Q1 2022 Nuwellis Inc Earnings Call

May 10, 2022

Good day. Thank you for standing by will come to the New Relic, Inc. First quarter 2022 earnings at this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.

I ask a question during this session you will need to press star one on your telephone.

You require any Friday assistance. Please press star Zero I would now like to hand, the conference over to Matt <unk>. Please go ahead.

Thank you operator, thank you for joining today's conference call to discuss <unk> corporate developments and financial results for the first quarter ended March 31, 2022. In addition to myself with US today are Mr. Harry <unk>.

Companys, President and CEO and George <unk>, the company's CFO at eight a M. Eastern today, New wireless released financial results for the quarter ended March 31, 2022, if you have not received any losses earnings release. Please visit the investors page on the company's website. During this conference call. The company will be making forward looking statements except for historical information mentioned during the.

Conference call statements made by the management of Nols are forward looking statements that are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 90, 95 forward looking statements involve known and unknown risks and uncertainties that are based on managements beliefs assumptions expectations and information currently available to management those risks, including but are not limited to <unk>.

Risks associated with the possibility that the company may be unable to grow revenue in future quarters that the company may not be able to commercialize its products successfully the possibility that it may.

Unable to raise the funds necessary for the company's anticipated up anticipated operations and.

The other risk factors described under the caption risk factors and elsewhere in the Companys filings with the Securities Exchange Commission. The company believes that these forward looking statements are reasonable as of today's date. However, you should not place undue reliance on forward looking statements because they speak only as of the date when made by providing this information the company undertakes no obligation to update or.

Revise any projections or forward looking statements, whether because of new information new developments or other circumstances that might subsequently arise you should review the cautionary statements.

And discussion of risk factors included in the company's press release issued today. The Companys latest 10-K subsequent reports as well as its other filings with the Securities and Exchange Commission under the titles risk factors or cautionary statements related to forward looking statements for additional discussion of risk factors that could cause actual results to differ materially from manager.

Current expectations those discussions regarding risk factors as well as the discussion of forward looking statements in such sections are incorporated by reference into this call and are readily available on the Companys website with that with that said I would now like to turn the call over to Mr. <unk> <unk> CEO .

Thank you, Matt and good morning, everyone welcome to new <unk> first quarter 2022 earnings call.

Revenue for the first quarter came in at $193 million, representing 17% sequential growth from the fourth quarter of 2021, and essentially even with the prior year period.

Sales early in the quarter were negatively impacted by COVID-19, with limited elective procedure volumes hospital access and funding priorities.

Colby 19th impacts subside as we progressed through the quarter, allowing the sales trajectory to improve.

Sales of consumables prove particularly strong in the first quarter driven primarily by increased utilization of the <unk> therapy at our largest account and favorable order timing.

Reviewing performance by customer segment, both critical care and pediatric posted strong growth versus the prior quarter fueled by higher consumable sales volumes across many of our current accounts.

However, both of these segments had lower total revenue than the prior year period due to fewer console placements in the first quarter of 2022.

The shortfall in consoles was offset by strong heart failure growth, which benefited from increased utilization and order timing.

I would like to point out that critical care continues to be our largest customer segment and represent nearly half of our revenue.

Followed by Pediatrics, and Dan heart failure, thereby providing an indication of the success of our expansion strategy, which we implemented in late 2019 prior to the pandemic.

On our previous earnings call in March I mentioned, the following four growth catalysts, we expect to positively impact performance in 2022.

John .

Improved reimbursement to additional compelling clinical evidence three.

<unk>, a new sales management system and for product development now I would like to speak on each of them starting with reimbursement.

Effective January one 2022, the American Medical Association granted a new <unk> three current procedural terminology code or CPT code for the therapeutic ultrafiltration procedure. This code is the 069.

Pete.

This code supplements DRG based reimbursement for in patient care by allowing health care providers, who also seek reimbursement under a professional fee.

