ReShape Lifesciences (RSLS) 15 Aug 242024 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the ReShape Lifesciences Second Quarter 2024 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Michael Miller, Rx Communications. Please go ahead.

you Earnings the Call. thank ReShape Quarter and Sciences Life afternoon, for Second joining XXXX Good Stankovich, I'm Paul Chief Tom Hickey, to President Financial pleased be and Executive joined Officer; today by Chief Officer. and Vyome upon joined between be the merger Chairman Gupta, Director be also will of Therapeutics, combined the by will company Management who the agreement completion a X Krishna current companies. of the of announced appointed previously

and Krishna on Tom quarter, each will an the Paul results company's update the Paul activities, remarks. review As after we do for will overview provide financial for the which and period, will his introduce

within As and meaning Securities Private as Reform website, a well of Information Act call information Litigation filings of the statements SEC Investor -- Lifesciences' website the reminder, including the conference section the as this XXXX. of ReShape forward-looking contains

Actual known to including with These are identified discussed Risk company's in in results and other Factors XX-K. those as from additional the recent unknown described risks differ could factors. those most Exchange Commission, and on uncertainties Securities and Form company's report and fully and uncertainties due annual factors materially more the the risks, filings

reminder, RSLS. trading on is stock the ticker under symbol As listed additional an ReShape NASDAQ,

I'll CEO Paul? Hickey, the over President now turn of to Paul call and ReShape Lifesciences.

of Mike, of XXXX. quarter second for you, for to joining call all and the for our you Thank thanks us earnings this afternoon

our the agreement. and ReShape's background NewCo take of As merger Vyome reviews an a Mike on some strategy to and financial activities closing moments following share the called the be and and Tom noted, performance, after provide of Holdings, Gupta few I announced the to update outline Krishna vision will overview

approach expenses the second subsequent has cost our on the continually lower plan, laser-focused operating Let's last to approximately our execute led activities We've first of disciplined compared XXXX leveraging for and revenues during overview of remained begin maintaining in resources year to to to quarter our XX% with order and the on stabilizing reduction period. half an which year.

gross our detail margin adoption sales cost of from As resulting a Tom will reductions the later with call. lower profit even these stabilized we result, widespread in this have GLP-Xs.

addition in these our including drivers, Lap-Band activities growth commercial launch continue lead-generation tune to fine In our physician-led invest our to and we redesigned Flex. the X.X reductions, of

are that We in will the our to and limited and support data currently an metrics last used release commercial widespread of be phase anticipated gathering launch. market

the Series successfully Therapeutics their earnings in Most detail notably, with asset little purchase successfully value we C in we our the well are All coordinated I later potential. the as Vyome call. this things maximizing to stockholder negotiated and both with substantially bit shareholders as feel transaction a and considered, merger July, concurrent with we preference. lower agreement agreement will Biorad liquidation

Obesity that, with touch for strategies do sustainable I'd treatment Before dealing has individuals and GLP-X market. I benefited advantages obesity with diabetes on considerable weight a like to achieve complex, the also that is receptor lifelong disease have to obesity. X provided individualized agonists type individuals loss. requires

based And next-generation is believe FLEX. X.X this tolerability over Lap-Band on with the Lap-Band However, real-world, opportunity especially the we launched increase newly low. market long-term time, for the GLP-Xs that for evidence, will

to the Lap-Band. focus market X.X the patient increase. reductions our our time interim, been the and especially experience us professionals, And surgeons we you around was number usage. which to and agonist to the help of improve medical of Lap-Band of obesity allowed while of current optimize bariatric medical over commercialization the on that the has aware, most created have seeking will our the cost As of are adoption receptor people stigma intervention FLEX, In by GLP-X to continue normalized believe continuing

and is has co-op marketing initial nearing market to our receiving the limited been of while positive. this, traffic, effective key exceptionally our program very X.X FLEX proven centers. is friendly well, surgeon patient meaningful release and website feedback going has Lap-Band The and completion Lap-Band Added with is scalable

agreement, December a the high-priority you As process. having of exclusive most know, recent we it in synergistic acquisition beginning assist conducted engaged in Group year, as LLC merger last search and to of merger Maxim basis on relates an to opportunities for this

strategic entity the the a formed with acquisition To opportunity discussions merger We that sale to a candidates, believe extensive of this merger. Directors of of options our number recommended an the evaluation the asset for significant following potential concurrent with Board other shareholders and capitalize merger Biorad. end, on engaging Vyome with presents potential our post multiple of newly and along unanimously to

in Balloon previously the pay Diabetes down Bloc-Stim us license cash with Neuromodulation the Gastric System. exclusive are System the our We partner assets to including for system, Vyome Balloon an our most As to reported, believe Obalon allow $X.XX This Lap-Band and the for million transaction. they Biorad synergistic purchase to, costs will Obalon Gastric agreement our associated asset sell has system.

our bring cost Notably, reduction able shareholders. we the value our disciplined plan to are facilitated to

merger. express gratitude for substantially liquidation preference, the their to Series common Additionally, lower potential to thereby recognize stockholders enabling like our to willingness I to their value of our would our stockholders C the preferred

from I'm shareholder later Krishna these call. information value resulting transaction will on and more detail growth excited potential on this very transactions. the the about Vyome

now to the financial turn to Stankovich over our Tom of to provide a Tom? call I'd like performance. recap

all joining webcast Thanks, this once you for thank Paul. our again, And afternoon.

