Q4 2019 Earnings Call
2019 financial wouldn't operating results conference call.
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Thank you operator, good morning, and thank you for joining us for Neurogenetic sport quarter, and full year 2019 conference call.
Replay of this call will be available on our website for 30 days.
Joining me on today's call or neural networks, Chief Executive Officer, Chris stature, and its Chief Financial Officer, Steve for a long.
Before we begin I would like to caution listeners that certain information discussed by management. During this conference call will include forward looking statements covered under the Safe Harbor provisions of the private Securities Litigation Reform Act was 1995, including statements related to our business strategy financial in revenue guidance and other operate.
So its issues and metrics.
Actual results could differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the company's business.
For discussion of risks and uncertainties associated with Normedix business I encourage you to review the company's filings with the Securities and Exchange Commission.
Including the Companys annual report on form 10-K expected to be filed later today.
The company disclaims any obligation to update any forward looking statements made during the course of this call except as required by law.
During the call. We'll also discuss certain financial information on a non-GAAP basis that includes EBITDA management believes that non-GAAP financial information taken in conjunction with U.S. GAAP financial measures provides useful information for both management and investors by excluding certain non cash and other expenses that are not indicative of threat.
And our operating results.
Management uses non-GAAP financial measures to compare our performance relative to forecast and strategic plans to benchmark our performance externally against competitors and for certain compensation decisions.
Reconciliations between U.S. GAAP and non-GAAP results are presented in the tables accompanying our press release, which can be viewed on our website with that my pleasure turn the call over Neurotics, Chief Executive officer for stature. Thanks, Mark Good morning, everyone and thank you for joining us on today's call I'll provide an update on our performance during the fourth quarter.
Her followed by an update on a few strategic aspects of the business ill then hand, the call over to Steve to walk through our financial performance after which I'll provide an update in the business going forward, including guidance for 2020.
Then we'll open up the line to take your questions.
Total revenue in the quarter was 17.4 million an increase of 11% over the prior year, primarily driven by 14% growth and U.S. Norstar advanced therapy revenue and 13% growth in U.S. Northstar treatment section revenue. These results were in line with their expectations for the quarter and we continue to be pleased with the pace at which we've been.
Able to consistently grow our installed base with the fourth quarter, representing the seventh consecutive quarter in which the fact of install base has grown approximately 20% over the prior year quarter.
Due to continued execution of a commercial strategy, we've been able to consistently penetrate and take advantage of the out though the large untapped market that exist in the U.S.
Starting with an update on business development managers are BTM Salesforce as noted on previous calls our goal for the year was to bring our total BTM territories to 59 by the end of 2019, and we met that goal.
Also ended 2019 with 33 Norstar practice consultants in 15 clinical training consultants inline with the plan we laid out at the beginning of 29 team.
Mpcs and Ctcs are an important part of the value proposition that we offer to ensure that customers are important and training and operationalize the northstar and their practices.
We continue to evaluate how to best resource our commercial team across mediums NB season, Ctcs to ensure the right balance between North star sales driving system utilization, providing high level of training and customer support.
I will discuss later, we're going to make a modest shift in the focus of our commercial resources towards Mpcs and Ctcs in 2020.
We had another quarter of strong system sales with our Tms only providers. As a reminder, these are large businesses all being having multiple sites across the country, who either rhys either receive patient referrals from psychiatrists in the community that don't currently offer Tms or market directly to patient struggling with depression for bolt we're through.
At the pace at which we've been able to become a preferred partner to many of the country's largest tms only providers and we will continue to focus on this attractive segment in the market. As these providers are likely to drive consistently higher volumes of patients and make multiple new system purchases over time.
On our last call, we mentioned a decline in system utilization amongst a subset of our legacy customer base. We did a thorough analysis of these accounts to determine the underlying cause of the slowdown and have worked with our sales and marketing teams to develop a strategy to reverse these trends.
We found that there is room for improvement in utilization a majority of these customers with the right combination of training and support we did not expect to see a market improvement in the utilization of these systems in the fourth quarter as we're still in the process of working with these practices. However, we believe that can that we can deliver improved utilization in 2020.
Shifting gears to our global expansion efforts, we continue to see solid early commercial traction in Japan. Following up positive reimbursement decision in June 2019, We view, Japan is a high potential geography, and I'm very pleased with the worked at our partner Tagine has done so far to develop the market. We expect revenues to be lumpy in the near term as we work.
