ASXC - Earnings call transcript Q1 2021

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Operator

Good afternoon, ladies and gentlemen. And welcome to the Asensus Surgical, Inc.’s First Quarter 2021 Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. I would now like to turn the call over to Mr. Westwicke. of Klausner Mark ahead. go Please

Mark Klausner

Operator. Good us you joining and afternoon, today’s call. everyone, on thank for Thanks,

On with Chief Chief Executive the President Officer; Fernando, call and me today Shameze Rampertab, Financial Anthony Officer. are and

discussed are Reform or I of would any implied the Harbor results call, caution certain this Before to we risks Act covered The stated our the differ forward-looking with Actual this to by guidance those could no under like update during materially pandemic. due provided, begin, by and management on provided the any provisions call. statements from Litigation of obligation statements listeners COVID-XX information undertakes company XXXX. company’s Private impact to associated that the uncertainties Securities information forward-looking business, including Safe conference including from the

of business, Surgical’s to March filings Commission, later discussion with and filed Form with a the I today, be the XX-K encourage risks the including Securities make and filings associated company’s XX-Q to other expected and and Exchange Form review XXXX with uncertainties Asensus SEC. we filed For the XXXX you in

the to and of by certain indicative non-cash excluding measures, During taken this for section plans expenses website. of core in GAAP for financial against loss related to accompanying our are adjusted the over Chief conjunction performance financial with Reconciliations non-GAAP non-GAAP to present Anthony Relations call call, Management is be also my pleasure net U.S. uses the earnings relative not in It our GAAP externally to forecast results to and common certain investors adjusted benchmark information net Management and Surgical’s Executive presented our Officer, will both common to stockholders Asensus and are per President Fernando. share believes the now that non-GAAP which certain financial attributable measures, compensation can loss operating performance our to provide management useful attributable that results. Investor information found and other U.S. in stockholders. tables turn release, decisions. to strategic and we common company’s from competitors measures compare non-GAAP to

Anthony Fernando

Thanks, you as to joining to I us After priorities our well a which financial our brief call, asked provide will On rest thank and before today. today’s Mark, summary turning as all the review our during discuss XXXX, of I for quarter, first and Shameze for the performance. performance Q&A. will

from Overall, call Subsequent Shameze, provide hospitals XXXX. like continued the turning headwinds significant over hospitals our agreements of across progress signed overview the we globe, new despite two to Europe. in would we I COVID to recent our end of for an the lease a quarter, Before goals impacting performance. with the of the number towards to made

and we press in which quarter. announced later One week, of this release second, in the second which earlier announced the will be a installation upon

shows the flexible also economics leased We buyout occur pricing bring purchase We over it’s an believe the after and early value for to lease Hospital hospitals value we Japan, just a around high point this system model the opting the that Senhance during of quarter, with our had is having in year. and business our proof working. to first

clinical addition, papers. we a of number had published In

very which other One as the to procedure pointed of as system, the economic as to another clinical System well things papers offering. favorable robotic among the versus per other compares costs outcomes laparoscopy, of health Senhance robotic traditional compared

procedures Lastly, completed compelling with geographies, globally. over drove XXX procedure key volumes we in

a over will Shameze turn what the to of able proud to that, for very financial to forward look accomplish are throughout we XXXX. With were and continuing momentum call update. We this I

Shameze Rampertab

Anthony. Thanks,

in as compared the the XX, in three the of XXXX $X.X million million and XXXX, first March company quarter $X.X Revenue first March $X.X $X.X revenue in instruments $X.X for reported system of million ended revenue in ended months in and included to revenue, services. quarter months million XX, million XXXX. Turning of three the the to accessories

customers purchase or at of arrangements provided at the with the System For the System revenue buy term some multiple during Senhance to right arrangements. the from lease lease of lease and buyout least it. are the lease lease one or consisted end revenue

March in $XX.X were operating For to the the March million three XX, XX, expenses three months months $XX.X as compared XXXX. ended total million, ended XXXX,

March million ended March $XX share or per common the to months was three common per XXXX. attributable the in XX, stockholders attributable loss share, three to stockholders $X.XX $XX.X net net or compared loss XX, $X.XX million ended For as of XXXX, to months

non-GAAP net months the release. stockholders fair be items, value fair restructuring $XX amortization net stock, the attributable three loss was March per to change of $XX.X adjusted deem as non-GAAP to loss common million preferred all XX, $X.XX in which are net change three of common net the of months compared other and ended for $X.XX measure. to liabilities, or GAAP following charges. and charges adjusted feature to attributable for from and of is intangible For consideration, found earnings to dividend XXXX per our Adjusted loss value measures loss can non-cash of million of GAAP an the is ended share Adjusted assets, XX, related adjusted share, financial loss the net contingent XXXX, XXXX. in in stockholders in or March warrant beneficial Reconciliation a conversion

