Vivos Therapeutics (VVOS) 14 May 242024 Q1 Earnings call transcript

Good day, everyone, and welcome to the Vivos Therapeutics First Quarter 2024 Earnings Conference Call. [Operator Instructions] This conference call is being recorded, and a replay of today's call will be available on the Investor Relations section of Vivos' website and will remain posted there for the next 30 days.

I will now hand the call over to Julie Gannon, Vivos' Investor Relations Officer for introductions and reading of the safe harbor statement. Please go ahead.

Thank you, operator. to call. welcome and everyone, our conference Hello, A on our the our earnings website is available press release Investor www.vivos.com. copy of at Relations section of With Officer. Vivos Kirk Officer; call Brad us Chief and Financial and Executive Huntsman, Chief Amman on today's Chairman are the the financial results review rest XXXX of first for and developments and more as XXXX. well recent highlights Vivos' we'll the quarter Today, as plans for

to formal take be questions. remarks, these Following happy we will

hopes, forward-looking statements today's of I amended, certain and aim, would as XXXX a of concerning XXXX call anticipates, of forward-looking to intended could, goal, remind the Section within significant and unknown Securities which are that estimates, expressions subject projects, like contingencies, inherently of the and Act of XXE as the control. risks of involve XXA known may, are risks, should, and our also will estimates, identify similar and from future meaning to everyone to uncertainties Act as such Section events. company's many made amended, significant of such number believes, and expects, Exchange and the management contain plans, assumptions of upon Securities Words intends, and words which are are statements. beyond statements These variations based

in differ by expressed adversely be addressed implied revenue or such of those including, Vivos initiatives, regulatory this metrics, cost including results management results, well such to acquisition Actual or without operational future research and limitation, plans future operating profitability as or of forward-looking the and development, other to operations positive savings achieve generate Vivos' Vivos may plans, from matters statements. and materially call to conference strategies, growth as the potential flows for sales, potential and and integration, as by cash marketing, results product plans

SEC, XX-K Securities and Factors XXXX, Vivos are including and Exchange described limited the could December contained filings other factors the for accessible other of XX-Q filed Form all be obligation the statements Investor and in disclosures first the with the to Relations but on will and differ include, disclosures of Vivos the with to not year risk actual the website materially other risk today, law, with change. cause the are SEC's no which results including ended our our that to, as factors Commission, well update or assumes the in XX, section filings required SEC Except Vivos website. extent to as circumstances as by quarter our

has Food the certain severe that Vivos please given clearance treat appliances to Administration Drug aware Finally, OSA. be XXX(k) and to U.S. mild

of no protocol. severe part performed With discretion of Vivos the integral severe needs it of off-label patients is the OSA as be now with FDA clearance an at for the longer treatment doctor November, clinical last treating treatment to the

this time, my Now to please it Brad, at introduce Amman, go ahead. pleasure Brad is Vivos. CFO of

Julie, and good highlights I of financial will you, for review Thank results first XXXX. Today, the our quarter of afternoon, everyone. the

distributed March period vivos.com/investor-relations. the our earlier available which see release, of our Form Relations XX-Q, today, SEC XXXX, please as earnings on further Investor For was section Julie website, for our of information our portion on X-month which the ended results report filings and mentioned, quarterly the on XX, is

to XXXX. $XXX,XXX VIPs product lease by program. sales increase generated increase from to less sleep and approximately and enrollments Today, Pediatric $XXX,XXX in generated revenue of ring our was million for in we report XXXX appliance and sales, home offset first from due to of Lifeline million the first decrease of approximately an $XXX,XXX an by $X.X $XXX,XXX test The quarter year-over-year revenue compared lower total of revenue of $X.X quarter VIP

Pediatric the products, which offerings, we was to flat, become expansion year, the essentially were were of product that including our have revenue. additive to Lifeline revenue and introduced started pleased While last

