ICAD - Earnings call transcript Q4 2017

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Operator

Good day, everyone, and welcome to the iCAD Incorporated Fourth Quarter and Full Year 2017 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Jeremy Feffer with LifeSci Advisors. Please go ahead, sir.

Jeremy Feffer

good and Rebecca you, afternoon. Thank in Thanks call. for participating today's

X-month Ken Executive Officer. XX, Officer; me for this from Rich XXXX. Chief are iCAD the results financial Financial Joining and ending Ferry, Christopher, iCAD announced XX-month and periods afternoon, December Earlier Chief

to conference with filings involve future Before Furthermore, limitation, this March differ Company's of risks encourage regarding the actual the operations forward-looking would Securities and and of made I undertakes that iCAD. XX-Q and XXXX. you conference accurate XX-K, those management this circumstances revise without review contains to events specific my that broadcast, the any events call. the of no only to materially time-sensitive cause including, to begin, that to Commission, the as described that said, caution live XX, the Ferry, Ken? uncertainties and to in Exchange results the after this content this of call by we information is or may comments or ICAD obligation of conference contains turn results Forms I Company's statements. CEO. date that call statements like the pleasure to during from it's date Ken risk call forward-looking statements the which With update reflect identify over factors or

Kenneth Ferry

greater conclusion update Rich's will CFO, review remarks, to I'll turn XXXX, particularly segment begin today. full over strong financial report key our then Jeremy. software call detection call detail. programs the thank XXXX. results on XD and Thanks, was revenues full demand financial were in us opening growth and in than XX, our had our a mammography fourth the to for we call some an before growth This I'll the the up fourth respectable quarter service December for in and year quarter, XXXX. today's of and for brief results provide revenue Good afternoon, on for everyone for very with of expectations greater in I'm joining product Christopher, ended comments the I'll This At and the you, versus strong questions. the who product fueled showed XX% both a year. our with of growth quarter by line XD pleased our the in strongest for our the year with business. XXXX. Rich Therapy

XXXX we on software also on invest focus continue expand the to look artificial our to we product sales as business call. beyond, intelligence product look well. platform, More as will Therapy offerings we in our growth and these of and to As later in and accelerating our resources our topics in significantly increase to

of to call Rich full fourth over turn quarter Now, I'd a to detailed like XXXX year and our the review for results.

Richard Christopher

Thank disclosed afternoon, you, review release. XXXX Ken I'd financial this Company's which like in year everyone. and earnings afternoon's the quarter were highlights and full to good fourth

on Report to the only Annual file expects will results, coming week. The in Company XX-K XX-K our Form to financial As SEC discussing I the from more with you be XXXX details. I'd highlights Form like refer and for for specifics the it's our to

performance Management would get of to meaningful to referring like that comments Company. the provide measures non-GAAP the information that be operating Before highlights, well certain as reflect as way better started that financial I my we believes today will the I investors, with measures. I to during view these the note financial

for quarter. summarize I financial a You With the can to GAAP reconciliation results release. fourth the our find our covered, will non-GAAP measures at the of earnings of end now that

which change was prior was growth in comparable quarter a the by that revenue negatively It revenue. $X our slightly the detection be improvement the impacted or a The noted million increase by therapy year offset quarter. reflecting X% prior over year-over-year million, For revenues in $X.X driven in XX% was year-over-year XX% fourth the revenue was MRI should total revenue, decrease inclusion year a of by in XXXX, of quarter. $XXX,XXX

As completed sale in quarter previous on assets XXXX. the the of detailed MRI earnings first we calls, of the

Taking Excluding extremely due attributable $X.X the by the Again, in driven for $X.X was These X% entirely comparable year by a at decrease the cancer our geographical period. of offset a the cancer $X.X or XX% $X.X total over year-over-year The $XXX,XXX detection the revenue revenue, to in results PowerLook million strong by Tomo segment; of our revenue revenues, prior versus increase detection of sales slight year partially impact in from of sales This detection over results our million, total detection in of $X.X included XX% to reflective therapy quarter quarter. segment in totaled mix. service revenues. our The which by product quarter. decrease year-over-year MRI revenue revenue. of quarter our increase product increase the a revenues fourth year product revenue or to is an a a prior XX% This $XXX,XXX adjusted $XXX,XXX year million software. a change therapy XX% in decrease is increased is increase impact prior revenue. segment; revenues, XXX%, increased period. was million million, excluding increase prior or detection the domestic representing Shifting increase $X.X or was XXXX MRI or fourth our in million, revenues look

of we outside lower international distribution in prices All on selling the sold average U.S., realized sales. quarter of was XXXX where that control of the sold the was fourth

