EKSO - Earnings call transcript Q3 2018 | Ekso Bionics Holdings, Inc.

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Operator

Greetings, and welcome to Ekso Bionics' Third Quarter 2018 Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, David Carey of Lazar Partners. Please go ahead, sir.

David Carey

thank for and call. in Operator, you, you participating all today's Thank

Early released me Jack ended press Jack is Officer; Officer. are Ekso September Glenn, website. available Ekso President Financial Joining copy Bionics release Executive XX, Peurach, XXXX. from of the results financial for and A Chief Chief on today, quarter company's Bionics the and the

without within will the like make I of pursuant we would that trends those historical place to to on include remind including, forward-looking actual that made that uncertainties should begin, not securities involve operational statements examination statements. during statements All federal management meaning estimates results management's or financial statements undue this the and forward-looking are laws, call implied and cause future are Before various you which to Reform statements. you limitation deemed operating events statements based forward-looking expectations, be the upon or material Safe Harbor of in provisions statements and current statements, not these of of should anticipated these the or facts to Private or could These our be Act Securities XXXX. this Accordingly, risks Litigation historical from are forward-looking assumptions. reliance of call differ that contained materially by statements. Any

Ekso conference over X, future broadcast call as information, XXXX. of is of November now operational business, For any This call by a Commission. revise list the intention Jack? to except see any forward-looking contains otherwise. our please turn uncertainties I'll our accurate or to with statements, and and risks other filings Peurach. projections Securities because financial or law, with only new the or as Jack description Exchange whether time-sensitive disclaims of or associated update the and today, or and the required information obligation, events

Jack Peurach

in that third had David, everyone growing the I'm our and pleased and of report the call. and offerings quarter benefits for growing from reflects a strongest our the our customers. EksoGT quarter provide our awareness our innovative industrial company to products today's and adoption our history to EksoWorks underscores we perspective. revenue of second rehabilitation Thanks, thanks of and This best joining ever that

year-over-year We very third more growing key is pipeline growth. proud The also continues are our from than prior XX% of to quarter revenue sales our deliver our from doubled Notably, commercial up by since sales financial our results. third takeaway business has by strategy in the that the performance quarter U.S. our than Total from rehabilitation more XX%. XXXX. revenue with period, quarter was first of the year XXXX

many core our in neurological indication economic interest units focused of multiunit embracing is demand specifically part solid the this last a making We customers measured the Additionally, an able sales operate are and as whom increase believe and by patients believe and a of treat X we almost increased from our pipeline. it We we their are to an have from by sales a Approximately our customers continuum customers EksoGT care. importantly, of severe per clinical systems, several of GT they have seeing multiple this increasing neurosciences and that broad the centers receive productivity, is by programs. U.S. currently of our are an the XX% quarters. multiple has on rehabilitation the also EksoGT, facilities as more through network. understanding Even in across rehabilitation, of benefits salesperson, more X/X integrated driven

of drive rental program, significant getting products. we is which benefits we adoption customer our from productivity, sales our As increase helping are our also

and our products constraints. a them more budgeting Our processes flexible purchase, budgeted with of capital to rental to bridge giving customers access offerings annual provide outside

driven still rental conversion sale high customers' from approaching rate its rental believe the a is to days, program this our Although XX%. conversion in We a is are by rates to commitment of incorporate all EksoGT and convert into sales, rehabilitation rental programs fleet, value The our potential of economic is units million. that assuming rental current its by supported to $X clinical in benefits. excess early

also best EksoWorks revenue in We had growing reflecting quarter industrial our demand units. EksoVest and ever for our our segment, EksoZeroG

of generate to value strategy partnerships and shape. to greater with industrial solid Our create take levels sustained profitability continues customers through

