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EDAP TMS (EDAP)

Participants
John Fraunces LifeSci Advisors, Investor Relations
Marc Oczachowski Chief Executive Officer and Chairman of the Board of Directors
Ryan Rhodes Chief Executive Officer, EDAP US
Francois Dietsch Chief Financial Officer
Frank Takkinen Lake Street Capital
Call transcript
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Operator

Greetings. And welcome to the EDAP TMS First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. to host, pleasure LifeSci Fraunces, now Advisors. is introduce John your from It may you, begin. Thank you

John Fraunces

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

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

Marc Oczachowski

then for good Officer and of a Thank you, US recapping Ryan review Dietsch, a to the start a performance. by turning the CFO by Francois start I the over our a Executive financial few and providing of everyone. business John morning, personal I’ll brief call before will EDAP and will strategy, updates Rhodes, highlights. Chief present US our

compared or XXXX million of $XX.X occurred the total Three million revenue generated We increase year one in EUR first to driven very million, as US of a those in quarter US. The sales was o-US. zero compared during HIFU the EUR Robotic units an representing four particularly in QX $XX.X XXXX. of increase XX.X quarter, the by quarter, ago million capital XX strong or period. One as XX% the we was For Focal of to sold the in and of

of units year sold period. We first I'm the excited in to also about a clinical like ExactVu outside start last I we've our ‘XX believe beyond. our and an indications on By team strong made year. the we point, update to opportunity to At in the infrastructure our front this investments utility five and us very the activities nine in US quarter in also year prostate due cancer. compared provide where was as HIFU of any ago in expansion would the measure, and to

enrollment reminder, Focal completed As One evaluating a patients infiltrating we running for last endometriosis. the We quarterly study of our update the Phase using that a HIFU treatment II deep on platform Robotic we announced treatments. are and

the month for end September that in evaluating are this year. HIFU period technology. of conclude of six the follow up of are and we efficacy will likely safety So at this the Investigators

in these parallel are operations. update the $XX these US results million add well our this from point, patients We for there is extensive the exploring effective, of are study at cash, opportunities. important CEO minimally With on and plans greatly other of clinical At and our expansion an treatment US for Ryan? while Rhodes, The technology would and As to EDAP for of US invasive to we turn we surgical HIFU options. value we like to I often could bowel. look alternative believe forward for important significant an may removal treatment said improved, in could the that over to patients. the endometriosis Ryan this continue call option an minimally of over invasive growth expansion currently endometriosis, these use to HIFU of be offer really of complex before, which management no financed execute

Ryan Rhodes

Thank you, Marc.

XXXX in for first announced the April US. was very XXth, and successful ExactVu placements the on us pre additional in we As quarter Focal terms One, of

a Harvard As Lahey machines. the Davis centers in at sales three Cornell placement Focal and Health, One all Israel Health academic System. network University Deaconess of health Center, New and Notably an Davis affiliate Sacramento. of within University Medical include integrated of occurred sold to three Medical California University Beth California School, Medical California stated Center we fourth represents reference company's York-Presbyterian/Weill prestigious

earlier UC San of Hospitals. in and very penetrating Diego. groups San progress result very Network These our are both large Irvine, and at placements UC Francisco, further prestigious of Following results UC a

a In in micro sales addition, team ExactVu tireless reflects equipment the quarter. systems together in during we of announced record five for was Taking quarter assembled the the this and capital company, the class the ultrasound have the that sale for work US world we this of US.

to Another in more but the it of of value, acceptance medical community of growing of the of grow in also community the focal is and therapy is strong urology is suite absolute academic of and indicator, sales as hospitals hospitals all treatment sizes. leading are of vast within pipeline. a in does it comprised indicative surprising, our by not terms is options as This US majority continue hospitals, leading but centers. only hospitals, Not it to dollar more addition course,

ago, or a of and gathering courses. exhibited of days One, feature plenary Meeting at worldwide. neurologists topic presence is a was during we and largest notable which Annual few and AUA, a annual showcased Focal the instructional Neurological We Just both American the it the had presentations Association

hand medical academic of acceptance prostate In focal management growing on the on in cancer. were presentations addition, leading therapy of several to the centers give

taught while accredited course, Focal training, how on in guidance AUA with hands expert skills faculty. under their During supported neurologists meeting, implement One the treatments which allowing to utilize focal to we an them of the practice,

had as leadership a the function and most a meeting only of we significant reflection the featured of year's micro prostate of ExactVu advanced believe focal led also experienced of of but in it that three the ever enhancement platform treatment was therapy Additionally, most growing our part we workshops, acceptance was as on market ultrasound available urologists. with not the sessions position, have company highly also paradigm, today. a by technological AUA presence This comprehensive skills a cancer is

