Neuronetics(US:STIM)2023-05-13 16:13Financial Data and Key Metrics Changes - Total revenue for the first quarter was $15.5 million, a 10% increase from $14.2 million in the prior year [62][74] - U.S. treatment session revenue was $10.6 million, up 12% compared to the first quarter of 2022 [64] - EBITDA was negative $8.8 million, an improvement from negative $9.5 million in the prior year quarter [4] - Gross margins were 73.3%, down from 75.4% in the prior year quarter, primarily due to revenue mix and increased capitalized software amortization [75][126] - Net loss for the first quarter was $10.5 million or $0.38 per share, compared to a net loss of $10.8 million or $0.41 per share in the prior year [76] Business Line Data and Key Metrics Changes - The company shipped 49 systems in the first quarter, up from 48 in 2022, aligning with the strategy to ship between 45 and 50 systems per quarter [2][40] - NeuroStar system revenue was $3.9 million, compared to $3.6 million in the prior year [74] - The Service Provider segment returned to growth, albeit at a slower rate than local per-click customers [42] Market Data and Key Metrics Changes - The company noted a more than 25% increase in marketing spend among participants, indicating value in the program [33] - Co-op marketing program participation increased over 60% compared to the first quarter of 2022 [66] - BlueCross BlueShield of Mississippi updated its policy to allow non-physician practitioners to prescribe NeuroStar therapy, expanding access to treatment [70][71] Company Strategy and Development Direction - The company aims to achieve cash flow breakeven in 2024, supported by top-line growth and operating expense management [105][106] - Focus areas for 2023 include increasing participation in NeuroStar University, enhancing co-op marketing program participation, and creating a network of accounts following NeuroStar best practices [65][67] - The company is actively working with providers to advocate for health policy changes that broaden access to NeuroStar TMS therapy [71][113] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in treatment session revenue growth and raised annual guidance for 2023, expecting revenue in the range of $68 million to $73 million [5][39] - The company is encouraged by the performance in the first quarter and anticipates continued solid treatment session growth [73] - Management highlighted the importance of educating non-physician practitioners to increase access to NeuroStar treatment [17][97] Other Important Information - The company secured an amended credit facility with SLR Capital Partners, providing up to $60 million in borrowings [4][54] - Operating expenses for the quarter were $21.3 million, an increase of $500,000 compared to the first quarter of 2022 [104] Q&A Session Summary Question: What gives you the conviction to raise guidance? - Management noted positive signs from Greenbrook and increased confidence in treatment session revenue growth [57][81] Question: Can you provide more details on the co-op marketing program? - The program has been simplified to make it easier for accounts to participate and submit ads [82][110] Question: How do you anticipate growth rates for Q3 and Q4? - Management expects revenue per active site to increase in Q2, remain steady in Q3, and increase in Q4 [86] Question: What changes have occurred in reimbursement policies? - The company is actively working with payers to reduce the number of failed medications required before covering TMS treatment [88][113] Question: Can you provide insights on the ramp-up period for new sites? - The ramp-up period typically takes 90 to 180 days for new sites to reach full treatment session run rate [120][125]