SMLR - Earnings call transcript Q3 2019

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Operator

Good day and welcome to the Semler Scientific, Third Quarter 2019 Financial Results Conference Call. [Operator Instructions].

Before we begin, Semler Scientific would like to remind you that this conference call may contain forward-looking statements. Such statements can be identified by words such as may, will, expect, anticipate, estimate or words with similar meaning and such statements involve a number of risks and uncertainties that could cause Semler Scientific's actual results to differ materially from those discussed here.

Please note that these forward-looking statements reflect Semler Scientific's opinions only as the date of this presentation and it undertakes no obligation to revise or publicly release the result of any revision to these forward-looking statements in light of new information or future events.

Scientific's risk for Semler factors and forward-looking Semler description more Scientific's to these the of that statements. refer SEC a filings detailed results Please may affect being is event this note Please recorded.

ahead. Doug would I of Please like introduce Now, Murphy-Chutorian, to Semler CEO Scientific. go

Doug Murphy-Chutorian

everybody, for the Good third and Semler thank results financial XXXX call. that Scientific you afternoon, joining quarter

all am to report pleased after earlier mild-stroke a and happy that I'm well I this be to your to talking having I’m feeling now. year quite

patience your I’d Dennis Chief to for Thank past now Marketing this Semler you months and today. during like few of presentation to Rosenberg, being introduce our Officer

please go Dennis, on.

Dennis Rosenberg

Thanks Semler’s improve effectiveness and Doug. with strategy. an calls emerging our efficiency of growth the clinical healthcare provides like We to to providers. company begin solutions Semler’s a reminder about that always technology

is mission in customers and Our innovative market develop, and assist to products diseases. our that treating chronic evaluating manufacture

our when before are We solutions technology and our software enable heart like events and identify customers occur. appropriate and attacks believe to strokes options care to that preventive intervene

million were $X.X share share We're Comparing basic quarter the share company's quarter quarter XX diluted one per basic $X.X during earnings compared our diluted per per Cash of tax of and $X.XX $X.XX Earnings history. income revenue third quarter prior. excluding million pre-tax the of the per share. benefit share, the tax income between revenue financial based to September $X.XX year includes and which income, in the per share. benefit was and pleased on report an the as XXXX, per best and $X.XX were XX%, grew income company's performance of net to XXXX third results that was XXX%; XXXX, third grew

current we quarter and for from saw assessment and product our home-risk QuantaFlo our company the customers from increased customers. usage insurance During our orders

from We new also customers. orders received

in more to performance. of and in improvement detail our Weinstein describe financial like Accounting, Senior the over Andy? call turn Finance I'd Vice President to on-going Now, the to Andy

Andy Weinstein

press release today. Thanks the Dennis. Please distributed close to refer was that described in when the market financial results

For $X.X $X.X to an last million, compared XXXX at the million from year. XX% that corresponding revenue was was XXXX, increase time quarter ended period of or September million of $X.X XX, which the

includes Operating $X.X million million. or of which cost of expense an increase was from million, revenue $X.XX $X.X $X

million income Our $X.X million, million which pre-tax last was the an over same at $X.X is of increase $X.X year. time the

income $X.X which the reported We tax $X.X million, valuation was tax the of $X.X an increase quarter, of of to net for release of an income due allowance. million. the benefit $X.X million achieved we primarily from Accordingly, million

inclusive basic per Net $X.XX per share. share was basic the share tax $X.XX diluted income share which and per per share share, per year. tax last $X.XX was share excluding period same per and Earnings per compares share this income diluted during and basic benefit to per $X.XX of the benefit diluted $X.XX $X.XX

a percentage was XX% and was Analyzing as revenue, For quarter of Engineering quarterly and X% of revenue. sales was XX% to income quarterly revenue of amounted was product revenue. quarterly of expenses marketing and and development of expense quarterly administrative revenue, XX% were Pretax quarterly expense general revenue. share of earnings third ending of share basic X,XXX,XXX. diluted XXXX quarterly categories count was in September quarter of revenue the and X,XXX,XXXand count the XX% the the expense XX, XXXX cost

