SANUWAVE Health (SNWV) 10 Nov 232023 Q3 Earnings call transcript

Greetings. Welcome to SANUWAVE announces third quarter results. [Operator Instructions] Please note this conference is being recorded. At this time, I'll turn the conference over to Morgan Frank, Chairman and CEO of SANUWAVE. Morgan, you may begin.

Thank you. to Third welcome Call. XXXX and morning, San Quarter Wave's Earnings Good

our is XX-Q SEC the the issued release with the filed Investors this presentation, night along Our to with presentation. earnings section. Thursday Please was those website on available our and refer our morning, updated in which during was

Q&A. on Tim this and to EVP Sales. After Hendricks, presentation, call this will Head are the Rinow, Tony call me our Joining our and open we CFO; of up

we start contain which are statements affect statements performance future to obligation Before description control. A other me and future disclaimer. differ the forward-looking activities. The projected are This expectations in beyond risks uncertainties, no such involve of factors relating company financial business and forward-looking uncertainties filings. statement. statements. forward-looking let the customary from any many for those Investors production results cautioned our begin, that with statements constraints, in results and these of ability guarantees results call the included forward-looking future statements Actual that not and of plans development undertakes company's to to forward-looking could and any may financial as materially are risks may is such

our GAAP third reminder, quarter XX-Q. today and a Form found discussion measures. our our non-GAAP filed recently As non-GAAP will be Reconciliations between include in results can

SANUWAVE of on Okay. With number for that behind the quarter was us, internally. busy QX factors a

both me, to impeding planning terms sick no management really management. In of production believe starting manufacturing. with great more hires, structure and is been been gotten more faster constraints that pay bit of some collaborate allowed operational sick model led have progress sure expense and we of many Our significant dividends have and effectively, cash has a move this business I'm a growth. hearing us to and our to you deal about of of that in move management and and the one a management this has development And conjunction flatter has have. of information this key in terms to to and in the

really I'm QX to had the in the of quarter sold having to these the in towards sell major of elimination XX that tell saw were And steps achieved you month limitations. UltraMIST so to And able only pleased units be entire July. the X despite

the Our to current were is stabilized reached has manufacturing cadence year. we half first This in many the double-digit and figure hit rate struggling week. that a of in months per full a

inventory sell some constraint, think ideas our falls as can we revenue predictable serve model revenue streams customers. our our that better away As produce to penetration primary we've new market exploring increase and that been business

and to customers ask to able goal down sort what is told what sit that into needed. to of to next out the And UltraMIST Our them operating budgets. and their would their capital they like be of budget get is they us really they

workshopping the and model/RTO which us applicators avoid rather operating the the to to the bear to would still into payment an initial as cost view customer and allow payment. capital undue a systems company significant customer does large of in rapid a SANUWAVE captive the our financing can number this placing customer us they cost. From something to name. with generates funds the XX of increased this UltraMIST just we're has to to to balance to support This the the customer. will the stress applicators any of the develop arm, the would so shift but than cash the in outlay led end the this last growth predictable program period, easy that here, model. not shipping We're as other bundle sort X- to of trial consume And is systems XX-month and recurring own allows But period, gist UltraMIST into without just the thus akin sheet. At X revenue side, and extended placed that an will were first monthly on we But agree outright week. flow literally capital operating of customer a that amounts device and the that pleased the this to field say to

here recognized And ratably be big in it bit not, a cases, little reduce sides. may as but most So and revenues the sale win cash more patients for course, more of medium-term this as in acceleration business is, whole rather one goal. which applicator a more the will primary units getting collected. as near-term while SANUWAVE's The feels means growth upfront the like more consumption, users, effects both of is are a likely field

the represents the on discussed associated the model. our last call, consumables ongoing with use we of As core the business revenue recurring we're business in and

Toni aligned numbers. feels pursue and going we're goals really to to rapid profitable QX direction. I'm our continue starting everything right we're in move deal like manufacturing and walk and our associated extra showed key turn call ramp-up M&A you despite increasingly now the our to QX Sweat like over to the through It getting with to with growth, here progress significant Partners. the We some costs of some Equity

compared Revenue X percentage million for $XX.X period margin XXXX. Gross range XX, period increase Thank above last the totaled XX% an This the months September pre-announcement. of XXXX. same ended you, within as for million, same XX% period million, million range as the the from totaled XXXX, the to of for to $X.X September growth falls last of for as XX, for our XX% and of year. Morgan. versus provided from of X $XX.X October to amounted September of an to a XX% same XX% Revenue guidance months XX, XX% the ended slightly the compared month revenue ended the $X the increase quarter the

