LENSAR (LNSR) 9 Aug 232023 Q2 Earnings call transcript

Good morning and thank you for your participation. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session.

As a reminder, this conference call will be recorded.

I would now like to turn the call over to Mr. McClellan. Burns of Radinovic Cameron Mr. Radinovic, please ahead. go

at overview Thank Quarter Relations of XXXX Good the ended issued providing June website morning, the This the results Earlier available and Second LENSAR company on an release press release the XX, to a the Financial quarter section www.lensar.com. morning, financial for welcome this you. of press Results is XXXX. Call. Conference Investor the company's

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

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

which including performance statements, future those be information the risks achievements. forward-looking unknown cause contain company's statements may and performances forward-looking or results different results, future These to actual unaudited future in will call well statements materially or conference expressed as and performance results, financial this known the and implied as presentation. company's and/or to subject regarding are achievements from uncertainties, or any Today's

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

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

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

Nick? the turn call pleasure my Nick is It Curtis. over to to

having systems pleased XXXX XX well us quarter of call. systems for everyone. our XXXX number installed Thank way Cam, XX installed LENSAR on this strong in you, morning I'm goal and year-to-date that our QX, bringing second to total Thank of systems our report a our to placing joining ALLY had on or quarter, conference more year. you good to to XX,

and in supporting XXXX, robust and managed the to these in private as slower other strong competitive to older, second nearly Our private Partially technology. ALLY see see revenue momentum into the PE and/or be We're and both both technological, ophthalmology outdated practice increased an from placements areas quarter can sales lease beginning it groups. as which benefits that the same financial hope multisystem increase revenue. operational groups equity-owned in increases was attributed quarter as of having additional start and to demand realize the XX% well distinguish surgeons, to systems, all over system

add potential other higher and/or of the in patient ALLYs ability to and future. within precision, owned from highlighted efficiency in multiple outcomes we has private the installation the ALLY Each equity-owned groups. the As as groups been of has systems July, in Upon levels managed improved increasing ophthalmology practice in groups in we level of the benefiting and have steadily press these commonly ophthalmology practices. to private of the these sites ALLY equity-owned five completed system's adoption support multiple release

using to of cataract for partners equity-owned synergistic growing, where are system. United being total of about gaining surgery LENSAR, Private value for ALLY ophthalmology we're groups the groups new making States, and XX% account traction currently these procedures advantageous in the performed due financial outcomes-based the the

growth the in to procedure data in the and market, same all and To year, in from an adoption according with XXXX. period XX% into the FLACS most demonstrating the This an XX.X% estimated U.S. share increase XXXX, utilized during which of marks XXXX our of market. volumes next utilization the consistent LENSAR of quarter to Looking point remains more of in our closely focus last this procedures and recent XX% technology market second the compared and grew by reported increase primary MarketScope, second of continued LENSAR published systems area first year. importantly, quarter at to quarter, the in

performance have our pleased the of yielding value practices previous systems expectations Furthermore, for transitioned our among over XX% with first growth operational efficiencies, added terms we practices. brings technology. XXXX. demonstrates and This users our to better to these of who increased for or of by the level from exceeded these and generation volumes in the ALLY ALLY of Procedure half users internal has economics an are impressive particularly that utilization LLS

one making the to As is surgery feedback in receive laser immensely the a ALLY LENSAR, our switched that reaffirming particularly impact is of customer systems the gratifying, from to positive for assisted the surgery in femtosecond procedures our those field cataract importance market market reminder, and overall, the are premium company. of growing advancing ALLY. the U.S. largest from competitive the users premium have noteworthy who to significant cataract world The continue procedure represents and base we

point, are of this XXXX ALLY new sterile and to devices to switch highlight with further generation with previously procedure, more legacy speed, leaving older our ALLY surgeons technology. XX% communicate size, multiple entrenched combined ability systems versatility in the ability perform preoperative more benefits to competitive We behind provide an ergonomics, from used. placements compelling the architecture, managing recognizing open astigmatism are ALLY all reasons the To that and our of believe

femtosecond high the nearly features leads as are expressed system. efficient also patient enhance interest care but These state-of-the-art surgeons to out perspective, more and marketing only workflow, and outcomes. XXX in sales sales solution, necessary the ALLY not and procedures from volume target of in increasing have our various productivity From marketing stages with improve their and stands and to and cycle. ALLY we continue who provides nurture competitive allow laser users a the to leads faster

