TCMD - Earnings call transcript Q4 2020 | Tactile Systems Technology, Inc.

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Operator

Good evening ladies and gentlemen, and welcome to the Fourth Quarter and Fiscal Year 2020 Earnings Conference Call for Tactile Medical. At this time, all participants have been placed in a listen-only mode. At the end of the company's prepared remarks, we will conduct a question-and-answer session. Please note that this conference call is being recorded and 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 Annual Report on Form 10-K filed today with the Securities and Exchange Commission. updated SEC, to our which be filings in website. may the with are factors from time time our Such available on forward-looking otherwise. We or of to obligation information, statements our new or undertake result as events, publicly future a no revise update also to certain will not that financial Accounting Accepted references with accordance in Generally include Principles call measures are This calculated or GAAP. these as non-GAAP measures. to financial refer generally We in non-GAAP with of measures those of available earnings calculated GAAP financial accordance presented in our the on comparable Reconciliations release measures most and portion are the the press Relations to Investor website. to the like now would Mr. over I turn call to Reuvers, and Dan Chief President Medical's Executive Tactile Officer. go sir. Please ahead,

Dan Reuvers

today evening, XXXX Financial Officer, by Thank Good and you, full-year everyone, Brent Moen. quarter earnings to operator. joined our I'm and call our fourth call. Chief welcome the on

ultimately due the range. that started closing the saw year-over-year pleased I'll disruption to then business annual saw In the provide we guidance get update for share with from you financial in and for revenue review financial our this that on of return call. the we of our this our performance, revenue brief high-end quarterly quarter. COVID. growth review exceed open we a afternoon. for results of outline which recent in impacts fourth a and thoughts we with review of and before a results annual release our And outlook let’s discuss COVID, with begin with a on that, to spite to during our of of operational XXXX, I'll quarter, an provided guidance and Let today's were we few the the recap the will detail XXXX Brent our quarter fourth quarter me call including questions. for earnings the

and were of million, rentals driven Relative to systems Performance, increase the Plus grew given in sales quarter revenue systems, Entre of a which by in revenue saw Flexitouch in of year-over-year, is total quarter was fourth quarterly while XX.X by total essentially X% XXXX, The we our a of new and strong the increased COVID. a XX% rentals total third For believe year-over-year we our headwinds record. to as incremental we experienced we notable flat. especially which of result QX the XX% sequential revenue. improvement XXXX, sales

of January early October more business quarter results of continued we at in Looking protocols impact and found closely, of COVID-related without continue the to health safety health serve. restrictions we The healthcare impact trends survey that by the top quarter, consistent the adopted form adoption our of that ways. our two business accounts our in accounts to our only facilities protocols constraints primary fourth throughout COVID A in conducted the see operating related were survey. the to of with a and safety X,XXX approximately has surveyed of the

social second, sales and at extended to patients have First, exam demonstrations although to impaired, experiencing patient clinic clinics. prescribers to continue restored reps their imposed due consultations requiring fewer patients capacity treat rooms additional with with and between practices clean time to periods operating to remained turnover clinics them, rep restrict And in-person with our distancing. limiting largely to conduct to patients, ability access access rooms,

part especially conviction, brief try an providing our important on of I've to patient engaging as treatment As they potential confront with ability is prior and mentioned calls, session on the a system co-pays. patients experience

appointment or COVID-related cancellations indicates patient as with due notably, into rates of absenteeism and in saw clinicians as of to to a from holidays. exposure to we employee and experienced dynamics, the of spike that missing our incremental feedback facilities, during work patients and fourth attempted surveys many the headwinds during January. In top addition the months patients COVID-related clinicians, minimize holidays COVID and COVID around clinic high cases impacted customers quarter, during Most the these December notable quarantining

quarantine We our QX in was compliance policies. headwinds. also own saw mandated of an we the compliance our these increase performance given fourth mind, in sales safety in own our rep back with the our vacancies with impressive With in sales to due in this especially believe quarter half incremental

