Evolus(US:EOLS)2020-05-12 00:47Financial Data and Key Metrics Changes - Net revenue for Q1 2020 was $10.5 million, significantly impacted by a provision for coupons amounting to $10.2 million [11][12] - Gross margin for Q1 was approximately 60%, affected by high coupon activity [12] - Non-GAAP operating expenses for Q1 were $29.2 million, consistent with prior quarters, and expected to be less than $25 million in Q2 2020 [12][14] Business Line Data and Key Metrics Changes - Jeuveau unit sales grew in low single digits through mid-March, with a 15% increase in account base to over 4,100 accounts [9] - Reorder rates for Jeuveau increased to 62% prior to the COVID-19 impact [9] Market Data and Key Metrics Changes - U.S. revenues are expected to remain nominal in Q2 2020, with a gradual recovery anticipated thereafter [11] - The company does not expect sales from Europe in 2020 [11] Company Strategy and Development Direction - The company is implementing a post-COVID promotion program named Evolus 350, offering flat pricing of $350 per vial to all customers [22][23] - A consumer loyalty program is being launched to provide instant savings and improve affordability for patients [23][36] - The company is focusing on a more efficient business model with increased reliance on technology to drive share penetration [10][20] Management's Comments on Operating Environment and Future Outlook - Management expects Q2 2020 to reflect the bottom in procedural volumes, with a gradual recovery as practices reopen [18] - The toxin market is viewed as resilient, with 92% of surveyed physicians believing patients will prioritize aesthetic neurotoxin treatments post-COVID [19] - Management remains optimistic about the long-term growth potential of the market despite current uncertainties [54] Other Important Information - The company has approximately $100 million in cash and equivalents, expected to fund operations for at least the next 12 months [12][13] - A significant reduction in employee days and executive salaries has been implemented to conserve cash [14] Q&A Session Summary Question: Customer reaction to coupon initiatives in Q1 - Management reported strong coupon utilization prior to COVID, with practices eager to offer benefits to patients upon reopening [26][27] Question: Practices' reopening protocols and managing pent-up demand - Practices are expected to extend hours to manage pent-up demand, with varying strategies based on local conditions [32][33] Question: Return of patients to cosmetic procedures - Management noted that practices are beginning to see patients return, but the extent of pent-up demand is still uncertain [44] Question: Normal levels of couponing and operating expenses - Current couponing levels were nearly double the normal levels, with guidance for Q2 operating expenses set at around $25 million or less [47] Question: Permanence of flat pricing model - The flat pricing model is a promotional program expected to run through the end of 2020, after which the company will revert to tiered pricing [49][51] Question: Recovery timeline for procedural volumes - Management indicated uncertainty in predicting recovery timelines, but remains committed to achieving a number two market share position [54][55]