NeuroMetrix Inc. (NASDAQ:NURO) Q2 2020 Earnings Conference Call - Final Transcript
Jul 23, 2020 • 08:00 am ET
Good morning, and welcome to the NeuroMetrix Second Quarter 2020 Earnings Call. My name is Carlo, and I will be your moderator on the call.
On this call, the Company may make statements which are not historical facts and are considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature that depend upon or refer to future events or conditions are forward-looking statements.
Any forward-looking statements reflect current views of NeuroMetrix about future results of operations and other forward-looking information. You should not rely on forward-looking statements because actual results may differ materially as a result of a number of important factors, including those set forth in the earnings release issued earlier today.
Those refer -- please refer to the risks and uncertainties, including the factors described under the heading Risk Factors in the Company's periodic filings with the SEC available on the Company's Investor Relations website at neurometrix.com and on the SEC's website at sec.gov. NeuroMetrix does not intend and undertakes no duty to update the information disclosed on this conference call.
I'd now like to introduce the NeuroMetrix Senior Vice President and Chief Financial Officer, Mr. Thomas Higgins. Mr. Higgins, please go ahead.
Thomas T. Higgins
Thank you, Carlo, and welcome, everyone who's joined the call this morning. I'm joined on the call by Dr. Shai Gozani, our President and Chief Executive Officer.
NeuroMetrix develops and commercializes neurostimulation-based medical devices for the diagnosis and treatment of chronic health conditions. Our commercial products are DPNCheck, ADVANCE and Quell.
DPNCheck is a point-of-care test for the detection of peripheral neuropathies. ADVANCE is a point-of-care device that provides nerve conduction studies as an aid in diagnosing and evaluating patients suspected of having focal or systemic neuropathies. And Quell is a wearable mobile-app-enabled neurostimulation device indicated for symptomatic relief and management of chronic pain. It is available over-the-counter.
The second quarter of 2020 was a continuation of the suppressed business activity evident in late Q1 of this year, as a result of the COVID-19 pandemic. Late in the second quarter, during the month of June, we saw a modest increase in orders for our diagnostic devices and consumables. This was encouraging.
However, at this point, it would be premature to extrapolate the June activity to any conclusions regarding a broader recovery of the business. We have and will continue to maintain staffing and production capabilities to support our customers as well as to advance our priority R&D programs.
During the second quarter, we took advantage of opportunity in the equity markets to strengthen our balance sheet. This provides us a degree of protection against delay in the economic recovery.
Turning to operations. In the second quarter, total revenue was about $1.4 million. Gross profit on that revenue was about $900,000, representing a gross margin rate of nearly 64%. This was despite the low production volumes and low fixed cost absorption in the quarter. By comparison, in Q2 a year-ago, revenue of $2.4 million generated a gross