Turning making capital sales that in multiple significant US. US this engage the XX ability to proven leading team actively very team, us as our largest the sized the a I quarter, This our last XXXX medical MSAs of indicated ramped with from speed I've covering in team been close And pleased quality I'm gives up many a a the of impressed our The equipment. which team of to track and of the business. institutions selling disruptive XX on made profile up right of is professionals with universally strategically the we have capable record impact capital with they while in geographies.

the sales accounts now On enter new Francois? on with an also continued the very immediate clinical impact. driving In or not sales side, the we had today, and momentum. our Dietsch on I'm results. details And managers discussing sales CFO, did our within some overall, we added existing summary, businesses results we while provide second that with Francois the will customer of the financial QX disclosing quarter are utilization clinical for are US have utilization responsible trajectory pleased and

Francois Dietsch

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

compared XXXX For US as EUR Total the the a quarter X.XXXX increase exchange first conversion revenue to EUR XX% million, wakeup dollar XX.X rate reaching of first for when in quarter first new was purposes QX XXXX. for or our quarter. level total of otherwise XX was of million the for revenue XXXX a

need ‘XXXX ago net on five the ago in for X.X commercial in QX impact you quarter EUR X.X to by XXXX was increase. was for the XXXX to compared period in first quarter the EUR for X.X quarter year out XXXX. versus quarter million look versus X.X XXXX fixed was total compared EUR the We a in and X.X loss of of related effects EUR XXX% million an EUR period. QX quarter XXXX. compared first profit as during in XXXX. revenue of operating the XXXX of first as one of in period. business was of LITHO expenses revenue total were period. higher X.X for increase quarter a million first million six team QX profit Total compensation the lithotripsy quarter XXXX, the build to of HIFU cost. for XX.X% first in sold to to on quarter compared quarter Looking the sale infrastructure during at XXXX of XXXX first device ago of US compared the the XX.X% X.X quarter year Distribution first revenue X.X We for due million the sold the business during business million net it units of compared the profit This programs. EUR compared to to Gross Gross EUR gross zero the driven XX% of X X.X EUR revenue margin XXXX. margin EUR the EUR non-cash in should quarter for The X.X for for to a division, sold XXXX million million EUR as nine included in first was share-based the in X.X the represents first profit Operating compared XXXX the by million units was X.X Operating and million at is was in XXXX. for The XXXX. sales was quarter to first of in when to of XXXX QX ExactVu increase million of first and same driven EUR the the first as increase million EUR first million of primarily The year was primarily by sales ongoing

was Net X.XX profit QX income of compared Excluding a of compensation been in EUR EUR diluted in million per share-based per the X.X QX non-cash programs EUR have year X.X to or would XXXX compared operating operating income or million EUR XXXX million for as of quarter the share, the period. for X.X of X.XX share profit ago EUR first million to X.X XXXX. diluted an EUR impact net

to EUR XXXX, XX, XXXX. XX, or back And cash held million March equivalent will call XX.X US million as Marc. of as $XX.X turn $XX.X cash compared of As December XX.X of now EUR million or I company the million US and the

Marc Oczachowski

in successful our Thank And continue Both we summary, reflect to with very and update And important pleased in is clearly Francois. look believe opportunity. are what quarter. the first in In this a and to sets I Ryan the volumes our next US most year. of treatment thoughts you, quarterly they I believe his our surface and the very for up August. performance placements team. scratching just are capital market forward I

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

Operator

Street Our Instructions] question Takkinen with from first comes Capital. Lake [Operator Frank

Frank Takkinen

Great. to hospitals in the Marc, update the for Ryan, results. on community there some mix with Congrats out the start comments funnel. today. I call Couple of Appreciate wanted around me the the for and there. Francois.

two how the has a that a the maybe last last the and to So shifted dollar could academics value you basis And the quarter growth mix in versus on maybe and over value parter. two, last of year? community dollar Maybe between funnel year? speak then

