Earnings call transcript Q4 2022

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Operator

Good day ladies and gentlemen and welcome to the Fourth Quarter 2022 Earnings Conference Call for Venus Concept Inc. At this time, all participants have been placed in a listen-only mode. Please note that this conference call is being recorded and that the recording will be available on the company's website for replay.

Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that can cause actual results to differ materially from those indicated, including those identified in the Risk Factors section of our most recent 10-Q and our annual report on Form 10-K filed with the Securities and Exchange Commission. Such factors may be updated from time-to-time in our filings with the SEC, which are available on our website.

to result or events, of obligation statements our or no a as new undertake publicly revise update forward-looking otherwise. We information, future measures in may are GAAP. accepted call also references or certain This include accounting principles not with accordance financial calculated the generally to that refer generally as measures. non-GAAP We financial these to Investor financial our to release most with in earnings press comparable are of GAAP calculated and Reconciliations available of measures those measures today Relations on the issued non-GAAP website. accordance the portion presented in our

now Venus would the over go I to like call Chief sir. to turn Silva, De Executive Mr. ahead Concept. Rajiv Officer of Please

Rajiv De Silva

Domenic and operator, Penna President our Chief joined you, XXXX the and earnings Innovation Venus call. and Officer, Dr. and welcome Thank Officer, Concept's on fourth our quarter Hemanth Della everyone to by Varghese. call by am I today Business conference Financial Chief

start Let comprehensive transformational which our will the our remarks. new I with of forward. cover key development company for has will strategic from going agenda a the during me the the what of business, prepared review of of findings with an begin performed we plan discussion strategic our

provide our strategy pipeline will and as guidance. as our new financial for financial at summary will and and condition of Domenic a a an year-end, XXXX provide well XXXX. quarter R&D Then, in-depth with financial our results Hemanth priorities you review review then fourth of our balance of sheet

questions. I that, Following wrap open for up will call and the your

in With let's mind, that get started. agenda

XX.X to company an expectations of the improved in-line and we from delivered impact profile. in strategic reflect press million. issued quality revenues of morning, XXXX, fourth to seen early actions the quarter our in As cash revenue are and of the flow taken with These cash results have operations transition higher release you would internal total this

sales profitability to included of our actions strategic shift the operations. long-term and international a profile to efforts sales improve versus cash subscription These our

later detail in in topics these cover the will We call.

competitive now the included Importantly, commercial of and capital strategy, strategy, strategic opportunities and performance, company, product have positioning model things. financial processes, in our completed comprehensive technology review the and other partnership its among industry, possible operating and systems talent, which we of evaluation an structure, R&D

findings segments, in I energized Venus in platform and and with initial medical robotics. ahead. hair restoration review aesthetics the were across by the review. is the a of confirmed excited in position device our an am R&D all My automated leadership about during platform attractive Concept competitive aesthetic distinctive impressions strategic treatment key offerings a path

passionate support in disruptive potential platform Concept’s benefits are the robotic XXX and technologies, the aesthetics the sales of in device applications medical Venus the about of existing nearly future. pipeline market which to be million with customers global Our the in company's annual truly

with across well Bliss, two-thirds key based company's portfolio is aesthetics, of Restoration minimally our platform, ARTAS Velocity, revenue diversified Bliss medical Legacy, Our Robotic industry leading of coming from revenue and the invasive total base nearly system energy products iX. the of Hair Max current Versa, sales in and device, XXXX

nearly markets, market the alone. in to growth the company drivers as share sale the from They procedure brand which be recognition, and strong of services. and enjoy existing portfolio unmet solutions stream gain continue revenue in The they of restoration estimate commercialized recurring compelling. valuable forward X.X marketplace, to devices their address important we indeed annually consumables a in billion has hair also needs represent are for the addressable going based business key The primary U.S. and energy-based

platform years profitability company's in That company's to profile said, and and that is pipeline new that of the to built opportunities it the very the the is growth most our robotics technologies over development has believe last truly stage potential that company XX the the years significant is underappreciated. come. the robust firmly represent and transform much impressive I of technology foundation the