Prior to this code physicians treating patients suffering from fluid overload in the inpatient or outpatient setting.

And not have an appropriate CPT code to build for treating their patients with the <unk> and often did not receive adequate reimbursement.

In addition, this CPT code expands reimbursement to include facility and professional fees for outpatient procedures.

To date.

Reimbursement in the outpatient setting has been an important reason for not using <unk> to treat patients in an ambulatory setting.

We anticipate these new code will lead to increased utilization of <unk> therapy and in so doing we will allow for tracking of <unk> utilization and cost throughout Medicare and commercial Payors claims databases in support of obtaining a permanent CPD code that abbvie.

Quickly and fairly compensates health care providers and facilities when using ultrafiltration.

To support patients and customers with access to the <unk>, we have proactively established third party patient access program.

To answer questions related to the new CPT code and general reimbursement questions.

Throughout 2022, we will continue to work to establish appropriate reimbursement for the use of <unk> in support of our four pillar growth strategy, which are reimbursement clinical evidence sales productivity and product development.

While it is too soon to quantify the benefit from improved reimbursement. It has generated considerable interest from our customers.

Switching to our clinical evidence efforts, we continue to make progress building a dose here.

Evidence demonstrating our products therapeutic and economic value that will drive utilization and recognition in the medical Society guidelines.

Most significantly we received independent institutional review board or IRB approval for the trial protocol of our reversed HFF randomized controlled multicenter trial.

This trial is designed to validate clinical outcomes and the economic value of <unk> therapy for the treatment of fluid overload in patients with worsening heart failure.

We are confident that the results of this trial will help all profit tuition be considered as the first line treatment option and standard of care for heart patients, who are otherwise with factory to the benefit of diabetics.

We are now working to initiate sites and begin enrolling patients in the pivotal trial during the second quarter of 2022.

Additionally, abstract covering the use of aquavit in pediatric patients who suffer from kidney disease.

Frankly were presented at two academic conferences.

We are also awaiting publication of a peer reviewed journal articles demonstrating the clinical benefit to mortality and morbidity when using the <unk> system earlier in the treatment pathway for critical care patients undergoing open heart surgery.

The third growth catalysts has to do with sales productivity.

Following the broad rollout of our new sales management system. We are encouraged by the progress already made in the first quarter of 2022.

Specifically it has enable our sales reps to have higher quality interactions with key stakeholders at the individual account level, which we believe played a vital role in delivering strong quarterly results.

Additionally, we added our first customer, resulting from the relationship with Premier group purchasing organization than we entered.

We continue to make inroads with additional premier accounts and currently have several customer product trials underway.

The last growth catalysts I want to highlight is the progress we have made on product development.

<unk>, we continued to make advances on our bolt on both a new dual lumen catheter and a dedicated paediatric continuous renal replacement therapy device, both of which remain on track.

In summary, we continued to advance in executing our strategy with the ultimate goal of making the <unk> therapy standard of care for fluid management in patients that are resistant to diabetics.

We continued to expand commercial relationships established the foundation for appropriate reimbursement build supporting clinical evidence and develop differentiated products.

Like many businesses, we have been affected by COVID-19, inflationary pressures are difficult hiring environment and the time required to develop appropriate reimbursement and clinical activity.

However, as.

As we move past the latest wave of COVID-19, and its impact on hospital infrastructure, we see strong underlying momentum in our business in 2022, we will continue to leverage our investments to execute our long term strategy.

Now I would like to turn the call over to George to discuss the financial statements.

Thank you Nestor and good morning, everyone.

Turning to our financial results revenue for the first quarter was $193 million, representing 17% sequential growth from the fourth quarter of 2021, and essentially even with the prior year period as.

As <unk> mentioned sequential revenue growth in the quarter was driven primarily by increased utilization of <unk> therapy and order timing Chris.

Gross margin was 57, 2% for the first quarter, a six eight percentage point improvement from the prior year period the.