With Asian to increase awareness system installations, and psychiatrists training with the goal of driving both capital and treatments session revenues.
Lastly, I'd like to discuss the future expansion of indications for use for the north star of and therapy system.
We're very excited to announce that the Companys recently received breakthrough device designation in the us from the FDA for Norstar band therapy treatment for bipolar disorder breakthrough designation provides several potential advantages, including a proactive and faster dialogue with the FDA the potential for innovative clinical trial design view the programs clinical protocol Green.
The process and an expedited review process of the company submissions to the FDA.
It also validate the need for an effective non pharmaceutical treatment option for this disorder, we're working with the FDA to determine the specific clinical study design and expect to have some clarity on this later in the year at which time, we'll share more details.
Overall, we believe that we remain well positioned to continue drive topline growth in the business and build upon our market leadership position over the long term. Despite some recent lumpiness and utilization among a small percentage of our customers throughout the year, we've continuously demonstrate our ability to drive the adoption utilization Neurostar advanced therapy.
I'd now like to hand, the call over to Steve to discuss our financial performance.
Thanks, Chris before I provide a review of our fourth quarter financial performance I would like to bring your attention to a change in the way we are going to report our us revenues.
As a business has evolved as a result of the increased usage of sales type leases as well as fixed price treatment session contracts the composition of our U.S revenue has shifted.
In an effort to provide investors with the most useful information on our business, we have changed how we present our us revenue.
Under the new reporting structure us Neurostar advanced therapy system revenue will be reported as three separate items.
Neurostar capital revenue.
A significant majority of system revenue, which consist of revenue from capital sales and revenue from sales type leases.
Operating lease revenue, which consist of revenue recognized 70 units previously rented.
And other revenue primarily revenue generated from the sale of treatment coil upgrades.
In addition to providing a break out of these three items within us Neurostar advanced therapy system revenue.
We will be providing a number of new systems installed in the us during the quarter. This number represents the total number of units sold in the U.S. as either a capital sale or a sales type lease.
Total us treatment session revenue is comprised of all us treatments session revenues from both our park click business as well as well as our fixed price contracts going forward. We will provide an average revenue per active system metric defined as total us treatment center.
In revenue divided by the US active installed base at the end of the prior quarter.
We will be providing a supplemental disclosure document on the IR portion of our website, which includes a quarterly historical breakout of the new us revenue reporting structure for 2018 and 2019.
Turning to the quarterly results total revenue for the quarter was $17.4 million and 11% increase over the prior year quarter.
The U.S. revenue was $17 million, an increase of 13% over the fourth quarter of 2018.
International revenue was approximately $325000.
A decrease of approximately $220000 versus the prior year quarter.
The year over year decrease was a function of the initial stocking order of systems placed by Asian during the fourth quarter of 2018 that did not recur this year.
US Neurostar advanced therapy system revenue for the fourth quarter of 2019 was $5.4 million, an increase of 14% over fourth quarter 2018 revenue of $4.8 million.
In the fourth quarter of 2019, Neurostar capital revenue was $5 million, an increase of 14% over the fourth quarter of 2018.
In the quarter a total of 78 units were sold compared to 65 units in the fourth quarter of 2018.
As anticipated blended average selling prices declined 11% as compared to the prior year due to a higher mix of sales type leases versus capital sales and lower prices on capital sales.
We expect that average selling prices will fluctuate based on the mix of capital sales and sales type leases as well as underlying pricing trends.
During the quarter, we saw our active installed base increased by 21% to 1085 units a net increase of 178 units from the fourth quarter of 2018.
And a net increase of 53 units sequentially.
As a reminder, the active installed base includes capital units sold sales type leases and operating lease units.
In the fourth quarter of 2019 us operating lease revenue was $176000.
The decrease of 24% as compared to the prior year quarter due to the accounting change that went into effect in 2019, we don't currently expect to install any new systems under operating lease agreements and thus this revenue number will eventually go to zero.
In the fourth quarter of 2019, other us Neurostar advanced therapy system revenue was $278000 an increase of 50% over the prior year quarter as we saw an increase in the number of treatment coil upgrades compared to the prior year quarter.
Turning to us treatment session revenues U.S. treatments session revenue was $11.2 million for the fourth quarter of 2019 and increased 13% over the prior year quarter.
The increase in treatment session revenue was driven by our larger customer base purchasing more treatments sessions and a larger number of systems installed under fixed price contracts.
During the quarter average revenue per active system was approximately $10900.
