TCMD - Earnings call transcript Q1 2018 | Tactile Systems Technology, Inc.

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Operator

Good afternoon, ladies and gentlemen, and welcome to the First Quarter of 2018 Earnings Conference Call for Tactile Medical. [Operator Instructions] Please note that this conference call is being recorded, and that the recording will be available on the Company's website for replay shortly.

Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including those identified in the Risk Factors section of our most recent annual report on Form 10-K filed with the Securities and Exchange Commission, as well as our most recent 10-Q filing. Such factors may be updated from time to time in our filings with the SEC, which are available on our website. We undertake no obligation to publicly update or revise our forward-looking statements as a result of our new information, future events or otherwise. include in certain accounting accordance GAAP. also are measures principles, will calculated not with call references financial to that or This generally accepted generally measures. non-GAAP We these financial to refer as the Reconciliations non-GAAP website. presented accordance Investor press GAAP of with Relations earnings measures available the on financial to in in those are release calculated most measures portion and comparable the our of to would call the like Mr. turn now I to over Medical's Chief Executive Officer. Tactile Mattys, Jerry Please sir. go ahead,

Gerald Mattys

quarter welcome, Financial Thank call. XXXX you, first afternoon to call earnings Chief and joined by everyone Rob. Officer, the on I'm our Good Blake. today Lynn

started for the the performance that contributed our of begin a with quarter get during Let's an financial primary drivers the our with along brief of first today's call. overview discussion our with remarks agenda to of I'll for period. performance XXXX, prepared a

results Following of commercialization our Flexitouch then on review a call guidance these our outlook Plus an and I'll our afternoon. which press XXXX, some detailed new earnings financial provide neck. I'll questions. opening for we this remarks, in and update Flexitouch will conclude before the quarter thoughts XXXX financial updated on release Lynn with for with additional head both the share you first our for then products, our of and

the quarter growth. representing we of XX% reported XXXX, a total For year-over-year first million, revenue of $XX.X

sales our in System, Flexitouch of by which year-over-year driven was quarter. first the million growth to XX% revenue $XX.X total Our grew

we our Our quarter and the growth full primary that guidance year our performance represented to outlined due fourth year, was drivers largely in on quarter call. the that start strong earnings a supporting to XXXX

areas quarter field our organization our for expanded sales lymphedema years, efforts United key in strong $X market sales of and top pursue the we insurers. focus the in-network targeting growth expansion our we focus These from; the to Flexitouch line in and benefited our two years, organization to have billion-plus contributed commercial States remain the the clinicians with coverage primary during on market. recent our the over drivers past as strategic growth team high-diagnosing sales each first addressable Specifically, our the reported opportunity

key Let expand their the me our and of to contribution first these take minute in drivers performance quarter. on growth each to a

First, to large in the our order market position organization increase our on our we've organization geographic our field to extended U.S. addressable capitalize market. to of coverage opportunity, sales

XXXX. driver As to part of sales our growth we effort, of this sales end expansion was This an organization important XX of at our sales grew at over force XXXX over in the direct in XXX end QX. from the our representatives for

which these than data. we In XXXX, are on based of to sales analysis continue reps the our XX claims highest-diagnosing an more was clinics June we their U.S. which XX clinicians selling across in claims approximately our we've maximize on market, of identified found there our efforts high-diagnosing analysis clinicians of through Second, productivity from activity ending to the lymphedema focusing XX,XXX by the the data, in from the X,XXX months that benefit medical

potential lowering there. in-network adding selling within an as patients our clinician new with effectiveness also with commercial also to that end facilities, volume for we third, for high-volume commercial going continues to plenty leaves which one Tactile just of facilities, expense deeper that while by of the business the XXXX, And opportunity of XX%% least sales has high practicing our customers covered plans. contracts remaining of existing X,XXX done As over believe our of these at the by are facilitate high-volume under out-of-pocket coverage force at facilities Medical provider clinician increase our insurers insurance