such revenue This As $XXX,XXX. items which primarily expenses receivable to change million $X.X of an million, accrued $X.X accounts which of adjusted cash to increased is provided income, by XXXX million as in $XXX,XXX. the increase and increased of last is XX, $X.X operations quarter. due XXXX Differed decreased June compared XX, had as cash September from at Semler $XXX,XXX net by

inventory and was cash offset partially to of $XXX,XXX. purchases expenditures amounted by This capital which

equity stockholders our items, XX, these million of XXXX. at is of result $XX.X now a September as As

Our quarterly and cash our statement discussion days several cash report and will of include in form will flow filed more and be our XX-Q on liquidity.

of The the release was straight of and the past income income history the positive recent other due a eight for taxes before earnings this benefit tax quarters factors. quarter variety to of

Our and of customers largest revenues. quarterly three comprised XX.X%, XX%, XX.X%

Our $X.XX to were were approximately fees price were million, approximately million sales $XXX,XXX. and license variable $X.XX revenues equipment

annual during we we intend provide do the generating and profitability cash remainder not growth, continuing Although of formal revenue and guidance, on a at XXXX continuing XXXX.

this of is to in interest opinion product that the management It increase. our continuing and is customer services the team

Now, I Dennis? will discussion Dennis ask to remarks. continue and concluding provide his

Dennis Rosenberg

into through to the of grow believe product, and a annual more our business. licensing of will revenue numbers recurring result our revenue of XXXX and from as products installations of end XXXX We the continue increased of usage

is make which both, customer goal new Our from additions base did of quarter. and our expand orders both this existing to to to we customers,

Semler its expanded now third headcount; During quarter have the again infrastructure and employees. XX we

during intent XXXX. quarter-to-quarter our XXXX remainder is the expected anticipated and expand the accommodate Operating to growth are our to expenses future of It increase from infrastructure of to business.

assets quarter of customers. third During to in amount future be in form the components of continue made product optimism be to release management replacement the our of XXXX we sensors inventory. for purchase growth installations key the filed in and/or in These licensed of sold stocking inventory quarter may third for increases days. with include add the and will of of disclosed to are The several XX-Q to purchases indicative

asked get the NASDAQ about to exchange. up-listing often We

changed; this up-listing has on not not are Our position on focusing XXXX. in we

right arises. We at you opportunity our when reserve this will plan or additional the the We if update plan change. There's no our plans need as also and financing to to change time. raise capital

continued remainder in establish the for room revenue, that relative to annual plenty our standard vascular growth. earnings penetration, XXXX testing of product is market and of large current to grow increase market to for and XXXX the a there's further the goals believe are We Our as QuantaFlo industry. disease our for of so care

now our R&D to providing the goals invest and the of future. continue We in value with in enhanced customers to

Semler of diseases. chronic current We by in benefit provide insurance positioned the We effective, health facilities, the those for because measures. may environment, preventive well the patient. improve we with patients Scientific cost providers, believe deliver the We plans, that patients economics identifying healthcare market outcomes the from work the and who for wellness solutions for is health care government the

product. the patients XXXX for was your an of the company In quarter tested terms conclusion, for Thank the and continued in third with company, and you of achievement of financial support. your number our interest performance both in being our record

Andrew your address operator, open be I Doug, to questions. happy and will Now the please lines.

Operator

Thank you. [Operator Instructions].