with lead be bit lumpy, unpredictable and enough wise, seasonal close they our than least as end equipment we confident to the from growing year-end and take optimistic the on of adding XXXX install capital cycle extend the to we managed of continue from sales day, to complexity a in stated owned PE but remain competitive market overall while pacing groups at that market can utilization. by laser timing older femtosecond and/or We’re technologies, XX that The more the wise, at deliver the goal are more can to timing systems XXXX. market described share very will

which We we South pipeline belief are more When our in working and has procedure increase becoming Korea right over a procedure time. have year-over-year. are initiatives increased hard have you the worldwide volumes, interest volume ALLY strong continuing to remove for place, year-to-date that obvious from and the XX%

returns that of piece contributing in in a region resolved procedure sizable this strong to and being is challenge this hopeful We’re our volume XXXX XXXX.

Lastly, a cash with quarter position in financial we ended million in cash strong equivalents. and the $XX.X

May by efforts, financing, we in strong relationships sales distribution increasing valued our LENSAR and of marketing distributors, completion successful build for a and the our ALLY’s believe customers, position our and to advantageous continued plans and is partners. other with our XXXX that expanding with success strong drive Following networks, forward to our continuing

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

Nick. you, Thank

increase. like a quarter compared of XXXX, second this press are included items XXXX morning, which to was $X Our XX% XXXX the I’d reflecting significant million discuss. there quarter a in release earlier issued our million few results Revenue $XX financial the of second second to but for are in quarter in

system and X exceptional for XX mentioned, lease launch our had units We to the the quarter increase placements latter XX limited due XXXX Nick months. approximately was increasing installed in systems. for our As sales LLS increased last revenue. base increased of were This in units controlled our primarily ceased to the is Gen system an especially ALLY noteworthy and had as of we XX half production

so third-party the approximately XXXX. increased a or Korea revenue well quarter from LENSAR since XXXX XX% approximately Furthermore, South South issue quarter you $X.X the adjust issue that from of Korea million, third for XXXX of our been issues. revenue revenue has quarter in This we lost affects as an $X.X second the Korea as for of when payer ongoing in reimbursement associated operate competitors second and with South was million

ALLY region, the until that we limits sale commercial regions. limited in States for our in significant timing is other United ALLY due growth other and approval revenue In addition, placing to regulatory so in to the cleared inherently as volume of primary ALLY systems are regions, our

and We to being forward that in clearance are end, XXXX, to commercial filed obtain looking to we able to in sell in the XXXX. EU ALLY September

to clearance We taking distributors. in are obtain Philippines our with South the also and steps Taiwan, Korea,

us decreased approximately by in by XX% with second we and second when is which of XXXX, volume, With pleased from X% XX,XXX second compared in the U.S. procedure XXXX to increased negatively volume procedure XXXX. procedures of the extremely volume the are Worldwide Korea. though quarter U.S. be said, XXXX were versus quarter the In second of procedure quarter important comparing to very that impacted procedure the to increased continued in XX,XXX even market XXXX. to South XXXX, of procedures sold there sold quarter the volume increase

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

higher margin gross anticipated had of Our low-XXs. a in be as than half projected gross first we the for XXXX our the we to second is margin trending quarter little and

procedure than one, margins created Although, are are eroded ALLY benefits LLS associated supply margins. we costs higher have seeing margin issues and higher are margins margins whereby, than two, procedure somewhat, ALLY margins, inventory higher ALLY and chain with LLS System

attributable expenses benefits quarter these $X.X million XXXX ALLY will including Total in that to operating The future $X XX% in million operating XXXX, margins of increased quarter expenses R&D of sales and FDA With costs in lower we of XXXX to to product decrease to R&D development in approximately believe costs the ALLY, that were inclusion quarterly in million the the trend to charged significantly of expenses, clearance heavily second inventory second second between being following gross more primarily weighted quarter XXXX XX%. the the for mix was of compared period. XXXX. $XX.X

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

$X.X the loss and compared to per in loss $X.XX million $X.XX an second loss and Net quarter XXXX. the $X.X or share, loss of share was million increased it quarter for the per as

that financing year. significantly this Our the we was by completed GAAP impacted loss the of May in for quarter

