John Fraunces MD, IR
Marc Oczachowski Chairman and CEO
Ryan Rhodes CEO, EDAP US
Francois Dietsch CFO
Frank Takkinen Lake Street Capital
Jason Bednar Piper Sandler
Arthur He H.C. Wainwright
Call transcript
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Greetings. Welcome to the EDAP TMS Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. to conference like Fraunces, to now Relations. Investor would turn over the John I may now you you, Thank begin.

John Fraunces

XXXX Financial results Good Executive Rhodes, for we Officer the and quarter and joining US; you. will Officer us and Officer. Thank morning Oczachowski, Dietsch, the Francois for of EDAP and hear from Chairman TMS's EDAP Chief today's of call. Chief On conference thank Marc you financial Chief call, operating Executive fourth Ryan Board;

described like to may current I now would statements in Oczachowski. limited differ to everyone could that which are but forward-looking Before Chairman statements filings a with Marc? today and I we on such difference to Officer, company's expectations Such remind Management's over that remarks subject the that to in company's cause expansion and number contain statements. turn not include actual a Management's begin, are such EDAP's are Chief based plans. statements, may of Marc the would from results Executive Securities forward-looking materially and like Commission. uncertainties growth those to cause risks the regarding include, the and call to, described and those Factors Exchange

Marc Oczachowski

or of of year for or Chief strategy; business as to full Thank will by CFO, million Officer XXXX, present start turning €XX.X year U.S. brief few U.S. revenue of Francois million operational our Rhodes, for a the everyone. the Ryan an the you, the compared update a then of and call I recapping and Executive million morning, Full by start Dietsch, revenue XXXX John, EDAP $XX.X €XX.X our increase before will good year review I will highlights. X.X%. was providing full million a financial and over our to performance. $XX.X

machines U.S. significant developments and of prostate One with part While We for placed in Ryan worth that care Focal One oncology the with need institutions believe XXXX the validation Focal momentum. that of highly-regarded we we health as comprehensive program. business, exited is cover several the it will serve noting as new

For the see as of €XX fourth XX% as or quarter a the million XXXX. quarter revenue to we quarter X.X% revenue to compared favorable for time decrease capital though representing growth quarter, fourth fourth of fourth did from the The purchases. $XX.X sequential total do in QX XXXX, a more was tend floating offer million,

Focal with are quarter ago, momentum As fourth I pleased non-invasive with gaining by controlled acceptance treatment very as most the a and enter mentioned One moment XXXX. the urologist. the prostate we the is we exited which ablation for advanced

I growing in point, market we platform. believe U.S. HIFU micro the At investments cancer. can delivering especially have this distribution to in our our activities provide an to results, like globally, utility focused update on outside prostate the of business ultrasound and and indications Our is ExactVu is expansion regards would clinical where

the We are the evaluating for Phase a deep-infiltrating Focal treatment endometriosis. using One II HIFU currently running study of platform

options, in pathology. end and treatment be and enrollment XX days major endometriosis which efficacy could be treatment that of there will it and likely safety of across management of becoming an look for We the is technology follow-up worldwide. of HIFU significant treatment hospitals two an done are may for extensive HIFU use was women's of believe issue over at health the patients four bottle. year. important the just of for treated France effective option evaluating XX minimally-invasive and period, endometriosis completed surgical today These complex that We concluding from We Investigators assessed minimally-invasive The six-month the announce greatly to is very this patients. to in improved, this of could in HIFU a are the of value September this the major removal a for results currently were really we patients these add these alternative patients. study forward treatment in happy often are important offer last no The ago.