$XXX,XXX we XX During enrollment the XXXX, quarter and enrolled of same recognized approximately of year. revenue first VIP revenue million of period VIPs VIPs to last approximately for during $X.X compared XX in the a total

number updates We our to by at While lower enrollments entry of lives inputs methodology, VIP during revenue oral increased, the was estimated the recognition X,XXX appliance price VIP addition revenue the and the into impacted in levels of primarily new customer arches first in first a a for revenue key point. is program of the million. XXXX total The XXXX. million $X.X XXXX in decrease in X,XXX XXXX to of of quarter the for due of first part fewer approximately quarter than product quarter first $X.X discounts quarter compared during in of to sold

during Services revenue XXXX Therapy respective during Services of $XXX,XXX Intelligence at first Myofunctional of these XXXX, quarters and remained Billing areas and these each the Lastly, unchanged periods. in relatively our

the recognized revenue. and other quarter in XXXX During of first XXXX, we and also seminar sponsorship, $XXX,XXX

are to the estimated was XXXX, Our spread revenue to each during customer XX over months calculated period months revenue which is was by and to over first increases XXXX of that be of VIP year quarter the impacts This compared of recognized in lives, impacted in the period same time, XXXX. longer an be in increase separately estimated XX% compared a of thus amortization to when XXXX. revenue decreasing the XX

active a increasing for time, customer it our impacts of is longer our VIP thus revenue a year-over-year. retention period of negatively this staying Although result recognition,

an impacted from new VIPs. program, was positively which ranging entry received our to adding revenue and was $X,XXX our levels into the by Additionally, $X,XXX program, $XX,XXX Pediatric by VIP

of per results first also with XXXX. in This, enrollments resulted lower it for the However, in contract. revenue XXXX, in coupled revenue fewer quarter lower

about in OSA products strategic Kirk medical to make patients interest referring new our based the initiative talk better our revenue align our we we enrollments a which number broaden to As access with revenue launching going term, expect on on upon who of just are near planning and collaborations the to professionals, less materially in a have bit, forward. will VIP

appliance period first decrease offset was for The by attributable XXXX partially and driven XXXX. first was of quarter revenue of first for a $X.X the compared Gross million cost XX% in to the enrollment for XXXX. the of for VIP quarter primarily XX% XXXX sales. and decrease margin profit of lower to $X.X the in compared to was of decrease profit in gross Gross sales quarter comparable the by million

and digital period. expense well sales marketing related in as were represents $XXX,XXX Sales $XXX,XXX higher slightly for quarter slight first compared expenses. the to year XXXX increase sales commissions comparable as and marketing over prior of the The

are company operations. in This as and the seek reduction first more general make in continued been flow we rate burn lowering over As X.X achieve a we as cash trend past again quarter positive achieved most expenses. of you to our efficient significantly aware, have years we our administrative the significant to

decreased decrease million success announced For our compared or by the approximately to reflects operations This and to revenues. $X.X for million we of the for year. from million increase XXXX, quarter to previously expenses as cost-cutting XX% the foundation first last of year-over-year first $X.X a results lays $X.X G&A look efforts quarter positive

initiatives we is decreases our Total undertaken quarter the throughout of in have decreased quarter for by and operating operating the XXXX it reported mainly as as represents first year-over-year versus million XXXX. XXXX. expenses a XXXX This first well cost-cutting $X.X we of have consecutive significant or quarter to where seventh the expenses, due amount, XX% in

loss or of a a in $X.X to million operating quarter been of first to the first as XXXX. recognized XXXX compared of loss first benefit the due net a quarter. from $X.X million other of The was for loss onetime which for $X a to Net In the was in comparison that of year. loss XXXX absence the Vivos XX% improvement year-over-year Please million, of $X.X of primarily million decrease million, quarter reduction just note, was first G&A mentioned. approximately $X.X QX the last initiatives quarter reflects Operating year's equates I XXXX to basis. lower of compared our million $X loss million income million the of the first a of for XX% quarter year-over-year last for net cost-cutting the onetime quarter XXXX, on the noncash for loss $X.X benefit first a have in $X.X normalized in would loss

received first January net we proceeds $X.X XXXX value $XXX,XXX. XXXX, from to approximately The difference private million $X.X additional issuance value transaction. of change of nonoperating of related the net from quarter some onetime quarter the of offer that $X.X expense the recognized as in fair warrants that was To fair in million, a clarity, and excess of details placement the warrant costs first liability XXXX the between for sorry, -- issued Vivos our in

details further $X.X refer this. placement result, last year, impact of other As to of first in of quarter private income noncash a net was Please warrants. the XX-Q which our the for the Vivos recognized million regarding

