Q3 2023 InMode Ltd Earnings Call
Good day and welcome to the third quarter of 2023 earnings results Conference call.
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And I'd like to turn the conference over.
M S. I R. Please go ahead.
Thank you operator, and everyone for joining us today welcome to in N out third quarter 20 twenty-three earnings call before we begin I would like to remind our listeners that certain information provided on this call may contain forward looking statements and the safe Harbor statement outlined in.
Day's earnings released also pertains to this call. If you have not received a copy of the release. Please visit the Investor Relations section of the company's web site.
Changing business competitive technological regulatory and other factors could cause actual results to differ materially from those expressed by that forward. Looking statements made today are historical results are not necessarily indicative of future performance.
Such we can give no assurance as to the accuracy of a forward looking statements and assume no obligation to update them, except as required by law.
With that I'd like to pass the call over to more Shimmies Lastly, chairman and C E O.
Please go ahead.
Thank you Mary and thanks to everyone for joining US with me today, all Doctor Microclimate, Oh, cofounder and Chief Technology Officer.
Monica, Oh, Chief Financial Officer.
Chela County, I'll put it in the North America doctors filter dual our chief Medical Officer.
Come on O V P of finance following the.
<unk>, we will all be available to answer your question.
The third quarter was the first time that we so I slowed down and experienced normal seasonality. That's a common in the medical device industry in general.
Physically and death.
Face.
And it killed tree with revenue of $123.1 million.
Increase of 2% compare to the third quarter of 2022.
And the third quarter.
What they're even more has been in there and then accelerate the growth rate.
Re establish our presence in the U S and globally. Furthermore, the last two years of the covered pandemic led to abnormal environment in desk space, resulting in pent up demand and defend aesthetic treatment Kathryn.
Pre.
<unk> summertime hasn't been a popular time for aesthetic treatment due to traveler and the requirement to avoid sun boss treatment. This summer patients and physicians in the U S and in Europe, we tell them to normal seasonality cycle and this trend was it was.
[noise] reflected in our queue three financial results.
In addition, red called into a straight impacted the financing environment of new leasing agreement you know industry salespeople, often say time killed deals and there's the traded to Cleveland processed steak long ago last platform. So were sold in the United States.
Despite the small court challenges, we were pleased to see the demand for more treatment has not been slow down and remain high.
Better than golf download technology, and innovation are even more kids differentiate tool, we constantly improve and obligated out technology, we remain committed to developing a new minimally invasive technology and platforms as well as upgrading our existing platforms.
In addition, we will aggressively and sell and protests, though I P and patent this will insure our long term position.
Neither or in the industry and will enable us to benefit and become stronger following the calling challenges in the market before I turn the call over to Shaquille I would like to really take our message regarding the conflict the knee swell as we said you know press release all employee.
All safe and together with the management team in Israel and in the United States. We are we are all as committed as we have always been to the success of this company is committed supporting all customers disturbed with those employees and status people worldwide.
We prioritize the safety and the wellbeing of follow employees and will continue to do so as we execute our strategy. We don't anticipate any interruption to production Oh inventory levels globally and in Israel are sufficient and include component in sub assembly.
For the next three quarters as a result, we expect all platforms and consumable will be delivered on time and we'll meet the highest standards. In addition, even more take all the required measure to ensure continuous customer support and exceptional service well all.
As committed as we have ever been to the company's success now.
Now I would like to turn the call over to Shaquille, our president in North America Shaquille.
Thanks, everyone for joining us and modes third quarter was challenging to North America. Despite the headwinds a lower platform sales in North America, and the third quarter were encouraged by the strength inconsumable cells and view this year over year increase is an indication will continue demand for in those treatments.
<unk> some consumables in service accounted for 15% of total Petri revenues and grew 28% year over year we.
We are pleased with the successful launch of envision our non-surgical.
Thomas platform in Q3.
It is progressing well in North America, and is gaining traction of money, leaving optometrist an ophthalmologist. Additionally at the very end of Q3, we successfully launched define the new and improved version of our hands free technology for the face.
Expect early revenues to be in queue for.