energy-based modalities and technology Concept industry-leading expertise pending U.S. by robotics more and multiple offerings, across supported development has devices. proprietary This and led diverse expertise than established has of technology a XXX of Venus applications. range patents of to the

color We will call. strategy the [Technical pipeline this Difficulty] and more on in later-on R&D our

structure which to review has versus and business cash Our lack the Concept. in flow comprehensive fundamental of strategic the differences had technology profitability financial of to been completed, confirmed and The other challenges cap which the medical the model have business, also now contributed two significant companies, Venus improvement generation date. organizational small of

the model, built which the highly but a can over company's the company. the I company's markets enable confident history. After generation. in review, infrastructure be that the outside our challenges commercial of for First, first poor at second, growth cost cash the the and by And U.S. these new industry and flow strategy significant operating subscription am differentiated addressed historically,

has have plan Our strategic assessment main execute. a plan, begun informed we comprehensive of new development the strategic This business which the transformational pillars. six to new of

the U.S. rightsizing rationalizing Firstly, our market, maintaining an while direct the the model reducing primary reliance presence as and organization. in infrastructure, our use business cost, sales on distributors significantly. simplifying subscription of of reducing focusing Three, international Two, by the optimal international and on markets. mix the

our inorganic but energy a with to building. [compliment as to energy portfolio platform support provide targeted product a financial segmentation, And base primary with sustainable build investing profile focus a centric and [ph] sales. six, rejuvenate customer for M&A. based leveraging market growth robotics, customer through an improved portfolio in and device] a future broad to consolidation Five, devices the efforts revenue to consumables driver a robust R&D better in and maintaining growth on with based more focus to model Four, and robotics

cover Let briefly. elements these each of me

the We main begun related to company. actions implement have to rightsizing already the

now America announced a the fully restructuring in Israel. we implemented in has As a North been reminder, early of company, and which February,

of spend our initiatives. the not reduction markets. and restructuring organization, directly The sales international to streamlining on related model continue streamline business to We targeted operations changes, focused infrastructure, in simplifying

medical will these Difficulty] [Technical to As previously million pretax we With savings restructuring activities total respect subscription model, adoption aesthetic annual while in driving the investment $XX of technologies the model the at enabled flows. the in Concept's of this came of the early valuable due at million capital beginning cash working to growth disclosed, to innovative effective heavy years, when deferral clearly XXXX. completed, $XX expense of over result Venus expect

few strategy, with addition, in much customer In a the the COVID-XX To credit to pandemic environment on more of over took the forward our has clear, stringent qualification and which place company the the the though increased due subscription last exposure, model be go changes impacts years. macro requirements. in

shifted sales and meaningfully, subscription continue we over forward. to cash cash the subscription sales However, going to we away from have sales will already prioritize business sales

our year The to medical total revenue for strategic fiscal the U.S. largest device XXXX market. our markets reorientation, aesthetics profitable the be focus. most will U.S. through represented between XX% International the XXXX be With periods. priority continues XX% of and and

While these on company, important and This distribution markets XXXX. continue markets partners. our will to in to continue to process transition we in XXXX rely the will began be less profitable

array [ph] Venus future. a including body, segments, is enables removal, compete key We face, like less higher believe and opportunity our of and in hair reinvesting that The resources represent divesting distinctive U.S. and market to it] improvement the interests broad in markets those hair of the profitability driver a [then markets profitable the smaller in international sub product restoration. portfolio in company

see these segments] future. into the benefit serve We [modern all to [ph] continuing the of

however, will, to our We serve of distinct segment segments. differentiate needs customer portfolio product the better and

better In by derived addition, we practice supporting will from and the customers efforts. seek serve utilizing by in our our devices data to better key segments development

intend in to to R&D. investments We continue make

our robotics we device investments we Our of which upgrade R&D efforts expect to advancing make targeted growth platform on as forward. will time, in our same focused going the key be energy our At will based a well. be to primarily portfolio organic aesthetics, driver

as of pursue In generation consumable addition, well. components next part as we intend durable to our devices more

we And ideal we being an financial and combinations industry. finally, fragmented improve as profile, bolt-on acquisitions our in for this platform foresee

of to As profile profitability long-term cash to execute and Concept strategy, enhance growth. Venus sustainable business to the XXXX accelerate and a of and we repositioning year refocusing path the the this flow of is

