Earnings call transcript Q2 2023

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Operator

Hello, and welcome to the Q2 2023 ReWalk Robotics Ltd. Earnings Conference Call. [Operator Instructions] Please note today's event is being recorded.

I'd now like to turn the conference over to Mike Lawless, Chief Financial Officer. Please go ahead, sir.

Mike Lawless

Keith. you, Thank welcome call. and Robotics quarter second Good to earnings XXXX morning ReWalk I'm Officer, Executive Chief on Robotics' Mike ReWalk Lawless, Financial is Jasinski, the Larry and ReWalk's Chief Officer. call me with

issued a and of through release the be three ended and Earlier this webcast months rewalk.com. ReWalk morning, press detailing website this for six This financial XXXX. XX, section accessed of Investor the release at June a Relations the results press can ReWalk call

to on forecast, remind considered today's events, Litigation like ReWalk management that intent Before information the forward-looking be any involve the within express as on in Securities we I'd Private projected of performance. may company's ReWalk's get may noted of and future in forward-looking future materially our Actual release made Commission. those the today except are a everyone law. whether conference guarantees statements a ReWalk Reform statements started, meaning future and those regarding from forward-looking the forward-looking Securities and Exchange These of and belief, including forward-looking of intent or result differ statements, and developments anticipation, that information, uncertainties new not based press the results with filings available performance Act. call future expectation, as risks projection, to statements as to are or update required disclaims or otherwise any obligation statements. by these Such specifically statements

Relations company's be available release. the archived will A the the of today's dial-in Investor replay completion from call information the be in section The website. will accessible press after the available webcast of in shortly

subsequent call August be anyone who listening date, discussed. webcast, or the ReWalk announcements Since that recorded XX, on related For to made topics and archived held the to the benefit was replay XXXX. may of this

SEC releases the information. the So press please recent most filings reference and for company's up-to-date most

that, CEO, turn Larry to call the ReWalk's over I'll with And Jasinski.

Larry Jasinski

joining for thank and everyone Welcome us you today. Mike. Thanks,

profitability QX, company, have an regard excellent period personal and calls pending exceeding conserve submitted hosted few along solely the define milestones that was business we pursuing. in to we a public with Medicare revenue category our been on the our AlterG. have these for XXXX subject proposed of our in last relying specifically for acquisition current in us benefit two achieved claims and formally for to the a exoskeletons, would continue the we on In QX factors and We In guidance subsequent of XXXX call goal. the on quarter events rule to capital new achieve parallel, and in regional the Medicare cash XX reserves. and will believe drive allowing XXXX weeks,

AlterG later and transformative of was planned mobility, announced X, that is on technology August to today that enhance empowers to closing improve I'd quarter acquisition in the remiss start transformative report I Though XXXX, is call, didn't today's update and if a of on provide business leader second on financial today. recover people wellness our our performance. call AlterG performance revisiting physical be a with for and exciting

expand has in DAP differential The believe We movement in reduced of technology reduce serves DAP which that XX,XXX new and unique, air clinics, in the world effects segment growth to has is with from excellent and pain. potential calibrated or around a technology, well-accepted can the pressure benefit U.S. support X,XXX finally technology. gravity, ways replacement clinics the allow over to

technologies add strategy adjacent continues to stated and accretive be some been to for has time organic acquisition via development. and ReWalk's

in derived the add on our its DAP AlterG what strategic acquisition executing patented commercialization. use seeking to this organizational strategy. neurological patent of of physical clinic, expand Now rehabilitation with is example our to and to skills is the for a We in and prime we're do build for NASA our scale, depth increase believe antigravity position system to

creates and product infrastructure and presence technology profitability. AlterG ReWalk's a market towards maximize shared opportunity team across will efficiencies innovative enterprise track leverages formidable all poised assets the production drive skilled record established believe lines. exoskeleton acquisition with combining product to create and Further, We development, leadership and and across the and a AlterG's we strong the commercial believe portfolio

sales and Charles the excited organization trained the and is Sales be developing to that our very Rensburg to ahead home benefit over large this realize update The is we Officer tell, clinics capital addition event of of eager highly are to we up a from through as joint about of the those months systems. systems on step that investors can as equipment operations. in Chief and right Clearly, placement you capable build come our

that a recap line million, $X.X in complete, in will With now financial summary QX. quick figures guidance. in I provide were QX of Sales prior with

achieve For are addition over expected XXXX. once spread closes. transaction half U.S. This of additive the systems year-over-year the our revenue growth case the submissions the and antigravity driven AlterG for also that over VA, is be to contribution Germany XXXX, to of active second to convert is the exoskeleton The expected

