LENSAR, Inc.

Ladies and gentlemen, please continue to stand by. Your conference will begin shortly. Thank you. © transcript Emily Beynon Good morning and thank you for your participation. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. As a reminder, this conference call will be recorded. I would now like to turn the call over to Mr. Cameron Radunovic of Burns McLellan. Mr. Radunovic, please go ahead. Cameron Radunovic Thank you.

Good morning and welcome to the LENZAR Second Quarter 2023 Financial Results Conference Call. Earlier this morning, the company issued a press release providing an overview of its financial results for the quarter ended June 30th, 2023. This press release is available on the investor relations section of the company's website at www.lenzar.com. Joining me on the call today is Nick Curtis, Chief Executive Officer of Lenzar, who will review the company's recent business and operational progress. Following his comments, Tom Staub, Chief Financial Officer of Lenzar, will provide an overview of the company's financial highlights, before turning the call back over to the operator to facilitate answering any questions you may have. Today's conference call will contain forward-looking statements, including those statements regarding future results, unaudited and forward-looking financial information, as well as the company's future performance and or achievement. These statements are subject to known and unknown risks and uncertainties, which may cause the company's actual results, performance, or achievements to be materially different from any future results or performances expressed or implied in this presentation. You should not place undue reliance on these forward-looking statements. For additional information, including a detailed discussion of the company's risk factors, please refer to the company's documents filed with the Securities and Exchange Commission, which can be accessed on the website. This conference call contains time-sensitive information that is accurate as of only the date of this live broadcast, August 9th, 2023. LENZAR undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this live conference call. It is my pleasure to turn the call over to Nick Curtis. Nick?

Thank you, Cam, and good morning to everyone. Thank you for joining us on our second quarter 2023 conference call. I'm pleased to report that Lensar had a strong quarter, placing 14 systems in Q2, bringing our total number of Ally systems installed 2023 year to date to 18, well on our way to our goal of having 30 or more systems installed this year. Our second quarter revenue increased nearly 50% over the same quarter in 2022. which can be attributed to both robust system sales and an increase in lease revenue. Partially supporting these increases was the state start of multi-system placements into private equity-owned and or managed ophthalmology groups. We're beginning to see momentum in both areas and hope to see strong demand as additional private practice surgeons as well as the PE groups realize the technological, financial, and operational benefits to Ally that distinguish it from all other competitive systems, having older, slower, and outdated technology. As we highlighted in a press release in July, the adoption of Ally in private equity-owned ophthalmology groups has been steadily increasing as we have completed the installation of multiple Ally systems in five private equity-owned ophthalmology groups. Each of these groups has the potential to add multiple Allies in the future upon benefiting from the system's higher levels of precision, ability to support improved patient outcomes, and practice level efficiency in other sites within these commonly owned and or managed practices. Private equity-owned ophthalmology groups are growing, currently account for about 14% of the total cataract surgery procedures being performed in the United States, making these groups synergistic new partners for Lensar, where we're gaining traction due to the advantageous financial, and outcomes-based value of using the Ally system. Looking more closely at the U.S. market, which remains our primary area of focus in 2023 and into next year, procedure volumes grew 13% compared to the same period last year. To this point, and according to recent data published by MarketScope, Lensar continued to increase market share in the second quarter of 2023, with Lensar systems utilized in an estimated 15.6% of all FLAX procedures during the second quarter of 2023. This marks an increase from the 15% reported in the first quarter, demonstrating consistent growth and adoption, and most importantly, utilization of our technology in the market. Furthermore, we are particularly pleased with the performance of our Ally systems among users who have transitioned from or added to our previous generation LLS technology. Procedure volumes and utilization for these users increased by an impressive 15% over the first half of 2022. This level of growth has exceeded our internal expectations and demonstrates the value that Ally brings to practices in terms of operational efficiencies, yielding better economics for these practices. As a reminder, the US represents the largest premium procedure market in the world and one of significant importance to our company. The feedback we continue to receive from our growing customer base is immensely gratifying, reaffirming the positive impact that Ally is making in the field of femtosecond laser-assisted cataract surgery and advancing the market for premium cataract surgery procedures overall. Particularly noteworthy are those users who have switched from competitive systems to Ally. To further highlight this point, 50% of our 2023 Ally placements are new surgeons that are recognizing the benefits of Ally and leaving behind the more entrenched legacy competitive systems previously used. We believe Ally's speed, ergonomics, size, open architecture, and ability to communicate with multiple preoperative devices in managing astigmatism provide more versatility, combined with the ability to perform an all sterile procedure are compelling reasons to switch from older generation technology. Ally stands out as a state-of-the-art solution, increasing productivity with faster and more efficient procedures, and provides the necessary features to allow surgeons to not only enhance their workflow, but also improve patient care and outcomes. From a marketing and sales perspective, we continue to target and nurture nearly 160 leads from high volume competitive femtosecond laser users who have expressed interest in the Ally system. These leads are in various stages of our marketing and sales cycle. We're confident that they are more than enough to deliver on our stated 2023 goal of at least 30 systems by year end 2023. The capital equipment market and pacing from lead to close to install can be described as lumpy, more seasonal, and a bit unpredictable timing-wise. Adding complexity with PE-owned and or managed groups can extend the sales cycle timing-wise, but we remain very optimistic that at the end of the day, we will continue to take market share from the older competitive technologies while growing the overall market in femtosecond laser utilization. We are working hard at continuing to increase the interest and pipeline for Ally and have a strong belief that we have the right initiatives in place which are becoming more obvious over time. When you remove South Korea from year-to-date procedure volumes, our worldwide procedure volume has increased 15% year-over-year. We're hopeful this challenge is resolved in 2023 and that this strong contributing region returns to being a sizable piece of our procedure volume in 2024. Lastly, we ended the quarter in a strong financial position with $25.5 million in cash and cash equivalents. Following the successful completion of our May 2023 financing, we believe that Lensar is in a strong and advantageous position to drive forward with our plans for Ally's continued success by increasing our marketing efforts, expanding our sales and distribution networks, and continuing to build strong relationships with our valued customers, distributors, and other partners. Now let me turn the call over to Tom, who will cover our financial highlights for the quarter. Tom?