March year. Now a the $X.X our operations in period the decrease turning last net X million, nonoperating warrant expense XX, value the is warrant $X.X XXXX million burn fair favorable to $X change comparable million, was $X.X a by primarily of This compared of of statement Cash offset ended to from absence due for million during flows. cash day liability $XX.X of million. decrease quarter to

XXXX in the capital net asset investing ended to consisted for placed of year. investing the activities quarter the internal used ordering used in of development to $XXX,XXX expected purchase. $XX,XXX comparable cash software capital of related the March a use, ordering here second XXXX, $XXX,XXX period, as be into arising of as well from quarter expenditures For VIP the software which net of in to is This in for XX, software for expenditures compares same the activities cash service

period March net XXXX $X.X million, related transaction. placement. from quarter February provided XX, to to financing provided from cash XXXX XXXX, the our This net our in $X.X cash of warrant January comparable financing activities the ended For private reflecting inducement activities million of compares

augment the February an by of XXXX. As an stock company and of XXXX, position common into approximately previously XX, of purchase held agreement common entered warrant equity, the institutional stock gross closed February investor to aggregate for purchase outstanding to of to proceeds our Vivos transaction This $X an Vivos an announced, in stockholders' shares liquidity for XXX,XXX million. exercise on

As had XX, cash in of we equivalents of December XXXX, XXXX. and compared million cash million $X.X $X.X as March to XX,

growth, quarter, In to and cost future drive strengthen our conclusion, burn. our improve cash reduce during steps cash position the continued and structure first taking to revenue we

target to confidence first or operations quarter continue by and XXXX. becoming renewed our the prospects, of cash us gives progress we XXXX end from Our of positive flow long-term in

all joining today's on I us conference want to call. you thank for again

Kirk privilege please turn it's to over Chairman to the Kirk, CEO. Now and my ahead. call Huntsman, go

Thank Good on joining conference for everyone, afternoon, us you call. today's you, and thank Brad.

expect initiatives do you give to then dramatically that engaged my actively questions. Today in we concrete are future my that, remarks, your opportunities growth. two to we'll I'd revenue progress on our Vivos, our in be perspective like things: on After strategic and take and happy impact at discuss launch been we've to the about here that the to

couple As focus we previously for possible. been past flow have cash Vivos get stated, primary at has to years of positive as our soon as the

this expense reductions. driving revenue goal accomplish been dual Our through has strategy phased-in growth, top to line with of coupled a

our Brad execute that the we applied Such plans. have cost our our impacted been careful revenues. As reductions business we methodical and seven cut quarters, were just highlighted, reduction past as consistently our and cost deep strategic, not we over rightsize to consecutive continue go-forward and initiatives so

by four, executing new products; such agreements that On small distribution and our Navigator included unprecedented; key our seven, achieving diverse and new boost have way, items: approvals, large DSO and groundbreaking following refining the new targeting the and Treatment Lincare; on Vivos with peer-reviewed one, dental DME establishing two announced technologies and regulatory we've kickoff five, past trained groups, for featuring enhanced the initiatives research; the the DSO Vivos' key lines dentists. were expanding product revenue coverage two, services; companies three, Medicare for and growth adding eight and which, eight, six, programs publishing front, signing of as Program; groups; insurance in

even many line Each each frankly, efforts our important though to material of of and revenue And resources top and progress. to we've been is each them of line top of in efforts be time as areas at in while areas, and these revenue given growth the initiatives runway. those revenue has we the those accomplished expect great drive of growth. near-term clear, revenue of is generating forefront continue and and those none initiatives to milestones growth significant growth we To realize over continue to all potential fully our sales that mature accretion those need today, see long-term progressing, realistic

and substantial cash However, eliminate our flow management needs hard reality this immediate monthly fully burn. recognizes that company to the generate and