Administration benefited from hospital of in system. the the addition Veterans first drivers sales Flexitouch sales our In long-term also growth, to important quarter growth into these strong

do prior discussed quarter first because copayment important of veteran VA the calendar each an patients calls, area year, have As our our organization for on the during not focus represents obligations. sales

covered a deductibles. than As we're patients in by The insurers with commercial sales result, the of to be system enhanced the we seasonal the implemented success also year. annual strategy the result their purchasing tends less our seeing is for VA course activity hospital of throughout a last

help of network. VA Specifically, we of more dedicated We VA with hospital within remain added effectively success market to number very a the this who specialists initiative. our sell and pleased reps the

of profitability the loss was of in quarter improved compared in of included also stronger from last to of million EBITDA performance, the $XXX,XXX margin year. QX quarter XX% to last quarter gross highlights financial $X.X with the which and adjusted Our year EBITDA in first first compared XX% an

most first During controller also the system, products. commercialization addition market of on Flexitouch important suggested to of improvements Most release the successfully new a both latest-generation and progress Plus we we customer portfolio Flexitouch importantly, our feedback. the our an and the to the some it Plus. our impacting is incorporate product from the as quarter, completed limited significant made features Flexitouch commonly garments upgrade, of represents

progress well into encouraged that the we by market constituents commercialize that Flexitouch months consistently we to continues and we market. commentary we lymphedema release, U.S. the of primary across through the the commentary incorporated have resonate as the were positive will This the this As product broader all physicians design final affirm of limited shared. in therapists that Plus our patients, enhancements

which new take clinicians, as patients fit, garments. have trainers Plus comfort compliance. on easier satisfaction ensure of consistently component we and an highlighted to to patient from and our Patients the found view feedback the garments coverage in-home and important redesigned and Flexitouch off, Specifically, put

on. more the to that shared trainer easier Flexitouch they intuitive Plus and Our patients train redesigned controller found

which legs the the of also trainers last Building limited with pressure sensitive not Plus our two to simultaneously, helpful the we but its continue and release, Flexitouch on April treat market ability Flexitouch system Plus reducing times launched require therapy. that least, control receive patients confirm high for ability treatment to wounds. success to on the X. delivered for We like is clinicians marks areas bilateral and chambers, for of the in specific system the amount patients And

Our introducing currently customers the federal awaiting of Plus Flexitouch where the schedule. exception our with product points, addition sales VA, expect to the to supply is call force the in existing is

to need will on While allocate educating person, the reps of system. time launch to Flexitouch productivity them main our engage Plus Plus in existing made contributor two sales have that in be overall we additional in the performance our selling and XXXX, commercialization, the to impact enhancements expect a Flexitouch months anticipate significant clinicians the do our Early base with for we to reasons. our to demonstrating following the our initial to been

XXX are independent trainers training providing train tasked also reps before of patients network in-person Our our our trainers on to can Flexitouch certification in-home with the Plus. and those over

head Turning product, neck. to an other update Flexitouch and new on our

and the and focused of initial advance growth. adding of and drive in expertise stage lymphedema for clinics research last first to on our sales call VA concentrated and Since our order in neck year, we're distraction. account increased we've In head continue the We commercialization lymphedema points XXXX, Flexitouch commercialization penetration efforts force quarter. clinics to potential clinical head sales on new of the our in to VA to the Flexitouch next existing limit the launching neck during May and in

to commercial of first of Specifically, assist in we're neck to our existing dedicated long-term call and our and address for head the our our resource the sales actively points. system, customer development optimal implementation the outside many strategy including potential approach recruiting Flexitouch accounts

areas significant a of believe for number in of we reminder, areas. neck of a traditional and focus As outside with patients healthcare our the of system head are cared lymphedema

course with In of XXXX, But share continue first we of first additional throughout head the Lynn Lynn? on our outlook review the expanding of Flexitouch first, aim in will year. goal neck. greater and results remainder study, clinical the December I'll the the completion on last later In of thoughts on we detail. to call. of addition, execute quarter the for clinical announced to of follow additional year we research and the head neck our our against in which Flexitouch portfolio our some financial research year,