A decrease of 5% from the prior year quarter, primarily due to the substantial number of new systems sold in the last 18 months that have not yet ramped up to steady state utilization and price declines for port per click treatment session.
U.S. service and other revenue was approximately $376000, a 12% decline over the prior year.
Gross profit for the fourth quarter 2019 was $13.1 million, an increase of $1.2 million from $11.9 million during the fourth quarter of 2018.
We continue to generate very strong gross margins in the fourth quarter of 2019 at 75.7% down just a bit from the fourth quarter of 2018 gross margin of 76.3%.
This small decrease in gross margin resulted from a higher mix of sales type leases and lower average selling prices on capital system sales.
Sales and marketing expenses for the fourth quarter of 2019 were $11.5 million, an increase of approximately $825000 over the prior year. This increase was primarily due to the increased size of our salesforce.
General and administrative expenses were $4.3 million, a decrease of approximately $385000 compared to the prior year. This decrease was primarily driven by the year over year timing of public company costs.
Research and development expenses for the fourth quarter of 2019 were $4.2 million, an increase of approximately $2 million from the prior year period.
The increase was primarily due to product development costs related to that continued development of our next generation platform and higher personnel costs in preparation for clinical trial.
Net loss for the fourth quarter was $7.6 million compared to a net loss of $6.1 million in the fourth quarter of 2018.
EBITDA, which is a non-GAAP financial measure for the fourth quarter of 2019 was a loss of $6.3 million compared to an EBITDA loss of $5 million in the fourth quarter of 2018.
Moving to the balance sheet.
We ended the year with cash and cash equivalents of $75.7 million compared to $104.6 million at the end of 2018.
We are pleased to announce we just closed on a 50 million dollar term loan with solar capital, which allows us to repay the $30 million currently outstanding on our prior to that facility within the interest only period and provides for additional capital to bolster our balance sheet at favorable terms.
Yes.
That is available in two tranches, which would be funded this follows tranche $135 million funded yesterday.
Tranche to $15 million will be available to be funded on or before December 15, 2021 at our request and within 30 days of our achieving a net product revenue milestone.
Measured on a trailing 12 month basis measured on or before November Thirtyth 2021.
The interest only period on the initial trial is 24 months, but can be extended by an additional 12 months on our achieving a net product revenue milestone measured on a trailing 12 month basis measured again honor before November Thirtyth 2021.
I'll now turn the call back over to Chris Chris.
Thanks, Steve as we move into 2020 beyond we'll be putting an increased focus on accelerating or pathway to profitability. As a result will be taking some actions with their spending strategic initiatives. This year focusing on a path to EBITDA positive in late 2022 to early 2023.
We also would note that we believe that cash on hand, combined with credit available to us the sufficient to get us to EBITDA positive.
Starting with the Salesforce over the last couple of years, we've gone through a period or rapid expansion and we currently believe that medium territories in the mid Fiftys is the most appropriate not number territories. The covered the U.S. at this time, despite the slight decline in the total number of territories versus where we ended 2019, we believe that we can continue to drive growth the news.
System installations as a number of BTM full time equivalents are up to east will actually be higher in 2020 than 2019 due to the cadence of hiring throughout the year.
We've also expanded our HBT targeted universe to the top 5700 solo and group practices and use that treat 60% of the MDD patients in these types of practices. This gives the mediums more towns to prospects and Optimizes. The BDC productivity at this juncture in order to keep up with a growing installed base we will.
Ed NP season, Ctcs to drive new system ramp up and facilitate ongoing utilization.
The us in 2020, we expect to higher seven mpcs as well as a regional manager along with two additional ctcs.
Another area the business. We're adjusting is our international expansion efforts in the past we've considered entering a number of incremental geographic regions in Western Europe and Asia. However, however, given the large greenfield opportunities in both the us in Japan Thats still exists we will remain focused on these reasons exclusively for the time being.
I would now like to discuss our product in clinical development efforts as noted earlier, we just received breakthrough device designation for bipolar disorder from the FDA. So we decided to concentrate our near term efforts on this indication.
Bipolar disorder by definition is someone that has undergone an episode of depression, followed by an episode of Mania, we're going to focus on the greatest unmet need which is the episode of depression.
We remain interested in pursuing a PTSD indication as well, but think it's prudent from a cash management and profitability perspective to prioritize our clinical development activity activities first on the bipolar disorder.
We're also continuing development of a next generation Northstar advanced therapy system with an eye on improved usability precision in reproducibility.