We in an pancreas also of the doctor announced the Pancreatic in designed patients hypoablation publication in locally-advanced is positive the the tissues pancreatic cancers. locally-advanced methodic general the five-year January for HIFU guidance pre-clinical surrounding than adenocarcinoma HIFU touch aggressive the pragmatic rate known that such therapeutic inaccessible results treating authors conclude perentimin properties treatment among other holds The by less animal is the of using X%. the to using overall of adenocarcinoma the survival The possibility cancer. model. is with HIFU methods. the under treat pathology vivo promise of assess of was in cancers. of pancreas treatment, superior to all the the pancreatic Regardless treatment vessels help feasibility of in Paper study most using for of could great that

We utility upon are findings. and excited further very explore possible these HIFU difficult-to-treat this in the cancer build very to of

robotic a treatment benign note, prostatic Leon device hyperplasia, safety Hospital Eau using for patients feasibility treated a University evaluate or as of HIFU successfully quick at in and in we clinical trial and BPH. yesterday Finally, two the the Focal our to first One

of new these execute newly-hired we give clinical to keep who U.S., expansion I Ryan a CEO to cash, parallel, this posted to pipeline opportunities. operations. full team exploring supported well of a and turn and as by you finish point, clinical $XX.X to growth start our Rhodes, to congratulate At projects of XXXX while in well-financed U.S. study. Ryan plans, move like our our call Ryan? to expansion a with are like and million the sales update talented XXXX continue EDAP with us for experts. With strong promising U.S. an I of would of will will would this other over We forward we to the

Ryan Rhodes

Thank Marc. you,

those placed placements, the been included announced of both leading notable Boston, Carolina as made suited since now Francisco and prominent gaining These States. comprehensive needed Ford Early uniquely in further in Detroit, therapy institutions. pipeline, is option is Focal approval well Focal of the United cancer and care to prostate mix hospitals Angeles, non-profit integrated believe systems alluded as the earlier, to as the several Diego. that device meaningful a we University Prisma Care Marc North in Henry of of Focal to Ford facilities One Health California a valued a of program, in Irvine. mix of third academic System Women's the We of network in One validates Duke with as Focal each that Los as University As with that of the together and was a This Focal care both Medical Focal earlier this One announced in and to San the at Health mix California, and system installed also QX, year HIFU a and in leading while fourth all our in was of worth to is we More fusion advanced prostate growing is utilizing delivered are represent a One system, both Prisma it in is academic Health care and by largest therapy University It's Health, ultrasound of hospitals. of surrounding our academic option hospital We community new it energy centers UC areas an providers believe Selling San recently, the urologist. and we controlled noting following the quarter, Henry growing California, Carolina's in at One the reflection MRI system, types regarded sale sale as community community most sales South at largest busy has all that in hospitals. these is these new improved particularly highly the Hospital One University Center health robotics, technology, every for Brigham University the and health installations Michigan. which large of Cedars-Sinai earlier Carolina. Washington, important a South delivery example, such Health XX ever up Focal Focal Detroit is and validation centers. for

important existing U.S. Another the be installations. prostate treatment continues in highlight growth to volumes at

HIFU year full treatment U.S. over increased XX% the year full volumes XXXX. XXXX, For

year. said of in Focal utilization the is we as one past, the robust urologists, indicators believe adoption procedural by much important on increased activity in growth most year-over-year of as we spending and leading to the One capital of the weigh have it the continued As in even for directly reflects pandemic hospital

more equipment. areas metropolitan add experience medical cover is our actively pleased organizations a within professionals of separate the new of the ramping continue Vice close team, them sales up team. who with the The in gives Finger, our our States. of very United deep equipment, leading U.S. the disruptive strategically, our of those terms a geographies. customer President Scott multiple the team existing clinical years capital quality statistical impact for in made have they in in XX to clinical we have accounts. out of to disruptive we sales largest so experience. than At of the positive hired And record driving selling In engage sales leading I'm significant have robotics. to world-class XX sales proven December, medical industry that we side, selling responsibility Sales, team now with XX capital forward In dedicated managers new up We of utilization several the profile we the large us sales may capital with track look added business. grown have ability in on of a to capital on this also institutions including sales This many XXXX, talent

there radiation of multiple for to respondents that quarter disciplines, there noteworthy progressed cancer Before institutions Oncology. part focal the by of representing technology and leaders I use HIFU is some focal for authored in role active were therapy, academic that the This peer-reviewed paper the numerous was therapy, focal notable turning important Francois across including in to because recent an in it oncology. key highlight and financials, The surveillance. some over and is published a localized urology, our who use paper, significant including during physicians technologies. takeaway was patients prostate review who fourth to want XX beyond Out with paper consensus benefits Journal are who other this these call the Urologic radiology

