Full Press Release Details
SANUWAVE HEALTH, INC.
CONFERENCE CALL TO DISCUSS FIRST QUARTER 2020
FINANCIAL RESULTS AND PROVIDE A BUSINESS UPDATE
MONDAY, MAY 18, 2020
10:00 a.m. Eastern Time
day, ladies and gentlemen, and welcome to your SANUWAVE First
Quarter 2020 Earnings Call. [Operator Instructions] As a reminder,
today's call is being recorded. At this time, it is my pleasure to
turn the floor over to Kevin Richardson. Sir, the floor is
you, Melinda. Today, we'll be doing our safe harbor statement at
the end of the call. When we -- we'll have that. We're going to
dive right into the conference call, and then we'll cover it with
financials. We'll follow that with some follow-up and then open it
review some highlights and other points during the quarter. We will
also review the financial highlights, and then we'll come back to
discuss what's taking place at SANUWAVE. We last spoke to you at
our year-end conference call and we'll provide today an update on
Q1 and forward looking.
just begun to see and quantify the effects and the impact from the
coronavirus on the last call. It has had an impact, but we are
quickly adapting to grow in the current market conditions. At that
time, we mentioned the pandemic would have an impact on revenue and
new placements but that we were working on initiatives to address
our clients' needs and even use the technology to treat patients
with respiratory issues. I will discuss these items
COVID, the Q1 revenue was not up to par and not what we expected,
partially due to the timing of international licenses and
international orders, but the main shortfall was from the
recognition of procedural revenue. We recognize the revenue
basically when the cash is received. And in the first quarter, this
was a disappointment, which has since been addressed.
the quarter, as you will hear, we have taken corrective action
within management at the account level and our claims and billing
education for training. These actions were implemented in April and
they began to show progress in May. We currently have over $300,000
in billings outstanding, and that number will increase to $700,000
soon and hopefully even higher as we head through the summer. I
will address this issue and specifically, what we have done to
correct it and why we are very encouraged by the team's efforts to
reignite the top line.
also like to point out that we have recently begun to place devices
again. Just last week, we had 4 new placements occur. And with the
renewed focus on revenue per account, I believe we will be very
happy with the momentum occurring. Also, just so I'm clear, wound
clinics have still been treating
still been using our device and are still helping patients, most
importantly, show fantastic clinical results with the dermaPACE
are not going away. They're only getting worse. We have had a great
technology, and we can help and we see tremendous demand,
especially now as we have begun to figure out the reimbursement
game a lot better and more effectively.
talk about home care right now. We are pleased to announce that we
recently rolled out our home initiative for wound clinics, which
allows the dermaPACE System to be brought into patients' homes and
treat their wounds. It is one of the only advanced therapies, which
is mobile and can be used in the home setting. You cannot roll a
hyperbaric chamber into someone's house.
rolling this out in 10 sites initially, but we have had a lot of
interest from existing and more importantly, new accounts wishing
to get our device so they can treat in the home. These clinics have
seen volumes during COVID decrease 10% to 30%. And many have had to
look at furloughing staff.
dermaPACE mobile solution allows clinics to have their physician
assistant or registered nurse treat patients, and they will receive
85% of what they would normally receive in the clinic. Not every
office will use our mobile capabilities, but it does allow us to
enter a new realm in paradigm and wound care.
placements and backlog. As I have mentioned, we have seen open
states begin to loosen restrictions, and we're beginning our sale
and account managers entering the sites and the backlog we've
developed means we will have -- be having a very busy summer. You
will see an increase in placements occurring in May and June, then
accelerating throughout the year. Based on our current backlog,
July should resume to the normal monthly placements of over 15 a
important, these sites we are targeting and the training we have
instituted will result in faster revenue for the sites and
importantly, for SANUWAVE. We have worked through many of
hangups that hurt us in 2019, late in the year, and we feel
confident to see revenue quickly recover as we roll this out this
Korea and Italy are our 2 biggest markets, and they were impacted
directly by corona. But as of last week, we began to see some
activity out of both. As we have said, you cannot eliminate a wound
due to COVID. It just gets worse. So we do expect pent-up demand to
kick in, in the third quarter this year from our international
markets. We'll also add a few more countries, some quite large in
the Q3, Q4 time frame.
a.m. this morning, we also announced an agreement with Shri Parikh.
Shri was our President. He's resigned to begin his entrepreneurial
endeavor to start a mobile health unit. They will treat wound
patients in their van at their home. They will be using dermaPACE.
They're initially targeting Atlanta but have future expansion
plans. The business model looks promising, and we know they will be
extremely successful, and dermaPACE will become a critical part of
gave you an update on revenue and our at-home initiative, which
will begin to show up in earnest in the second and third quarters.
But given the pandemic, we have taken corrective actions on the
expense structure as of May 1. We have eliminated some positions,
the entire team has taken voluntary pay reduction, we have
eliminated T&E budgets and importantly, trade shows are now
done virtually, so the cost has been eliminated.