ReShape Lifesciences (RSLS) 18 May 212021 Q1 Earnings call transcript

Good morning, and thank you for joining the first quarter 2021 ReShape Life Sciences Earnings Webinar. I'm pleased to be joined by Bart Bandy, Chief Executive Officer of ReShape Lifesciences Inc., who will provide an overview of the company's recent activities and business highlights for the first quarter of 2021. Tom Stankovich, Chief Financial Officer of ReShape, will then review the financial results for the first quarter and then turn the call back over to Bart to finish.

As a reminder, this conference call as well as ReShape Lifesciences' SEC filings and website at www.reshapelifesciences.com, including the Investor Information section of the website, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those discussed due to known and unknown risks, uncertainties and other factors. factors and with described Commission, in the factors as risks the fully including our additional report yesterday. identified filings annual Form company's Securities risk was quarterly and report uncertainties XX-K XX-Q more are in those on on These Form our that and filed in and Exchange

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everyone, morning, Good Thanks, you today. thank James. joining us and for

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momentum. I'd much financial are over continuing for Tom XXXX to like to fully committed company, now results. to a turn a from our detailed as call the stronger We emerging

Thanks, Bart, to and good morning everyone.

be to First quarter encouraging to same XXXX of proved last time year. the compared as

XX%. international The XX.X% revenues increase. partially a due offset U.S. months by The XXXX, representing sales, and the March of $X.X a international This margin gross of is marketing gross compared X in X ended stems of ended March $XXX,XXX increased quarter to quarter million primarily XXXX. Sales compared XX, lower million quarter million XXXX, for March the resulting the greater pandemic. We and XX, to greater X sales. Total by of expenses million in million sales volume, regions of were first million reduction from million of a XX% domestic compared several a $X.X sales increase decrease heavily first decrease with profit than $X.X higher XXXX, at X months ended $X.X $X.X XXXX, consulting COVID-XX margin operating for expenses a the as of revenues $X.X to reported and the gross payroll-related months by the for expenses March to was higher XX, improved to expenses For XX, was product gross profit March decreased representing gross the of $X.X ended from historically fees. margin in mix to as have we affected attributed of reported X XXXX $X.X XX, and XXXX, lower in to months which $X.X for million ended first months overhead a compared the the XXXX. as million margin

return amongst with amortization XX, $X.X due depreciation The X of to the absence a XX, impact on months $XXX,XXX expenses adjusted ended first a for legal slowdown Vest less consulting, improved were with of development The pandemic. On trials by extinguishment was months ReShape in As the of months March and and the $X.X ended clinical loss million for EBITDA loss improvement option quarter million other the the bad gross collections compared the was related increase debt and $X.X Obalon due profit March marketing increase the March and million for compared operating audit, of and X for decrease and related remainder decrease COVID-XX professional XX, for the a including on million XX, months XXXX. primarily XXXX. tapping X potential XXXX primarily due further addition grants, travel the the was ended debt, XXXX. the for $XXX,XXX expenditure margins. $X.X $X.X we March to This XX, of X of was of ended our of into for to expense, and reduced expenses to $X.X and for our offset to which COVID-XX. interest were ended focus EBITDA administrative to the services adjusted positive March expect non-GAAP market, to was proposed the advertising we and This the of stock things, improved expenses million months merger. Research XXXX same result the center compared expense basis, weight million X an primarily an loss reduced in XXXX strong XXXX. General the

Turning to balance sheet. the

and cash cash XX, As cash the $X.X and of company's million. totaled March XXXX, equivalents restricted

cost burn and January as institutional to decreasing at line increasing To monthly any and focus on obtained for an investor, continue we our cash monitor time. successfully to with potential note, of is XXXX, reductions. spend which million a we ReShape $XX We accessible credit in revenues our operations

this draw on facility. of have a as of this the end made However, we quarter, past credit not

at reflected received full our we sheet which March loan, balance we XX, received Additionally, XXXX, which during XXXX. have of in is forgiveness our PPP

are our expenses mentioned operational As with runway. cash earnings extend on on previous burn we track to announcements, our reduced and our

expenses to turn that, growing back the monitoring operations. With continue We to operating Bart. prioritize call will will also over to revenues while improve I overall

are we weight positioned well and to believe loss physician-led loss to We continue solutions. effective the with Tom. market weight Thanks, safe our penetrate

more confident value. are of our improve directly will base reaching we shareholder Additionally, that customer

an to increased constraints value progress, am continued at the pandemic, sustainable vision uplisting for Board of mission your greater to potential provide support investment forward of to the platform robust employees, interest I Our NASDAQ very our ReShape. develop shareholders Despite have for offer within business continued with investors, and and ReShape. Thank opportunity model and community customers of we and the and liquidity. our you the will pleased the