Turning to guidance for the full year 2020, we're setting guidance of total worldwide revenue to between 69 million in 71 million, representing approximately 10 to 13.
The same year over year growth respectively.
For the first quarter of 2020, we expect worldwide revenue of between 13.5 million and 14 million, representing six and 10% year over year growth respectively.
For the full year 2020, we expect to generate strong gross margins to remain in the mid 70% range and we expect operating expenses to between 76 million in 78 million.
We're very excited about the opportunity for norstar advanced therapy to help a significant number of patients who suffer from major depressive disorder, we intend to mean or market share leadership position in the category by offering the most advanced in effect technology in the best customer support to the largest and most sophisticated commercial team in the industry. We plan to Leverages team to continue to expand our installed base.
Oppressive rate drive system utilization and provide best in class customer support and training our commercial strategy remains consistent as we continue to focus on both the Tms only in HBP providers and we will continue to invest prudently in marketing programs to drive awareness of our therapy with patients increase systems USEC customers practices.
We look forward to updating you on our progress during the year.
With that I'd like to open up line for questions.
Thank you and as a reminder to ask a question you need to press star one of your telephone to withdraw your question. Please press the pound key.
Please stand by only companies acuity roster.
And our first question comes from the line of Margaret Consort with William Blair. Your line is now open.
Hey, good morning, guys. Thanks for taking the questions.
Good morning first one just one for me maybe is just to start on guidance. So.
In terms of the 2020 guidance that can you give us a sense of what's your modeling for average treatment revenue per system and what does that assume for some of the legacy accounts. Maybe that you guys are trying to put some new strategies around re accelerate.
So we talk about.
Average revenue per active system.
So we see that is a bit of seasonality and we would expect in Q1.
Slightly lower average revenue per active system.
And then a generally increases across the year to high typically in the back half.
We believe it is flat to slightly down because of higher install base with slightly lower asps over the full year.
Okay, Yes, and the impact of those legacy accounts, maybe both for the second half. So 2019. So you can get a sense of how that headwind and then what that could be over a matter of two or four quarters. Whenever you think that you can see some improvement there.
Yes. So so we're monitoring that we've been in and we've assessed those accounts.
We understand.
What what's attributing to the decline in the primary operational issues Margaret such as staff turnover training, new staff and one off reimbursement challenges.
The Salesforce is identified what those are.
And over a period of time, we're tracking what we think our impact is going to be in those accounts.
No the thing that's going to drive most of our increased utilization or our average revenue per active system. In 2020 is really our ability to scale. Our most recent customers.
That will have the greatest impact on on that number as an all years. So the systems that we put in last year, we will have the greatest impact on utilization across 2020.
Okay and just one last question for me in terms of kind of those ladder that latter focus in terms of.
The bigger physician accounts in kind of the Tms only centers.
Is there anything that surprise you over the last few quarters and what do you think they can do and what can you do for them to continue to help scale going into 2020. Thanks guys.
Yes.
So so that so that the Tms only accounts just to give everyone a sense of.
We're Tms only fits in there is about five companies out there may be several of those emerging.
Of the five that out there we believe that we know we have.
The primary market share within those accounts.
To give you a sense of the Tms only CMS only really provides a patient referrals.
Two accounts that don't have a Tms system. So our market focus right now is.
On 22% to the solo improve practices, which is about 5700 of the 25000 accounts that exists and that's about 60% of the MDD patients in the segment and really with the Tms only providers are playing is in the 78% of the accounts that were not targeting that have about 40% of the MDD patients.
So this is how we address the entire market.
We are the primary partner for Tms only and then we have our salesforce or medium team selling on and selling into the the highest potential.
Single group practices in 2020.
Got it thanks guys.
Thanks Mark.
Thank you and our next question comes from the line of Jason Mills with Canaccord Genuity. Your line is now open.
Hi, Good morning, this actually specifically on for Jason.
And I just wanted to ask about.
Strategy shifting the focus on growing the PBM quirks and just your outlook beyond 2020, I know you talked about maybe this we see kind of a target range for now but beyond 2020, as you expand indications and.
This is seamless to right size or will you continue to evaluate that and just from an S.J. standpoint in 20, Tony can you talk about the impact of really growing your force other than the BBM.
Hi.
Thank you.
Okay. So so so to give you a sense of where we are with the BTM team in 2020.
On a weighted average in 2020, we had about into high Fortys of full time equivalents for mediums and what we believe this year will have DDMS in the mid Fiftys.