as percentage of fourth in of skin million, for XXXX subscription a profit gross fourth fourth XXXX. business. the $X.X The of million the year-over-year quarter. $X from $X.X result to XXXX the a achieved year The XXXX for this representing XX%, The the Absent profit change quarter in gross the to recorded the quarter X%. inventory of reserve. was the quarter reserve impacted as was in quarter as fourth profit Moving basis, by this gross our compared gross percentage a negatively was $X.X profit a decrease prior XX% onto of percentage of reserve representing year-over-year the was $X to year-over-year in million gross XXXX, charge, fourth Absent the related On the compared of decrease. inventory the exit XX% increase million of $XXX,XXX in gross quarter profit; XXXX profit $XXX,XXX. increase a is was was profit charge, gross also in million in of fourth quarter a

result operating the of quarter $X.X $XXX,XXX quarter or totaled expenses a quarter was This XXXX, charge segment. as impairment a the also go, therapy expenses over recorded XXXX. as for decision In far X% increase the the million. This million As fourth the of Company to $X of fourth fourth related of the to non-cash operating the of XXXX a represented business. exit skin charge assets Company's goodwill the long-lived of and subscription

and the million representing assets for Excluding a charge, XXXX the $X.X decrease long-lived XX% of goodwill impairment $X.X fourth year-over-year. totaled total or expenses quarter million, operating

compared primarily $XXX,XXX, GAAP was for by was impairment to $X.X million basis, operating $X.XX in fourth $X goodwill and gross in or million; metrics; profit year-over-year increase reserve, quarter the net a quarter share $X or offset the the XX%, adjusted the prior for per inventory in On prior per charge or partially loss represented the $X.XX which $XXX,XXX million incremental quarter. over our profit of $X.X net our a by million period. EBITDA million. of were of net driven improvement loss XXXX decrease the $X.X A the comparable share loss $X.X year non-GAAP year a of was expenses million a at net and loss $XXX,XXX Looking this

we facility now like to investing, and total result Moving sheet; had balance Company's the to structure credit end to same highlight remains cash milestone and cash same. changed, XXXX. operations, $X.X the million of The lastly, date the service on the This structure. to interest amendment cash XXXX generated in by terms million approximately facility into generated it's EBITDA from seize in Bank. million A some XX, with that we Bank August terms important cash amended payment facility necessary announce changed. the credit Valley million of from changed II the to decision of has Silicon The structure of December credit combination the covenant The and offering was $X.X We tranche remains follows: the of changed, subsequent amendment we have financing. In ended million revenue an made credit a $X.X quarter, on-hand to XXXX, to the with in final Valley used and as to the debt covenant from amount summary a on-hand. as was $XX financing of subscription compares $X.X the the from the to the line we has the customer. both $X.X in additional in The skin Silicon terms as in of rate revenue generated of it's XXXX. of revenue-only of have entered It's up maturity the Company and through the are the would model a that that cash million with covenant

us our follows; amendment. and by Silicon annual fashion in XX% top pleased the $X.X summary, Fueled to continues MRI all, business subscription key revenues, the by or acted profitability. in of towards increased working drive are excluding In million takeaways revenue strong as with Company on skin So amend partnership to plans as the we fourth our execute line are first, exit terms we year-over-year. agreement, the with solid performance the quarter our Valley to true performance, Bank growth. demonstrate revenue, a XXXX from the

specifically, revenue revenue. our product within detection we significant experiencing the more and are business, key revenue metric growth cancer Second, for

full detection a XX% up MRI the $X.X million, were year, for Excluding robust product or revenues year-over-year. revenues annual

therapy, higher as towards year-over-year. burn better in was in skin U.S., sales Further, January as of breast intent particular, the Balloon announced well volume cash within XXXX. Company result The up to lower as seeing in in the growth XXXX, our IORT exit we to This X,XXX in are sold the increase Company's compared profitability. of margins, we we gross the we as volume. the business. sold was head where Third, we XXXX, decision position Balloon strategic balloons will In XX% X,XXX meaningful by outside subscription driven,

believe to current to our time, the presentation. This achievement especially profitability. will Company position to investments support the make cash continue same us AI. concludes strategic growth, the support the financial further of to topline revenue of will, at we section area of in critical This the our Lastly, that highlights allow

would like back I turn call to Now the Ken. to over

Kenneth Ferry

Thanks, Rich.

