Neuronetics, Inc.

Good day and thank you for standing by. Welcome to the NeuronetX fourth quarter 2021 financial and operating results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star one on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star then zero. I would now like to hand the conference over to your host today, Mark Klossner. Please go ahead.

Good morning and thank you for joining us for Neuronetics' fourth quarter 2021 conference call. Joining me on today's call are Neuronetics President and Chief Executive Officer Keith Sullivan and Chief Financial Officer Steve Furlong. Before we begin, I would like to caution listeners that certain information discussed by management during this conference call will include forward-looking statements covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. including statements related to our business, strategy, financial and revenue guidance, the impact of COVID-19, and other operational issues and metrics. Actual results can differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. For discussion of risks and uncertainties associated with Neuronetics business, I encourage you to review the company's filings with the Securities and Exchange Commission including the company's annual report on Form 10-K, which will be filed today. The company disclaims any obligation to update any forward-looking statements made during the course of this call, except as required by law. During the call, we'll also discuss certain information on a non-GAAP basis, including EBITDA. Management believes that non-GAAP financial information taken in conjunction with U.S. GAAP financial measures provide useful information for both management and investors by excluding certain non-cash and other expenses that are not indicative of trends in our operating results. Management uses non-GAAP financial measures to compare our performance relative to forecast and strategic plans, to benchmark our performance externally against competitors, and for certain compensation decisions. Reconciliations between U.S. GAAP and non-GAAP results are presented in the tables accompanying our press release, which can be viewed on our website. With that, it's my pleasure to turn the call over to Neuronetics President and Chief Executive Officer Keith Sullivan. Thank you, Mark.

Good morning, and thank you for joining us. I'll begin by providing an overview of the fourth quarter and full year performance, followed by an operational update. Steve will then review our financial results, and I'll conclude with some thoughts on 2022 before turning to Q&A. I'd like to begin by thanking our employees for their hard work and commitment as they have seamlessly navigated the complexities of the ongoing pandemic to allow us to successfully execute on our initiatives as we seek to bring relief to patients suffering from depression. I'm very proud of everything that we accomplished in 2021, which was capped off by a strong fourth quarter. Despite the ongoing macro headwinds that existed during the year, We successfully overhauled our commercial organization and fundamentally rebuilt our approach to educating patients and customers, driving awareness of NeuroStar, and helping patients get relief from their depression. These strategies have helped drive the momentum we generated during the fourth quarter, which was continued into 2022. Total revenue in the fourth quarter was $15 million, in line with the top end of the revenue range provided in early January. and above the guidance issued within our last quarterly earnings release. On the capital equipment side, U.S. Neurostar Advanced Therapy revenue was $2.8 million, driven by solid demand for new systems as demonstrated by our sequential growth of 8% over the third quarter of 2021. U.S. treatment session revenue was $11.2 million, a 2% increase over the fourth quarter of 2020 and a 10% increase over the third quarter of 2021, and represents the highest U.S. treatment session revenue quarter in the history of the company. The increase was a result of growth in treatment session volume across our entire customer base. Turning to an operational update, During the fourth quarter, we announced exclusive commercial partnerships with three leading TMS providers, Zion Healing, Success TMS, and River Region Psychiatry, making Neuronetics their exclusive supplier of TMS equipment. We have seen good early traction from these partnerships and expect a more material impact on our business during 2022. turning to an update on our commercial strategy and marketing initiatives. Since I joined the organization in the summer of 2020, we have made significant investments to overhaul and realign our commercial organization. In January of 2021, we launched a new commercial sales force along with a new communication strategy aimed at driving awareness and educating our customer base on the benefits of the NeuroStar Advanced Therapy for mental health, and ultimately, to help more patients recover from their depression. In addition to bringing in new capital equipment sales force, we launched several customer-focused programs during the year, including our Five Star and Precision Pulse programs. Since August, we have piloted a tool designed to help our customers identify existing patients within their practices. who are candidates for Neurostar therapy and are looking for a new alternative to treatment for their depression. During the second half of the year, we work to optimize the screening process to make it as simple as possible. We have seen encouraging results from our patient tool and we intend to expand it into a greater percentage of our customer base during 2022. Lastly, we made strides towards executing our long-term clinical and regulatory strategy. As we spoke with our customer base regarding NeuroStar, one of the most common pieces of feedback we received was a desire to simplify the motor threshold process, or MT, which is at the beginning of the patient's treatment protocol. In December, we announced that we received 510K clearance on the MT-CAP technology for NeuroStar. The MT-CAP technology makes mapping and determining a patient's motor threshold seamless and eliminates several steps previously needed during the patient's initial evaluation. When combined with the recently launched FAST-MT, treaters can reduce the average motor threshold time by 40%. We have begun a launch of the technology and expect a national rollout during 2022. We are planning to launch other tools over the course of the next 12 months to continue to make the MT faster and more efficient for our clinicians. Over the past two months, we have had significant collaborative interactions with the FDA regarding our pending 510 application for a new indication. We have received and responded to several sets of questions from the agency, and based upon our latest interaction, We anticipate receiving the clearance during the second quarter of this year. We also have a second pending 510K application with the FDA, and we would anticipate receiving questions in the next one to two months. 2021 was a transformational year for Neuronetics, during which we revamped the way we drive the commercial adoption of Neurostar Advanced Therapy for mental health. While there were certainly growing pains at points during the year, we are happy with the way we closed out 2021. In addition to building positive momentum during the year, we made substantial progress on several of our strategic priorities, putting us in a strong position to drive future growth, including signing new exclusive commercial agreements and making progress towards expanding Neurostar's indications for use. With these pieces in place, We are laser focused on the execution of our strategy in order to drive future growth in the business. Now I'd like to turn it over to Steve for a financial review. Thank you, Keith.