XX, back as the over to expected turn Anthony. to XXXX. $XXX.X balance and call the and of to capital cash company I’ll restricted equivalents March Turning had cash cash the runway million is into $XXX.X extend sheet, of which approximately of cash working XXXX, the million and

Anthony Fernando

provide an on progress on on update in we the XXXX. that Thanks, are as performance, have will areas I now as key the Shameze. well recent made we focusing

surgeons of Senhance. are, that efforts, crucial and Starting advancement of clinical two System a educate market with to benefits technological At for papers second, with data of development that development continued Senhance were is As follow to expanding up Senhance published our continuing reminder, to clinical these and important year, continue the market on to the a portfolio us. strategy then the first, were them. the the our very the support and it we System, beginning

outcomes between per procedure Computer system costs. were that compared robotic indicated hysterectomy in first Senhance The comparable. as The well robotic Journal procedures, robotic health and System and certain the of versus paper as were other the than another of half case economic The in cost of gynecology and assisted laparoscopy of times the April. system, International The published showed in Medical also was Robotics and less study System Assisted for vaginal Surgery Senhance with study laparoscopically procedures comparable the costs line Senhance traditional case

papers laparoscopic gastrointestinal other suggesting of utilizing a abdominal, of and both study local thoracic, completed of and surgery In We milestone the published economics expect performance analyzes to were be for addition, in clinical further the in use half XXXX. half year which published a when System procedures the the have of Senhance and surgery. paper, and System, gastrectomy on will including Senhance second a second first gynecologic Senhance reproducibility the of utilizing safety stromal on in urology, a number during general and focusing study first procedures still and this gynecology, the tumor European in

provide clinical foundational emergency base. quarter. global costs, some next still surgical installs with system XX and is various slowdowns, development of of a goal Germany we real state could surgical XXXX growth government our market continue increase installed to another a as benefits, Even sites, Senhance last the and continue evidence for and and volumes by demonstrate Systems our of geographies lifted the number impacted believe the the said COVID-XX, its COVID-XX. Senhance year. have the restrictions Japan accelerate goal as effort outcomes of shut quarter, we delivering place. The we is saw lower tailwind with believe new robust System these national third the of be to we to that of still procedure are we our good fourth segment acceleration adoption. negatively in effectively XX specifically installed. has confident well down publications our world were a we in as As at most procedure to the for Switzerland in local for remain of in install pipeline the but have quarter of System to be and Netherlands, were struggling and waves We The

lease second quarter. end with agreements installed which earlier, I new As to hospitals quarter, of we signed subsequent Europe, in we the be the stated during two expect to first the

to on Moving procedures.

volume our growth colorectal. of XX% our foundational performed In XXXX, volume and quarter, applicability start and both during mix elective update over On the impacting During Shifting a constraints saw laparoscopic was quarter global on shutdowns Senhance lockdowns, quarter, in the to the and the being quarter. the the in XXXX. platform headwinds U.S. first continued in accelerating case the procedures procedure of overall both At at were strong installations Even Asia the largely by XX% over the the to of growing from XX% well utilization ability of result a Europe year-over-year existing cases number procedures, a over and of saw foundational procedures digital in over we as the broad caused the driven This XX The the volumes end during U.S. face despite numerous general, of to is with outpacing new of the as in of system persisted across we applicability in strong significantly Asia, XXX quarter. growing volumes was perform within strong had growth up volume which completed. procedure of sites. by COVID, with countrywide volume. these XX of over broad gynecology scale, we as growth hospitals procedures in sites, with installations, the our in the regions. Europe system a an performed continues validated growth COVID case

are the number of continued utilization. team sites, proposition to the our an the as are uncertainty up with XXX year. The the sites procedures they system that ability perform clinical of value our have and about on-track than foundational including volumes foundational procedures per annualized of rate we been at performing increase that or hospitals of fact to speaks greater to able reminder, customers a As ramp support Senhance the

Another positive is efforts the our progress with the trend lease buyout. in development early market

from System of in utilize XXXX to that Senhance hospitals As install the previous model. opted a leasing you the all know calls,

their convert Senhance exercising By buyout a the a these in we a As foundational Asia. are for COVID pleased to had agreements, of one the year system’s to quarter, expect capital the flexibility This that some an we pricing in early lease option purchase system procedure the initial contract to sees of is a to around in announce in the part focus located hospitals end environment. just lease even not site the the our per the XXXX. A digital the to hospital’s working lease a hospital system laparoscopy before additional buy point option low models which into at and over willingness system. cost the This in of demonstrates purchase value period. buyouts primary have I’m is is it the proof ours, conversion program. leased