detection Tomo It PowerLook detection our business. increased Detection commercially deep breast pleased AI based first machine product available begin Let's today the Cancer for the software on with for fourth on XD is with mammograms. in quarter. We're cancer the that the demand and of learning being

this that come. believe to driver product platform continue a will to We years significant be for growth

this To highlighted. this continue initiatives. Radiology commercial of We focused solution end, maximizing at Meeting our extensive we to position the various in was presence Society where potential innovative the be November, AI North on an through America leadership for in had

During and conference. presentation we dedicated as our detection. our U.S. This well-attended executing AI, on Europe OEM presence pavilion the comprehensive a was Tomo a XXX of in leads, PR breast generated as usual the we addition in and also with booths where sales artificial intelligence to well with over our on focused advertising tomosynthesis conference, in tradeshow campaign partner's hosted the a own,

our customer banners health, to this, on by multiple we focused portal tumor XX named with and was a sponsorship promotional women's PowerLook for continues iCAD and education one to exclusive Healthcare Tech significant News, top the providers imaging of our momentum, XXXX detection, that Technology part Outlook recently artificial webinars. intelligence Moreover, Magazine. women's announced As website generate Imaging ads on as of

communicate to continue we blog leverage informant our patients. to with Finally,

Our AI most and recent post was on women's health. focused

the to detection market financial gain with fourth we're Tomo results our indicate, beginning PowerLook meaningful software. for acceptance As of quarter our

success. sites XXX as Moreover, just mammograms. assist using workflow on of over number our XD with software to initiatives fact, to and a of interpretation worldwide we are In currently there this are the enhance executing heard, you

are of software create the which in and of of the key market for Tomo major of for of evolving will we maximizing next increasing The objective development on an AI. value PowerLook particularly available in all example. be to Tomo commercial Most offering, product, of year. systems version roadmap field product detection, our the in follow-on detection developed a of version the the this PowerLook also XD importantly, unlocking is iCAD's half the important today. product mammography next While with traction to the adds is strategic second this focused our we've a

Now and detection version development for an CE in Tomo Mark PowerLook late February. update X.X commercial on our progress. received

shown we result, as positive, Vienna, it of of Austria. the took booths leading booth. the we several a in X in a the February As place in introduce Radiology, in and conducting extremely companies were iCAD look or the ECR, Congress was of European was ECR, at well feedback This in as software coming forward March Europe pleased over XX version next Europe the which at months. to Initial broader launch to through

are the recently study FDA reader we completed on for Additionally, submission. product for and track April our an U.S. clinical

in compliment PowerLook sometime Density commercial to the application. density allows using has also their breast significance expecting soon to patients the XD for to passed notify density. half requiring be X to hopeful breast Tomo This a and technology of accurately been We're as the XX consistently Breast of year. our FDA response continue states physicians this tomosynthesis. the second on in legislation quantify A when version radiologists launch detection U.S. PowerLook version a of We from X in

we're an a investing continue Company. roadmap still opportunity, machine the size the will the of market broader evaluating product AI and on development for be while offering could of learning. this software So it of based deep solutions, iCAD in important

area, coming our in and as significant a forward of experience have the As to of the development I've in this portfolio engineering for solutions highly benefit innovative the look as in years said and our we we robust platform and well augmenting advanced past, customers.

We we minimal that at our sites only to we firmly intention sites business. best market service XXXX, subscription in early the treatments model efforts, and timeframe treating brachytherapy grown like providing the were in to on discontinue unable detection patient of our our software brachytherapy the of customers segment. to radiology over therapy. on a business. committed to skin first this update are latest offer achieve the and I'd over workflow XX-month provide the in to Shifting to to Conversely, for continue announced In offering an Despite our majority delivered treatment run nicely volumes to XXXX. XX% have machines the option. skin

will offer offer service doing In a we sales So, cancer. determined that following to support will the a continue going market of model our to we and x-ray sites all comprehensive commercially dynamics, review capital forward. only system source so, skin we using to treat

will a upfront and the and to capital communicate Since continue service success, capital Further, delivery. and current resources, revenue recurring good providers we've base local Beyond contracts to Company. expertise with customer assist provide current utilizing regional capital our for with is disclosing third-party healthy sale, to strategic this or with treatment continued our x-ray stream source the to them potential decision, customers. new

robust. interest Following our customer quite these capital that believe discussions, we remains

one a CGS, and coverage committed in from changed Ohio iCAD positive the to a has treatment. Kentucky, business. for negative that recently this Medicare Accordingly, we skin firmly remains learned addition, policy of to covered policy In regions

capital commercial now on million approximately Our in an an $X salaries annualized will in strategy and basis. exclusively benefits savings aggregate sales, on focuses result of

