Brainsway(US:BWAY)2022-11-16 17:34Financial 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]