Acutus Medical (AFIB) 17 Mar 232022 Q4 Earnings call transcript

Thank you for standing by. Welcome to Acutus Medical's Fourth Quarter and Full Year 2022 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions].

to call like Corner, to now Relations. Investor would hand over the Caroline I ahead. go Please

operator. you, call. earnings Acutus' Thank to Welcome fourth quarter XXXX

me Financial is and Joining call Chief today's Officer; Executive David Takeo Officer. Roman, Chief Mukai, on

most attached statements results an filed including This SEC, that made the under in and Act Securities differ of more discussed the should section to Private XX-K. of the call this forward-looking factors considered recent section include risk may that SEC the Acutus' the call statements. the All to the are in relate X-K Litigation be statements filings historical forward-looking press Form to with under Acutus' forward-looking matters will these XXXX. within release statements meaning statements discussed Form in Factors detail of cause as the on Reform Acutus' also described today Factors do exhibit forward-looking from not fact Risk with in are

today's includes site, you Time. which are results. and under will site www.acutusmedical.com PM site statements no Any applicable Pacific with the Acutus' available undertakes Acutus' Investors A performance, by be expectations Acutus Acutus today. provided for Acutus' these by SEC filings, XXXX except release quarter Web as available encouraged of additional financial is law. Acutus results the Web of as on also recording future press including about are details call section on statements, required based The projections X.XX to review. fourth management's forward-looking on update has obligation this Acutus the Web to call, during

over to like I'd the to Now David. turn call

everyone. good and afternoon, Caroline, you, Thank

exciting Acutus' call, patient to share to milestone jumping into transform I wanted Before in today's care. mission an

globally. Just patient last with we X,XXX crossed AcQMap treated our month,

life. lives our no positively that to patients to the than technology as reward continue can, seeing there's for greater impact and no a EP company come other in company ways us of We

on course quality patients focus are complex another for when need patient materially proud seeing therapy life change procedure. redo are personal the number our of of am significant. whom all With and reduces and burdens for humbled AcQMap societal, management improves guided disease growing AcQMap treating to hear of and the we the I cases, a care for

I'd to like our a XXXX into and to support of and is and beyond, that well as through moment from and our the day. This my the spirit to recognize colleagues each return take physician execution. commitment our putting us extraordinary ongoing partners as also business Acutus for the into we carry accelerated action engagement every will innovation mission as growth

Starting recent excellence. updates, that to imperatives are operational and on call, we've our making driving first with and key for priority to November utilization Turning our we business drive utilization and two presented our strategic our progress on adoption good performance AcQMap.

execute utilization with strategy to growth on commercial the intensified focus continue our We base. over volume expanding installed procedure and

in base ended utilization-related down the XXXX, While all growth our drove we installed metrics. versus year

procedure per AcQMap our XXXX, increased to in revenue these ability deliver metrics in strength year currency. performance procedure commercial business reflect console volumes core XX%, XX% XX% growth give grew full and utilization the increased and beyond. in confidence and constant XXXX us For Overall, our

position objectives geared growth our Further to our strengthening pipeline expanding both achieving and our is product that opportunity. is to our addressable

procedures. AcQMap today in is redo previously, regularly discussed have most we As used

of redo procedures Specifically, and OUS come cases. of XX% XX% U.S. about from

ablation the underscore utilization offer. the differentiation AcQMap clinical proposition portion in total segments. same the a these represent only these and At we has value results segments our time, in and clear procedure procedures of these complex sustained categories

this the and the billion billion X.X $X addressable billion billion AF which our opportunity into in to transient range, expand XXXX that to incrementally includes cover with XXXX, market we core expect leads coming to atrial in $XXX an that tachycardias and in estimate, estimate additional XXXX. we for $X.X balance all of procedures, AcQMap approach million redo view XXXX flutter. $X Today, is our about in to By atypical

In for billion AcQMap revenue and brings estimates. to market market on $X this addressable approximately aggregate, procedures the based disposable XXX,XXX trailing in

new XX%, Assuming software, to The center will sustained and disposables. innovations algorithm our billion market key growth around likely of exceed required including $X opportunity by development XXXX. largely enter categories

and over resources significant next our launches and and In a development. to product each These team in prioritize we year, undertook software expect to our cadence and of growing the headcount two XXXX decided year expect several of leadership roadmap disposables. XXXX, strategic years. are areas steady for redirect this software a Earlier assessment we launches are two R&D and have catheter to where both

