ReWalk(LFWD) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics - Revenue for Q4 2023 was $6.9 million, up 216% from$ 2.2 million in Q4 2022, primarily due to the acquisition of AlterG [8] - Excluding AlterG sales, Q4 2023 revenue was $2.2 million, consistent with Q4 2022 [8] - GAAP operating loss for Q4 2023 was$ 6.1 million, compared to $5 million in Q4 2022 [12] - Non-GAAP operating loss improved to$ 3.8 million in Q4 2023 from $4 million in Q4 2022 [12] - Gross profit for Q4 2023 was$ 2.4 million (35.5% of revenue), up from $0.7 million (30.9% of revenue) in Q4 2022 [61] Business Line Data and Key Metrics - ReWalk Exoskeleton revenue in Q4 2023 was flat compared to Q4 2022, with the same number of units sold [87] - MyoCycle FES training cycle revenue declined slightly, offset by an increase in ReStore unit revenue [87] - AlterG backlog at the end of Q4 2023 was 46 systems, lower than Q3 2023 due to commercial reorganization [9] - The company expects to launch a new AlterG anti-gravity system mid-2024, targeting smaller private practice clinics [97] Market Data and Key Metrics - The company achieved Medicare reimbursement for the ReWalk personal exoskeleton in 2023 and expects Medicare claims to begin processing in April 2024 [4][74] - The US market is a key focus, with plans to expand Medicare coverage and engage private payers and Workers Compensation groups [18] - In Germany, the company expects up to 50% year-over-year growth in the exoskeleton market [102] - The company has 19 distributors in the EU and 22 distributors in the rest of the world [5] Company Strategy and Industry Competition - The company rebranded as Lifeward, integrating ReWalk and AlterG to unify teams and leverage strengths, resulting in$ 3 million in annual net savings expected in 2024 [56] - The company is shifting its US sales focus to physician referrals to improve scalability and patient qualification [71][108] - Technological advancements include a new AlterG anti-gravity system for smaller clinics and AI integration into exoskeleton prototypes [97][98] - The company aims to achieve profitability by 2026, driven by revenue growth, cost reductions, and operational synergies [72][85] Management Commentary on Operating Environment and Future Outlook - Management is optimistic about Medicare reimbursement finalization, expected to positively impact stock price and revenue growth [13][74] - The company expects 2024 revenue to be between $28 million and$ 32 million, driven by Medicare claims and new product launches [66][83] - Operating losses are expected to decline sequentially in 2024, with visibility to future operating profit [16][67] - The company is prepared for a reverse stock split if CMS reimbursement rates are not finalized in time to meet NASDAQ compliance [65][92] Other Important Information - The company has 70 ReWalk cases in process as of December 31, 2023, with 49 in Germany and 21 in the US [60] - Cash and cash equivalents at the end of Q4 2023 were $28.1 million, with no debt [91] - The company has submitted 35 claims to Medicare and plans to submit an additional 60-75 claims in 2024 [83][88] Q&A Session Summary Question: CMS Reimbursement Timeline - The company expects CMS reimbursement rules to take effect on April 1, 2024, with final payment rates anticipated soon [74][101] Question: Growth Expectations in Germany and Europe - The company expects strong growth in Germany, with up to 50% year-over-year growth in the exoskeleton market, supported by 19 distributors in the EU [102][117] Question: AlterG Revenue Dynamics and New Product Launch - AlterG revenue is expected to grow sequentially in 2024, with a new product launch targeting smaller clinics mid-year [39][76] - The new AlterG product is designed for smaller private practices, addressing a previously underserved market of approximately 15,000 clinics in the US [25][119] Question: Physician Referral Strategy - The company is shifting to a physician-focused referral model to improve scalability and patient qualification, targeting PM&R doctors initially [71][108][126] Question: Integration Savings Timeline - Integration savings of$ 3 million are expected to phase in throughout 2024, with full impact realized later in the year [130]