large-scale one Ford on better in of margins important part operational opportunities this company-wide on quarter. exploring focus, achieved to This new last remains making area. are our We that quarter, similar became our companies, and an period quarter improving we point our X since demonstrate are excited in value effectiveness, reducing to gross manufacturing with that increase our the of I And goods. costs the products XX% progress is XX% pilot our Multiple will with of third has several more efficiencies. growth for part, we substantial percentage due, programs well are CEO, our been proposition our focused same with partnerships optimistic progress XXXX. XXX as to date. articulating expand to This The results to other progress the from opportunities. significant in customers for third several customers, as and these are the we We we are to their an piloting key sales Fortune announced including to strategy, validate of

these and operational have Additionally, flowed cash helped through reduce consumption. efficiencies company our our

enhanced our by made service Our we business. have were that refinements also in operational efficiencies

reported for the forward. profitability include us, in profit an and we our This a of emerging business well to service these maturity quarter in ways remains changes, our explore which continue business as as As will the third of model XXXX. improve operating the to service first-ever ongoing of improvements result and its to improvements product, robustness going

end, makers proposition. them adoption includes the are economic in to this efficiencies educating clear, operations communication Toward we EksoGT innovative Our our key commercial of our technology value approach provides. rapid decision benefits broader of while clinical enhancing on more products our and the targeting driving and that and

indicates midline recovery. their EksoGT the longer that high greater their research Clinics well from at speed, strength throughput also leg rates, increase benefit and during through patients as walk, endurance and volume. alignment patient treatment distance using the balance reimbursement a EksoGT as gait Our increased and

Before to our business and I XX our over we Jack and companies experience welcome him addition I the especially efficiently. Officer. Glenn, leadership to brings August our grow in He's continue valuable turn a Chief team, of want leadership joined financial as private sciences in to to the call as Financial industry. new within public over Jack Ekso life years

to excited team. the have are on Jack We

Jack XXXX our results. will quarter third Now review I G over turn the financial to to call

John Glenn

for Jack, warm you, the introduction. Thank

device XX have XXX financial in total reported field, same QX and to QX XX in the rentals, rehab months to quarter, million is this $X.X rentals. for in which revenue, XXXX. XX our revenue QX units as X placements turning We revenue up a The the XXXX, related first XXXX. revenue $X.X follows. approximately QX period the increase We our are Now of X of from placed is already units Ekso total XXXX of exceeded which, currently are recognized $X.X compared units $X.X breakdown XXXX year. unit million of over the results. in last We XX% underscoring strong The a trends. through XXXX in Total million of for was growth approximately million medical

drive bridge help a in almost as revenue to continues program recognized purchase. ago. approximately customer capital the to compared $XXX,XXX adoption EksoWorks period a We rental and with year in a serves $XXX,XXX Our same

EksoWorks terms As ever best of revenue. Jack for noted, this in quarter was the

among traction customers to manufacturing the gain continued Ford. Our by EksoVest evidenced as recent adoption by

$X.X million, of the same Our margin overall approximately to was gross margin a representing XX%. of quarter gross period year a the This profit compares XX%. last for gross for

in numerous reductions in our cost that for ago, service profit gross initiatives represents of model the These first-time business. in past few a our department we improvements in include have XX% a service noted EksoGT quarter. operating year given margins strengthen for operating and in actions that our Jack positive our nearly this resulted taken the As minutes the material rehab, segment to

our in gross this respect as margins extremely in are to from EksoGT the we almost increased pleased are progress XX% XX% the quarter. We with making

in the loss as our million million acquisition for from costs on were for to The Operating loss third in quarter believe in XXXX increasing primarily margins. the per on $X.X quarter of third areas actions for quarter of by our R&D a XXXX. expenses We or will to XXXX. loss net was a more sales to we X%. operations of of more efficiently the $XXX,XXX quarter million of the our $X.X focus to million from is the and expenses half $X.XX our was to drive of U.S. Net million of marketing per the improve first reflects our operate sales of improve is compared our management for of a compared $X also quarter EksoGT compared consolidate or share team realigning with This operations in share third forward. $X.X our continue third U.S. remain million we $X.X that quarter reduction investments reduction the It customer efforts efficient Loss we focused $X.XX or the XXXX. strive to going to $X.X proactively gross XXXX margins. driven and our team close as

