Ekso Bionics Holdings, Inc.

Q4 2022 Earnings Conference Call


spk_0: greetings and welcome to the exo by on it's fourth quarter twenty twenty two financial results conference call at this time ah participants are analysts and only most a brief question and answer session will fall the formal presentation if anyone should require operator assistance during the conference please press start zero on your telephone keypad and as a reminder this conference is being recorded it is now my pleasure to introduce your host match steinberg within partners thank you ma'am
spk_1: you may begin
spk_2: thank you operator and thank you all for participating in today's call twenty me some actual biotics or scott davis chief executive officer jerome long chief financial officer and jason jones chief operating officer earlier today axel bionics released financial results for the quarter and year ended december thirty first twenty twenty two a copy of the press release is available on the company's website before we began a like to remind you that nasa will make statements during the school that include forward looking statements within the meaning of the federal securities laws which are me pursuant to safe harbor provisions of the private securities litigation reform act of ninety ninety five any statements made during this call that are not statements of sort of fact should be deemed to be forward looking statements all forward looking statements including statements were going our business strategy future financial or operating expectations or our expectations of the regulatory landscapes governing our products and operations are based upon management's current estimates and various assumptions these statements involved material risks and uncertainties such cause actual results are events to materially differ from those anticipate on fire by these forward looking statements accordingly you should not place undue reliance on the statements for list and description of the risks and uncertainties associate with our businesses see all filings but the securities and exchange commission exo disclaims any obligation except as required by law to update or revise a financial or operated operational projections it's regulatory outlook or other forward looking statements for the because of new information future events or otherwise this conference call contains time sensitive information is accurate only out of the broadcast today march twenty eight twenty twenty three and without from the call over the iso by our chief executive officer scott davis
spk_3: you
spk_2: i will choose to have officially closed twenty twenty few with continued solid demand for exo and are and the completion of our most significant transaction today the acquisition of human motion control business unit board agency from parker hannifin the importance of this acquisition cannot be understated as it expands or product offering across the continuum of care to home and community use markets this is also why we are announcing our to for one twenty two financial results weeks later than usual as is often typical and matters involving is combinations i'll touch on this deal more detail surely including what it means for business
spk_4: and the value we're bringing to customers and places
spk_2: the first summary of a fourth quarter business performance we generate revenue a three point six million dollars in fourth quarter which included bookings totally twenty seven x health devices of which to were indigo devices that were booked in the last two weeks of december post close of the acquisition throughout our actual health segments we continue to leverage or advanced robotic exoskeleton technology and rehabilitated programs to help patients on the road to recovery and improved health would better outcomes than the current standard of care and twenty twenty two we successfully executed on our commercial strategy
spk_4: resulting in the placement of substantial have a substantial volume of additional devices with a network operators globally and the completion of many multi unit orders both of which contributed to it
spk_2: to drive a solid year for excellent article games and record revenue internationally with excellent are receiving at the a clearance for the multiple sclerosis indication the first known exoskeleton device to carry this designation for resulted of use and patients suffering from them as to see as of for excellent are continues to grow demand an order flow for in our remain robust with revenue in our exo health segment of by more than twenty percent compared to twenty twenty one overall for the year we reported one hundred x o held device bookings are cumulative conversion and really will rate is eighty one percent and we now have more than two point two million dollars of contracted unrecognized revenue under our subscription model furthermore we have made significant inroads with many of the large network operators or ideas throughout the year as they continue to make excellent either standard of care lower extremity neurological rehabilitation or pipeline of new opportunities remade strong although due to more challenging economic and market conditions the sales timeline is taking longer than previous course nevertheless we remain bullish on our future growth prospects are integrated sales and marketing teams are executing on our overall commercial strategy putting us what we believed to be a favorite
spk_4: opposition heading into twenty twenty three
spk_2: on the international front we achieved record annual revenue performance in europe and a pact with a pack growing more than sixty percent year over year
spk_4: we're excited by this increase and will continue to invest in our international footprints to support ongoing growth in these regions
spk_2: now turning to our acquisition of the agency business from parker hannifin which is synergistic in bronze or product portfolio and commercial health and expands or reach into home use
