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ZELTIQ Aesthetics, Inc.
Q3 2013 Earnings Conference Call
October 30, 2013 4.30 PM ET
Nick Laudico – IR
Mark Foley – President and CEO
Patrick Williams – SVP and CFO
David Roman - Goldman Sachs
Tycho Peterson - JP Morgan
Bill Plovanic – Canaccord
Margaret Kocher - William Blair & Company
Anthony Vendetti – Maxim Group
Previous Statements by ZLTQ
» Zeltiq Aesthetics' CEO Discusses Q2 2013 Results - Earnings Call Transcript
» Zeltiq Aesthetics (ZLTQ) Management Discusses Q2 2013 Results (Webcast)
» ZELTIQ Aesthetics' CEO Presents at 2013 Bank of America Merrill Lynch Health Care Conference (Transcript)
» Zeltiq Aesthetics' CEO Discusses Q1 2013 Results - Earnings Call Transcript
I would now like to turn the conference over to Nick Laudico of The Ruth Group. You may begin.
Thanks, operator. Welcome to ZELTIQ's third quarter 2013 earnings conference call. ZELTIQ's Senior Management on the call today will be Mark Foley, President and Chief Executive Officer and Patrick F. Williams, Senior Vice President and Chief Financial Officer.
Our discussion today, including the Q&A session will include forward-looking statements reflecting management's current forecasts of certain aspects of the company's future business. Forward-looking statements are denoted by such words as, will, would, believe, should, expect, outlook, estimate, plan, goal, anticipate, project, potential, forecast and similar expressions that look towards future events or performance.
Forward-looking statements are based on current information that is by its nature, dynamic and subject to rapid and even abrupt changes. Our forward-looking statements are subject to risks and uncertainties which may cause the actual results to differ materially from those projected or implied in our statements. Such risks and uncertainties are discussed in today's press release and can also be found in the company's filings with the Securities and Exchange Commission.
This conference call is the property of ZELTIQ Aesthetics and any recording or rebroadcast of this conference call is expressly prohibited without the written consent of ZELTIQ Aesthetics. After management's prepared comments there will be a question-and-answer session.
With that, I’d like to turn the call over to Mark.
Thanks Nick. Good afternoon, everyone, and thank you for joining today's conference call. Our results for the third quarter of 2013 were exceptionally strong and better than expected. Q3 revenue of $29.5 million was up 64% year-over-year and 12% sequentially. Our growth was driven by an increasing leadership position in the non-invasive, fat reduction market and continued execution of our bifurcated sales force building upon its momentum form the first half of this year. Armed with market leading technology, our account managers continued successfully and predictably expand on installed system base while our Practice Support Specialists leveraged on hands treatment protocol, treatment to transformation and approve training and education initiative to drive greater utilization. At the core of success thus far has been an ongoing commitment to delivering outstanding patient outcome, a commitment partnering with our physician practices and a commitment to driving awareness through our cooperative advertising campaign, a new marketing initiative.
Our third quarter results further increased our confidence that the changes we have implemented are resulting in more predictable and sustainable growth. As a result, we are raising our full revenue guidance to approximately 40% year-over-year growth in 2013, up from 20%. Due to our focus North America continued to be the main contributor to our over performance. But we are beginning to see positive signs in our international markets. Additionally, we've demonstrated strong discipline in our cash management this year and have significantly reduced our year-over-year cash burn. Patrick will give full guidance detail and our improved cash projections during his financial overview.
With our strong Q3 results and projected Q4 performance, we feel it would be helpful to give a preliminary range of our expected growth in 2014. Although, we liked 2013 with a very high growth rate, this performance is amplified due to lower revenue comparable in the second half of 2012. Also with the strong 2013 performance the comparisons for 2014 will become harder. At this early stage, we believe a growth rate between 15% to 20% for the full year 2014 is achievable and our prior comment to generating cash by the middle of 2014 still hold true.
As we have done on prior earnings call, we will touch on those areas of the business we believe are driving our growth to give some insights into our third quarter and rest of year performance. So we start with the market. Starting with the addressable market, we continue to believe we are in the early stages of not only penetrating the existing market but also seeing rapid expansion of the market as non-invasive, fat reduction and body contouring gain traction with the end user patient. As we broaden our installed base and grow the utilization of CoolSculpting, we continue to gain a deeper understanding of the long-term market opportunity for both treatments and systems. Previously, we've talked about the base aesthetic market of 30,000 practices worldwide and the company's initial focus on penetrating 5000 of this market leading practices. We are currently in about 1700 of those practices and our success to date in further diligence on the market opportunity suggest that we can likely go much deeper into base aesthetic market than initially anticipated. Additionally, we find the CoolSculpting practices continue to add multiple systems in order to increase their throughput and to handle increasing patient demand. Our market research continues to demonstrate that CoolSculpting is changing practice dynamic by driving new non-aesthetic patients into the aesthetic channel. At our Investor Day meeting in New York last month, Dr. Grant Stevens presented his published pre reviewed paper on the success of CoolSculpting in attracting new patients whereby 66% of it is CoolSculpting patients were new to his practice was 52% of that being completely new to aesthetics. This supports our ongoing believe that CoolSculpting can and is drawing new patients into the aesthetics channel. We believe the ability to drive new patients into the channel combined with high new procedure conversion rate is on tested in the aesthetic space.