The increase in gross margin compared to the first quarter of 2021 was driven primarily by favorable product sales mix and lower inventory revaluation expense. We continue to be encouraged by the progress we're making in our operations and support of gross margin improvement.

Selling general and administrative expenses were $4 4 million during the first quarter. This was 16% below prior year due to continuing cost vigilance and certain nonrecurring administrative costs in the prior year period.

First quarter research and development expenses were $1 1 million compared.

Compared to zero point $9 million in the first quarter of 2021.

Higher spending compared to the previous year reflects increased investment toward our dedicated pediatric device.

The net loss for the quarter was $4 5 million or <unk> 42 per share compared to a net loss in the first quarter of 2021 by $5 2 million or.

Our $1 62 per share based on an adjusted share count.

As a result net cash used in operating activities improved from $5 4 million in the first quarter of last year to $4 8 million in the first quarter of this year.

Regarding our liquidity position, we ended the first quarter 2022, with $19 $3 million in cash and cash equivalents. We believe we have sufficient cash on the balance sheet to provide a meaningful runway to fund operations through the second quarter of 2023, while we execute our growth strategy.

Looking to the future we are cautiously optimistic as we continue to closely monitor the situation caused by the Covid pandemic and availability of health care workers, we remained focused and determined on winning new business and increasing utilization among our existing customers and we demonstrated success in that regard during the first quarter.

We have also scaled back spending in areas not critical to top line growth, our key strategic initiatives, thereby decreasing the cash burn until market conditions improve.

I'll now turn the call back to <unk> for some final remarks.

As I reflect on the first quarter of 2022 I remain encouraged by our considerable progress in executing our strategy.

Includes securing reimbursement for ultrafiltration initiating pivotal clinical trial.

And improving our product portfolio.

This is a continuation of the playbook, we develop in 2019 and all indications are that it is a winning formula.

Thank you for your interest in <unk> and I would like to take this opportunity to thank the many health care providers, who continue to take care of patients under very difficult conditions.

And to our employees for their resilience and hard work to fulfill new well as submission.

Operator, you can turn the call to questions.

Thank you as a reminder, if you will.

To ask a question. Please press star followed by one on your telephone keypad. If your question has been answered or you wish to withdraw your question Ross.

Again, Thats star one to ask a question.

Your first question comes from the line of Jefferies Go ahead.

From Ladenburg Thalmann. Your line is now open.

Good morning necessary George this is actually destiny on for Jeff. Thank you for taking our questions. Firstly I know you said, it's a little too soon to kind of quantify the benefit from a CPT code to category III CPT code.

Curious based on your commentary around additional interest is that coming from any segment in particular E heart failure critical care or pediatrics.

Primarily from the heart failure.

That we have seen the interest as you know that has been one of our.

Primary segments, where reimbursement has had an impact in the past.

Okay got it thank you and then.

Given that you saw some disruption maybe the first four to six weeks of Q1, and so many others Im curious if you can talk to some of the trends youre seeing in Q2 and now that's kind of settled in.

Back to more normalized level.

Yes, we just started.

Q2, and the trends that we have seen is very similar to what we saw in in late in Q1. So we expect to have a a good.

Q2 quarter.

Okay perfect. Thank you and then could you just discuss some of them yes.

Outside of the U S anything on there.

On the U S and outside of the United States, while Coincidentally I just returned from a one week traveling in Europe , visiting our key distributors and.

And also meeting a potential new distributor and they are very excited about.

What we are doing in terms of the new product development as well as the clinical evidence. These clinical trial. So they were very impacted by COVID-19.

You probably saw in the news most of the major countries, Germany, Spain, Italy were shut down during COVID-19. So they are very excited now that the COVID-19 is subsiding.

Especially with everything that we are doing again from the product development and the clinical evidence.

Got it. Thank you and then you received IRB approval for your protocol for reverse Hs I'm curious does that change anything on timing and what are the near term next steps that you guys would need to take in order to progress that to the next level.

