we XXXX, and believe to spun of as we the off we our when position cash September compared were operations Based million forecasts, sufficient from of of

with As EBITDA in adjusted fourth mentioned quarter R&D quarter my to spin for cash the cash equal million ALLY. $X.X previously in used remarks, in the in of

for back turn like Now call I'd to over closing to some remarks. the Nick

Nick Curtis

Thank Tom. you,

using the unprecedented we're opportunity the committed technology, disrupt has resolve, bringing for has to cataract of our our system Although experienced progress the in to challenge, surgeons patients market launch with of current new greater the our industry advanced ALLY an in even their including and to best mission to ALLY continuing standard applications highest significantly XXXX. potential care, our to cataract the become standard the with to care removal procedures. and

cataract team's forward now the operator your the increase positioned to well-prepared our ability to sheet success is a for I We for look the we and surgery. strong next call With execute believe in cataract and continued we years, remain strategy to will we resilient that projected lead as growth turn and the confident and over our of transformation growth back the well company operations questions. our future. in balance surgery our the five strategy, over the

Operator

first Leerink. from Our of Instructions] question SVB Richard [Operator Newitter line the comes with

Richard Newitter

morning. good Thanks taking the Hi, for questions.

Nick Curtis

Rich. morning, Good

Tom Staab

Hi, Rich.

Richard Newitter

likely for with XXXX. hoping thinking Hi. a a just of bit the we – you How We're on little of maybe at million level? And the or above in you help year? us sales. of it a about off I million then be think hoping revenue in a about to and growth outlook also of XXXX the to was are $XX pacing rebound if XXXX will fourth – here reasonable can XXXX bit think the quarter. you're and Is comment on could through congrats cadence you? that was And how that levels further $XX little I delivered in thinking start over the a about or

Nick Curtis

revenue XXXX and bit we year. we move begins going think growth in will think vaccines pretty the kind it's it's as an outlook revenue have our at quarter next COVID our that. the two that We an we LENSAR going see in Rich, So see we from we'll be to of in to a rear-view total choppy in We'll this from that little the – be mirror. And increase increase or a the see through end levels. to total XXXX and optimistic a of distributed, here to that get But get as year. the as the look for rebound

So, we certainly do expect from some growth XXXX levels.

Richard Newitter

think history COVID should then [ph] in general, last to on go that least look be probably it's expect back step around, just, But going How And of down Okay. like the at a just less what situation. ton all that more things of the presume calibrate time you have we and don't for can us to off maybe year? to a we XQ of your year XQ XQ because seasonality, quarter pronounced of meaningfully last a trends XQ at to this because than drop to was and there?

Nick Curtis

is Yes, have – at the involved. anyways, of place not the whatnot. protocols calling should the generally that in addressed third and some in and with given beginning. second involved harsh to quarters fourth some cataract and There patients quarters surgery some in and There cataract volumes. surgery, patients seasonality have associated seen I of cases, speaking cars some is in is first seasonality Through and distance terms in in and the We've the the doctors same this. them with winter the as seasonality waiting sorry, trying there are

there, here going mean, COVID, cataract aren't with we're obviously Now, patients seeing things different away. I some and

out of some backlog the haven't So, able certainly the the the COVID surgery more in. There's been seasonality patients get to mirror, practices to and starts here starts as winter you see is with and these in as return, our maybe the smooth patients that to that pandemic. and of coming rear into fact move

So see and than the quarter quarters the – you'd first, third, there be see strongest. would less typically but in where our would certainly quarters, little some second fourth seasonality what be a the fourth

Richard Newitter

color. few on and FLACS market Maybe one your more Okay. operating. the thank a just then Your Helpful is system, here, you. couple on ALLY? system just Nick, and current a

what the said operating [indiscernible] an maybe XXX utilization that little seeing is I average competitive this how go? of significant. guys of where sustainable at can you guess, such you your double a explain you That's above bit cases. And think and this? can market, are systems number about I are an why utilization trend competitors

Nick Curtis

So, part efficiency sustainable and it's I toward I'll – answer our features of And some the that it's the second first. the very towards differentiating those and driven we're are of towards DNA. it two inherent in practices. driven We're things of up because believe really our affords system like primarily outcomes.