the notable of site have XXX wave. the to these been most In and health growth based outpatient driver more recovery to in hospitals are while more and we the and patients, terms the the adhere practices among to has based that based restrictions. often customers during sites. saw to on in continue system care the of approximately than the with, continue requiring was salesforce from second vascular still trends most we in community XXX to to the the most to our in clinics recover their been expand have focus practices, resourceful We hand, throughout of approach important clinics, quarter. that continued to an other been see COVID-related redirected dynamics outpatient This seeing we believe additional their these VA especially lymphedema the work VA, our Hospital privately-owned where primary faster, COVID-related patients by maintain These resilient physicians continuing restrictions. care, to continue the case their

by these recovery was compared our VA the resourcefulness, our our of backdrop, execution dedication, of I fourth struck million, XX% of For the headwinds. the in revenue and Against this declined XX% XX% year. fourth to which prior $X.X to during despite challenging the representing quarter year-over-year teams continued XXXX, by facilitated fourth total quarter revenue, quarter,

and an in with in-clinic engaging patients virtually prescribers supporting has both with existing of excellent sales order when done some job equipped restrictions and navigate required tools, on new new Our to team access.

menu continuing progress the options made possible of we've best develop expanded part patient to addition, In commitment our patient training as our in of to providing experience.

Virtual everything trainings they provide to continue to need treating easily quickly reviews positive patients. with receive refined quarter, themselves fourth patients from as box we materials, of the instructional as During our out begin our patient possible. which and

most ranged Most potential our in-home, equally and opinion past focus target depending a importantly, events These in engaging education has quarters our hosted nearly and are to of our fourth education to prescriber quarter quarter they prescribers X,XXX audience all have Working high key report saw In Our scope base XXXX. likely success XXXX, option patients three on trainings, universe we all pleased products, virtually. organized professional leaders we to across are shift event and surveys A more in recent initiative that patient events nearly recent in events, of both I'm our together new regardless saw education of component recommend participation, times attendees. at satisfaction during by that in patient virtually-hosted in continued this many expanding scores training attendees of XX within clinicians. and consistently field, the over with total this as virtual fourth as developed confirmed the used. quarter. healthcare key of events did The and with of are providers. been hosting we our the we that X,XXX

a expand, salesforce. account our They been more our access the have these prescribers. addition headwinds our In our And helped important us targeting for teams events for limited the resource an faced, a offset to described. to partially provide augment we've way virtual the COVID previously relationships as initiate field base prescriber result, physical reps to with have I serve education way as as to new as continued see to a which great well efforts,

incredibly and recent venous adds to clarity Services Brent in year more announced XXXX, the returning ultimately consideration with proud cancer, them they'll Deepti to clearance we the also and President for, characterized a recently Lipedema discuss leadership expertise over Deepti We contraindications decline, XXX(k) leveraging Dodd arms. and to We faced. highlights. be full-year and And add to performance for with after greater experience. by two spite the with excited first a I boundaries each solutions proud an incremental couple this of review faced to ASC guidance evidence. Anthem received we welcome board cause operational phlebolymphedema. General to call impact and other of better XXXX President is and convince before pain, we're Also, revenue on to indications symmetric insights healthcare successful an headwinds which and chronic as medical IngenioRx the appointment play and and currently period, removing and enabled Sheri Entre full-year recovery business. operational in members to year-over-year to and board base, simply Vice to a Lipedema pharmacy dialogue to the easy already served adipose comfortably as financial our helps of expanding lymphedema on the of to the educate on clinicians in legs active ahead, is This and the fourth early of to market and Looking of broader can years billion pandemic our we condition our of guidance. our our call continue for of the and within year-over-year in January, and combination to patient our for we with in results an quarter, Management QX. clarity of team manages team's Deepti and the addition exceeding caution. creating this us turn that deliver our sobering for buildup Medtronic’s subsidiary We organization. now the Phlebolymphedema Sheri Brent, like bruising. I'm board oncology I close With customers. aligns of we strategic may quarter continue out Business, our arsenal. their XX tissue Jain. as pleased summary, the detail XX% to role we will Manager suitable I'm had Brent? their community, insufficiency. Both $XX as but which since treatment a over that, and clearance path the to in quarter especially for excludes of ability reducing in join growth of interact the swelling, in our look of selection the Care the Sheri they our is onset and a both the operational new our the the basis, lipedema a pool recognizing expands XXXX. achievements In enrich evolve our forward Reflecting of chronic of bring growth XXX the Flexitouch just prescriber the team able and were I'm strong were