Well as I mentioned, we are in the process of initiating sites and we expect to have the first patient enrolled any day now.

And we will continue to enrolling patients throughout Q2, and the rest of the year, but we're very excited we have the study and the protocol has been well received by many positions.

There are going to participate and those that are not going to participate as well.

Okay got it thank you I'll jump back in queue.

Thank you. Thank you.

Your next question comes from the line of Anthony Vendetti.

Madison Jobe your line is now open.

Thanks.

Mentioned higher consumables this quarter.

Can you also just talk about.

If capital sales were a little bit weaker than you expected.

Why was that.

Which is COVID-19 impacting in January.

Access to hospitals or as your access now.

Back to normal.

Alright, good morning, Anthony and thank you for the question, Yes, Indeed, as we mentioned in previous calls we have been impacted by the negative.

Impact that hospitals have had with the pandemic, especially on accessing.

The hospitals by our sales organization as well as their funding priorities.

So that had an impact in terms of both opening new accounts as well as purchasing capital equipment.

So we hope that now that the.

Pandemic is subsiding that we can see more return too.

Two perfect capital purchases, but I'm going to let George also give you some more information.

In our own planning, we anticipated a little bit of a downtick this year, because we realize and looking at the numbers that last year benefited from the launch of the smartphone because we saw a lot of customers upgrading their.

<unk> to smartphones and we thought a lot of that upgrade activity with.

I should say the bulk of that activity would occur last year. So we did see.

That benefit last year that that's not recurring that influences the numbers and thats.

Over and above this considerations at Nestor mentioned.

Okay and next year, maybe just talk a little bit more about pediatrics in terms of.

What your expectations were.

This quarter and what your expectations are going forward.

I know Thats, a big push for you guys and I was just wondering if you could give us a little more color on how that how that's going so far this year.

Right yes.

Pediatric is very important.

A strategic.

Segment for Us and as you as we mentioned we are spending considerably funds to develop a pediatric dedicated device. So this is a very important segment for us.

The reasons for our pediatric strong we sold in Q1 has to do with pediatric census across a number of accounts.

And Additionally, you know the pediatric registry was recently presented in two recent academic symposium, so that helped but that encourage the utilization of the <unk>.

Moving forward, we continue we would expect to see similar.

We sold for the remaining of the year.

Okay, great. Thanks, I'll jump back in queue.

I'm not showing any further questions at this time I would now like to turn the call back the Nestor harder measure for the closing remarks.

Okay. Thank you for joining our first quarter earnings call.

We would like also to invite you to attend our annual shareholder meeting, which will be held virtually at two o'clock PM Central time on May 17 2022.

Further instructions for participating in the meeting can be found in our proxy statement.

If you have not done so I encourage you to complete and submit your proxy will be upcoming meeting.

Thank you and have a good day.

This concludes today's conference call. Thank you all for your participation you may now disconnect.

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Good day and thank you for standing by welcome to the New Relic, Inc. First quarter 2022 earnings at this time all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session.

Ask a question during the session you will need the best Star one on your telephone if you require any further assistance. Please press star Zero I would now like the Hydro conference over to Matt Backfill. Please go ahead.

He is president and CEO and George <unk>, the company's CFO at eight a M. Eastern today, New wireless released financial results for the quarter ended March 31, 2022, if you have not received the losses earnings release. Please visit the investors page on the company's website. During this conference call. The company will be making forward looking statements except for historical information mentioned during the <unk>.

Call statements made by the management of new outlets are forward looking statements that are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 90, 95 forward looking statements involve known and unknown risks and uncertainties that are based on managements beliefs assumptions expectations and information currently available to management.

Including but are not limited to risks associated with the possibility that the company may be unable to grow revenue in future quarters that the company may not be able to commercialize its products successfully the possibility that it may.

Be unable to raise the funds necessary for the company's anticipated up anticipated operations and.

The other risk factors described under the caption risk factors and elsewhere in the company's filings with the Securities Exchange Commission.