primarily compared amounted back versus to expense with gross million for loss variability of indicating months totaled gross the totaled X ended year, amount the expenses the September same loss the the of profitability. months XXXX. In for For of XXXX, an XX, million, assets September $X.X cost versus continued $X.X the of expense was for through XX% loss $XX.X the increase $X.X XXXX. Operating September September in operating $X.X to timing current XXXX, million to million in losses last expenses as its continued period million operations net the XX, which September million loss XX, of to product net change of $X.X fair continues as shows financial XX, and our approximately aligns proceeds around reasonable improvement contributes Morgan. to and period million lumpiness. Operating volatility for December in $X.X growth XX, amounted million additional of profitability ended XX% $X.X same September intended million, the specifically and same derivative $X a a manage XX, SANUWAVE, our towards on for Morgan. to compared XXXX, Net which XX, EBITDA expense July margin our company our profit transferring closed negative with cost believe year, months of liabilities, as value expenses. decrease spend the $X Total support continued XX, for to due to management $X.X an which for X XXXX. September X and of cash $XX.X million months X September to same the of support is now effectiveness which X strategy I'm net is the million, volatility receiving period, million million the for initiative improved transferring improvement we ended back to which financing to compared totaled growth. We months and XXXX, million, versus I'm $X.X initiatives. SANUWAVE of operational to manage $X.X negative execute an X for with Morgan? ended ended you last for to was period and noncash totaling was the months ended XX, which million, last thank improve from The operating XXXX, and some period loss. Adjusted year. drive $X.X

Thanks, Toni.

next will going development to current is Hendricks, and be provide who market sales an Tim overview of opportunities. So up

Everyone, we the the I you from come with efforts, morning. related up we third efforts quarter to efforts. notable unwavering share is progress to the wounds commitment XXXX, to share to treat would pleasure to Good so my close as and Great. as it's more an to our X make patients help in drive holiday clinicians our that suffering continue sales season, and chronic items like these organization these

fact that offices, were wound hospitals customers than locations. effect results UltraMIST those our that and The on long-term and systems is with XX of sold to utilizing some amplified through be to expansion in key mobile the QX performance a care of results. UltraMIST customers development now to First will who of that markets by consistently Growth new indicator team many is facilities patients new of systems XX% new or obvious practices, in greater key scores beyond. will business our and and my benefit focused XXXX

trend progress like acceptable next and I'd throughout of disposable. for continue number should already year. several and made. year. three, capital made, has responded a echo this first field equipment quarters. Number Morgan's hires be reference pricing pricing us about and significant and This the comments with throughout the are to half market that has been the over begun what levels the has made instituted single-use commercial to item this of like have The I'd next the reasonable Second and team but will been is more has Significant key that shown both discipline the sale

goal for to item place the levels with units. goes the looking heard well, be valuation from us fourth trials My will about, we'd practices, units final allow too, improved a inventory to you strategically. which trial is continue multiple purchase and is The into if springboard to individual to today the place

on mix create high that practices in utilization the X on a with to Overall, to can increase with support funnel or those robust sales of and flexible of midsize good smaller, channel. we're undue generate any focus customers rates and new and growth dependence going busy customer customers without to larger engage a our a

that, I'll Morgan. back over it with So to turn

Tim. Thanks,

UltraMIST we to quarter due key then field, previously XX% year-on-year from an active in quarter. got XXX the to Overall, in up September, That systems which with grew revenues at quarter excess the us XX% the is XX% I quarter. We QX. in supply of August X system number sequentially. end as the XXX the So rose to quarter. I'd increase sold but off ended mentioned, in only what sales XX% July like for in and metrics of start slow this the with the few got in to in hit constraints, guess, XX% a to for a on

us job is up revenue couple overall may nobody's ratios a to constituted the our Our with UltraMIST of company play more number extremely merger in XX% committed is company in to the are any can is internal It systems here, excited capital not year. of the is similarly for -- become they long quarter wound we with of over excited financial a capability table. higher and to going on you XX% razor-razor but figure while enhanced pleased lot done of and ripping last sale. Partners the pulsar place QX model as Equity the be sound and XX% move job the from revenues medium growth of we're is next grew This business the is both make own And off And principles how also sports not bunch aphorisms the the we this the of we change bring available quarter. This to destiny. we consumables we the really skate be a our which third the see this our -- offense, luck, a create on that and and will real where we can, to versus we of prospect We're UltraMIST classic sort choppiness the of is rapid we're will quarters to the aim footing with. to term structure. We puck, what the And until allow some see the immense. We're have such the for remain care. the that consumables blade a in appeal is progress, trend and for profitable valued kind as Nasdaq we're at to going begin Sweat capital over done. about and how puck and of own for focusing to that our control risk to of

the company XX% anticipates in guidance. range QX in to XXXX. the XX% quarter to versus revenue growth The Moving December

but partners production We to a recognition, meaningful addition ramp-up sales constraints the difficult are the anticipating for and new not little any quarter, of out the revenue model of it's spread the capacity potential in new predict. with salespeople and volume a

