MYO - Earnings call transcript Q3 2019

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Operator

Good day and welcome to the Myomo Inc.

Third Quarter 2019 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. is event this note being recorded. Please

now Adam Holdsworth would like go to to over conference the from turn ahead. I PCG Please Advisory.

Adam Holdsworth

Myomo’s Henry; call today and Welcome Paul Gudonis; conference Thank afternoon Officer is Officer. With third and Executive the Dave call. the operator earnings Financial quarter on you, me Chief XXXX Chief good to everyone.

to limited and from implied Exchange in filings the your of relations forward-looking the release factors not or is call outcomes and materially facts obligation forward-looking statements. I investor results the release following or make of forward-looking at are to results. can used these At that any may and turning Myomo’s are are the Before press All intent in expressly today, Myomo words and statements estimate, like website be at future what but statements would anticipate, the statements. contained may section historical other update business, typically and forward-looking attention affect performance, statements. other and financial press issued quarter call myomo.com. confidence, expect, include over Securities to p.m. identify risks expressions to expressed may copy to These other involve this The statements. A a these intend, which and statements. differ with conference subject operating concerning are target, found to Commission we X uncertainties with directed. by These our third forward-looking other guarantees than similar are management, belief, results. Myomo’s disclaims of remarks forward-looking project Actual guidance, the factors qualifications is risk the not and condition such certain to

pleasure to over please CEO. Gudonis; Paul, my to go It call the Paul turn ahead. now is

Paul Gudonis

following discuss the of XXXX to questions. business update. call welcome we'll will conference give call. and Adam, for provide Dave closing begin quarter and third and all some the I'll financial financial earnings us your updates. on on guidance to then quarter Then third I'll you. our take you you, and by Thank our results be Thank joining available an update providing remarks

During I'm growing lastly billing, growth Myomo’s and insurance number number the metrics report new percentage billing the to the This largest units of any our pleased the growing to additions of selling revenue third A quarter. that due reimbursement direct authorizations. payments. greatest direct converted accelerated. backlog in ASP, quarter to of to of pipeline, or value well percentage of up to increasing as and largest as additions the average new price included

individuals O&P past paralyzed expanded allows provide us significantly to able of MyoPro year, now distribution and conveniently to and top met the Orthotics States, XX metro goal network the clinics, the During areas in the population. we U.S. Prosthetics to majority by of the our being to United our in serve which

to works us patient's MyoPro our augmented with plan to directly authorization and health while direct also obtain insurance our for directly Myomo program, O&P We with the payment billing distribution the brace.

which costs pilot, per margin the under includes revenue higher payments billing, we unit. with the clinical billing The incremental on offers associated average it we're marketing, we're direct and receive initial than that success as responsible on us the billing more these of channel, patients. costs this and the focused cover Based higher growing now direct for,

of the period. XX% of XXX over compared candidates the this just direct reimbursement on with direct billing third associated directly as MyoPro in to for patient time billing a channel revenue percentage This by billed XX gross or of billing Company, directly to units now the it overtime, that the should the continue quarter pipeline to pipeline, Myomo. unit we increase billing did which new XX% added process cycle and higher grow insurance growing we direct that's significant revenue in And be the is a companies. year units emphasis patients will generates additional very And is XX-month margin our program the while ago, the expect represents underestimates seven-fold

at of to in a Here's Dave to how provider a this recognize an we payment. ship example months point. we O&P payer, we minutes. revenue customer, can currently our direct the will When this take more and our we MyoPro bill affected earn it an billing has and O&P And few depth typically cover a upon of actually direct payments, that receive Henry When CFO build shift the several revenue. to in revenue the receipt

record of levels into units as a expect of have the well pipeline, leads backlog while that we authorized in and MyoPro we convert an revenue. backlog new As result, will as

we've cases. cycle, and To the Our actions because shorten the accelerate a series of and the expectations out a third quarter revenue be describe those analysts our revenue of timing missed undertaken of which what I'll to billing in direct moment. turned

our Meanwhile, here accelerating, as the earlier, additional fundamentals are are operating some I details. business stated of and

of XX, up XX% to with of the continue increase. end the a at which XX, which record MyoPro patient quarter XXX in a We sequential is September the pipeline reimbursement generate number from XXX of units June, level of was second a leads the at growing number at