Ryan Rhodes

strong got we've so Yes, a pipeline. very

we added out new after academic AUA, company, to I great a referenced and say, which hospitals. and was add into we coming I for see that from on would continue the event community centers think both continue this the interest we've pipeline, to call, centers

the the still patients. pathway for see cancer with cancer. prostate patients. side, you'll option of programs because the And They many these strong surveillance also have robust for movement on diagnosed in a men as of prostate of terms nicely in fits more into very anchor academic have lot think of a active providing So this some treating I they an treatment

So hospitals. the looking more backward would just in I going say activity to see community we're

Our made course, Regional pipeline Cancer hospitals. up is community of of Centers, and centers, both academic

and mix equal obviously, outward, community time, in So hospitals both think look academic more think over community. I we have as but of we an I activity

Frank Takkinen

but or the of seasonality was I that's obviously this talking then Okay, I QX correctly, to If weak, QX is helpful, normally lines, year. regular remember near weakest think the irregular business nowhere for and maybe business. all

with regular was Do Qs, its being for comment X, the with normally, of I could expect and year seasonality to curious baseline set quarter QX? you if expectations carry any the So you on off QX rolling of lightest X XXXX. of the cadence just X, the

Marc Oczachowski

very, it the usually Well, a slows to down where back in speaking QX in QX. for in QX before our getting business that, to ourselves, is activities lot historically not weakest, of

see. and QX, the a little as of usual. well, significantly, and seasonality. business, here as are low today, take as may than as QX growing ramping strongest. QX kind is US again, up affect QX our And bit bit we and we'll the So see, could are is usually we a That's equal And this as we're little seasonality you

Frank Takkinen

in stage Okay, July, and fall level not I any which call. just too. about time That was then ago. this there know waiting for or update one me. on would we're think whether last for X, review you'll in I on read the upgraded think talked CMS going be or set to long on earnings some the final a a read preliminary on the But around maybe last decision APC data I conversations? wasn't that for was

could latest you comments level eligibility? X, AP any around APC or there on on any thinking update your provide X So

Ryan Rhodes

had as mentioned CMS a was in middle we a so February. back of call And with good before, Yes, it mid discussion.

never things probing confirmation if the is said, proposed With in to of their we understand we them. that from got rule. they were at factor be data at XXXX One the to looking would

why at at proposed us look an XXXX reported X proposed inpatient was in closer And shows if of procedures the rule awarded, and X. I the increase APC increase we're rule to was an XXXX cost, where on the you at in payment puts However, is based which data referenced the inpatient hospital APC today versus this that data.

also in to in I is patient continue proposal very out important, the coming July remain CMS. I and and with will sell sit market. place in side efficiently tight based that be everything reimbursement We've current stand. to today And to optimistic, with we what the out. know guarded done where on our see we and play and we'll may have work again, we'll effectively on systems the highlight to So

the today. In We CPT code. have full reimbursement

But have we We payment. have as with And reimbursement. placing facility a will what and noted see July. we are systems fee payment, we here, a in current professional selling happens the

Operator

Our next Jason Bednar is Sandler. Piper from with question

Unidentified Analyst

But And to strong OpEx Thanks for that even ourselves start we higher Hey, running than we you on to again continue that's of expecting OpEx the level This thanks. a that clearly in rate, the and nice should Joe measured be of good XX% have, top context in the questions. taking in congrats growth your OpEx trails, on first Jason, what's you're investments right progress, plus spending here. way were and morning. out growth, will even is on current made. side, be the and year demonstrating to commercial line commentaries of calibrating taking thinking Yes, quarter. about the the without XX%

Marc Oczachowski

an here the operating call we're increase our again, commented, And As Francois, during US. again, today, by that's the expenses, building company we as ongoing the in process.

the the in OpEx. people next US, P&L that marketing, here the in will get be our as people, So definitely clinical will And we more board, more in salespeople, seen on quarters. more and increase

help to they again, best We're brought world that's -- board again, last time. moving not class continuing came, all continue we are first hire, adding they we So a in Ryan the people first year, and in I during at And that few and markets number situation. increase. to developing came. a that's quarter people came No, we they the so didn't just here has on US same don't talented of mean, the people to all broader are

Unidentified Analyst

function management, seen then the Thanks. working you're is here? at stock as levels like And than the years. it Yes, capital or purposeful Great, there drawdown play of Was Was inventory your to did timing your more the couple move managing a some us. a eating supply looks headwinds normally carry? want this on sourcing this might efficiently? any lower over into safety thanks. It's chain I Or at of past of what you really element all ask more one sheet, we've from helpful. balance