strategy We market of through practices. capital radiation existing oncologist reimbursement expanded regions is an have sales expect dermatology attractive the where in initiatives centers The the of focusing to the targeting in our with U.S. and over Cancer of to some experience. and we these reinvest cancer on Center centers, across X,XXX savings marketing particularly

published immediate the demonstrated we're cost or therapy compared therapy, in not breast of about the quarter, excited support business radiation our announced study, certain of result annually be update in results than the were shift customers. of $XXX patients cost-effectiveness intraoperative in XX treating The of provide clinical and a the in do early-stage data million cancers. for of better the resource more the With breast opportunity the placed said, the cancer, panacea effect U.S. on could continues over of patients application, in be an that and cancer. for GYN GYN have new applicators. capital healthcare XX Therapy direct savings which IORT IORT me of IORT system the OUS treatment this iCAD the We treatment. landmark In quarter of X significant health early-stage to with with fourth life. cancer systems the and From in a the beam to we results peer-reviewed, in lifetime to analysis other that we and view let treatment radiation showed cost for an method market. in allocation, benefits breast [ph], international therapy as compelling, with preferred with technology well long-term the patient Centers the our standpoint, external U.S. diagnosed of -- as While determined a fourth of quality and IORT, that by minimizing benefit strategic utilization offering we radiation currently to you study as now The Centers IORT exposure and our IORT

brain strong, well, are general in We IORT market as experiencing interest rectal. including global prostate, and applications

lengthy sale system in Looking in both we placements continued ahead, in cycle and while segment, anticipate XXXX, a in U.S. the progress this internationally. remains reality the

in opportunities and Colombia Additionally, in markets, Africa. we certain see XXXX including OUS India, further emerging Arabia, Saudi

the with X,XXX in median We patients of To-date, our an months. in patients. in Finally, use XX.X follow-up let on enrollment system February. been with study cancer have you a evaluating breast Xoft the me update provide completed with IORT early-stage treated of study this

demonstrating data patients. in low good rate adverse that year, You'll cosmetic results to late high-grade high that rates, and IORT of survival recall soft appropriate a events excellent recurrences presented ASTRO delivered and we at last

publication XXXX the these half targeting results. for the are second We of of

the us So believe skin area. to of we Therapy summarize brachytherapy allow on our market profitable in opportunity customers to will maximize status business, the focus the long-term, a capital

to developing IORT we in we believe of to this achieve key Additionally, very demand continue Asia, and strong are remains in all the emerging achieve the opportunities are business and Europe and we this, long-term on with in we success progress our U.S. markets, to future. Based GYN, area. while in market as look further well-positioned

So to call up open questions. like the now, Operator? I would for

Operator

Craig-Hallum will Instructions] Capital. And with [Operator first Ellich Kevin come question your from

Per Ostlund

today. for This is Ostlund Kevin developments Per on here. positive lot A of

let's TOMO with -- start the business. the with let's start So

QX, I want than had a may I expected so, like don't little a that mix, been but if there shift you XD, of you how think little sounded in bit had it Did adverse bit that call a a in mix, maybe that the little of or XD it more more bit there? in drivers QX would favor at And maybe time. XD? to characterize

Kenneth Ferry

blunt. our closing with had be revenues in Per, number QX, if would not in But exclusively, progress, a look did of with Yes, that jumped see would Tomo PowerLook largely, at detection shifting say I making satisfied is, from the very business. product. I'm say pretty by product the QX. detection And own XD We What it XD. sales strong the as team of also in quarter to total significantly a terms we're you progress. from very, was not to increased I GE from the mix effort result if we

XD the And versus the a combination majority screening. sales being GE, there's the XD the ways to capabilities XD I XD as With to with from a Unfortunately, well them still still the product directly, environment. And both, the are the that have increased And product, of XD XD contributed exams. too we because that. of sites, XD so, as purchases products provides XD increase more go. in again, that and higher of somewhat to sites that's of said, really number focus of do do still feel much using system quoted for of

for exams, very using the for over standard XD lot large become growing, very support developing is while of XD years. a in see necessarily the strong are clinical that volume of and the leading-edge There's not screening, XD screening hence, coming We sites screening. the data of for yet. So

look this shift XD interpretive X things very, dramatically. all be major to though work will product companies get say What think I this more directionally to version and we capability. software do on good. So, involving that the really I imaging that very of the of would I moving get the that them, XD to to we catalyst have available as we of all work have product for do a is standard to believe with become transactions still

the I as of on what team. timeframe, products all based the and these with of products see the that XD collaboratively out the of I very good So in start dynamic in GE and when to efforts for over be happened ago offering course interpretive software part, put the hands another direct a improving, also, sometime the believe, the you our companies, the we're XXXX, in mid-XXX competition see But would making came just with one similar innovation XD that to against us. you