our several CPAP have directly negotiating gain able gross into assisting potentially the Vivos cash one, front be both who each extend put community markets; across of as likely proven to patients with likely for States abilities end whereby to the each treatment into our immediate operational and Vivos the new the by treatment new professional margin have and pending flow fifth, we Vivos pediatric of accomplish to United patients; quarter of to access leverage potential immediate XX we Xx medical month will clinical sixth, positive who untapped the Thus, or expand highly of get put exploring public; to OSA close important two, new professionals thousands access hundreds of Vivos on been either add levels and eighth, and massive navigators; Canadian -- of treatment; patients -- four, OSA into channel XXXX. following: the relationships, of services current XXXX to in CPAP to access OSA are to scope and seventh, as well highly X as case or patients to group market Vivos first brand new to to failed additional cases; to start; our three, the call important millions fully out as to to significant X the trained declined channels our leverage to much and tap general enter to who of

operational expect firms, we've formal We finalize yet details above. our opportunities or target make to during to all similar this other already ink this dry yet, just to and As live initial integration to indicator able quite first very we a share since are kinds in go hope of the point an listed and discussions names fine will weeks be about our we accomplish or deep coming which with near with in affiliation, we've on announcement of activities but more progress, can't begun isn't name what hold the the future. at which

Under Here's and with treatment the value new initiative. communities, becomes and the focus this same patient us with vertically Vivos while revenue experience expanded and what its improve we dependent channel the and levels effectively profiting Vivos far of allowing can of collaborations on becomes say At enhanced medical this dentistry. sleep less time, the immediately operating and the model better about to testing on and from more influence integrated, multiple patient journey interaction overall creation. single

collaborations Importantly, by expected this model a require is it not as to driven joint Vivos parties. lot expenditure by of the success is the on focused of capital

state corporate every In getting and aspect endeavor and structures to new to fee in but with -- hours core provisions of under other spent note state-level network care and to a legal medical both federal third-party analyzing from proven financial model health believed highly been to the assumptions management the coverage medicine this in financial practice has in result that to working more. point, laws be and experts the The countless splitting end we in and our sleep reimbursement of that to of unprecedented conceivable this of from medicine. to is aspects evaluating legal health knowledge, and world comprehensive out rules is for profitable and laws specific modeling financing of the should care required

creating in conceptualizing believe support the further operating was first-mover DSOs new experience a We in competitive that this unique market. successfully and dental Vivos prior or large this structure. especially organizations and strategic critical and gives extensive useful multimarket advantage Management's

dental reach through full of its allow advanced channel companies truth working potential. harsh this never will to The oral appliance for technology that the type is exclusively all

nothing years of However, we've our the experiences would current gained and informed What insights journey will full paramount the Vivos, In at even past always do those in strategy strategy insights throughout we and focus to of realization our several patient the without here about optimal in the interest learned none is importance now. what and our is Of how long intense way matter are important along outcomes. the our have market go-forward run, and possible. be most else journey of the be more. clinical what on will

treatment, sleep expect never that scale belief apnea. for win. and our will of seen Vivos facilitate assert firm gold of We And Vivos our as breathing and and other unapologetically on wellness by care day new renewed we fully continue how new devices any will method one the treatment health to become such disorders, expect the we a oral further, model is and that boldly medical a standard degree sleep and before to obstructive

in things from the the how to beyond the technology research of cases, we've how networks now third-party research and the provider world, safety the approvals date, out patient doubt, to obtain can to very done tens and reasonable the protocols our possible. how we've that that by of of lifting we've regulatory some knows ensure to cases, leveraged systems how that handle we heavy and, efficacy prove Everybody of mission-critical accomplished we've any unprecedented built thousands best around the painstakingly outcomes established and

that ready. of All is now

What to at harvest to reap and this is monetize remains that the is hand. financial now for finally foundation that company begin

Our new over we as look more challenge. soon to sharing and the stated I reporting also our up our to the quarters course and achieve as team And the we is progress forward of details milestones next said, to reach on several objectives.