As always I'd like to thank our entire North American team and all employees everywhere for their continued hard work. During these challenging times I will now turn the call over to your ear.
Review of the financial results in more detail <unk>.
<unk> Hello, everyone. Thanks, again for joining us.
Email generated revenue or 123.1 million dollar indestructible 2023, representing a 2% yoga you increase the gross margin of 84 per cent on a got basic.
Within the company more than over 83% to 85 per cent.
Cause it says outside of the U S accounted for $44.9 million or 36 per cent of says compared to $39.8 million or 33 per cent.
Three o'clock.
We continue to see go with coming from different regions around the World and then two three.
<unk>, it's a new record.
<unk> <unk> <unk> <unk> 93 countries with access team of more than 267 direct threats and a T. Two distributors worldwide.
Capital equipment and it won't ever presented with 85 per cent of total revenue when consumer goods and services revenues accounted for the remaining 15 per cent.
As in my opinion experiencing increased to $50.8 million in the third quarter compared to 43.1 <unk>.
Last year.
<unk> I can be good to get a decent with new shows no presents.
As well as in grape indirectly consumer advertising campaigns and hosting interesting okay.
Should it be compensation accomplish so 6.6 million <unk> 2023.
Compared to $7.9 million <unk> 2022.
Yep operating expenses, <unk> $56.6 million and 16 per cent increase over here.
And then get basically a breathing experiences with 56.
In this courtroom compared to a total of 41.4 million Bulldog English <unk> 2022.
<unk> 22 per cent increase.
<unk>, 20th 23, 38 per cent compared to upgrade <unk> 21 Q.
<unk> 23 was 43 per cent compared to 61% for the third 2022.
Gavin diluted earnings per share for the third quarter, where 54 cents compared to 58 <unk>.
Sure two three of 2022.
None grab diluted earnings per share for this school with 61, 10th compared to 66 cents.
Sure in the third quarter of 2022.
Once again, we ended the call today, what he was talking about it.
As of September 30th 2023, the company head Catherine <unk> mortgage securities and the policy of $675.8 million.
Before I turned to call back to make sure to take your questions I'd like to read to write though advice guidance for 2033, or even new between $500 million and $510 million.
<unk> between 93 per cent and 95 per cent now.
We've got the income from operations between $220 million and 225 minutes.
non-GAAP any further I need to check out between $2.53 and $2 and 50 557 cents.
I will now turn over they called <unk>.
Thank you. Thank you should kill all poets are we now can get Q&A.
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Today's first question comes from Mexico with Barclays. Please go ahead.
Thanks, so much for taking the questions.
And for the color around the around the results I'm wondering if we could start with.
Some of the things that caused the Ah shortfall to the to the third quarter relative to to street estimates, even though I think directionally. It was in line with your your inquiry seasonality and I'm speaking of.
Pressure around.
Thing and leasing costs and and how that affected Q3 on that topic. Just just wondering if you have any additional color to share.
As we progressed into Q for urine.
And any any thoughts across the management team as to as to how what what in mode can do to potentially alleviate some of those delays or or pressures that that that caused a little bit of a slow down there in Q3, and then I have one follow up.
Okay. I. This is <unk> and I believe my colleagues will compliment me I believe was specified the three main reason why we are well it'll betrothed and what what the market expect first I believe the seasonality, which is now normal.
In a in a in the medical aesthetic as you probably know in 21, and 22 World coffee deal and the coverage was in the beginning of the year and they'll fall Q3 was much stronger than expected and sometimes stronger than killed too.
But that's not normal in the medical aesthetic I've been in the medical aesthetic for 25 years, all the way for me to see luminous in Iran, and now in more and it's always the case that the third quarter, because it's summer time, because people don't want to get treatment during the summer and exposed to the sun on vacation.
It's a slower quarter and the fourth quarter, usually is the strongest one. So this is one of the reason and and and I mean, we cannot avoid that second as far as financing. What we said is that you know today unleashing cost is 14% to 15%.
Annually, that's the interest rate of leasing company charging customers. So I'm sure that you will not take a mortgage with 15 42, 15% Ah Ah Ah Ah interest rate.