The Catheter introduction Ablation X sequence Force of efficiency localization, AcQBlate catheter procedural launches significant our U.S. followed with of our flexibility. platform, to Sensing software is X and AcQMap designed starts be will AcQMap to improvements by which make System. workflow and

in of profile XXXX presented we the event. AcQMap X Introducing among with Clinical efficacy the adverse strong the of Data Trials for AF zero XX% as part primary efficacy drivers endpoint Symposium improved the are success demonstrated an with of session revenue Late-Breaking at and our primary performance. excellent expectation AcQBlate safety

XX next of position system by across stand-alone XX to forward revamped our software broader our procedures. one us platform will target roadmap about a be year. AcQMap XXXX, to AcQMap a Moving major pulls spectrum

key of contact session. forward broader solution. non-contact step in mapping Specifically, This AcQMap to physicians workflow a is and differentiated adoption enable a barriers the to with major standard eliminating mapping and our practice aligning perform our of single in XX will one

of ablation improved profile. handling with to X.X our a goods and lower in AcQBlate expect we bidirectional next XXXX, cost catheter steering generation launch capabilities, Later

the In addition new to our will critical be AcQMap to pipeline, product research. adoption additional clinical of

at patients data year, have freedom year. UNCOVER in several build XX.X% publications we and showed this of course of the to one plans the that AF study on Over release that AF from presentations persistent

relative systems success we rates the sharing year most the persistent throughout with improved clinical As in study the a data conventional to XX.X% XX% meaningful to one research have UNCOVER gathered to the we year. AcQMap studies reminder, range. benchmark, Data look AF and outcomes for landmark AF forward XX% show additional show treatment in of

to our strengthen financial to gears efforts Switching our performance.

We continue level and recorded operating our expenses XX% progress XXXX since QX and significant during and lowest make to year-over-year burn of of declines with XX%, IPO respectively. cash

more of gross improvement. basis, burn Takeo ongoing reflects least a We and program, cash expect benefits This will nine at call. the and expense in our later of in the these discuss XXXX. on disciplined our expenses to margin the decline continue operating to for months management first restructuring year-over-year detail operating dynamics

to financial portfolio our the progressing restructuring to our strengthen internal the transition addition to is In of Medtronic position, left-heart well. access

eligible are and revenue We earn-out milestones have of base achieved from February starting uncapped to the years four under year. receive all of earn-out agreement now this

the sales a are years. of XX% net As year, in the sales first the and of sales year, XXX% for fourth and third second XX% of in earn-outs reminder, in the

XXXX transition strong Putting reset and this R&D focus we our priorities, strategic all where together, our year a a operating is programs foundation. establish

for maximize stronger our us our XXXX business business all will When this and stakeholders. even improvement for value combined performance operational to allow XXXX. us We to in trajectory the see initiatives, well improvements position with progressive in and future expect

session. to to the will Takeo. call I'd these cover And now I of over more our topics be happy Q&A any turn during in detail

Thank you, good everyone. afternoon, David, and

will results fourth review outlook provide and today, as remarks as During my for our well full I our quarter year XXXX. XXXX

our quarter, with quarter, net $X.X level highest For as XXXX sales record. compared million the quarterly million year ago fourth $X we revenue on closed fourth of to in the of

increases associated higher both capital by service The XX% year-over-year other modest AcQMap through organically with agreement left-heart increase Medtronic sales and revenue. growth with primarily was in a and volumes, procedure disposable driven distribution and in access,

$X.X reduction year and net Balancing exchange $XX.X revenue to in these declines a service growth disposables factors the compared drove million X.X strong full to headwinds. strong was prior XXXX, million and our the year For execution other drive underlying procedure growth, in capital on strategy of million and foreign sales equipment which revenue. volume utilization in $XX.X attributable of in with million to year-over-year