remarks. our concludes prepared That

any questions. questions? happy be we we'll have to Operator, Now take do

now Ladies from question comes Markets. begin Ward line Capital the Instructions] from Thank [Operator first the of we Your Ascendiant Lucas will and you. gentlemen, session. question-and-answer

business your and your Congratulations progress. and you, operator, work Thank good gentlemen. afternoon, on hard

Lucas. you, Thank

Thank you.

of type are you're like obviously, talked expound can heard it these regarding nature talking what the relationships, the that we've I agreements of entity on you the we about would different DMEs, relationships DSOs, mean, So already about? that how about? And the talking about, the distribution be you've from channel new

the facilities. -- one -- giving be be reasons of a They be it's what can targeting of I'll that for you I great will vary or can be centers is and large I of groups. They do we're the one testing Yes. could They any that number say type somewhat. and organizations question, similar groups like could could -- that, That's the with medical But and today. that. is an They could that sleep affiliated hospitals. nature answer the best with Lucas,

have relationship prospective a California. For large a group example, with happening we ENT in out

We with, working have that some testing we're groups sleep some groups. testing

the about they're that very where condition But they given that obstructive these positive are. as the need insurance-driven the slap I'm and to they've information for of things know whether education or that all that device first. [ and slap not apnea these about patients don't given And patients about or the what they have have today's or do CPAP if journey treat their of the not don't are of so which one and model, to information very just slap go this options home where of sort OSA are groups care, comes common way. might -- future the they to their sleep hold pat of that little beginning it's alternatives, patients refers the are have failure treatment health cheek pat options all in condition, that treatment a most very at, little model The is just or to given basically given tongue patients tested know model risks sure with. who a what and CPAP is in pat automatically they have ] what world it. their In given little I'm with their sure industry

what so left well alternatives to really introducing their on current which they out oral use, insurance-based informed they model, of and panel feel and these to other model, And In new their like treatment many CPAP. the ill is of our know of We'll for own, just entire are bringing they're options the comprehensive line feel they what about they as yet patients device, table be don't don't sort feel in a CPAP appliance be it figure want we'll overwhelmed, a they are. as therapy. patients our and

that all experience, vast with doctor, a And try our presented opt with costs they the opt necessary options to coverage a what will the almost in it working or the good is even XXX%, time, little decision their which them treatment all in we in make not that's option, for for CARE when the information insurance majority even all that found for probably PCP to that of patients, get their of though sleep more though have patients, our find X these they coverage Vivos specialists the money, and means will well, that the opt to will XXx. the out is experience, we

and these And processes. so systems been protocols, we've testing out these these

cases. we be when we from heretofore our dentists our And difference sleep now close DSO, to medical front put MSO and revenue and basically payment professionals will obstructive from profit will been now for nothing expect work full who end apnea but the of be massive the time. be or deep new pool. will our fully may we'll realizing and cases just margins of they realizing those teams that patients, be be We'll only these have the of those and for doing able doctors is those those realized the the from be numbers the by receive And in to -- wherever independent that professionals practitioners

want today the why reason they're now they them because hall the these go turn the to telling turn treatment. and the hall this who instead these fully of down who different is -- available, great. need already of of saying, the into go you to CPAP, with go down full to you readily a who education fully directing informed oral have have greatly "Hey, need we're are Those to get benefit relationship. an immediate advancement go patients resources that to to patients And these we And to is and great. partnering patients firms decision. get we're you measure there, we'll and mandibular appliances, So of very exist; left, want expect right." make Vivos, into Those into can a And of go -- great. you that Those want from and

lot of than probably information sort wanted, that's going. So that's more you but we're a where

Okay, Kirk.

So I live difference new correctly, the you with with if hear these is customer. partners like they They're have it sounds the that already end patients. big dealing

[indiscernible] Exactly.

follow a up guess question... I

[indiscernible] I don't have any

Yes. ahead. Go Yes, go ahead.

