EDAP TMS(US:EDAP)2023-08-24 15:55Financial Data and Key Metrics Changes - Total revenue for Q2 2023 was €14.3 million, a slight increase of almost 1% compared to €14.2 million in Q2 2022, marking a record level for a second quarter [80] - Gross profit for Q2 was €5.7 million, down from €6.2 million in the same period last year, with a gross profit margin of 39.6% compared to 43.8% year-over-year [83][84] - Net loss for Q2 was €4.7 million or €0.13 per diluted share, compared to a net income of €1.8 million or €0.05 per diluted share in the prior year [85] Business Line Data and Key Metrics Changes - HIFU business revenue for Q2 was €4.9 million, a 63.6% increase year-over-year, driven by the sale of four Focal One units compared to one unit sold in Q2 2022 [81] - LITHO business revenue decreased to €2.2 million from €3.6 million in Q2 2022, attributed to six fewer units sold and supply chain constraints [82] - Distribution business revenue was €7.2 million, down from €7.6 million in the same quarter last year, with nine ExactVu units sold compared to 15 units in Q2 2022 [83] Market Data and Key Metrics Changes - Focal One HIFU procedure volumes in the U.S. grew 85% year-over-year and 29% sequentially in Q2 2023, marking the third consecutive quarter of double-digit growth [8] - Reimbursement approval for High-Intensity Focused Ultrasound in Switzerland took effect on July 1, 2023, which is expected to enhance demand in the DACH region [9] Company Strategy and Development Direction - The company is focused on increasing awareness and adoption of Focal One HIFU as a treatment option for prostate cancer, with strategic investments in clinical sales and educational activities [2][10] - The company anticipates continued strong adoption of the Focal One technology platform, with expectations for notable sales in Q3 and Q4 2023 [33][79] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the remainder of 2023, citing strong underlying demand for Focal One technology and a growing active pipeline for new business [2][52] - The company does not foresee significant headwinds from macroeconomic factors, indicating that hospitals view Focal One as a strategic capital investment [39][40] Other Important Information - The company reported a total cash and cash equivalents of €51.3 million or US$56 million at the end of Q2, down from €58.3 million or US$63.4 million at the end of Q1 2023 [64][78] - The company is actively working on clinical development programs for Focal One HIFU, with positive results reported from ongoing studies [75][76] Q&A Session Summary Question: What are the expectations for system placements in the second half of the year? - Management expects to see notable sales in both Q3 and Q4, indicating a stronger second half of the year [33][34] Question: How is the utilization environment shaping up? - Increased utilization is being observed among both existing and new customers, with a focus on creating market awareness for non-invasive treatment options [21][35] Question: What is the outlook for average sales price (ASP) of disposables? - There is room for growth in ASP, with some price increases already implemented and ongoing monitoring of pricing strategies [37] Question: Are macroeconomic factors influencing hospital purchasing attitudes? - Management does not see significant headwinds from macroeconomic factors, although the purchasing process may take longer as hospitals conduct thorough evaluations [41][42] Question: How long will it take for Swiss reimbursement to reflect in sales? - The timeline for sales impact from Swiss reimbursement will depend on the onboarding process at individual hospitals [44][61] Question: What is the status of supply chain issues in the LITHO business? - Supply chain issues are primarily related to componentry needed for lithotripsy technologies, but are not expected to have long-term impacts on other business areas [62][67]