MYO - Earnings call transcript Q1 2020

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Operator

Good day and welcome to the Myomo Inc., First Quarter 2020 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. Please note this event is being recorded.

I would now like to turn the conference over to Kim Golodetz. ahead. go Please

Kim Golodetz

and with operator, release everyone. is of This financial Thank Earlier good today Golodetz XXXX. quarter first LHA. for new Myomo Kim results you, the afternoon issued announcing a

be to receive and at speak at to please myomo.com like would call announcements, you added the in distribution future Company’s Company’s the on Curran. XXX-XXX-XXXX LHA with to register or Carolyn list email website York If New

Henry, Chief the on Myomo today Financial Executive Officer; call Dave Gudonis, me With are and for Chief Officer. Paul

Before statements operating like statements we other including are forward-looking such and caution made certain to typically target, guarantees forward-looking belief, Myomo's affect Myomo’s to during condition facts confidence, and not are management pandemic outlook, anticipate, statements. COVID-XX project performance, business, factors may historical business of are of I risks and used by involve on operations. estimate, and other that begin, to results These financial statements. would the other guidance, forward-looking impact may expressions listeners expect, The the words identify this subject that ongoing conference than uncertainties other intend, are and call future similar and

the or this Except forward-looking of or undertakes required filed and are with to March and Myomo XX, Actual discussed update in by afternoon. contained for by may and results this statements. ended revise quarter circumstances Commission call. events materially which or statements XX-K obligation other earlier the Securities These is outcomes risk and including as factors any to after XXXX, additional expected Exchange uncertainties reflect no implied filings what and other the in risks date differ these forward-looking factors be from to qualifications the Myomo’s expressed the is law Form

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

Paul Gudonis

all well the at afternoon global full coronavirus, today. our you by caused families this during the us had effects are the unknown Good I that thank affected this the has you way and COVID-XX It's on is you, economy. your Thank personal lives and of everyone still life time. everyone that hope and colleagues pandemic and on Kim. and our for joining impact

I described to to with for brace with this actions address to today, extremity for arm results we've the continuing take I'll then and provide we powered environments, upper Dave I'll the And remarks financial questions. their As update, closing while following taken operations and large some the financial your can review financial business our deal paralysis. Myomo's change address will outlook. quarter first After update, our discuss give need those

strategic $XX billed directly. in the in online direct to marketing, up and first we our quarter reflect from a ever. we've were company channel the ago, The where and our revenues emphasis to XXXX, of quarter's the insurance same billing revenues results our Our included which highest million quarter quarter patient's first on XXXX XX% took the direct year actions patient

same period unit Direct year revenue the revenues has higher year. revenues a just higher the margin compared last unit from of in increased ago. up billing per XX% of in This a XX% per in resulted to quarter to and

to payers size but authorized users that our been meaning us. the or being the have of to process increased backlog are delivered also We either MyoPro by of are payments in awaiting

up of start at end XX from Our the the at units XX of backlog quarter. QX, stood the

to a the for started conferencing, via forward year, screening reimbursement candidate and them set pipeline into and them video move future fittings. MyoPro patients to Last we telehealth as

within by in past the remote end the of in continue our place conducted we've social of the COVID-XX building the have With front measures the travel the to in MyoPro to been telehealth restrictions guidelines that and months, pipeline put distancing few able screening protocol. response for been

for home. safer since they the at It's screened be can candidate

screens number travel is the to safe screenings. conduct to productive perform they these more And the with staff field much in be and Our per can and associated save day. time of costs we

spite record added reimbursement XXX a XX% coronavirus the built of in the by up into the the XXXX be shutdowns, pipeline related quarter we And through from in the are domestic in its pipeline directly health us XX% So fourth insurance company. added the the XXX quarter. adds that's to of patients cases and to

candidates pipeline as XXX up than XXX our more of from are year. A in the the beginning now

patient This are need cast settings. and one to to a we backlog software to QX the fabrication and the grown fit for adjust in units to to revenue of resulted that has in growing number at for perfect in own And and of deliver today. arm has However, XX recognition. a our measure of for of and the XXX payment the of MyoPro from end as units need deliver the their person see device we to providers preclinical person then

delay and pushdown able being This or product we revenues delivery, to for payments. longer the wait several Since we invoice our upon payers typically users, days XX in we set fabricate to to have deliver the months. to for have

limited few increased So been reasons, noticeably far, candidate impact has of candidates typify in the cases, the to COVID-XX. their just churn due exit insurance, and which has not or a by medical to a requires our new to change who backlog authorization, for