And the data them such in as look devices, confidence leads as things registration into thus, and with better as electronically Iris through helping The to is achieve when procedure. communication feed the information we system. of more and the efficiency Doctors the it they're terms the to have the diagnostic they you so, the system and feel where a, – they throughput higher at getting into that finished and And outcomes. can to do automatically confident good system cloud patients the LENSAR, presenting pre-op the adjust.

think been we've at utility. the we levels our system higher other volumes that's And take one from continue And come as So, and to rebound, that, market volumes more grow a that has it's why to because a those reasons the to is our see rate. because to sustainable. footprint the it and grow beyond. XXXX result I able as of companies, share expect of continue back we'll And the and

Richard Newitter

bit ALLY. launch? what your run will of that give we the you that be switching to your should into of guess up Is stepped for on the R&D kind Maybe we Thanks the confidence stated or these anything that rate about just, you what about I fourth and up continue sounds as gears that XQ reiterated thinking for to leading on to timeline. launch a you It R&D ALLY, timelines it. that approval increase and quarter should you're on is little and that about all it? we confidence to And in think move previously to like there? Got the XXXX something more one related track way then us what two, there. gives the in through color launch, quarters visibility or can

Nick Curtis

in be some some We’ll increase as commercial move starting towards comfortable place launch. and selective functions systems, R&D preparation around we our up, this get and get we make we’ll as build SG&A our if adding will in that investments We're presence you support we stepping be ALLY. to in force as we more in manufacturing launch. sales to will some to expense, for and systems building year starting with

so, the select And move will as areas these some see we launch. in investment towards you

year. and manufacturing the done order specific team about integration terms timelines, for of why got In device. focused, into quarter filing the that. of the into departments R&D to starting the R&D very working very end and well we're need the in year we in we ready first of next by have terms integrate side, we've be The confident in feel in we're early to partner super on of this of in the to And with goals some development what terms is LENSAR device other

everybody look in competency, And so, team from where we're in femtosecond this LENSAR? developed back while. that's focused the on that, you a where lasers quite companies and certain been And at If for very a is that. core all just just place and we is differs like here go a

starting weren't competency product a core in that ground the like with with so, not terms it's team is this of like like ALLY. and – been here at zero in that's And we place,

staying a target. there direction And moving instep in so, and on we're and very focused

Richard Newitter

Got it.

Tom Staab

by more said were And to Rich We XXXX. going quarter first R&D. on file little more, color a we the of

guided we getting to because do. what know prepare need because – expenses we're careful And Nick, our think that end we're still of to perspective, the from we're to XX%, we commercial to going we're the R&D go from seeing XXXX conferences at go impact seeing we're up, reasonable to an pandemic So, we levels, launch we remarks expect, just SG&A in it's ALLY lot up in tail have XXXX. what to that's successful the that be going the XX% is more cancel, kind a virtual for of seeing be still to I But we're foundation to a hugely in, of broadening stuff.

to have at to, be we the right so, careful the adding very as And right time. increases infrastructure to our

Richard Newitter

Got last it. here, Thanks for jump that. I’m And the maybe in then one and just one back queue.

helpful. think out Should launching just change? revenue guess we the models revenue, the there we little capital think reverse into in the are a occurring future XX% as into So, are refine bit ALLY you you as of kind right the would recurring our launch, comes capital model can you. we I in when of considerations, more at after transition selling to kind to now time? of is give favor future, a Any going of be ALLY for of Thank period mix of ALLY color any that

Nick Curtis

the even that's these, broadening start beginning a efficiencies appeal market of the more operating capital people of and I sort tend good way That two some the because of once backlog look in procedures, these to couple post-launch. the purchases years. through in of expect we're in higher all years that launch. you'll and systems are I patients things would higher see especially the you'll the coming see them when trend. hungry But that which a their these get here into question. years of used purchases you technologies introduced Yes, technology just utilization there'll certainly is, when you said, cataract rooms the we first installed because more the be ophthalmology capital also that's for a the post-launch flows first any With there, the of to new particularly working technology, new types, the and capital is historically sales, into of if of in in think as get see definitely mix

Richard Newitter

Great.

Nick Curtis

into From utilize and we are where internally a market, what use business some the of deals to of of take occasions us use of we financing have it's to a a cash. we see – start broader third-party if third-party highly razor-blade until white will. as broaden see so focused up we're on the you'll side cash can – financing we'll since We've model. into you this perspective, And we model better time, that self-finance prudently but start cataract still, a as a financed than away, most to move use sort things, label a better rather to for more

So, program the customers. to it's a LENSAR

five And seamless. it's three- we basis. five-year a to So, finance these on three years to

Richard Newitter

taking for much very questions. you Thank the Great.

Nick Curtis

Thank you, Rich.

Operator

have I We no questions. remarks. closing for the further will now turn call back to management

Nick Curtis

interest as look we continued everyone updating And call and your really forward you. in you launch of LENSAR. further and progress today approach our thank make and we for to filing for like Thank really ALLY. joining I'd the to

Operator

today’s concludes conference call. This

hold Presenters, the disconnect. please now may You line.

LENSAR (LNSR) 10 Mar 212020 Q4 Earnings call transcript