Do dishes are walking machine that generates money.
But do we tell noninvestment with this kind of interest rate will dex longdale and of course, Taco salad afraid what would happen the economy's slowing down everybody not everybody can see that it's not just in the medical aesthetic or in the medical field and therefore, when when the interest.
I'll still going up or at least did not start to go down and the leasing financing will cost 13, 14% to 15%.
Don't know for how long, we believe that a doctor will think twice if that if they want to do it.
Third reason is the fact that leasing company are tightening their procedure and they'll screening.
They are afraid doctors will go bankrupt and they will not see the money and therefore before the issue of pills to soda to us to to actually Ah Ah Ah take the older. They do a very long I would say a very long ago processing time, sometimes.
It takes two to three weeks and you know when the when you have 222 weeks some of our competitors are coming our doctors think twice Ah you already Ah you know think maybe I need to wait a little bit. All this process is taking place now how we overcome it.
And you know we have a lot of resources, especially we have a lot of money and therefore, we're walking with the leasing company to come up with some solution first to optimize the processing. So it will not take three weeks it might take a few days as it used to.
We might do some other activity of in house financing and and in other program too he's ah that that to ease the financing to certain doctors are the main the main the project is to work with the leasing company to find solution. We have some ideas were always the disk.
Two of them were in the process to implement that hopefully in the queue for its will easily debate northeaster awake bear weight will stay 14% to 15%, but at least he's the process and and and walk better.
The only thing that we can do in addition to continue R&D continue marketing continued development Ah you know on the third quarter this quarter, we've slowed down.
<unk> one had to do it one 1000 doctors use a meeting in Chicago in August.
We have 400 doctors summit in Cyprus 440 countries O W.
We actually Ah continue to invest in a an I P. M continued to invest in marketing we participated in 12th May.
Medical conferences around the world. So we're not basically what doubling down well doubling down on any any any any marketing any self promotion R. N D, where we I have three more people in our own deal older to expedite coming with a new product to the market well not.
Sitting down and cutting cause that's the last thing that we will do although it's a challenging time, but the company DNA is different we will not fire people, we will not lay off people, we will keep everybody on the contrary where hiring people this quarter and we will continue to invest in in marketing.
Being in cells in R and D in regulation and product development.
We received we received two F D a approval this quarter.
And which will enhance our position in in the fourth quarter of next year. So overall, although we're taking the slow down and the situation seriously, but we're not we're not we're not sitting down and wait to see what would happen in the market.
That's super helpful color I just.
One follow up if I could on on some of the events that have unfolded. Unfortunately in the past months in Israel and and.
You too.
Comments around the time that this conflict began about your ability to to supply and your supply chains.
You're at risk of disruption ability to deliver a product and so on if you could maybe walk us through and any updates that you have on that and how far into 24 do you feel confident that your that your position to deliver.
Given the current status of course thanks.
Yeah. Okay. Thank you for your question Ah, Yes, it's a it's a very difficult time in Israel, but we try to run the company business as usual we have two production facilities both of them on the north part of Israel, which down at the fact that currently there are not affected Ah with that with.
The war that it's mainly in the south part of Israel.
All the team and Israeli safe all we're located in the northern part of Israeli and the city called York now, which is a relatively not close to the to the war area. All the team in Israel is safe and their families were taken care of them we have.
Accumulated inventory in the U S and Israel and in some countries in Europe in order to take care of their supply for at least a two causes. So finished good and three quarters of component in sub assembly. So wet well, we will cover everything you know.
I I'm optimistic, but I cannot I I'm not the profit that I'm not I don't tell you that everything is 100 per cent hopefully the war will not extend to the northern part of Israel, where we are located in the spa was that that will that will not happen.
And we will continue to have the situation right now as it is right now everything will be OK also in fourth quarter and the beginning of 2024, we have some employees on their army reserve duty, especially in the manufacturing side, but we took care of that by.
Switching to walk to shift we hire more people and and these that are not going to do reserve beauty on the army and were walking to shift in order to keep the capacity. The same as we plan. It's it's a 24 hour a day you know challenge.
