LNSR - Earnings call transcript Q3 2021

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Operator

Good morning, and thank you for your participation. 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 call will be recorded. I would now like to turn the call over to Cameron Radinovic of Burns McClellan. Mr. ahead. go please Radinovic,

Cameron Radinovic

of Good is financial welcome www.lensar.com. this results a section XXXX. Company’s an Company operator. quarter the for third September of on ended morning, the the quarter issued XX, overview providing release XXXX conference press press at financial morning you, results to the release and This LENSAR the its available Thank website call. Relations Earlier Investor

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

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

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

For please on accessed the additional the refer of the information, factors, which including can be website. a Company’s the with risk detailed discussion SEC, documents filed

it’s after to of of the any undertakes call events this to pleasure live In addition, the circumstances of no as update revise this call this that call. date to Nick At this to forward-looking the or only contains time-sensitive broadcast, date reflect time, conference accurate XXXX. obligation my November information or over turn live Curtis. statements X, LENSAR is

Nick Curtis

morning to us Thank to taking conference time you our the listening. today for call. on third join XXXX everyone you, Thank quarter again Good Cameron.

navigate and this consistent of the Company as we strong the has pandemic. to of quarter progress strive year, in the the COVID-XX We’re third pleased the uncertain by results achieved times

rebound the over the lingering rate growth and XXXX, procedure continues a aggregate our certain more of to consistent overall shutdowns. represented to the On to and where in more pause, our a markets an once restarting the to and in of results, more is in same the be quarters business. XXXX, from pandemic-related impressive of predictability due see growing through operate our continue are, on again first significant XX% the we performance outside returned this growth from This weigh XX% pandemic. we the front, the seen And in evidence the of the backdrop we’ve volume growth three pre-pandemic growth commercial the especially which nine our historical which we be pandemic, importantly, growing first headwinds important to Europe, that months period operations, taking An is our of of which all indication over the implications after of U.S. stopping XXXX, place. of even specific, can and surgery

revenue also drive including product, LENSAR’s the and useful growth. we’ve lease to of and revenue increase seen and procedure driver to an placements, Refractive the addresses which that Streamline continue is to an addition most In volumes, market will in the expect in evolutionary remain be Capsulorhexis technology technology IntelliAxis which significant key platform a needs cataract that current and growth XXXX. growing surgery, we unmet quarter beneficial combined XX% believe procedure firmly our in We third over

gen Academy six and quarter. reported Cataract events the technology both, using LENSAR information, ALLY at our ALLY our current to look the conference, I last System report Later our forward enthusiasm will Treatment over to team remains the LENSAR’s technology. more to we marketing of quarter, We LENSAR in will posters abstracts, third pleased get include and for medical when filing. we conference. next the active System to to sharing month, generated participate this increase Laser laser-focused As our the closer XXX(k) where to that extremely our the Ophthalmology with specific as Adaptive the I’m outcomes as two and data congresses continue anticipation we get highlighting closer accepted American superior featured have of for

product, XXX(k) development milestones of submission We completing ALLY continue and make and XXXX. solid Treatment quarter file to the first progress to the in generation Cataract of Adaptive the our the we’re in next necessary System, complete

flow the reminder, precision ALLY with continue Swiss-made phacoemulsification performed core progress. move, ongoing reprep much believe quarter be Cataract feature the potential be next system the operating Adaptive significantly time providing surgeon-centric market Company cutting been with that a treatment, to in the an and to in patient efficiencies, up a values combine having for and improvement Overall, to integrated procedure The any single translating As market We as commitment technology has generation and to advancing suite patient, laser our outcomes, procedure without a by entire has succeed the superior will the easily the into better with fully in or two ALLY third System to room faster higher suite a experience. surgical to LENSAR’s enhancing one Adaptive enable will of grow of expectations a a the continuous containing fit in addition thirds. Treatment of patient to to tremendous innovation, in technologies world-leading and in the will current can to system. the laser Cataract first System office a all improve technology Treatment femtosecond or

our highlights me call to to the Tom? financial over turn the let Tom cover Now, for quarter.

Tom Staab

Thank you, Nick.