These forward looking statements are reasonable as of today's date. However, you should not place undue reliance on forward looking statements because they speak only as of the date when made by providing this information the company undertakes no obligation to update or revise any projections or forward looking statements whether because.

There's new information new developments or other circumstances that might subsequently arise you should review the cautionary statements.

Thank you, Matt and good morning, everyone welcome to new well, it's first quarter 2022 earnings call.

Revenue for the first quarter came in at $193 million, representing 17% sequential growth from the fourth quarter of 2021, and essentially even with the prior year period.

Sales early in the quarter were negatively impacted by Covid, 19, which limited elective procedure volumes hospital access and funding priorities. However, COVID-19 impacts upside as we progressed through the quarter, allowing the sales trajectory to improve.

Sales of consumables proved particularly strong in the first quarter driven primarily by increased utilization of the <unk> therapy at our largest account and favorable order timing.

However, both of these segments had lower total revenue than the prior year period due to fewer console placements in the first quarter of 2022.

The shortfall in consoles was offset by strong heart failure growth, which benefited from increased utilization and order timing.

I would like to point out that critical care continues to be our largest customer segment and represent nearly half of our revenue.

Followed by Pediatrics, and then heart failure, thereby providing an indication of the success of our expansion strategy, which we implemented in late 2019 prior to the pandemic.

On our previous earnings call in March I mentioned, the following four growth catalysts, we expect to positively impact performance in 2022.

John .

Improved reimbursement to additional compelling clinical evidence three a new sales management system and for product development now I would like to speak on each of them starting with reimbursement.

Effective January one 2022, the American Medical Association granted a new category III current procedure terminology code or CPT code for the therapeutic ultrafiltration procedure. This code is the zero 692.

This code supplements DRG based reimbursement for in patient care by allowing health care providers to also seek reimbursement under a professional fee.

Prior to this code physicians treating patients suffering from fluid overload in the inpatient or outpatient setting.

Not having appropriate CPT code to build for treating their patients with the academics and often did not receive adequate reimbursement.

In addition, this CPT code expense reimbursement to include facility and professional fees for outpatient procedures.

To date.

Reimbursement in the outpatient setting has been an important reason for not using <unk> to treat patients in an ambulatory setting.

We anticipate these new code will lead to increase utilization of <unk> therapy and in so doing will allow for tracking of <unk> utilization and cost throughout Medicare and commercial Payors claims databases in support of obtaining a permanent CPT code that app.

Quickly and fairly compensates health care providers and facilities when using ultrafiltration.

To support patients and customers with access to the <unk>. We have proactively established third party patient access program to answer questions related to the new CPT code and general reimbursement questions.

While it is too soon to quantify the benefit from improved reimbursement. It has generated considerable interest from our customers.

Switching to our clinical evidence efforts, we continue to make progress building a dose here of evidence demonstrating our products therapeutic and economic value that will drive utilization and recognition in the medical Society guidelines.

More significantly we received independent institutional review board or IRB approval for the trial protocol of our reverse HFF randomized controlled multicenter trial.

This trial is designed to validate clinical outcomes and the economic value of <unk> therapy for the treatment of fluid overload in patients with worsening heart failure.

We are confident that the results of this trial will help ultrafiltration be considered as the first line treatment option and standard of care for heart failure patients, who are otherwise refractory to the benefits of direct.

We are now working to initiate sites and begin enrolling patients in the pivotal trial during the second quarter of 2022.

Additionally, abstract covering the use of aggregates in pediatric patients who suffer from kidney disease, where we are.

Currently were presented at two academic conferences.

The third growth catalysts has to do with sales productivity.

Following the broad rollout of our new sales management system. We are encouraged by the progress already made in the first quarter of 2022.

Typically it has enabled our sales reps to have higher quality interactions with key stakeholders at the individual account level, which we believe played a vital role in delivering strong quarterly results.

Additionally, we added our first customer, resulting from the relationship with Premier group purchasing organization that we enter.