a to and lead on engaged, operations cash in portfolio. XX% CAGR XXXX the sustained driven in development. of our strong to in margins with from that in in contributions half deliver EBITDA five-year revenue clear total And newly and to our strategic of expense at next this believe sales plan. place single-digit based over the of second GAAP three profitability increasing adjusted performance years the have creation, and growth basis positive stage organization energy through system flow I operating focused a robotic We responsibilities they defined on positions strong by management, strategic prudent our full-year highly and XXXX, our all next a leadership us value ready from team support are plan

a and the XX% long-term achieving CAGR revenue double-digit provide will plan This foundation of margins. adjusted for EBITDA plus

maximizing taking near-to-intermediate-term our path value maximizing and debt our multi-year strategy execute to on is secure highly capital our are resources obligations. the to we our meet as While requisite work capital focused place, creation to we

to Hemanth priorities. Varghese now would the for pipeline call discussion strategy our Dr. of turn I like to over a R&D and

Hemanth Varghese

and group of over a robotics Thank proposition high and R&D platforms robotic scientists our restoration has device quality, growth market now XX-plus engineers brought strength have energy markets. and global clinical is the value strong new invasive developer two dedicated product treatment to history our the you, We pipeline of a and underpinning leading and energy as the aesthetic and past a XX years. This for based over teams. our believe non-invasive, devices long-term the Rajiv. based aesthetic strategy Venus innovative collectively hair of minimally systems

solutions With hair offerings hair customer body, restoration. key and treatment in segments all unique for product removal, face, targeting

investment and treatment strategic many both markets, our and product on organization connectivity, As portfolio for differentiated advancements solutions drive introductions ultimately our and physician with the oriented engagement to have highlighting successful innovation, plan, better utilization, and outcomes, solutions features, ROI building to our new advanced to we end of customer focused treatment key part of customers. enhance spot dedicated a refocus towards key continuous new new

treatments artificial for delivering they [Technical state become of of with predictable Furthermore, the and together art development San our proprietary in and and a product outcomes Jose, true experience technology vision mechanical recognition, proven strategy. new Medical robotics IoT, intelligence Difficulty] of working has Robotics R&D of California our team developing the located Center track company's in a controls at decades record Excellence engine

We've a process, is standard hair latest sets transplantation machine to robotics, ARTAS up the cutting the recently the XX% harvesting, learning now implementation per of of up leveraging machine offers and to intelligence, resulting technologies. artificial speed of advanced edge to hour, generation system iX, vision, by procedure improving a X,XXX faster. while implantation allowing that grafts of new also speed a level of in which announced the introduction for new This

Additional new the improvements patient centering, graft quality, in resulting and which improves enhanced vision follicle better include and system, precision. tracking

this development forward, key our and to Going component a and several product growth over be an in future business for strategy will team catalyst the essential will XXXX years. next revenue the starting our the growth be in new

conscious this in new and a two strategy, systems finalize key we by targeted as with bring to and the new of part investments To forward refocus XXXX to do efforts made development, choice mid-XXXX.

the project systems new One be called Astera. of will new contouring these body brand

around we've on Building will hear suite system shaping some last this pressing and laxity, body new address a enhancements best-in-class contouring, and training. cellulite, incorporate customers innovative and over our we of decade everything muscle technology, the advancing concerns full skin design the from system most that new including proprietary will features of learned body all-in-one MPX in

as come launch to exciting in this of first [we on More XXXX. [ph] to] are half closer program the

past resurfacing. robotics aesthetic skin is this paradigms. for treatment aesthetic The generation AI.ME second which clearance ability next We fractional platform, December has truly revolutionize FDA the our received believe AI.ME, to that medical XXX

[the micro-coring robotics algorithms AI.ME utilize manner. selective and visualization [system] skin treated pre-planned a move depth a to array collagen in area. resurfacing smart the vision, to precisely fractional of of XX% deposition advanced [core, to an We intelligence target system, dermis] skin area, hollow to of [ph] artificial punches at [ph] use leading machine and in precise predictable The an treatment the the fractions micro up skin exercise] [ph] to and