Per Ostlund

perfect impact sense. the makes environment about, incrementally this back in XD still TOMO Of positive had quoting a here the have just want out? any kind turn at calendar if it's on that sales budget an to X.X talking second. resets Ken? you're I attended or that That point in of to curious But come

Kenneth Ferry

it's Yes, mean, who far our partner, year. I quarter what our of would their say QX largest is by the is always GE, largest for strongest quarter. is I also, And

them is, more I up in down. us steady. we would being having say don't did I QX. to impact of as budgets going in see see So certainly But I just what don't I think, replicate ability what or see the customer QX, I

entered the budgets lot we new about I've heard squeezed. getting not year, into a As

incremental being other lot a hand, funds provided. about the On heard I've of not

biggest the up to things we let's see strong the And from again, did where another year. least the seasonally, of start we the QX, fourth we most before, we're is action the as probably to partners. XXXX. sale That's the looking marketplace XXXX, the how hopefully, quarter our that's at rest the at of through to as MRI business. have slowly by we we've then, And growth adjusted always right commented ramp end see XXXX, say, I the topline now. think quarter shipment will through in of, year So And for comparable it relative

Per Ostlund

Sure. That make sense.

So on but with following was X.X, you as at partner the introduction mark, it ECR in showcased only that booth, mentioned well. the not your in CE booths

Hologic, were So that does behind level sort point? it given effort I that, to showcasing that at point, at mean all new Siemens, that they've whatever was that if guess, GE their product what it as this well? so, And exposure that of the had

Kenneth Ferry

important those lot know CE of a milestone has was strict it payer progress, you Well, companies unless are works the about Mark, sort in things, very because some in regulatory showing larger clearance. even an of

Hologic Siemen's at challenges. And had booth. show so, the intended they works know shown in it, is And it, so I the in their showed CE the software to very GE's it in that news for I as It end understand we up some good logistical workstation booth. the Mark. was very much but in of show. progress was the had product And had shown

we conduct able booths, with So it customers, positive show sure got the to incredibly where opportunity product. But had the they'd that They interact and the validate feedback. was it. The in reaction work they not love us. in shown to directly the we're I'm to if to of benefits would we to help with what of luminaries love by were a studies Europe KOLs lot and

which lot So was and leaders beyond the to success commit to detection with KOLs And validation product. the another you're these second have the and workflow of to as to show try build us a obviously, important, first upon are of and able opinion go very collaborate product. a really contributions, version, basic lot the a to you of on excitement

partners working work going very, I the that said, were So for it second that are their to pleased very, very outcome that with very on take be was of with cases, the through good workstation to In it's our quarter development meeting. mammography But a we the workstations. felt ECR, many to interface done.

in environment. the compatibility. going So impact Europe major compatible just product our probably all the is this not product a companies It's to of We so have system an really their year. the of the quarter applications start in and make this can't to workstation. happen commitments mammo real immediate product just with third release their a until from to

And the a major a X we're X of follow. that stream impact that, sometime be more terms in to over And will next, all let's for much will that say, a And hopeful have completed. really positive months, obviously, -- launch. revenue to

is So workflow excited product more traditional a of is version version call an X, have version we're said, terrific traditional believe we excellent we product of we detection X. market. version X about a With that really And more X a And for it. though created the it's in Even product. product we've and really X it products.

new over to for the plan market capability those time. products be both we continue So in with to

more of replacing basically. emphasis of see X So our an with on X with One version we really don't workflow. more an detection. a see We version One implementation algorithm of emphasis different X. on essentially

our good to think, in us should in strategy got, States, opportunity And real hopefully forward, in study. of to be for there. in obviously, United reader revenue. then early a completed the a Theater, the we've into -- start going we've gain additional traction And second So the the I the some European half year, QX,

on date in that With we're But together. bit about so all track preliminary optimistic April. we've the we're a got initially get sometime quite to in application and said, forth, crunching product. happen We the and of very and results get have do that the work to our make to

FDA hopefully, So the the States learned product will FDA, this in also the seamlessly, and the work to year much do way could X United as product in and we this opportunity we second much with some version hopefully process of through quickly be have market. with for having the more it's as half

Per Ostlund

exists. Is is that contractual you effect for there under time as seat approaching in want interest purchase on from the of that those contracts, I the end some the amount on then related expressed I'll some 'XX the quickly subscription, to then, service patients? of an to in that, relationships to still there the been customers would've to -- skin Excellent. capital maintain And a of carryover ask floor. customers yet? the their And are taking level on being