24 hours a day walking Ah man, it's although it's not easy, but we're managing.
Well I appreciate the update and with you and the teams they're the best thanks for taking the questions.
Thank you.
And our next question comes from young Lee with Jeffries. Please go ahead.
Hey, guys, it's an add on for young How're you doing.
I just wanted to ask a couple of questions about your your forecast maybe you could talk to us about.
How you arrived at the four Q4 task you know after seeing the seasonality and low growth <unk>. What are what are some of the key assumptions.
That you looked at and developing that in.
As an extension and can you talk about your confidence.
Growing in 2024.
When you said the focus few men the guidance that we gave for a lifetime.
Four Q for employing by the pull your day, okay. Okay. Okay, okay, well in order to meet the $500 million target to be above the $500 million target as was stated we need to do $140 million revenue in the fourth quarter.
Okay. I can tell you that I have I have work with all the territory's North America Europe Asia Latin America.
And currently I believe we are well, we're going to meet this target of $140 million in the fourth quarter in order to be above the 500 million dollar dollar Ah 20 twenty-three targeted that we gave.
As far as these well we have all the capacity to supply everybody in the theory to always with the $140 million of transfer of platforms held pieces disposable Ah. It's all in inventory. So from that size, we are not going to have a problem.
From a sales point of view I can tell you that Ah Ah Ah October Ah Ah you know he's always the first quarter of that quarter and therefore, it does not reflect what's going on as you know more than 50% of the quarter revenue being generated in the last.
Months, which is December but I'm I'm very optimistic that that we will do the $140 million. If it will not happen we will notify everybody.
Now regarding the 20th 20th regarding 2024, we do not have a target yet we want to see what will happen on the market in queue for as far as the slow down and and and the slowdown in the economy and mainly on the medical aesthetic.
Towards the end of the year, we will do some kind of analysis of all the territories well walking on preparing their budget for 2024 and based on that we will give a guidance.
Yeah, maybe just one final.
Question in a different way on on queue for you know the implied gross right.
For your guidance at the midpoint is about 70 per cent or so so I guess why is that the right number of why wouldn't it be 2% or 12% you know how did you arrive at seven what are some of the key inputs that are informing that level of growth versus something lower or higher.
Gay or do you want to answer that.
Sure I think we're at what we did is we looked at the different territories.
<unk> <unk> <unk> more significantly some of the <unk> and the others cause some of them would not grow yoga you sound <unk>. The one good food would not and looking at taking all this into the mix.
You your I P.
To this like <unk> did you go with you over here.
And that's in terms of revenue in terms of variables irritability weird feeling slightly in decline in the profitability, but not that much operating margin.
Q food, we expect it to be around 2% to 4%, which is very healthy and and <unk> and <unk>.
I don't know.
I'm thinking I I, just I just want to add something here as far as yeah. He talks about territories Ah Grove.
Yeah, Yeah, Yeah, I always like for example on although it's relatively smaller than North America, but Ah, but Ah the market in Asia is not slowing down yet, although we start seeing something on the fourth quarter and therefore, we have to do some weighted average b.
That they always tell us to come up with the guidance.
As we go to profitability I'm sure you'll notice that al Gore small Jen is still very high 84%, even with inflation and the cost of component, which is going higher and higher every quarter.
Because of because of cost because of inflation, we still maintain 84% without without raising the price on the market without raising the prices of our equipment on the market, we did not waste price and any time at all yet.
We might but not yet and therefore on keeping the 84% gross margin on the third quarter, even in the slowed down time was was a challenge and I want to compliment all the all the all the operation team the manufacturing danger nearing the design.
And everybody that's walking I I would say a parallel to there are regular walk on new product development walking on how to improve how to improve the process how to improve the supply chain how to improve the manufacturing in the testing in order to keep this 84.
Percent gross margin, it's not it's not easy okay, that's something that everybody needs to remember our marketing himself cause. This quote there was a little bit higher than usual because we have several one time event.
Use a meeting in in in the U S 4000, doctors summit meeting in Cyprus, We bought the patent which also Ah Ah it costs to go to two marketing Ah Ah. We we also tell me Nathan one of our distributors in Germany in order to establish some a subsidiary there are.
