Q1 2021 Cardiovascular Systems Inc Earnings Call

Healthcare facilities around the country are better prepared to manage a resurgence of the buyers.

Our customers report that they have adapted to the pandemic and are successfully performing our procedures.

While also caring for patients hospitalized with cold at 19.

After considering all the variances introduced by then pandemic, we're expecting procedure stabilization consistent with the assumptions communicated in May and August with Q2 sales approach in 2019 levels.

With that in mind, our second quarter revenue guidance of $63 million to $67 million represents sequential revenue growth of 4% to 11% compared to Q1.

This range also represents approximately 92% to 98% of our Q2 revenue one year ago.

Procedure volumes were consistently strong throughout Q1, and as Scott said earlier, our worldwide revenue of $60.5 million was approximately 94% of Q1 last year.

When we consider the impact of COVID-19 on our second quarter we.

We believe that our revenue will modestly improve and return to pre cobot levels by the end of second quarter.

Please note that the international commercial development will remain negatively impacted due to the resurgence of cases in Europe newly imposed lockdowns and travel restrictions.

As a result, our international business, especially operations outside of Japan are expected to be lower than Q2 last year.

So taken in total we expect that worldwide revenue in Q2 will land at about the same range of approximately 95% of Q2 last year and this is the basis for our revenue guidance.

Gross margins are expected to remain in the 78% to 79% range.

Q2 operating expenses are forecasted to be in the range of $52 million to $54 million. This.

This represents a decline of approximately 7% to 10% from the prior year.

We have resumed enrollment of patients in our eclipse trial and that will modestly increase R&D expenses in Q2.

However, until procedures return to normal levels, we intend to maintain several of the business continuity plans, we implemented in March which reduced operating expenses and capital expenditures across the business.

On the bottom line, we anticipate a Q2 net loss of 1% to $3 million and to generate positive adjusted EBITDA.

That concludes my prepared comments I'll be happy to answer your questions during Q and eight.

Bronto will now discuss our commercial developments Rhonda.

Thank you, Jeff and good afternoon, everyone. As you just heard from GAAP Q1 was a strong quarter as we continue the recovery from the impact of COVID-19 to strengthened domestic organic procedure volumes improved throughout the quarter and we are pleased with our momentum in.

In Q1, our domestic peripheral business decreased only 5% compared to last year as we forecasted last may well be able to continue to lead the recovery and atherectomy.

Ill revenue accounted for 29% of our peripheral revenues during the quarter and revenue at the site of service increased 4% compared to last year and 40% sequentially. Our hospital site of service also improved sequentially at 41%. However, it has not yet returned entirely to preclude levels.

Strong sequential growth in our peripheral hospital segment was driven by the increased utilization of exchangeable purchase of an extra cartridge for multi level disease is nearly 20% of our exchangeable unit volume.

And as we anticipated many physicians have become keen on providing full lag revascularization in one procedure, especially during the pandemic, we continue to achieve a meaningful ASP uplift to capture the value of this important innovation as well as extra revenue per case, when a second cartridge is used.

Our performance in coronary with even better increasing 63% sequentially compared to Q4.

This occurred as the referral channel rebounded as patient exiled elected and add procedure volumes increase nationwide.

In addition, we continue to make great progress selling coronary support products, our rep for granted increasing access to the cath labs throughout the quarter and we generated 543 of incremental revenue for every coronary device sold.

Increased procedure volumes and higher revenue per coronary procedure resulted in us coronary revenues declining only 2% compared to last year.

International revenues declined 42% to $1.7 million, most of which was generated in Japan as Scott mentioned coal that has impacted our ability to travel and train and educate new accounts.

And while our training ability flowed in Japan, we were pleased with a rebound in case volumes and increased penetration in existing sites throughout the quarter.

Looking ahead to Q2, we are forecasting stronger organic procedure volume in all types of service increasing use of exchangeable and revenue per coronary procedure moving above $550.

Of course, all of this is heavily dependent upon cobot case and utilization Ifyou utilization trends continued rep access hospitals, and the maintenance of complex and more elective procedures.

Hope it has been a catalyst for change driving creative solutions for digital patient engagement virtual medical education remote medical education and shift to alternative sites of care like the LDL.

As I highlighted last quarter, Cfive pivoted with velocity in all communications and educational programming to reach our customers digitally and this quarter was the high point in terms of our visibility at major conferences like end CDH with the reach data release.

Additionally, we reached nearly 700 provide.