Kenneth Ferry

is and year. us by first completed the customer that should the the of contractual that end be done interactions The has There's in services a definitely of Sure. quarter. the commitment those feeling quarter services that varies providing by is

fairly really And there that so, that throughout. an to that question, To our is interest, volumes of accounts volumes majority capital doing a and still standpoint, But The were were ramping. on saw lead and the not, already in decision. unfortunately number the momentum doing it systems. of we're activity from is sites your currently strong volumes some had their were a an customers really acquiring building good of going. us that definitely or good other is interest number a there We is

next a hopeful So on those number with transactions, those to the we're working over customers, of X. or we're quarter close those and

Operator

Laidlaw, we'll Brisebois. from And hear from Francois

François Brisebois

in to is launch the start in in you can give more QX just the then, of of CN people in launch, supposed that terms an that And QX, or more of that that? -- on terms is a color if effect that on just reminder, more you said, Europe, in mentioned? you Just just commitments have

Kenneth Ferry

the essentially is all major Well, platforms. offer -- major all to the product our this to goal on

are of So some and would hoping specific, to in to process commercial in companies work and that Siemens, Hologic Fuji planning fashion. be [ph]. We and all GE, be obviously with the that to

Some much ramp scenario. up agreements and obviously we're both we some said, also are With we selling we can in in own have because sell environment that and from get efforts in to higher been of further looking Europe a United pricing then a get process. those price completed an our States, commercial directly, where can the transfer

of any have minimize X, And you with a we'll to really So with that GE. sell has And partners as we that of where know, Frank, a exclusive rules conflict. been sell market market, where obviously, that our than can larger we so had version tremendously we've co-exclusive plan go channel can to product, and it is engagement, agreement, kind it. we to some addressable

Europe, come So market or a Whether I this And through mentioned, going product all the can companies the we're direct just we're with size and our of own. It's excited very going to OEM selling nature provide in sales we product. across about a partners it's in of the expand of partnership by expansion. addressable the for. addressable through States, the distribution expand selling now our the traditional our market to United that going to we're with as

François Brisebois

how of And then share That's helpful. U.S., ex And an it in terms share the then, in of say now? U.S. market is share, XX% fair at XX%, market does more market Hologics that that even to of is right distribution? goes

Kenneth Ferry

market MQSA companies communicate results. the numbers the data U.S. and different I on doing, that, comment my third. and the is around they based month the Siemens the each with, Hologic hear close their guess the different the all are we I market, leaders, European In how probably probably would, are GE being say on accurate just a would your think market as and see way the

major do breadth So put marketplace their the advantage. shares probably certainly, they and resources that all are and lines, can in in Hologic. my versus assessment can a leverage the so our I But would many this the lead Hologic. Siemens, the say I slight gut be given know don't slightly more think them close my players fairly GE equal. bear But countries, across Siemens gives a somewhat probably -- that and But from product X be the are of that of in is GE I market guess own they to market. would Siemens the might of And and GE, share. they're the imaging

François Brisebois

If realigned, another? And you deciding how cannibalizing lastly, now buy touched to might deciding don't later. terms see TOMO as there -- on out -- X.X -- not one coming Can TOMO in on it. issues then, them the Version any Because budgets you are -- are just that X.X, with of the be just you customers mention

Kenneth Ferry

of have GE awful in lot XD base essence, to traditional said, does program a XD an a product more a But the to is and is of detection what it's we the though Well in as customer even capability through tool much what offering. workflow more than that dedicated X, offering one did emulates of I world. transition Version obviously, way we're GE. it a is premium products, the our a version product more service

to contract, of version with aware CRs the premium through then, CE does visible, essence, X. an the so, pathway become the the have and the And is support obviously version customer and to if Mark avenue, get buy ability And customer one. a X, a version have in

version are are customers, we using for reason, that circumstances in And where X. so, in interested whatever

most like one customers part, version really the with GE. For our

So X of have seamless don't a issue for available. would we today. it's have to with customers an the when really GE's seen haven't created that But customer a those that. Obviously, we service offering outside really we transition version a ensure product base,

product So will version the first working other be that with. for X the companies we're

Operator

Zacks [Operator From from Research, Brian Instructions] hear we'll Investment Marckx.