In treatments as life-altering therapy over held surgery Oncology indicated respondents as This two urinary technology. advantages XX% meeting sentiment role addition, our focal Orlando continence, side righter distinct radiation. strong and a early was the significant and has radical of validation therapy likelihood focal presented, preserving function of the has both view and of that Society and more shared of of benefits rectal effects We as noted Urologic and clinical such aggressive the another yet very publication also invasive in XXnd therapy. of this more at in December. of the

focal Our of we cancers team and leaders in brought to this The urologic treatment treatments. actively made advancing up defined in the of simulated for participated thought of micro-ultrasound a perform academic the oncology. therapy in SUO field notable have systems within focus is who meeting,

During I'm with results. did Focal some And and business there the enter first high summary, One HIFU And be meeting, delivery Momentum update trajectory we advanced interest that look to Francois? HIFU provide In technology on on. our to sales is level of HIFU acquiring very while not a Francois delivering and in most now was accelerating. good will our Dietsch, today. we in pleased that the utilization year momentum, we have for forward I growing market today, our providing expressed We of of quarter CFO, believe with the focal details is financial the May. clearly we'll QX very therapy. in platform discussing the our new U.S. support results

Francois Dietsch

except Please and figures, note percentages, euros. in are for you, everyone. Thank Ryan, morning, good all that

the purposes, €XX.X conversion fourth quarter, for for of same the million, of was X.XXXX quarter with roughly compared and our expectations euro-dollar XXXX with For fourth for in line €XX quarter million rate total the the total revenue Beginning was in XXXX average to exchange as revenue street X.XXXX the period fourth full of for XXXX. XXXX. year the

versusXX sold €X.X of revenue units €X.X of XXXX dividend, quarter quarter of six versus of and at was The for was XXXX compared the expenses LITHO of to was XXXX. the €X.X million lower were in income to €X.X Operating million the XXXX. quarter million to fourth 'XX, same share our €X.X Net quarter quarter year XXXX quarter the during fourth XXXX. of million profit in million Furthermore, lithotripsy €X.X driven million in million team fourth We revenue fixed million the gross Total XXXX. €X.X year fourth €X final year-over-year per as settlement of was the an in quarter to for in as XXXX. the the impact, Out €X.X diluted in XXXX. QX period. primarily XXXX Operating costs. the in the profit business €X.XX million XXXX program. HN million compensation million €X.X period. XXXX. were for for to year-ago income to €X.X to of This LNG the of €X.XX the Looking the the Gross in sales quarter in total €X.X the infrastructure. of XXXX of of €X.X share-based of have U.S. €X.X fourth for first XXXX share million XXXX operating was by was or grant profit revenue of sales the primarily profit QX QX distribution €X.X among operating million due ago XX.X% was compared quarter diluted decrease to net the for Gross for the compared compared per of program commercial the fourth our business been first the Total quarter profit in as million compared of on quarter a business build-out of for XXXX of in quarter fourth for and compared €X.X we by HIFU would period. ago of ago the effect to decrease million for as was the margin net million compared of million quarter X.X XX.X% in for profit for the period. first compared for operating in profit first the first year the period QX compared €X.X fourth XXXX first an to XXXX recorded quarter The in of a non-cash devices ongoing as revenue or