Fully owned subsidiary and that cost us a little bit of money. So we have some event in the third quarter that affect their marketing and sales expanse by at least three and a half million dollars, which are not gentle and not regular so and therefore dad there.
Aiming at the operating but operating earnings when Elizabeth down due to this this expensive, but but overall, even with even with the slow down and even with Ah with all the challenging time that we're having in Israel.
And on the market, we manage we manage we managed to make a nice net profit and nice gross margin.
Thanks for the call in Russia.
Okay. Thank you and our next question today comes from Danielle and hopefully you will C. B S.
Ed.
Hey, This is Ryan broke is known for Danielle today. Thanks, so much for taking our questions. So just on Q3 I just wanted to try to better understand the timing of some of these impacts within the quarter to reconcile with somebody Intraquarter commentary you guys made so when did you really begin to see the impact some seasonality and interest rates and how much of the slow.
Two three and I guess in queue for it comes from the impact on the financing side versus any potential real demand softening for your assistance.
Well I I think it's very difficult to calculate how much from the slowdown came from the economy, how come from the slowdown came from the interest rate how how how how much from the slowdown came from the time take to approve leasing Ah process, we never made this.
Kind of calculation flash, it's it's accumulate of all those reasons or all those the fact and the fact that the slowing down on the full economy. The fact that the Doctor will think twice if they want to buy equipment with 14% leasing package and will interest rate.
The fact that you know take longer to to to get the leasing and in the meantime, doctors think again if he wanted the system. In addition to that I'm sure you know that more than 50% of them off the web and you are being generated in the last.
Months of the quarter that's always.
That's not typical to slow down and not typical to anything.
And especially that if for example in the last few days of the quarter you close the deal and you don't get to finance those deals stay on the table for the next quarter and usually they disappear.
So so you can put all those elements together in order to in order to come up with a with what we have explained and in the press release and now on the question. There was no quantitative calculation what will be the effect of each one of those foxholes, it's a combination of all.
Got it thanks, no shade and then Justin capital allocation just about to get an update on your latest priorities. There. So with cash now just over 40 per cent of your market cap is there any additional urgency on your end to put money to work here and with the meaningful dropping your share price would you more consider any sort of share buy back or even.
The dividend program here. Thanks, so much.
[laughter] well Ah we start about buyback we thought about it in my back for a long time.
But I have to say two things one oh previous experience with the buyback actually we did buyback for $100 million did not help did not help at all and.
And and and the stock did not react to that it was not now but it it.
Second I'm sure you know that one of our competitors a company called hydro facial which market the product to the same market that we do Ah mainly to spar and less to doctors, but in in they sell also two doctors they have an ounce.
Six weeks ago.
That they are doing buyback of $100 million official by like $100 million, we all expected to their stock to go up.
The stock price when they announce it was 6.3 dollars.
The stock price today is $4, so they lost 35% of their value.
In the last six weeks.
Now right after they announced the buyback salad.
It's Meghan, it's make us to think twice if this is the best way to support the stock.
To do it by Big usually we believe that buyback is something that will have few days and the market will forget that and therefore, we're better off keeping the money and looking for him in a opportunity business development opportunity things that we can do with the money better than just spending on buying stock.
That's that's what I can say Ah Ah we are exploring some opportunities for them in a we have nothing to announce yet and nothing to show Ah Ah Ah. We tried few thinks but the prices were too high for us.
We try to find something that that have the right profitability, although I'm not sure we will find something with 84% gross margin, but something similar something that compliment out technology something that will be you know a synergy to our business, but we don't want to do it in a.
Rush, we don't want to do it in a rush, maybe right now and the slowdown situation, maybe there will be more opportunities, but that's something that we will explore.
[noise] understood. Thanks, so much.
Thank you and our next question today comes from Dale Earnhardt with Bird flu Shaw.
Alright, Thanks, guys, maybe just a question for shack here kind of on the end consumer and if you can give any color on what you're hearing kind of from your surgeons doctors out in the field I mean, I know you talked to a ton of of consumables Grove still growing out a kind of a healthy greater than 25 per cent or whatever but that is down from you know.