spk_4: these products acquired include indigo therapy and indigo personal now renamed exo indigo therapy and exo indigo percival both devices are as the a clear lower limb powered exoskeleton which enabled task specific overground gay training to patients with weakness or paralysis and or lower extremities
spk_2: exit indigo personal is a lightweight exoskeleton safe for use in most home and community environments it's the only known exoskeleton to offer a modular could connect design which allows the portability and producers to put on and take off the device without assistance this device allows for gate repaired individuals to stand and walk again granting them and new level of independence at home and in the community xl indigo personal is primarily soul to veterans by using existing reimbursement and relocation programs supported to the veterans' association but has also been funded through workman's compensation and various international programs to believe that our future opportunities to spend more traditional reimbursement programs both domestically and internationally extra indigo therapy is an adjustable modular exoskeleton used primarily for patients with spinal cord injury that also struck complimenting exos product offering you outpatient patients saudis it can be fitted the most patients and minutes providing the potential for high dose of therapy sessions that further enhance rehabilitation
spk_4: last month we showcased or new xl indigo therapy with functional electrical stimulation or fps at the american physical therapy association meeting and recently filed free market notification five ten k with the us food and drug administration that covers the addition of integrated fps hardware and software to actually go therapy
spk_2: this added technology brings forth further patient benefits allowing for improvement function balance and muscle strength
spk_4: through this acquisition
spk_2: exo of the ongoing development of intelligent robotic specific technology designed for use in the orthotic and prostate or lt industry
spk_4: his potential technologies being designed to would have the capabilities of existing industry leading me idol footwork dogs are capable products to improve the standard of care
spk_2: this is a large and accessible market with establish reimbursement payment and channel channels i was looking forward to continued development along as front also along with these current and future products this combination expands the current xl team to include the former employees of agency comprised primarily of highly experienced engineering operations clinical and sales professionals
spk_4: finally to sacrificial x others added strategic relationships with key commercial and research partners including vanderbilt university
spk_2: the collaboration with vanderbilt is expected to provide a continued path for future research and product development
spk_4: this decade long partnership has yielded the successful in the go product line and has promised prospects for development for a future innovations
spk_2: with exos for engineering staff that experience quality and operations the we're thrilled to have joined forces with this a we academic partner to help our new product development
spk_4: to showcase the value of benefits of our newly integrated product line i'd like to share a story of a patient who regain mobility through the use of exo indigo personal
spk_2: the was initially diagnosed with spinal the and mama tumors despite numerous treatments the tumors return for times beating him partially paralyzed from cervical vertebrae seven down
spk_4: over twenty years of increase neuropathy fill explore different therapies and devices in an effort to maintain his mobility eventually he was chosen to participate in the v ase exoskeleton evaluation programs where after exposure to multiple exoskeleton devices he opted for rehabilitation program utilizing exo indigo go the extra when to go device help still with calvin's aspects of his daily life for example he no longer experiences severe physical challenges when standing and his digestive process is a much improved coding still
spk_2: beyond the physical improvements the indigo exoskeleton has given me the confidence to try sports and social events that i would not have previously we are honored see or products improving the lives of our patients first and and a very grateful to fill for sharing your story turning to an update on our industrial statement exo works in twenty twenty two our actually works business refocused it's product offerings and go to market strategies temporarily reskilling our sales and marketing resources while refocusing and refining our market approach to larger high volume customers we remain encouraged by the high level of engagement with our strategic targets and customers crossed the aerospace automotive manufacturing commercial construction and renewable energy verticals as to progress is it a twenty twenty three
spk_4: we look to expand upon the execution of the strategy set in motion and twenty twenty two and to continue to engage with potential industry partners
spk_2: now i will turn the call over to jason jones or new chief operating officer to provide background i'm self and an overview of the initiatives that had been working on to improve our efficiencies jason
spk_5: thank you scott and thank you for having joined today cause