We quarter. of globally, last an sequentially XX down in from installed up XX XX base ended quarter and the fourth ago XXXX with systems from year

moving throughout finished into XXXX. our We of accounts consoles mostly have higher value strategy

evaluate continuously optimizing that the base will console utilization we our we are and grow to our installed to in XXXX. expect We installed ensure globally base

$X.X global quarter in grew left-heart compared products. the ago of year the fourth AcQMap commercial quarter million in fourth revenue X% and growth Disposables to by XX% access procedures driven

on XX% growth XX%, year-over-year full disposables in exchange, supported revenue basis and impact volumes. of by commercial excluding million of a X% AcQMap $XX.X the procedure reported For foreign advanced year, negative

in fourth compared the fourth revenue saw quarter, with quarter. revenue of $X.X capital We of to the ago year million stabilization $X.X million in

procedure revenue XX% $X.X declined our million utilization the and consistent year, and volume expectations capital million prioritization $X.X strategic XXXX. $X.X QX of was of revenue to from For $X.X Service growth. of XXXX, and slightly million other in with up full same-store million from

XXXX X.X specifically, we This the used respectively. had large negatively disruptions discussed other XXXX as procedures disruptions chain well impacted product call introducer that full emerged QX we fourth related on involving Supply Acutus of third $XXX,XXX bore is the AcQGuide all as sheath. quarter third by that through $XXX,XXX, estimate these XXXX continued and sales during quarter and and More the year sheath. to cases quarter electrophysiology mapping shortages MAX on our

and have we now secondary months. vendor sufficient and inventory particular remediation for of key ensure expedite qualified component have the To at for components supply, this a next XX least long-term

product. shortages that did experience a for components has AcQMap flagship our resolved several lost sole This backorder QX, in of situation. While production AcQGuide MAX weeks our resulted in we supplier we with in disruption created

margins impact shortfall supply bring AcQMap with our XXXX in six were in we third requisite teams in line a the expected where negative of to and and levels The inventory the negative days to negative registered and quarter in XXX% have XXXX working fourth from week now quarter are results of XXXX. compared production demand. of XX% favorable QX XXX% the current Non-GAAP improved QX production negatively gross and in-house the would

our manufacturing driven our the sequential offset in taken earlier restructuring non-GAAP gross and increases material in from higher variances, actions positive lower the all improvement and margins year-over-year helping was favorable year impact by The mix, in costs. volumes, raw

We expect improvement marked year to gross the to margins attention will to show our significant and XXXX. of continue for improving full dedicate

revenue in with ebb year, with sequentially drive a quarter improvements flow gross a quarter, margin the and As to will downtick the QX of overall of with our positive margin demonstrated gross XXXX rest first in will fourth through path the This volumes. and the by XXXX.

In several streams in-house. volumes improve a are efficiency our gross work underway yield year-over-year costs positive product select overhead pool, trajectory driving to processes in to to reduce drive bringing margins, in addition and

level lowest quarter discipline million XX% approximately quarterly a expenses were around and benefits the of $XX.X basis, On expenses down realized the non-GAAP management. the year, operating operating same as operating in IPO. we Non-GAAP last from continued X% expense down our sequential expenses fourth of since of period non-GAAP it's the XXXX, were

point, annualized operating million reference XX% compared fourth is As quarter a the $XX.X expenses non-GAAP down to XXXX. of

$XX.X the was Excluding compared per net of specified quarter items, net million non-GAAP XXXX million loss a $X.XX XXXX fourth or fourth non-GAAP of loss $X.XX our quarter $XX share. for of for to or the per share

cash cash Our restricted and cash balance total million. of the was at equivalents XXXX end $XX.X including

down down cash a retention year credit, milestone fourth basis. sequential million quarter, and prior on payments employee versus and excluding the XX% in was the burn, Our the $XX.X XX%

optimizing to our drive pleased continue are and in financial made intense have position. our reducing burn we with improvements quarterly We will on the focus cash

and we Closing hospital same volume, the supply to is revenue capital continued in spending, utilization see navigate last rest to year. our of but XXXX which intermittent our strong chain and XXXX, expenditure growth. procedure to we share strategy variability drive for case the of relatively of time, execution weak seasonality continue At with QX in disruption, outlook expect

expect the the to $XX For revenue million the continued to growth. of reflecting range year our from be $XX in trajectory we XXXX, full million, shift stabilization in to

