Ekso Bionics Holdings, Inc.
Q4 2020 Earnings Call Transcript

Published: 25 Feb 2021

[Operator:]

Greetings, and welcome to Ekso Bionics' Fourth Quarter 2020 Financial Results Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce Matt Steinberg, of Lazar Finn Partners. Thank you. You may begin.

[Matt Steinberg:]

Thank you, operator, and thank you all for participating in today's call. Joining me from Ekso Bionics are Jack Peurach, President and Chief Executive Officer; Jack Glenn, Chief Financial Officer; and Bill Shaw, Chief Commercial Officer. Earlier today, Ekso Bionics released financial results for the quarter and full year ended December 31, 2020. A copy of the press release is available on the company's website.

[Jack Peurach:]

Thanks, Matt. And thanks everybody for joining us today. To start I'd like to acknowledge the dedication of our entire team across our organization. Their commitment allowed us to continue serving our customers and bring meaningful solutions to patients recovering from stroke, and spinal cord and traumatic brain injuries. Our unique technology has enabled tens of thousands of patients to take over 130 million steps to date. And we are proud to see a growing number of physicians recognize that Ekso elevates the standard of care for neuro rehabilitation. Now turning to a review of our fourth quarter performance, our commercial and clinical teams continued their strong execution in raising customer engagement levels and expanding physician awareness of our innovative exoskeleton devices in the medical community. The introduction of our subscription selling model is getting solid traction among our hospital and long-term care facility customers whose capital budgets remained under pressure. By creating more opportunities using the EksoNR as part of the patient rehabilitation process, we are facilitating relationships that we expect will result in long-term subscriptions or future capital purchases. Bill will discuss this in more detail shortly, but we are pleased with the early progress.

[Bill Shaw:]

All right, thank you, Jack. Our commercial team has been resilient in overcoming challenges related to the pandemic by remaining engaged and increasing access with customers, as well as making it simpler for them to adopt their leading exoskeleton solutions. In spite of the persistent COVID challenges, we undertook a series of actions to showcase the benefits of an exo program to our virtual selling solutions and educational webinars. We are also exploring strategic partnerships to make these webinars more widely available for physicians and clinicians, who are building a platform to further illustrate the benefits of a robotic gait therapy program. We are hopeful that COVID cases and hospitalizations will continue to decrease. And now that our clinical team is fully vaccinated and are active on site at rehab centers, we expect to see an uptick in live in-person interactions going forward. In fact, we are now close to the number of onsite demos in the first quarter of 2021 compared to the previous three quarters combined. We've also experienced an increase in web visits, demo requests and social media engagement from potential customers.

[Jack Peurach:]

Thank you, Bill. I’d like to provide an update on the progress with our industrial segment. We view the industrial market opportunity across our targeted industry verticals as greater than $5 billion annually. Our initial target segments include construction and food processing, where we have already seen promising early order trends for our EVO devices. EVO was specifically designed to address productivity and health risk challenges faced by industrial workers. We are encouraged by the customer feedback around usability, durability, and strength augmentation so far. Challenges of the pandemic notwithstanding, we are pleased with the launch are seeing a high level of customer interest. Given the budget challenges facing so many businesses, our subscription model provides flexible purchasing and utilization options designed to meet customer needs. Going forward, we look to bring our game changing technology, not just to those verticals, but also to warehousing, logistics utilities, and mining verticals. Now, I will turn the call over to Jack Glenn to review our fourth quarter and full year financial results.

[Jack Glenn:]

Thank you, Jack. Ekso generated fourth quarter revenues of $2.3 million, compared to $3.7 million for the fourth quarter of 2019. Our gross profit for the fourth quarter was $1.4 million, representing gross margin of approximately 60% compared to gross profit of $1.9 million and gross margin of 50% for the same period a year ago. The increase in gross margin was primarily due to higher average selling prices and lower production costs of the company's EksoNR devices coupled with the introduction of EVO. Our actions to preserve our cash and align our cost structure enabled us to lower our operating expenses.

[Operator:]

Thank you. We will now be conducting a question-and-answer session. Our questions come from the line of Sean Kang with H.C. Wainwright. Please proceed with your question.

[Sean Kang:]

Hi, thank you for taking my question. I just have a couple of questions on the EVO side. So how many pilot programs are ongoing right now and also is there any additional discussion that could lead to pilot programs or EVO?

[Jack Peurach:]

Hey, Sean. Let me make sure, I got understood the second part of your question. Can you just repeat the second part? Are there any – just repeat it?

[Sean Kang:]

Just I was wondering like, is there – so the first question was how many pilot programs are there ongoing. And the second one is, is there any additional discussion that could lead to pilot programs or EVO?

[Jack Peurach:]

Got it. Okay. So, we have several pilot programs going. We haven't disclosed exactly how many yet, but we have a number of them. Each of them are roughly so – less than 10, but each of them have about between 20 and 30 units on hand. And that's kind of shared between those two industries and we have conversations going with the number of additional companies in those industries to start additional pilot programs second question, right.

[Sean Kang:]

Yes. Just follow-up to that. Is there any cross selling opportunity for other EksoWorks products including I think you also have ZeroG?

[Jack Peurach:]

Yes. There is actually – there's a portion of that customers that are customers of both products. But there's actually a decent number of ZeroG customers who are not yet customers of EVO and they're in the same holds true for EVO. So, we don't sell them as a package. We pursue opportunities for both, but we're seeing in somewhat organically that there are customers who use both.

[Sean Kang:]

I see. Sounds good. That's helpful. Thank you.

[Operator:]

Thank you. There are no further questions at this time. I'd like to hand the call back over to management for any closing comments.

[Jack Peurach:]

Thank you for joining us today. To summarize, our commercial team has proven to be flexible in adapting to the rapidly changing market conditions. We are continuously engaging with our customers with the goals of increasing their adoption and education of our EksoNR devices. With the implementation of our subscription model, we are focused on further expanding our install base and supporting our path to sustainable future growth. Moreover, we are encouraged by EVO’s growing customer excitement and solve adoption trends following its initial launch. Looking ahead, the proceeds received from our latest public offering are critical to our success in executing our growth goals. I'd like to thank all of our new shareholders. We intend to focus on expanding our customer base in both the medical and industrial segments will continually innovating, which is a hallmark of our company. Ultimately, we are determined to improve patient outcomes, bring solutions to the industrial workforce and deliver long-term value for our shareholders. We look forward to providing updates on our continued progress throughout the year. Thank you and have a good day.

[Operator:]

Thank you for your participation. This does conclude today’s teleconference. You may disconnect your lines at this time. Have a great evening.