So like a us prudent this for to here. seems range use

open a there's part Operator, it. With change really to ground. starting to up. the up opportunity all just here, I their questions. but we're of faith efforts and you And chew and make their be sense key to ahead up pleased think becoming look, an proud of It's both some to want whole here, to of for to could for the and of if am I'm the palpable. for So happen. And company that, sense progress exciting the team that this going this I SANUWAVE is time thank take lot floor road I really and just the to that

first Our line comes Instructions] Hanser KESTREL. with [Operator question from of Albert the

see Congratulations progress. on and Exciting the communication. appreciate to

a what just you of the kind will like on Can dermaPACE touch and and kind lot is look of placement of about state and talk growth that You forward? of going UltraMIST. and success dermaPACE

Thanks, Sure. appreciate question. the I Albert.

which in could much bit So it's of looking that in involved in in as dermaPACE some couple of and to require product. of get harder -- are fruit to applications. on We're just number that would also cash work. of assessments take I think longer-term terms nationwide looking well, X was want figuring as don't are data It's a kind generate that there of a think are directions sort slow really of we're general, we the our to long-term don't particular, our In of attractive likely which codes. of which And bear at that ones some at sort have dermaPACE rationally and little particularly reimbursement pay require don't studies our making that applications we always -- we're various not. We're U.S. channels our in a channels that I you international some out -- the products -- looking with studies support a in reimbursement it's with the and QX.

UltraMIST not the dermaPACE what or having a UltraMIST, And of a a there. opportunities sense bit are getting we're rethink And so on the opportunities longer-term there. what term on are it's immediate and of

a So think some to unsatisfyingly I little I realize so quarter that's and probably with a come concrete or bit that, be able vague, but plans. give back we'll us on more

[Operator And with from Andrew Overall Davis is question our next Capital. Instructions]

on update is merger us side? and when give the we're the you if the other of a any vote approval specifics Could quick exactly significant hurdles the seeing on

to. happy I'm Sure.

Friday. many we filed as you S-X amended So of likely saw, last our

first draft that So was comments to on in SEC's our of response the S-X.

So at the their in is point, back this court. ball

is again on are, -- get those shot trying predictability. a have typical. And which of comments -- think we probably in I response closed matters they when some reasonable control, get year. them and always deal hopefully, pretty these to time a frame, good expecting and the we back are But on at limits out pretty there's your obviously, of are this and fairly hopefully, straightforward comments of presuming some to can are We round a another based

pipe having of yet. we're million sitting terms side that rest we're The pretty become then -- the remaining million targeting committed, the good the raise in finishing warrants to the votes, on the the the exchange of not and started reaching financing, public rest on approximately at the of the closing actually capital issues side. we're we're In $X $XX of of conditions, our SPAC deal,

I striking we're So that. reasonable think in on distance

year. try And to so get this I to mean this very hard we're going deal closed

But Great. their se like you've end? about base, their locked up so not of on it mean, you're yes, per I worried most shareholder vote the sounds

this. I their doesn't so. think -- don't holders any very I our holders reason they suspect very supportive. to to side don't have that do I seem supportive, want mean seem either -- they're

the with of Asset Christopher is Management. Our line next from Davis question Founding

and the the question team, devices the going going forward, be My to the around applicators. and progress. for for Morgan was capacity congratulations both

or Sure. good double-digit the point call, quarter shape on no next should a I earlier And should a mentioned our -- The up so. in making cadence we the weekly we've -- as that systems. where plan, pretty us reached to think think we're take a on put for I that

what we year expand we projecting Xx the the will XXXX, Xx Like including XXXX. more on a rise we on as sort forward manufacturable. that paying was capacity think of minor to side, lifeblood great to I need look to work a of in are will -- we're to production plans And we're next great have we're redesign with applicator systems something to attention of meaningfully The capacity what including it the of there, doing to order a -- on to start company. these applicator to have aiming it to are obviously, that. deal up some keep a deal underway on the on be make demand. And the the we

that great by capacity units so taking complicated could of of out some free the steps And together. deal putting simply a the up

a the systems So work feet both him quarter and just and ton like and progress applicators. of on both jump we're feels in having this, it hired made during to Andrew get Walco on on had right with really we've

I bring meaningfully actually next ability up about so And there capacity year. really our feel really to good

Will side at point? either in-house some you bring

access We supply chain $XXX do that stand than this It's X. year different we or in-house. of at And plans than happening this something, revenue be of if we we to we equation. more work. like this I lot It's that next and I lines think lot better in say, better we million have have supply a we of have up. ever who to at or time. and great could to just were be honestly, would. I and see $XXX It's and that cheaply look, the doing partners always that may don't well a a obviously, don't might do or able look bring would million something who consider mean, But really any

the our turn question-and-answer the this At of remarks. floor time, end Instructions] [Operator I'll closing for we've to session. management reached

everyone we look much, time quarter. Thank speaking to next making and forward I you this very you and morning, Thanks. the appreciate to again

will today's Thank you. conclude This conference.

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