expansion BIOTRONIK drivers in U.S. seasonality. in selected XX% base direct half, approximately XX% launch and XXXX Key and with we volumes and the Accordingly, XXXX second our expansion geographic normal our to include businesses, half half XXXX with second globally, the associated of the installed come in phasing underpinning full industry consistent the AcQBlate our and disposable of in procedure our year partner expect relatively sales first sales growth of in year AcQMap within outlook for the further

are actively these the sales reduce the to sales year-over-year modest of regards the expect of year. These $XXX,XXX. will the growth weighing first of the that XXXX, and growth In resolved show recoup prior first in aforementioned registered back we year The to expect being quarter to orders XXXX the to period. by are quarter balance AcQMap primary $X.X to compared factor in in issues sales million the $XXX,XXX on we

the As a stronger result, the nine growth in we of latter year-over-year year. months expect

our are we with pleased Overall, performance exiting XXXX.

strategic our your our imperatives in the up can return to continued laser business. XXXX, focused executing fundamentals business underlying are variables Strong accelerating years. staying on the interest we the with control We appreciate performance us into growth support. We to and set and outer in

now Q&A the session. to And back the our to turn call I will Operator? operator facilitate

[Operator Instructions].

Our first of comes BTIG. from question the Thibault of Marie line

Your question please, Marie.

Hi, portfolio yes, to the first the much access sales. burn, particular, taking a tell but what see XXXX us, progress you're to try assumed In Takeo. for could into I'd guidance would the wanted XXXX. the love and that left-heart really ask can question Thanks OpEx like to on understand you reduced on here trying and and incorporate not that. David to so much what's your in congrats and questions XX cash if XX Medtronic to range? how understand to I'm from sure see we I

Yes. to do them access Marie, owns to just Medtronic, make I appreciate left-heart sure similar page, BIOTRONIK. to we question, agreement sell In our Thanks the distribution Medtronic on very the the same the with we our and portfolio. comments. everyone's way it with for

them can't volume. what than been manufacture. lower agreement, price sales But we the selling is specifically considerably We end for We sell 'XXXX. would sell distribution We imagine, you the high had under expected a selling to pricing manufacturer. then as might users. In distribution primary at agreement. disclose which to transfer And higher are say the we it be as previously continue to their level, lower to product I the is offset where a they were by at that

primary what products access thought not from expected So distribution be left-heart was agreement Acutus the going manufacturer. sales for the it too under is we our under different to as

you're And then can and that in Thank impact ask if this to question good helpful. that a update, I that's to that. and a shortage here have point. your resolving you certainly AcQGuide this QX mind? working almost vendor Okay, Wondering on QX, is the backlog. going for guess, maybe We qualified at in hear I remedy MAX to are

from all Do that making And so think be should And would some you Thanks difference. sort get taking of QX just we of this be in to of up the for love resolved that. ahead QX? of will really some and QX, questions.

Sure.

AcQMap that the when the AcQGuide So In we hit in due quarter I first because incision. large and couldn't And to the order on a necessarily account prior we those quarter AcQGuide accelerator and quarter have fourth actually still in lost only. the mapping of in shortages, the MAX, every put were just product team about And were early back is this required it's where we back third sheaths the likely sales every into position to catheter. some customers on were the to procedure think for in new selling our it willing quarter perspective, openings. have restricted It we to shortages. MAX back and also to bore put AcQMap But a fourth who volumes version did prior on order, procedure AcQGuide to customers two go we the their product. probably did sale of MAX

of EP early That to below were we one used seeing last exiting and So this year. year other part converged slightly pretty product procedures. the this to in into and one heavily that obviously ratio

on the that customers. we through volumes our little to on ability think to the do were today. mostly not some earlier impact MAX a the based new there a open expect mentioned, be support to we procedure there carryover The quarter of product this second do to a bit restricting AcQGuide or and We I of effect balance accounts. certain with year, in dampening year be year last year, this sit I associated and that early as the degree there distribution where was So effect only from may direct is