We in new level first AI.ME may we its develop of see aesthetics game a in to procedures. high-demand platform, of aesthetics, versatile is provide kind predictability, energy-based starting which innovative minimally technology physicians of continue platform changer differentiate and it AI.ME solutions robotics the to offering invasive new become This with areas medical a medical solutions. from skin a consistency, existing fractional will will as which area the treatments real offering resurfacing. of visualization, for

technology technology in and maximizing and field well-established medical be These of R&D critical ongoing Concept's our AI.ME the our synergy applications aesthetics in clinical innovation advancements will showcase research Venus investment robotics critical between to aesthetics. robotics capability. the medical towards pioneering The business

a leading in Medical launch second full Board We're will in for establishing XXXX. the preparation that of Advisory our process of the physician of support half commercial partners AI.ME of

these with coming years. continue products this commercial priority new come XXXX, our features with several future More strategy our out to innovation commitment plan in to the next launch on of the Following and to systems, updates. over we topic in technologies, several

With of results as Domenic? and me our Domenic that, December call balance to turn for of the review let sheet fourth financial over quarter XX. a

Domenic Della Penna

Thanks, Hemanth.

related fourth are focus XX.X of company's prepared For XXXX the my avoidance quarter basis results all items revenue on international of GAAP growth year-over-year. driven noted, decrease a year-over-year unless remarks XX% a was and revenue million, will XX% region otherwise a United a of by revenue States on for in doubt, on revenue. GAAP in year-over-year the reported the We reported by and decrease down decrease year-over-year in total The XX% basis.

The XX% from a in decrease XX% decrease a decrease systems by decrease in to X% quarter revenue, was in XX% fourth by prior the in of driven revenue revenue, services The XXXX, derived category in revenue, products the total of revenue. decrease lease period. product and in a percentage compared XX% a total approximately subscription was XX% revenue model systems in year company's the

deals to as over our of the of efforts rationalize in focus year-over-year generation total order to preserve The cash and States by United unprofitable in recent revenue in well deals proactive primary prioritizing the revenue driver subscription liquidity, improve cash quality as international on decline strategy markets. is to our

in XX%, year-over-year in of or quarter quarter of model of subscription as gross XXXX. sales X due primarily focus of fourth result review revenue. compared Gross across change to our lower was driven the change The to a was by was gross sold primarily million. Gross in million results cash sales. The the XX.X system XX% profit the devices, in rest fourth decline based XX% of to P&L. the revenue on profit a to financial Turning margin energy margin our of the decreased system under

million offered were total or to shift of Sales the remained change a research strong million The subscription an expenses, by in the lower or systems decreased was in by X% partially impacted or expenses marketing [ARTAS and on by million. total artist in to margins, driven or administrative our general development X.X in expenses are at XX.X are increase sold XX% operating offset quarter, and of in therefore slightly million X% expenses. X.X a decrease fourth expenses, robotic and of X% [ph] decrease X.X not million sales not The operating strategic of systems] X.X cash. and

of $X.X GAAP XXXX [ph]. expenses plan Fourth $X.X payments] payments [severance of quarter of general and million restructuring include administrative and

our X million XX% operating restructuring related non-GAAP to and expenses Excluding related or year-over-year. activities, other expenses the severance declined

an your attention of review expense call note GAAP you I fiscal to a your operating models. to take XXXX item and financial quarter to our moment as fourth and results year update want

XX-K our morning, filed in operations. reclassifications operating section detailed with of company SEC the the the the As performed expenses statement within of this

and selling The development to previously and intent costs general and clinical research and clinical presented respectively. expenses marketing and and reclassify within affairs administrative costs, was training to expenses

between for XXXX a unaudited items these company's XX-Q on have GAAP the and as as XX-K operating filed on detailed Form We XXXX, reconciliation XXXX. well XX, the Form reclassification the line provided periods of March filings adjustments expense the

the total of of year quarter compared XXXX. in specifically the Venus includes first to million million of was in in X.X million, to of XXXX our X.X quarter the and quarter other in million, Net compared million period. compared X.X and fourth X.X XXXX. Returning expenses to on Argentina, prior expenses million Other fourth were the financial subsidiaries, fourth Venus loss of results. to France X.X loss of discontinuation quarter the interest operating X.X The a review

$X.XX attributable for X.X of was XXXX. million fourth or per fourth share of Net compared compared fourth XXXX. the loss the Adjusted the $X.XX EBITDA loss X.X for X.X or for of stockholders to XXXX million, was per fourth share, to million quarter X.X quarter quarter to quarter million for of the XXXX

As adjusted a have to press a loss reconciliation net GAAP EBITDA provided our reminder, in full we our earnings of loss release.

