Neurometrix (NURO)

Thomas Higgins SVP & CFO
Dr. Shai Gozani President & CEO
Jarrod Cohen JM Cohen & Company
Bill Church TGRA
Call transcript
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Good morning, and welcome to the NeuroMetrix Third Quarter 2020 Earnings Call. My name is Shannon, and I will be your moderator on the call. On this call, the Company may make statements which are not historical facts and are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature that depend upon or refer to future events or conditions are forward-looking statements. Any forward-looking statements reflect companies of NeuroMetrix about future results of operations and other forward-looking information.

in on a because of result including set rely differ results important not issued those as release materially of forth should forward-looking actual statements may factors, earlier You today. earnings the a number and including at the the heading under website Company's in Company's Investor uncertainties, Factors sec.gov. the with neurometrix.com factors periodic described Relations Please refer filings and on SEC the website to the risks the the SEC's Risk available at on undertakes no on and to update NeuroMetrix disclosed intend does duty the information this not call. conference introduce now like NeuroMetrix I'd and President Chief Officer, to the Senior Vice Mr. Financial Thomas Higgins. Mr. Higgins?

Thomas Higgins

diagnosis you, our treatment conditions. health on President Thank develops of the Gozani, Executive Chief Dr. the Officer. NeuroMetrix Shai medical joined and I'm and neurostimulation-based and chronic call Shannon. commercializes by for devices

are and patients DPNCheck, neurostimulation ADVANCE peripheral of and It Quell neuro counter. conduction device XXXX. customer particularly quarter necessarily by environment QX a way ADVANCE the of second neuropathies. and mobile facility in good available systemic is busy over top We was with the symptomatic larger and chronic priority. studies device provides the indicated is Quell. the management the and utilization customer was high having neuropathies. from for test to is And a of Company, experienced employee needs. rebound a pain. a relief the business throughout for app-enabled considering that the quarter address managing evaluating operating commercial wearable as was orders imposed Our economic the suspected Production constraints QX safety diagnosing as products of point-of-care focal detection or is for point-of-care a DPNCheck of

appreciate all have uncertainty. is staffing customer marketing R&D, all the issues and remains operating tightly demand a We unclear. sales were of high and Our The raw levels, supply forward activities material outlook managed. G&A and that degree

enter we optimism of year. with leaves the a the sense However, as performance us QX in business last the of quarter

about to long-standing DPNCheck the reported QX, were both way. as in results led was strong from Medicare which million. customers $X in our revenue biosensors. for sector Total as Advantage operating orders accounts we new Demand and quarter well Turning the in devices earlier today. the

business the Our results. and revenue line rebounded The with Denshi QX, meaningfully contributed also contributed Quell Japanese profitability. Fukuda from diagnostic quarter business levels depressed to ADVANCE the and of product

down R&D current spending next-generation focus $XXX,XXX and of prior It flat reflected XXXX. activity XX% was QX was reflects And year next reduced $XXX,XXX spending release G&A from QX and of sustainable last contributed been primary level is sustainable $X.X indirect plus and OpEx over gross The production about outcome an throughput of The X/X profit costs higher XX.X%. spending totaled was was Our going consistent to million. revenue level strong spending efforts level This of margin two quarters, This on has and under it's past from Lower about DPNCheck XX% services. from $XXX,XXX marketing a rate going encouraging on higher XX% was spending the forward. XX% for $X.X margin margin below QX of was targeting a last our and the gross spending XXXX. margin. QX XXXX. the forward. of at of million. Sales just of of a technology professional the year year. R&D than down with quarter with

sufficient the $X.X end share $X.X to $XXX,XXX. was and QX improvement XXXX. an share Cash operations likely amount million, of improvement On of Our loss QX was or This $X.XX quarter Company's QX a QX net of per QX the loss through year. versus $X.XX of last fund share into per of the million versus in basis, an was per at $X.X a was loss XXXX the net loss for million. XX% XXXX

address Our about is Gozani, debt-free. strategy. this are will let over to capital now that, outstanding. Dr. overall me who turn million structure shares common our X.X With There

Dr. Shai Gozani

Thank you.

As Tom are outlined, performance in quarter. we pleased Company's the third with the

our principles. opportunity is So strategy, built to I'll around three business review which take this

is profitability. This respect in reported about have of past of we operating $XXX,XXX. this prioritized first quarter The attainment encouraging that loss an we was as

is initiatives, positioned an throughout talent this uncertainty improving that We specific which the efficient gross currently lower quarter have time. employees. point our Because and out get established a overall I these headcount, with the led cost expenses and crossover our covers the to need business. of and This into realize we marketing margins. business and to of has should commitment the to economic not state distribution, to a are at structure efficiencies experience testament our manufacturing, to ability more operating profitability