I written little XXXX quarter press those add would in to third Our but included like financial results to our a release color remarks. today, are

filing cash procedure the in all of making first mentioned, a as XXX(k) towards you quarter management, and for consistent As top-line while XXXX. lens ALLY focus growth was quarter it on strides Nick strong us for our upcoming the revenue,

Procedure Specifically, reflected returned volume, deeper of primarily year-over-year. and a United quarter the revenue the in lease in continues be XXXX, to driven million extent United increase its as exceeded in performing to increase volume by share quarter strong was the level, a $X.X was for of the million States, particularly and and procedure pre-COVID increased region of compared XX% analyzing history levels the lesser at XXXX Company market third $X.X to a growth placements. to us. expansion, revenue third States a The

showing procedures XXXX, nice XX% in the XX,XXX from third States. increase the of Procedure of third quarter periods, sold existing quarter foundation both, of States, increased contributing and sold XXXX, in seen a in it and a increased placements, prior system our compared robust have as powering in the quarter third a sold procedure is with procedures In rest all quarter business procedures the of of We as and quarter the growth thereby XXXX, in both of over have are in reported particularly provides XX% again. respectively. from our system placement of operating third Also third total to third United appears XXXX procedure procedure of we of the was growth growth disruptive procedures the XX% were worldwide a as in recently three pad XXXX. United XXXX, novel the third are third Accordingly, and States, increase levels incorporates the That once for rebounded quarter XXXX levels, of XX,XXX the of XX,XXX United but pre-pandemic each placements phase the existing there regions. ALLY, to quarter year-over-year. compared system. world our significant EU has growth the and compared in to technology in in quarters, and The increase system system of XXXX, a activity features launching and reflecting XXXX, the a growth that XXXX combination

three compared margin was Our total of margins percentage as September totaled gross months revenue which recurring At The ALLY. terms a XX% as XX%. ended had September margin gross Laser attributable and of manufacturing margin revenue, level, of in the quarter XXXX, system our the aggregate transitioning compared in as XXXX. reasons: we XX% of of quarter $X.X XX% decrease for million approximately to for lower two well third the flat all sales; current than compared for dollars to months revenue percentage to our gross and operations as our which revenue, to our XXXX, sales third as quarter or margin system on recent XX, was Systems the XX, main gross the in three from to ended largely XXXX dollars flat define of the other

and to as operations quarters ALLY to build revenue depression higher of more we Drug This and eventual XXXX. with margin ALLY purchased our for the continue in $X the sales percentage may was in and first next of was of and XXXX million a being associated few not the to for The sales. expense Food and the ALLY. currently development $X.X third XX, have this of impact Selling, have prepare in years, XX% and than for our for more a expense is general trade offset ended the primarily $X.X margin thereby largely growth gross anticipation of XXXX the our thus and and the of was research our to development next for increase affect a of research Stock-based and to third negative incurred and of expense does and inventory expenses XXXX, XXXX significant in due filing compensation higher expenses for gross expense, ended increase and administrative materials fund less gross and an hits This and represents Administration overall $XXX,XXX or was These quarters in cost with the stock-based to and Total the our margin ALLY compensation and XXXX. in were filing As the on public Within the inventory respectively. September and we XX, quarter production reposition is respectively lucrative and in two September revenue, procedure Company. being cost for is and charges cash along as $X.X was recapitalization marketing of increased $XXX,XXX resumed, quarter a of for which million million charged XXXX $X.X an primarily the XXXX. of ALLY This we compensation of continue sheet. shows million, on quarter by volume increase on costs offset due expensed XX, stock-based increase increase being were This XXXX. and systems. compared the capitalized the the to expenses balance transition September quarter rather quarter company. of manufacturing margin than million X% travel $X.X raw launch increase development with incurred ability non-cash had spinoff approximately units. XXXX the an manufacturing, ended of third additional million $X.X but XXX(k) or expenses runway million it recorded quarters the to continued Research

compensation for of XXXX, of in will million of XXXX, million of stock-based the before and remainder have XXXX. of $X.X which September the expense, recognized recognized end approximately will As be $XX.X almost XX, be all we which unrecognized

infrastructure to commercial broaden increase Looking to United geographic forward, the in market coverage and of share XXXX. in ALLY to we infrastructure launch and expect prior the our States, expand

ALLY. or quarter XXXX for million of of materials. EBITDA third for net loss to of meet also of pandemic. excludes the share, working spent result normal corresponds for which approximates and XXXX. immediate expense been which was operations able our have adjusted needs compared incurring nine and cash effects cash $X.XX months evaluating been point, Thus has are $X.XX of first XXXX, we a cash-based costs to our per in quarter of XX, a due and loss September deduct Adjusted are ended $XXX,XXX of per $X.X At this quarter or development commercial flow capital stock-based adjusted third considering net loss objectives. our in of you EBITDA our our Simply Net when XXXX impacted pressures to ongoing to accounts. a expenses quarter the million neutral, When from XXXX. zero. the to adjusted or X, both, the research on loss on the certain September our XXXX, our in the development But, EBITDA said, supply adjust without operations supply we cash balance in fluctuations used chain chain, monitoring We sourcing loss directly are three ended higher operations, million EBITDA was third loss sheet our compares the future by $X.X to quarters the share compensation adjusted $X.X the

Based XXXX. the in we compared of $X.X million, of cash operational cash September had utilized the believe cash to to quarter XXXX. filing XXX(k) and million XX, the months application that to through XXXX. at on XXXX and have fund for of December our ALLY sufficient $XX.X of we and million of $X.X continue million expected XX, nine XXXX, position of As we and third $XX.X the was forecast, equivalents in our launch our cash operations Cash