Loss for representing same months months compared $XX.X the the increase approximately million, the compared $X.X was $XX.X of XXXX. to year-to-date million, year-to-date $X profit Turning XXXX. for XXXX first approximately X a the representing of of year the profit first margin to in to XX% of for gross million, of XX% to operations period in approximately compared million gross $X.X gross of from $X.X X months X the results. first was million Revenue XXXX million first months prior. gross of X from margin XXXX a was XX%

Cash for months in in are We and months burn This the the of sequential million both compared XXXX XXXX cash third $X.X reduction in in the financial compared each $XX for a in the exemplified to as million quarter first reducing activities XXXX. our million with first by of in $XX.X activities for cash quarter ended XXXX. X is of was annual basis. September the by $X.X million cash the quarter X of improving operating of used use XXXX, on XX, standing used operating

$XX had a As of September XXXX, XX, of balance cash million. we

for below recent expect pipeline fourth over continued Jack. our quarter. the we XXXX. back I'll $X it of in operating and today the And to industrial Please for activities to filed and million result details turn XX-Q businesses cash improvements now structure, used rehab both quarter regarding our that, our further of a with to operating for earlier see As be

Jack Peurach

Thank quarter we pleased make. with the summarize, of are you. To and growth we to another strong progress had continue

difficult to human improving talk he tangible exoskeleton at and motivational spinal a challenges. a injury minutes technologies Recently, and cord visited was often As reminder few individuals spinal conference, is our the we available work mobility. a viewing which Mark with ultimately the stroke paralysis. and use support recommend are the first XXXX and was noted expanding between the technology focused protecting facility. to we for the watching products FDA mobility toured to cord Ted to exploring stroke is explorer do certification injury. blind and our with an were to he's I truly on is and Mark recovery. He Pole, ago, Bionics an truly that rehabilitation, individual, potential South visit company Pollock would and are on roads us now the patients at person gave the humans for to their matters We amazing Ekso race speaker and first cure potent and the to receive to and I we Mark's intersection living online. He

become We provides expect to care believe to of for rehabilitation someday that technology this the life-changing transformative and to therapy. EksoGT the our customers, stroke rehabilitation see standard continue soon

Turning to our outlook.

taking sector in growing positive the Asia. market are of as and opportunities We by Europe advantage across well large primarily and high-profile targeting North rehabilitation dynamics as America

our including construction offerings aerospace. expanding new exciting EksoWorks We also and markets, industrial into are automotive,

our overall strong. in growth lumpiness we results, trajectory line have of may While remains quarter-to-quarter our business the top future

ultimate continued shareholders. you to and maximizing adoption the see now value open and questions. with in progress for of to expect the and levels as goal acquisition improvements in adding We our gross profitability line pipeline may visibility as unit Operator, our margins well customer costs

Operator

Instructions]. [Operator

comes today question first Our of SunTrust. Bruce Nudell from

Bruce Nudell

we Could housekeeping U.S., XX some how worldwide. sales? first. Just talk units, rentals. many There rentals, many were conversions? math shipped questions how My were says like the about one many six how outright And

Jack Peurach

the got turn here. I'm He's Glenn. it to Bruce. Jack going data to over right

John Glenn

Yes.

Of distributors said. upgrades. four four two we also were were device, And XX, of our others rentals, six new was through one there So -- one -- those them. of were of as an indirect the and new or of

Bruce Nudell

-- So upgrades other four were in words, conversions? so

John Glenn

were... four Four, yes,

Jack Peurach

Sorry, rental conversions?

Bruce Nudell

kind what was That's Yes. I of asking.

John Glenn

we Oh, I quarter. conversions in don't had rental the think any

Bruce Nudell

were, as Okay, And it stocking kind were? okay. two of, units

Jack Peurach

No.