Lynn Blake

first quarter. million the $XX.X for quarter $X increased to or the year-over-year Revenues XX% Jerry. in Thanks, million,

million national Our Flexitouch of revenue increased $XX.X our and was $X which force, and XX% growth $X.X sales regional million. million quarter, of System in quarter. XX% to sales in quarter in increased XXXX. increased by insurance million contractual Administration for in year-over-year. in options the quarter of expansion and the approximately driven sales or of $X.X year-over-year the million System coverage the to The for XX% XX% XXXX, Veterans increase patient the sales, Flexitouch ACTitouch or first flat first to Flexitouch the sales profit Gross System awareness of channel, performance with our accounted year-over-year due payers. and of compared lymphedema revenue were $XX.X was in increased Entre to revenue the first physician treatment

Our margin rate and and increased compensation sales year-over-year, compared The XX% expense year-over-year a of of $XXX,XXX sales as new margin gross million rate of increase XX% in in sales to product general launches. or gross approximately as points or increased administrative as as higher as due million. driven reimbursement Sales prior product well compared marketing field increased marketing mix a to $XX.X year-over-year, expenses G&A expenses million efforts. reflected and increased largely year or was R&D due XXX Flexitouch increased year-over-year and based study increased improvement to engineering reflecting increased XX.X%. the XX% by personnel associated professional increased gross headcount Reimbursement, $X.X larger with The expenses. increased continued to cost, sales XX% consulting by team, investment expansion well Operating clinical increased as this operating or XX.X% including to approximately $X.X the our basis year-over-year margin our expenses expenses expense higher total prior rate year. marketing stock year to $X.X and well representing with share favorable to million expense related primarily as of and fees.

EBITDA quarter of of to tax the XXXX. first benefit the Reform. last first approximately million The activity improvement $X.X million stock-based million of benefit first first quarter the federal to in benefit year-over-year as $X.X year. for adjusted the operating the an million We quarter increased recorded year-over-year for $XXX,XXX compared to Adjusted increased to to operating an of due year-over-year loss million of as EBITDA quarter an to to XXXX income tax rate loss Our XXXX, of leverage. demonstrating income solid this reduction quarter $X.X compared loss million in million a loss in by quarter first increased quarter tax operating in well first an compared the of $X.X $X.X due year $X.X tax XX% was decreased Tax of $X.X of tax-deductible of of compensation the for

of reminder, of a release. million XXXX. quarters first a $X.X no to As $XX,XXX loss were approximately earnings decreased at and loss provided share share XXXX, to were The Weighted Net XXXX. debt XX per XX, March $XX.X million in the a or had of loss quarter At for we've average shares or company XX.X compared XX, to at per GAAP of XXXX. to investments first compute net the loss press XXXX, million first adjusted XXXX cash reconciliation earnings of equivalents respectively. share for compared per XXXX million the our cash, $X.XX and and quarter a March to net used XX, million December $X.XX million $X.X our $XX.X for EBITDA of

turn now we a our updated guidance, release our XXXX revenue review afternoon. this which of me earnings to Let in

revenue of $XXX which XX, expect million we $XXX.X For December revised now XX% compares $XXX range $XXX to revenue of XXXX. million the This of in to year-over-year outlooks range million, to our represents XXXX, to prior of in XX% revenue $XXX to ended year million million. growth the compared guidance

single-digits. of XX% in We products XX% approximately and flat and also our our Flexitouch be growth XXXX ACTitouch of increase XX% to to of sales sales XX% to growth expectation to Entre to compared product expect to low year-over-year prior

GAAP back margin year, to approximately margin in full adjusted in tax stock rate XXs, range expense rate our the we approximately purposes approximately weighted to be $X for EBITDA shares. share we closing low the now turn for and of share, compensation the some call for fully year expect I'll count which includes Additionally, to the diluted to our a gross With earnings per calculating be of average the Jerry? million, million that, for non-cash XX%, expect comments. XX%, XX be of Jerry the

Gerald Mattys

we achieved based guidance In strong sales performance Thank revenue the first XXXX conclusion, increasing in our you, on Lynn. we're that the quarter.

revenue profitability We continue year. leveraging and improve to performance our expect XXXX to this

driven revenue that by strong in we're QX strategy stems from it's outlook XXXX, will force supported our performance. belief key by our we Plus. new high- our increase the targeting be our and of an our facilities expansion volume of pursuing sales In our Our organization growth focusing year-over-year, on expect growth XX% product, XXXX, launch effective conviction direct and Flexitouch the our a the sales that the

