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ReWalk(LFWD) - 2024 Q3 - Earnings Call Transcript
LFWDReWalk(LFWD)2024-11-12 16:30
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Financial Data and Key Metrics - Revenue for Q3 2024 was 6.1million,up396.1 million, up 39% from 4.4 million in Q3 2023 [23] - Gross profit for Q3 2024 was 2.2million(36.22.2 million (36.2% of revenue), compared to 0.9 million (19.6% of revenue) in Q3 2023 [28] - Adjusted operating expenses for Q3 2024 were 6.7million,thelowestinthepreviousfivequarters[20]−ThecompanyendedQ3with6.7 million, the lowest in the previous five quarters [20] - The company ended Q3 with 10.7 million in cash and equivalents and no debt [31] - Full-year 2024 revenue guidance revised to 25millionto25 million to 26 million [32] Business Line Performance - ReWalk exoskeleton revenue was 2.5millioninQ32024,up732.5 million in Q3 2024, up 73% from Q3 2023, driven by increased sales in the U.S. and Germany [23] - AlterG revenue was 3.6 million in Q3 2024, up from 3.0millioninQ32023[24]−ReWalkplacementsresultedin20moreindividualsregainingambulationinQ32024[14]−AlterGbacklogincreasedforthethirdconsecutivequarter,with74systemsinbacklogattheendofQ32024[27]MarketPerformance−U.S.leadsexpanded623.0 million in Q3 2023 [24] - ReWalk placements resulted in 20 more individuals regaining ambulation in Q3 2024 [14] - AlterG backlog increased for the third consecutive quarter, with 74 systems in backlog at the end of Q3 2024 [27] Market Performance - U.S. leads expanded 62% year-over-year due to expanded Medicare coverage and commercialization efforts [16] - The U.S. pipeline for ReWalk includes approximately 70 qualified contacts with Medicare and other payors [16] - Germany has 45 ReWalk cases in process at the end of Q3 2024 [25] - Active rentals for ReWalk systems include 23 in Germany and 2 in the U.S. at VA hospitals [26] Strategy and Industry Competition - The company is focused on operational efficiency, including the closure of two facilities, to streamline operations and reduce costs [19] - The ReWalk 7-0 system, under FDA review, is expected to receive clearance in early 2025 [21] - The AlterG NEO model has received strong market reaction, with 40 orders to date [18] - The company anticipates AlterG will be accretive to operations in 2025, driven by revenue recovery and cost reductions [34] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about the growth potential of ReWalk, particularly with Medicare coverage expansion [10][16] - The company expects a strong Q4 for AlterG, setting up well for 2025 [19] - The path to profitability requires quarterly revenue levels of 12 million to $13 million, which the company is aggressively targeting [35] - Management is confident in achieving commercial goals without needing additional cash, supported by current cash reserves and operational efficiencies [36][54] Other Important Information - The company plans to host an Investor Day after the end of the year to provide more insight into its commercial goals and technology expansion [36] - The Medicare claims processing time frame has been about 150 days, which the company is working to shorten [15] - The company has built a dedicated team of clinicians and case managers to support the volume of claims expected in future quarters [15] Q&A Session Summary Question: Comfort level with revised guidance and Medicare reimbursement issues - Management is comfortable with the revised guidance and noted that Medicare claims processing is taking longer than expected, averaging 150 days [38][39] Question: Potential for positive surprises in AlterG revenue - AlterG is improving quarter-over-quarter, with a strong Q4 expected and 40 orders for the new NEO model already in place [41][42] Question: Timeline to profitability - ReWalk growth is the primary driver to reach breakeven, with AlterG expected to recover and grow in parallel [43][44] Question: Cash burn and sustainability - The company expects Q4 cash burn to improve significantly and is confident in sustaining operations without additional cash through 2025 [48][49][54] Question: ReWalk system placements and Medicare Part B patients - The company did not disclose the number of Part B patients among the 20 new ReWalk placements in Q3 [58] Question: Supplemental insurance payments - Supplemental insurance payments are contingent on Medicare claim approval, and the company is working to encourage patients to obtain supplemental insurance [60][61] Question: Medicare accounts receivable and potential write-offs - Medicare claims do not go back far, and the company reserves a portion of claims for potential non-approval [63][64] Question: Reimbursement process improvements - The company has made significant progress in understanding Medicare requirements and has built systems to streamline the process [65]