Brainsway(US:BWAY)2019-11-25 16:10Financial Data and Key Metrics Changes - The company reported record quarterly revenue of $5.9 million, a 38% increase compared to Q3 2018 [14][20] - Recurring revenues reached $3.4 million, reflecting a 40% increase year-over-year [14][20] - Gross profit for Q3 2019 was $4.8 million, up 43% from $3.4 million in Q3 2018, with a gross margin of 81%, an increase from 78% in the prior year [20][22] Business Line Data and Key Metrics Changes - The installed base of Deep TMS systems increased by 138 units to a total of 488 systems, with a quarter-over-quarter increase of 32 systems [15] - The company shipped 132 OCD coils since obtaining marketing clearance in August 2018, with demand exceeding supply in Q3 [15][22] Market Data and Key Metrics Changes - The company entered exclusive distribution agreements in Taiwan, the Philippines, South Korea, and Thailand, expected to contribute to results in Q4 and beyond [19] - The U.S. market remains a primary focus, with strong demand anticipated for the Deep TMS system [24] Company Strategy and Development Direction - The company is focused on expanding its sales force and enhancing marketing activities globally, with plans to add two new sales reps in Q4 [16] - A robust clinical pipeline is in place, with ongoing studies in smoking cessation, PTSD, and opioid abuse, alongside efforts to develop new technologies [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong market demand for the Deep TMS system, with a positive outlook for Q4 and 2020 [24] - The company is actively pursuing reimbursement for OCD therapy in the U.S., which is expected to enhance growth opportunities [28][35] Other Important Information - The company ended Q3 with cash and cash equivalents of $23.9 million, down from $27.6 million at the end of Q2 2019, indicating a strong balance sheet to support growth initiatives [23][24] Q&A Session Summary Question: Sales disruption due to leadership changes - Management reported no disruption in sales due to recent leadership changes, stating business continued as usual [27] Question: Demand for OCD coils and reimbursement progress - Management acknowledged a seasonal decrease in demand for OCD coils but expects stronger demand in Q4, with ongoing efforts for reimbursement [28] Question: Growth expectations for business components in 2020 - Management indicated that the leasing model will remain the primary focus, with confidence in growth opportunities, especially with potential reimbursement for OCD [29] Question: Manufacturing issues affecting OCD orders - Management clarified that the decrease in orders was due to seasonality rather than manufacturing issues, with expectations for a ramp-up in Q4 [33] Question: Revenue opportunities in Asia - Management highlighted the significant market opportunity in Japan, with a leasing model expected to be used, pending reimbursement [39] Question: Timing of smoking cessation study results - Management confirmed results are expected to be published in the coming weeks as a press release [40] Question: Sales force efficiency and account management - Management stated that the current sales force is sufficient to cover key U.S. markets, with plans to add a few more reps [42] Question: Utilization trends and geographical strength - Management reported strong utilization rates, particularly in major U.S. hubs like California, New York, and Texas, which are expected to drive growth [46] Question: Trends in leasing versus purchasing for MDD - Management expects the leasing model to continue being favored, with some hospitals still opting for outright purchases [47]