EDAP TMS S.A.

Welcome to the EDAP TMS first quarter 2021 earnings conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If you would like to ask a question, please press star 1 on your telephone keypad. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeremy Pfeffer with Investor Relations. Thank you. Please go ahead.

Thank you, Donna. Good morning and thank you for joining us for the EDAP CMS First Quarter 2021 Financial and Operating Results Conference Call. On today's call, we will hear from Mark Oksakowski, Chief Executive Officer and Chairman of the Board, and Francois Dietsch, Chief Financial Officer. Before we begin, I would like to remind everyone that management's remarks today may contain forward-looking statements, which include statements regarding the company's growth and expansion plans. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in such forward-looking statements. Factors that may cause such a difference include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission. I would now like to turn the call over to EDAF's Chairman and Chief Executive Officer, Mark Okcikowski. Mark?

Thank you, Jeremy, and good morning, everyone. I will start by providing a brief operational update and then turn the call over to François Ditch to review our financial performance. First, let me start by saying that we believe the first quarter of 2021 and subsequent period marks an important point in the growth trajectory of our business. Without question, the successful commercialization of any novel technology must be supported by present and timely investments. In April, we had the opportunity to raise substantial capital that will enable us to fully support our ongoing U.S. focal one commercialization effort, while also advancing a key clinical program in endometriosis. This capital raise was strategically important for several reasons. First and foremost, our strengthened balance sheet now provides us the additional resources to fully engage multiple channels across the U.S. healthcare market. In addition to investing further in market access and reimbursement, which I will discuss in a moment, these additional funds will allow us to attract top tier talent with vast expertise in driving adoption of innovative technologies such as focal one. In addition, we are building out our U.S. clinical marketing and sales organization so that we are well positioned in this most important market. With HIFU gaining broader acceptance as an effective and less invasive paradigm for the management of prostate cancer relative to surgical options, we will firmly establish ourselves as the leader and clearly at the right place at the right time. To that end, we will continue to invest in our U.S. infrastructure. And these activities will be complemented by the many top tier hospitals that have already adopted focal lines that are serving as important reference accounts for our company. Some of these include Mount Sinai, Cleveland Clinic, Ochsner Medical Center, UCSF, and many others, and our pipeline continues to grow, notwithstanding restrictions on some sales and outreach activities resulting from the pandemic. While our strategic marketing efforts will clearly involve engaging leading KOLs, it's equally important that focal one reaches a wide breadth of urology medical practices, And the added resources provided from this funding will help us maximize the opportunity to develop these important relationships. Secondly, our recent financing was also a clear sign of investor confidence that our high food technology represents an important advancement in the management of prostate cancer. As we all know, clinical data generated from well-controlled trials ultimately drives medical decision-making of the time. Without question, the capital we raised during the first quarter clearly reflects a recognition by the investment community that focal one is becoming an important new treatment option for patients battling prostate cancer. Finally, I would also like to add that we truly appreciate the high-quality healthcare-focused investors that participated in this offering. It is gratifying to know that after spending so much time conducting due diligence on our technology and studying the competitive dynamics of our end market, these firms have placed their capital with us based upon a shared vision of bringing an important new innovation to the market. This financing also resulted in expanding research coverage, which we believe will help raise the worryness of our company and the significant unmet need that we are addressing. Of course, launching a new medical technology in the U.S. healthcare market brings several challenges, not least of which is navigating a complex reimbursement third-payer landscape. Changing long-standing medical practices is never easy, and while adding a superior technology, sufficient capital, and a sizable marketing apparatus are all essential elements to a successful product launch. We also recognize that building productive relationships with private insurers and government entities like CMS are critical to establishing focal one as an accepted mainstream procedure. In early March, we announced increased partnerships with two of the leading reimbursement consultancies, MTP and Argenta Advisors. These partnerships are off to a strong start, and we anticipate positive momentum on the reimbursement and market access front across key hospital networks and physician practices throughout the remainder of the year and beyond. Securing attractive reimbursement levels and achieving the broadest possible patient coverage for COVID-19 remain top priorities for our company, and these two strategic partnerships, coupled with the previously announced establishment of a Category 1 TPC code and reimbursement to physicians performing ablation of malignant prostate tissue with HIV in the U.S., will help us drive further adoption and growth across the U.S. From a sales perspective, our combined 401 exact view offering continues to resonate with healthcare institutions as the only end-to-end urology suite available on the market today. Now, I will provide a brief update on our endometriosis program. As noted during our last conference call, this phase two study will enroll a total of 38 women across five major hospitals in France. who will be assessed over a six-month follow-up period. Investigators will evaluate the safety and efficacy of HIFU for this pathology. At the end of April, we opened a second trial site in Angers-France that has already successfully treated two patients. Across both trial sites, we have now treated a total of 19 patients. Enrollment is tracking closely with our internal expectations as we are pleased to be able to execute this study according to our original timeline. We believe the treatment of endometriosis could be greatly improved with application of LACE invasive procedures and the use of HIFU technology could offer an important minimally invasive treatment option for these patients. We look forward to updating you on this important program throughout the year. François will cover the financials in a moment, but let me provide a few highlights from the first quarter. I am happy to report that we generated first quarter total revenue of €10.3 million, or $12.4 million, which represents a strong growth of 35.4% year-over-year and a new Q1 record revenues for the company. We expanded our growth margin to 42.4% and increased our 220 basis points as compared to 40.2% in the first quarter of 2020. Revenue growth and margin extension led us to achieve a profitable quarter for the company, both on the operating and net income basis. Our high school revenues were down slightly versus the fourth quarter of 2020, This was a difficult comparison as we had a particularly strong December, signing key accounts, a few of which we outlined in the press release on December 30th. We also experienced some toughness in high food treatment driven revenues in Q1, particularly in Europe where the pandemic has hit especially hard. However, it is important to note that there is a natural lag between treatment driven revenues and cases performed at hospitals buy kits in bulk and use them over time. In the U.S. particularly, we are pleased by the continued growth in the number of treatments performed in Q1. Most of our key academic centers have increased their high food treatment numbers as compared to Q1 of last year and also sequentially as compared to Q4 of 2020. This is in part driven by the adoption of the Category 1 CPT code since its official implementation in January of 2021, as well as the broadening of wariness of HIFU as an important addition to the Eurology Parliamentarium. Turning to our very strong cash position, we ended the first quarter with cash-in-cash equivalents of EUR 24.4 million or USD 28.6 million, as compared to 24.7 million euros or $30.2 million as of December 31st of 2020. As noted earlier, subsequent to the end of the first quarter, we completed an underwritten public offering of American repository shares that yielded gross proceeds of approximately $28 million. We have a strong balance sheet with which to advance our accelerated growth plan in the U.S. and elsewhere. And now our CFO, Francois Ditch, will provide some details of our financial results. Francois.