Good morning, and welcome to the InMode Ltd. Fourth Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Miri Segal of MS-IR. Please go ahead.
Thank you, operator, and good day to everybody. I would like to welcome all of you to InMode's Fourth Quarter and Full Year 2019 Financial Results Conference Call. With us on the line today are Mr. Moshe Mizrahy, Chairman of the Board and CEO, and Mr. Yair Malca, CFO. Before we begin, may I remind our listeners that certain information provided on this call may contain forward-looking statements, and the safe harbor statement outlined in today's earnings release also pertains to this call. If you have not received a copy of the release, please view it in the investor relations section of the company's website. Changes in business, competitive, technological, regulatory, and other factors could cause actual results to differ materially from those expressed by the forward-looking statements made today. Our historical results are not necessarily indicative of future performance.
As such, we can give no assurance as to the accuracy of our forward-looking statements and assume no obligation to update them except as required by law. Moshe will begin the call with the business update, followed by Yair with an overview of the financials. We will then open the call for the question and answer session. I'll now hand over the call to Mr. Moshe Mizrahy, InMode's CEO. Moshe, please go ahead.
Okay. Thank you, Miri, and thanks to all of you for joining our fourth quarter and full year 2019 financial results conference call. Here with me around the table in Israel are Dr. Michael Kreindel, the Co-Founder and CTO. Michael is also a board member of the company. Yair Malca, our CFO, and Rafael Lickerman, our VP of Finance. Before I update you on the major developments and financial results for the fourth quarter and the full year 2019, I would like all of you to join us as we celebrate two major events. This year, we're celebrating 10 years of operation. We began operation in 2009. Last year was our 10-year anniversary. The second event we're celebrating is that 2019 was the first year that we reported full-year results as a public company.
As we celebrate this major event, we would like to highlight our achievement along the way. In 2015, the FDA cleared InMode new and proprietary Bipolar RF frequency technology, which enabled further development and marketing of minimally invasive subdermal adipose remodeling devices. I'm sure that all of you may know our BodyTite, FaceTite, AccuTite, and Morpheus8. With this new technology, InMode introduced a new category in the medical aesthetic market, which we call minimally invasive and subdermal ablative aesthetic surgery. This technology enables physicians to provide solutions to patients who do not want to suffer from the shortcomings of full plastic surgery, yet would like to get comparable results. We call them treatment gap patients. Today, five years after the introduction of this technology in the U.S., InMode has become the leading provider of minimally invasive aesthetic surgery solutions to the aesthetic surgeon.
The success of InMode subdermal adipose remodeling devices in the minimal invasive and the subdermal ablative space inspire InMode to apply the same principle of facial and body reshaping to the non-invasive market with hands-free application. As such, InMode has developed two FDA-cleared unique hands-free platform, the Evolve for body and the Evoke for face. These two platforms are also cleared in Canada and also in Europe, received the CE mark for marketing themselves in Europe. Utilizing this bipolar RF technology for delivering RF energy and electromagnetic pulses made Evolve as the only device for treatment of skin, subdermal fat, and muscle tone improvement. While Evoke is the first hands-free device for the face and submental area. The introduction of Evolve and Evoke to the market created for us another new category within the aesthetic market. We call it hands-free aesthetic procedure.
Therefore, currently, our portfolio consists of two proprietary and protected group of products. The first one, minimally invasive and subdermal ablative aesthetic surgery, and the second one, hands-free aesthetic procedures. These two groups are expected to be the main growth engine for InMode in the coming year. To position InMode as the front and as leading innovative aesthetic company. As for the global reach, InMode continues to develop the United States and the international market through our network of subsidiaries and distributors. In addition, InMode continue to work on clinical and regulatory advancement in various countries. Recently, we received ANVISA clearance for Brazil and additional clearances in the United States, Canada, Taiwan, and other countries in the Eastern Bloc. These new regulatory clearances will create additional market potential for InMode platform and solutions. Now for the numbers.
As of December 31st, 2019, the total number of employees worldwide was 251, and our distribution network cover over 50 countries. Our worldwide install base reach approximately 4,900 platforms, of which approximately 2,800 were in the U.S. In the fourth quarter, InMode generated record revenue of $47 million, a 63% increase from fourth quarter of 2018, reflecting our continued growth and the increased adoption of our minimally invasive RF technology, as well as the introduction of the new hands-free platform. International revenue grew 71% year-over-year. Net income increased to $19 million in the fourth quarter. We are focusing on profitable growth and are successfully implementing our goal of international expansion. We are increasing this expansion effort with our current subsidiaries in Spain and the U.K. and our newly established subsidiaries in India and Australia.