spk_2: i'm excited system i will add hassle to include operations in addition to product development and background or thing with extra funding he previously certain a senior vice president or part of elements my goal as the of oh it's an like there is an integral part of honor of the fighting management fidel castro into their platform the caffeine design produce the city and service a broader range of products or amplify human emotion and mobility improving operational efficiency of critical to enter the of the scale of business of organically antithesis antithesis repeat and point three billion acquisition of begin to go product line represents the next that and leading the way for face rehabilitation while we are no on our way to successfully integrating the business were also using that as an orphanage in on proof or upgrade systems and processes
spk_5: as one example we now have a second idea manufacturing facility in macedonia ohio currently we are using face provided by parker hannifin for continued operation the grandmother facility for a separate nearby location within the next twelve months and are evaluating how often will utilize how presence additionally have mentioned earlier we are starting the process of combining engineering a part of and team are also working with rounded or in an effort to delay our technology innovation we believe the combined effort he's a few team is unmatched in the field of exoskeleton or anything which helps to further strengthen our position has industry leaders
spk_2: on the i have guide and twenty twenty soon began a half of having a tsunami passionately familiar florida product line that a contrast manufacturing partner will kinda malaysia we believe that will help us stand capacity floor fast and improve part of our current season and for production cunnilingus it again in the first half of twenty twenty three moving forward a farmer executive leadership team i'm intent on ensuring that successful execution of our standing in supporting our corporate it on activities i look forward to contributing to the company's success and that sounded like a turn the car over to our chief financial officer from want to reveal our fourth quarter and for your financial results
spk_6: thank you jason
spk_2: xl generated fourth quarter twenty twenty two revenue of three point six million dollars compared to four point one million dollars for the fourth quarter twenty twenty one
spk_4: are gross profit for the fourth quarter was one point seven million dollars representing a gross margin of approximately forty seven percent compared to a gross margin of fifty nine percent for the same period and twenty twenty one the decrease and gross margin was primarily driven by an increase in service and supply chain costs elevated labor costs and lower average selling prices
spk_2: of device else do the sales channel next operates as as for the fourth quarter of twenty twenty four six point one nine dollars compared to seven million dollars for the fourth quarter of twenty twenty one the fourteen percent decrease was primarily due to lower legal and consulting expenses net operating loss and the fourth quarter twenty twenty two was four point four million dollars compared with a net offering loss of four points million dollars and prior year period jane on more liabilities for the quarter ended december thirty one twenty twenty two was point three million dollars from the revaluation of warrants issued in twenty nineteen twenty twenty and twenty twenty one compared to have two million dollars game
spk_4: associated with a revaluation warrants issued and twenty nineteen twenty twenty and twenty twenty one for the same period and trying to one
spk_2: turning to our for your results for the year and a december thirty one twenty twenty two revenue increased by fifty percent to twelve point nine million dollars compared to lump point two million dollars to the same period and twenty on one family growth was primarily groom by an increase in the volume of xl and are devices gross profit for the for your ended december thirty one twenty twenty two one six point two million dollars representing a gross margin of approximately forty percent compared to a gross profit of six point seven million dollars for the same period and twenty twenty one representing a gross margin of sixty percent decline in gross margin is primarily do to an increase in service and supply chain cause elevated labor costs and lower average selling houses of device else do the sales channel next operating expenses for the twenty two to four year or twenty one point eight million dollars compared with twenty point six million dollars for the prior year period increase are primarily due to one time sermons costs associated with management changes costs related to the relocation of a corporate headquarters in manufacturing facility and acquisition and often and cost of a amc these increases were partially offset by decrease and legal and consulting expenses now offering loss in twenty twenty two fiscal year was fifteen point six million dollars compared with thirteen point eight million dollars for the comparable period of time twenty points for the year ended december thirty one twenty twenty two were recorded a game on weren't liabilities of one point three million dollars associated with the revaluation of warrants issued in twenty nineteen
spk_4: twenty twenty and twenty twenty one compared to a four million dollar gain associate with revaluation of warrants issued and twenty nineteen twenty twenty and twenty twenty one for the same hundred and twenty on one cash use and auburn activities and than twenty twenty two fiscal year fourteen point seven nine dollars as a december thirty one twenty twenty two the company had a strong cash balance of twenty point five million dollars please see our tent a falls earlier today for further details regarding corner and for your operator you me now
spk_7: i'll open a large courses
spk_0: thank you we will not be conducting a question and answer session of you would like to ask a question please press star one on your telephone keypad a confirmation time will indicate that your line is in the questions you you may press start to as you would like to move your question from the que if a participants using speaker equipment may be nicer to pick up the handset before pressing the starches a moment while we pull for questions and the first question comes on the line of rk some hc wainwright please proceed to question
