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Avinger(AVGR) - 2019 Q3 - Earnings Call Transcript
AVGRAvinger(AVGR)2019-11-06 02:48
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Financial Data and Key Metrics Changes - Total revenue for Q3 2019 was 2.4million,a192.4 million, a 19% increase from 2 million in Q3 2018 [20] - Catheter sales increased by 33% year-over-year, contributing to the overall revenue growth [7][20] - Gross margin improved to 35%, up from 31% in Q2 2019 and 27% in Q3 2018 [22] - Net loss before preferred dividends was 4.6million,animprovementof144.6 million, an improvement of 14% from 5.4 million in the prior year [24] Business Line Data and Key Metrics Changes - Pantheris revenue increased by 81% year-over-year and 48% quarter-over-quarter to 1.6million,includingover1.6 million, including over 400,000 from Pantheris SV [9] - Pantheris SV was launched in 25 sites during Q3, with expectations for increased revenue contribution in Q4 [7][11] - Sales for the Pantheris seven-French catheter increased by 29% year-over-year [8] Market Data and Key Metrics Changes - The atherectomy market in the U.S. is over 500millionandgrowing,withsignificantinterestinthePantherisproductline[37]−TheCTOcrossingmarketisestimatedat500 million and growing, with significant interest in the Pantheris product line [37] - The CTO crossing market is estimated at 90 million to 100million,withpotentialforgrowththroughtheOcellarisproduct[38]CompanyStrategyandDevelopmentDirection−ThecompanyisfocusedonexpandingitsproductlinewithPantherisSVandpreparingforthelaunchofOcellaris,aimedattreatingchronictotalocclusions[13][14]−Aimingtoincreasesalesproductivityandexpandthecustomerbasethroughagrowingsalesteam,whichincreasedfrom20to28members[12][41]−Thecompanyplanstomaintainaleanoperatingcoststructurewhiledrivingrevenuegrowthandimprovingmargins[18]Management′sCommentsonOperatingEnvironmentandFutureOutlook−ManagementexpressedconfidenceinthegrowthpotentialofPantherisSVandtheoverallproductline,anticipatingcontinuedrevenuegrowth[26]−ThecompanyisoptimisticabouttheupcomingCEMarkingforOcellaris,whichwillfacilitateitsentryintotheEuropeanmarket[14]−Managementhighlightedtheimportanceofclinicaloutcomesandsafetydataindrivingproductadoptionandmarketexpansion[45]OtherImportantInformation−Cashandcashequivalentstotaled100 million, with potential for growth through the Ocellaris product [38] Company Strategy and Development Direction - The company is focused on expanding its product line with Pantheris SV and preparing for the launch of Ocellaris, aimed at treating chronic total occlusions [13][14] - Aiming to increase sales productivity and expand the customer base through a growing sales team, which increased from 20 to 28 members [12][41] - The company plans to maintain a lean operating cost structure while driving revenue growth and improving margins [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of Pantheris SV and the overall product line, anticipating continued revenue growth [26] - The company is optimistic about the upcoming CE Marking for Ocellaris, which will facilitate its entry into the European market [14] - Management highlighted the importance of clinical outcomes and safety data in driving product adoption and market expansion [45] Other Important Information - Cash and cash equivalents totaled 14.5 million as of September 30, 2019, down slightly from 14.8 million at the end of Q2 2019 [25] - The company has made significant strides in reducing operating expenses while increasing sales and marketing investments [23] Q&A Session Summary Question: What was debt as of Sep 30? - The company had a debt balance of 8.6 million at the end of September, with payment terms beginning in 2021 [27] Question: Will operating expenses remain flat going forward? - The company expects to keep total operating expenses roughly flat while increasing sales and marketing spending [29] Question: What are total FTEs now approximately? - The company has approximately 83 employees, with about 28 in sales [30] Question: How does the company view future gross margin improvements? - Management is optimistic about further gross margin increases as revenue grows and operating efficiencies improve [32] Question: What is the user profile and utilization trends for Pantheris? - Pantheris SV has been shipped to 43 accounts, with ongoing interest and utilization primarily from the seven-French product [34] Question: What is the total addressable market (TAM) for the company's products? - The total market for atherectomy and CTO crossing is estimated to exceed $600 million, with significant growth potential [39] Question: Does the company feel it has good coverage in high PAD incident areas? - The company has strategically placed its sales team in key markets with high atherectomy procedure volumes and plans to expand further [41] Question: Will positive feedback on Pantheris SV accelerate broader rollout? - The company is currently in full national launch mode for Pantheris SV, having transitioned quickly from a limited launch [44]