Company. ahead. with Bauser Please Our go first question comes & from Kyle Dougherty

Kyle Bauser

from to Andy. and you you're Doug that nicely recovering good to Great you hear meet Hi! and Dennis and

Doug Murphy-Chutorian

Kyle. you, Thank

Kyle Bauser

customers. we've So another here. growth excellent Dennis, quarter some within your really largest nice seen

it of roughly I that it’s the year-over-year you're comprises themselves. mean XX% the fortunate half roll-out able to technology kind regarding and So business. infrastructure your of training their growth, leverage

level account operations your businesses since still role activity in account, is there? in self-sustaining has or become, how physician Are changed? groups So of somewhat you sort you into branches this new has of the know this support within been your of actively marketing more

Dennis Rosenberg

go continuing I’m – yeah, see ahead Doug. to

Douglas Murphy-Chutorian

was saying, question. Dennis. go Oh yes! the I Please answer ahead

Dennis Rosenberg

the account. just we say growth see that I'll to Sure. within continue

spaces grow, the it’s in itself to presence As account it and grows continues [ph]. not our in

with grow So in have, while we maintenance business are we we're the inside. seeing expanded

Kyle Bauser

implementing or year big choose presumably Are is quarter, rather ago the that’s new now an that client $X new phenomenal. than option to over the that million go payers to in a is like a looks of it themselves, heard per we'll large think about licensing large you the it which with finding customer, payers we use the administer definitely a HRA the HRA’s see remaining months? likely kind QuantaFlo doing are and you coming or do electing Okay, some

Douglas Murphy-Chutorian

would so. to we like Dennis, think Yeah

start, them customers probably create they HRAs, going to because better and the do for to patients. because useful and it’s are occurred they way, New this, to either the for way it automatically other are

So reasons all the aspects these future are from business. is this of the a growth

Kyle Bauser

that kind payer, a three sales And more a large then across channels, helpful. and that's if marketing we’re the the strategy the of if staying HRA's talking licensing and the on broadly so and bit theme, QuantaFlo, about Okay, we’re big about the different individual practices, bit quite of selling knocking advantage physician practices. likely is little doors mean addressing a I than talk know Medicare on these. can you of the into you you’re administrators bit how

each So about addressing how can might of and you channels how fluctuate you're the headcount these a talk bit a result? as

Doug Murphy-Chutorian

is on Well, are the the I trading because – think, the markets. market, other [inaudible] of the drivers they insurer all basically

the structuring is this larger and this where anyway provide services many forms. they companies changed to So need,

it. the and delivery work, So for dollars our product R&D we're the constantly and improving constantly of to developing

Kyle Bauser

partners many to and of keep with consolidated CMOs assemble Okay. financial you manufacturers but specifically question, before can to more you I contract and to is produce the have me used what know you're remind additional how demand. qualify And you ship QuantaFlo, going have the capacity up kind Andy to

Doug Murphy-Chutorian

Okay I answer will to kind you the question could of and later. speak it Andy,

more have this, give and done about future. or in foreseeable have the market of but companies We demands is a don't lot there one the problem in manufacture place. meeting our will demands no contact at our more capacity demand We that reached than all the details than a for it American

Kyle Bauser

questions. me. a the Okay. Hey, from thanks lot it taking for That’s

Doug Murphy-Chutorian

Thank you, Kyle.

Operator

from Please Our Street Lake Takkinen with Frank comes Capital. next ahead. question go

Frank Takkinen

to great my taking you're great to guys, Doug, well, progressing question. and nice for another you meet Dennis thanks Hey on Congratulations Andy. and hear quarter.

Doug Murphy-Chutorian

much. you Thank very

Frank Takkinen

got Hey, a I couple of just questions.