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

Nick Curtis

The year end of company. public Tom. a quarter third first the marks as LENSAR’s full Thank you,

challenging could we has each no a persevere, thrive that way say have I squarely weighed became as faced having doing in have While that one head-on, public predicted can us not but only our environment found so. company, would a to challenge proudly the team

of ALLY by ALLY, great tremendous and outcomes continuous the in progress to support of our quarter-over-quarter and industry, our while uncertain surgeons one times team creating maintaining doubt the our patients having hard-pressed superior in creating grow most conventional continuing to potential in cataract in nearing both patients well the has operator, a providing deliver both, the has treatment both market, positioned that the Cataract Our expansion entire as look to to while a I’ll treatment that will updates that to Company, and the and way to for this have commitment cataract a LENSAR and surgery patient we made questions. I match. flow, laser premium, procedure near anticipation and other with optimize superior the are get doorstep over creates growth experience to plan our in as with for within to the establish the no in be now back improvement as well each and ALLY as are opthalmo will the we right forward to closer we With the Adaptive System. believe LENSAR call ability process your overall filing. as an turn future the market for improves disruption current we community. and outcome customize surgeons leader We to team, ALLY our platform, further technologies as the revenue forward have look well Treatment

Operator

comes Instructions] [Operator first line the of Your of Danielle Antalffy question Leerink. from SVB

Danielle Antalffy

Hey. quarter. Good Congrats question. for taking a Thanks so on the guys. morning, strong much

Nick Curtis

Hi, Danielle.

Danielle Antalffy

Hi.

shortages. healthcare the earnings about healthcare a I just was lot from has of hospital, I not across levels. and just few returning the pre-COVID heard dynamic but we’ve me, worker So, where first an within staffing obviously industry, been shortages, on just questions season this talk companies the curious, to of a hospital

curious hear -- levels already you’ve Would as able you’re pre-COVID despite like you’re around that. month then, what few some seeing And just and what that been love and or grow return seeing to have QX? seems a to to into I follow-ups. So, a head we there. into commentary we’re It

Nick Curtis

So, patients for away. cataract us Danielle, that cataract it I and surgery, it good the is news think doesn’t go is that

they surgery, continues have patients the and system. the get -- away, that don’t the patient’s can’t just better exacerbate fact since things to pandemic there’s creates they you the degenerate. They go people during to And like, backlog get if into vision of a don’t when other cataract it continue, slowdowns trying So, is either. they’re are

get procedures to to to being rather try hospital. open capacity the to specific is so, we our seen doctors surgery some performed times, that And There in in enough Most access are surgery facilities. centers issues able patients get are have back. than motivated ambulatory outpatient what particularly are like of inpatient

surgeries but surgery of outpatient are there most Although, as well, there that are are the in an done done center. surgeries ambulatory

are no in and there having we’ve throughput. there’s control But, have while able be to issues that more to and surgeon the with support personnel there that over open in-flow. doubt the continue a seen and so, capacity to capacity owned well issues as facilities, are access little issues patient practices And you hospital-based, enough

we’re And with. the Fortunately, systems have surgeons for being with anxious of to receiving our and procedures are benefits us, I these able help the are -- with and of systems well-utilized. well-utilized ahead go been that think types have to patients

Danielle Antalffy

helpful. That’s Yes.

And then, sounds I beyond said on and remarks you system don’t utilization, give color any just what seeing prepared the now. just trends in know hear. curious Good are Okay. It can positive. to about if just the pretty there. you there’s you

Nick Curtis

feature things. overall to commercial convince we group, surgery, people that a core our because One our portion out they the our trying should with be of we femtosecond nuanced technologies two we’re spend big there, address have that be femtosecond efficiencies assisted is So, a of surgery. not found time doing really time higher because spend used and more in a systems laser have a fair value assisted who need we smaller laser technology unmet but competitive than people to can with most

into get a And are our when learning faster curve ramp-up subsequent and we from perspective. times so therefore, there trials conversions, do

we’re so, utilization. to able that And get

to well. with to feeds and becomes want And that we see with with we that continue I managing think and astigmatism, physicians to that as tool practices that system an growth surgery, get demonstrate results as they procedures people getting to sort about it. that the it the as talk into cataract more and of comfortable do more routine that as are invaluable

Danielle Antalffy

know sounds are to users? last hearing you’re track, the from interest if great. hearing on Would And hear I what much. level you is LENSAR for which Thanks is great. anecdotal, And what’s current ALLY, love guys question ALLY? you’re from on but -- Okay, surgeons you’re of this for it so like me

Nick Curtis

couldn’t more say as pleased we get I more ALLY launch. towards I So, be that or would with anticipation excited

interested, certainly, cataract is I what that in laser are so operating efficient with room. that getting think And really the surgery, want femtosecond right surgery, we’ve people meet into being having is cataract a not in their presenting really in laser that assisted into and heretofore the that that are of people seen enthusiasm maybe interested. lot utility see people, laser physicians and a of we’ve to the cataract just they lot are femtosecond about very seen with forums surgery, different opportunity surgeons ALLY to different talk in tremendous it

we’re really we’re So, about going where excited here.