We result expanded direct this is online. marketing our direct-to-patient of efforts believe a that

the number as also We with also This international added majority number O&P candidates. these XXX distributors. overall MyoPro patients direct from growing new designated the billing of our units includes of units pipeline into

XX months represent six authorized to medical since just potential and device, upon quarter or another quarter, to the whether the VA beginning patient authorizations a during O&P the the first Of approximately of or went customer that the amount process of the MyoPro year. XX doubled to quarter insurance Medical X.X revenue were These on-hold delivery due situation. direct units million that exited authorizations issue, who a almost the XX XXX reimbursement of or provided that's in Center, in or this and patient changed the were personal to to be at of

payments. cycle As patient I Worth, These which goal us of the allows included valuation arrange or mentioned, the we've Texas, the where online have to lead from and call of to a a clinician in our is hour, a center verify to accelerate the device the with and revenue enquiries insurance actions goal to quickly. undertaken between compressing an Fort respond also referring is delivery for marketing recently number MyoPro’s opening new time becomes within to actions

XX send depending the on to and times evaluation was trained in we'd at XX how comparison clinic the For that patient for the that to in orthotics days to busy arrange person to local cycle of O&P past, a candidates clinic. led

began candidates screenings do to also of We’ve conference. video telehealth initial via

pre-screening waiting the scheduled trained date. few than enquiry, the evaluation for can waiting within screening Our a now an rather staff for busy O&P a patient setup often or days of clinic do to

experience a support that customer up a Also to MyoPro. to with our Our the have team now reimbursement the obtain follows patient their for more and [assessing] call center we the then physician medical documents, can speed fitting [prior] with patient options to necessary team authorization. patient up delivery, process so collect their insurance

so trained Texas MyoPro’s and in country, with such more we First, around to quickly. have certified as geographic the have the fit our we certain areas And and O&P their can California. staff available we also partners more find own clinician patients

longer the we patient time O&P at We wait again, will to bottlenecks get in enables which directly us from that the enquiry eliminate to time This us in more the busy pipeline sometimes which speed deal now been some the up help these with clinics, candidates these locations and into have payments, and past, can interested quickly. actions believe authorization, delivery patients. more with

higher employed per up strategies units metrics, the and So, to cycle. and generate that accelerating overview revenue to our of revenue operational the were speed

our Move on and Henry. financial the the Dave by year-to-date third the review quarter CFO, to of

Dave Henry

afternoon, good Thank you, Paul, everyone. and

XX% comparable third Turning for was the XX, financial XXXX. of XXXX in nine a increase similar versus to of ended the the $X.XXX months to million, approximately in review, our Total third the XXXX. of which was an revenue period XXXX, revenue the $XXX,XXX, quarter results September approximately was quarter

Our revenues XX quarter units. We’ve XX in offset units on the months number versus quarter average of lower price, during XX, and by a a ended were higher third nine units for recognized of XXXX. revenue September third revenue driven the the three selling XXXX, which

channel I'd reimbursement channel of XX% XXXX, like in in our the to revenue. XX% the pipeline provide to end in compared of mix direct reimbursement XXXX. of our quarter change billing In has the impacted near-term some patients at color how on in pipeline are quarter third the third of the the the

billing ASP the of revenues. selling pipeline last on mix margin shifted the are has since and the patients the four direct done So, both higher towards direct over quarters. This gross is in consciously