May will that up, and opening our we in have even continue have of more certain in this some is MyoPro phases already realized. news to I restarted that beginning caution trend to be good the only allowing locations. so this it's resume deliveries expect are to deliveries in pandemic COVID-XX social June and are And that The effects all geographies. economic early and still

eased. new both equipment able in patients being are policy patient as visits a interaction safe, resulted public health patient we COVID-XX We protective have a our supply been to we've employees instituted procure and of and keep our for order restrictions restart personal as to

so positions, QX impact, deliver we freeze eliminate devices of travel the as and other this make of number COVID-XX. such we lift, fees. ago, some a operating expenses the to and About headcounts, impact our regions, utilization. and We reduce warned took we cash revenue on to of costs month to steps a Because negative employees, and the had impact about difficult furlough service outside reduce their in other able to decision are to due

us testing, the year. since actions, of will reduced to in in person reduce children push cash our the families to we quarter, With been MyoPro a spending by meet we're these the rest that prior additional launch quarter unable we've plan current of able operating over from this with pediatric to year. and out, which the And the device save $XXX,XXX our we for national and complete product expenses

among of number commercial patients insurance by Plans the the companies and other growing, covered the is by authorized who Meanwhile, especially Medicare payers of are MyoPro. regularly Advantage MyoPro being cost reimbursing

a D we initial or of MyoPro, for supporting direction decisions has documentation provided wait medical partner as durable Part Medicare, and rental, on CMS' DME criteria claim, on and as one we on for these additional the patients. amount to followed seniors For equipment our O&P who payment coverage

for XX for Veterans our work centers inquiries VA purchase veterans care. We've MyoPro's medical in and Administration. reimbursed MyoPro's the VA in their recently also patients and over with had

also in process work the the veterans Defense purchase VA VA, veterans. we're just funding VA just relationship In and for of fact, with do our to the pleased The MyoPro, delivery nation's the of orders and started several research help are Department value with backlog with past in the our we the on so week. we the our

our situation, the and our of we've results overview of COVID-XX Dave CFO, reviews financial the to quarter Dave? how this by we'll first adapted Henry. on to With move XXXX

Dave Henry

you, total a and was growing More year billing specifically, achieved was and higher prior for growth record million, a XX% reflecting ago total amount year XX% revenue quarter. compared We in the from quarter for Thank this this everyone. of of direct through record of of which quarter a revenue direct a good $X up up selling the from first is is Paul, revenue. with XX% The quarter. revenue average revenue afternoon price, the XXXX first

to Note channel these have positive emphasize which to expanded billing this happy gross nicely. billing The ago, continued very increase the impact that we're sales compared same also margin, in reflects and a with has this a our period on progress. direct revenue year direct efforts

not XXXX. units of authorizations into represents backlog which XX, as insurance but converted revenue yet with received, Our March XX of units

XX% with sales compared the O&P, XX% XX, of XXXX, orders first and up as quarter. the from of first came revenue XXXX. our of these were Approximately converted international during units units quarter is and in XX, channels. received December quarter VA roughly the of and XX was into revenue This our from majority The backlog unit December XX% backlog

in margin Starting certain of decrease in of XXXX, prices The this channel. the refers recorded gain average being again quarter XXXX compared basis margin. in first primarily Gross selling with for XX.X% XXX XX.X% revenues. that change to the R&D higher in quarter selling XXXX, XXXX of are the reflects increase accounts were Margin was first sequential higher the your the This cost almost in now gross recorded only during all for Prior points. of primarily to costs gross price, direct reclassification. for a

expenses personnel, for sales, higher addition and the service professional and with of XX% as quarter of XXXX expenses. compensation first The reflects increase higher associated expenses the an costs well increase as of service million, marketing over Operating primarily of quarter first reimbursement X.X XXXX. were the customer

with Note term the for charge million to loss weeks. XXXX. of includes XXXX XXXX while for first COVID-XX increased quarter of to of the about was The loss Net the the undertaken $XXX,XXX, that from of actions we to loan. the million related in quarter the in first XXXX. million, operating loss first lowered period the same we've a compared pandemic of is XXXX personal $X.X for the in loss quarter of recent company's be a net $X.X extinguishment $X.X quarter of will first a expect expenses million Net ongoing X.X of operating

share, Net loss first in stockholders of a February $X.X deem or quarter. in originally December $X.XX reflect recorded or first XXXXconcurrent year's in quarter $XXX,XXX attributable with share the offering. the to XXXX issued XXXX of per $X.X approximately with in public $X.XX of to compared the warrants prior our We first XXXX million common re-pricing million dividend quarter of the was

approximately reverse same our that $XXX,XXX deemed of share XX in year. effected financial Company's the for that X-for-XX XXXX of on February reflect as re-pricing offering revised statements of our on per those public the We reflect of a split this XXXX. words, dividend the amounts result stock quarter first to Note for January

first XXXX the of compared the press and XXXX. Adjusted with Please of quarter table release a XXXX were for Cash negative earlier first million, $X.X to was and accounting. $X.X the negative to equivalents million XXXX. for a a XX of the compared issued XX with non-GAAP $XX.X December for $X.X EBITDA GAAP of we today quarter million refer reconciliation March as cash as million of