QX. were in with further in results activity, Mike financial section will by acquisition excluding Expenses the declined also related $XXX,XXX line expenses and the address expectations internal to from this

until of the defining and Medicare key for a a Medicare Our The is the expand industry. Services, believe, our with process Medicare be, of to rule point codify will to access element for the efforts beneficiaries to we exoskeleton strategic with exoskeletons proposed final and final rule and the the CMS, become proposal base Center path August of to the be issued the in comments will cycle is X, November/December personal January in from developed the provided. definition XXXX. race This A and comment is exoskeletons be expected to include effective rule public a XX. period

Medicare exoskeletons. ReWalk price this a several the to and code occur is extensively and benefit facilitating to process. After years access price XXXX. of working to supportive highly the we proposed a may XXXX, and occur rule [HCPCS] late a in effort, may CMS a proposed in category to Parallel foundation of considerations the follow. price have beneficiaries with point public are process on support early are should in that a commentary Finalization

of and in claims the long and population the during the largest placing confident least will efforts single XX I segment that beneficiary XX during Creating individuals is QX device our could for The repeatable our at am potential process benefit beneficiaries ReWalk continuing and an supports submissions submissions this United therefore, SCI place a potential of QX secure target from market Medicare for States. XXXX. largest technology, segment during CMS is The to population our payment our to Medicare term. single essential in priority. the the largest market, industry positively shape who QX

over for a call Mike? financial to I'd now to like review details. turn Mike of the

Mike Lawless

Thanks, Larry.

quarter revenue million reported compared $X.X second in XX% the prior in was to with earnings or XXXX. Robotics ReWalk the in the million second quarter's of million from line our $X.X of This $X.X quarter down of call. XXXX, guidance

X% June six to reported XX, or revenue six XX, the million $X.X June up compared months million we For million $X.X XXXX, of $X.X ended the months for ended

slightly the the while to The of decrease as Solexoskeleton continued down from quarter. in compared the a prior revenue was Germany was result in QX performance second XXXX year's for quarter exoskeleton sales U.S. revenue

of the success is effort QX up of of our XXXX. line, that training product build over to our MyoCycles complementary XX% a $XXX,XXX, portfolio FES a around The another with of cycles provide can distributed Our sales our revenue to MyoCycle from quarter strategy had products validation strong we customers.

U.S. Administration me, the our current individuals for excuse metrics for the workers' down from quarter, X with line, and in in Germany. ReWalk XX product XX VA market within the insurance and is Turning by broken line, current private Veterans rentals which the pipeline includes of of in by compensation the Germany insurance consists up pipeline cases, rentals. ReWalk product which to The four covered last active and

and is process U.S. in in with the cases XX X Germany of number overall XX in Our

As totals a establishment successfully we pipeline Medicare list the results progress eligible rate the identified figures do reminder, already our not If payment patients. eligible and acceptable our supplement reimbursement with reimbursement. can cases in an would of include with CMS that Medicare for than pipeline be mechanism of these

XX.X% XXXX, points million in percentage our revenue XX.X% in Moving XXXX. $X.X margin was volumes. or million profit. decrease gross lower or of X.X QX, down profit to This revenue, In to compared gross QX, exoskeleton primarily of by gross as was $X.X driven

were QX, XXXX in million or to $X.X million, expenses up compared XX% QX, in $X.X Operating $X.X XXXX. million

R&D the completion the on spending decreased consultants lower stairs the $X.X functions, FDA are project the the the U.S. due we since in of Within ReWalk spend and spending to primarily final submission. the X or towards subcontractors XX% projects in on to stages lower due to and million

reimbursement CMS due $X.X million to showed Salary higher and associated trade marketing or activity expenses consulting to fees with primarily X%, expenses. and increased related

higher or acquisition expenses $X.X to administration increased - activity. to and professional related services million General due fees XX%

expenses down been have Excluding the $X.X XX%. or expenses, M&A G&A transaction would million $X.X million related

