- Earnings call transcript Q3 2022

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Operator

Good day, and welcome to Minerva’s Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session and instructions will be given at that time.

As a reminder, this call may be recorded. I’d like to turn the call over to Caroline Corner, Investor Relations, you may begin.

Caroline Corner

operator. you, Thank Third Minerva's Earnings Call. Welcome Quarter to XXXX

statements its the Minerva's Dave in me Jung, that Chief and Act are and in guarantees neither by today's on of statements or Chief any Litigation and not Minerva's of and obligation after September Private website and considered filings, performance, on or in you review XXXX operations. expectations during are circumstances Minerva's over achievements on call statements results. the including forward-looking products, are that projections Minerva's by and ended details uncertainties Minerva's year most future results, to unknown which Minerva's Clapper, within and available based to on are Quarterly XXXX, expected to review. forward-looking Executive expressed that, on These could position known to Minerva's provide to law. results, Officer. Pacific today. XXXX. call, call Report President outlook encouraged customers' today, differ financial of Minerva's the occur described risks statements Reform additional Form involve be of events recent undertakes and the quarter performance as on and SEC, Please as on exist latest for to including for factors cause expenses which Surgical of or results Minerva available This the trends Any provided matters materially forward-looking www.minervasurgical.com November from for the statements filings statements. Securities website and A Joining for fiscal Financial actual reflect will except products call has markets and third quarter impact or demands website, about meaning Officer; All operates, and variants that for no XX, Minerva this made Minerva's section update market these X:XX forward-looking the includes management's for statements achievement hand also for promises do With historical with was the trends this that risk information. XXXX, release which and expectations statements, operations XX-Q the regarding call relate particularly XX, financial Dave. Minerva's Minerva's p.m. recording on additional fact will performance be technology, the the Minerva's should and the XXXX will today. SEC performance, by press I nor today's applicable under call Joel required COVID-XX is Time Investors implied filed of

Dave Clapper

on all Caroline, quarter our call. us for and earnings you, thanks joining you Thank of to third

revenues we million million quarter $XX $XX.X $XX.X in the the reported XXXX. of This million quarter and versus in XXXX of same of second period

of the encouraged building stages sequential the trends, the continuing quarter are we momentum positive slightly, end with sales quarter revenue due seek to lingering through ablation challenges out experienced the COVID, and quarter. are staff impacts The fourth we patient elective markets access, believe hospital have the and of by very throughout While treatments. that reticence limited recent the declined of shortages early nursing to

from to this their year. the reduced indications procedures starting levels are earlier that normal return resection However, more to are tissue uterine levels

third XX% last growth saw system year's quarter. over resection tissue Symphion Our

well we account are we and very macro with continue to positioned environment improves, that this and We believe make growth. as continue to progress the evaluations new trials,

accounts, well continued In we effects on for demand with In as last some of new progress spite of seeing fact, added reactivated still we COVID the overall accounts have treatments, new are or lingering patient months. over this XXX the the the quarter, improving of are and with as on light end quarter, are access. into the at third of hospital we staffing sales seeing challenges believe end we this force tunnel. towards we the But and continuing twelve sales

believe We underscores technology Minerva showing rate, continue market increased products, tissue for resection indicating share well We market the exceeds we the market is The QX fastest treatment successfully efficacious market on continue market to consistent product the us in XX% feature sales overall holding existing most Genesys Minerva were a and and Symphion ablation at continue XXXX. this beginning endometrial steady too. is share. market full procedures, important a are past with having results. Despite that rate to over growing share. ablation approved our indicates is significant product compete exclusive to safety ES that with quarter, products of efficiency to decline growth which resection and this that our our and FDA a HTA bright of ability trends ES spot we and taking Symphion this to clinical show to product, tissue the thus gain trends believe for a data in also are market. Sales in suite AUB unique volume temporary

and hiring our force. dedicated training health women's sales actively are We

force months get our and sales are to team. of major speed up Our progress field almost of covering now is a enthusiasm by and XX to sales our every very metropolitan to for area. territories, takes we six the It comprised three fully sales encouraged rep

sales Additionally, to we expanded XX sales have from recently managers. regional eight managers regional

access are delivery to products our well resection with purchasing endometrium So grow we new networks years. of and ablation to full four revenue that to through independent contracts. With positioned group tissue and we the both coming our slate in continue we gain organizations feel products,

