LENSAR(US:LNSR)2022-11-12 16:29Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $7.7 million, a decrease from $8.3 million in Q3 2021, primarily due to a 46% reduction in procedures outside the U.S. and Europe, particularly in South Korea [22][23] - Gross margin for the quarter was $3.9 million, representing 50%, compared to $3.9 million and 47% in Q3 2021, consistent with expectations of approximately 50% [22][23] - Net loss for the quarter was $4 million, or a $0.39 loss per share, compared to a net loss of $6.2 million, or a $0.65 loss per share in Q3 2021 [24] Business Line Data and Key Metrics Changes - U.S. procedure volumes increased approximately 9% over Q3 2021, driven by existing LENSAR laser systems, while Europe contributed a 3% increase [10][22] - The total number of procedures sold in Q3 2022 was 28,453, down from 30,765 in Q3 2021, with the decline attributed to South Korea's reimbursement issues [22][23] Market Data and Key Metrics Changes - The South Korean market experienced a significant decline in procedure volume, resulting in an approximate $725,000 decrease in revenue compared to Q3 2021 [19][22] - The U.S. market remains crucial for LENSAR, representing the largest premium surgical procedure market globally, with plans for continued market expansion [9][10] Company Strategy and Development Direction - The company successfully launched the ALLY Adaptive Cataract system in the U.S. and aims to place approximately 10 systems by the end of 2022 [7][8] - Future plans include expanding market share in the U.S. and prioritizing other markets based on premium procedure opportunities and regulatory timelines [11][21] - The company is focused on transitioning from the first-generation laser to the ALLY system, with a controlled expansion strategy [20] Management's Comments on Operating Environment and Future Outlook - Management noted strong demand for premium cataract surgeries in the U.S. despite economic uncertainties [10] - The company expects to improve gross margins as supply chain challenges lessen and production volumes increase [24][33] - Management expressed optimism about the future, highlighting positive feedback from surgeons and the potential for growth in the U.S. and European markets [18][21] Other Important Information - Cash and cash equivalents as of September 30, 2022, were $19.3 million, down from $31.6 million at the end of 2021, with cash utilized in the quarter amounting to $5.9 million [25] Q&A Session Summary Question: Can you discuss the ongoing rollout of ALLY? - Management indicated that initial systems have mostly been sold, and they are setting up centers of excellence for early sites to allow physicians to observe ALLY in action [27][28] Question: What kind of utilization are you seeing in accounts that have purchased the ALLY system? - Management reported that the ramp-up period for procedures is faster than expected, with over 1,000 procedures already completed [31][32] Question: Can you discuss your expectations for margins as the ALLY launch continues to scale? - Management expects margins to remain around 50% in the near term, with potential to increase into the mid and upper 50s as supply chain issues are resolved [33]