ASXC - Earnings call transcript Q1 2024

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Ascensus Surgical First Quarter Financial and Operating Results Call. [Operator Instructions] This call is being recorded on Tuesday, May 14, 2024. I would now like to turn the conference over to Mark Klausner from Westwicke Partners. Please go ahead.

Mark Klausner

Good afternoon, everyone, and thank you for joining us for the Asensus Surgical first quarter business and financial update conference call.

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

provided would management caution including Securities during provided forward-looking I information that any Litigation begin, harbor are by safe XXXX. discussed this statements Reform we Act like the listeners to certain guidance provisions of Before of the Private under conference call uncertainty those control differ any STORZ whether with by the negotiated of business or including our and and forward-looking agreement Actual results successfully our will stated risks associated could statements stockholders. factors and be uncertainties our beyond geopolitical the materially from merger be definitive implied due to executed, a by if company's approved can KARL with company call. The provided to information the on no this undertakes obligation update

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

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

Anthony Fernando

you for start, I'll summary XXXX. quarter dive performance accomplishments today. To Thanks, and in give Then joining results. all with first the into notable and recent our Shameze of Mark, thank financial of our will a us

Following that, I'll floor lies the us you finally, for may open of discuss have. any questions what XXXX. in ahead we'll And

regarding terms, First, nonbinding I'd of into In on would an stock provide like to outstanding attend entered common in potential Under a the systems. share proposed per company. for stores $X.XX intent of recent update April, letter cash. development a the acquire we a acquisition of car our XXX% for with STORZ early KARL

robotics state-of-the-art provides the broader KARL and clinical of ISU. presence with operating adoption of our KARL digital global this to group. an potential resources STORZ' deliver attractive scale to value digital combined commercial and by solutions unmatched the STORZ is global LUNA minimally and medical a believe specialties. procedures various leader effectiveness. for As clinical precision surgical and state-of-the-art company a and reminder, across a STORZ devices medical in strong with offering an instruments, that endoscopes, global to design, We industry, visionary opportunity coupled and enable could and solutions craftsmanship STORZ maximize KARL surgery capabilities acquisition is the committed is technology and KARL family-owned the presence invasive independent potential

and As is agreement. and diligence conduct exclusivity merger period previously STORZ definitive ongoing. started negotiate on March due a XX, to we XX-week XXXX, have exclusivity a period KARL disclosed, This granted

we announcing agreement be $XX if support will negotiated the definitive diligence our been providing operations have necessary closely a Since pursue KARL working due up we period, facilitate STORZ their exclusivity April approvals. process. us note merger the X, to as additional all is in KARL million $XX STORZ with on us to available million fully to potential secured promissory During with and transaction financing and a and successfully is through executed to

which As To tranche make committee. the the of liquidity today, note, million we recommendation formed for provided have board a a drawn the of has evaluate stockholders, first the potential of terms $X operations. transaction has our the of million and to transaction $XX

activities, our merger in will acquisition. Further particular, While we will ongoing interest on Senhance there's continued this first we pediatric system stockholders. STORZ, clinical X-millimeter the procedures that unit approval completed, LUNA stockholder future. as the are in to expeditiously these capturing KARL valuable the uniquely be of opportunity was of agreement With nearly no the the able to X-millimeter be our secure updates and system delicate the improved growth STORZ we in ISU. transaction diligence data the development Senhance is we move of surgeons with proposed for the the system the business KARL focused and the If remain machine procedures. allowing instruments, learning the Despite used and worldwide. and assurance system through increasingly ongoing the surgical will provided intelligent to finalize believe for the us exploring appropriate. is capabilities Senhance company nature our insights of definitive continually with best to provide from quarter, and In surgical XXX By surgeries, designed in specialized

minimally unique and the performed expect sensor's procedures the not to and recognize of number surgery, grow. invasive digital continue system the solutions, advances with which surgeons robotics preserve we using Senhance only design, pediatric also to pediatric but ISU surgery more laparoscopy As

of represents into of of Japan's in the to adopt capabilities Japanese the market. In adoption of to Hospital Senhance in institution I technology. to Moving entered our and quarter as surgical utilize our of solutions progress in digital growth platform. systems systems. April, the one steady summary, Senhance within Senhance saw in we view further validation in the this system the In the private largest our program trust new continued surgery one enhancing first Sendai This growing the second initiations. agreement hospital lease and our that announced an Tokushukai Japan

are We the our with of KARL potential to opportunity mission accelerate join about surgical STORZ excited environment. the forces digitizing to

on and potential new a our clinical team for our advancing to XXXX. With a transaction, initiations, towards driving for development. work initiatives we including executing continued momentum platform our adoption registry key we like our well program Shameze over expanding remains believe are focused update. I in turn volumes, LUNA call positioned would that, While increasing through proceeds We further against to the financial

Shameze Rampertab

Anthony. Thanks,

Turning quarter. to the first

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

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

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

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

will balance the sustain KARL operations QX XX, review we approximately with into financing. I'll million received that eligible million If be XXXX. Based the The QX now to excluding operations from if on sheet. to turn of support March STORZ our project available sign would had additional that operating XXXX, to secure into and cash, investments, $XX cash we plan, the back the Turning recent we short-term cash, restricted such KARL as call and XXXX. company over we of receive current the Anthony. would STORZ, definitive $X equivalents financing cash

Anthony Fernando

Thanks, Shameze.

next-generation key continuing drive current and to system of XXXX Our the surgical platform. for advancing our our Senhance initiatives digital while center solutions development of adoption associated around LUNA