We continue to make inroads with additional premier accounts and currently have several customer product trials underway.

The last growth catalysts I want to highlight is the progress we have made on product development. Specifically, we continued to make advances on our bolt on both a new dual lumen catheter and a dedicated paediatric continuous renal replacement therapy device.

Both of which remain on track.

In summary, we continue to advance in executing our strategy.

With the ultimate goal of making the <unk> therapy standard of care for fluid management in patients that are resistant to diabetics.

We continue to expand commercial relationships established the foundation for appropriate reimbursement build supporting clinical evidence and develop differentiated products.

Like many businesses, we have been affected by COVID-19, inflationary pressures at difficult hiring environment and the time required to develop appropriate reimbursement and clinical activity.

However, as.

As we move past the latest wave of COVID-19, and its impact on hospital infrastructure, we see strong underlying momentum in our business in.

In 2022, we will continue to leverage our investments to execute our long term strategy.

Now I would like to turn the call over to George to discuss the financial statements.

Thank you Nestor and good morning, everyone.

Turning to our financial results revenue for the first quarter was $193 million, representing 17% sequential growth from the fourth quarter of 2021, and essentially even with the prior year period.

As Lester mentioned sequential revenue growth in the quarter was driven primarily by increased utilization of <unk> therapy and order timing Chris.

Gross margin was 57, 2% for the first quarter, a six eight percentage point improvement from the prior year period, the increase in gross margin compared to the first quarter of 2021 was driven primarily by favorable product sales mix and lower inventory reevaluation expense, we continue to be encouraged by the.

Progress, we are making in our operations and support of gross margin improvement.

Selling general and administrative expenses were $4 4 million during the first quarter.

This was 16% below prior year due to continuing cost vigilance and certain nonrecurring administrative costs in the prior year period.

First quarter research and development expenses were $1 1 million compared to <unk> 9 million in the first quarter of 2021.

Higher spending compared to the previous year reflects increased investment toward our dedicated pediatric device.

The net loss for the quarter was $4 5 million or <unk> 42 per share compared to a net loss in the first quarter of 2021, a $5 2 million.

Our $1 62 per share based on an adjusted share count.

As a result net cash used in operating activities improved from $5 4 million in the first quarter of last year to $4 8 million in the first quarter of this year.

Regarding our liquidity position, we ended the first quarter of 2022 with $19 3 million in cash and cash equivalents. We believe we have sufficient cash on the balance sheet to provide a meaningful runway to fund operations through the second quarter of 2023, while we execute our growth strategy.

We have also scaled back spending in areas not critical trek topline growth, our key strategic initiatives, thereby decreasing our cash burn until market conditions improve.

I will now turn the call back to <unk> for some final remarks.

As I reflect on the first quarter of 2022 I remain encouraged by our considerable progress in executing our strategy.

This includes securing reimbursement for ultrafiltration, initiating pivotal clinical trial and improving our product portfolio.

This is a continuation of playbook, we develop in 2019 and all indications are that it is a winning formula.

Thank you for your interest in <unk> and I would like to take this opportunity and thank the many health care providers, who continue to take care of patients under very difficult conditions and.

And to our employees for their resilience and hard work to fulfill new wellness mission.

Operator, you can turn the call to questions.

Thank you as a reminder, if you wish to ask a question. Please press star followed by one on your telephone keypad. If your question has been answered or you wish to retool your question Ross.

Again, Thats star one to ask a question.

Your first question comes from the line of Jefferies Go ahead.

From Ladenburg Thalmann. Your line is now open.

Good morning next Gen. George This is actually destiny on for Jeff. Thank you for taking our questions are firstly I know you said, it's a little too soon to kind of quantify the benefit from a CPT code to category III CPT code.

Curious based on your commentary around additional interest is that coming from any segment in particular heart failure critical care or pediatrics.

Primarily from the heart failure.

That we have seen the interest as you know that has been one of our.

Primary segments, where reimbursement has had an impact in the past.