A bit over 40 per cent for the past few quarters. So just wanna see if there's any incremental color that you can give their and if you're seeing some patients may be you know.
Differ push out these procedures given the macro pressures right now.
Yeah, and then the question I think it's it's a kind of a combination of both so number one what you just mentioned there definitely there's definitely some macroeconomic impact here. There's no question people are getting a little a little tighter with their wallets, but at the same time I do think that.
From from what motion was even saying seasonality for Q3, there's a lot of patience you know going back to traditional seasonality within our industry patience or on vacation. They don't Wanna be in the Sun. So on and so forth. So we did we did see a little bit of a slowdown obviously, you're still encouraged might be by the demand for it it hasn't dropped off significant.
Yeah, I would say, but I I do think it's a combination of both the macroeconomic environment and the seasonality of the business.
Okay. Thank you very much for that and then second question and probably for a you are here, maybe taking a a different correct at the 2024 question, but I know previously you guys have kind of always talked about you know maybe doing $50 million increments every year and obviously the past few years, you've kind of surpassed that.
At potentially just with the Covid pent up demand and and tailwind affects there, but you know is that $50 million, maybe something that's still in question is your kind of going into budget or is that may be a safe way to to start and then under the margin front I mean, I know you guys have put in quite a few sales reps and other investments this year.
<unk>. So it was this probably a better starting point to think off of it and we can work from here or might there still be pressures you know just potentially from growing consumables and more in person events, though thanks.
I would really prefer to wait to see how cute full it looks like before we provide any additional color on 2024, and you know and <unk> excuse me I'd be it's gonna be off the table and <unk>.
Then we will get a better feeling before we see.
Comes with a headwind.
Directly related to the economy and only then will you be in a better situation to discuss that.
20 fold items.
Alright sounds good thanks.
[noise]. Thank you and our next question comes from Mike Martin with neither one company. Please go ahead.
Yeah, I think so just given you're all the concerns out there about the G. L. P. One weight loss drugs, I mean, I'm not gonna ask about what impact you're seeing are expecting but a question that I've gotten quite a bit from investors just trying to better understand kind of inroads exposure. There is you have a mix.
<unk> <unk>.
Body shaping procedures versus more of his skin tightening type procedures and your your business and I don't know if you can even have visibility into that but even if you could give us just some general sense of Luckily you the mix of those two types of procedures at least that gets within the minimum.
Basic part of your business you.
If it's like a rough percentage or something like that.
Okay can you answer that for the U S and I will answer for the L. A W.
Sure I think Spiro should also jump in here so yeah.
When it comes down to it you know we've never been a weight loss company right. So go into what you were saying about body shaping and skin tightening I believe that if there are those patients that are going to be going through weight loss and experiencing that you know, we actually serve as a complimentary adjunct to those things there but spear.
Oh did you want to talk about some of your practical experiences with this yeah. I mean, we get this question quite often.
Trying to taper down, though I think it's a little too early to to make a decision a holiday overall sort of 30000 foot view is gonna look like in the future about this but I can tell you I can tell you one thing's for sure weight loss and and loose skin is a problem and these patients are definitely going to come to us right and I'm not talking about the massive weight loss of vision.
Who have traditional plastic surgery done that's definitely not going to change I'm talking about the average weight loss of 10% that these drugs, usually do 50%, depending on which one they use.
Those patients all gonna need some sort of skin tiny procedure and and they're gonna want it in the minimally invasive way in the office not surgery, none of the hospital and where the best company to provide that so repositioned into really good place to take advantage of that and as a practicing plastic surgeon I can tell you my colleagues.
[noise] are starting to see more and more of it. So the trend is upwards, it's very positive.
Morphia says genres are leading commercial brand and what people are asking for it and the demand shows it right in the level of consumables and in the offices that we talk to now as far as body. Contrary is concerned Ah liposuction has never been a weight loss procedure. So patients that are over 35 or 36 P M I or not really good.
Kennedy's for liposuction, we definitely want them lowers so these drugs actually get these patients to a lower b M. I were then they become candidates so.