As for the full year 2019, our total revenue reached $156.4 million, a 56% increase from 2018. Our net profit grew to $61.1 million, a 173% increase from 2018. Now for 2020 guidance. Turning to our 2020 guidance, we expect another consecutive growth year driven by continued development in the market in the U.S. and internationally. Based on our expectation, we are providing a full year 2020 revenue guidance of $190 million-$198 million. We also expect full year 2020 GAAP gross margin to be in the range of 85%-87%. Full year 2020 non-GAAP income from operation is expected to be in the range of $76 million-$80 million. A full year 2020 non-GAAP earnings per share is expected to be in the range of $1.85-$1.93. Now, we would like to update you on our portfolio categorization.
Starting in the first quarter of 2020, we're introducing a more detailed presentation of our product revenue to better reflect our operation by disclosing the following three categories. The first category is the surgical platforms, which includes all the platforms engaged in minimally invasive and subdermal ablative treatment. The second category is our hands-free platforms, which currently include Evolve and Evoke. We intend to continue to develop platforms and indication, and a new indication for this category. The third category consists of what we call traditional laser and non-invasive RF platforms. Here, I would like to make the same statement I made before. InMode is not traditional laser company. We develop and sell non-invasive laser equipment since we want to be one-stop shop to our customers who buying our unique platforms.
Last but not least, I'm sure that I will be asked on the effect of the coronavirus on our business. The effect of the coronavirus on our business is threefold. The first one, we expect the overall impact of our revenue to be as minimal as possible since our Asia Pacific region now account for a small portion of our total revenue. We believe that at least in the first quarter, and perhaps in the second as well, our sales in China and the other neighboring countries will be affected. As of today, many events and medical conferences are being canceled in Asia. We also took this into account in our projection for 2020. We hope that in Q3 and Q4, everything will be back to normal. Regardless, we are continuing to follow the situation on a daily basis. The second effect is on our manufacturing.
As you probably know, some of our components are manufactured in China. Currently Chinese factories have not returned to full production. We are working hard to get second and third sources for those components from Europe and other countries. We believe that these components will probably be more expensive. We plan to do our best to minimize the effect on the flow of manufacturing and deliveries of product. The third effect is our regulation in China. Since the CFDA is now closed, we anticipate delay in the approval of our platforms. Hopefully, not more than three months. We expected to get the clearance in China in the first quarter, we now believe that the clearance will come sometime in the second quarter. Now let me hand over the call to Yair to review our financial results in detail. Yair?
Thanks, Moshe. Good day, everyone. Total revenue in the fourth quarter of 2019 grew 63% to a record $47 million, with gross margin of 87% on a GAAP basis. The revenue growth was driven primarily by the continued success of InMode's expanding direct sales organization in the United States. Additionally, InMode continued to gain traction in international markets, with international revenue growing 71% year-over-year. GAAP operating expenses in the fourth quarter of 2019 totaled approximately $23 million, a 2.3% decrease from the first quarter of 2018. Sales and marketing expenses increased 60.7% in the fourth quarter of 2019 compared to the first quarter of 2018, but were offset by the anniversary of a one-time legal settlement and loss contingency expense related to a sub-license agreement of $8 million in the fourth quarter of 2018.
On a Non-GAAP basis, operating expenses totaled $22.7 million in the fourth quarter of 2019 compared to operating expenses of $15.4 million in the fourth quarter of 2018, an increase of 47.6%. GAAP operating margin was 38.2% in the fourth quarter of 2019 compared to a 4.6% in the first quarter of 2018. Non-GAAP operating margin in the fourth quarter of 2019 was 39% compared to 33% in the first quarter of 2018. GAAP diluted earnings per share in the fourth quarter of 2019 were $0.46 compared to a net loss of $0.01 per diluted share in the fourth quarter of 2018. Non-GAAP diluted earnings per share in the fourth quarter of 2019 were $0.46 compared to $0.22 per diluted share in the first quarter of 2018, an increase of 109%. We completed the first quarter with a strong balance sheet.
