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Company Participants Hadar Levy - Chief Executive Officer Conference Call Participants Jeffrey Cohen - Ladenburg Thalmann Operator Brainsway Ltd (NASDAQ:BWAY) Q3 2023 Earnings Conference Call November 15, 2023 8:30 AM ET Brian Ritchie - Investor Relations, LifeSci Advisors Ido Marom - Chief Financial Officer Jayson Bedford - Raymond James Carl Byrnes - Northland Capital Markets Boobalan Pachaiyappan - H.C. Wainwright Good day and welcome to BrainsWay Third Quarter 2023 Earnings Call. At this time all partic ...

There are no further questions in the queue at this time. I will turn the call back over to Hadar for any closing remarks. Hadar Levy I would like to thank all of the investors, analysts and other participants for their interest in BrainsWay. With that, please enjoy the rest of your day. Thank you. Operator Thank you, ladies and gentlemen. This concludes your teleconference. Please disconnect your lines. Okay. Got it. And then Ido on the financial side, could you just give us a sense, you talked about a red ...

BrainsWay Ltd. (NASDAQ:BWAY) Q1 2023 Earnings Call May 17, 2023 8:30 AM ET Brian Ritchie - Investor Relations, LifeSci Advisors Scott Areglado - Senior Vice President and Chief Financial Officer Jeffery Cohen - Ladenburg Thalmann Boobalan Pachaiyappan - H.C. Wainwright I would now like to turn the conference over to your host, Brian Ritchie with LifeSci Advisors. Thank you. You may begin. The format for today's call will be a discussion of recent trends and business updates from Hadar, followed by a detaile ...

Revenue and Financial Performance - Revenues are expected to increase due to the expansion of the Deep TMS system marketing for MDD, OCD, and smoking addiction, with a decrease in the gap between operating expenses and revenues compared to 2022 levels [930]. - Net cash used in operating activities was $9.8 million for the year ended December 31, 2022, a decrease of $10.7 million compared to a net cash provided of $0.9 million in 2021, primarily due to higher losses and changes in working capital [931]. - The company anticipates that the trend of increased reimbursement coverage for Deep TMS could positively impact revenues, income from continuing operations, and profitability [955]. Government Grants and Royalties - As of December 31, 2022, the company received approximately $13.4 million in government grants, with $4.4 million paid in royalties, leaving outstanding royalties of up to $11.6 million [932]. - The company has engaged in research and licensing agreements with Yeda, which include royalties ranging from 1.6% to 5% for certain products [950]. Coverage and Market Expansion - Over 90 million covered lives are eligible for reimbursement for Deep TMS treatment of OCD as of March 2023, with positive coverage decisions from several major insurers [955]. - The company is actively working to facilitate increased coverage for OCD treatment by more payors, including both commercial and governmental [955]. Leadership and Organizational Changes - A leadership transition occurred in early 2023, with Mr. Ami Boehm appointed as Chairman and Mr. Hadar Levy as the new CEO [956]. - The company has seen a trend of high workforce volatility, affecting recruitment and retention of sales professionals [954]. Intellectual Property and Technology - The company has a total of 34 issued U.S. patents and 51 issued patents in other jurisdictions related to Deep TMS technology, with various expiration dates ranging from 2021 to 2039 [937]. - The company has acquired additional patents related to multichannel stimulation, which are expected to broaden the capabilities of its developing multichannel stimulator [968]. - The core technology for Deep TMS is exclusively licensed for worldwide commercialization, with rights owned by the DHHS and licensed through the PHS [969]. - The company has achieved all milestones under the PHS license agreement, which is valid until the last licensed patent expires [972]. - The company may rely on trade secrets and know-how to protect its technology, although such protection can be challenging [975]. Supply Chain and Inventory Management - The company has seen a significant rise in the price of electronic components due to supply and demand factors, leading to increased inventory levels to meet future demand [977]. - The lead time for receiving electronic components has increased significantly amid the global supply chain crisis, impacting ongoing supply capabilities [977]. Financial Controls and Ethics - The audit committee is responsible for overseeing the quality and integrity of the company's accounting, auditing, and reporting practices [773]. - The company has adopted a code of ethics applicable to its principal executive and financial officers, which is available on its website [771]. - The company has established internal controls over financial reporting to ensure reliability and compliance with generally accepted accounting principles [769].