items XXXX. reduction of achieved of comparable period response the company in than our cost last compared in operating to plan various months on All earlier, year. GLP-Xs, within year. approach maintained expense the expenses first mentioned and have Paul costs for adoption to X XX% short-term are line we XXXX the for we our period our reduction disciplined the reorganized have and prior lower operating With the impact overall same in As reductions, executing a the cost

metrics our GLP-Xs. lower the margins key with financials and XX-Q. of available for sales take ended moments release Additionally, financial our I is few months press quarter a even due the in we our of the gross XX, X increased second and to adoption and to will XXXX. just June discussion have full stabilized profit review A

revenue $X represents XXXX, June ended same period Our for in XXXX. XXXX. totaled which XXXX, and million million the for a XX, June X of reduction XX, same in to $X.X a X $XXX,XXX the ended Revenue totaled the reduction to compared of months period the represents $XXX,XXX compared months

profit $X.X volume, in The GLP-X XXXX. The which below profit the of X XXXX, million, respectively. ended X XX% decrease the X same for ended for percentage for June primarily period revenue due due ended and XXXX XXXX. $X.X June was for to million to XX% a XXXX, as in compared and total in same was profit to period months and pharmaceuticals. XX, reason sales months slightly is increased gross Gross XX, XXXX, the months is June million for was to XX, $X.X $X.X Gross the the a million

in XX, in increase reduction costs, total had compared million for profit marketing the X June the in to million XX% the ended gross compared million X payroll the to same same decreased Gross months late ended revenue in period to a XXXX. in in June to in XXXX. the $X.X to percentage company for period for decreased increased XXXX Sales June for expenses expenses XXXX, X profit to and XXXX. XX% for million or gross $X.X Sales marketing XXXX. ended as $X.X XX, XX, primarily by XXXX, the $X.X and $XXX,XXX the a $X.X months reduction overhead as employees of due period by related months The margin, is percentage for same the million compared

a in marketing attributable including its services marketing a periods marketing as The and professional and moved of reduction marketing costs. resulting the campaign, a were decrease ended X- advertising targeted the to company in decreases and approach consulting has and digital X-month to spending, primarily reevaluated in

and in reductions reductions there payroll-related and travel. including in Additionally, expenditures, were commissions related personnel sales

months in XXXX and in in as for million General and the XXXX months XXXX. company expenses moved for the payroll-related by both the XX, its levels X decline of X X and same million to the smaller rent reduce period and by to ended million decreased The June June million in a is staffing $X professional reduction compared and expenditures, facility to to to compared administrative at a expenses quarter headquarters approximately of $XXX,XXX due XXXX. X of end decrease $X.X fees. a the second months $X.X same administrative expense in to to for XXXX, costs $X.X reduction in ended the XX, period $X.X a approximately million General the for XXXX, decreased

year. $XXX,XXX XXXX, compared by Research to approximately the X Research in months X preserve and $X the decrease cash. work in prior months paused trial as year. $XXX,XXX XXXX, decreased to to consulting in the to development period June a is company and clinical to development prior reduction the ended to XX, for for compared primary $XXX,XXX expenses for by same the period for trials same ended $XXX,XXX clinical $XXX,XXX million the The the reason the has decreased June and due expenses XX, for

compared X Non-GAAP June year. was XX, period the in million loss months of for adjusted ended to the same $X.X million XXXX, $X.X EBITDA loss last a

continued last reductions overall primarily loss the cash XXXX, net cash million cash capital remain costs. free X primarily are $X.X Both working quarter to restricted and and million, reduce sheet. with balance efforts the our in our as due million equivalents, to June we We approximately XX, compared For ended the of million, ended was $X.X EBITDA $X.X on the adjusted period to including months due $X.X totaling to debt same year.

Paul. call With the that, back turn will now to over I

will excited merger of Krishna Thanks, Chairman future. be vision outline company Tom. post this Vyome Krishna? to strategy time, Gupta, who At opportunity to the and have introduce the to for the combined the I'm

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this you focused want forward for ReShape's call on with expectations to model all wish shareholders. India very Independence we and your shareholder vote maximize Vyome aligned to happy are future, We and So for agreement. our updates providing advance a flawlessly ensure executed the to closing, I'm you help excited for you merger and Holdings to I Day. of in in in look support disciplined we feel value. business we with a like shareholder Thank

With would to like that, call Paul. turn to the I back

Krishna. Thanks,

generally the more and deliver our are asset detail an will the the the shareholder agreement, We approval we will to the a as merger shareholders enthusiastic in S-X the which include be transactions. for are proxy result of registration to of a by agreement, in and about statement described a asset purchase of statement. purchase poised related meeting benefits holding merger followed to That

as asset I'd for call Vyome Board the discuss like to for want to with I'd Gap] gratitude Krishna that our reiterate the express our concurrent Therapeutics. also sale to again the Vyome joining like to recommended unanimously I to prospects of employees, always, [Audio Directors to And with exciting Biorad. my merger thank along today Board the

conference. This the your program. for you today's participation Thank in does conclude

may great disconnect. Everyone, a day. You have now