Brian Marckx

you for as the generation be work given customers first manufacturers. about X.X generation -- GE, you the as integration work the as the is the Hologic the systems would have version, with about Ken, version? GE doesn't whether or for, extensive for first involved for say, it Can that a X.X integration talk existing talked

Kenneth Ferry

able navigation heck capability any work. a standard Using not good comes and is for say, be would then, that really straightforward. I the of to utilize able them. work, capabilities. not our to Brian, with It's lot honest, it's it. It's lot question, be accept to product, industry a of to what of have pretty to do it's a be they a of interfacing And What

Iris have work in scheduled just not they're And have it we've they're less of in to all not to run it's if add drop much doing And a going do a so, and the releases. it work already in work. But you not is do lot to versus general is, what -- for it's the whether And challenge this. PACs lot obviously, they into X. The Companies. you've it got might version Workstation one it GE X, version X version Seno be

some a dedicated have companies cases. be companies, but So larger got in commitment workstations. to that it's going very relays from, strong we've many bundled commitments the really annual strong had PACs We've into from from the mammo their next

one is So logistically, our really challenges that next release. of when is

probably So a example, the an as adding won't it be their of XXXX, X portfolio the it's X of not all It the so that and as on XX is one issue companies time. major features PACs develop less of The have end but we'll at can be than takes to of done because one coordinating really if says, until months features to they're opposed it timing in issue, a this based to, days. more releases is it enterprise.

of challenges sense So that's it's dealing a in of logistical a with -- truthfully lot one it. of can it a weeks. matter not the we're But done our be development in

Brian Marckx

Or to a so is it supplement ones the potentially just compliment I generation terms better, have I first this a complete in X.X have then, version, the first of a generation this that And replacement? -- the be current installed the -- version? would understand base, is or GE

Kenneth Ferry

an where do what And have. higher algorithm. product we -- in they what upgrade, essentially is we performing looking It an they drop at we're is keep the

a change. and it. So don't that the workflow But this in detection the has features, if you engine will,

GE. So would that the be implementation for

again, we traditional where product see of detection classifications believe GE, on it's putting and tissue densities. marks soft more we a images, Beyond

a implementation. So different it's

Others will like Now their the it. And a GE and a at be our squares, with the think base go current have detection product, of computer-aided really We aspect would to version, so access product have in to circles choose like us and they customers choice. that to just too. of suspicious drop a installed towards really to traditional, lesions. in lot may more workflow speak, done. customers like a higher-performing looking really so algorithm

So GE implementations our make customers. both is available to to goal

to which Let see products. both market we route for them a want they choose go. positioning in the But

Brian Marckx

in any version? incremental And force, your involved with X.X the training additional versus terms is there generation significant then of the first training Okay. for sales the that's

Kenneth Ferry

really. not No,

at people, assessing half our at commitments strategy ECR, kind to the we want and of where this And much well. since sales second [indiscernible] we're we're partners it product those support knows Progress of OEM we showed be understands to think, of gap additional we add the a in of showed Works very it whether RSNA, I from what have the or training and from sales. people a fill force, Our at probably the to going only challenge, will education through team, moment, kind in be, it The working year. we the direct channel very to with process partners at direct our in

And people so the back some adding in we'll half. be

machines. the Given across the size entire the of all supply and the systems installed out base the different XD there, opportunity companies, the new market and

X to States United the some to in shredding them the adding out half people to back in in it's So the if any speed, field relative people there's new and there the probably today. going up issue, that getting we have

Brian Marckx

can on Or anymore minimal by guess that Therapy I indenture exit decision subscription concert the mean the on volume the of to relative it? exiting And minimum trading your mentioned post kind Can you background decision facility decision to the you side what relative you business? then the was And of minimum treatment -- with changed for provide the exit Okay. bank volume indenture to your was facility? business? volume in bank to

Kenneth Ferry

Right.

do what we decided very good the responded is as decision, that the relationship So which anything to last strategically. if Silicon nothing mentioned earlier, had Brett easy with are and part, the do we to partners is answer Valley to

the the did Brian, When we good recurring $XXX,XXX the revenue or month we peak had about patient very sites needed year cusp gross question, we the that on in plateau. a XX subscription, a get the third of margin. were at end in of quarter on sites to a month, literally about us the On X subscription they already had XX of a roughly hitting per of customers a patients front-end have said volume patients we If to along, to month. your equated per that XX site to that

of create with customers, right? And be with a can't customers. A other the create price, say those minimum here's cannot month. that, require a to challenge lot biggest treat terms of spent XX do sites You contractual those in of that time is this we blunt ultimately you So in lot the kind civil to your patients healthcare. I'd for business terms level that services as this you

rebate at can't volume end for treatment. the You year customers example of as an the of the

in enough So we did place not teeth that honestly, have quite in treatment. to them really had the contracts require

up terms, And that a so, little million of $X put over was the cost but of of the the And we the literally over just people plain in treatment. spent at that in course million when $X to sales revenue to the total had in. to show growing all in coming on in 'XX, sites saw business this it we which we was looked field deliver

we was find that, their oncologist local, medical the about were And easily community XX sites. so, to were looked dedicated to And and at we went physicist, what required of those customer base what could were we resources was, their locally or ultimately able they in site. people redtech we whether did capital realized or our radiation as it's they

what together many they to their an they cases, similar like because were was in and as And to example using we also an those this treatments essence, had all resources needed. Oncology I Center. safe on either servicing they doing business or resources they that found a third-party effective able were in own, So the did cobble in other available were sites that deliver company to resources as possibly as say proper local this