street XXXX. compared €XX.X exact LITHO Total from full driven turning for €XX.X year. the with X.X% year full business in Now full as net full year year as full for to for year year to the compared loss full The for XXXX the to Net €XX year million by in period the €XX.X operating XXXX year €XX.X increase revenue profit distribution year €XX.X the compensation to full XXXX. the in The expectation, was compared to margin in business of XXXX. million net the also growth in revenue overall full revenue line total €X.X for for expenses increase the and to the million million, for year roughly million XX margin share-based of revenue for profit the included full the the full primarily XXXX. operating in programs million an €XX.X distributor in impact XXXX. the revenue the the was expenses diluted was versus €XX generated full of million for XXXX. XXXX the compared XX.X% Operating revenue was part of Total to year share adverse compared the XX% for XXXX full full Gross year Focal gross Total year margin million. the sales €XX.X the €XX.X to business was XX initiated XXXX. XXXX million for to profit percentage or for non-cash as the was million full of revenue. a XXXX full loss increase We were Operating per million the the in was devices for full of revenue. compared due million XXXX. the €XX.X the full in compared the XXXX XXXX. share XXXX was Gross year net 'XX for €X.X of year for mix was as units million for XXXX. year to full year XXXX. for XXXX for HIFU million or was million for XXXX XX.X% full the to €X.X income €X.XX full year for million sales XXXX sold the for XXXX comparable €X.X seven as One €X.X full diluted lithotripter profit versus for €X.X in year for full of an per compared year on million to decline the year We year XX sold €X.XX effect the Total

XXXX, XX, XXXX. of $XX.X call equivalents share cash €XX.X number to The year million December turn of of the XX.X had approximately now end was million the As the outstanding and Marc. will cash million. I our company at the or of back

Marc Oczachowski

Thank with you, to parts operating challenging the be what pleased environment very many a are of Francois. In summary, world. against our continues in we performance

in many U.S. optimism May. and we QX placements growth year look to notable Our volumes quarterly announced the Focal in One significant our We and forward providing in beyond. treatment us for this next tremendous update regularly-scheduled give that

open now will your call questions. to We Operator? the


Takkinen Our with first from is Please Capital [Operator Lake Markets. proceed. Street Instructions] question Frank

Frank Takkinen

on taking versus for with start my expectations placements. to progress. Francois, Thanks sales all question. Wanted of the Bryan, Mark, capital congrats equipment

you Just volume some there how the in this as see of go year? the And XXXX the accelerate sole throughout you about curious quarter? if any placements were fourth placement the we thinking be should to contract in with may disposables model

Marc Oczachowski

answer you can that? Ryan,

Ryan Rhodes

that. answer Yes, yes. I'll Frank,

not bridge a to to if We may the have an in under challenges we we reserve accounts buy. use, some have lease where we placed That in what the for leading model few equipment capital accounts getting systems we near opportunity or funding is that model model of the a visit but operational call a would term.

commonly I they One the outright, either pay scenario. find we cash. sell finance there very out eager and what are in that acquire buy to think technology it we is technology In most help centers instances, an Focal may will to operational So we lease or accounts they some see that we themselves them

still and opportunity strategy, visit with reserve periodically other our but the have direct to models and flexible that sales, so models those cycle. is throughout lead sales the we And we obviously sales go-forward

Frank Takkinen

to And at a one get great next, thought history. on in all? high call it. at extend of those on company release point in best potential That's would should moving pipeline funnel to be Can made prospects comments you to are Got great. how in many now, of right we the the the and Then process feel convert press throughout XXXX? little how expect and into the that

