Financial Data and Key Metrics Changes - Q4 revenues were $1.7 million, down from the prior year quarter, reflecting a focus on gross margins and product line profitability rather than top-line growth [8] - Gross profit was $1.1 million with a gross margin rate of 62.2%, improving by 15 percentage points over the prior year quarter [8] - Operating expenses totaled $2.7 million, a reduction of $1.8 million or 40% from the prior year quarter [9] - Net loss was $1.1 million, down by $1.7 million or 62% from a loss of $2.8 million in the prior year quarter [9] - The company ended the year with $3.1 million in cash, approximately level with cash at the end of Q3 [16] Business Line Data and Key Metrics Changes - DPNCheck revenue for Q4 was $900,000, up 51% year-on-year, driven by a 78% growth in the U.S. Medicare Advantage market [10] - For the full year, DPNCheck revenue was $4.2 million, up a couple of percent, with the U.S. market up 25% and international down 44% [11] - ADVANCE revenue was $280,000 in Q4 and $1.2 million for the full year, compared to $300,000 and $1.4 million in the prior year [13] - Quell posted revenue of $500,000, down from $2.8 million in the prior year quarter, with ad spending lower by $1.5 million or nearly 86% [14] Market Data and Key Metrics Changes - The U.S. market for DPNCheck is roughly two-thirds of the business, with new customer accounts contributing to growth [10] - International sales for DPNCheck were down 44%, entirely attributable to Mexico [11] - Asian markets for DPNCheck were flat year-on-year [11] Company Strategy and Development Direction - The company is focused on profitable growth, emphasizing gross margins and product line profitability [8] - A major upgrade of the DPNCheck device is expected to launch in Q4 2020 to fuel future growth [20] - The Quell business is being operated at reduced promotional spending levels to move towards profitability [21] - The company is committed to identifying commercial strategies and clinical applications for Quell that deliver consistent profitability [24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for continued growth in the Medicare Advantage market and increased sales in Asia for DPNCheck [19] - The company is actively engaged with the FTC regarding earlier Quell advertising [22] - Management believes NeuroMetrix has excellent products targeting large markets and is structured to support growth and profitability [23] Other Important Information - The capital structure remains simple, consisting only of common stock and being debt-free [17] - All previously outstanding convertible preferred shares were converted to common stock during the quarter [17] Q&A Session Summary Question: How much of Quell revenue was recurring from electrode reorders versus new system purchases? - Management indicated that it was about 50/50 [29]
NeuroMetrix(NURO) - 2019 Q4 - Earnings Call Transcript