Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Second-quarter 2024 total revenue increased by 19% year-over-year to $4.1 million.
- Gross profit for the second quarter of 2024 was $2.7 million, up from $2.1 million in the same period in 2023.
- Sales and marketing expenses decreased by 46% year-over-year, reflecting cost-cutting efforts.
- Net loss for the second quarter of 2024 decreased by 65% to $1.9 million compared to the same period in 2023.
- Cash and cash equivalents increased to $6.9 million as of June 30, 2024, from $1.6 million as of December 31, 2023.
Negative Points
- VIP enrollment revenue decreased by 6% for the six months ended June 30, 2024, compared to the same period last year.
- Revenue from myofunctional therapy services decreased by $100,000 year-over-year.
- Operating expenses, although reduced, still amounted to $4.1 million for the second quarter of 2024.
- Net cash burn from operations for the six months ended June 30, 2024, was $5.6 million.
- The company is still not cash flow positive, although it anticipates achieving this in the foreseeable future.
Q & A Highlights
Q: It seems that the strategic alliance with the sleep clinic is pretty important in the evolution of Vivos Therapeutics. Could you maybe expand on that a little bit? Are you referring to your marketing pilot study and the high rate of patients that choose Vivos' oral appliances?
A: (R. Kirk Huntsman, CEO) The strategic pivot is crucial for Vivos. The dental-only channel was not scalable, and the new model with physicians offers a reliable growth opportunity. Our pilot study showed high patient acceptance rates (70-90%), and the new strategic alliance with sleep clinics is expected to significantly boost our revenue and profitability.
Q: What do you see happening with the VIP doctors or dentists that you've enrolled going forward?
A: (R. Kirk Huntsman, CEO) The market is large enough to support both our new medical channel and the existing VIP dentists. We will continue to support and train VIP dentists, but our primary focus will shift to the medical community.
Q: Congrats on the cost-cutting efforts. Can you provide more detail about what happened over the last several quarters to achieve this? Is there more room for additional cost reductions?
A: (Bradford Amman, CFO) We've reduced SG&A costs significantly, from $8.7 million in Q3 2021 to $4.6 million in Q2 2024. This was achieved through workforce reductions, cutting non-essential expenses, and renegotiating vendor contracts. We will continue to review and trim expenditures as needed.
Q: It seems like a significant portion of the revenue jump was due to lower discounts. How did that come about?
A: (R. Kirk Huntsman, CEO) It was a conscious effort to reduce discounts, especially with our new regulatory clearances. We took a disciplined approach to stand by our prices and the value proposition of our treatment.
Q: You had a big sequential decline in sales commissions. How was that achieved?
A: (R. Kirk Huntsman, CEO) We restructured our sales force and compensation model to achieve savings. This was a deliberate effort to reduce costs.
Q: What do you see as a steady state for operating expenses?
A: (R. Kirk Huntsman, CEO) We don't see a steady state right now as we are pivoting into a new model. We are reducing some expenditures while staffing up in other areas to handle growth. We will provide more clarity on this in the next quarter.
Q: How do you plan to leverage the new FDA clearance for severe OSA patients?
A: (R. Kirk Huntsman, CEO) The new FDA clearance allows us to offer a viable alternative to CPAP, which is well-received by sleep doctors. This opens doors for higher-margin products and services, significantly boosting our revenue potential.
Q: What are your expectations for the new strategic alliances with sleep testing groups?
A: (R. Kirk Huntsman, CEO) We are in negotiations with six other sleep testing groups, which see upwards of 5,000 OSA patients per month. This new model is expected to materially alter our growth and profitability prospects.
Q: How do you plan to use the $7.5 million equity investment from New Seneca Partners?
A: (R. Kirk Huntsman, CEO) The investment will bolster our cash position and facilitate the launch of new strategic alliances, positively impacting our revenue growth.
Q: What is the long-term vision for Vivos Therapeutics?
A: (R. Kirk Huntsman, CEO) We aim to put our technology into use for thousands of people, achieving significant revenue and profit growth. Our new business model has the potential to realize the full financial potential of the company.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