Ryan Rhodes


since we've we've clearly institutions. new been joining June, there the of in pipeline. can ramping last company as organic gotten our just So is notable I say with been interacting and and Part interest out growth it year

in we to is added salespeople U.S., they're other cultivating and The interest. have new of our course, the team

call, the in throughout mentioned the attend the year. in urology attended meetings we other notable meeting on We'll December As Florida. SUO

assured been I can increased sales where So attention. really dramatically. our rest and to think pipeline with give we now. eagerly our kind institutions you numbers, I our is can't through brought where that focus but team when years it on. joined the me, in it's this and assure as team, new key we history, has that And of are looking it's I'm were probably certainly urology, know hard I XX never June, new time I excited healthier at we I in

to a area. individuals in fantastic make big contribution this Some

Frank Takkinen

one to It And bit then getting market. have we're you for like little a That's point, more predictable helpful. me. Okay. last a feels

thinking pursue little and we selling obviously. cleaner investments predictably been expense Some how get investments environment, should in bit more the organization, a made impacts But you the about have operating as you on additional be to can growth?

Ryan Rhodes

of areas the list. on most top on, commercial excellence obviously, the focused I'm that Well, is

product, So will and we needed. a where I'd say we great add have headcount

sales domain the force. You you, the reminding commercial a sales on can side, have imagine we bifurcated sales in and

selling. of we a capital side have So

the We and side, also investments we'll have make so there. clinical notable

individuals probably in we investments development, It's company, for et other I place. organization now. to accordingly. and/or what focus a needed, the good in meaning all other to -- out look We've top does on four as we year quarters domains training, the We'll forecast take do. our and the like to that we'll the think three support know marketing make that. market transitional need from structure we're build what opportunity growth, to very hard cetera. making the that year will or got team to We investments line been include has a notable go assured, is and in It's add this Rest

Frank Takkinen

I'll there. all progress. on Perfect. the stop Congrats

Ryan Rhodes

Thank you.


is question Our Sandler. next Piper with from Jason proceed. Bednar Please

Jason Bednar

there Good ask as and in Europe, environment Hi, questions to thanks. good in morning everyone, on well. to the tech. topical the congrats afternoon progress some here Wanted over current med

companies many challenges supply in suppliers challenges seeing be. many chain first, some it are cases, product. necessary to Just where needs getting in technology accessing the product mean, in I of and terms then

-- customers mean, to then I hands there that just to of in in inability your products it within side, ability Just your question ask involved? on and the business you're I anything get get of terms to check. a an to seeing is want

Marc Oczachowski

that enough so that really we everyone don't that our and to the sure work challenging, where that down team slow the anything. issue. any didn't we or we make aspect. challenging or is getting environment true point a to more the more anticipate time with to in slowdown get we're is to time getting trying stop had feel and supply it's that environment have chain But more an anticipate we to that we here so like and Well, We with

Jason Bednar

I things the velocity can trajectory logical right. beginning here talk saw intuitive have have compare cancer the year? curious at it you been HIFU what seems if gotten patient sit versus procedure or we exit were just influencing visits I'm we out March where the might in about with where would maybe you of Omicron Is Very diagnosis. I that in that we All business? there demand or of the at Okay. where guess, helpful. end your of today of if better. the mean, here we

Marc Oczachowski


Ryan Rhodes

Yes. question? sorry. repeat Can you that I'm

Jason Bednar

Yes. just the getting part saw you the the curious quarter early in the with we versus Omicron on raging procedure have really in here was seen question exit procedures of as done in we out demand, that I might exited guess, the early just, there quarter, velocity the quarter? what

Ryan Rhodes

I in there's I any of nothing there's the business. poles in terms diagnosed. surveillance some can or any put the Yes. this mean, Nothing show we've queue are newly I or being or of -- would patients other can't in treatments on the on seasonality had of how of that challenges U.S. hand that depending active notable care physicians our in that stage. see progress quarter affects those or from who are as under my may types who

behalf progression I the the I are of months, happening several been up, speaking last over of a that's that and U.S. think but state most speak I'm loosening on physicians things with feel only

I I think, good momentum. again, think we have

care systems our accounts. new install take ramp have We of course, and legacy and and, of utilization build to

radiation. anything as more are also any So there's a interest will radical in higher I utilization. surgery don't continue side, out area, I see to and our don't more drive and From -- less we awareness I that that headwinds see and options patients think seek big I back and to pointing higher think

cancer. for very with of a subset patients large have good diagnosed story a We prostate

