LENSAR (LNSR) 15 May 232023 Q1 Earnings call transcript

Good morning, ladies and gentlemen and welcome to the LENSAR Inc.

First Quarter 2023 Financial Results Conference Call. At this time, all lines are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Monday, May 15, 2023.

to McClellan. conference like Roth to now Burns of would turn over the Lee I ahead. go Please

Thanks website Pam. conference available release everyone, providing the first section morning Good quarter morning Relations issued on an quarter at the welcome we the XX, financial of XXXX the LENSAR overview to ended of Investor financial results press March is results a call. www.lensar.com. our this and Earlier company's release once for again, This XXXX.

Nick is review today Chief call Executive business will the on me who Curtis, the and Officer, Joining operational recent company's progress.

Chief Following you his before comments, Officer might have. the operator who Tom of to financial over Staab, will overview provide highlights our to back company's Financial an facilitate questions LENSAR, any call the turning of answering

unknown and you These information results, forward-looking unaudited be subject known future results, any the different or this including call achievements expressed implied to begin, contain will like as presentation. uncertainties, our statements, cause and during performance future statements future actual achievements. Before we from or to which well those on I'd regarding materially or as that to today's statements may performance company's and/or performance information remind are and results financial forward-looking risks

You reliance should not on place any statements. undue these forward-looking

including Securities Exchange website. Commission, and information, the risk be company’s the with on factors, discussion the additional a For of the which detailed filed please refer documents to accessed can

this forward-looking time-sensitive reflect information revise undertakes broadcast, call. or to contains statements only no call live LENSAR any Monday, date after date the events otherwise this addition, XXXX. this update to or of circumstances of XX, live In accurate as the May of obligation

Nick? to now Nick it's call my said, the to turn that With pleasure over Curtis.

everyone you, call. XXXX Thank on and first our good joining quarter us conference to listening. Thank for morning you Lee

install our I'm since installed has quarter Xst, four bringing base ALLY running say having more and that hit April the five XXXX, to in to LENSAR total XX. ground in the systems first proud

the over have XXXX. XX quarter -- the next and as in May install systems another also backlog of this XXth, quarter. We over These will next

the of with of Procedure US number in last small, growing ALLY in volumes nicely first when part users. the by year, but quarter increase the driven compared

reflect first availability, commercial we it's of launch on of that technology, has been deal months ophthalmic successful several targeted for community in controlled great As our the our a ALLY's executing and in the evident enthusiasm we've and United the States. new

on LENSAR, looking quarter they increase surgical point, This recent at this cataract XX% Market US of that entire of we for XXX received of for procedures points To only were by demonstrates LENSAR estimate for an performed all the assisted in ALLY. published represents adoption quarter systems the Scope, important growth as industry. catalyst, time the the not femtosecond over laser XXXX, This clearly an clearance ALLY second first XXXX. FDA of data of the basis but

and to ALLY, This of among fact, reinforces In growth quarter proposition. was are expectations practice our of level previous to over users ALLY's ahead XX% of first operational LLS, the who that volumes transitioned procedure are have value XXXX. internal level efficiencies generation, fundamental up our

reach the is and continued as premium world our in market represents largest beyond. to expand share we market Importantly, US procedure critical the ALLY's growth XXXX the in and

systems and awkward of who technologically from other transition difficult be feedback tell to I competitors. users customers from practice. to have can the made commercial being of and we into reception Most and ours ergonomic makes today are in as ALLY with previous days adaptable field less our are are less slower, early their its countless capable, both mentioned, pleased the integrate There just availability. much the our technology brings, to the and the more the are nearly from extremely positive, based those sizing addition and data of femtosecond lasers, efficient, generation particularly on the in them you As not surgeon from advantages aging continues in that

Evident to industry We backlog consistently XX to supply continues to for from expect have but high year. these abate demand a impacted issues by ALLY's to throughout been affected grow since remain systems, and that chain of the continue whole, the the launch. as the we challenges continue

and front, we've at On of Cataract major San This meeting team Diego. we Surgery has month, active to presence and advanced ALLY's worked and dedicated skilled the the maintained Ophthalmic the American our Refractive marketing Congresses. diligently showcase in Society an attended Annual capabilities,

ALLY's In a posters non-LENSAR as contracts meeting prime the addition number outcomes, two enthusiasm, with signed this example contracts a customers, for of requests in representing record completed more XX we resulted to with ALLY and superior Again, new of customers. highlighting the systems. XX we improved and additional productivity received demos than

on first working agreements multi-system which multi-system is Additionally, and this launch several I'm surprise. pleasant stage announce our our that are secured at facilities with we excited of additional a early contracts, to have

technology effectiveness market that to industry's the performance. to The us and have systems level been solutions. placed to secure able recognition of in and also of the begin months that to following a these multi-system our our fact the testament and benefits to platform propelling It the We trust offer, XX in confidence schedule materializing the ahead leader advantages of a we company, of forefront demand XX unique anticipated and highlights is agreements initially our the this of product launch.