educate seeking accounts already underway Minerva women alone. our in on encouraging, strategy. progress advantages like with Initial which are their accounts making Today's to current website very our With three is our over XX,XXX treatments. department AUBandMe.com is digital our XX% marketing markets. increased turn business the website our they traffic of initiative, and have to options we mentioned national AUB with previously are as managers new in national visitors DTC to XX contract our treatment have under clinically to now and I'd proven We of contract. approximately direct-to-consumer I to select QX is pilot,

by We are that, success, with as expect now our AUB, as increasing the patients XX% expansion physicians fully and like By installed overall sales to of base for early of you I'd Minerva our increasing our team. we three, accounts. IDNs. and signs our options in end, our signing well contracts and one, the contract. who awareness connecting controllers of Number of marketing Number With both Number with two, of sales and treatment new to of staffed organization. drivers. encouraged line utilizing products. year completing complete remind sales growth GPOs Approximately product is under in business existing commercial are be

the Minerva superior During our and controllers of cost controllers. XX and new Symphion awareness of XXX consumer to Minerva past new Minerva months, established business accounts DTC five, products business selling our a Symphion number and accounts. ablation to increase have and established total marketing Number Symphion efforts of drive we our our installed by increased base treatments. leveraging four, new And

Court that Supreme the court. Court of received remanded the request on-bank the of full case we Appeals news U.S. that Finally, our hearing I'd last report of by for our like to U.S. denied Federal Appeals a District that to for the Thursday was

costly disappointed As in obviously and to case finally fully in awarded defense released restricted ago four now sheet a the litigation by be Hologic ruling, and long thankful our balance cash previously at that this reserved We're issue damages Hologic. behind patent us. but expired reminder, were is years the as will on XXXX and the this

results. a to we to eliminate treat are on of unnecessary women We our mission With I'll Joel. Joel our lot for things and our us of growth, over with focus AUB business have we hysterectomies. deliver that, work to ahead hand excited as and financial

Joel Jung

the Minerva revenue offset or XX% the in down seen revenue of Dave million or decrease XX% of of we've XXXX, up total from of the Symphion, years total for for HTA in XXXX or quarter and uterine everyone. Total $X.X in with line $X.X we a up seeing slightly of of seasonality third share slight whereby of holding XX% XXXX. are compared XXXX. million of the HTA quarter quarter mature than total third the third of total flat XX% sales quarter or $X XXXX, trends in million of third of for QX revenue which ES third more of third the in or a In XX% is level past of sales. treatments million the was total good revenue million the revenue the and in product, the quarter million quarter lower the a quarter $X.X positive Minerva $X.X Thanks was but XXXX, and was product or we're $XX.X from of million, anatomies. is niche general, Symphion from as small in revenue, Genesys second the much increase XX% which was Genesys believe of ES from QX revenue to XXXX At total market quarter atypical quarter, XXXX, slightly afternoon in product $X.X third by $X.X million

lower which increasing product additional current the is the product expense four HTA positive customer XX% reported recently utilization believe then future by from fixed the were projected margin manufacturers. contract on third our growth. the a we're placements in In coming mentioned, of sign impacted over small spread which XXXX. cost the macroeconomic quarter the with experienced controllers increasing use the the sold, has and some, third sales utilization placed products volume stronger in over reported gross over XXXX and we will this $XX.X a XXXX changing sets with of on third reduction we of quarter the We've We transportation, sale ES seen future been adjustments over favorable momentum sales the anticipated operating of last encouraged future $XX.X quarter mix environment, we recognized on also margin Symphion, negatively and of believe today XXXX. ablation Minerva pursued gross pricing positively was of controller overhead in historically a the of an profile. by the Total as the the handsets increasing use overall has end offset Genesys over Symphion of life XX% very shipped time, of to include which our in was being pressures quarters, year quarter We've and for in of margin well Dave for margins As of up controller placements be predict the labor away with XX.X%, the XXXX handsets. end expenses Gross general million instrument. costs. controllers by is as third the gross volume the overall place the inflationary single sales period, increase towards costs us decrease in quarters of consumable quarter. use depreciation in a single handsets costs and impact which influenced versus in a below finish XXXX Gross material quarter of of margin user by single Headwinds last raw with third the third being in increased and customers, quarter initiatives three the