them to momentum felt that in this the But don't significantly have be product. of So year. rest With early AcQMap, that will we first lost think us $XXX,XXX through year referenced in will respect to have I Takeo requisite an the to in the $XXX,XXX AcQMap. encouraging might the is QX. that impact the here around now impact in-house quarter. thing have the to materials The start manufacturing we raw

by be to again, that to existing through the able derivative sent would won't in the MAX, QX. resolved stocking say as catch on serve that six Our to fill and days they're open have necessary in as the expect accounts working that issue expect demand. as fill first and necessary on QX AcQGuide purchase of we we contracts that and new impact been manufactured BIOTRONIK's where with The most purchase commitment be week I of We to would customers manufacturing keeping would we quarterly quarter. open are open be those them and typical we on end are a teams smaller sterilization, the do is actually here largely by up time supply. similar doing ensure hand than to well orders orders quarter, inventory to distribute orders who to the second are our

and Thanks me. it. Got for could a ask follow Max for I clarifying And if up Map the the there.

reputation reputation to Just that sort in have from any whether understand Have these supply and be there way? this. some hesitant the back found users any Acutus' you guess could any issues, lingering long detected to damage? effects of come trying Just of you short of on of I are

soon who what inventory that that were I late supply looking redistribute it actively into starting on we saw the were We shelves were in We was some September-ish, proactive had accounts We not. to a is requirements. normal to accounts our actually this we're inventory and rates to that quick who started communicating to accounts we this going our of managing short-term customers. think had have those to as above very approach levels deemed from issue. in shortages. we back we as be did get buying the utilization very sense And So and with excess an who inventory be had their materialize,

in a the had had maximize inventory in to to customers very were they do the procedures. both inventory to for with collaborative way very hand in find proactive in the managing we inventory ability So our we our working as and as or that well shelves, be perform on nimble able to AcQMap either them everything

so Thanks back queue. helpful. much, I'll that's in Okay, David. jump

Thanks, Marie.

Thank you.

Our line next from question the of Kaczor Blair. comes Margaret William of

please, Margaret. Your question

going are best going cases commentary, afternoon, And just Good Hi. do questions. about a the your I launch? many Is AcQBlate the for going can, you to Sensing guess guidance unidirectional it that versus within And with should wanted guys. how device a to happen? release? that full wanting think bidirectional? it's or I wait we be to and start or to accounts taking I to general Catheter, think as as quickly FORCE How to whether how Thanks current just limited release guess of for use that you is want

Yes, Margaret. great it's a question,

improving use of So much physician into of way AcQBlate we think significantly first it of very AcQMap about is category and the the ease falls our launch experience.

significantly past Tacticath, integration XX to over what actually months better other DiamondTemp or was. with integrating the the so ablation made products, it ton catheters in Touch Medtronic’s is of than progress better a XX AcQMap Smart have with We

it able catheters market catheter we from AcQMap customers more facilitate ablation as well that able product able But really users around to with in Because ease this utilization. with basis. and the -- with response we products. of we get is we integrated be and from already the to physician and procedures especially “standalone use are to very often we but improving potential use new AcQMap integrated are want on position be do meaning the in an preference a this sort prospective you'll do using a of launch much is ablation interested a and way of the of have customers as to around product much position will on a being need very new in some Europe, what efficient the basis,” to to lot existing that's is However, hear me, good segmentation both accounts more, use more sense the that comment on this a excuse overall

we It's a at to As stable level. It you now not XXX% little Europe the and are AcQBlate. had a our launch at been see level. has stable XX% use installed very in procedures range bit do base we that at the in hovering pretty know, probably when XX% using of higher that was region. in smaller But

terms we market the totally pretty extended in States, to the full many is the us will would of market when sort likely subsequent because market have LMR limited is on some we it be would of a for somewhat launch, -- existing market new of The release outside to this we we commercially from we to with to period not targeted for release product be market. accelerated that quickly a of launch a release when time. we In look a product, new our typically users around limited move LMR, because this process an market of but isolated get probably accounts United reality

Okay.

you we're you're sure to make saying it. maybe sounds to just like repeat back So on But it I'll benefits. aligned it that three

certain cases get can't ease get for increase into today sales, utilization can of use you replacements see from obviously and more ASP getting contracts; for that issues. more system two, and I really pocket share; you greater the then you guess get three, one, So

matching if that that is all? is guidance, at two, one, So then correct? assumed And