We also think that with the increase in a number of new accounts per reps.
Plus we also were forecasting a slight increase in a number of second system sales.
For the last 24 months, we've been getting into larger accounts and we we are seeing higher rates of second system sales. So we believe that with this.
Modest increase year over year, and DDMS with a slight the higher productivity rate that will have.
A record 2020 in terms of new system sales.
For the year.
As it relates subsequent beyond 2020, you know, we're going to monitor and manage the business appropriately.
And we'll guide on 2021 in the future.
That said, we are shifting more resources to Mpcs and Ctcs.
To bring and improve our average revenue per active system.
And bring that metric more in line with our unit sales of 20%. So that that's the real big thrust for US here, We'll chart the progress of those new Mpcs and Ctcs.
On impacting pull through with the account level and then at the end the year will be really thoughtful and.
Assess and then decide what we're going to doing 2021 and beyond.
Okay, great. Thank you and then I guess, just also turning to revenues I didn't.
Thank you in terms of capital is two trends in 2020 as well as install based growth that's factored into that and especially as you continue to target. These high volume.
And just how you're thinking about the mix into accounts between sales and sales participants.
Thanks.
So the question is is are we thinking about.
GAAP line growth so.
When we think about it in two parts. So as I mentioned, we think the productivity of mediums will.
Remain constant was slightly up so we expect a record breaking year on a capital unit sales in 2020.
That said.
We expect a slightly lower blended ASP, which is a function of the capital sales and the sales type.
Leases in 2020, so the combination of those will create a little bit of downward pressure on asps for 2020, we're not going to break out the mix between that we're giving you the total unit sales.
Each and every quarter.
And as I mentioned.
We've sold a significant number systems over the last year and these systems have not ramped up to a steady state.
We we know we have a much higher percentage year over year in systems that are less than 18 months. So this lowers our overall.
Revenue per active system, each and every quarter. So while the we're treating more in selling more treatment sessions year over year to use treatment system revenues are not growing in line with active.
Install base.
Because of that reason.
And we're looking to add Mpcs and Ctcs to close the gap on that we also expect.
Slightly some slight downward pressure on our per click treatment sessions asps to continue in 2020 as well.
Great. Thank you Tom Kelly.
Youre welcome.
Okay. Thank you and our next question comes from the line of Matt O'brien with Piper Sharon Sandler Your line is now open.
Hi, guys. Good morning. This is drew on for Matt. Thank you for taking the questions.
I'm just kind of wanted to go back to some of the utilization in the legacy accounts on that impacted you last quarter. It sounds like it didnt bounced back way too much into Q4 as Youd expected.
But I guess the question is did you see any improvement as the quarter went on in those accounts and sort of what you'd be confident that it can improve going forward.
And then I guess last down I mean, maybe the.
Can you give us a feel for what level of BREP expansion to address that you specifically had been incorporated into your opex.
Sure. So good morning drew thanks.
So for Q4, we did not expect to see any change.
In utilization in those accounts, we're basically in their diagnosing and trying to understand.
What the circumstances.
The good news is that.
Most of this has been attributed to operational issues as I just explained and these are well within the Bailey works of the NPC CTC CTC and reimbursement team.
To resolve short term what we did is and ARX currently doing use a ship shifting the coal patterns of the Mpcs that we have in the company now to spend more time on this group of customers and as you heard what we plan to do is to address this longer term is we're increasing the number of nbcs.
Two seven and the number ctcs to two to provide more touches to the existing customers. While at the same time gamble scale or are ever expanding and growing installed base. So overall, that's how we're addressing that customer group.
Okay. That's helpful.
And then just on the international side, I guess, especially in Japan, I know, you're you're getting just getting started there yet.
In Q4 of 18, but obviously, a pretty large opportunity just kind of seems to be moving a little bit so.
Are you, making any additional investment kind of we have the process. There and then I guess any impact from going to buyers.
Okay great.
So so she will actually was a startup you're right. It was really the building in the beginning of the foundation, we got approved in June.
And the purchases last year was really to create inventory for both norstar newts nor store treatment session.
This year is really all about the pull through that in returning replacing an inventory.
And we'd expect to see orders of capital equipment across the entire year in and we gradually see increasing in north star treatment session purchases. So this is really going about as planned we were pretty.
Impressed.
With their early sales theyve gotten in Japan, they've gotten the leading key opinion leaders to purchase at the University is over there we're getting some really good national publicity over there so.