Operator

Your next of Zimmerman BTIG. the of question comes from line Ryan

Ryan Zimmerman

questions. Hey. want on pretty a can Nick or where your pricing whether just Tom, few just you the with Thanks over this go to kind think want trends in market? to Good have the The of morning. Congrats to ASPs on those held system time, think up the nicely trends today, or taking if me. And quarter. get seem on ALLY quarter. it’s pricing the the you for I ask for procedure existing perspective about

Nick Curtis

for -- Thanks Ryan, trends on procedure of today. the first do You hi volume…? getting in mean Are your you on all. you based call mean and pricing questions --

Ryan Zimmerman

consumable Nick, referring, to I’m Yes. component. the

or about so that revenue thoughts your and just to how kind So, if think expect that the to recurring hold it over steady? go ASP. blended wanted time, about -- get where tracked I just that of your as could of you kind you we’ve and think procedure numbers, potentially I about price

Nick Curtis

and So, as our communicate reality real and devices given that is bring don’t I present given feel is, able is for given is a the down relates and we system provide an there that the the practice. the the -- outcome how in system, procedures. pressure really value believe we with and there throughput mean, to surgeon like that increase we’re it I perspective, to efficiency preoperative here an the the and from delivering we’re we prices the to value environment

getting feel they’re people fair being what’s a that value think, I for delivered.

cut that’ll alone, ALLY that mean, being just forward like going procedure times into take mentioned, another times as I procedure with think, it I whole bring to whatnot. more. operating and level. to a I I to able increases value the in and the there, up and having the right not two-thirds proposition delivery value addressing patient even and the reprep feel room like, it

going I see don’t to in like from perspective. a we’re So, regard pressure that pricing feel

good We’re and value. priced fairly, a we’re delivering

Tom Staab

selling to back thing return Ryan, the actually would I surgeons the takes the system is on little and pricing, as placements, expect And volume the we’re not be to But, and say, weren’t systems. or as many volume, systems but learning we a systems for as now back increase to the for systems, placing that -- hiatus while with get would as is trained this other levels, it we to the to past getting had with to procedure start a current pandemic, we many these curves. we

Ryan Zimmerman

Right.

Nick, you or obstructed to mean, could take today? system point. efficient given I value that So, ALLY you given think is whether through a it consumable, the do will the be just that [ph] just bring, potentially, price systems some how

Nick Curtis

particularly time, the like number kind over that number believe brought And how do efficiency one. to Danielle, on something, I relates that along of the value delivers, the personnel. it it’s tag when people of two, use up, Yes. how see

in they because or without room will right will prep be from you’re next, essence, able role better to that the to that having one patient transport the think, personnel way. people play switching in that to, have. the in a procedure I and because we’re utilize also this the operating And

the it to and strengthens and pay that be value believe willing overall do I what how proposition potentially that. they’d So, for

Ryan Zimmerman

How do then, about that margin not recovery long you and how last the potentially And could or just the for on of side? out calling me. of appreciate some XXXX, Tom, quarter. into you could just one the on around margin that the dynamics think impacting I ALLY it. this margin, kind last Got Okay.

Tom Staab

associated the start see a that our with operations and there’s transition think that, I for there’s quite manufacturing then, with the for going Well, new to well the because been manufacturing ALLY We’ve are units, as current building curve our system system. probably learning we -- a for building unit. there’s ALLY some you learning infrastructure And manufacturing time. curve the changing just

art manufacturing as our ALLY on we it’s folks we better increase I at volumes and expect but, margins get very quickly. it up They so, do speed them hopefully And and for much would science the a we get the ALLY should of an we’ll to the past they on have second probably some say concerns, of I first on XXXX, XXXX, the maybe cost of pandemic would margins. certainly quarter and of fourth that a looking pressure but into quarter quarter and you’re that a little mean bit

Ryan Zimmerman

appreciate to you. you questions. the I Okay. taking Thank

Nick Curtis

Ryan. Yes. Thanks

Operator

questions showing time, sir. I’m no other at this

Nick Curtis

you. Thank

Okay.

you thank filing So, we the and We interest our I and launch ALLY. guess, further you get everyone’s call continued in forward updating appreciate to for we progress, as really and make LENSAR. closer of joining look to today, I as

LENSAR (LNSR) 8 Nov 212021 Q3 Earnings call transcript