XXXX public was $X.X Excluding for the private concurrent offering, and February XX% from burn of first proceeds our balance outstanding of prepayments offering net loans of of closing the million cash term $XX.X of our a quarter. the the the with million the in

we the repay or the note amended Chicago outstanding loan announced convertible was fee term option. which into a includes it our allows our $XXX,XXX, Today, a added that in Partners, of with to cash at also to note, we which stock This Venture balance. amendment restructuring turning us

X-K balance amendment our approximately file before $X,XXX,XXX fully the fee described the reported was outstanding terms the of date more of is loan, the of restructuring date, the today discounts. refer amendment. Please term including to the As

to of has COVID-XX expectations, altered the our outlook. now our Turning impact near-term

normal quarter the As our revenue we said, and quarter be certain to That second travel open geographies revenue. we starting mandates substantially to restrictions and revenue that temporarily constraining by one activity, operations a second return to end to the more and expect expect, public first of quarter. would health up are economic will hopeful below are are pace

in third the backlog put we something which expected In extent quickly the accelerate to how revenue reserve backlog the quarter. can have quarter can normal the us to some been on will of position is an depend we third meantime, during that operations revenue into in convert the weeks. The coming we into impressive authorization closer building growth to to

increase the we expected inflows as working while to impact being XX for second on expected business Despite to down we we to cash the have at second of liabilities. next Turning expected as to higher quarter, cash believe cash least burn expect COVID-XX hand in the usage in the months. our pay sufficient cash operating meet requirements the of we quarter, position, our is for the cash our burn muted are capital cash by on net substantially

if in to weeks, components the require believe growth term, Longer remains the our coming operations we accelerate normal gets XXXX. operations second quarter putting MyoPro are the the resume opportunity all However, back can't something fund place closer capital may of beyond when in to We revenue the to additional we to significant. country necessary work. we

call I'll to back Paul. With that turn the overview,

Paul Gudonis

you, environments. today, our Thank describe us we've Dave. economic as quickly Well, change light you've of business heard in and personal health the adjusted

to unit. continue margin pipeline, and our the channel, which our per higher we're larger approach so to and a We billing gross we more percentage leads an in add and doing expect to direct see to effective patient cost through of even using much business going telehealth, revenue

plan our revenue generate spending to increase been been the And While future. to delay achieve flow in leverage we were had for breakeven that's a revenues, able restart a we've cash short-term with necessary able and operating our we lower believe to deliveries deliveries to able growth. in in us

concludes the and our formal for ready of to the part we're This operator, call presentation, questions. open

Operator

you. Thank

We question-and-answer the now will session. begin Instructions] [Operator

Paul Gudonis

before during time this first And take and travel. we more for I that question, we available are to and virtual mention meetings investor want calls limited the

And a Investor investor XXXX contact relations today's tab. our Reports under on firm information release. contact Myoma to find on time. please set is website the Their may up Annual also So news our you

Alright, we're ready question. the first operator, for

Operator

Please The of ROTH question from first ahead. comes Scott Henry today Capital. go

Scott Henry

Thank many you good sold you A afternoon. mention QX? Did were didn’t I couple questions how in and units hear.

Paul Gudonis

units revenue sold XX QX? in We

Scott Henry

for Is much. look at pretty that's would I not typically expect carry person there And because number, with backlog a into backlog is very typically, the can't off of what kind to interact to when for XQ, make the XQ a wear the being a Okay, revenues the which bottleneck you and the the XX, you of excellent. of Thank that the able quarter. good would issue that patient? into next But issue in units I is? the

Paul Gudonis

That's we've patient we restrictions. fit to complete We able -- be but that and of we -- health can't been able able right. public deliveries an haven't the to have after because authorization to got we're not to the

Dave Henry

April, delivery. scheduled has down of for clinical next the as here those reported some of now we've out our at Yes, which weeks. two first to field slow step while fittings the to in three I fabrication the the started Scott, end do March and these and And castings, number now over team is a