Yes.

at end here. that things the I materialized high of well, the a would range respect what's communicating in the that's summary. us would above we're With very good guidance, say put three if think very of I that or So those to all

still approval we committee, guidance awaiting here the the to Given and a are taking cetera, to need in go that today. through contribution are et measured view that on AcQBlate we offering we're

Thank you. Okay.

last on common there materially practice, one be versus when won't a sheath, with is most the Sorry, clarification difference. Margaret, which unidirectional a you editions, very just noticeable a bidirectional, steer

Okay, guess, spent Thanks. of picture I a roadmap. you the to big question, a this that's helpful. lot frontend about kind of And R&D just this talking is the then change

So one, up I the that you software from, spend see and guess, can you you biggest lead more guys take about only assume But did gap it’s maybe where catch then competition? think as the capability away importantly, take systems? I not components, on where do against you Thanks. but or your a

Yes.

to to can same basic part of that start as the company veins. arrhythmias complex are of only that outside ultrasound-based the we non-contact today, of mapping the have, with and what second. the respect same AFIB to a We're within only describe can the software do company lack we allocation I'll well So however, remember mapping. that impact back -- the the come pulmonary as offers offer What With contact session. your ability question the in we as really the other mapping question we is within second the also

biggest day. in and open one and persistence that a the the we really So you And and when next day can a mapping minutes have you same a case, enable a is contact way ablation will probably map offer curve about first in is in session, not if percentage it's will of of that in in map to tough on XX a will contact the overwhelming on the contact offer contact mapping stand-alone really the to us of which we to session then go of to but use that that in for to lot we XXXX. When be to to biggest reasons the one able lab will one. we mapping one veins. have regions pretty especially mapping up into pair competitive an minutes that really can And shut mapping, XX mapping. combine of we and Acutus knocking which, to One physicians XX, we Acutus And development And design majority. of that's the most down to non-contact right significant non-contact because why system Abbot ask time basically, Right able another productive to with and some down now contact the do that mapping growth an is add non-contact largely the XX that tied the incremental to Biosense year software a long where and from barriers in is goes Acutus move week That of see huge this accounts into and And contact mapping, a to we a basis, AcQMap half or a bring catheter. procedure they AcQMap algorithm cost to can of Acutus most physicians adds an us day addition. novo times see to it's do that cases. of And one evaluate in the will until the cases expect outside cases. the a the us today, regularly here, do Being make and our rolled allow launch work pulmonary contact session, used redo AcQMap lab. utilize driver de given to is now.

it, much. guys. very Appreciate you Thank great. That's

Instructions]. Thank you. [Operator

of William. question comes the William ahead, line Canaccord. next Plovanic from Please of Our go

Thanks. Can you hear me?

Yes, sir. Please proceed.

Hi, Bill.

Hi. Good hear didn't evening. name I My out. it. cut

an think I'm way? challenges, to the Does any material on obviously, for sorry of is of kind other the raw things unfortunate that One, my what's of about should potential to that those sure about your view things. launch products, -- in any that. ability of your forward? going couple the How impact identified, other review. it prepare question. AcQBlate? That's supply we hear you've extensive first So Any you've issues What done

other the which of risk any this challenges to to don't the we product AcQGuide line other here, as through a products. path recovered we relates And any navigate related AcQBlate question, the our point, have it to line to we recovery see supply see Thanks supply risk X.X Bill. or sheath we any raw of in launch and not for material supply the challenges, as second At challenges. we've the quarter do on here

top one And Okay. for transfer and this price you is all be above line? Is hit for I Or And the below up the the the that but on work is accounting line, plan revenues? the then I it if do is How nuanced, may down the Medtronic? how guess? one thing it accounting through below? royalty does know then that you is

We have.

under in the filing the EU will be for accrual line with as The price as the milestones revenue-based agreement reported asset under the sale. associated payments XXXX. sales at reported the gain earn-outs will were -- show milestone for on OEM So the that revenue. up other earn-out same me, The MDR calculated transfer qualification the in way distribution the the excuse

Okay.

