Financial Data and Key Metrics Changes - The company reported Q2 revenue of $769,000, a decline from $1.656 million in Q2 2023, primarily due to the DPNCheck product line [5] - Gross profit for the quarter was $492,000, reflecting a gross margin rate of 64%, which is 360 basis points lower than the same quarter last year [6] - Net loss for the quarter was $1.488 million or $0.74 per share, showing a slight improvement from a net loss of $1.5 million in Q2 2023 [7] Business Line Data and Key Metrics Changes - The DPNCheck product line accounted for the entire revenue decline, with the company working to identify new markets for this product [5] - Quell revenue in Q2 was $192,000, representing a year-on-year growth of 47%, indicating positive momentum despite its smaller contribution to total revenue [5][10] - The number of Quell starter kits sold increased by 165% year-over-year, with 540 units sold in the quarter [11] Market Data and Key Metrics Changes - The DPNCheck business experienced a significant drop due to changes in Medicare Advantage, which is in its final year of a phaseout of risk adjustment compensation [13] - The company is exploring opportunities in international markets that are not core to its U.S. focus to offset cash consumption [9] Company Strategy and Development Direction - The company is conducting a strategic review to maximize shareholder value, having explored several potential transactions but found none in the best interest of shareholders at this time [8] - Plans to restart the over-the-counter (OTC) business for lower extremity chronic pain are underway, with expectations to have both parts of the Quell business active by Q4 [10][21] - The company aims to submit a de novo application for chemotherapy-induced peripheral neuropathy (CIPN) by Q4 2024, with a potential commercial launch by the end of 2025 [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced by the DPNCheck business but expressed optimism about the growth potential of the Quell product line and the planned expansion into the Veterans Administration health system [10][13] - The company is focused on methodical growth, particularly in the VA market, and is ready to increase investments to drive growth [18][21] Other Important Information - The company has approximately $16.4 million in liquid assets and a working capital of $16.9 million, with a quarterly cash usage of about $1.4 million [4][7] - A reduction in force implemented in Q1 2024 is expected to lower operating expenses by over $0.5 million per quarter [9] Q&A Session Summary Question: Long-term growth strategy for the Quell business amidst DPNCheck decline - Management emphasized a methodical approach to growth, focusing on understanding the market before significant investment [17][18] Question: Product effectiveness and market strategy - Management confirmed that Quell provides symptom relief with minimal side effects and plans to restart the OTC business primarily through e-commerce channels [20][22]
NeuroMetrix(NURO) - 2024 Q2 - Earnings Call Transcript