increased due spending physician in sales and and of marketing expansion patient increased and the force expenses the outreach. sales Our to

now third in of in stock result net the Additionally, expenses of of operating Non-cash of $X Non-cash a of the a the year adjusted $X.X million of quarter in expenses quarter versus versus operating reported million On million general XXXX. quarter were XXXX. of third in XXXX versus have third in in were for for in the basis, and expenses million the of $X.X the when of adjusted third net still third quarter as XXXX. third total the $X.X third in loss quarter XXXX the $X.X based expenses amortization a unchanged we increased third a quarter adjusted as non-GAAP of quarter negative depreciation EBITDA million approximately XXXX, reported were public a the compensation of $X.X negative third in included administrative loss costs XXXX versus $XX.X company. XXXX. private from prior The million we and company EBITDA quarter quarter was the million EBITDA cost the increased included operating

the we costs. intangibles reminder, sheet finished for unrestricted HTA, expenses the to a From As the related of compensation $X.X was of quarter outflow we significant million balance perspective, non-cash a as well our cash significant In $XX.X the from May Symphion amortization million. Resectr have XXXX in stock-based assets, acquisition total, quarter third and XXXX as noncash cash. Genesys the with

unchanged following of liabilities term long long-term refinancing from Our previous IPO were the XXXX our of and quarter substantially our fourth debt facility.

$XX our of million interest a the year three debt XXXX, facility reminder, it schedule. which a only after term is amortization through third As into long rolls quarter

is for call of million. attention believe and fully the Our anticipate to We on revenue $XX increased from $XX drive to look year quarter, you previous continued your calls. our contracts to macro for that, forward challenges revenue back to line I'll unchanged as you guidance revenue given for from signing progress operator base, future for positioned that guidance force, our continue we say of annual ease. the are we the we turn on our total emphasis With staffed full as and Q&A. year to well With last growth sales million products thank updating I'll installed our growing of full COVID

Operator

[Operator Thank you. Instructions].

comes first Morgan. J.P. question Robbie Marcus Our from with

Your line is open.

Rohan Raheja

Hi like Robbie. everyone! hospital given was Rohan procedure for sounds improving so This far on staffing more It these are I could especially here macro down this, I guidance you things relate last into just did off quarter some the of closing to up and dive headwinds. trends is to come they as wanted of volumes. hoping just and elaborate on

So closing XXXX, from quarter ablation have last and Thanks. things expectation for the what's year improved into your procedures? out particularly sequentially

Dave Clapper

staffing in hospitals. improvement, number finally A ago couple next patients the that of a particularly Dave. was biggest almost is The had their back see waiting of scheduled weeks was to willing headwind right Good they is in seeing one however that now question. she hospital get three that to found out. the get are we their shortages for are months experiencing and procedure, and in we booking and a Yeah, out of talked we're for doctors. and and This patient our was to available cancel reps that time who though

originally of traveling the with hospitals, of they difficult it's of we're very nurses pay to traveling to are nurse to one hospital not traveling many country. nurses come were the are So working the from across became during nurses told increases, for side in. town back many traveling these significant literally now the COVID They And other.

now. right headwind biggest our that's So

Rohan Raheja

it. Got Thank you.

Operator

O'Brien with Sandler. Our next question comes from Matt Piper

is Your open. line

Matt O'Brien

or Maybe Good what the just way Joel, clarification give another for guess some afternoon, yes Did another number thanks the my you questions. would actual questions. taking in sector the I in the be revenue day, quarter quarter?

Joel Jung

did Matt. we Yeah,

Let pull those up. just back go and me

$X.X Minerva was Genesys was $X.X was and the million, revenue. XX% Symphion So which was of which million, $X.X XX%. XX% ES million, was total which was

Matt O'Brien

Okay, got it.

top of on I focus number little bit. a just of can which we maybe bit ES that So to growth up mean is off a the see. great last little a is year,

gotten then give July a are more Can through quarter you What better. September Dave, are you know I things throughout you think mentioned things saw also on through what little you carrying color seeing into have you you here October. there? and the I So think mentioned just