As of December 31st, 2019, the company had cash and cash equivalents, marketable securities, and deposits of $193.4 million, out of which $70 million are net proceeds raised in the IPO in August 2019. Total revenue for the full year of 2019 grew 56% to a record $156.4 million, with a gross margin of 87% on a GAAP basis. Year-over-year international revenue growth was 68% in 2019. GAAP operating expenses in the full year of 2019 totaled approximately $76.5 million, a 24.2% increase from the full year of 2018. This increase was attributable to higher levels of sales and marketing spend, partially offset by the anniversary of a one-time legal settlement and loss contingency expense related to a sub-license agreement of $8 million in the fourth quarter of 2018.
On a non-GAAP basis, operating expenses totaled $75 million in the full year of 2019 compared to operating expenses of $51.7 million in the year of 2018, an increase of 45.2%. GAAP operating margin was 38.1% in the full year of 2019 compared to 23.5% for the full year of 2018. Non-GAAP operating margin for the full year of 2019 was 39.1% compared to 33.4% for the full year of 2018. GAAP diluted earnings per share in the full year of 2019 were $1.60 compared to $0.62 per diluted share in the full year of 2018. Non-GAAP diluted earnings per share in the full year of 2019 were $1.63 compared to $0.90 per diluted share in 2018, an increase of 81%.
On the cash flow front, the company generated $62.2 million from operating activities for the full year of 2019. Please note that 2019 operating cash flow were impacted by the payout of a one-time legal settlement accrued for in prior years. With that, I will turn the call back to Moshe.
Thank you, Yair. With that, I will be pleased to take your question.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question will come from Jack Meehan with Barclays. Please go ahead
Thank you. Congrats on the quarter. I'm looking forward to the new disclosures you plan to provide around revenue across surgical, hands-free, traditional. Was hoping, could you just give us a little bit of color, if you look at that today, what % of revenue each of those buckets were in 2019? Within the guidance, what you expect each of those to grow at? I'm expecting the hands-free is probably the fastest level of growth, given the new products, but just a little bit more color there would be helpful.
Okay. Hi, Jack. How are you? This is Moshe.
Good. How are you?
Well, in 2019, we introduced the Evolve preliminary in August. Therefore, we sold hands-free devices, only the Evolve. The Evolve only in the first quarter of 2020, only a little bit on the third quarter, on the fourth quarter. All together, it was around $12 million. The main market for minimally invasive. Just a second. The main market for the minimally invasive was around $24 million, subdermal ablative, the traditional was only $1 million. Previous quarter, just a second. Okay. The numbers that I'm giving you right now, I'm looking on the spreadsheet. The numbers that I'm giving you right now is on U.S. only. I will not give you numbers on the international, since we did not sell any hands-free devices on the international market. On Q4 of 2019, $24 million were the minimally invasive and the ablative.
Hands-free was around $9 million, and the non-invasive laser was only $1 million, total of $33 million. This is out of the $47 million. In addition to that, we had another $4.3 million of recurrent, and the rest was international. On the full year 2019, $89 million was the minimally invasive and ablative. $10 million was the non-invasive. The hands-free was $12 million, since we sold a little bit on the third quarter as well. This is together for U.S., $111 million. Total sales in 2019 was $156, out of which was around $15.4 million of recurrent, and the rest was international. In the international, we did not sell any hands-free yet.
That's great.
Does that answer your question?
It did. Miraculously, I think I kept up with all the numbers, and I think they make sense. Seems like you're off to.
As you can see. Yeah. Jack, as you can see, up until we will start selling the hands-free devices, which is the unique platforms, in 2020, the minimally-invasive and ablative, all the surgical products, are the main category for us.
Yep. Yeah, it seems like you got off to a really strong start with Evolve. Maybe just talk about, in terms of revenue within your guidance of $190 million-$198 million, what are you assuming for those platforms and how the customer feedback has been?
Okay. Well, we don't have a lot of customer feedback, because most of the deliveries were done at the end of the fourth quarter. We get some doctors who did some preliminary study even before we launched the product to the market, and the results are good, so we are very encouraged. What will happen in the future with the hands-free devices? First, in general, we do believe that the potential of the technology that we developed for the hands-free segment is even higher than the potential of the minimally invasive, and the reason for that is that the minimally invasive and subdermal ablative is mainly for doctors who are surgeons, and the hands-free devices can be used by any aesthetic doctor.
The ratio between plastic surgeons and aesthetic surgeon, doctors who are doing surgery, to doctors who are engaged in just medical aesthetics, I would say, is at least 1 : 6, to 1 : 7. The potential is high. How the market will accept that, we don't know yet. We have those few quarters. It will take us at least two, three quarters to understand the potential, to understand the message, to fine-tune the message, to decide which community of doctors we are approaching. It's too early to say.