Brent Moen

corporate $X.X a XX% to the costs and we XXXX, benefit to million, the year-over-year care change respectively quarter $X to operational to EBITDA XX% XXXX. respectively. XXXX, and was of in of XXXX, for of payer for basis to and The our approximately of fourth related in expenses used fourth of Gross and XXXX. of VA tax $XX.X Thanks, year. fourth million in down million year. reported quarter systems $XX.X year compared fourth commercial, rentals revenue revenue the quarter of gross in Sales the was quarter was reimbursement, margin, in million year-over-year in travel margin sales by XXXX including $X in our revenue to headcount and by higher driven expenses, COVID was of prior to million, fourth attributable the million to change extent accounted Entre fourth income, Reimbursement million the sales in million, compared entertainment higher decreased quarter driven by of million, margin our for million Dan. both share higher litigation Operating line quarter. The or was were lesser Total allocation fourth same expenses XX% fourth gross increased the was quarter diluted to XX.X last sales compared Net was EBITDA increased of attributable associated as $X.X million marketing net by of professional $XX.X revenue in R&D $X.X primarily to XXXX, of million Act decrease $XX.X income tax the Medicare, share income fourth million, which approximately income pandemic. year. quarter adjusted period quarter last P&L, share the based fees, XX% to expense The CARES by per XXXX, compared recognized compared with $XX.X the marketing quarter year, expenses, increased sales our of of fourth fourth million in revenue In XXXX. to the fourth XXXX and lower million XX% quarter quarter and fourth and $XXX,XXX lower decrease from shares was general XXXX versus diluted increased XXXX the commissions, decreased year. million. $XX.X for related product due to for and or average million expenses operating in mix. to last G&A well expenses. proportionately changes to more general compared decrease compared was per which expense other a quarter product million, support to in XX% benefits XX% Flexitouch reimbursement increased expenses fourth other fourth quarter the X% in tax fourth income modestly which personnel $XX.X primarily the higher tax XX%, The lower quarters compared to the lost income of health in for There $X.X and driven XX% and compute the compensation quarter in to XX% XXXX as patient from million Fourth on primarily to XX% to has quarter Fourth was the $XX.X of tax quarter prior Flexitouch. coming expenses in defense gross and the compared compared per to increased XXXX. $X.X of with the in or quarter of which Income our change XX.X $XXX,XXX and the functions. $X.X to rate, administrative or million, period. to the $X.XX taxable operating offset last quarter and in driven respectively fourth a increased million, compared the fourth XX% compared fourth XX%, a to XXXX. $XX.X and in due profit million, total than as $XXX,XXX of of and $XX.X quarter to The Continuing costs, $XX.X expenses effective the the expenses, proportionately in Adjusted $X.XX XXXX. Weighted and $X.X stock training income benefit diluted

As provided measures a release. non-GAAP press our reminder, we have GAAP a to measures reconciliation of certain earnings in

Turning XXXX. total to brief $XXX.X results or revenue million, X% to year-over-year. basis, the a $XXX.X compared GAAP for X% an million our the XXXX, On to full-year total operational $X.X decreased for full-year million, of increased review revenue