With this Black stock in This as significant model. mark calculated with very Scholes and a the value liability generally model in that fluctuate Scholes will variable Black inputs we company’s the quarter the being quarter-to-quarter financing, upon the our to we the future warrant liability each market to price using did future valuation will based calculation.

in the quarterly This share, of $X.XX other in and assumptions share, XX, $X the non-cash to from change would’ve June loss loss additional quarter price significantly a input charge with to per approximate loss second per Due charge. XXXX, without to variations stock $X.XX recorded the our an the charge which liability. financing warrant been per the completion warrant loss impacted in per associated million we value thereby our adding share a this the share

ability As June XX, million us XXXX in $XX.X initial cash our as Nick as to million sheet, operations Cash ALLY’s of had commercial XXXX. as June success compared from strengthens net million the well provides expand financing, liquidity XX, XX, million the derived believe the proceeds. XXXX, to generated was our as and December $XX.X marketplace. $XX.X more was financing said this of ended equivalents We we in of enhance and balance significantly on the to cash $XX.X quarter

Now, over the answering to to your forward operator and the to we turn look call I’d like questions.

Zimmerman Instructions] ask your BTIG. first question. you. [Operator session. now we from and is the will begin Ryan Thank question from Please Your question-and-answer gentlemen, Ladies

the the a Good Nick, Seems quarter to questions. thanks potential want of Congrats leads. subsequently, understand talked Maybe the conversion to kind rate maybe and ALLY of guys. a us like as of and taking the little launch, the about the think contracts that is morning progressing timelines start about and bit on to talk process, XXX how for here, you launch dynamic. just orders on really to you I nice that well. of narrows about kind pipeline just kind out pipeline you expect,

today. Yes. right. call Thanks, the Ryan. appreciate All you the I taking time on

to type to system. sell ALLY got digital marketing have seven make typical a the let’s to place in equipment of these the be lead can time practice that social very strong we a peer. take from decision there’s of institute of qualified if been sort the or a also condense cycle, contact that’s about initiatives they competitive and initiatives to see say, this to from a media The visits that closes or going inaction, it process started decision peer an various doesn’t the interested So a of device. visit takes were We which that accounts them a, months where the We’ve on making you they’re some helps lead sale will, and to an initial average, the close. time it complexity replacing we and on

it now trigger just the site to sort the get the at through not And and decision the from but complexity some in surgeon it’s and we obviously, pull much so as goes increase the of happen of into of there. groups that the those private leads the like of because can sooner, makes of the place, I that the system process. now comment equity the lengthen well, business and a some more made pipeline, get sort those kind

news and the cycle little bit is good there’s a that so there opportunity bad lots that longer. And the of news takes is the

a So then the sales strong it’s these account reps point meeting up take we, go to it a will them step on initiatives in cases, in who for in seven set further. digital average, and the call cycle, to the into where the month and nurturing leads many get place, the

by gave guess? your and Okay. about with me base where to the And user today, kind on metrics I if can investors capacity But by I was for to procedure more volume, and think do was I I’m specifically. disclosures are you the think great go mean, a of talking all ALLY correct I the I of the struck and time? do if over I you increase think they ALLY users made off XX% understand. you wrong, that have mean, it case, comment that’s just the old comparing base, productivity

Yes.

is only LENSAR the to now and compare that right technology ultimately, site ALLY that studies. have going X or what with measuring which – on LENSAR time. where were flow, than do may previous and because cases, several we're doing before, thought LLS of efficiency would we device, more do the in the but we have obviously, the these come always metric let's we that basis, What speed increase. historical we we're the we doing a, that And perspective. can for ultimately they and say, So we're We're be of volumes number site that's technology, older with measuring don't in of groups connectivity these time against to we

X And so today. practice the and kind what depending time that savings, you'll using the flow start to see XX range is of between minutes like on minutes

And we've operating move the because size, which the sort small flow the it of to seen their into more and doctors' increases the of really the and throughput. change willingness ergonomics room then

months I day taken two is – really to for two take so of to a And good four an there's several been we've if day practice. hour which from to able where backlog, typical hours a surgical save a we've sites the backlogs can that different so cite months,

backlogs we've a we in second in ALLY those sites, cut ALLY. just half already with the added And one an so of

to would they're and I you so to improve, volume, to continue will. able that And then be think increase would to their continue if going

then devices. the additional seeing who from on And switching cases competitive their are people,

