Neuronetics, Inc.

Good day and thank you for standing by. Welcome to Neuronetic's second quarter 2024 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 the session, you'll need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Mark Glossner. Please go ahead.

Good morning and thank you for joining us for the Neuronetics second quarter 2024 conference call. Joining me on today's call are Neuronetics President and Chief Executive Officer Keith Sullivan and Chief Financial Officer Steve Furlong. Today's call features a live webcast which includes a slide presentation. There's a short delay between the audio over the phone and the slides being shown on the webcast. If you are listening over the phone, we would recommend downloading the slide presentation from our website and following along independently. 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 the proposed transaction with Greenbrook TMS, our business, strategy, financial and revenue guidance, 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 Neuronetic's business, I encourage you to review the company's filings with the Securities and Exchange Commission including the company's Form 10-Q, which will be filed later today, August 12th. The company just claims 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.

Mark, thanks for the introduction. Good morning and thank you all for joining us today. I'll begin by providing an overview of recent performance followed by an operational update. Steve will then review our financial results and I'll conclude with the discussion of our merger with Greenbrook TMS. I'd like to start by saying that our financial performance during the quarter was below our expectations. With revenue of $16.5 million, which was down 7% year over year, the impact of Change Healthcare's cybersecurity breach still lingers. Our utilization in our local consumable segment was up 18% and would have been higher had there not been the related bottlenecks impacting prior authorization caused by Change Healthcare. Despite the positive underlying utilization trends, treatment session revenue was down 5% as our customers were forced to allocate cash to support their operations rather than purchasing new treatment sessions in line with historical patterns. This redevelopment of cash is a result of continued delays in payments from Change Healthcare. We believe that the negative headwinds from Change Healthcare are transient. and our revenue patterns will return to normal over the balance of the year. Based on the trends we are seeing in motor threshold determinations and treatment session utilization, we continue to see strong utilizing underlying demand, and through the continued execution of our commercial strategy, we will drive sustainable long-term growth once we move past these macro challenges. On the capital side of the business, as noted last quarter, our customers experienced challenging securing financing for capital equipment purchases. The process now takes weeks instead of days. We've addressed these headwinds head on by adjusting our Neurostar Summit timing and engaging the financing companies earlier in the process. As a result of our actions, despite the continuation of high interest rates and increased diligence requirements, We were able to recognize revenue on 50 Neurostar systems, which is at the high end of our quarterly guidance of 45 to 50 systems. This highlights the continued demand for Neurostar and our ability to adjust our strategy to execute regardless of prevailing headwinds. We continue to be bullish on the future of Neuronetics based on the results we are seeing from our Better Me program. In July, we fully launched the program nationwide after a tremendously successful pilot. Let me share with you some of the results. Participating practices improved their 24-hour follow-up rates by 6.4 times compared to non-participating providers. Through Neurostar University, at which attendance is a requirement for customers to participate in the program, providers who received advanced clinical training on average treated 61% more patients in need. We've also significantly reduced the time from initial patient interest to first treatment, leading to a 3.7 times more motor threshold determinations. These improvements are making our life-changing NeuroStar treatment more accessible to millions of suffering patients from MDD, OCD, and anxious depression. Despite these outstanding results, we believe there is still room for improvement. With the expansion of the BMP program, we now have a critical mass of participating customers within many of our key markets throughout the U.S. This increases our confidence that providers will respond in a timely manner to focused investments in growing patient awareness and education for NeuroStar. During the second half of this year, we will be piloting a TV advertising campaign in Tampa, Florida. This TV campaign will supplement our existing digital advertising campaigns that have proven to be highly effective. We chose Tampa because it has a high concentration of BMP accounts, and we are confident this group of providers will be representative of the other BMP accounts across the country. This campaign seeks to test the effectiveness of using TV as a medium to increase awareness of Neurostar TMS and facilitates new patients to connect with BMP practices in a specific market. We held a kickoff event in Tampa earlier this month for our BMP providers and other customers wanting to get into the program. They came out of the event very excited to participate in this pilot. as we seek to deliver even more value to BMP practices and help even more patients receive the life-changing benefits of NeuroStar. Another highlight in the quarter was the launch of the NeuroStar TMS therapy for adolescents. Physicians are responding positively to this new option, recognizing the critical need for effective treatments in this age group. We're seeing encouraging adoption rates and positive feedback from providers highlighted by over 425 adolescent patients having been treated since April. With an estimated 4.3 million adolescents in the US impacted by depression, many of whom are poorly served by the limited number of approved antidepressants, our FDA cleared treatment for ages 15 to 21 represents a paradigm shift in addressing this growing mental health crisis. Following our FDA clearance, we've made significant strides in expanding insurance coverage for adolescents ages 15 to 21. Major providers, including Blue Cross Blue Shield of Michigan, Cambia Health Solutions, Premier Blue Cross Blue Shield, California Medicaid, and Aetna, covering over 27.4 million lives nationwide combined, have updated their policies to include adolescents as young as 15. Our dedicated health policy team continues to advocate for further policy updates with providers and payers. As the first and only TMS company with FDA clearance for adolescent treatment, we're at the forefront of expanding access to this vital therapy for particularly at-risk and underserved patient population. To highlight the benefits of NeuroStar can have on adolescent patients, I wanted to share a note we received from a patient who recently completed a course of treatment. And I quote, I started TMS when I was 16 and a half. Before then, I felt hopeless. I had been on too many medications to count and none of them worked for my depression or anxiety. I had no hopes or dreams in life or for my future. My depression was so bad I dropped out of high school, stopped socializing, lost friends, and isolated myself. At first I was scared about starting TMS. I didn't want to get my hopes up because nothing else had worked for my depression. It was hard at first. But over the span of a few weeks, I started to feel less anxious all the time and happier. It became easier to do the things I used to love. Towards the end of TMS, even other people started to notice how happy I was. I could finally laugh, make jokes, and enjoy every moment. I am so much happier now. And I am making plans for my future and have real ambitions and goals in my life. TMS helped me truly realize that things can get better, end quote. It is because of patient results like this that we worked so hard at NeuroStar to bring this therapy to patients suffering from mental health conditions. I would now like to turn the call over to Steve to provide an update on our financial performance.