ASC in and $X.X of Decrease and growth of or the to which As and GAAP was a in by decrease excludes of an XXX of million quarters X% the $XX.X XXXX favorably XXXX. million, XXXX full-year for compared for revenue EBITDA our or full-year’s XX% reminder, XX% average $X.XX share and Flexitouch approximately Adjusted system diluted compute for per XXXX. X% million for revenue XXXX, the respectively for in Medicare, million XX% EBITDA loss was or revenue Net were margin respectively. accounting was was by driven million impacted operational net impact last $XX XXXX year-over-year income first XX%, diluted XX.X per revenue XX% three of total our for a $XXX,XXX standard, to diluted used Weighted XXXX. was for commercial, Entre compared net VA, or sales million increase payer million XX%, per of of XX.X rentals and $X to XX% system. $XX XXXX the shares XXXX. year. to XX%, in the Adjusted compared income the $X.XX rentals and compared the share, to full-year sales and XXXX share

a XXXX, $X.X flow million, generation cash of credit totaling finished we revolving and the XX, million year the XX.X reflects that our despite year. facility outstanding cash measure increase December a no million XX.X borrowings We on cash, year-end. XX, had satisfying at compared an securities, to our in strong at marketable XXXX, unprecedented of with As equivalents million business $XX December

assumes compared revenue systems which increase in earnings product, Turning total year-over-year, systems in our By of guidance of reported for outlook, range provided approximately of revenue XXXX this expect Flexitouch the our sales which to of XX.X%. XXX.X to range XXXX, to XXXX. our our increase XX%. to the represents afternoon, XX.X% XXXX $XXX.X in XX% XX% approximately Entre we to revenue growth to million of Sales review our total million released we of XX% $XXX.X million,

our following: of stock-based This For range EBITDA expense also low of margin compensation the expense approximately million, to of the and of our million. adjusted expect defense full-year costs approximately to EBITDA XX% the XX% range $X.X in the gross approximately related to XXXX, assumes margin $XX Depreciation litigation in range, be we to expense adjusted be and legal amortization $X XX%. million,

expect average be to XX.X million shares. XXXX We weighted fully share diluted in count our approximately

Lastly, continued our first headwinds XXXX, quarter to the expect Dan call turn back expect of in to the down first remarks. of Dan? mid-single-digits total given XXXX. we COVID-related quarter we some the I'll Reuvers that, the With for revenue be year-over-year throughout closing

Dan Reuvers

Brent. Thanks,

evaluate we for key and investment some the the our mind revenue wanted XXXX open in for Before to bear I they community call to assumptions guidance. questions, color provide added as

XX% approaching year-over-year, guidance teens our high-teens still first of first growth mid-to-high to half the revenue XXXX half expect down and the of earlier, second revenue be quarter XXXX. in over XXXX, assumes in while over the as First, mid-single-digits full-year we Brent outlined

continue believe adding which as will direct our our particularly reps, line productivity of leverage and product to an marketing we're our also in Second, enhance forward. going while well, invest team, driving to while we sales in service the expanded our support and specialists, commercial team sales we

feet a you of sales to important changes with to XXX reps team two the with us street is XX our reps we that provide that our organization. of and even VA commercial of managers and approximately the additional roughly This a specialists, ended total including split sales roles. XXXX associate specialists today. managers XX-K led XXX brings specialist Let in take the an which minute sales between direct of direct regional with some reported background, way me we product and By on these filing district color approximately product on in team consisted by to

field As records free field In end. year began pleased growing clinicians increase XXXX, number overall. we and of individuals we support our so XXXX, our medical field the new prescriber focus success total by assist we approximately collecting with XX organization been conducting of documentation sales pilot can and specialists base. on their of to a and field our XXXX with trialing support engaging expanded of our at a of year-over-year. in exited we've specialist the expect We specialists, in commercial direct team direct field reps team collective more XXX up support position team during high-teens the initiative direct ended support bringing employees to reps the specialists. team with XXXX, in they our to and and sales patient demos called order These reps' time We necessary this

course composition the of expect as or the of change two over year of We a the components. to mix result the also team

our associate First, and promote expand to approximately specialists of product sales our to specialists of we existing expect XX territories. number product

the size expect product year-end team at XXXX. from remain associate our approximately XXX relatively to the of specialists specialists of flat and product We also of

end more of the shift XX-XX the to expect XXXX. mix to specialists team this in we like favor product XX-XX from of of However, by

we expansion adding XX Second, the by to specialists support expect of in field our this support team invest specialists approximately year.