spk_8: yeah thank you good afternoon scott
spk_9: i are case
spk_10: so
spk_11: at the start of the called and said i i think you said there were two indigo of installs in the fourth quarter is that part of the backlog that you received when when you went through the acquisition and if that is true it all what sort of bachelors is of their mouths
spk_12: going into twenty three
spk_13: so are rk thank you for your question as is those were not backlog unit those readers were actually hum orders received in the last three weeks
spk_14: of december
spk_13: post close so with the acquisition we did not receive a a backlog of orders harm however we do have a strong pipeline
spk_15: okay okay that's good and then
spk_16: so for the and our business
spk_11: you know you're saying that the demand is robust
spk_17: the pipeline as strong or the same time
spk_18: you're saying the lead time is becoming longer
spk_11: so have i don't know what have you define lungs and also is there a possibility that it all in some part of the backlog ah i lot the because it out oh yeah because if if the backlog becomes longer do deal
spk_13: do you foresee any loss in terms of the demand as well because you know nobody wants to wait forever to get the product and ah understood so on and you know in terms in terms of our our backlog i think as we came through twenty twenty two we managed backlog out pretty well certainly as we as we you pushed to the close of of twenty twenty two so i generally speaking
spk_2: you know we're not carrying a huge backlog out of orders the with us to answer the first part of your question which is regarding the of the the lead time hi to are generally speaking we are experiencing a slightly larger the longer times too hard to close some how may be
spk_4: a couple of months i generally speaking anywhere from thirty to sixty days that we're seeing as we have seen more of our customers are beginning to use thousand third party financing options that we offer and it simply takes a bit longer to work through that dumb that process by
spk_19: but in general we have a strong pipeline
spk_4: going forward
spk_5: and and looks good and jason i would like to elaborate a little bit arcade just as it's as if and jones asked me to come
spk_2: hit the clarify on lean times of our when we say we times and with contacts are really talking about deal closed time or actually time on shit man is quite short usually i'm not going to say some media for it you know it's it's between four and for and eight weeks probably with are estimated so i don't think that once the order then three times
spk_20: pretty sure i think scott referring to the to the deal cycle time as opposed to lead time for shipments
spk_11: thanks for that the last lesson from me is and now that zero had indigo for few months ah franklin when you think indigo
spk_4: will be completely integrated with index of business such that you can actually stuff synergies not only on the sales and but also not been reading it well i think such as that's a that's a two part question and and from of a sales and go to market standpoint
spk_13: the ungracious been progressing quite well
spk_4: we're we have aligned are far commercial team and be know we have great
spk_13: synergies with that in in many ways exos sales team all carry with them the ah the indigo of product line as well and we have a slightly different
spk_4: method for i'm sales methodology for selling the that the personally unit that has also been a wind
spk_5: to work in conjunction with our with our sales team so i would say that that overall that side of the business and integration has been going very well there's a second part of the integration which involves looking for synergies and in operating and engineering and maybe adjacent would be best to answer those yeah sir so maybe as a quick update on integration so from a from assistance prospective crt in accounting system those are fully integrated already so that integration is complete come on the are the side that we have a plan that includes integrating some systems there that really is going to take through the remainder of the year this year is kind of incremental and then the last area is kind of on pure operations manufacturing supply chain those are separate functions today and i think that's a longer process
spk_11: yes because the the business units are kind of operating as have already been over the next maybe twelve eighteen months i think or prices are more integrates on the supply chain and operation sides
spk_21: thank you about thank you bought something like this
spk_0: and you are case
spk_13: there are no further questions from the floor back over to start davis for closing comments
spk_4: price thank you john and thanks everyone for joining us today
spk_13: twenty twenty two was a transformational year for exo biotics was highlighted by the successful acquisition of the indigo product line at the a clearance to market excellent are for rehabilitation use in patients with m s and a strong number of exo health bookings complimentary acquisition of the agency business was critical to our future growth principally as it expands our product offering across the continuum of care to home to meter to use markets we can now reach more patients in the across the larger market opportunity we believe the smooth integration of the agency business combined with the continued strong demand for our industry leading products
spk_4: as as well positioned to continue our momentum is a twenty twenty three and beyond
spk_0: we look forward to providing updates on a continued progress thank you and have a great day

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