28, 30 ideal candidates, even less started coming in for liposuction. So it puts them in the category, where we can actually treat them and the fact that we can actually do liposuction and tightened her skin simultaneously with something like body type again puts us in a really good place because of differentiate technology that nobody else has so.
Overall, very optimistic I know it sounds a little different than what people expect well if I lose my way with a pill I don't need plastic surgery. That's on the contrary once you start losing weight you become more optimistic you Wanna look better. It's a it's a vanity procedure that we're offering of course and were right there to take advantage of it so the trend so far.
Are are positive and I keep on getting better and better and better. So I can't tell you longterm, but I can tell you a short term, we're seeing a positive impact and researchers across the country.
Okay.
Thank you.
And then I wanted to ask one on just the the the disclosure about this pattern.
Detail can you maybe just talk about kind of what products that are I guess technologies are involved there you know.
The degree to which they sort of have a presence in the U S. What they're competing product.
Are you you were talking about the the patent infringement lawsuit that we filed against them yeah.
Yeah, Okay. Okay. As you know as you know we were on the women had a small cat for quite some time, we started with the routine and then with the empower we have all on a portfolio of patterns on the women health and recently we bought.
The full portfolio patent Ah of women has performed V. V V. We've used to be a NASDAQ based company that try to develop a monopole R. F device for treatment of S U I.
Finally, they did a study and the study was not successful and the F. D. A rejected their submission they went bankrupt and we bought for half a million dollars 480, something all of their patent portfolio.
One of their patent, which is the 511 pet than specified in there in the press release that we that we that we should as as the prior dates even better than the president of of in mud and based on these <unk>, which is owned by US right now we.
Filed a lawsuit against them because what they do is exactly.
French dish patent exactly infringe disburden, it's it's a one Paul auer device for bugging Ah Ah Ah Ah Ah Ah Ah tightening and and inside and outside they are competing with US and there was no reason why we will not protect.
Technology and know how it's in the early stage of the of the of the litigation we file it not far from not not long ago, well waiting for their call waiting for the answer to that but we're going to take them to quote.
Okay.
Got it thank you.
Thank you.
I'm from Cleveland Cronan was kind of chord Genuity. Please go ahead.
Hi, good morning, and thanks for taking my questions.
So you know and I shall weaknesses corner in North American capital and just to touch further than what you're seeing the rest of the world. When you seen two four so far and any signs of swelling their plans in place to be proactive on the list in front there.
Well.
The hours that the the rest of the World is similar to what you see in the United States interest rate in Europe, even higher than into straight in the in the U S.
And even before we had difficulties with leasing companies in Europe, we finally walking with their P. L. B balebos, the French company and try to do the singing some false hopes either way in Europe.
Some of our some of our distributors are also have some some sources of capital a lending in order to help with the customers. There was no different in the in the in the interest rate and also in the leasing process in other part of the world.
And therefore I'm in Europe is behaving the same in as in the United States What will happen in 2024, we don't know what will happen with the leasing company in 2024, we take into where we anticipate that this will continue to be tough and teal.
Interest rate will start to go down.
Awesome. Thank you and then just you know a quick question on you at side of the business what capital systems and platforms really kind of saw the weakest uptake sorry in the case here.
Shaquille that's your question.
Sure.
So I think it was just overall, we we didn't you know as I mentioned before we had some strong growth within vision and doing the initial launch.
Which was which was successful so far with with a fine launched towards the latter end of the quarter. There hopefully we'll see some of the rewards from that come into a queue for but overall it was it was kind of pretty much level across the board as we normally see it it's just again.
<unk> had mentioned in common.
Common theme here the financing side of things in the macroeconomic environment. So I'm, just kind of slowed things down but for the products that we did see we still have.
Still going very strong the minimum base of side of things with Morpheus H, one and so forth and we're also seeing study with our women's health and wellness platforms as well.
[noise] great. Thank you.
Thank you and our next question is a phone call from young Lady at Jefferies. Please go ahead.
<unk> I just had a follow up question I wanted to add some more about the G. L. P. One I guess tailwind. So you started talking about you know I wanted to ask you have you already seen this phenomenon where patients are losing <unk> coming in to get.