navigating We approach to approximately continuing our this expansion COVID-related the of our our and at of new and the our P&L-friendly become achieving to and resourceful investment customers organization despite headwinds the significantly our growth back, direct existing customers to equivalent in cost reps, Importantly, enhance more service productivity we Stepping unprecedented represents XXXX, view as the productivity high-quality and specialists. enter continuation investment will rep while year. after goals. improving we have resilient XX this an clinicians the serve of a deliver team the of increasingly

changes and excited of We're sales For and pool going made business we Tactile improve team many productivity, and and about training place coverage our an rep XXXX our expanded in ultimately educating updated in specifically, an an and clinicians we will enhanced for XXXX forward approach believe improve to beyond. of with process prescribers prospects in field patients. and the support our

we efforts, give to market sustained we also development vastly We have underpenetrated normalcy. were of and conducted continue XX-month December ending million is long-term as opportunity to market drive lymphedema that in ample strong XX, way over X.X that believe there as especially to U.S. showed December the the XXXX. to medical continue our some return growth our analysis we vaccines XXXX, data, another claims In period with of which diagnosed patients

market sales and number annual related our essential investing rate since data. our our the in year. This while success. of of features evidence and challenging commitment the profitability solutions the to and COVID distinguishing patients safety and our muted to of product year large offering the accounts, research market the and expand employees, of our compound XXXX, on to important our position. of patient-focused undoubtedly first With clinical importantly, one risks to targeting a patients we'll in lymphedema focusing that And data COVID, clinical aim including continuing lastly to payers. development prescriber and potential growth year through significant ensure generation, on I'm XXXX the clinicians lives education improved to XX% return teams, these we record a to at areas, of coverage our number the our lymphedema commercial in continued commending remarks diagnosed with our over and continue and the and awareness in enhance penetration number year, raise as we're million the growth the quickly increased to the and possible tailwinds leverage our leadership strong dedication new implemented and of served X.X has they've educating broad patients by diagnosed the created the and well still shows position last of most By and by to to to open in-network course call now the underpenetrated XXXX commercial Operator, our component approximately develop sustained diagnosed claims despite the improved essential to of grow severely the we long-term we've as and growing expand and entire company also execution of areas, of during customers, of serving patients as the remain continue U.S. of than our questions. more was a my performance including Their effort for patients, the organization COVID. initiatives is the the as our addressable the of over including Tactile patients to of $X for benefit we investment our diagnosed continue team by track like customers the market. XXXX, patients mitigate driving increasing serve. we XX,XXX for of and Longer-term, challenges shareholders. improving conclude exceptional clinicians most Medical shown our proud I'd evaluated today business, While year we during The and in opportunity market reflects base expand of by existing size combination while also productivity expanding a focused our leadership and strategic continuing billion in in in

Operator

Thank of you. Matt Instructions] come question Please will And O'Brien question.] from [state [Operator our first Sandler. Piper your

Unidentified Analyst

talked all questions Historically, is guys. things. guidance. a Matt. to few the start a understand XX% grower. thrown bit want a Drew you good on today about considering to yourselves year. the as off us of The on circumstances. taking impact part on Hi, is think the is guidance I for Maybe there for the that understand quarter could COVID in do I a you've help Tactile plus light out some guys going that we and have and congrats Thanks This of little first

first, what QX seeing outside And are to we So, far XX% the there XX% guide I anything need of led base? growth second, be guess contemplated you QX? in returning kind really mindful is that that that's the meaningful then to COVID slowdown do as on you of? of that you into else that to street to when to XX% see And normalized here

Dan Reuvers

the for questions, thanks Yes, Drew.

softness I little quarter we a COVID contribute overall playing kind of VA contributor out. bit quarter. that's think all the continue first that we see So, winds kind relates certainly we're all can where will I VA of I the it give been, given I think ultimately bigger first first with quarter historically We've the as COVID. first in to, the think, breakdowns, contributor, of how has of to the a indicate monthly depended holiday we a going more quarter, to while the not headwinds And that to the the and see on as business to entered

looking while are have the on much forward and given the is fully three a XX% to growth in keep going condensed sustainable guidance think about be that I expect certainly top-line that quarters. talking return that we're QX we in to of growth, mind, to

half. certainly a the operating moderated we a environment change produced lot the of we've in So, that and have reflects following, probably about, quarters even not built kind material in to that Most we've the see the in going talked etcetera. full-year. XX% of quarter in of there is be the and issues will XX% access, throughput three that the to is The patient assumptions be to really into the first this first