LUNA, the we in prepare QX, initiate manufacturing pilot regulatory plan verification and QX system in freeze design to to testing For conduct submissions. and for validation

anticipate digital integrating road ecosystem. XXX(k) and In clearance We and following continue XXXX, LUNA capabilities half the tools, to innovative advanced the into XXXX LUNA's clearance. our launch and training submission the includes of safety of in second enhance features digital parallel, map half communication first analytical then in

the both Unit, ISU XXXX. Surgical partners On greater the configurations, the hardware aiming and to being manufacturing ISU Intelligent the designs ISU by with complete for for front, the ISU, LUNA midyear standalone up future

continue which XXXX we For expect our market a volume advanced system, to to in digital XX adoption sustaining XX% growth. we XX% annual and to LUNA anticipate procedure capabilities Senhance prepare as X pivotal to to to new be XXXX current will our year bring platform initiate and programs Senhance globally worldwide. while growth,

our of a we like strategic year, track Thank questions. have vision. With We keeping to the to now set would that, you. open milestones for accomplish line firmly on us towards this

Operator

the Your from Instructions] Swayampakula line Ramakanth comes Wainwright. [Operator H.C. first of from question

Swayampakula Ramakanth

discussions with so talk about you know your and Shameze, can't Anthony I much STORZ. too KARL

little bit of to time like would just I a the However, understand line.

exclusivity period would period transaction start, to what go it happen to to the end? through when acquire when needs actually sign did So the exactly letter a you. for XX-week And them and

Anthony Fernando

question. Hi, your RK, thanks for

with to KARL So as continue work you said, collaboratively we STORZ.

period are We exclusivity on and March into the began X XX-week exclusively currently weeks XX.

further, diligence of and said, So currently. we and you as that's on is the are the we but where ongoing, kind going can't work is comment

Swayampakula Ramakanth

the obviously, best the wishing mean, and So we I for shareholders company. are the for

that to terms not? if a promise However, generating not Or of what's through your go I'm gone here? then such devil's what-if scenario in million advocate, transaction, way process. and a that something that you a got this operations? $XX going the the trying And with maintaining funds this mean are they in business just you've or happens put becomes to playing Does

Anthony Fernando

be It's otherwise. note would a and we would That's as to able continue RK. have we secured correct, operations promissory

Swayampakula Ramakanth

Okay.

anything unique. operations transactions out and and you in publicly are about people go are come you which of affecting of situations progress to really in obviously, how that had are kind they is a field, like of terms might terms have sensing is the through some this, itself, in So to being hesitant normally, or transactions at your like little operations? you in bit it all when it. In talk this started,

Anthony Fernando

sure, entering we scenarios, our into announced question. I because promissory transaction one primarily mean try I'll a diligence any not through LOI And a the exactly, goes of answer prepared the in typically, agreement. note. mean, I to before the definitive on

knowledge. talk public had the any right without then be place taken disclosed we we have and now, why would as what ongoing that's the when But to. XX-week and definitive we we'll mark, before able that's process to are the now more And that's along give details with as otherwise, So reason the agreement. soon

Swayampakula Ramakanth

hesitancy No, any are they happening no, of my you seeing in commercial or that and the normally asking -- on are things anything happen things terms are was the placements so front, question those I'm would about. as

Anthony Fernando

Okay.

question. it's misunderstood challenges have future Sorry, think company potential among our not very and and the Currently, I okay. a seen is any all customers. KARL we of well-known ongoing, existing STORZ I

challenges So any not had there. have we

positive field, pipeline globally. we as continue perceived it's think on to the in the execute and I news

Operator

comes Your from the Osburn next Cantor Fitzgerald. of question Ross from line

Unknown Analyst

start Ross. off your for this on asking April. just past I Matt initiation to Japan Senhance wanted is by in This about

place of region? the guys couple Japan. seeing systems adoption terms are trends What growth you and a in that of Now in you in

Anthony Fernando

next for to Thanks focused site markets this primarily and your is several one Europe. Japan question. there Matt. sites. of are on Thanks, pediatrics other And faster-growing

the a year, XX terms can so the positive growth on driver So placements Japan the been for we've in to volume terms for the system rest very good also placements we of us also But growth volume. case and momentum for positive Japan hopefully, looks and in pretty pipeline -- seen systems of deliver has that X the case also of in year. full good and

Unknown Analyst

Got helpful. it. That's

terms a ask guys continuing into to of gears wanted how bias KARL LUNA? switching I integrating you bit, plans provide just in development STORZ to maybe of versus any Just the can assets utilize insight if our

Anthony Fernando

at those details it's next, any of I this integration of process can't just not that because into Matt, and purely plans will currently diligence unfortunately, the a kinds of come time. but get

Unknown Analyst

Got it.

guided and timeline And more guess integration good. provide impact guys previously may for then follow-up acquisition Sounds any into line and how for your was me. the I I if just can potential insights wondering time X LUNA. the you

Anthony Fernando

I mean with our currently, of shared you of disclosed moving time line. from we've ahead a all time view, we on are line and point as

everything track. time because extremely And program we progress So -- transaction I is and making is don't line all. any not good the this shifts LUNA at anticipating are on of

Operator

time. There back at questions further continue. the Please call I are no will turn Fernando. this to Anthony now Mr.

Anthony Fernando

operator. we and Thank you the you, you, look everyone, Thank joining forward on our throughout updating year. call, to for today's progress

Operator

call. concludes Ladies conference participation. today's Thank and gentlemen, this for you your

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Asensus Surgical (TRXDW) 14 May 242024 Q1 Earnings call transcript