Looking Overall the in were our more compared volumes of for XX% meets performance at procedure to quarter XXXX. the eye. volumes first quarter, much there's down business than what procedure the

driven Korean essentially surgical payors ophthalmic eliminated time the and was purchases South being. challenges However, practices between market third-party have the by this where decrease for procedure

will We not expect have timeframe. that this for this do clear foreseeable and challenge a future resolution continue

region million in procedures $X.X revenue the The for of and first XXXX. approximately X,XXX accounted of quarter

the of quarter X% would've for to first first the to South increased revenue Excluding XXXX the compared quarter attributable XXXX. quarter XXXX revenue Korea, first

strategic to which proceeds closing proceeds, placement, gross to breakeven. private our will cash flow the empower runway we in sales of provides us a grow. further will capitalizing and penetration and Today believe resources ensuring in are demand effectively distribution million has ALLY, our been the we significantly $XX These to announced with operations make we which and that marketing which our investments and market to on and cash and extends fund production also of maximizing inventory continues shown enhance

highlights call turn for me over to our Now quarter. let the cover financial Tom Tom? to the

Thank you, Nick.

included issued earlier in discuss I'd XXXX release quarter first financial are like few detail. results a to our Our items in are there morning, but press this further

million XXXX in million the of quarter of to compared $X.X in Revenue quarter first $X.X first was the XXXX.

ongoing mentioned, Nick $X.X reimbursement Korea in revenue driven million primarily generated decrease this As was by that South with approximate the from associated market. in challenges cataract an decrease

and The in Korea in South States the and increase increased United compared the and carry procedure gross and an as which X%, decrease quarter of procedure in in a XXXX. related first volume reduction volume respectively to US in by volume XX% higher margin. volume approximately revenue generally offset in somewhat Europe, Europe the was Procedure procedure

in first XX,XXX decrease volume procedures XXX XXXX, in there XXXX. first not XXXX, the a procedures to South procedure procedure Korea quarter decrease sold of in compared to approximately procedures. sold quarter mainly XX,XXX is X,XXX of in the of sold the Again, attributable were procedures, In

gross realized to million $X.X Gross was the million, margin XX% a XXXX. and margin of first the of XX% compared $X.X representing for in quarter quarter

gross decreased revenue a Although, reduction basis our in with Korean South associated XXX significant points. procedures, increased margin

discussed with have gross in previous Our for XX%. is margin expectations approximately gross XXXX we consistent margin of the the first quarter calls,

seem production greater in Supply fluid expect ALLY higher remainder in chain we the be availability manufacturing inventory now as materials. XXXX. issues have that and ALLY of are to raw Accordingly, created we and inefficiencies easing of see more efficient costs to seeing

ALLY development development charged of to of and for quarter clearance quarter the in second $XX.X of in $X.X the XXXX. million first to Total were first million XXXX the expenses quarter expenses attributable inventory decrease primarily compared $X.X significantly of operating approximately FDA research lower was the XXXX, in first XXXX. million expenses costs the of inclusion operating following including quarter to The of in

we and XXXX and of XXXX to investment fluctuate annual our million. in the development our first from expenditures $X research continue do significantly not ALLY development, expect research invest approximate Although, and expect and quarter we to in innovate R&D and to

Net the $X.X $X.X to as the million of loss was million XXXX. quarter and share loss or $X.XX per compared for decreased $X.XX share loss loss first and per quarter the in

the equivalents in December As of largest first utilizes the of $X to is million Cash largest first the March as cash utilized quarter in to was XXXX, the XXst, XXst, generally cash as cash we million $X.X million $XX.X each amount consumption XXXX. the represent within quarter in and had compared of the of and expected XXXX, year. company cash quarter of

private with our gross the after in Form net release financing, pleased have our press million, a million deducting mentioned transaction, are associated we $XX $XX.X significant bringing proceeds costs. proceeds placement to transaction estimate and of we As of in and K completed

capitalize the As of will the share invest and market early launch, surgery in more ALLY premium ALLY and proceeds, Nick market. extensively increase organization cataract the commercial to said these our on with we to our in to success continue