We under we all record GAAP. revenue the when of criteria meet defined

and providers sales meet channels non-direct VA, upon generally not directly or we insurance criteria O&P the do For companies those able deal shipment. all are revenue of and record billing to as such with

insurer. In know where be basis, no with are which by case-by-case we directly with revenue have we so a the by network instances, paid deal a is paid. -- direct recognition many insurance an insurance don't the until and of will companies channel, company, we In out billing do for contract how on prerequisite the we much

normalize near-term [big] sometimes in revenue XX longer. change which insurance pay to This expected can from quarters increase. to that take days direct our in the resulted as billing coming to anywhere XXX companies Given or is GAAP, a has revenues

quarter. third units the the mentioned, end second at the in the units have from quarter Paul As of we end backlog at of XX XX up

had quarter. backlog POS insurance in A insurance the record Our received for received we’ve authorization, not number but authorizations patients third is a are recorded of in whom XX revenue.

the I changes of higher into exited part and conditions to changes turning non-revenue was quarter prior the than not percentage was do XX a backlog of earlier, we've due patients. number experienced converted future backlog during XX in expect insurance revenue were units in As units without We to quarters. quarters, in this revenue. This in which and mentioned

ended of Gross in respectively. September Margin quarters XXXX, XXXX each XX, and was XX% the

by quarters $XXX,XXX under the revenue. for $XXX,XXX of at no in direct of to Normalized margin approximately these with the XX% corresponding first factors is Third for recorded billing affected quarter period. revenue gross delivered by recorded was with was a of margin line costs, two in revenue margin was recorded gross a approximately in quarter partially This of patients XXXX. channel offset third prior units which XXX% as cost was corresponding

realizing and gross XX% period our price higher comparable selling Other MyoPro cost factors is on a Year-to-date reduction positively same year margin the to the compared average ago. XX% for compared to benefits year ago. period gross the impacting margin included a

ended of months XX% the of versus reimbursement. the approximately months XX, product and expenses X% an increase of approximately million three period were reflect increase for the the period million an Operating nine ended same marketing were spending to efforts expenses The comparable increase Operating $X.XXX secure September for XXXX, associated XX, September XXXX. compensation XXXX, year increase the addition ago. primarily of with is higher a and compared to costs personnel, development $X.XXX

XXXX, $X.XX ended approximately Net approximately cents compared or $X.XXX ended $X.XX approximately loss compared a per net or $X.XXX September Company's of XX, per XXXX September $X,XXX,XXX loss million period for period loss $X.XX for The a for XXXX. of share to for or the amounted with per net the share, nine corresponding corresponding of $X.XX XX, the net or months per the quarter loss with of $X,XXX,XXX share XXXX. share, was

of $X,XXX,XXX release quarter to EBITDA. compared afternoon reconciliation of September was loss of issued of for a Adjusted the see this $X,XXX,XXX EBITDA the corresponding our adjust Please for loss press XX, ended with period for loss a XXXX XXXX. net a

and in June continued XX, $X,XXX,XXX XX, was compared at Cash the approximately slow quarter in $X,XXX,XXX the -- third quarter, million third September in and $X.X XXXX. million second million burn to the to XXXX of quarter year, XXXX. at to $X.X compared Cash the first on hand of to the decline approximately in $X

of clarity $X including which version on used XX% at October of XXXX, of quarter and expansion original we which on from a Interest means is closed proceeds is The lender. after growth capital, our which Pro further closing. the months and in cash XXXX, from the of non-dilutive under for a to net rate on begins of On quarter is first issue there's term-loan, six and discount, pipeline. the principle term-loan a term-loan forma the with will repayable MyoPro, the progress further term-loan in Partners. introduction in in reimbursement CMS on with The million a we ended XX% XX, proceeds million cash. of term-loan the we the allowable. Chicago and Venture the receiving the our $X.X be milestones, pediatric the from coverage the make source expected million represent for third term-loan $X.X repay The will redemptions

and forward point not control, good visibility our for patients and had guidance, recorded, announced under pipeline dependent based to Turning the at the our those halfway the payment from quarter, looking of insurance. revenue we fourth on already which is in we're and into other words, revenue in

quarter growth resulting compared growth a result, trajectory, fourth XXXX in will As for we resume believe to significant revenue their revenues XXXX.