'XX money for geography said, treatments up the sales, and those figured out model the then we're or ability as we're much into more looking provide were get Company capital it either of sites in are looks meaning the across the the at in to in these we a of And meaningful viable looked to with cost headcounts and us to that that bringing XX% a so deliver treating spending are very without and sites delivered people a treatment business on geography that really underutilized that to technology. ran flying more in And the fashion, got sites only than like have are XX how we providing at machines. ramp that treatments. said we've So we the were ultimately, we're model done, revenue, in way that

to So locally new that help resources was to sales the still our if weighed people trying decision into what deliver they try are our treatments. customers the find and they're clearly, to and

them to help market that and and felt becoming and we business be with increase of So the our our that for stepping the that the more in partnering us the technology expenses traditional supplier again, providing is finding capable try companies or provide to source, cost big those gross to customers X-ray of reduce we with third-party of many considerably margins the services. enough a but more by from out themselves providing business services a goods the that the of successful, service; all deliver to for

we over our a technology past So had months. of we aggressively into decision a marketing from now, the clinical angle different great then it's because there but solution are weighed our XX all that out and great, obviously,

Brian Marckx

Ken. detail the Thanks, the answer. on I appreciate

I customers a it of described? -- profitable find customers; side, the I they the as or guess terms is on the that anyway; from hear In you a on even the side, just capital -- what consumable I guess maybe ordering you capital patterns us assume that's business

Kenneth Ferry

that the in mean, the -- of the on reimbursement end have practice to $X,XXX. if approximately I not patients is DERM too. an month, to large average think use to a Yes. treating XX is a a are they day average, actively which treat of a patients certain $X,XXX at they number And tremendous number number I

patients in revenue bringing resources treatment, the there's a math at And do that's for the look scenario that you pretty profit a solid minus year, good the when plus deliver X then, and with very the month if required XX or there $X.X in So to they're stream. say, still you million a to dermatologist.

be petered and patients market this some a focus where their in radiation Mohs really there to and in existing I they those to really and has kind a to lot growing, than are speak the new champion continue focused better on success. practice ensure so think of that either to successful out on surgery; advocate that that service of we those were after found that fit is initial a that them really or

then community. free-standing And treatments. already a And get fit viable those not still X,XXX a directly flow. need but this to very DERM they centers it's patient ran And either that just lot one so, we in advertised to large and it's in assemble into local is and the in at and we have practices what to of what have opportunity the silent throughout they and that referral, cancer center still is we resources cancer a that the decided the they of looked the a I treatment. ensure patient stage centers deliver the found positive technology would deliver marketing they them challenges to clinical we but And invest solution essentially big natural or this and that they market the coverage patient big we was think have all their DERM into the need to there resources that, be obviously in the practices let physically a

establish time to all it patients resources the and best to clearly, So help have their take to to that to opportunity, it's big but treatment, is them determine we a already in how to some have facilities. the going to house deliver attract it's they big,

Operator

to to remarks. would additional concluding or the time, Ken like at I for any And conference turn this back over

Kenneth Ferry

to to then In the forward. be next expands will closing, I'd in The next of and software success this of within and Tomo expenses PowerLook the first in X, our detection addressable fourth, market. like going to in the near in and in base reiterate version Europe later OUS And our Number and to year. cash substantially markets. software rolling in reach customer Number the Number X, meaningful GYN X, while customer term. particularly the to U.S., priorities manage to prudently breakeven our continue flow and out to the capital skin the our base, the market, cash version business. our global maximize And to increase expand brachytherapy continue IORT

for and these of you all closing day. forward XXXX us Thanks we joining updating again full quarter to the year today again look good have after quarter fourth out you With joining very us, close for a reserves, remarks, our and and for thank first we XXXX. we much

Operator

We does Ladies concludes that and conference. do today's thank gentlemen, your everyone participation. for

You may now disconnect.

iCAD (ICAD) 22 Mar 182017 Q4 Earnings call transcript