I more that Other think can of your to XX% high-volume at And I which practices, the neighborhood the mean I where And are convert practices course, the total best how in over that to of average, are best their got practices, in on trend XX% volume that we'll XX% I say much XXX%. best premium But XX%, cases. between putting they terms like best are continue patients So boutique average, place don't practices, practices lower it in of best the practice. practices, go? practices you've of On a practices at the rates. way. to see XX% that medical best is – high-volume when handle mean on some are and in

significant And XX% there's including the and in at on general market premiums, multifocals some is the you XX%, when at, market. upside look so, of which what, there torics

that. about question no Yes, right. Right,

margins least I for stand given the you that questions. one, XX%, where Tom. want of I kind grow that's revenue couple going of And on keep on see here at year. you to Number I I to stated, So believe, think previously you a for formal guidance, year. but maybe Tom if guys just for financial then okay. didn't second haven't said can you you hear rolling your your comments, to have turning I the that. heard question, this in I'm

longer-term the your taking recent and the I'm on Thanks you steps the putting consumables of you Tom. margin procedures few, to just infusion and the thoughts pick question, hitting then up trends? base work? for As guys. How kind questions a sorry, ALLY with And last are cash up,

was doctors going for regards great the we PE the even your we year-to-date, technology. you Nick’s Ryan. a that and we’ve at to questions, statement predict pull have that see at What hard Yes. going said when remarks, the really placed Thanks us. to are right, were to practices guidance, place to least it’s And XX is beginning revenue the when systems, actually with very trigger, XX. quarter given was for we and In which

have gives as given little forward a up benchmark trending we were revenue you and to… the formal guidance historical the going as regards placements regards know that a but we In in revenue. percentage. And given that that So well haven’t to we do

Okay.

the Xx. to and razorblade laser than trends, procedures, sale you’re the margin a tune than of actual or garner obviously in lease regards exactly to your much Yes, they the higher our margin of and the more With right. model

a the in we on drag So successful the the more placements, margins. more there is are

XX% U.S. importantly such can we going it XX% into see increase, I on depends it will might’ve get that the and that. the approval to more outside do And certainly think And going we that we into lasers saturation forgotten really do I and States forward continue However, third clearance the XX%s. question. to sorry, Ryan, of your when the that United I’m

No I problem. at Yes. threw I lot you, a apologize.

the Just see utilizing we do that to how and you’re to are increases how where spend cash recent that, cash? infusion in you expect work, putting

can I that. answer some Ryan, of So

looking definitely scale the are field organization. We to up

sort several us. marketing we’re so we are digital is looking have of working and for digital customers sales efforts well in And of – inside where contact areas the with our

see expansion as that to the in some we relates in would and And so and sales where I reps. service some think in application sales regard field training to would in add we’ll continue field it specialists our

will business we’re side, on are more then at astigmatism bringing growing solid growing and more the versatile and I since be in other and think users and number the instituting management development a areas practice connectivity side support competitive And level lot procedures. us see you’ll order on so patient management to we the of that astigmatism the education the programs on

been been inventory we organization, brought May pandemic million, We’ve we us we with supply. some that in for supply a and the that in $XX million you’ve sure that allows continuous in, about really of the Ryan, financing in make chain following talking kind while. invest invest to a us to for have commercial And time. the $XX things And delayed with

up that sure meet That’s probably exacerbated see little have United bit significantly. our production when chain especially and just gone of outside States. in we to we the making inventory ability a have demand approvals the to marketplace, keep is it that design, the balances supply because get by you our And

investments potentially make So and already financed inventory. of our we’ve bit to going been little those and have regards we’re to delayed in a made about some now we’re those talking or that

a color. I really nice guys. Congrats appreciate the quarter, on

Ryan. Thanks,

Ryan. Thanks,

further now are Nick closing There at to call remarks. you. Thank this questions hand I’ll time. back the no over for

call doing and progress further joining we Thank really obviously today. about remainder you. continuing in to of and the as you our today LENSAR, XXXX. to forward Thanks Thank what all interest make look exciting for call we excited for continued in you update we’re joining the your

all you. has and the now gentlemen, you for Thank joining. conference ended. Ladies Thank

You may all disconnect.