Surgery, and if there is much broader adoption of them.
It could be a significant tailwind for a modem in the future.
So it's a great question I think the one thing I did not mentioned is the price of the these medications right I think a person that spending $1500 a month or $2000 a month.
To lose weight.
Cause it's already crossed the line to say you know what I want to look better and healthier and healthier part is secondary it's usually I Wanna look better just the way human nature is so you're looking at a patient spending you know 10 to $15000 in a year on these medications and committed and now they they definitely have lost the weight.
But they've also look worse. So once you've crossed that line. What we're seeing is for them to come in and have things done to spend more money on a morpheus treatment for example, which is simple three and a half to $4000.
It's not a big deal.
So I don't Wanna say, it's sort of like a gateway drug to us, but it kind of is so I do think that's going to have a positive impact for us. We're seeing these patients come in the term exempt big face is a term that came up from a new York plastic surgeon is one of our Kols. So that goes to show you that you know we're very aware.
Very engaged our doctors are definitely involved you'll see the different.
Names come up from a xanthic Bud those epic Stacy Israel plastic surgeons or aesthetic doctors coming up this terminology and the reasons are coming up. This terminology is there, they're creating an environment in educating patients.
For them to come to the practice and have this treatment is done so definitely I think there's gonna be a positive impact for us and I and the trend. So far are looking that way does that answer your question I'm not quite sure is.
Cause that would yeah right.
Okay I just wanted some confirmation of that the only thing I want to ask you about I notice here in the news.
Suddenly talking about some of the dangers with with fillers and so I was hoping maybe you can just touch on that and whether that might actually also lead folks too and no treatments for some reason you feel are options.
Yeah sure I mean, that's sort of separate work I'm a practicing plastic surgery. So it's not necessarily in mode sponsored the work. They do is completely different bud as physicians and we have to be leaders and what we do and the concerned with the fillers Israel. We we were the first to the group that I did the study with Pru.
Grooved that that you know fillers do block lymphatics and that studies coming out soon but why does it how does that impact well. We do have doctors that are using in biotechnology Ah Morpheus combination with a highly run it as there's a doctor on the Lady's name was comedy Parsoes doing great with it is a two year waiting list. So overall.
Step back I think that what's gonna happen in the next two to three years as as patience and especially women because the majority of these pages that are heavy fillers.
Are gonna look it was gonna be a push towards biologics, whether that's fat whether it's a filler that's not highly erotic base with a lotta crosslinking pictures are gonna be seeking more natural Ah sort of Ah those things and does the are we looking at all these things and then one of course, we are but that has to do specifically.
With the trends are and I think that if you look at any device and plastic surgery. It takes about 20 years for it to start having problems. The same thing happened to influence back in the past. So I personally feel strongly about it. This is not represented in modes of certain.
Thoughts or this is something I've done independently, but I as my position in his company. It's important that we always take good care of patients find the best treatments for them and and what it does have that reputation that are that are equipment works. So I mean that line whenever we're looking for in the past and M&A has two usually go along those lines.
As well so that.
Does that answer your question more or less.
Yeah, that's great. Thanks, so much not at all not all welcome.
Thank you and what is the gentleman. This concludes our question and answer session.
I'd like to turn the conference back over an emotional <unk> chairman and C E O for closing remarks.
Thank you. Thank you all for Ethel again, thanks to all of you participated in this one and call I would like to thank all in more the employee worldwide that work hard on the third quarter Ah Ah you know facing the challenges that we have discussed today.
Especially I want two tanks, all the info team in Israel.
Under this kind of you know a war situation walking every day, sometimes 16 hours a day in order to make sure that we will comply with all the with all the Ah. The promises that we were that we make worldwide deliver on time.
We all hope that our queue for Ah will get better as far as the market.
Really cool for a stronger.
We have some challenge to which the number four cure for in order to be within the target that we gave but we're doing everything. We can is always taught me that again. Thank you all bye bye.
Thank you. This concludes today's conference call and thank you all for attending today's presentation. You may notice note your lines and have a wonderful day.