I'd to look questions. we call and like to to Pam, Now forward the turn your over back

session. and Ladies Instructions] you. we question-and-answer the begin now [Operator Thank will gentlemen,

at go from comes ahead. Zimmerman question First Ryan BTIG. Please

for taking on Izzy questions. for is This Pam. Nick, Hi, Ryan. Thanks the

Izzy. Hi,

hi. -- So

productivity of from improvements terms gained what launch, what in ALLY -- in and insights are have early guys the you seeing in So install base? you the

a question. really That's good Yeah.

their somewhere time Khodabakhsh the productivity over seen able at half Solomon we've on and like Jim between quotes surgery and of improvements and surgery time. are, you from which is a know, from South costliest the hour Carolina, terms when in that doctor day, an of time Beverly Hills they've people hours as what surgical for been save look Kerry OR So you to two and in in overall is

the a return the frankly, on reduce center, and they with So this four to course can add, they more, finish leave. help because can really number work quite day the early overhead to translating or they the of over on the cases backlog depending is their them or three cases day investment they through of and nice

Also, growth early. those procedure when see significant pretty than XX% which know productivity ALLY US competitive comparing already devices there. cases XX% early on we more to think it's in market in to I convert the volume numbers encouraging average are users. produces Those additional it's LLS, that the on And LLS an a scope perspective from

have the the is that seeing a that I worth to speaks that, and the have. adding noting several thing to costs increases ability other think offset other accounts added or they productivity are is device, second

the to And if life sales? of guys And outright cases Do leases, or over see a helpful. do more That's do terms Great. just you, acquire as really lease? it customers Thank ALLY get you the prefer all. of through is result? you leases in systems utilization what

good a That's question.

an a fee. any that have been So really per been than -- we've we've towards at simply that company operating depends hard and operating or always purchase. this -- a per systems working would pretty gets at We've point an XXX. rather There's purchased not variety a but over technology. with operating primarily, lease invested either whether these they or practices, accounting we on event, fee. moving they and dictate whether There's laser in towards And higher have their practice, to a the much are as percentage placed a things particularly fee, working time, section as separating days would placement to different lease from been purchased lease. been where leases But customers the whether in been as or on practice procedure using just model a a have hard of good capital other that this heavily the move to the purchase towards the procedure procedure moves we've an well operating it per a in right early outright, and of in ALLY moving there's the that's launch small access

day have LENSAR, of of, a the and accounts new that procedures, of to through we've is, in to we productivity terms new are also resulting don't surgery, again, device things not these of a patients. the us an the ALLY, one productivity other increasing telling so that that operating the in faster, devices that it's with new are of couple is their it think much but history. to And is two They're In we've ability and an only number schedule that more some on. seen hour increased accounts of the we communicate hours savings added I biggest that

with IOLMaster communicate and LENSAR, been to ability of case their the veracity here pretty ability the the IOLMaster from to instance, for South so XXX, the significant. through ZEISS, from And count from the in to let's in has route and data our say Sarasota Carolina

addition so laser to savings And the itself. those are resulting time in the of

I think see over that cases we're Additional to time. going

sentiment affect has we whatnot the confident, patients conversion but results seen they more here ability patients and certain the percentages this willing as more confidence some the and these improvements, we're into are practices of more with the and helps Obviously, to they're they then fashion. haven't cases they confident consumer see the to get do patients convert. therefore, a of more with macroeconomics in directly their of that result more lot doctors terms number getting of any can all feel is do get practices that marketplace, a feel there's the with staff it because the staff, And practice. in negative that getting and the they're working a Obviously, of to in the that --

Got That's hear. great it. to

And still XXXX? the expect so guys XX% seeing revenue the to demand are the in you think right the do order given way pipeline, about of you growth strong

primarily contemplating XXXX that XX% now. least would a this States that United the it of terms at in recognizing of there's in the we're selling this South of The right XXXX, that only in we're comment growth the And guidance. market. in system. Part down So the XX% -- out Korea pole be growth sold system's or

XX% there's you when the at So globally, US, was continue at and business, the growth, got out more will more number which we've which substantially XX% and particularly than of a to XX% the said about at of have that you XX%. going which Korea, from than the is that And a to XX% the net look little drag of in actually look US represents when actually a South there. rate systems least get we've growth

not I good forward a that's we're that this But number. any providing -- So like guidance time. at say would pretty

Got this they were expecting better it. margins, than And in of quarter. in came we terms

better know -- systems year. this guys was servicing, and what Are providing can for what you I issues increased on there last to? So attribute some that the going you supply demand?