Okay got it thank you and then.

Given that you saw some disruptions in maybe the first four to six weeks of Q1 asset. So many others I'm curious after some of the trends youre seeing in Q.

Kind of settled in terms of back to a more normalized level.

Okay.

Yes, we just started.

Q2, and the trends that we have seen is very similar to what we saw in late in Q1. So we expect to have a good.

Q2 quarter.

Okay perfect. Thank you and then could you just discuss some of them yes.

Outside of the U S anything on there.

On the U S and outside of the United States, while Coincidentally I just returned from a one week traveling in Europe visiting our key distributors and also meeting a potential new distributor and they are very excited about.

What we are doing in terms of the new product development as well as the clinical evidence. These clinical trial. So they were very impacted by COVID-19.

As you probably saw in the US most of the major countries, Germany, Spain, Italy, where shutdown during COVID-19. So they are very excited now that the COVID-19 is subsiding.

And especially with everything that we are doing again from the product development and the clinical evidence.

Well as I mentioned, we are in the process of initiating sites and we expect to have the first patient enroll any day now.

We will continue to enroll new patients throughout Q2, and the rest of the year.

We're very excited we have the study and the protocol has been well received by many physicians.

There are going to participate and those that are not going to participate as well.

Okay got it thank you I'll jump back in queue.

Thank you. Thank you.

Your next question comes from the line of Anthony Vendetti with Maxim Group. Your line is now open.

Thanks.

You mentioned higher consumables this quarter.

Can you also just talk about.

If capital sales were a little bit weaker than you expected.

Why was that.

With Covid.

Passing in January .

Access to hospitals or as your access now.

Back to normal.

Alright, good morning, Anthony and thank you for the question, yes, Indeed as as we mentioned in previous calls we have been impacted by the negative.

The impact that hospitals have had with the pandemic, especially on accessing.

The hospitals by our sales organization as well as their funding priorities.

So that had an impact in terms of both opening new accounts as well as purchasing capital equipment.

So we hope that now that the.

Pandemic has subsided that we can see more return too.

Two perfect capital purchases, but I'm going to let George also give you some more information.

In our own planning, we anticipated a little bit of a downtick. This year, because we realize that looking at the numbers that last year benefited from the launch of the smartphone because we saw a lot of customers upgrading their.

Our flex low to smartphones and we got a lot of that upgrade activity with or should say the bulk of that activity would occur last year. So we did see.

That benefit last year that that's not recurring that influences the numbers and thats.

Over and above this considerations at Nestor mentioned.

Okay, and <unk>, maybe just talk a little bit more about pediatrics in terms of.

What your expectations were.

This quarter and what your expectations are going forward.

I know Thats, a big push for you guys and I was just wondering if you could give us a little more color on how that how that's going so far this year.

Right yes.

Pediatric is very important.

A strategic.

<unk> for us and as you have.

We mentioned, we are spending considerably funds to develop a pediatric dedicated device. So this is a very important segment for us.

The reasons for our pediatric strong we sold in Q1 has to do with pediatric census across a number of accounts.

Additionally, you know the pediatric registry was recently presented in two recent academic symposium, so that help but that encourage the utilization of the <unk>.

The equinix.

Moving forward, we continue we would expect to see similar.

Results for the remainder of the year.

Okay, great. Thanks, I'll jump back in.

Thank you.

I'm not showing any further questions at this time I would now like to turn the call back the Nestor had a measure for the closing remarks.

Okay. Thank you for joining our first quarter earnings call.

I'd like also to invite you to attend our annual shareholder meeting, which will be held virtually at two o'clock PM Central time on May 17 2022.

Further instructions for participating in the meeting can be found in our proxy statement.

If you have not done so I encourage you to complete and submit your proxy will be upcoming meeting.

Thank you and have a good day.

This concludes today's conference call. Thank you all for your participation you may now disconnect.

Q1 2022 Nuwellis Inc Earnings Call

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