Turning to the sheet. balance

XX, XX and million, December to for decrease XX.X quarter-over-quarter. compared As approximately as the of XX.X million had X.X XXXX. a XXXX, used cash and December was cash in Cash in December of XX.X months the of and used cash company total debt respectively million of operations XX.X ended three obligations million, XX% equivalents XX, million

cash improvements sales. in on flow driven as the to in improvement our working of cash system by used benefits focus cash in operations The result initiative of and was a capital generation

million partially was due were as combination of lower higher by advances lower we fourth our cash quarter – expenses capital performance cash capital lower of reductions Specifically, used investment, to accrued in compared in sales, working increases of the the offset X.X subscription to working performance in and which payables DSOs and suppliers, third lower driven to prioritize XXXX. by inventory versus quarter sales payables as cash from to

used the X.X XXXX cash of operating was by period. fourth the and activities quarter million investing during offset Cash in in from of activities financing

from During our common quarter, November a Capital. from million proceeds agreement stock the Park of in and Lincoln of raised issuance equity X.X the placement fourth company net the private to pursuant XXXX raised and of sale million with proceeds purchase X.X of

review guidance. a of to Turning our

the XX, X.X% year-over-year. revenue total million, for in As to period. press of guidance range million XX of the company we range the XX-months for X.X% to our our the approximately and release, revenue introduced detailed a December representing ending expects XXXX XX The in XXXX decrease full-year

are we full-year the providing guidance While for XXXX, use our we for profitability outlook XXXX. are considerations modeling in providing for not formal following the evaluating

the of growth half X.X% at of total our of in XXXX, decline offset revenue assumes the full-year in First, low-end by in in XXXX. the first revenue declines revenue year-over-year the second guidance range half

This high will revenue we decline partially expected We sales systems, full-year expect offset cash system to the XX% in shift than XX% sales of is system compared in result sales subscription represent increase in to the approximately mix total XXXX, by approximately lease and expect cash XXXX. for year-over-year. for full-year XX growth to in more expected a of of million, which revenue teens

Despite total systems the expect the expected result improved generation. decline quality in net improvement in in we and to subscription revenue, of an cash revenue

total aforementioned revenue the Our of in guidance our are impact XXXX revenue reflects for strategic approximately we year-over-year business also million changes, this which to related year. X implementing international

prioritizing impacts the international believe in cash normalized on changes year-over-year certain basis. from this revenue markets XX% we our a strategic and total would Excluding the system be growth year, sales,

practice our last QX not expectations the our is be the of to it helpful for interests to of XXXX, provide range XXXX, first in that total guidance thought week for of share quarterly we we would it while Second, are of revenue in the reporting quarter given fiscal transparency.

As total such, that of in XXXX will XX to the includes range quarter first be our revenue full-year million XX guidance million. assumption revenue the our

flat margins we of million. and expect revenue our XX GAAP Third, full-year to million the range XX at range, approximately in of low-end the gross deliver operating expenses to XXXX relatively

X.X XX.X in to restructuring of range million range fiscal the million year includes X.X Note, expense and compared approximately to includes compared fiscal expenses, guidance approximately million year guidance The severance approximately XXXX. also XXXX million approximately XXXX. for GAAP expense non-cash operating non-operating other XX.X GAAP of expenses, operating XXXX

X and of X to million, fiscal X for G&A, we million Specifically, million, XXXX. million, non-cash compared X.X expect million compensation, and X debt year million, X.X expenses stock respectively, bad

the X% release in investments our This non-operating cash R&D expense reflects XXXX, benefits from the compared press of target offset initiatives. expenses, year-over-year, XX partially to aforementioned target initial million for the items our cash year driven X% by X Excluding and or by announced a early and XX restructuring XXXX. X million operating activities XX.X to is million February, million decline approximately in strategic expense to non-cash to for million fiscal