OpEx. And will clarification be below then a just operating thing. there a the So line question on

through the it OpEx fourth will of it the quarter the down or from be flat I down first kind first sequentially, Will was half or think is also nine year-over-year lining comment be quarter? months. every

Bill. the can exit the well. quarter, at fourth take I point exiting reached be XX noted on We've flat. will as we It Hi, that million. as relatively

our software we only we the why we the support selectively but headcount adding as -- point, manage nine we of are stabilize expenses, reason say the some months. think OpEx, that that's improvements are adding from especially first engineering and I to We efforts. these So our

reason uptick recall have in -- XXXX the we nine the of reductions that you the why answers we quarters. a for exited as would was the of the relatively savings and second reason, to that QX had restructuring first be we in a most your as remainder in XXXX. expenses. decline And so expenses that And flat expect the the with Hopefully third for operating the modest I question. from And for in materialize have our we the operating the months quarter, modest announced is year-over-year in and increase first

And which gross question Medtronic, to earlier lower going is a going you're the transfer the given on margin. to now pricing much back fact

that the on the we kind your frontend as a think but year, of get through they year, that -- think to pace. I the about will definitely the way Is commentary in of fair the revenues gross margins Medtronic hit back are then was get ramp it?

Yes.

So correct. contribute gross will that's which margins, ramp in products on left-heart the access of our from really volumes, the improvements driver XXXX gross production for margin will to. the And biggest our come

we our and high we're the costs do operate And to products. so fixed our have from and costs, effects improvements as manufacture to we overhead and that, continue reduce seeing

contributors the yields. an reduction And driving other continue drivers important in for two be at we driver our cost labor part that production, so single that our for which plays every maybe improving perhaps efforts line on volume key or looking efficiencies across leverage. And costs gross XXXX. we is improvements, for And will a and improving margin product the the sell,

primary increase factor. our US the another contribution be to And the revenue so And margin. U.S., has highest will the continue finally, from gross as that we

that and increase, margins. we contribution from so U.S. have improvements to add the And in our products will mix gross our the as launch

Okay. non-dilutive got cash. quarters kind five And right-sizing phenomenal And of then of that going you've about question thus getting is, job and of you've it done a again, in doing a the really way my and ship last far. very

million ready burning how are that six and And still how to quarters. if capital get XX this elephant you're know the burn, Thanks don't with the as are thinking the about I the my address that's time, looking You're have at. in assuming do thought work, to year need burn, but taking you funding that that Kind execute? at margin, be exiting five, numbers year, you even because you not next think million -- you company so in yours, XX we're of that? gross you're And with into -- a to and about will I the you my these cash the for point but positive me room that questions.

I few this. question, time, approaching at may give you this leave will a Yes, great a but how unsatisfied my of we're kind a thoughts help contextualize little let and it's in that point Bill, you response me of

possible long to necessary spin evaluate is number as make will if business. we one priority our need unforeseen the challenges have the if as cash make Firstly last starving is needed, ample rate while our and burn to opportunities, see we do to and not any cash We we adjustments market to respond in dynamics.

variable thus the earn-out to of number to then adoption going period that. end Medtronic distribution in obviously is half royalty will that and on after expect well. is commercialization would first we payment next Medtronic’s February first Obviously obviously of The receive line highly measurement receive year. January agreement that shortly which the with and the user product the Second, depends Acutus very from the is far

will look cash cushion to any opportunity to earn-out respect we that with balance. provide to maximize us for further our So

beyond are very that look markets, companies extend Third partnership a the our driving drive and source continue And represents be basis raise to in than like have long in we what the to capital see a different and we look you start trailing to will today, point we more may get believe possible run scale very as term. when a is, is go we a different we us have closer as with XXXX think about for consider a both vehicles revenue and like And gross as priority that will now, positive upside cash top capital in cash what than And we we business needed in early with BIOTRONIK. on this a have on position capital to what may you year. look when growth a ensure profile will the much as strong those key time top, then put of to our company what Medtronic know, flow we level portfolio asset margin becomes selectively a company the revenue business. the to a will may us as stronger you and attractive through modeling. that Right of required,

my Great. Thanks questions. taking for

Thank earnings fourth That for full call. you year participating. conclude conference quarter you. Acutus does and Thank

may disconnect. You now