from to respect With our order the the reach additional our of we second repay in raise into quarter cash cash the to cash, flow XXXX, to objective and expect after have the capital proceeds term-loan of runway extended to need which breakeven. term-loan

to over Now Paul. call I'll turn the back

Paul Gudonis

Dave. Thank you,

also of moment number clinician began the to in backlog that contact MyoPro. reimbursement the us As patient respect shorten the family revenue our of operating described or follow and pipeline, us delivery insurance of expanding implementing as all of the from the We've and authorizations, pending with will leads, accelerating, to are you've are today, payments initial revenue the the received. approved the heard new approval makes member metrics patients business strategies cycle are or through

to call year. that the I past the to review opening emphasized the growth four over for before want questions, So, catalysts we've

as U.S. large the initiatives in third increased their we The pipeline generating very cases, We candidates will with digital media authorized direct-to-patient into leads distribution be year’s direct on support in XX% And of billing to been and continue reimbursement the backlog continue in and paid. O&P pipeline quarter, follows. been of and marketing increase currently also X, marketing. XX pipeline, efforts our units marketing these as we and such engines a on search successful has candidates doing and the Xx represents clinics to delivered to building execute to a record Number is a and number social we've last well. and compared

organizing pediatric our younger patients development in children's is start meeting product new days their we're the for screening stages, with X, Number prototype final device to for and patients. hospitals

Number this XX by we we reversing other X, in And major reimbursement, advantage pipeline. will they Healthcare advantage candidates began for earlier are and over United to the Medicare policyholders Medicare year, payers. Medicare managed obtain now have

we're have codes, beneficiaries, Additionally, the coverage which with at claims guidelines CMS first while under part submission payments B staff Medicare for the amounts of we continue for to were our finalizing preparing payment MyoPro for new the issued dialogue regular this about our and beginning year.

broader in as MyoPro in population. licensing program countries. distribution technology the discussions international a our partners broaden And the several case-by-case and as markets finally, started very product international number X, international markets excited markets dollars our this overseas Asian We're to reach O&P potential and have in new engaged we get partners successful for local are in about also authorization. opportunities potential growth announced pediatric orders third subject reimbursements. now pipeline, distribution they million player In in they ordering We in to our continue with introduce to are we a quarter,

part this of call so, now opening to the we're presentation. formal And the Operator, our concludes questions. up

Operator

The now will question-and-answer and Please We Jim go the Company. ahead. question from session. Instructions] with Sidoti begin first [Operator comes Sidoti

Jim Sidoti

better saying I pricing take longer but to Hi, method. to to be you book this good more on margins, transition revenue just going the it's Are higher direct this, statement? want clear get income now units going of billing you're because afternoon. actually that sold being that to on gross this to to to

Dave Henry

Yeah, that's right.

is need wait we take just to to that don't what if giving some under And can't revenue under paid record be we're trade-off because the getting things channel that direct going as margins -- because you're that, what the I fee for economic that mentioned, until state. direct we're billing to that is are revenue, rules you provider. of that's those through one higher know of you GAAP. the would we it's benefit billing for But, the ASP So, the O&P under and that not be paid,

backlog resulted could pipeline, and then XXX in call cases, resume will which XX for fourth the to revenue and in the I pay, what reason So, in it the in take that's in company that GAAP our anywhere are growth third insurance quarter, an to it to for direct because the from Then our follow expecting of billing revenue increases, that and as doing. quarter. revenues we is days

add the $XX,XXX manufacturer's to I ranges MyoPro. could depending of to a retail we If from bit that too, that, more price in the on a model [MSRP] $XX,XXX have that’s

patient's the the out so general, we a amount, So, on. directly our pay network, is when depending significantly channel. in company network in higher through will submit than wholesale will that that to they for that partner O&P But on sell device plan and insurance payments, the vary and amount we

Jim Sidoti

to you're assume or and just XXXX. fourth XX%, XX% now, be you and clear, somewhere Okay, hoping you're [north to I at so quarter XX% be know, then in the of]

So, transition will be didn't if as didn't [indiscernible] high, or the will transaction? not you make you this it you this if revenue growth report is make