The M&A accounting QX, XXXX. that of fees were transaction-related incurred banking consisted during and expenses investment legal,

work will additional the diligence current QX continued We processing for transaction that incur transaction the fees and into due quarter. in

of for million, in $X.X loss an was of Our quarter the operating loss quarter the XXXX operating to of XXXX. second million compared second $X.X

related million XXXX. transaction expenses, M&A $X.X or million operating loss $X.X was the QX, improvement the versus Excluding a

- that aggressive contribution financial in management The point we yet a equivalents resulted result of $XX.X no ended income and to and increase that the QX. out is like from our in higher cash more cash interest We favorable cash quarter a in in $XXX,XXX million I'd policies with income generated income of debt. balance. prudent

of cash million XXXX $X.X half the operating usage first was in and $X.X Our it was QX million. for

shares approximately ordinary repurchased During and repurchases. we cash XXX,XXX QX, spent in these ReWalk $XXX,XXX for

us on the You six-month recall X. program. second repurchase six-month for a approved shares This court authorization repurchase February, under to ended may our Israeli in August period

evaluate will then that other capital, versus repurchase will our If We decide share seek the repurchases best of extension. use for capital investments. we another share we six-month of use is our

hand, a that an acquire entered for payments growth achieved AlterG adjusted for over indebtedness As announced and potential two based to for agreement expenses, few the million, the the year-on-year earn-out the AlterG capital on ReWalk $XX transaction is working next on days into business. cash for years ago, with two we

This ReWalk's end from expected results AlterG of transaction for the the August financial through quarter. is include performance Accordingly, of later XX starting today. close to would the financial QX

Larry like I'd to call for remarks. to that, turn further back With the

Larry Jasinski

Mike. you, Thank

the sales or with at operations progress Germany, provide with along breakeven, compensation acquisition more current to the activities agreements adding of out portfolio towards two, workers' start profitable activity, and move growth our each these and insurers through quarter. each XXXX We goals, for line to year, distribution leverage via product goals after third, our restate to products contracted on in capital. the I'll and of to and expand To VA of them our laid achieve

We have on objectives. made progress substantial three all

half. as lines first leads existing has our with growth submissions approximately XX their facilities increased increased year-on-year. training, And exoskeleton from and the in sales year-on-year as expect referrals the in five their the Germany more half the growth anticipate number year we revenue, more of second to of XXXX the double opened For VA and has support we to to exoskeleton candidate to placements veterans up or

We also half add four if with After are see in XXXX to upside the systems AlterG the XXXX. MAC the antigravity AlterG, to the results. case closing and in add a they of submissions would CMS part months of sales potential with lines paid we

grew of growing new systems. pre in expand current products Fit add portfolio, will three and into These Via continue our of with the broadly penetration and For of antigravity new well to CAGR our XX the AlterG at years acquisition upcoming clinics can COVID used designs. for Pro products: accepted XX% and and a complementary objective

with balance, line our systems, lead on reach profitable products the drive The AlterG if key once burn current and driver Medicare beneficiaries. programs to and we growing to will growth execute that profitability on capital. XX to seek breakeven per a progress with leveraging We also is XXXX XXXX a in parallel establish exoskeletons an to and workable the addition XXXs we We're a units of to believe DAP reduction rate cash CMS advancing as and year goals. in approximately with available of expenses

and this shareholder also as communication it I the updates XXXX base thank business to look achieved. and new the further quarter in and providing commitment our I have to these existing joined forward each expand milestone us life-changing XXXX. is supporting that recently we of each and technologies wish for through shareholders as

like would you answer now I have. questions any may to

Operator

question comes from Yes. Thank you. [Operator first Instructions] the Ramakanth And H.C. Swayampakula from Wainwright.

Swayampakula Ramakanth

from is H.C. Thank you. Larry This Wainwright. and Good Mike. morning, RK

the So November exoskeletons, - get - as you in out, you gets category the timeframe. state if when base ReWalk, awarded including it for

the change the of In And the - would is terms expected that of sort code of out category HCPCS what that? the of HCPCS code? benefit