So I think we're growing as we expected to grow.
In that market that said is we're not expecting significant growth in Japan.
Based on what I, just said most of the inventory that was sold most of the sales last year was to build inventory. It wasn't the pull through of inventory and then this year, we'll see that pull through of inventory.
They have added incremental sales reps to the organization.
In the back half of last year, and that looks promising as well and remember.
We do not fund any of the SGN a for this operation in Japan.
Asian is responsible for that part of of the business planning and investment.
Okay. Thank you.
So you will thanks drew.
Thank you and our last question comes from a lot of Dave Turkaly with JMP Securities. Your line is now open.
Hi, Thanks, So just going back to the the legacy account the 100 or so we talked about last quarter.
I looked like the.
Contrition was something like 25 and in this quarter fourth quarter and I was wondering if you could just.
Commented on are you, calling some of those older accounts and what you expect that it's a little higher than say what youve averaged in the past just maybe color on what you expect in 2020 for that.
Right so.
So it was a little higher in the fourth quarter, and it's typically a little bit higher in the fourth quarter for the last several years.
And remember when an account goes in active that means they have important treatment session for us from our supplement 12 months. So these are usually decisions that happened in the fourth quarter of the fall below the prior year. So it seems that there's a little bit or slightly higher businesses are made about closing a practice.
Stopped providing tms stopped providing Tms as a service line.
And or moving to a competitive system those seem to happen more often at the end of the fourth quarter. So it's slightly higher.
This quarter than our prior three quarters.
We don't we don't anticipate that run rate to continue we believe it'll it'll go down to probably somewhere around 1.5% quarter somewhere in that range give or take the quarter or half each and every quarter.
So we're not proactively calling it and remember.
This is most of these are people that are getting out of practice or or can't make Tms work and that's one of the reasons why we've evolved our strategy in the last 24 months to get into.
Higher volume accounts that have more backup office capabilities.
And greater capacity to operationalize the norstar in their practice and most if not many of these or legacy customers that have decided not to continue with the Northstar advanced therapy or gone out of practice.
Got it and then just what does the guidance.
Actually the revenue commentary the breakout.
I'm, just curious to break out operating lease, but not the sales type.
That's now included in the capital I, usually the logic there I'm just curious if you would even comment sort of an on how sizable that.
Sales type lease could be in that capital cells and why break on operating if you think that's trending towards zero. Thanks.
Yes.
They were trying to move away from the financing differentiation of systems sold so going forward you know, we're going to report system sold and the total revenue for those systems.
And really get away from differentiating between sales type lease and traditional capital sales.
It really is just really capital acquisition strategies for our customers and as a reminder, we only offer sales type leases to our large Tms only service providers.
Our strategy is to free up their capital. So they can continue on with their expansion plans and not have their monies tied up with the system acquisition costs.
And so those are.
The that sub segment will continue to grow.
And we'll grow at a higher rate than traditional capital equipment sales in 2020 somewhere north of 30%.
How did that you'll see some fluctuation in the a sps as that mix changes quarter to quarter, but again, we feel it's more important to get installed base growing north of 20% like we've done in the past seven quarters and ultimately the treatments session volumes will catch up.
Got it. Thank you for that and I think last quarter, you gave sort of an update on green broken.
Access some of the others.
Just curious if you provide any update on sort of the mix for the Tms only providers today, I mean, I imagine it increased again, but just directionally I imagine it continues in 2020, but any update on the size of those guys for you today. Thanks a lot.
Yes. Thanks. Thanks.
Thanks, Dave.
So as it relates to some of these large Tms only accounts like freeing book and success Tms well, we prefer for them to comment on their earnings calls as it relates to their performance in the marketplace, but we're delighted to partner with these groups, we think that our value proposition really resonates.
This group.
We have.
Significant investments and field service Engineering Tech support.
And our track Star system provides them real time insights into their locations utilization of their systems. So we think our value proposition on many fronts really resin makes it resonates with this group.
We're not going to be breaking them out on a go forward basis, and they'll be part of overall norstar treatments session revenue and our norstar.
Capital revenue.
Got it thank you.
Thanks to the next day.
Thank you and this concludes today's question and answer session or would now like to turn the call back to Chris Snatcher for closing remarks. Thanks for joining the call today, we look forward to updating you on our progress on our next quarterly earnings call.
Okay, great ladies.
Ladies and gentlemen. This concludes today's conference call. Thank you for participation you may now disconnect.
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