Financial Data and Key Metrics Changes - Revenue for Q4 2022 was $6 million, a 29% decrease compared to $8.5 million in Q4 2021, impacted by the inability to recognize approximately $1 million of lease revenue due to a customer's financial condition [38][44] - For the full year 2022, total revenue was $27.2 million, slightly lower than $29.7 million in 2021 [59] - Gross profit for Q4 2022 was $5.2 million, representing a 75% gross margin, down from $6.6 million and 78% gross margin in the prior year [59] - Operating loss for Q4 was $3.4 million, compared to a loss of $1.5 million in Q4 2021 [44] Business Line Data and Key Metrics Changes - The company placed 33 Deep TMS systems in Q4 2022, with a total installed base of 884 systems, reflecting a 17% growth from 754 systems as of December 31, 2021 [58] - Lease revenue was negatively impacted by the financial condition of one of the largest customers, affecting overall revenue mix [9][10] Market Data and Key Metrics Changes - The company reported strong international momentum, indicating a sustainable trend in direct sales both in the U.S. and internationally [58] - The coverage for Deep TMS for OCD has expanded to approximately 90 million lives, with nearly 50% of the installed base now including OCD treatment capability [29] Company Strategy and Development Direction - The company aims to achieve breakeven operating income by Q4 2023 while demonstrating full-year revenue growth over 2022 [28][37] - Strategic focus includes optimizing the commercial process, enhancing sales efforts towards larger institutional customers, and reevaluating R&D investments [33][34] - The company plans to be opportunistic in business development, particularly in collaborations with mental health clinics to expand faster [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a positive outlook for 2023, anticipating annual revenue growth and improvements in cost containment [1][37] - The management acknowledged the challenges posed by a customer's financial condition but remains optimistic about the overall market potential and growth opportunities [55][63] Other Important Information - The company was named to Fast Company's list of the World's Most Innovative Companies for 2023, highlighting its recognition in the industry [36] - A health care policy update allows non-physician practitioners to provide TMS treatment, which is expected to positively impact the market potential [82] Q&A Session Summary Question: What are the assumptions and key risks associated with targeting breakeven operating income in Q4 2023? - Management indicated that necessary measures have been taken to reduce costs, with expected outcomes visible in the second half of 2023 [17][70] Question: Can you provide an update on the impact of a specific customer on lease revenue? - Management confirmed that the impact was contained in Q4 due to the customer's deteriorating financial condition, which is one of the largest customers on a recurring revenue basis [48][58] Question: What is the company's cash runway? - The company reported cash, cash equivalents, and short-term deposits of $47.9 million, indicating a strong cash position to support operations [1][70]

Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $5.2 million, a 36% decrease compared to $8.2 million in Q3 2021 [33] - Gross profit for Q3 2022 was $3.8 million, representing a 74% gross margin, down from $6.1 million and 76% gross margin in the prior-year period [34] - Operating loss for Q3 2022 was $4.9 million, compared to an operating loss of $1.2 million in Q3 2021 [39] - Net loss for Q3 2022 was $5 million, compared to a net loss of $1.8 million in the same period in 2021 [39] - Cash, cash equivalents, and short-term deposits at the end of Q3 2022 were $49.6 million, down from $57.3 million at the end of 2021 [39] Business Line Data and Key Metrics Changes - The company placed 22 deep TMS systems in Q3 2022, with a total installed base of 851 systems, a 19% increase from 717 systems as of September 30, 2021 [33] - Research and development expenses for Q3 2022 were $2.2 million, up from $1.9 million in Q3 2021 [36] - Sales and marketing expenses for Q3 2022 were $4.8 million, compared to $4 million in Q3 2021 [37] Market Data and Key Metrics Changes - The company is experiencing strong international momentum, with significant sales in Australia and India [16] - Approximately 90 million covered lives for OCD indication due to recent positive coverage decisions [21] - Changes in Medicare coverage criteria will allow all 60 million Medicare beneficiaries to qualify for deep TMS depression coverage after one or two failed medication trials [19] Company Strategy and Development Direction - The company is focused on expanding its sales force to 21 territories but currently has 14 sales professionals, facing challenges in hiring due to the economic environment [9][30] - There is a commitment to strengthening the sales force and targeting larger enterprise customers [11][15] - The company aims to leverage advancements in international sales, reimbursement progress, and clinical milestones to drive growth [31] Management's Comments on Operating Environment and Future Outlook - The current macroeconomic environment, including inflation and recessionary fears, is impacting customer purchasing decisions [6][7] - Management remains focused on conserving cash and prudent spending to navigate the economic challenges [7][30] - The company anticipates a longer ramp-up period for sales force expansion due to hiring difficulties [9][30] Other Important Information - The company received FDA clearance for the deep TMS H7 Coil for treating adults with depression, marking its ninth FDA clearance [22] - Collaboration with NOCD aims to raise awareness about deep TMS treatments for OCD [24] - The medical community is increasingly focusing on mental health issues, which may benefit the company's growth prospects [25] Q&A Session Summary Question: What is the mix of units sold, particularly regarding leased systems? - Lease revenue has remained consistent, and the drop in overall revenue has shifted the mix towards a higher percentage of lease sales [43] Question: What is the current status of the sales force? - The sales force was around 16 or 17 at the end of Q2, and the company is evaluating its sales representatives as part of a normal process [44] Question: Can you elaborate on the enterprise customer opportunity? - The company sees potential in larger psychiatry networks that are not currently using TMS and is focusing on bringing in experienced professionals to target these accounts [45] Question: How has the patient start rate been affected? - Patient starts were flat between Q2 and Q3, with a reported drop in the number of patients visiting psychiatric offices since July [51] Question: Are there any updates on H4 coils for smoking addiction? - The company has over 60 systems for the H4 coil and is focused on acquiring clinical data to support reimbursement efforts [48] Question: What are the plans for capital deployment? - The company is measured in its approach to capital deployment, focusing on building a strong commercial team and enhancing clinical and regulatory areas [58]