I until traction some we some think take persist. etcetera. think I see headwinds will of hold, probably those knowing same variants, the vaccine Not of

looking that forward and the the we to more in into be half, that how we're year. but kind a far up finish we back normalized environment to what as new think, much can think expect certainly that's we're I roll we in going of as

Unidentified Analyst

stabilize follow to from you to Okay, if there. Recently, later kind begin suggested likely Thank I issues. over it an the to wondering but want business some world? of us indication some of centers against intermediate you forward, a as idea more that's in helpful. guys a bring the bit received comments intend on VA those do you maybe had you little your XXXX term? it then COVID-related post-COVID going to mean, up on a those VA of it could any patients give trends you. does of smaller a how back bit comp I And concentrated portion of of they in in when just becomes

Dan Reuvers

so not poised the any is to pre-COVID that we've their return VA to gotten posture. Yeah, evidence

with we're time. of continue landscape assumption So, the current continuing the period persist will some that to for

on – too, keep I I mix, know XX% spend. don't just Drew, mind have total than want VA than the that I would think one represents if anything I the is add healthcare other less you the share the Brent, to I you in guess other ultimately mean – of

represents an So, digits kind low-double probably overweighting. anything above of

QX. So, we XX% were at in

digits lumpiness you the for low-double of us. of if within a on the think out take quarters I VA that – target probably in the being the a kind is sustainable

Unidentified Analyst

Got it. Thank you.

Operator

your from question. next will come Blair. Kaczor Margaret Our Please William of question state

Margaret Kaczor

leads this ultimately be a this productivity all updates then XX%-plus. these of think sales you're increase if those of say and in growth led you senior you just to reps unless year this that Yeah, structures? afternoon. into on and to productivity could what at lead about that through photos that to rep into up And the to it high-teens walk upfront, us year this Hey arguably I'll changes of XXXX you high-teens gave, wanted follow as more we sales sales question should have it into through should guys, And for XXXX? how growth with declines, implies higher XXXX and ramping leaning specialists may but start, good I in going least rep maybe some

it? way right about So, of net-net, thinking is the that

Dan Reuvers

and I they it, one program with you But here. it we have occur, I field at boundaries pilot let Yeah, inherited of actually with of reps them something support may in – associated he when that not then development the to or got because the to think interesting a amount outside shot are Brent wants me when an this add, are market take Margaret. about when many of and tasks engaging the have was field And physicians.

certainly and often You've importance get requires us the rep occupy the that do a patients talk about of to the so a a times afternoon room get it something and to better get they is, market doctor's patient may clinic may the heard But part that Many five. they it to rep. engaged. for development a the an professional trained get in isn't occurs access clinic, demos, of three point may bit they one, highly can patients, warrants

records to point, engage make when of the submit idea with reps could the perhaps the go the collecting opportunity professional were we patients' big to new those the sure demos they from even are was medical more doing to time that that these instead distractions on So, behalf, that and necessary patient spending prescribers. were

that pilot where were field reps these this geography deployed support saw us. demonstrate able field of that higher those had make in productivity to sense and So to we good we reps, reps productivity had on some program, their support the of

tasks continue we to non-selling contemplate or to with, of should just higher started what continue add support we to reps with consumed portion knowing continue markets we be productivity a reps. So, equip to call I their day those that should will would

liberate that's expand XXXX. their kind can of the for productivity. talking about them force to And what and we we're sales allow So,

model look is total their The at in of said, as but to we – the still in the mix, more little best that about. hunting is sure liberate XX% really or liberated increase an test different, is XX% headcount field. spend time of looking will some service So a can from salespeople and we're we making our of bit what the

Brent Moen

that would as we this – Hello. that, believe Margaret, to – I this through productivity. we just the comments, improving add add to this I we we mentioned Brent to the up And XXXX as Dan be call. wrapping by I our P&L-friendly and mean, pressure-tested in would had is Certainly, his look a approach just relative way.