Jason Bednar

point Frank's as to clarifying And question, on helpful. there right. All previously. come Ryan. back a Very just maybe

team, maybe I in made, whether this Just think the head press or side clinical that new on teams of point. commercial on in was could like it's side, count. release in opportunistic adds capital be the reference terms the the the sounds at But bringing rightsized there's commercial it still the

you. that So speak I about ads right as, guess, you be am Thank then this the is there? just as anything to to might throughout XXXX? you you'd like, we for willing thinking I pace move as far be year there hearing And of

Ryan Rhodes


we the some we team that as the Clinical So for right I'd now say additional have the place we more place in add headcount capital side, year execute feel we systems. side. to on may

where the place clinical of upon cadence the terms placing many, in systems, et cetera. And we is dictated so really headcount how

So open. leave door I the

We to if year, and it's on, so as I that see have opportunity to I additional the faster. we'll if up needed, year. we transitional but where make And an execute reserve investments we throughout opportunity mentioned the before, we needed a those plan a grow right investments think,

And so, few other year. people We I'm a good few a again, place. add and others very we've throughout training. the in pleased may team through with we been put now They've And a hired. the areas

Jason Bednar

All right. Very so helpful. Thanks much. again. Congrats


Instructions] from Wainright. [Operator He Our next Arthur question with is H.C.

Arthur He

is my for in RK. everyone, this Hi, Arthur for taking Thanks question.

level? we first of expect So question CMS the regarding reimbursed What reimbursement. regarding can from my CMS APC the side this year the the upgrade,

Ryan Rhodes


back had the CMS a we on XXth. in February with So meeting

the indicators productive at charges side. things very reimbursement throughout that throughout CMS cycle people looking HIFU building the made across our are average kind point -- facility or points of data meeting. a at, increasing. these look are average charges on they that was it case and the think We've all that bases the I the And

as last now year. quarter the and of crunching again, for data, July, volumes through their so mentioned, this data so the numbers proposed is be based year end have proposed And both that be use are they as through of XXXX come in will up at We're the data optimistic the it the look looking they coming which year, on there's -- they'll And the be Leading year first data half to treatments if coming is gone at looked the past out that these rule, rule at the analysis September. third of out final numbers in, fall. charges. will in so We've the we're that in of the charges up. rule can from we

came unanimously out So is which I'd panel, is year, HOPS increase I and change say advisory the reimbursement, this the to was there vote guarded yet panel, had no last independent if reimbursement. mean, the rule to we're an we And optimistic. final government. you remember

an can anything saying think increase. the very But get and numbers, guarded increase. I on you we'll discussion and point obviously. would that it that points to numbers to we've again, support interactions the It's I'm looked present in our CMS, that. around But of purely analytics at well hands So side everything the say to have an and of those done if prepared happen, would be I'd

Arthur He

a get great. into study to us Ryan. enrollment Could congrats give study. these HIFU on sounds more -- That also endometrial get the Thanks the population? these guys completed you pivotal plan color your for And patient for on

Marc Oczachowski

So we enrollment our as I completed I study. the said, of II Phase mean,

we'll we us randomized the follow-up, the a a done of work III on next probably which get compared clinical will with September, be probably. Phase end into computation end the the then go then and to year, step by at of So study study [indiscernible]. should some the And lead with

So be year. that's next end the by should and the that step, of the

Arthur He

great. That's Thanks thanks Marc. my taking And for questions.

Marc Oczachowski

much. very you Thank


This closing to Marc I it to comments. for concludes over question-and-answer back like session. would our turn

Marc Oczachowski

QX very forward news you Well, and May for in thank day, results. good your in again to you much. after interest updating a you the We wish Thank EDAP. we look


conclude today's does Thank you. conference. This

this and thank You at your may time, for disconnect you participation. your lines