That's fair. Last question. The recurring revenue, I think I heard $4.3 million in total. You continue to have a nice ramp on the consumable side. Maybe just what was the revenue contribution from consumables and how are you seeing adoption of that?
We're currently around 10%. Overall, in 2019, our current revenue from disposable, and others are around 10% of the total revenue worldwide.
The breakdown in there is about 70% of that is consumable and 30% of that is warranty. Does that answer your question?
Yeah. How much of the growth is coming from the minimally invasive side?
I mean the.
How do you expect that to ramp in 2020?
Jack, only the minimally invasive and ablative has disposable. The hands-free and the non-invasive platforms do not have any disposable. The disposable are for the BodyTite, NeckTite, AccuTite, Morpheus8, and now we're introducing other version of the Morpheus8. These are the one-time use, and these are the disposable. As the install base of the minimally invasive and ablative platforms will grow, the total number of disposable will grow as well. We see this starting in 2019. For example, Morpheus8 is becoming a big winner, and we don't even keep the manufacturing in order to supply all the demand. It's growing.
Consumable doubled year-over-year in 2019 versus 2018. Consumable exactly doubled themselves.
Great. Thank you all.
The next question comes from Matt Taylor with UBS. Please go ahead.
Hi. Thank you for taking the question. I just had a follow-up on Jack's question. Could you articulate, when you look at the three main categories that you're now breaking out, how much of the growth in 2020 do you expect to come from each of them, if you can quantify that, or just kind of speak to the trends?
I believe that, just roughly, it's too early to say, but just roughly, I would say that at least 65%-70% of our revenue will continue to come with the established business of the minimally-invasive and ablative. 25% worldwide will come up with the hands-free, since the introduction will take time, the regulation in certain countries will take time, although it's already cleared by the FDA, but in other countries in Europe, Asia, we need to go through the process, and we haven't started yet. This will be around 20%, 25%, and then the traditional laser will continue to be around, I would say, between 5%-10%.
Thanks, Moshe. It sounds like the hands-free launches are going really well. You're predicting a lot of growth from that this year. Could you just talk a little bit about the initial receptivity to them, how you feel they're differentiated, and just any other color on market size and growth?
You mean on the hands-free platforms?
Yes.
Okay. We have basically two platforms. The Evoke, which is for the face, we don't have any competition because there is not even one platform similar to that in the market today. Okay? On the Evolve side, there are some companies who are offering hands-free devices like Zeltiq with fat freezing and like BTL with the EMS and some others with EMS. These are single function platforms. The beauty of Evolve is that Evolve has three modalities. It can compete with BTL and all the other EMS because we have one of the modalities is EMS. It can compete with Zeltiq and all the SculpSure from Cynosure and others on the fat treatment. Also, we have additional modality, which is the tight for skin tightening. Also, the three modality in the Evolve is doing fat treatment, but also skin tightening.
Therefore, when we see the competition, there's not even one platform who can offer such comprehensive platforms to the doctors. This is something that's unique about the Evolve. What is the potential? I said before, I believe if we will position it right, to the aesthetic surgeon and also to the aesthetic physician, doctors who are not doing surgical and who are not involved in minimally invasive, the potential is high all over the world. Time will say, we need to compete against the competitors. We need to position it. We need to develop some training program for every country. We need to finalize the regulation in many other countries. During 2020, that's the main objective of us, to bring the hands-free platforms category into the awareness of all the doctors who are engaged in aesthetic.
Great. Thanks, Moshe. One other follow-up question I had. When you talk about the contributions from these hands-free products, you mentioned a couple of times that you're looking to roll these out across the globe throughout 2020. Can you just offer some early thoughts on 2021 and 2022? Can we see this launch build basically over multiple years? I guess, what year would you see peak sales from these products?
Okay. Good question. Well, the plan for 2020 is to take these two platforms and get regulation clearances in Asia, in South America, in the Eastern Bloc, which is separate from the regular CE, in Italy, which is again separate from the regular CE, and make sure that we got clearances all over the world, including Canada, U.S., and other countries, and also in Brazil, of course. Once we have that in 2021, I believe the total revenue from the hands-free category will be at least double from 2020. At least double. Also, for 2021, we might be able to double it again, because honestly, the technology that we're presenting, which is based on the Bipolar RF, is the only technology that actually treats the fat and tightens the skin.
