Venus Concept Inc. (NASDAQ:VERO) Q4 2022 Earnings Call Transcript

Rajiv De Silva: Yes. Look, the overall system pricing remains similar. And obviously, the way we work with our previous customers who have a ARTAS iX system versus brand new customers, the system is a little different, but the pricing has broadly remained the same.

Anthony Vendetti: Okay, great. I’ll hop back in queue. Thanks.

Operator: Thank you. Our next questions come from the line of Jeffrey Cohen with Ladenburg Thalmann. Please proceed with your questions.

Jeffrey Cohen: Good morning, gentlemen. How are you?

Rajiv De Silva: Good morning, Jeff.

Jeffrey Cohen: So, just a few questions from our end. I think firstly for Domenic, talk about inventory write-downs. I see there is, I think, 2.4 written-down in fourth quarter. And then correlate that over to inventory. I think it was with some receivables around 37, and long-term receivables were 20, the effect on the outlook, what you might expect for that for this year and also some of the ramifications going to that 70% cash sales model?

Domenic Della Penna: Yes. So, Jeff, the inventory write-down we took was in the third quarter and it was 1.4 million. The reference to 2.4 million might be more on the FX side, but the inventory write-down was 1.4 million and it had to do with some cleanup in relation to some of the subsidiary discontinuations, etcetera. We had some clean up that we did and we took that charge. There was not a big inventory charge in the fourth quarter. And we’re not expecting any big write-offs in 2023. As far as the inventory level goes, we really don’t provide any forward indication on inventory, but we will manage inventories in-line with 2022. And we don’t expect a big investment in we’ve done in the past as a result of improved supply chain and some of the conditions that we’re seeing out there in terms of lead times and so on.

They’ve improved a bit. So, that should help us. The slight offset is that as we invest in the robotics strategy, some of those component parts are a little more expensive, but net-net, we expect working capital to be a source of cash to receivables, but inventory we don’t expect that to be a drain in 2023.

Jeffrey Cohen: Okay, got it. And then secondly for us, I did want to follow-up a couple of Anthony’s questions on ARTAS. You could talk about the improvements, are they both hardware and/or software? And then could you walk us through the current fleet and give us an indication of the size of the fleet and utilization trends that you’ve seen over the past number of months? Thank you.

Hemanth Varghese: Yes. So, it’s Hemanth here. Thank you. So, we’re not going to give product level guidance on sales performance or sales expectations. But as I mentioned, the system updates largely involve software upgrades, but significant improvements on both the speed and precision that are capable of the system. But there are minor hardware upgrades in terms of handling increase in data provided by the enhanced speed, but for the most part, we’re talking about software upgrades to the system.

Jeffrey Cohen: Okay. That’s helpful. Can you give us .

Rajiv De Silva: One of the other things we have done is to really increase our efforts around training the persistence and precision practices. So, we actually now have in San Jose a full preceptorship procedure set-up where we regularly bring in to do training. So, all with the view of continuing to, kind of improve utilization going forward.

Jeffrey Cohen: Got it. I apologize for seeking this level of clarity, but could you talk about versus implant cases or cases which are using both explants and implants and give some indication there on new trends there, that would be helpful? Thank you.

Rajiv De Silva: So , could you repeat the question again? I’m not sure I fully caught it.

Jeffrey Cohen: Trying to get a sense of hair transplantation and is using ARTAS or doing both and implantation using the ARTAS?

Hemanth Varghese: I believe we saw improvements both on the harvesting side, as well as the implantation side if that’s what you’re getting at? The enhancements in the new iX system actually improved the speed and quality of both.

Jeffrey Cohen: Super. That . Thanks for taking our questions.

Rajiv De Silva: Thanks, Jeff.

Hemanth Varghese: Thank you.

Operator: Thank you. Our next questions come from the line of Anthony Vendetti with Maxim Group. Please proceed with your questions.