Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vivos Therapeutics Inc (VVOS, Financial) has expanded its product offerings, including pediatric and lifeline products, which have started to contribute positively to revenue.
- The company has successfully reduced its general and administrative expenses by $1.6 million, or approximately 25%, compared to the same period last year, reflecting effective cost-cutting measures.
- Vivos Therapeutics Inc (VVOS) reported a significant decrease in total operating expenses by $1.6 million or 22% compared to the first quarter of 2023, marking the seventh consecutive quarter of year-over-year decreases.
- The company has achieved FDA clearance for its appliances to treat severe obstructive sleep apnea (OSA), enhancing its credibility and treatment scope.
- Vivos Therapeutics Inc (VVOS) is actively engaging in new strategic revenue initiatives and collaborations aimed at broadening patient access to its products and reducing dependency on VIP enrollments.
Negative Points
- Vivos Therapeutics Inc (VVOS) experienced a decrease in total revenue from $3.8 million in Q1 2023 to $3.4 million in Q1 2024, primarily due to lower VIP enrollments and appliance sales.
- Despite an increase in the number of VIP enrollments, revenue was negatively impacted by changes in revenue recognition methodology and the introduction of new entry levels at lower price points.
- The company reported a net loss of $3.8 million in Q1 2024, compared to a net loss of $1.7 million in Q1 2023, although the previous period included a one-time non-cash benefit.
- Gross margin decreased to 57% in Q1 2024 from 61% in the comparable period in 2023, primarily due to lower revenue and partially offset by a decrease in cost of sales.
- Vivos Therapeutics Inc (VVOS) is still working towards becoming cash flow positive, with a target set for the end of 2024 or the first quarter of 2025, indicating ongoing financial pressures.
Q & A Highlights
Q: Can you expound on the nature of the new channel relationships you're discussing, particularly how they differ from previous distribution agreements?
A: (R. Kirk Huntsman, CEO) - The new channel relationships vary and include large medical groups, hospitals, and sleep testing centers. These entities have direct access to CPAP failure patients or those newly diagnosed with obstructive sleep apnea, offering a direct route to introduce Vivos' treatments. Unlike previous distribution agreements, these partnerships provide a ready pool of patients, enhancing the potential for immediate revenue generation.
Q: What do you need to execute these new opportunities effectively, and how resource-intensive is it?
A: (R. Kirk Huntsman, CEO) - Vivos has trained teams ready to deploy across the country, experienced in managing patient cases and closing treatments. The resource intensity is manageable as the infrastructure and expertise are already in place, allowing Vivos to scale operations without significant new investments.
Q: How does the FDA approval for severe sleep apnea treatment and eligibility for Medicare reimbursement impact your business model and revenue opportunities?
A: (R. Kirk Huntsman, CEO) - The FDA approval enhances credibility and respect within the medical community, leading to more referrals and patient confidence in Vivos' treatments. Medicare eligibility opens another payment avenue, making the treatment accessible to a broader patient base and potentially increasing market penetration.
Q: Regarding financial performance, can you provide insights into the first quarter's revenue and profit margins?
A: (Bradford Amman, CFO) - First-quarter revenue was $3.4 million, a slight decrease from the previous year, primarily due to lower VIP enrollments and appliance sales. However, new product lines and home sleep test programs contributed positively. Gross profit margin decreased slightly due to these factors.
Q: What are the strategic initiatives Vivos is focusing on to achieve future revenue growth and operational efficiency?
A: (R. Kirk Huntsman, CEO) - Vivos is focusing on expanding into new channels with direct access to OSA patients, leveraging regulatory approvals to build credibility, and enhancing collaborations with medical professionals to increase patient referrals and treatment adoption.
Q: How does Vivos plan to manage its operational costs and cash flow in the upcoming quarters?
A: (Bradford Amman, CFO) - Vivos continues to implement cost-cutting measures and operational efficiencies aimed at reducing the burn rate and achieving cash flow-positive operations by the end of 2024 or early 2025. These strategies include optimizing sales and marketing expenses and general administrative costs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