Now portfolio expansion number the achieved of of quarter of year, the for advancement continued regulatory milestones. System, turning Senhance initiative we to technological in a second the which our XXXX, first the and

ISU, of the Europe which programs marking initial this version the CE will new the technology. provide to laparoscopic in Senhance of was access digital First

million clearance can was procedures System Surgical the surgical a performed indication general expanded This milestone in general be U.S. this utilized States. the of in the clearance, Second annually. in FDA With X.X surgery regulatory over our Senhance is future major our progress the growth end, Since during that first made we key last expect stated we quarter’s applicability call half clinical our our on have of our the achieve goals and to of the XXXX. to also technology. and United on

and instruments, of filing value widen of number earlier which for surgeons. technology month. articulating our clearance will we platform clinical Adding being a broader XXX(k) articulation utility to filed the The this submission for the first

the was goal second our the for XXX(k) in which second we expect The to next-generation submission of clearance submit ISU, the quarter.

other and digital adoption portfolio surgery applications on also the enable have laparoscopy the of progress made our mission improve and that pursuit tools performance-guided with of to expanding Senhance. We

communication communication encrypted surgical the interact, the accomplished virtual is system. video system’s enhanced to remotely features last the shut up mobile OR independent observe an we example, COVID of Senhance clinical Senhance in via OR capability. six and This we communicate Connect and the surgeon to product Connect, team interoperative down For Senhance the called throughout clinical key developed Connect, through a during With with a year, product in system. procedure specialists allow two

multiple First, view the OR view console OR, the camera the the surgical including the performing outside and patient team. surgeon from the procedure, camera enables of to system the allowing from view feeds participants laparoscopic the the Senhance system view including the side

In on based surgeon addition, the of voice the demand way dialogue the during real-time system between allows OR. course participants surgical for outside and two the for This communication procedure. allows the verbal the

use the surgeons for surgeons operating without a the disrupting surgical second The of has piloted number tool also interest using surgical is to in and at in opportunities optimal plan half the on Connect users conversation greater System without teams The accounts the on on to in to we remotely their a and Senhance Japan, being valuable centers bring themselves with better more but only and XXXX. Connect these few cases on support, clinicians useful platform outcome. educate a allows enables across the of Senhance U.S., Senhance. Secondly, present system Currently, touchscreen to for ends OR the to expertise physically approaches of also proven display and not specialists has provides when sites of the external the an and System regions illustrate allow observe the the Europe call both The been Connect in to and Connect communicate to monitor of Senhance to Senhance ability this surgical annotate the lend access to being be room. clinical training. Senhance points

highlight performance-guided I will Next surgery development.

We of surgery good on of the the initial thus performance-guided have feedback received use ISU, the far. application

help trainings have relatively shutdowns situation, has and the the out half what European due the period all part expect the number to been February Despite lifted to site in is utilization but including seen momentum multiple in three procedures fact high great sites across a of center countries. over XXXX of added worldwide turned We the the that We in variety support ISUs into during second training This sites get half by surgeon was Feedback interrupted surgeon in the those the ISU given the far rolled At XXXX, has a our XXX ago. that restrictions especially installation. believe will and months center geographies. which the shutdowns back with in Europe. of U.S. of to of continued both be center has just an regions. only very exciting we have to and European we training of of strong help of Saitama XXXX. high been region, in out installed Saitama, of to we We short that very accelerated in their To center working so being launch XXXX. two this, across were are of new of the over of XXXX, will support hospitals are performed of This able interest in the At challenging we to third new Amsterdam, held training Japan training demand, a remains the and Japan. multiple new in COVID-related drive surgeon facilitate a surgical early during Japanese adoption generate announced for a Senhance launched center Amsterdam. time and there they centers agreement facilities new in cadence key as in very in a training adoption respective number continued training have both training been the sites the quarter foundational

XXXX, As of which will operate to to we balance operations geographies, in of predict of difficult it a or is because are in variety various the it stages be relates resurgence our impacted. recovery, how

performed. are to we continue in that see elective through year volume we the progress more increase However, procedures we expect widely as will as an case