Note, to restructuring XX million benefit a expenses GAAP reduction to of million operating expect in continue beginning to XXXX. in we our of the our XX full-year activities result from XXXX

more expense diluted result Fourth, used of assumptions for we are P&L across And and year-over-year. our expect in than XXX in average our our shares guidance X the million weighted of million. to approximately expected cash modeling and XXXX total a supporting XX% interest operations finally, reduction approximately revenue from

to our all continue secure We capital initiatives. fund to to the strategic requisite growth evaluate opportunities

our hand today. to wrap Rajiv? now Rajiv call over me to the call up Let

Rajiv De Silva

you, leading Domenic. Venus new the am Thank this and by effort. strategies by we implementing I excited energized are turnaround at

a the guidance this very for As company. for is indicates, much XXXX transition the year

course sales over this see However, to cash the in our from reductions expenses, we flow cash losses on year-over-year will expect meaningful operations. improvements and in metrics several year. include growth, narrowing of These improvements in

second I'm growth confident in breakeven for with to investments that these return improving R&D metrics and cash a stage the in the flow operations XXXX. from set projected in will half planned XXXX

evaluate to will required and our the options to growth all funding turnaround We opportunities. fuel secure

include discussing future available your R&D our calls. efforts cost partnering reduction of secure options for look to avenues initiatives, I Thank progress you high These execution us. financing as time through to to on forward will of today. other well non-dilutive much financing priority potential very as of initiatives,

will With to call now that, the your questions. Operator? we operator, open

Operator

Thank questions. Marie BTIG. questions from you. with our with Instructions] [Operator Thibault first come And your Please proceed

Marie Thibault

the Hi. Thanks next cash appreciate I on questions. on company. of all extending runway. detail hear. the so would sort morning. the to taking hear, latest to for like the plans Good what's much your I Good for

but like that's terms factoring hear, in capital, there of in a cash You've etcetera? receivables, thinking opportunities, job sort what on cash would trade funding to done whether you're extending of of and job a the nice is reducing used nice operations working runway,

Rajiv De Silva

cash And seen year-over-year we're fourth our reduction cash our as the Look, as an Marie. of flow losses flow we've from indicated in the you, over runway said XX% extending course projecting full-year, from our for reduction to Thank we in cash focused at least quarter. are the We've on in initiatives. operation losses. we encouraging comments, fund keenly operations

work So, cost on in reduction implementing we to words, initiatives. continue other

So, we planned. of better do than I extent the to we'll upper the that, thought to get can that end obviously

look robotics which companies our in R&D We opportunities is platform, own our validation continued continue the at R&D to a of projects other and partner to from their enthusiasm about platform. interest our

as you we kind work to some because individual It accounts. [ph] do slow our process know you as is factor] are not – And mentioned, on these and and continue of factoring though receivables. a institutional customers we, individual of receivables these [that

it's much want promise can Domenic. We that So, to certainly on priority deliver slow. for important just don't how but we an is it,

our might relationships, worked converting distribute international and us well. subsidiaries geographies we’ve As some as opportunities of some to those these sell for to partner, either be our through there

look to at. another at R&D are opportunities we And need in robotics all will about to the given platform, obviously, available that's So, level the make our looking investments we us. our enthusiasm platform and we

Marie Thibault

I in and Very be Okay. it what XXXX? can front me, this in that's in was model. used check going I of I good, cash operations just by that to But reduced year. have know XX% so my

Domenic Della Penna

was [ph]. million] It [XX

Marie Thibault

Okay.

Rajiv De Silva

It the was mid-XXs. in

Marie Thibault

Okay. Mid-XXs.

launch my in On in to helpful. hear of wanted I encouraging to Okay. full guess, XXXX. XXX a or second that's done for XXXX, on follow-up or systems the AI.ME, commercial before needs here new launch? get accomplish, pipeline, R&D you're half approval so? coming the K to the you have then And use very That's in XX is two ready months clearance, next already to what What I it hoping

Rajiv De Silva

Hemanth?