Tom, want do you to that? comment to

Nick. Sure,

as things there. we of going It's question. purchase We're good expensive one. thanks R&D a Izzy, to and we So a A the for amount couple inventory mentioned -- on had before. decent to

difficulties remarks, So Nick out coming has are limitations the on margin. an can that systems chain reduce causing said impact the the with of wages to as we of And our of as I significantly occurred ALLY. the and of production just that amount we've and out just we coming -- up well go materials and prepared produce ALLY that both some in we're supply associated as raw

driving some to been early where inefficiencies of the were fifties of had low system expensed. and up that materials chain guided the manufacture supply costs or conflicting versus systems in piece around up in we the ALLY of raw we because able the factors, for So those driving two a XX already charging

continue think I chain you So totally look some going forward, those supply then to of for quantity going of those think is much forward come the to limitations, would in I fifties around I to scope what margins XX its malaise the we expect margin XXXX, low as gross and higher. up and out still can increase

one your given think it. then now million about private placements me. Got cash you runway And you. the How do for Thank last complete? $XX guys

it at exciting. I look as

we now the of that number filling we've I'm are the really that backlog that the in that -- are start the I think forward. got us got, right for running demand prospects the as gives a I excited. we've this systems, we think pipeline, where given run a go here,

because conference And can some Nick Lizzie of on maybe put calls said governor Izzy something building I -- organization. chain the as a the add of in I that, issues, to we have supply COVID, -- before really commercial and

stock, to commercial significant tout a benefits our launch there, but for already, going up, we've the build more can is the was us and you out really been of inventory in only the message of organization get to not company this So allow physicians investing balance the which more to reach ALLY. see and important financing importantly, doing really

And team thus Nick commercial a been job far on sort and the have a done because herculean things. there's of governor

in that going of coming money done put And said we have but date. -- to able hopefully to really the -- we'll in launch, in, ALLY with much were so not invest like have this to, we be always

-- to to other helpful. want comment. was that want Tom, do one I thanks make Izzy, that I

system, to the the that things on is percentages able want cases. that surgery I month, to we're important here and really mean, which getting surgery, is able we good staff as do they service commercial the LENSAR and sooner them months perspective them that, there's time for, the this important. and here, three practices -- to system known they make we and about than can and extent feel transitioned up number incredibly the that trained so and incredibly infrastructure this record number And So of for good become get product ALLY asset those the so rather which for we physician every sooner is as customer the and LENSAR one can the is when is the that of productive, is folks maintain later, organization, the is focused revenue take to protect we until do good to of we over monitor both supporting as also uptime one. from all transition perspective, of our to And important. the we're that trained a because well the like know, two, the and

We're the that company diagnostic. remote utilizes only a

And to perspective, many cases, and only in push remote we're a not system can so but look we challenge a the with many if into through. someone the times fix able system, the diagnostic it, having is diagnose from we can

that we let's to more and marketing support sales are important these increased sort able activity. infrastructure of, to these that help thus, in so have be of these all help us technological the And And this of move advantages will say, systems. building proceeds

Got the questions. it. taking Thank for you

you. Thank

next Please question Thank you. at go The from Bolster Advisory. Chris Propel comes ahead.

like sales bit do sounds investment to you a concern the on the sales. obviously obviously liquidity did get Congratulations lowers a provide terms? of But a why you. placement color some quarters? through where given it and is do the other Thank And what great approaches and factoring you any given The alternatives, to allows the chose dilution risk few more little on quarter now private you Yes. look in at on or size. front. Can receivables is you a like to stock

enough. fair a management that's of question well. and So Obviously, a owns amount good stock fair as

is at alternatives SVB So they certainly dilution, say made other that the collapse looking is fair more some not I'd fundraising, stocks. pretty process in microcap question a ran particularly The the though and think types And all I of probably of around the over, dilutive. question. alternative as be. onerous even an what for And the aware much financing, well good various potentially today easy might less a were we financing you're environment environment

to there'd felt if an underwriting able was forward where shareholders that. best the when on market to that than that to and company you substantial costly rest alternative, more and the a substantially what was bite us outright that inherent than today. that discounts to is opportunities given already of a with more and an -- turns make finance given lot the stock. of with up versus table the the and is, the an much put begins the to largest opportunity will will, bullet, is this the we the have depressed fact value of be on the like, And put understand it that we that There's dilution, the showing the value less table company, involved believe the a take stepped for timing, probably ALLY, be of The the market one partnered proposal to

over the Curtis Thank concludes you. question-and-answer back for call session. Nick today's now I'll closing turn to comments. That

as obviously, everybody of look I'd continued progress updating exciting your we like XXXX. call Stay the tuned. our remainder further and interest make We joining to in thank for forward LENSAR. in today to you

you this and lines. concludes please the and We thank for we participating you for conference gentlemen, your that Ladies call today. disconnect ask