So a follow-up would resource-intensive be able be and to like what do opportunities? you actually need these to for mean, I patients? their you to do it serve to execute how those partners is

expertise the the to have with coast field trained. we United Well, in coast in and all teams to done putting States. throughout been are out and and teams from We've that around country. the them patients this north gain We've experience the taking south working

get so in patients And treatment. how close well to into to our very, the our very We versed we're cases. methodologies systems. know how know and We

have example, all work me is a to give company. just -- testing example you And for of we just these now let so do with an

So a sleep sleep performing company testing test. that's

a high patient a patient, little have to say, test them a send home that OSA the sleep $XX contract it, they it's a do, the read they home for make on may that just make on $XXX. then testing test. say the they got may bit probably test. they for a physician by sleep physician let's prospective So to they And out sleep they've company just case. the a and sleep test, will $XXX. a Well, But the interpreting yield things $XXX physician time the all probably, That's That end. and send a to let's -- sleep test, reading do that

dentist new $X,XXX, historically made, case. $X,XXX model, to maybe on say our has the just $X,XXX let's circa Under a

we medical the disproportionate company. the the the realizing of of amount cases on bringing is network, order reallocate being these of our being been dramatically the to can money So community and have money company By is testing for made testing MSO amount dentists the the into magnitude then that them. compensated that by

to they incentive than made money so that before, ever an opportunity more And have far strong. make is and they

patients most we we choose At so whatever work makes collaboratively the we given will end to from treatment that the will every kind options, sense. available. opportunity and they are sure our to of of -- make know the have we are And will that same of go the more to treatment the work them experience, day,

Got one I more follow-up. just could, Okay. you. If

mean You've made that Medicare very eligible devices two -- approved powerful very severe for devices announcements, your your and a for one powerful -- treatment are eligible FDA-approved that model, are revenue guess my does you impact I reimbursement. does monetize how great, that? apnea those sounds marketing? I question and that how sales opportunities, is, announcements, sleep also -- that but it how CARE business Like do your your your

thank -- you the by the Lucas. thing that, way, is first Well, for

are of is having FDA-cleared XX% appliance a are creates device that sleep the OSA with population. among but that severe comes severe the the causes probably and of world's XX% certain that severe sleep treat apnea. only conditions severe, to all aspect first along oral and of credibility all comorbidities apnea cases The Roughly of

ability providers amount treat tremendous it of to really among for community. to attention treat cost very severe and So our garnering and effectively a the the is medical medical

So X years into happened providers today. are clearance, And have ago, year, that they're and X years, of country credibility. this they entirely with today happening the this never of a new level dialogues would is entirely new and happening respect level an the a elevated around severe as Vivos result of an medical

to more we're so and patients. our more comfortable And medical recommending seeing doctors getting very, with therapy very

greater drive community with never the to medical been just a so just patients much It So and door the different level many with the before. to that the levels in more collaboration there have patients of work opens to that it to tends provide therapy. technology, of opportunities tends and for confidence

sat Dentistry operated clearance, this it really interesting and happen? embraced. sort questions And that this as we these technology our medical the all different?" a a this does in almost these the of medical and How did into silo, is here. we a building future happening said, and has of noticed sudden, And has people? by "Well, all historically immediately is here. back who to really fully and lot always community the what that are never why is what With And and resented silo been it of somewhat started And momentum we go And see this community do? arise.

front, that So This for now bit or for now the in this. little table Medicare But in of providers, And Medicare participating time. for of overnight. whether may it pay patients happening terms patients the need it's in additional takes network some assistance have a on just treatment. assistance Medicare they isn't wallet their paying on how another

the wallet another it's table. So on

Thank much. you very

bet. You

And Chairman at speakers, I to hand continue. no questions the Kirk to this are Huntsman, like Please over call Executive and time. there would further Chief Officer.

plans and with adversity as prospects have safe had of would more that And journey. operator. beyond. to sharing on and and to to we has I it's to I optimistic for continued like our the company say all support a just Thank And despite and about XXXX forward progress the that the on -- never to felt continued it's we've overcome, your everyone safe growth continue been all we thank you, this this you to I opposition and throughout we our know forward. and long our say Vivos call about We that we've all joining think for think just look announced execute future that for and going things we today's Therapeutics. us interest of the

evening. Thank you all, and have great a

this gentlemen, and today's participation. concludes for you call. Thank your Ladies conference

disconnect. You may now