Even when you take the CryoShape, SculpSure, or the Zeltiq, the CoolSculpting, okay, they know how to kill fat cells, but then you have loose skin, and the beauty of our technology, especially with the hands-free, is that we can do both simultaneously, and we can combine between the three modalities, depends on the patient, and customize the treatment according to the BMI, according to what the patient want to achieve. We have many type of scenarios of treatment and protocols of treatment that we can employ here. We see a great potential for that. This is something that we will concentrate on 2020, not just in the United States, but as I said, to get it cleared by the regulation authorities in many countries, and in 2021 to go big.
Great. Thank you.
The next question comes from Kyle Rose with Canaccord Genuity. Please go ahead.
Hi, guys. This is Ian on for Kyle. Thanks for taking the question, and congrats on another impressive quarter. Wanted to ask about gross margins as that line came in a bit above what we were expecting, and 2020 guidance is 85%-87%, seems to imply a bit of a step down from the current levels. Anything in particular this quarter that led to the strong performance in that line? Anything you're seeing in 2020 that would weigh it down a bit? I know you mentioned the manufacturing concerns from coronavirus. Was there anything else? Thank you.
Okay. Good question. How are you?
Pretty good. Thank you.
Okay. Yeah. Well, the gross margin in the fourth quarter and the full year of 2019 was 87%. The main reason is first, economies of scale. We manufacture much more than 2018. We sold more than $50 million more. Now, when you deal with this kind of manufacturing, you have bargaining power, again, versus suppliers. You can get better prices. Of course, you don't increase your overhead accordingly. Therefore, 1% increase from 2018 to 2019 was reasonable increase based on that. What will happen in 2020, we believe that somehow we will need to find solution for the component that will not be purchased from China, and we might pay a little bit more. This is the reason why we say that the range is between 85%-87%.
If the coronavirus will spread, and China's factories will not open in the second quarter, we estimate 1% decrease in the gross margin in 2020 to something in the neighborhood of 86%. This is based on some calculations that we did here. I want to tell you one thing which is very important, we dealt with this issue this week, we established a team of people that's right now exploring all the other alternatives around the world for similar components, we will pay more on the components as long as we can keep the production line up and running. This is more important for us, to deliver on time. On the first quarter, we don't see a measure because we have some inventory. If the coronavirus will continue to be an issue in the second quarter, the gross margin will go 1% down. This is why we estimate 85%-87%.
Helpful. Thank you.
Once again, if you'd like to ask a question, please press star then one. The next question is from Jeff Johnson with Baird. Please go ahead.
Thank you. Good morning, guys. Moshe, I just want to follow up on the sub-component supplier point there you just made on the 100 basis point impact. Is there any risk that you won't be able to find alternative suppliers? I guess, you've quantified the size, but is there risk of actually going out and finding those suppliers?
No, there is no such risk. Even if we have to make, for example, metal component, in Israel, and it will cost, I don't know, four times as much, we will do it. We're not taking any chance of not delivering product on time, and we're not taking any chance, even if it will cost much more, to stop the production line. Once you stop the production line, it will be very difficult to start them again. You lose the knowledge, you lose the people, and you don't want to be in this situation. I can assure you that all the components will be purchased from second and third sources, and we will continue the manufacturing. The good news, and I'm saying it again, the good news is we are not yet cleared in China for selling our product.
Therefore, the effect on revenue will be very minimal. Unlike other companies like Lumenis and Cynosure and, of course, Candela, who are having subsidiaries in China and a major part of their business in Asia originated in China, they are going to be hurt much more than us as far as revenue. As far as manufacturing and component, there is no risk that we will stop the lines.
All right. That's helpful. Thank you. Maybe two follow-ups on Evolve and Morpheus8. Evolve, are you seeing most plastic surgeons and other purchasers of that platform buying all three hand pieces? Are they buying two hand pieces and maybe thinking about adding EMS later? Just would love to hear kind of an update on how that is being purchased. In Morpheus8, you mentioned some updates to that. Any additional color you could provide there would be helpful. Thanks.
Most system of Evolve that we sold in the preliminary launch was with all three modalities. Because the message to the doctor is simple. Those modalities and the treatment of tight, trim and tone are complementing each other. Therefore, in order to customize the treatment per patient, what you need to do is to develop a customized protocol for him, and you need all three modalities. We do offer the system with one, two, or three modalities.
Great. Morpheus8, the updates there?
What do you want to know about the Morpheus8?
