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Neurometrix (NURO)

Participants
Thomas Higgins Senior Vice President & Chief Financial Officer
Dr. Shai Gozani President & Chief Executive Officer
Call transcript
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Operator

Good morning and welcome to the NeuroMetrix Fourth Quarter 2020 Earnings Call. My name is Anthony and I'll 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 current views 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 neurometrix.com including website on the heading under Relations the in company company uncertainties Factors at with filings at factors for described Investor Please refer periodic and and the the SEC's to the risks sec.gov. on the the Risk SEC website available to duty no the undertakes and intend not call. does on disclosed conference update this NeuroMetrix information I Vice would Officer, Higgins. NeuroMetrix' now like to President Sir introduce Senior Financial and Chief Thomas

You may begin. now

Thomas Higgins

XXXX, of Thanks our medical diagnosis the involving on President the you, is year offset solid devices the ago the and Gozani, Executive cash disorders with pre deliver growth. The loss orders. the was three margin, rate metrics XXXX. over points That across of continued gain showed continued outside improvement year. earnings million facilities lower gross profit over for all electrode the margin over QX about results percentage spending international of nervous million. and G&A, expenses on Chief roughly conveyed Dr. fourth commercialization and a Officer. DPNCheck revenues of R&D, improved in Medicare Gross totaled quarters in efficiency were XXXX. and today to NeuroMetrix XXXX. Operating achieved Shai a net quarter XX% and on major quarter. development in with $X.X versus joined sales QX revenues, XX.X release were last year-on-year Spending $X this financial in the was Quarter-on-quarter pandemic strong quarter level XXXX, noninvasive to XX% were and of of usage million Anthony. with XX% marketing weakness spending $X.X reductions with the and profit million. The $X.X in-line advertising XXXX, in and with staffing, its gross financial the it services down QX QX during a OpEx earlier or XX.X% the key focused positive for contribution categories call I'm or Quell a operating QX revenues Advanced contributed on year, QX system. by was global from levels. spending. Advantage comparison of spending and represented early was sales reductions and the prior

a net between in of Our quarter the loss loss the prior and year million $X.X also the quarter it Shifting and $XXX,XXX collaboration. several ago and $XXX,XXX. difficult with loss comparability from nearly milestone a compared the development $X.X operations for was year the few $XXX,XXX, overall was million XXXX results, comments. GSK benefited The year under loss is for to was XXXX reasons. full final by from our

and was revenues obvious and of a effects were with other the was mid-XXXX. Focus recorded marketing facilities items. productions, staff top $X.X line first shifted operations XXXX. addition, radically for time, million contribution in XXXX, But The line that Quell At is in during P&L altered. to one away inventory In the profit lower restructured approach from growth. charge COVID-XX

achieve including from development collaboration digital services. Quell-GSK the professional significantly and distribution and retail to most effort result, spending to reduced, TV not did activities a OpEx from was ad XXXX reliance involved advertising. mid-year As was extensive outside occur onward milestones, on similar reduced was XXXX in curtailed, redirected R&D spending in in XXXX. Also,

effects. million. numbers. $X.X This pandemic the reduce to company's as in million, the the on drop nearly was margin on rate on revenue profitability year. million Revenues leading $X.X those XX% XX.X% profit few reflected XXXX. So a mind, XXXX from was focus revenues, It were last $X versus in with year XXXX events Quell a comments gross was brief well full million $X.X as

professional the for the to still charge, XXXX substantial restructuring XX%, Excluding inventory of spending XXXX of XXXX Quell was was operating in of profit $X.X improvement million. so income year the staff and was services. in elements included greater last negligible charge advertising in XXXX. was as more staffing XXXX first rate and as spending $XX.X cost a sales costs, this levels in the million gross year. well half OpEx versus R&D broader the severance year, mentioned higher as I the extensive Other

of capital for for outstanding. XXXX Cash operations earned the this loss million. an $X.X amount That's million the net shares was million and and our into at the remains The company's structure million. from was year $X.X end sufficient that million, under GSK XXXX. milestones fund $X.X XXXX, million improvement there collaboration, are an $X.X during about $X.X and However, in year of of was well achieving a the to debt-free, development loss $X.X prior net was

financials And so XXXX the in summary, significant business. the improvements to convey

gross XXXX strategy. to We We by Gozani pandemic exit our with XXXX R&D operations XXXX that overall and as begin particularly profit, improved cash will believe our prior net usage second that are mature. the XXXX. with a now the balance effects of will the and did sheet loss, recede has accommodate OpEx the to over were structured address opportunities and provide year. $X end initiatives million, growth of spending revenue growth half flexibly that While contract Dr. to all superior

Dr. Shai Gozani

Thank you, Tom.