Larry Jasinski

KXXXX a that ReWalk code the components. to exoskeletons exist. code Well is you created that in code are product not - they That that to is apply change. order be has product the have for to paid a particular, that you in three there does a the our in which That applied - a have There's be defines, been Once to gap. well. And for. category benefit has code

nowhere The to we benefit It didn't different. rulemaking category, is like going of is did. had within category the braces. there defined system. the fit innovative us, put even come out what's essentially an because nothing to been, So which process is in A existing and a what there was so exoskeletons of was CMS challenge product remotely

with have category, definition this newly category it defined will category. we why to that into frustration an be the a changing or now able into for. By the paid was that existing new category, be rulemaking didn't a And a

code. now HCPCS brace the So it'll in has is rulemaking final the price, a if the process benefit the go establishing into And that It then the category on defined price. track. the stays

to stages work here through. three to us there's So

First one succeeded. is

go may and defined CMS Second days, and a it comment goes may or propose believe is the issue would going through HCPCS HCPCS not price the If discussions they then period of public the comment we by and final price period. pricing through one meeting public a after. a it XX is at to where November comments a one they here now will

benefit we a believe, will category, have in year, cycle. November we this calendar So,

us. I somewhere will issued not We end the definitively say it. the end to way between proposed, and can next year and first quarter the pricing have of is year, to and a the the lines CMS this But, are of up probably time up best

cautious better that So that's - Okay? why little explanation? a I'm a on that being was

Swayampakula Ramakanth

that's yes, Yes, good.

in you have to trying as soon category. to you category, just So reimbursement the reimbursement can starts, understand, you before for I'm November this reimbursed? heading dollar, what - to brace can need given the as it get still where or identified you once imagine, get I'm to, question once Do the wait be

Larry Jasinski

supposed have be were to get you you you're to category. Well, benefit able priced. once a When paid

using challenge is our they decide they MACs. CMS what have So will as the to process price will use

this have we XX ones in one QX pending XX got will of met So year all the put they've definitions. is claims all reasons have that these in the filed and or more the

pricing then I the paid establish there And say the can they'll some either all clearest use exactly, much proposed they once price benefit as that didn't approved other theory, until and have They requirements to answer be a is final interim or But you we wasn't in an a it. price it way how category, the just for for. understand yet. That that's met price.

Swayampakula Ramakanth

the get answer. - I

to me leads this next So, the question.

the end So XX by the that to expect and this QX, of did to submissions get in XX they you year.

for because to taking identified amount still the in be, submit, the identifying they figure out difficult there amount any there - really the that to it is process once haven't has lead reimbursement reimbursement CMS an time you is what will or when of of is ex by reimburse? the time So or once regulation they're us,

Larry Jasinski

early products even been, following, until not placed lines, approach any for this at should the be revenue become in least we're - some time on them year time. that repeatable at our year planning though are has conservative There next have will and moment, it for they will calendar we still XX

being we of put at didn't get some delivered trained we calendar the this it of that paid will year. but fairly in products a have point, So, in people for large hands base

the Typically, a XX days. and takes The a process they typically it good cycle submission the process. relatively defined, not but for actual time, is once part place. long is to in is government have is The training some once process XX payment

long on and extremely CMS, we've going with is established, not gone we based QX line should has that we're feedback efforts time So all by the answering the think next to be the on gotten. the process is be where once which year,

Swayampakula Ramakanth

Perfect. Perfect.

now gears acquisition. to So switching the

transaction Now today. we that by going complete end the know to AlterG potentially of

sort can talk And some to commentary what of remarks upside terms a high-level of you synergies any to - of the four the is could to prepared too folks months, about in on stated could in terms of your us from you So expect dollar be you revenues amount, - synergies, identify going that sort side. in in AlterG. Are of as we know expect? then worth to what I ready about or revenue it is you early give

Larry Jasinski

let I'll history what our the of Mike, And what revenue you and give we expectation some of - we how can can start, you or develop. -

Mike Lawless

Yes, sure. okay. Yes,

them. $XX I since business as growing on half benefit a - So, revenue the quarterly revenue of we two just it's quarter, for a was business. we - today. On have XXXX team. we quarter's forecasts as the together, worth a Obviously, think to as XX if it in for for a teams would is not this a prefer and we going-forward of provide putting guidance roughly doing - from AlterG partial It's basis, quarter, since - management closes QX, expect - million August expect revenue the current - the when for

be think guidance think to provide will I to we to want about we Street. to start how consider, able and

will more I now, that easier, able the be more little scale to our transaction, have have and say we'll bit predictability So, forecast we'll benefit coming it to - be is material shouldn't of a more this performance. easier

what quarters. in our around look guidance think, future So, I can definition could more we to be