You said something in passing in answering a previous question about some updates there. I didn't know if something is changing with that product, if you're launching a second-gen or maybe a third-gen product in Morpheus8. Just was trying to follow up from a comment you made in passing.
No. What I said is that we'll continue to develop some other version of the Morpheus8 because the Morpheus8 is a winner product, and we will announce it once it's ready and get the clearance from the FDA.
All right, great. Last question from me, just India and Australia, I think your two newest subs. Just where are you at in building out your market presence in those two markets? Are you now fully staffed up and going after those markets? How should we think about maybe your presence in those markets in 2020 versus 2019?
We started the Indian subsidiary in 2019. On the fourth quarter, we did close to $400,000 already, which is good for start. That was the first full quarter. In Australia, we set up the company in the fourth quarter of 2019. We hired the managing director, we hired a logistic guy, we hired the three salespeople. They are getting ready with the training. They sold two system in the fourth quarter. Not in the fourth quarter, in the beginning of this quarter, of the first quarter. I believe that in Australia and India, by establishing subsidiaries, we're going to be one of the market leaders.
Great. Thank you very much.
The next question is a follow-up question from Jack Meehan with Barclays. Please go ahead.
Hello again. I was wondering if you could update us where you ended the year in terms of the number of salespeople in the U.S. Given some of the distractions at some of your competitors, do you think that's helped you at all on the commercial front?
Yeah. As of December 31st, 2019, we had 110 direct salespeople in the U.S. and in Canada. Since then, we continue to hire and prepare ourselves for 2020. I believe there is some opportunity, and I would like to explain that in the market today. The fact that Cynosure was acquired by an equity fund and Zeltiq is not doing very well under Allergan. I believe that the companies like Alma and Candela, just because the crisis in China will lose some of the revenue in 2020, I'm sure that some people will leave those companies, and we might find some good people to hire in 2020.
We will continue to hire, because if we want to be in the neighborhood of $200 million worldwide. At least 70% of that will be in North America, we need more people. On average, direct salesperson in North America is selling something between $1.3 million-$1.4 million a year. We can calculate and do the math simply in order to determine how many direct sales rep we need.
Great.
We continue to hire in 2020.
That's great. Then within your guidance for 2020, is there a range you feel comfortable with for the first quarter? Is there anything seasonally you would call out?
Jack, we decided that we do not want to give guidance for the first quarter. I'm sure all of you know the seasonality of the market. We decided we don't want to give guidance per quarter, but rather give guidance for the full year, which we will update every quarter with the actual. Therefore, at the end of Q1, we will update the numbers based on the actual revenue that we achieve in Q1, and Q2 and Q3 the same. Right now the guidance that we gave, we believe as far as competitive situation with our competitors, it's the maximum we can do. Also, the categorization that we decided to reveal, I mean, the three categories, are also because we cannot give information about individual platforms. This is a very strict competitive information, which we do not want to share with our competitors. All of them are on the line now.
No, that's all fair. Last follow-up. You're building a bit of a war chest on the balance sheet now, over $190 million in cash and equivalents. How are you feeling in terms of what you want to do on the deal front, potentially? Do you think any of this disruption could open up some targets for you?
Well, maybe. We are not engaged in any M&A. We had a board meeting yesterday, basically, in the board meeting, we decided to give all the $200 million that we have as bonus to the employees. We'll do it over four quarters, not immediately. No, I'm kidding. No, we're not. We don't have any M&A targets right now. We have enough organic growth on the table, from our development, which we need to bring to the market with a high potential. With the management attention that we have in this company currently, I just want to remind everybody that we are not very big company, altogether 250 people. We do not see any reason why to start doing an M&A and engage in all kind of issues and others. It will take time.
We might do it in the following years, but right now the answer is we will continue to generate cash, and it will accumulate on the balance sheet. If the opportunity will present itself to buy technology or something which will complement our product line, yes, we will consider it, but this is not $200 million.
That's fair. Thanks, Moshe.
Ladies and gentlemen, this concludes our question and answer session. I would like to turn the conference back over to Moshe Mizrahy for any closing remarks.
Okay. Again, thank you everybody for joining us. It was a very good quarter for us. We are very excited with the new categories that we're developing. We're very excited with the R&D pipeline that we established for the 2021 and 2022. We have a full engineering team here in Israel who are working on new platforms. As we promised during the roadshow of the IPO, we will bring to the market at least two new platforms every year, in order to keep the momentum and keep the growth and continue to be the innovative leaders on the medical aesthetic. Thank you all.
Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.