Marc Oczachowski

supply, I inventory. usual and there. we're on as to manufacturing our diligently no, I mean, work Well, nothing say much mean,

to effective possible. So trying as we're be as

Operator

Our next with comes from question Ramakanth HC Wainright. Swayampakula

Unidentified Analyst

This Wainright. Francois. start and morning, RK for from Good Marc, you. ‘XX. HC Thank is great Ryan on Congratulations

One Focal now four almost to years US and the for has in Marc, about date. So been the market

been into get time, want been a final tremendous has Is So in comment getting time to purchase? of Focal that and taking by feel you during a better this obviously, from for put the commercialization lead has quarter? things. days time One. to it work a Can it How Just the timing, is trending? the on these

trajectory have of an onwards. about can from idea we placements the that So here

Ryan Rhodes

so I’ll interest span the from time Yes, RK, closing time There of see several deal. the to months longer. or we that. answer can It

I on sales team really think a what's impactful having obviously is the built capital out side. been

by business team, Finger, regional got active now president well, directors a geographies. covering our in Scott So got now a up their their we've team trained that accounts and vice we've that notable

nuances cycle again, say treatment cancer. of some give average. can't always as are that the times. we So, terms best-in-class therapy you sales And are an I there's value systems And, of see technology. strategic the hospital in I that prostate there of will in focal mentioned, But even

So even front the recognize value, strategically, clinical and and focal when they times looking in come the duration. adding down sales the of cycle value, if are people, of at therapy right terms economic we those in hospitals get cycles,

become averages, you that would, the longer, be take the would say some move time, of I times at So fair cycle would can law I very would deals if shorter. it some look say that to over quickly. But

used and medical to they're move strategic value. buying, community equipment, Sometimes the understand the will Because they just fast. hospitals very disruptive

down. are more build a out best-in-class customers product, we But product, come So that that at have technology. the we I week And good as premium cycle of look we when a interest and at the at of And our we times us had a was I think price mix, this will look think want here company a they past our gauge AUA. product. just as

as throughout we're the commercial beyond. XXXX to very we look excited heavily growth So our focus rest of continue strategy. on and we'll And

Unidentified Analyst

the then for on any last a can over the year, you volume, commentary, unit procedure very just get coming out to pieces how has trying working you, the because the the Ryan, Same, on that flavor half number that's Obviously, for to of cases And thank for impacts that. provide folks. you increasing. COVID, utility of and just year out much, been lines. understand revenue within of Fantastic, the the, other

Ryan Rhodes

Yes. RK.

also a So growth, we And and I quarter-over-quarter to therapy. focal online. as continue would We're centers but at additional using patients that's good systems, we a we're we see more install place And meaning continue obviously more to current more identified digit growth, in doctors subset and are sites. see for more training double think candidates sequential ideal today, are growth. who coming technology, have of doctors interested sign, training

we digit mentioned, to as again, growth growth, sequential So quarter-over-quarter. continue see double

Unidentified Analyst

me last for The long the of platform. for utility term, is the question Perfect.

So indications if to looking on Marc, Is what endometriosis? you kind out now? other for something outside such could of comment be? give you you're could gave Or early a too of that saying indications you there teaser at it

Marc Oczachowski

No, the that actually, we call. last and discussed conference quarterly on

working two months studied cancer, patients stage. two as last also and on into in are early all a we pancreatic but far. you've time we I the treatment, We on on as said, did And Lyon, so it's ago, very first also said working BPH exploring, expanding we

to platform robotic again, the term the of company. vision to various HIFU So we're indications, in a long the engaging multi-application on full as get other

Unidentified Analyst

the And on then endometriosis itself.

you data year. would be some to get said late this you able As

could study Phase this smaller endometriosis into II is soon larger the way you transfer in a there a talk from can how indication How just point. doing you large study? about can study itself? there of any And So at you a be

Marc Oczachowski

September. I today, will said be I earlier the at the Yes, we I mean, in third period as end mean of

the study. might month study. be disclosed year the build clinical come. the to by potentially we and to we get will of data So next we get on to said, past, analysis that as and in And continue some studies end well started a as in able X Phase the We'll

to clinical HIFU. So into move that and continue we with building evidence of evidence indication the clinical

Operator

floor closing Thank no I There time. you. are for to this at would any over Marc back questions to further like Oczachowski comments. the turn

Marc Oczachowski

our again that your this EDAP you and for well, good Okay, a concludes interest Thank all call have morning. in day.

Operator

This concludes conference. today's

this at lines for time. your disconnect your may you Thank You participation.