John Glenn

that Well, through fell our European distributors.

Bruce Nudell

Okay.

guys. they sales those to outright So were

And the was Okay, of in split perfect. terms and there? what Vest Mounts,

Jack Peurach

One XX We're pulling filled it second, We XX and Bruce. up. QX. vests in mounts

Bruce Nudell

the margin XX. showing think XX%, gross very And nice this And or misread, and was improvement. GT clearly didn't XX is it if on I mishear quarter. I

And is of proposition part goods. of I ceiling to cost is able concrete that you're more more. was value that was some guess. ASP because becoming was What And on The product? charge the what

Jack Peurach

from product a... the on ceiling The

Bruce Nudell

margin... gross A

Jack Peurach

that, articulating of the product or value perspective? A both to enhance work to Well, that the expanding to the with deliver improving aspects all gross maybe we're going product margin we continue on making values And sure it understand our better the costs. the it it's them. on delivers. value and and work to Better understand bringing then validating to continuing it we customers and

of in the I to to on continue that So both we're opportunity that can. believe and I optimize there we side -- -- as for in -- would customers value pay our cost product. both a price fair that willing just it, to the we're and the is are going side best fortunate those

should I continued So we over improvement. really, longer think, term, some see, the

Bruce Nudell

you label, give then Okay, us landscape convenience, that in and all of just of just competition defined the is stuff. perfect. costs, Could terms like your barely of continuum view by And you in it? where rehab, competitive perception of your like the landscape as in view color market's scratched. of stands But I see just on the your know Ekso devices. the functionality,

Jack Peurach

leading the in in competition the I base constantly terms bit competitors and space, and the very said, customers. designed position it with Both think installed area doing. in really little rehab our and feel we being strong with healthy continue market, to area. the this But watching in and our Well, our because it's specifically developed are of position the have a Sure. a and are That serve to value And our say and we a what some in pioneered it's fair is this of we functionality, well. terms for rehab we product in very that bring more. validated understanding trying they bit very in we're sense confident that some to as We little confident in understand market see position market.

Bruce Nudell

medical the over mechanisms? IDNs, the one package which year, to other packaging kind like go your a intrinsically of like sounds it last could kind And and kind of of the benefit side has are are having that economic very Where selling from gelled. in of efficient these penetrate you

Jack Peurach

Yes. great point. Bruce, that's a

clinics. got understanding the economic frankly, then that focused -- of the last of of economic I of the proposition. our we've good lot understanding, customers clinical for well, such We we been perspective. proposition -- a before well out customers, it think it, really they then their talk fairly economic and spent a as have we've least since benefits a how over that from the value here, different on customers. the operate time we And got value I've the bring. the levers EksoGT -- at on We proposition, defined And very time refining articulating given that refining get will long value an can to And brings well,

reimbursement And may for throughputs, lot help So things. may a do different want to those patient. to some we drive drive some want of can per

we've had with number question, a studies worked the in case we And we've it as So customers develop feel really a that evolved we've are quite to marketplace. your to so of -- bit. well, think our I answer these validated

yes, we're confident very So in that.

Bruce Nudell

-- we you of exoskeleton critical me. the like a is. U.S., whatever units. attract be get lot And how or what? terms familiar fall before how Like or critical investors be this If how just front -- behind away to far to out to some year -- market with that in just for patients units how far here time, XXX mass? breakdown But how far maximum everybody and/or in are the -- we have going don't but there from says, I the know we're in U.S. being sort have has achieving before of like assistance, reimbursement hook -- you're to many x you -- of in like don't much have able have of not if mass the away units like story, are

Jack Peurach

here. about talk the Yes. that time We all

and think those, if to neurological this of in once call we and rehabilitation that. centers, have you have X,XXX facto between to it to it we there to that considered a are are in XXX a continuing believe becomes today The U.S. centers XX% about in care, So centers about and We of XXX U.S. mean, center. it, stroke rehabilitation the to be leading about, want XXX down XXX We're march stroke de to leading I X,XXX call standard get so -- path. you