Financial Data and Key Metrics Changes - The company reported second quarter revenue of $8 million, a 14% increase compared to $7 million in the same period of 2021, marking the eighth consecutive quarter of year-over-year growth [6][24] - Gross profit for the second quarter was $5.8 million, resulting in a gross margin of 73%, down from 81% in the prior year due to inventory obsolescence charges and increased shipping costs [24][25] - For the first half of 2022, revenues totaled $16 million, representing a 22% increase from $13.1 million in the first half of 2021 [24] Business Line Data and Key Metrics Changes - The company shipped 39 Deep TMS systems in the second quarter, bringing the total install base to 829 systems, a 22% increase from 682 systems a year ago [24] - International sales were strong, although this sales mix slightly impacted pricing and gross margins [8][24] - The company shipped 31 add-on helmets for OCD treatments, with 45% of the total install base now including OCD treatment capability [18] Market Data and Key Metrics Changes - The Israeli Ministry of Health approved coverage for the Deep TMS system for depression, which will require health funds to provide the treatment free of charge to qualifying patients [8][9] - Recent policy updates from Medicare contractors proposed reducing the number of prior medication failures for Deep TMS eligibility from four to one, which could enhance access to treatment [9][10] Company Strategy and Development Direction - The company is focused on increasing market awareness of its technology and enhancing its online presence, with organic website traffic growing by 50% year-over-year [12] - Strategic initiatives are in place to support customers with reimbursement processes, particularly for OCD treatments [20] - The company is also pursuing commercialization for Deep TMS in smoking addiction, with ongoing data collection to support future reimbursement efforts [21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic challenges, including inflation and recession concerns, which have impacted customer decision-making and sales [22][32] - Despite these challenges, the company remains optimistic about long-term commercial success, supported by a strong balance sheet [22][28] - Management indicated that the current economic environment may lead to a more cautious approach in the second half of 2022 regarding investments in commercial and research activities [27][29] Other Important Information - The company participated in seven medical meetings during the second quarter and plans to continue its presence at medical conferences [14] - The company is actively working on expanding reimbursement for OCD treatments, with recent positive coverage policies from major health plans [19] Q&A Session Summary Question: Impact of macro headwinds on customers and sales - Management noted that decision-making has been delayed due to macroeconomic factors, affecting the conversion of new customers [32] Question: Shift towards leasing versus outright purchases - There has been a slight shift towards leasing, but overall decision-making has been delayed [33][34] Question: Updates on coverage policies - The proposed updates to Medicare policies apply to all TMS treatments, not just Deep TMS [35][36] Question: Gross margin guidance for the year - Management indicated that gross margin pressure is expected to continue due to increased shipping costs and inventory issues [37][38] Question: International sales performance - Approximately a quarter of the systems shipped were for international markets, indicating stronger international sales [42] Question: Update on sales force size - The company currently has 17 regional territory managers and aims to increase this number [45] Question: Commentary on international market opportunities - Israel's recent approval for reimbursement positions it as a significant opportunity, although it remains a small market [63][64]

Elevating Mental Health Treatment May 2022 Nasdaq/TASE: BWAY Disclaimer Safe Harbor and Non-GAAP Financial Measures This presentation does not constitute an offer or invitation to sell or issue, or any solicitation of an offer to subscribe for or acquire any of the Company's securities or to participate in any investment in the Company. No representation or warranty is made to the accuracy or completeness of this presentation. You must make your own investigation and assessment of the matters contained here ...