EDAP TMS(US:EDAP)2021-11-18 15:18Financial Data and Key Metrics Changes - Year-to-date revenue for the nine months ended September 30th was €30.1 million, or $35.9 million, representing growth of 14.4% over the first nine months of 2020 [6] - Total company revenue for the third quarter was €9.4 million or $11.1 million, essentially flat compared to the year-ago period [7] - Gross profit for the third quarter of 2021 was €3.6 million, compared to €4 million for the year-ago period, with a gross profit margin of 38.4% [34] - Operating loss for the third quarter of 2021 was €1.9 million, compared to an operating loss of €0.3 million in the third quarter of 2020 [36] - Net loss for the third quarter of 2021 was €1 million or €0.03 per diluted share, consistent with the net loss of €1 million, or €0.03 per diluted share in the year-ago period [36] Business Line Data and Key Metrics Changes - Total revenue in the HIFU business for the third quarter of 2021 was €1.9 million, a decline of 25.6% compared to €2.6 million for the third quarter of 2020 [32] - Total revenue in the LITHO business for the third quarter of 2021 was €2.5 million, an increase of about 3% versus the third quarter of 2020 [33] - Total revenue in the Distribution business for the third quarter of 2021 was €5 million, a 13.4% increase compared to €4.4 million for the third quarter of 2020 [33] Market Data and Key Metrics Changes - US treatment volumes are up 68% over the same period in 2020, indicating growing adoption of Focal One HIFU as a prostate cancer treatment alternative [10] - The growth in US treatment volumes reflects the positive impact of HIFU category one CPT reimbursement code that went into effect on January 1 of this year [12] Company Strategy and Development Direction - The company is focused on increasing its US pipeline and establishing HIFU and the robotic Focal One device as the leading therapeutic tool in ablating prostate tissue [38] - A comprehensive action plan has been developed to demonstrate to CMS the benefits of HIFU technology, with the aim of securing increased facility reimbursement to level 6 starting in 2023 [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that delays in machine placements were due to COVID-related restrictions, but expressed optimism about recognizing equipment sales in Q4 [8] - The company remains confident in its ability to navigate the challenging hospital CapEx environment and is optimistic about future sales and key placements [38] Other Important Information - The company held cash and cash equivalents of €45.4 million, or US$52.6 million, as of September 30, 2021, compared to €24.7 million, or US$30.2 million at the end of December 2020 [36] - The company is actively recruiting for its US commercial organization to enhance sales efforts [46] Q&A Session Summary Question: Sales funnel and penetration into Tier 1 accounts - Management indicated that discussions with Tier 1 hospitals are increasing, and more placements are expected in the near term [42] Question: Investment in the commercial organization - The company has added notable hires and is actively recruiting more skilled individuals to expand its sales personnel [46] Question: Reimbursement levels and expectations - Management discussed the potential for moving to APC level 6 reimbursement in 2023 based on improved treatment volumes and claims data [47][75] Question: Leading indicators of demand - Management noted that the addition of headcount and support for existing customers are contributing to a positive outlook for demand [52] Question: Challenges in the marketplace - Management stated that they are navigating supply chain challenges effectively and remain optimistic about improving gross margins [54] Question: Feedback from physicians and clinical data - Management highlighted the strength of clinical data supporting HIFU and its efficacy compared to traditional surgery [67]