I’m First a over continue some strong need penetration digits to perform or standpoint, bit in seen that triple you do and the double you things could little from your to big just to maybe about picture one, talk given Obviously installed say growth picture what the long question. hoping the single are big base still of very term? we've a you're

Doug Murphy-Chutorian

Margins the think fundamentally team and doing effective that I to think to is proposition good, value Well, agreeable. think don't is think everything we do it’s our the have customers are are we can. different. we anything I sales

of doing So, it’s the same more a doing matter anything more than rather different. of

the to we you at we So job to you and a support is We number trainers doing take need that had going people. good challenge and This is as that. know three technical been much are doing suggested hire the or more times businesses. we people of hiring had need challenge assume four I

assuming in a I'm the future. be won't So it problem

Frank Takkinen

as in you how some products secondly, it saying That's just or this if issuing you excess, potentially potentially think great. up could about much did guys place to quarter, as opposite of what of in coming curious the your of then sort pursuing go buy back. you you're effect in are that putting regards And some may just use Thank new thinking cash you. and shares cash with

Doug Murphy-Chutorian

and things the to I think to with tend in other haven't decided plan crew etcetera. doing getting a what and latency do invest we we not cash, to plan, and of other want ourselves, this we addition financing, Well, stress R&D than of

additional invest basically invest So product with and the it's in in maybe R&D. to current ourselves

Frank Takkinen

That's you, all good the have. congrats I Thank and on quarter. great. questions That’s a

Doug Murphy-Chutorian

Thank you.

Operator

comes Our Investment Brian Zacks Research. next question Marckx with Please go ahead. from

Brian Marckx

to Doug, glad congrats and great everybody, hear hear on Hi voice, you're your back. to the quarter.

Doug Murphy-Chutorian

you. Thank

Brian Marckx

one of Just the on the business. seasonality

it if about you could QX maybe I it growth as think any QX. that business the way been it there favor seasonally the savoring just just a or talk is has but is was, making that, seasonality that's in and the look,

Doug Murphy-Chutorian

to the the of have HRAs we seasonal lower more have we of think that and we throughout adding yet. going business, periods by we a year, Anyway, seasonality. seasonality Well, seen because see kind one of that are first that have better the not is the in customers quarter I in They are but business. groups, the crossed thought

as we're to it, to risk that see not suggested have access, say, who going yet. evidence but I I so So has I don't

Brian Marckx

if in Well, else about or worry talk whether it – the that could technologies a be competitive you wondering anything Okay. technologies, growth? you’re about you space could bit little about just that new seeing threats, if the slow anything

Doug Murphy-Chutorian

Dennis, this? could if answer you

Dennis Rosenberg

have seeing seeing other been Sure, based, systems seeing, is really out traditional kind anything competitive some of are doppler which is new PAD than really as have we a that out sure. of threat. We're not there competitive there What wise far time. and for what that been cuff we're as and just more

Brian Marckx

Okay.

you you me can if talk I’ll talked this You know not, or and if the talk question but bit a don't you to little about I about can tell CapEx. it. ask can

Do going were think for in you I like On levels? around expect curious what basis and and of talking to XXXX assets you a it that think increase Just there? close, yearly forward? I'm CapEx significant any right lease. looks to as around Do you expect pretty terms just about XXXX roughly remain the $XXX,XXX

Doug Murphy-Chutorian

in Well, in reviews, had the that earlier factors years a are capital CapEx, but we more good have been on growing our CapEx are our rate. that more equipment in we at more The consideration sensors are inexpensive. later

already on you So value really this absolute per a is growing basis. that see CapEx but unit as basis, don't

a it’s units than more consideration so So are them more going old the now than are and of the deprecation and all is three some – away. years

with anyway, factors I are the details these question answering into. more your a time have So than most will that of to are little go

Brian Marckx

great. that's it a Yep, I all I Thanks had. appreciate That’s Dough. lot.

Operator

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

Doug Murphy-Chutorian

for appreciate the joining business. us you Thank support the support I continued of today. and

any additional If be questions, time. you any have can call the post at I contacted

completely to it questions and call to longer appointment, an answer me a your free them because You’re want answer me takes little I now. arrange and to

a me evening bear and have day all. to So you and now. good with Bye

Dennis Rosenberg

care. Take

Operator

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

disconnect. now may You

Semler Scientific (SMLR) 2 Nov 192019 Q3 Earnings call transcript