Paul Gudonis

have for business transition that to units to would growth expect this in do for selling revenues average we one have but makes near-term, towards as have direct thing O&P to But the grow -- make selling in channel -- accelerate the we much taken take revenues here sense those it we impacted said. reason, that decided I has would return it the selling from, because the more to feel and our is well, yes, the thing. revenue lower because price It the price, as one

Jim Sidoti

the as But, be when had for expected? margins So, bit the should the gross originally growth think a revenue to maybe look next we years, we lower we over model, will get little than we quarters. should later higher that we out few reported

Paul Gudonis

then and margin later as we what out a But is Medicare, the on impact would as we, be -- be will gross don't decision amount happens wildcard there the what what fair think we or a assumption. that to get be. period I CMS on know that's obviously gross what on could if the with by reimbursement margin

Jim Sidoti

And it’s any my next over Have months? had past the question. you CMS with three communication

Paul Gudonis

discussions the orthotics is mentioned as the responsible remarks, file to the the DME continued now payments. we've claims medical certified around country. to in with of one to my file Medicare them. working Yes, I amount approach And claims The specific for practices and on deciding claims. different prosthetics in have first we're They're are and the the what the one these regions [indiscernible] contractors regions of of with of

And first advice the approach, encouragement from to will headquarters. so, staff that claims We're we per CMS at quarter. this filing be taking

Jim Sidoti

Okay, end and amount year you'll you of the a think do assigned think then? still you do get it's or at now possible an it's -- XXXX this

Paul Gudonis

how device a depends are and process whether fast once make It region allowable the pays and they take these amount. they that for what claims into national

how speculate they'll really I So, can't that, quickly on act on Jim.

Jim Sidoti

U.S.is one Okay, many me. now? right in available and then last MyoPro O&P the the from How centers

Paul Gudonis

where have excellence. Oh, offices it's our all between centers of the different we

probably partners We're other to so XXX O&P have and close We the on. locations around country.

Jim Sidoti

all right. Thank you. Okay,

Operator

[Operator Instructions].

question Our Ed Please Capital. next go Ascendiant ahead. with comes Woo from

Ed Woo

new Yeah, thank My noticed market? Have landscape. my on is competitive you changes you more or question. question the for taking into the entrants any

Paul Gudonis

haven't. No, we

one Mark -- have patients commercially and that the our it's in like And registered, are it. We the is turning it's that our to available CE FDA knowledge, clinicians device to only Europe. this

the enter competitor direct any seen not we've market. So,

Ed Woo

this, mentioned well? in billing. [indiscernible] shift towards, Are as you this now And and international more this markets more about Great. your you direct

Paul Gudonis

unlike reimbursement in home the markets, international O&P in their And and No, these are U.S. understand in specifically. working approach because regulations providers through the providers, network countries. the exclusively market, we're they

clinical [indiscernible] and with So, we background reimbursement, and we're them. but to clinical data them the so reimbursement are on, supporting

Ed Woo

this looking then or or bit next presentations into pretty more little of patients, to year marketing or forward And be outreach in a year? year your would Great. less terms that next sales your than while similar

Paul Gudonis

seen to so marketing and Facebook, What direct well now, is media, Google, because we've the real we patients, have on it’s social

Paul Gudonis

you. Thank

Dave Henry

Thank you.

Operator

over back our turn any session. concludes answer Paul the conference like and would Gudonis to to question for This closing I remarks.

Paul Gudonis

operator. you, thank Well,

of remained very in metrics we’ve in into growing insurance that our outlook as our growth will units overtime. we for as closing, convert the in well to confident improve backlog So, reimbursement pipeline, of authorizations, continue revenue as

you to average and the as achieving today to the Our prices and are to selling recognize your focus leverage the all benefit expected from evening. a path us time operating is begin unit drive higher per of billing on allow good to have increasing direct we revenue continue terms Bye for in Thank to down we able profitability.

Operator

is for presentation. now attending Thank you The today's concluded. conference

You may disconnect. now

Myomo (MYO) 12 Nov 192019 Q3 Earnings call transcript