So most will think on be and to We something but or trying we just that not that. point, understand once should whether centers to it will budgeting very they we're that become around not it. get timing focused

Bruce Nudell

were to out and with played mean, the I great. just on the Vest I mount, went was -- and they I I when And the Mount, plant tried the thought

question Ford and other so corporate in partners the evolving? where tangentially, is, cultivating and/or And you relationship -- my are how's

Jack Peurach

Yes.

the very explain decision-making there's of world, strong. how continuing data. go in, gather through They multiple relationship's Then adoption, of at may I maybe customers' sites. That relationship we well. And into say, with the discovery, XX of, a, in they a -- go stage. ultimately, evaluated deployment think so phase. is of terms may a Then general me it. trial let they single is there, an plants. new, pilot first, or broader a educational education The We're That around extremely process. then, evolving site it. Ford sort go Ford pilot. to they're a to would the And element broad First, be This at plants to what number deployment in

everyone large-scale the that makes and our learn a we to -- timescales, the different somewhere customers number with on manufacturers helps -- product. of actually that in have pilot are our about decisions it as We evaluate It's conversions. it's trial more so very to difficult in and will continue But we predict. more are more to them, of these confident product how and see phase

Bruce Nudell

way, like look if will is opts be So in that, And to Ford you just become they do or both product a that terms pilot at?" to, -- very capacity still something in should seriously to a we manufacturers their that, kind just absorb other that to of, advanced aha, think about Ford, customer. signal major this of really And "Hey, go will the, if that Ford thinking stage. Ford get very be send -- is

Jack Peurach

perceptive, very -- area. The in Bruce. this Ford that's leader much Yes, I is first a of very all, think

the Ford look -- so like. companies And on them what companies and to to future other inform really looks like

customer definitely -- with will support Ford as to that other customers So for sure. continues adoption having our a

want if does material Ford's decide make what business as Ekso? business. mean to you on We ideally, very Ford, and earn a of a Ford moves if and about I to other was, become forward, that deployment, part supplier that and our they think -- the asked certainly thing to

So, yes.

Bruce Nudell

cash about is question final burn. my And Okay.

financing around building, are left big think what $X.XX-ish like you it's one it proving magnitude thoughts spurs avenues Is of right, million gulp? of general reserves? I raise? incrementally there's I your about the just your and/or -- cash your the And $XX or million. are if about Or thinking husbanding heard and

Jack Peurach

over Got turn it. to I'm that going to Jack.

John Glenn

Yes, Bruce.

burn as into going sequential-to-quarter think a I that basis that are to continually looking on quarter we said -- XXXX. we So reduce

best are in for and We I are and million in that. XXXX, company. the QX, continue options. growth the way in think several looking we And best the we at place $X around put to an fund we're is we'll But to raise and -- we think ATM to our did through that do able what

Operator

additional to Jack There at questions call I no are to would Peurach turn the time. for back like remarks. closing this

Jack Peurach

have believe the the X all already today. joining full growth revenues Thank there in exceeded XXXX for through year very you us and months We're fourth XXXX the of excited opportunities first remain to significant quarter.

a clear is remains strategy growth sign healthy user Our the strong. of adoption pipeline and

you forward, I remain employees, support and of industrial focused demonstrating see the markets our the we rehab And benefits customers from across the economic on ahead. exoskeleton forward Thank continued offerings appreciate Going growth shareholders. in to you. and where our months tremendous we our and clinical We the potential. will progress sharing look with

Operator

This conference. concludes today's

your disconnect Thank your now may you for participation. You lines.

David Carey	Lazar Partners
Jack Peurach	President, CEO & Director
John Glenn	CFO & Secretary
Bruce Nudell	SunTrust Robinson Humphrey

Ekso Bionics (EKSO) 7 Nov 182018 Q3 Earnings call transcript