Hemanth Varghese

Yes. Sure.

when in we go in board, out, space clinicians to work So, to of with amount top out the system. as finalizing data we for we're process the of clinical really a want of support medical the creation advisory go sure with good make mentioned, and we a new

for So, sure have that we're expecting. development and we finalization available systems for between make that clearance while have the demand manufacturing to we of

is systems expect We is lot we in types of This go that commercial with it and work we make sure sure get when those to make one this just XXXX, position launch. of to truly we want innovative a properly right. full of we

that clinical And so, of do support we're the full in to putting place. we're the going that with team

Rajiv De Silva

company launches of preparing prior great of of Speakers] the ahead these market launches. [Multiple haven't done the just job that is a we

is what we focused ongoing we AI.ME advisory So what is indications board that for on towards really are our defining as to new want well, And efforts on really of on. focus right. medical part also

because will is be a for there new over that So, of our series the indications expectation time platform.

of some the board as that work medical capacity will well. the defining will And advisory be the us for doing be

Marie Thibault

sense. thanks and questions. you the detail for so the for Makes Okay. much Thank taking

Rajiv De Silva

Thank you, Marie.

Operator

you. Thank

coming of with questions. questions next Our from line your Please the proceed with Anthony Vendetti Maxim Group.

Anthony Vendetti

Thanks. Yes, sure.

out model, you of and exiting just system. new of many then And follow-up Domenic, you but the those some a are mentioned the were a some So, How of on unprofitable. that you're getting I of many completely? distributor going know countries that them you're how ARTAS to convert to

Domenic Della Penna

exited on in-line countries. that for that we basis. we're So, XXXX are in XXXX, effectively with evaluating another three the three plans And

Anthony Vendetti

orders the seeing you're ARTAS you or Can old or for And system traction or sales your AAD? you then then at new system? differentiates at What AAD, you had expectation separates system? of initial – And new any generated talk the not from about whether it, at your the that the it what booth.

Rajiv De Silva

events ARTAS Sure, of get new interest well we I at specifically has sales reception regional that lot had. Look, a but specific think did calling iX, [indiscernible] been to of as we've both track the iX our events, the the We ARTAS – don't which obviously at Anthony. AAD, encouraging. very as of This you're Rajiv. the lot is the a

the version. ask me about Hemanth some bit to system in latest have a we of kind little Let just talk improvements of that this

Hemanth Varghese

or really system manual is in you be as procedures what's procedures. whether is software vision rate this when mention, really since fourfold did customers. Speed The questions about. and feedback the both enhancements, gotten on We we've other the well so introduction, the of efficiency at really and to changer look augmented increase compared as game it Yes. is from great a far implantation, which a

so place expect repeatability terms let's compete puts you that system. in transplant, the in of or able with all really except in own, And that to precision say, you'd its the a workflow the benefits, from normal a get robotic a that all robot with would

feedback well. So far going release, but its far early great days it's we're so really again, and on so

Anthony Vendetti

pricing, can the about similar And it that? is you talk or

Rajiv De Silva

the system same. the different, the Yes. have remained remains ARTAS customers, overall system with work is obviously, versus the a little Look, brand the we system And broadly a our who previous iX has pricing similar. customers way pricing new but

Anthony Vendetti

I'll hop in back Okay, queue. great. Thanks.

Operator

questions [Operator Thank questions. Jeffrey with Please from Instructions] Thalmann. Ladenburg your with Our come proceed you. of line next Cohen the

Jeffrey Cohen

gentlemen. How morning, are you? Good

Rajiv De Silva

Good morning, Jeff.

Jeffrey Cohen

just our a questions end. So, few from

I inventory Domenic, I And fourth see talk then correlate about in written-down I quarter. to over firstly inventory. think, write-downs. is, think X.X for that there

I were also with outlook, model? receivables [XX.X what now] going around expect receivables of the for some XX, that sales think and that some it XX, [ph] for and you effect the this ramifications cash XX% might was long-term year on to the

Domenic Della Penna

Yes.