Scott Henry

large Okay. -- capacity say, there And backlog ability, is there get revenue? and capacity is from restraint on to your you QX, like what's your the backlog and go its very to to

Paul Gudonis

we our on devices has out enough the central to the course the significant capacity and for backlog the has fabrication of month. site go with team many field it capacity in during fit what have Well, And today.

like feel watching as as open we go slowly. to soon from So, we're and up, as the ready they these now are news regions

Scott Henry

on that question. it's want the is number. big kind two focus is, And to a And the reimbursement really that just XXX numbers Okay. pipeline, part question of questions then final add

it that number, pipeline take you what become overtime? about become are to have ad? First, Can does how to you what backlog, need to heightened changed at XXX maintain pipeline the it a Has that post to are check. to go what a And the ad? think get --what And we boxes but the COVID-XX. insurance do it you take does Obviously, once that all level? you

Paul Gudonis

Scott. Thanks

our pipeline definition changed. what of the So, hasn't enters

to doctors Google hospitals have rehab activity get t patients and clinics. therapists their and own referrals and families Facebook, social We from the media, from through leadd plus and

and experience ask that candidates. verify this insurance reimbursement reimbursing of their collect documents. likely We their their they get phone, we from have for to team regularly interview would customer a are over and patient the have MyoPro that for we the we when that some the they does So, permission medical plans then the

medical histories. So, get a get their to we written order we have doctor's

submit the seven to prepares and percent years are channel. stroke had patients or and again, to back work they're they through necessity. these through arm then, company O&P they paralyzed, medical package pipeline And insurance of team direct example, XX-plus their our billing to provider an either goes chronically For our to that a the use go reimbursement ago, new want

to out, submit we directly that considered pipeline. when they're the part payers those the So, points of

very And large and over pleased change. how quarter. I'm of with, we're the number here has it doing to in big a XXX evaluations the expanded XXX these

country, screen a we around New or a month later. York patient which and put LA, plus, going may or a days leads be You do two Chicago the to screening get set-up then or example, or day might to, year-ago, recall to might be referring for in We we're out used

compressed So, that telehealth. by timeline and it we've we're doing

So, team team can able it an our evaluation. a is have our insurance we field us takes and half customer clinical screen And they an up contacted verify today, their video hour, conference and will if hour to someone tomorrow. set maybe evaluation

compressed saving also So of ad significant really have an that dollars. but amount time, it's we travel

moving So, that all us by that's to even pipeline significantly in telehealth and evaluations enabled these has from doing from increase quarter-to-quarter. why person

Operator

The next & question go Please ahead. Bauser Dougherty comes of from Company. Kyle

Greg Bogdanski

Greg actually is Kyle. on guys. questions, Thanks taking for you This for Bogdanski

like reopening reopened have I about for states looks elective First here. there XX procedures. off, quickly that saw Last it states

could that process? if fabrication of your forward can actually now you required move of So, visits, as backlog, the the share part with as percent these right what of in-person

Paul Gudonis

I up more couple We're May, backlog in up we how large in more June now patients, coming contacting in a dozen And country. is up as and the areas process now. come know around that's here will of the scheduled these XXX the open already,

hope well insurance majority of the But they've while they've quarter. I to guidelines. these we health can got been get patients, waiting that, our the authorization. team as the public those anxious following by a the end of their just as we're for And So, is

Greg Bogdanski

That's good.

Okay, $X.X quarter. burn in think that's roughly clarification, the just mentioned Thanks. cash helpful. really million for you the And I then, is that

With the spoke operating think expenses over of already about reduction about next the should quarters? how couple we

Dave Henry

million would mentioned Paul had operating the in expenses that and I had we a say remarks in of reduction. first quarter, $X.X about his $XXX,XXX

well how of states up from going look on how quickly depending maybe how second normal opening And that will reduction would that will for stem level quarter depend that that I are on last. quarter. how and and quickly in are So, operations first long kind a resumed we things of

to as as will those long possible. We extend savings out look

try So rate this on we expense lower long that, stay operating to as as we for can.