Larry Jasinski

There's that process. sales the years. has in that from way unchanged and from for AlterG till with comment after extensive been same group is this And it numbers pre-closing the a been The effort I'll delivering has we're afternoon been team closes is the December predictable in add XX, managing it this. more exact place integration their

it's So, unchanged. completely

Next and training. year, have one we will some sales go combine through forces bigger a and the

reps revenue sell in And so it. that can be that makes the team that more feel they same good us, will even their get place continuous will pretty having in results. But

Swayampakula Ramakanth

points then going clinic. in get And this the additional contact, especially with to you're acquisition also Great. because of

of point commentary as some on are ReWalk your sell the So, of sale? in of as clinic you what about clinic the thoughts of products relaunching, any cross-selling that unit well the

Larry Jasinski

can synergy lines, Mike established expense. relationships, and I the larger to the most clinic easily also going designed is I very end benefit both and well product. But MyoCycle both give because and team has with that Well, going product think comments growth clinics into a strategic on deeper and it's established the and a much the from with for a us

of the we the the really is us With level, primary have ReWalk product we clinician this more CMS. area because see line, helping if

We the write need for right to prescriptions these clinicians patients.

we a using more selling need and - towards approach to So - units than this personal those is our else. anything base us relationships gives synergistic

approaching home. So we're Relative is those going it in take model, the is that because the large training most ways unit done clinic ReWalk eventually it. expectation the of to to the strategic are they're here, a not

a lump product use clinic CMS this that If is for specific in - patient. fits sum, that will the that they playing the

that So, we work us. for will well believe

Swayampakula Ramakanth

taking you my questions. Thank for you. Thank Perfect. all

Larry Jasinski

clinic. push product in. in a the two there's is Okay. not ReStore we've add been able I'll really Well, that to also

to synergy. you will synergy. revenue on a comment side. the on around strategic a that. So, the little reignite some And gave you you the would bit want we effort I do little expense Mike, ask bit

Mike Lawless

Yes.

yes. So

more opportunity would the that we and their and businesses support businesses can There's to there's have. going and the quickly. vendor which need So future like are to hires both we of as that subscription the and be had resources and we on grow, as business imagine, costs some the that, through, things as also able for relatively grew duplicate working expense eliminate we're the larger you plans side, to

hires, the And because us because combination there's the of bringing with opportunity our together, those avoid companies. we're of those gaining the talents some peer through new we're to talent for

time, million to about say I annualized transaction two of resulting would factors. that's those expect in those over - phase we are this So of savings be going to the But over things see $X from that time. from combination

it those be And experiencing expect so $X - year's would million we'll I would a savings. within time,

Unidentified Analyst

all Thank Thanks. taking my you for questions. Perfect.

Operator

else for [Operator All you,. there Instructions] right, comments. the like the nothing any at I would is present closing return to management Thank time. to floor

Larry Jasinski

Keith, grow but and company for you, AlterG. better you, to bigger addition Thank because everybody, thank positioned to simple also better is and is combination because joining today. progress grow today of it's of position is that a ReWalk better us the a bigger, and there with ReWalk the CMS. That is

of our into here be put extremely process We detailed on of amount QX, high every this. pre go level integration we planning an extensive of on will integration. the time As focus step and closing

correctly. how right. very these also period prepared make a every well the outside the we detail are that's a expertise we And and work helped process have make are that the importance we next make by getting and have experienced significant sure things understand us has you team We will and few it, This very integration that. work be we in work well to of is this months and doing effectively

laser-focused for So measurement important that is it. and us, on very a we're

focused we're and Second, in the CMS still is is on process as this process. just

positive period, educating highly comments in educating to way the CMS are because them this active the provide working going in we and to political and we the societies with would own comment. encouraging So is in obviously, our comment also that provide believe support support right leaders,

established have VA for industry, established for the we We others. support and that best the the what with for the the working beneficiary are with have best reasonably patient, the the provide best also the and on already pricing pricing is and we why to

and of Thank time be your to earnings excited amount an able you extensive quarter, as again our we there's call. for get really to today. on So in about next work this we're report which

Operator

you. Thank

attending session presentation, this mentioned, call. you much concludes today's lines. may now and disconnect question-and-answer for the so you Thank for your and the As

Larry Jasinski

you. Thank

ReWalk Robotics (LFWD) 11 Aug 232023 Q2 Earnings call transcript