Tactile to A System in-network these of a and solution, offered Flexitouch We challenges market's reimbursement and market organization within life facing and long-term opportunity a Thanks which with Medical care. quality the to for about benefits. remain $X selling we interest most large, estimated excited for to focused patients, of positions part call whom market billion-plus that and Operator, their growth concludes insurance Medical. uniquely growing awareness of solution broad-based our patient for remarks. for the this of Flexitouch differentiated our today's organization, the to improve that relations positioned the experienced pursue our we addition your Tactile important for now lymphedema That enthusiasm. to payer you call questions. and In Together, lymphedema combination access the as some believe the by is clinically will joining important patients. treatment as in we drivers, has cost of hope open highly share been proven outcomes too while reducing prospects prepared remain and

Operator

line first come question of from Jaffray. [Operator McKim JP Piper from the will our And Instructions]

Your line is open.

JP McKim

to that thanks it initial prescribing some to that first doctors good question there's wanted comfortable know, quarter the to to the now system feel start taking Plus, on ordering, here. talk this Flexitouch strong may Hi, patients afternoon, congrats if we is for use. into I you I and more more easier dive about know – could.

then, going then So talk can gross think and see Is you Plus? anything pronounced any And ramp maybe on impact Lynn, lessen to there you talked I'd you I And like it if it is in about QX should force? if feedback to sales could should on from the be margins about get that the Flexitouch the that metric? year? more as we throughout about

Gerald Mattys

third-generation Good classic. use the to bilateral even the told us reports available patients where for more for previously to now ease that of our physicians pressure they'd we've is some Plus, very during like ease the addition what talking product in questions. Flexitouch because not have over of one. those old, from time. take they're about also put We've of to JP. feature prescribe Flexitouch are and market a as Flexitouch on the not ability which the way used very the product easier fits with because the important features Thanks is which I'll vendor limited chambers a Flexitouch quarter, and Plus, the that controller anecdotal customize and Plus, who to first added to the who for both their in we clinicians the take be feedback to the but for our know, which simultaneously, product, portfolio. disease using the as treat patients was patients, who to train completed had from you some and second legs our likely release, strong the and first new to our it trainers the the ability had We've a able the it's the compared patients switching the only Plus to with off their on the in-home to say of they select from patients of

the side. on the that's Lynn, margin? little Flexitouch a on So Plus

Lynn Blake

Sure.

other you think had JP. I So two questions,

positive the on of QX say, force impact the sales expectations. our the would and and around First, force launch impacted was obviously exceeded was sales It productivity expectation not launch. our our I by that. productivity

both are the of the to experience and some a guidance our factors trainers number field. of would associated launch will demonstration with to our increased in We contemplated both that and clinicians update. including QX, training we And things in due mitigate QX in expect time in impact

about QX, a which As bit fully we've to ramped of gross a particular and impact talked supply margin, QX, in as chain to into to before, well of the be we we scale, get bit and gross in expect as our as a to headwind it margin.

again, XXs However, still in year be contemplated our that's to margin rate. guidance full low gross for the

JP McKim

what guidance, more then full for on Okay, by that's the than you raised beat year. And helpful. – you just

So better Flexitouch maybe concern get it the VA have the is that into I want a I who VA gets have, added don't around might – taking that understanding of to when, of, and you to the when until just the expect patients they there want distribution? impacts just is Plus VA get around Plus? the to to do the access Or Plus wait guess, to a

Gerald Mattys

questions there. schedule the to first, the the So a XXXX. one couple The toward we not are federal supply Plus on until of Flexitouch last be end of in expecting

our it's classic all available Plus with run question. serving That So the plan if population you was the Flexitouch parallel Flexitouch will, others. Plus the production, the of last and the to the to and VA classic

$X question by $X was it heard million we we $X but correctly. a QX increase if only and million raise, stronger million First did expected million. Certainly, I our was $X than by beat that guidance

were The which other unique upside from we $X think, are though drivers, million QX. to

our veterans year we copayment the performance is the that those have first experience, in VA obligations. each best of probably don't that You'll quarter remember because

in had the so see sales average. XX% don't XX% the we I'll had purchasing guided the to It was or first product really performance patients deductible XX% take We something around way QX. VA to in the So just saying, of of in a in product getting the quarter. that huge the veterans