Greg Bogdanski

lastly, thank great, internationally then the U.S. it's hit the back course but international expectation Do and you things demand then the you. you And Okay, In impact U.S. other with I follow thereafter? anticipate will COVID that know be staggered? to the are seeing come early words, the markets of first already

Paul Gudonis

recently out We've shipped to Germany. several devices

good As media, countries. European to than reopened other Germany you and steps the might seen really have have has the in taken more some seems of

there, some Germany. of shipped months health insurance test devices necessity. to MyoPro the candidates ago, partners hold is couple add we've screening statutory are in And So, citizens and the revenue that for German days meet announced a continuing we The to pipeline. O&P partners who covering the medical

that's good thing a So, too.

our year. see market we'll Germany international think I So, this best being

Operator

from Jim go Company. Sidoti Instructions] today ahead. [Operator The question comes Sidoti And Please next of

Jim Sidoti

to March get Can for really able the took of see on earlier through, part quarter? in some you? and you started change. just really Have give before us you things to disruptions things We a got when sense February disrupted

Paul Gudonis

with was trip, providers. mid-March. It meeting clinical been on a really I've business our

following declared And end area, that have in here Massachusetts the Chicago flew the in offices week. back shelter-at-home. week, We then governor of

most home. can Fortunately, our work done at of be

work. and laptops their continue brought other home engineers fixtures design to So, their

works our clinical of team in field anyway. the from home Most

can from advocacy work patient of department home. Our

do and work it a patients arms with mentioned person that, ability their then as of So, return actually measure continued, because what fit. go to to take is was that to to get we what our need lot a has constrained cast was Dave visit in do that

pleased So, country. it's our certain around that now we're in up mid March. sorry the see open really been And since states to

Jim Sidoti

that much there's little came halt very April? pretty we a everything assume should grinding in mean, in to April, regards I to that right. contact customer But with

Paul Gudonis

then Yes, payers. claims no There's can't which means, for we die. with filed the payments

and international now again, lot, a there some, but that deliver out Now, were But couple we're go there fit a ones. able devices. to, not

usually convert but We will submit a more payments, us, into there's so to QX. little be cycle likely about a cash actually bit maybe to received revenue those claims for days, longer that in takes to XX

Jim Sidoti

Okay.

Dave Henry

just is, I This that to we time this off be second help paid we filed still from we help, we most in. health. grow even mean, to QX actually things direct getting from already direct that second down that could actually live a a with were on revenues is that But There patient without quarter take of potential there's for particularly get sequentially quarter do have is kind because were had some potentially getting of we to cycle to part, say not have the standpoint. able revenues. going claims public much get been sending why paid can and being that QX to from a billing -- to revenues going

try for as this to quarter can. like as much is accelerate now right So, to really third quarter third we playing

Jim Sidoti

XX you the in you Now, about said quarter. units shift

around $XX,XXX. to XXXX? price was in average compared $XX,XXX average price of How does the first your So, quarter the

Dave Henry

billing was of in -- much this We quarter revenue was direct year. XX% higher. a first last XX% It year's had

probably And might say would somewhere in a first to about, first the ballpark. average the it's so want quarters -- have in result, in range lower XX,XXX, somewhere I that as I was quarter price much of off XX,XXX selling say been

Jim Sidoti

opened? people sales to things once get people back? need can been that we clinical the have quickly with Are to who you those them you're been, And some I then, going get And in you assume, have how people people touch specialist or furloughed. had any that patients

Paul Gudonis

fit inability brought half team. we so field the one furloughing patients in because back Yes, just of to it's had and our step those about our clinical take we this with And to actually week. and of right go to with on, visit

opened do month those over some and will areas as more so, people bring in we And get probably we to we back. need two develop those deliveries areas, or up, of and the next

Jim Sidoti

Okay, trying And reimbursement that on regarding to that conversations the CMS thing know get last last then for in I you've quantify months? with update three had all right. me. ongoing and any

Paul Gudonis

between continues that of just first and back it medical disclaimer any rental forth provider back and contractors forth There's the provider no DME and published relations payment dialogue LXXXX time submitted the O&P Well, policies. who coverage or on against between we got code yet provider the steamy LXXXX. and claims and decision and the O&P

the in regularly Medicare as continues, are Advantage focusing are on that paying for of commercial VA XX% who device now this advantage we're paying the So, on the Medicare Comp are well seniors meantime, that Workers MyoPro. plans payers that plans as for for

Operator

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

Paul Gudonis

operating expenses, we're of while notations, reimbursement so some overall volume you, thank increasing going number eased of authorizations, a being the in delayed product restrictions reduced locations larger underway, in shelter-in-place doing on percentage the number orders. catch-up direct operator. revenues and now closing, of are Well, increasing to with and and insurance are obtaining delivering the the that greater pipeline, Well, is cases

along we'll the large breakeven. addressing flow line we're very product for down unmet a next a cash milestone need unique So, of continue that path our with valuable

well. Again, thank you afternoon much your all be very and this for time

Operator

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

disconnect. now may You

Myomo (MYO) 15 May 202020 Q1 Earnings call transcript