we million it the any not inventory discontinuations, side, to etcetera. a in big fourth took of the some some expecting There in not quarter cleanup might And but on subsidiary had do with and million. relation up in was We inventory be and did write-offs more The reference in quarter. third big had the charge. charge that clean write-down we some the that XXXX. write-down we're Jeff, to inventory was was So, to X.X took it X.X million and the was X.X FX we the

inventory, a don't goes, the we far [Technical any inventory XXXX. in-line indication really on big don't conditions as in level of we've will And Difficulty] improved seeing As expect provide inventories in on. we we of improved terms with investment manage but as supply of and done lead a a we're bit. times some and forward so that out They've the there the chain in result past

So, help that should us.

receivables, drain source net-net, a The as is those expect we XXXX. expensive, are slight a of robotics offset inventory but don't little to cash we be invest some that parts expect component to be of in strategy, in we that the to capital but working more a

Jeffrey Cohen

ARTAS. on to of then Okay, it. couple I us, follow-up a got want And for questions secondly Anthony's did

talk the they the us hardware trends are indication the and You give that the you you. about fleet number size seen an current then the fleet software? of Thank you've over of us could and/or through of utilization past both walk could and improvements, months? And

Hemanth Varghese

Yes.

you. here. Hemanth it’s So, Thank

going the of involve the part, the level precision minor performance provided handling the to significant enhanced guidance product of expectations. the capable that updates the terms or upgrades not to sales system. as data sales I by we're we're system for and largely but speed about mentioned, are in talking upgrades increase But speed, So, on in upgrades, on most there both give improvements But hardware but system. software are software

Jeffrey Cohen

Okay. us That's helpful. Can you Speakers]. [Multiple give

Rajiv De Silva

One of the around is efforts have and the practices. other persistence training precision our done to things increase really we

now set-up [physicians we actually we procedure [room] So, [ph] and where San regularly have staff] in preceptorship do a bring full [ph] to in Jose their training.

of So, utilization continuing to, forward. all going with the kind of view improve

Jeffrey Cohen

cases [explant or there, [ph] cases] I it. apologize explants you helpful? versus clarity, Thank some talk are give implant you. both level using indication be about implants Got new for and which and cases there would that this on trends but could seeking of

Rajiv De Silva

you [ph], it. repeat could fully the question I again? [Anthony] I'm So sure not caught

Jeffrey Cohen

get or transplantation [explantation] implantation using and to the doing [indiscernible] and [ph] both is ARTAS? of using ARTAS Trying a sense hair

Hemanth Varghese

I the new actually saw iX side The side, believe of at? that's the enhancements speed in quality system improved well the as you're harvesting improvements the getting if on as and both. implantation we both what

Jeffrey Cohen

Thanks for Super. taking That our [does questions. across] [ph].

Rajiv De Silva

Thanks, Jeff.

Hemanth Varghese

Thank you.

Operator

you. Thank

with Group. with questions the next of Vendetti proceed questions. Please Maxim come line your from Our Anthony

Anthony Vendetti

Thanks.

Just of a couple quick follow-ups.

some the when more half to XXXX, that but of is in these, I largely the second like guess reduction, that charges [Technical I way On there's when it will seems still expect that be happen over? And all is at efficiencies do is start that'll XXXX you know it? look and workforce to Difficulty] the realized,

Rajiv De Silva

correct. that's Yes,

will look that the to is you full-year at a variable as in lease projecting of of XXXX, XX If XXXX, million component components, run a of different component we and more rate are are headcount There for which expense times that a right? is that in personnel. different costs. XX in million there's savings kick-in there reduction component of There's projected which at of lots that

bit of little in in America we completed and headcount restructuring markets, are more puts in terms those reductions, with it's because North With actual we a Now, Israel. international evaluate in to markets to a the it terms it complex relationships. results our workforce move to continue of sometimes turning distributor effectively do distributor. for When you restructuring; over to sometimes new potential results and profitability a that, in in new owner,

take fully that changes. all this part the that better which year those differently, of a it us to little of way the is implement So, happen, work will transitions why

Anthony Vendetti

all have. Okay, great. That's I Thanks.

Rajiv De Silva

you. Thank

Operator

you. Thank

currently you today. call queue. participants We the conclude for showing additional our Thank participation. no That are your does for in conference

Venus Concept (VERO) 27 Mar 232022 Q4 Earnings call transcript