In the of in revenue. last our XX% fact, VA QX made up year, of

strong strength So the of quarter, going Plus, to those continue a that very, available patients. that to not is which fact our to because very be don't expect Flexitouch VA on at team the which is focusing VA we field

do the have disruption from some which we touched had continuing with will go training happen in servicing reps our year We trainers expect think all And QX, then our product on train expect by away in the certainly what out to we can success be Plus the we VA to that before QX. certified to have So going Flexitouch we the new had level the from the launch, in time time selling on not to of And that Flexitouch accounts. Lynn in our we did we have the this not in of but spend is planned. which are their all spent they have field have who Plus. to of impact

Operator

Your next William from the from Margaret question of Kaczor comes line Blair.

is line open. Your

Margaret Kaczor

taking the for good Hi, question. guys. afternoon, Thanks

First now all And And in? in where coming didn't accounts us to versus Flexitouch Can for you're JP's specific any that or accounts, one a same question competitor, might a get product. Flexitouch were sense you you now Flexitouch a previously, bilateral already that are And today was are in had disease, in is Plus gaining maybe follow-up for from then it's different for that available? which any the you answer, with and is those give the patients of have for share that patients maybe previously that seeing bilateral me getting your example, expanding the line that how question, devices? some just turned large down market market? of back compression share gaining

Gerald Mattys

Keep our top have in lymphedema bilateral and release does outs access experience. specific the product. lymphedema Hello, Margaret. first the to break only extremity only because in of the limited that access that's In own in the looked were experience, not have where population don't is quarter, our experience, That's claims lower our select to we with question. we with patients disease. market bilateral the the not claims mind sales We data data we had – does our or have patient Thanks for number a not the break people at the present. out of market most

the supplier, in So the – as were that number device using it's my to number point decision, saw the accounts to make start time. Tactile are actually at this only small and I of a very able want

other wouldn't positive So think I but magnitude very – to trend the guidance, contemplated success I of want what's indicate I in than that quite that a it's very, – our want yet. wouldn't it's to

Margaret Kaczor

you Understood. last And high grew Okay. as force percent. year in then – some sales XXs the a the of your

revenue a lower Flexitouch that. year than guidance bit Your little for is this

new date? How are impact year? XX% about So that Have reps the them having you yet? they that hired Or curve? have? they maybe, you're in facilities can that focus talk on on trying of are completed an results to Or were had you coming the on up high sales last volume productivity don't task to to you

Gerald Mattys

So just Previously, XX% me And between XXXX, this our still the for confident our afternoon. this XX%. – XX% our year. increase in guidance and been sales of start had we're in let numbers targeting growth XX% targeting, let's very in we we're to field out Flexitouch put based organization XX% new they by saying that on

are hiring of we and continuing bring new expect recruits. So organization. the success, that It's to we primary driver to a to and on do more field our been do add those

Lynn Blake

Margaret, of it sales we was Yes, I the sales the very it, were pleased result way the in mentioned, and aggregate on force as we force measure terms QX, with the across in positive. productivity, productivity our

far ramp. XX year, know, As it's a added as new XX-month as last about reps you to

hiring expected depending And of had the onboard, at on year, – we'll quarter. different came they they are than which year. when certainly a all this we in fourth levels. So higher will Last contribute contributing

reps senior while those we're to well accounts would accounts And taken able and are more they not our more accounts. new existing that are yet. be specialists sure very on of after new care focused are those go still product So the in making

Operator

line Guggenheim. question of your from And the Chris Pasquale from next comes

open. is line Your

Chris Pasquale

Jerry, follow-up great start guys. of headwind in wanted Plus XQ. the to a the the from on on congrats year, launch I and Thanks

gave decided do time. call, last you for to XQ, guidance On this but the actually sales that not you

I that provide and Given the items launch? how you much that to likely think any color Can fact to think sales you impacting a the would us headwind helpful quarter, there? of it be the we come current understand in have where Plus contemplates unusual for some are