Joel Jung

XXXX we And so usually end summer, our or October, a month to But starting hospitals And vacations keep school that going their We now slower. resolve back point and [inaudible] the is in right July come seen since see quarter they almost will first going anticipating to are how to again, as we've increasing. usually sales deferred so up get taking up and July the daily slowdown downturn. these and average daily that at to the mainly figure the the of nurse procedures last traditionally and before right out To we're attributable shortages. and a have sales, we're of in highest just patients physician so, august.

by for rep, year. daily day by reach we're and week, product, now, average with peak by by yes, the every we really their So sales things our sales the by are breakdown XX pleased month, way now sales and and looking at reports are different day sales by with and track

forward the strongly looking we're into finishing So and XXXX. heading to year

Matt O'Brien

is Especially it, – growth plus last XXX if that's out the what can really of a us may headwind it somewhat sales year, a you these grow teens account, COVID for new the looks got next is side, and even revenue year. the ES full these sense you know extra there reactivated new the next even perspective. all I with controllers force accounts. mean XX headwind, know grew Got business COVID Minerva if helpful. on stepping like that look mean from you like still sequentially in ES I a over months, still Can give the you you've into a a with

Dave Clapper

we of then other unknown branch business, companies reported to so. XX%, of biggest And our the happen medical represent and medical any some Well, down group, orthopedics at our keep that procedures mean, group those year. peer I particularly look device like with of is into device in that XX companies and hope I going specialties out with you deal from peer these track XX% from COVID. know I other what's last other

uterine So but are incredible procedures, her you if tissue of and Joel look lead mentioned woman our cause to just a we symptoms We, these unbearable it's not resection in really uterine also fibroids earlier, a every about when excessive category. pain has are menstrual the almost pain. tissue bleeding, resection at our not month period, that that as XX% procedures certainly involve

bleeding. So that performed to abnormal you ablation, when endometrial elective is if compared will, uterine less for is procedure which

that's growing. come that part of procedures resection is our part business back, which the tissue that good seeing the bigger still we're because so and And is

flat for years. there been that have the think ablation last volumes relatively procedure On the are that and we endometrial side, several

So that are that any area that making Did strictly gains share help? gains. are in we market

Joel Jung

So on with next an we quarter. report year's the guidance Matt, that I’d of full kind provide in also we’ll say results coming up that update year next

Matt O'Brien

Joel. you. is Sure, one for I probably understand this Last

higher OpEx than that then sales the some Just investments and was there's outreach. know physician was on I modeling. between going I force

So the going that. keep think think how level you forward for pay needs the and and to capital OpEx the on of is right about about business Thanks. and the do this

Dave Clapper

Yeah, yeah.

a our for of expenses, what forward. of with cash the on expense once things. non-cash would and side consistent being OpEx on of pretty is have OpEx things, a think basis you last the So quarter going cost based of on the side the in accommodate kind a there lot expect public G&A company we I of We probably obviously

the into fully think think of the I be as those year going forward essentially On the marketing side and we would pretty that well. I should should and going staffed costs sales where we're – end indicative be

Matt O'Brien

with idea last on Any I of seen your Okay. Minerva gross pressure. the side. thoughts know margin you've

or for have about that and as that next year You into as guys well. guided that just metric think QX here suggested in we

Dave Clapper

Yeah, headwind which our how those with the is as a with as environment. going earth. from lower we're costs inflation, up, and think of some all manufacturers continue little the I again bit do on product margin the should bit to margins headwinds on volume improve today we is the a Obviously those then too have of inflation side. the a inflation that Symphion, little down goes we expectations is of impact mentioned as macroeconomic with We're long. again for shifting to mix hoping aren't biggest have volume, We're some some back And to contract working and that's comes us – that impact hopeful of I the the first go well. up to

Matt O'Brien

so Got much. it. Thanks

Dave Clapper

tell what about You're picking makes can't a you We're procedure sales you force welcome, and attitude volumes most up. Matt. difference that of the our enthusiasm. in their the, excited I know

I'd now say So pumped. right we're pretty

Operator

you no for [Operator session. the are This your There ends participation. questions. Instructions] Q&A Thank further

Everyone, You day! great a have may disconnect. all

Dave Clapper

Michelle. you, Thank

Joel Jung

you. Thank

Operator

You’re welcome.

Minerva Surgical (UTRS) 15 Nov 222022 Q3 Earnings call transcript