The second our in strategy innovation. principle is

mission health health to corporate bring care is their quality Our life. customers our to of improve products innovative and that

the in advanced is devices. are whether Our unquestionably neuropathy products TENS most their categories, or diagnostics that

expect customers DPNCheck maintain to which relief the Also, is software, investment which the and in Quell and We example pain all app historical to R&D. enterprise launch device. release data the that our our includes requesting. recent the The device software. system, We are first of app, reporting features Watch we announced, have consumable recently launched Advantage updated itself, the Medicare associated previously the the control biosensor includes the updating large our have of biosensor are will wearable a focus elements continue as and security Smartwatch and and to we new

well our have profitability particularly suited By the that its end is that is manifested clearly the We of application in requires application, which the for and we to need innovation finding up extremity Quell, the wearable affects I primarily mean novel knee core user our pain, We that, before be last this four strategy. of chronic most knee This a placement expect products. and maintaining for in to adults And of best opportunities that principle leveraging where design flexible activity. to current typical that dynamic market in U.S. is to enables clinical strategy nimble The we near our strategy. Quell is year. indications. because the industry-leading lower defined pain, in the XX% launch a Quell believe its achieving

three conditions We combination, neuropathy to develop the in have identified a syndrome million In peripheral restless represent these we fibromyalgia, or million chemotherapy-induced RLS. CIPN or indications individuals market additional plan that XX and of to XX U.S.

in data large We next pilot have novel trial half along. randomized has We year. second program controlled the of In the or furthest summary, our fibromyalgia to with markets. are all program on updates targeting hope announce NeuroMetrix that products three

towards completes our efficient be structured That to prepared is operationally this and that and and take we'd to comments, committed are We organization move questions happy at support any growth profitability. point.


Our with Jarrod [Operator comes first question Cohen Company. Cohen & Instructions] from JM

Jarrod Cohen


what, you guess, reoccurring gel a from since just in And the little why since XXX,XXX, seen I question. curious over what, five devices sold Quell revenue Just years It's of over I'm bit quick what the your you packs, opinion more XXX,XXX Quell. have, terms been, haven't you've years launched you little think is the I a since in a then? five

Dr. Shai Gozani

correct, Jerry. Yes. That's

in potentially product, Quell have it helps there's use going trail consumer-oriented Yes, a X.X we've revenue it's from product or our have have need them. expect to customers. about of they time. churn over -- our go It they as they And move we and think -- Many you for of and a time. back therapy. might don't come They off customers customers forth -- We period anymore XXX,XXX devices to are a recurring on you shipped do or I over years stream now. -- around alternative

strategy somewhat you with disappointed So the recurring would it's somewhat and a focused I we're we're on can overall connections to reflective I on a revenue see are their we fairly the serve your of -- of little recurring revenue think to recurring is -- stream. consistency think specific do get stronger But our some better I which think, consumables from in would that, stream situation. dynamic that agree to more a that the some we're disappointed. of overall, is I of improve to which and But overall, revenue and the many I expected better continue answer it. needs are say, the that, need more not were in and and build we stream those consumers from there customers think moving-forward I are consistent fact, have revenue to reasons, bit question indications a we but consistent where

Jarrod Cohen

you -- I in know base, coming Okay. an existing that, Because exact don't this less don't of back an even at curious the than them but or from but you that? the do I'm give number, cycle. to about just point exact life you give see XX% installed You

Dr. Shai Gozani

situation. complicated you in I have of don't and I a kind good a Yes. think that to give it's respect number

be I quote what wide number reasons. tend customers. So We fairly variation don't on a depends. to for there's really we But want it describe. also subdued among I a competitive mean, to

think to I think clearly. app the applications, And us be to more again, customer allow focused more specific service that for it specific setting forward. on indications to build being and needs we'll those and to by going support services improved, our strengthen I that


with [Operator question from TGRA. Bill Instructions] Church comes Our next

open. Your is line

Bill Church

is growth market see DPNCheck, front going Do forward? much in how us? of share we

Dr. Shai Gozani

I competition. there have that's question. no no so -- -- we the is good Well, a mean

of care. neuropathy the the in point player we're So, peripheral only diagnostics at

early overall mean So, in even stage, we're terms our of I market. a Medicare the effort think core there's terms tremendous in at opportunity fairly in Advantage. what I of

Medicare core significant would even we're so -- XX% at even in what, our I growth. markets, probably X% international less focus Advantage percentages tremendous of I the growth in than, there So, that which U.S. lower opportunity, is to and say say, at opportunities, is the would

insurers want emerging many to peripheral concept I this mean, for to for an point screen I plans out, is neuropathy. and Now

So there's impressive. but quite along a is of is to large, quite has opportunity education the that lot with go while opportunity the that,

Bill Church

getting that? know and sort new So how But thing. the software update or be the Or for forth? plans realize we guess, that just you've out, and coming do improved so of it's I got insurance word I

Dr. Shai Gozani

U.S., on Advantage focus our core the is in Medicare Well, accounts.

insurers country. two We largest Medicare are in Advantage the the in

last to over become -- those we standard with to expanding the implementing to five organizations, we've are relatively as at and as they with years they we'd growth are within programs, see, the of they tend along the tend And It's that. go difficult sort push develop their dealing large have rate to of because slowly. care insurers. So four, we're footprint, very like

getting to It's Advantage with integrate solutions, into enterprise right software the So, Medicare kind along providing the along and the overall. growing business their grow and it's it with of out. is word them

to we faster, grow it it support. but right So to try that your I to try have point, word is the to We'd there mean, to out. pace see like get to the provide yes, We we obviously appreciate. a


further no showing at this closing time. call back over currently like I'm Instructions] I'd Dr. questions Gozani for remarks. to [Operator the turn to

Dr. Shai Gozani

Thank today early you and updating we appreciate call next you and look joining year. you this on to us forward


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

now may disconnect. You