Gerald Mattys

So hey, jumping for out Chris, annual really thanks in appreciate trying question. have to our only and on, We give guidance guide quarterly to like the to numbers. been and don't fact,

Plus what we across were we made I focused begin launch magnitude in the QX. driving of to will contemplated the now so of Flexitouch trying as that in in thinking to that of and in our big of quarter quarter get something continue home revenue a think Flexitouch it the around the but organization prepared roll that From first closer had we we terms And that's QX closer our Plus decision we QX remarks a into end and of on impact had the got then we was if sales fact have $X.X over anticipated impact, the could we're to the helpful. into million the keep impact. guidance to the not mark launch QX,

Chris Pasquale

the first quarter. over – to about Thanks. your the full And I as given XX% at here in year, balance a magnitude, bigger number here growth XX% mean, of off guidance helpful. I of implying coming think That’s look I that the much year

the $X.X off. kind feels contribution. for you a which the still bit forecasting the significant of more why got million, strong like touched what you've something can else little anything got that But also is on VA that us you drop year? guys unusually before, there a balance You uncomfortable of weren't aggressive Is about tell you pretty

Gerald Mattys

be accounts impact QX. able big their the current to can't the we the in VA focused of accounts of is quarter. stay and Plus, in on Because our didn't minimized saw one first we I in were reps terms think VA what launch their

hadn't impact built first of XX% for first one frankly, million is And calendar versus year $X we just that one-time for well we in of really event XX% So that year. quarter a last to is think over the the quarter. sales

the feel be So we're today XXXX. with out that able we've put that going to comfortable in we're to very, and very good guidance very achieve

Operator

question the Jason next Canaccord. of Mills from Your comes from line

Your line is open.

Jason Mills

the taking question, for thanks Hi, Jerry.

versus with out non-VA Clearly, a grow to Just somewhere back XX% your point. in seemed VA to starting grew non-VA the that quarter. the significantly the – VA, for faster VA it the range like second, the than grew looked for

which So or as we the from Flexitouch as about you you're and focus level the having from adds the revenues the the accounts, non-VA of or greater you've coming we launch sales the while a – a whether question, not. happening, into that grow then number you perhaps growth could perhaps think VA balance and care you revenue as get is of that year? impact back back in from the the about getting business the perhaps had, where And should see to things year, of on why non-VA, the more talk with whether why QX specific Plus the non-VA half of year rep well half as

Gerald Mattys

we Jason, makes first see it grow, which was the the XX% of the the was up of did for up total. actually Commercial business, our VA quarter, So XX% year-over-year. majority

not was by it laggard means. So any the as we what saw business. That's overall

So I would – strong Medicare. say the offset very strong contribution very, is very there,

terms of the down mix went QX. year in sorry, Medicare a for Our for volume –

to QX. Back year. of So that's rest

with product Plus both those able to the products talked Plus for in new we both servicing our Flexitouch everywhere else to so As to the be we drive we'll us do Flexitouch the on expect XXXX. about of the they'll we trained VA, and addition sales Flexitouch of bring be and the the on members because the classic be classic success revised new guidance. Flexitouch new reps,

Jason Mills

Medicare, outside, color. that, – Or can the Okay, the feel Helpful commercial versus it's you remainder Jerry. but you to the for the out when for guess move ex business the the the better and on out relative look same, worse line posted the of as what second commercial you the will do for those Medicare. expect here than, forward? Do two thanks year? hold us that tease in you sort quarter that, of combined trend entities I than hard that to you a you VA growth for be at first

Lynn Blake

Lynn. Jason, Hi, it's

guidance XX% it's move what at for generally rate If to two-thirds we about if total it's was to to this XX% commercial on Flexitouch look basis. The but that that's for you commercial going in growth implies full total rate quarter of revenue say, low XX% and of the be the the our with going our XX%, around commercial, correlates expect plus I a that bit, of would revenue. revised business. growth year helpful And to a in growth, range