In back We installations hospitals progress summary, less hospital as a pleased non-COVID matters. successful lifted also our we teams to the commercial gain broad very bandwidth as the of continue access to quarter to to the new expect in of more attention system with we XXXX, have have become are XXXX. related staff to -- made devote restrictions are first of challenging for and

received the balance the rebranded During sheet for announced for submitted instruments, clearance surgery, training utilization we the clearance the quarter, articulated company. good saw ISU, strengthen in the EU, FDA for significantly XXX(k) general the new and of center

believe the With confident patient strategy, than cash for efforts the our on surgeon and during open to in well-positioned that, achieve organization interface we performance-guided to thank uncertain the their ahead opportunity and would our the I hand. our to more for of surgery. pioneer for We between to and entire a these Thanks are line are I shareholders. digitize and the execution to ever tireless era want we our times like mission questions. new the business

Operator

Thank Wainwright. comes RK first Ramakanth] ahead. Please from of [Swayampakula (sic) H. C. Instructions] go question you. [Operator Our

A of… Thank you. and Good afternoon, couple Anthony Shameze.

Anthony Fernando

Hi, RK.

Actually it’s Japan well, site foundation and was like is one -- buyout in to that fantastic. in in fantastic this the which environment to a note especially it as that there be happens looks

you remember used is So extent. a that to where a telling -- is place us, large could you laparoscopy telling I Japan me

the dynamics obviously, them and drove it and system go that a so they in this do this decision, center bit best? like about used decide what little looks Just make at what for understand a buyout we the play more, to are to to a year for

Anthony Fernando

RK. Sure,

Okay.

healthcare this Japan hospital to system you’re cost to Japan goes speak it I a skill that well. also and to broad laparoscopy. about of as the as said, conscious is buyout, this base with has the So very respect remember correct, And very

use over to prove well. well expand was the And performed the about into this other agreement procedure for an cases significantly robotic as work, platforms. is they to something economics because they enter hour, XXX and that and decided therefore, per purchase they into wanted specialties compared So cost to themselves system this that lease other they lower and the that

what think it’s they using the significantly the confidence surgeons when really So I they increases proof getting. have have that it, know just and their they and system they’re

any get that I And out first figure to in XXX were typical of so procedures, way press that, the talked, about than closure how on performed the that… trying complicated more release, we if these are, good. have they’re during help were these Is can they kind whether idea just or procedures there that, that, the the think, trying to then, granularity understand hernia Very I’m efficiency you’ve there I cost complicated, saw just just that as procedures an more they’re we some more quarter. better? do on

Anthony Fernando

Yeah.

the two between linkage there are not? Is those

Anthony Fernando

across So, some RK, I within think, and what I general say gynecology, into cases pediatric think, for space then are and can is, well. these surgery to procedures as spread a very good -- colorectal are even general surgery extent there I the

So broad offline. to procedures, But bit me we pretty simple think can granularity if I of spectrum with they don’t they’re I quite try provide right are in these say, cases. now. little all just that’s have more cases, that of something the you breakdown about wouldn’t simple And complex

the XX of last on sites, that Thank quarter. first to question, to a you. of the there growth it’s from number end by is good the One XX foundational see

see are of because would of at States, if what think to of year? they talk that you you to some the light comfortable feeling at that to is how expectations to we’re bigger the by as year, end start like the to progress seem you XXXX? in don’t the we as coming of end get least the tunnel, do remember many -- end would this you the in sites people a your in general, I much through as COVID But, be had -- United seeing you but the see you number I a point the foundational the that number. at stated

Anthony Fernando

Yeah.

positive interest or I track think, a in it’s were able thing lot two about there’s the difficult I sign increasing our with year U.S. is at fact whether still mean, to turn So, are foundational RK, a goal the very things Japan, but we and case you. it’s level. Obviously, to and predict a definitely -- Europe a That’s volumes is get the that it’s agree to that, uncertainty, good sign. how I that going more to out. U.S. definitely the keep be on sites to of for

positive momentum some that I Japan, and are quite We and yet. Europe say seeing couldn’t

from for of much And our number, sites view, goal level, majority performing is our of say that what that’s get increasing the that given systematically. we improve So that can the keep at so so that pretty we to can adoption we point uncertainty… now,

Okay.

Anthony Fernando

to be more once numbers of we there. think about I we’ll come able out the this, be committed

Good soon. Perfect. Thank to you and very much. to you talk Shameze and you luck

Anthony Fernando

Thank you, RK.

Operator

would turn [Operator Anthony closing conference the Instructions] I Fernando for any concludes to to This the question-and-answer like session. remarks. back over

Anthony Fernando

next for and interest progress quarterly you. our in again Asensus on your Thank you Surgical you updating we call. forward Thank on look our to

Operator

today’s concludes call. conference This

you You Thank a participating your have lines. pleasant and may disconnect day. for

Asensus Surgical (TRXDW) 11 May 212021 Q1 Earnings call transcript