Ekso Bionics(US:EKSO)2019-10-31 02:53Financial Data and Key Metrics Changes - Revenues for Q3 2019 increased by 30% year-over-year to $3.3 million, reflecting strong performance in EksoHealth and improved sales in Europe and APAC [8][33] - Gross margins improved to a record 53%, up from 42% in the same period last year, attributed to higher average selling prices and lower production costs [9][36] - Operating expenses decreased by 23% to $5.5 million compared to $7.2 million in Q3 2018, reflecting company-wide cost optimization initiatives [9][37] - Net income for the quarter was $0.2 million, compared to a net loss of $7 million in Q3 2018 [39] Business Segment Data and Key Metrics Changes - EksoHealth revenue increased by over 70% compared to Q3 2018, driven by higher sales to U.S. and European customers [12] - Ekso Works revenue decreased to $320,000 from $790,000 in the same period last year, primarily due to slower customer purchasing decisions [35][27] Market Data and Key Metrics Changes - The company identified a post-acute market opportunity of approximately $500 million to $750 million annually, focusing on Integrated Delivery Networks (IDNs) and network operators [16][91] - The company has established a presence in about 130 to 150 centers in the U.S., primarily in the inpatient rehabilitation facility segment [76] Company Strategy and Development Direction - The company aims to solidify its leadership in robotic neuro rehabilitation with the introduction of the EksoNR and EksoUE devices, enhancing its product portfolio [18][100] - The strategy includes expanding customer awareness and supporting channel partners to shorten the sales cycle, particularly in the EMEA and APAC regions [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the traction in the German market and the potential for growth in the EMEA region [11] - The company is focused on increasing sales to existing customers and expanding its customer pipeline in both medical and industrial segments [100] Other Important Information - The company is transitioning production to a joint venture in China, with expectations for industrial shipments to commence in Q1 2020 [30][31] - The company anticipates a reduction in product costs by approximately 20% annually, with further improvements expected in 2020 [83] Q&A Session Summary Question: What drove the increase in net placements this quarter? - Management noted that changes in the go-to-market strategy in Europe and a focus on IDNs in the U.S. contributed to the increase in net placements [44][45] Question: How does the pipeline of centers look today compared to a year ago? - The pipeline continues to build with individual centers and network operators, with new products like EksoNR positively impacting engagement [46][47] Question: What is the expected growth rate for customers with multiple rehab units? - Currently, 30% of customers have multiple units, and this number is trending upward as utilization increases [49][50] Question: Can you discuss salesforce expansion plans for 2019 and 2020? - The company is strategically expanding its salesforce, focusing on experienced personnel who understand network operators [54][55] Question: What is the status of the joint venture and expected revenue contribution? - The joint venture is progressing well, with expected benefits in cost of goods and working capital in 2020, although revenue from royalties will take longer to materialize [56][57] Question: What is driving the improvement in gross margins? - Improvements in average selling prices and production costs are driving gross margin increases, with expectations for continued growth [58][59]