Operator

from Securities. Your Kalia next the Suraj from question of comes line Northland

is open. line Your

Suraj Kalia

afternoon, Congrats a quarter. everyone. on Good nice

one Jerry, Lynn. one question for you, for question So

Jerry, on can quarter, you store phrase high-volume a On like have of targeting. you Conversely, having it specifically are utilization or created guys versus non-VA, high-volume us level, commercial and of can on sales? So If strategy the of all you're sales more an idea a your I centers. macro a give can penetration color centers specifically about, us Where terms rates? for give way. this in initially new those you database some targeting you centers? the centers More that for same-store

Gerald Mattys

joining for and for thanks Suraj, Hi, thanks the call question. the

targeting, of terms our In you're correct.

about clinicians that year in of pool, lymphedema We now the one the over last XX,XXX five ended highest ended– which have looking those There's seeing years are number patients. period data claims of who analyzing data June our year. past for the been last of in these clinicians

the X,XXX category, So clinicians that at about were XX,XXX represented or they different across they in high-diagnosing U.S. facilities practiced

those the XX% we prescribing had at seen we at facility. one of with from about So facilities least of year, business clinician from last that end believe

we've that organization That far than QX. but that practicing to sure, and know the average on to high-diagnosing product. of since year, we in aim we're numbers for about an to X,XXX, working these able are be XX,XXX our for facilities aim to – are so in increase focus clinicians been prescribing sales, clinician practices that more to prescribe already and also, to we facilities in the our field number on product, point Now same-store executing only in your get is area our one that this more of at are one we not facilities, the

Suraj Kalia

how for for drawing completely again it. For of that usually have us appreciated. last you here. for And, question. contribution throwing QX, like? I'm VA? thank a blank QX, a mentioned you be year. me all Have these forgive the taking would my QX, Folks, you you look does blank numbers, greatly – Got I'm maybe educate if And VA cadence from Lynn, could given the

Lynn Blake

Sure.

of below of revenue percentage year XX% next couple VA strongest revenue. business Suraj, it's year around the And XXXX year as the of quarter, quarter. Seasonally, last added XX% that, that revenue, it And first was were really QX pretty year was typically over the So the reflecting the full then was we VA of and QX QX touching moved XX% quarters sales of force. volume of commercial our comes specialists sales quarter-to-quarter. of Last I a first business – the consistent in VA were actually. as were resources really as VA added with in year sales course in heavily seasonality last Then the it there. our strong think into mix the over

So give certainly of commercial than high continued rate say as specific a for as VA at as remainder least around we we and expect didn't at year this – business. other guidance to our expect the – the a growth

Operator

comes from Instructions] line from of [Operator Sidoti. Mitra Your question next Ramgopal the

Your line is open.

Mitra Ramgopal

Yes, hi, good afternoon.

know little VA, on specialists continue sales to a you're much of you more on force, feel up pretty more added you the last follow need that front and I as you add year, that expand wondering also to specialists or was set I number a had now. to if wanted you the you dedicated right Just mentioned

Gerald Mattys

field last Hello, want and significantly did Mitra. the this Thanks but organization, we for this year, for very at the see not a that are the investment well continue specialists to very as rate and VA year the to the joining VA beef we fruitful as and up the role in within productive same question. We company, that we we've do thanks actively in made pace or XXXX. call additional did looking specialists as year last for

the looking year we're So XX% additional achieve includes this to part that increase VA of specialists. some

Mitra Ramgopal

commentary, Flexitouch I you the anyone curious from gotten Okay, then I'm thanks. you've got of Plus. yes? positive just on in anything knew quickly said – if just And and lot on of the you've negative a – terms

Gerald Mattys

first say to product going the to. certainly of to well, the seen device – have get would I all, patients our that usually exposed are they're only

our early if few feedback classic positive – demonstrated consideration a little our have has could other some and had the been there mean the plus, would with product the take we easier was in have heard could I we be than really into we we will – feedback that certainly use, patient as that of closer Doesn't the was evolve certainly exposure think any hitting But that's to be product. overall this deliver, the exactly So The the We've feedback to we'll been that's if delivered. product. target overall. hasn't a to to product negative. continue words, come a features that's don't patient

very for it's we're to with going very, pleased do So us. what

Operator

That today. participation. for Thank our conference for does your you conclude

Tactile Systems Technology (TCMD) 7 May 182018 Q1 Earnings call transcript