review in to principles: about and in leading the the take two So our first forward as being to drive and quarter outlined, this are second It's opportunity near industry profitability are to core business attain strategy. we Tom our the I innovation company's pleased for the go around product long-term to with will built is growth. with optimistic XXXX. our prospects term; performance the continue fourth

and-a-half, an cost have throughout structure year for Focusing we business. past the as we have attainment this we To profitability; the profitability. prioritized first efficient established on of communicated end, have

full is headcount Our part-time several XX contractors. and employees time

We margins. gross marketing led expenses has and manufacturing, and and improved have distribution to optimized operating which lower

the realize commitment to The and of of ability XXXX reflects quarter provided these of our evidence front. this fourth Our on employees. our progress talent efficiencies

and an magnitude the to COVID-XX operating to maintain $XXX,XXX, We that provide position in turn time we follows corner get cash? operating of business reported, question similar third in year. In start to for target cores our specific these to shareholders not and income loss is expectation investments of in make We consistently in customers. some we we to to this the a answer uncertainty a to growth. on improvement net to due more quarter. when at will because opportunistic As around need loss will which our show flexibility year-over-year impact a are our with generate need is for the our of this initiatives the outcomes continued we Nevertheless, experience profitability

initiatives. Moving and market our to innovation expansion

Our quality innovative and life. corporate medical physicians health of patients them improve mission to is develop and bring to devices and to

products unquestionably is neuropathy advanced sophisticated in categories, most Our non-invasive the and diagnostics neuro-stimulation. their are or whether that

have investment a focus and will historical We continue maintain in R&D. and to

quarter. We an sensor all which includes and previously elements have platform, primary fourth software. Advantage launched Medicare features biosensor a of our requested enterprise in quarter release device bio DPNCheck updated this the insurance management to target and by neuro-diagnostic reporting which It we the the in reporting the the includes security new are itself, updating customer and expect announced, associated plans, data data the management U.S. As software we're

and platform: targeting. indications relief the chronic lower additional for Moving leading pain, specifically four Quell leg wearable restless musculoskeletal RLS. we believe uses pain or induced we or these clinical are ones Quell, CIPN to There for Quell, that but fibromyalgia, syndrome chemotherapy there the neuropathy are extremity are are peripheral

knee clinical extremity well-suited available which is application its and of chronic world. affects XXX,XXX lower chronic current Health Quell chronic the data with to wearable the that chronic musculoskeletal during focus now Quell pain includes it up of one pain, from repositories for Cloud U.S. primarily The users making near largest adults designs and over-the-counter pain the is nearly particularly in placement market is activity. Quell enables in pain, because Our XX% use novel the knee this of

data real-world this to the improve research. and clinical mining conduct are We product

not to that primary come business engine over-the-counter for the its growth for Quell opportunity Quell is specific will clinical believe device. profitable application as prescription indications the Beyond us, from we the medical which a

in areas I before: RLS. the well-suited In to million on with as up induced that CIPN fibromyalgia, and represent mentioned XX is three of We neuropathy to syndrome individuals are Quell leg alone significant treatment needs U.S. chemotherapy a conditions market peripheral combination, address. working again restless unmet these

This of Boston. sham-controlled submission in We in next of at business milestone leverage have or to data for trial treat clinical is fibromyalgia. symptoms conducted and The blind randomized data all randomized encouraging for our a Quell Hospital prescription trial Women's the Brigham double filing controlled a XXX(k) pilot a obtained will three.

in plan this is current third of Our file year. to quarter the

As outcome. novel complex stimulation claim this is to nerve the challenging electrical is a for and handicap and a fibromyalgia we transcutaneous treat, cannot regulatory condition

based FDA. we data present on optimistic are we the to However, the intend to

communicate of School peripheral the have additional chemotherapy strategy following We certainty. market Rochester Quell regulatory Medicine. an our will once in by sham-controlled We're we University neuropathy randomized run has induced been trial that multicenter NIH-funded of also closely of

of this regulatory We We strategy next on updates are CIPN second and the our the currently half planning steps. year. have constructing should in program

is to report not however, along users class, over Our who asset as the program indications, restless in two health have chronic XX,XXX Quell RLS pain. has -- as in far unique we addition leg syndrome other a data and from relevant RLS -- Quell having the which

this set and analyzing valuable insights. are large RLS for real world clinical marketing We and growing data

NeuroMetrix targeting has are markets large needs. with So summary, in products unmet novel

attain to organization point. prepared growth. committed be comments. questions supporting structured We'll concludes that take our operationally profitability are an are and happy to We while And at that efficient this

Dr. Shai Gozani

the then to conference us and over you balance call look we joining you the this of updating on Thank year. for forward

Operator

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

not may disconnect. You