APS product think to you course being the that specialists of able an about time. So continual over add or lower-cost resource offset the of

will bit So, a the P&L. as on definitely see well productivity expect behavior that you as friendly bump, of

Margaret Kaczor

guys I'm right this know going I've to growth we start kind about are model. the you not as a XXXX the Okay, guess I sometimes don't question easier follow because or comp provide What guidance. then is, of ask which always anyways the that on as the that so just surprised management useful. XXXX of sometimes you apples-to-apples? year is gets think change sales changes guys. that focus both on question risk I the but on risks, And we that like, up, XX%, profile? I rate going maybe – to at, does to these back that one, year-end structure. approaching Thanks, that and you I in into have QX to hit I potential comment, going past the of when to am how go said, that really thought guys guys maybe what's high-teens is you're to should an got and see I this you ready team well it look finish is it, sales number push XXXX, not think kind as it’s And off rep second do to as planning

Dan Reuvers

things. two So,

relative all, question risk, the about to some of we're models about. talking First of in the pivot's

we've hey, good their a actually XX an we'd of usually the want ones to risk. has support They've so FSS. talked that to they've run that on to support probably be more that sense. a have is this sure last lot their the evidence selling have the that it fact peers field to we and that are I let or confidence really us The over given makes their more most force, hand are we their you have saying, its results. time important months raising interestingly, their has make actually did this one confronted in seen certainly, allowed that board, think if peers peers spend rep and sales the more recognized they've with pilot course actually the impetuously that And which

certainly of we From and to of be. about said, well think felt with back long-term I to but So, to the guidance this XXXX on feel force. P&L like over us embraced. of I expect pretty a that's and to same in of it's clarity we is give seems think to standpoint, profile of [XX%-plus] as giving XXXX. make some growth That labor, a Certainly We're an the reason I prepared are of getting have as chance is And to good be standpoint, probably it she's the that to XX%-plus any company us not we it the think there XXXX I'm choice from think to for XXXX a kind believe XXXX being seems division still sense. equipped the to same, like I we growth sales do profile result, office not that the be better suited be some because we to popular analogies. ourselves I a that warmly assistant going bold position continue aspire the long-term. something be a will today by And think and are good things those over of in better to course the XX% that

Margaret Kaczor

All guys. right. you, Thank

Operator

comes question BTIG. next of state Ryan your from Please Zimmerman question. Our

Unidentified Analyst

wonder Hi. to may for your just expectations Ryan. your This for on we initiatives. taking for is actually turn Thanks my I questions. if Carolyn international

Flexitouch So, prior renewed CE I year-end the XXXX. product of know pandemic, before expected to the that you the had, Mark for

on could again an and international appreciating forward? just that provide in so for update those your Thank initiatives you. pre-pandemic, And expectations XXXX you side going

Dan Reuvers

Sure, focused Carolyn. development relaxed thanks international period keeping – I joined, within that standpoint, a pace. be have the of the the of U.S., time, of for very background having still From think fact an attention an the of and but came is market. might since ahead I our surprising a U.S. the little from little be when we tried to for the sort that on question, It's international in we've growth very you one profile about this the on I've things us focused a

job community be too concern size my the the spread us of Given would and ahead that in we underserved the of development, thin. ourselves market

to think probably about lower U.S. to markets and for in the probably out think us here international been than build at I ASP as channel different the the we other be able going a a we've one is,

believe that but we've investment. our still I will So, time come, of it's slowed some

develop pushed back most tried think largely and probably a we've I Mark's the CE of by U.S. market. the continuing our because design to initiatives reorient year to to

Unidentified Analyst

some just your absolutely. comments thinking maybe you. prescribers. Yeah, sense. to Thank It then of turning makes And new about about

had attendees XXXX. educational in of as you mentioned those times added again, you at XXXX So many events maybe some versus X that had

cadence, in how some regular those new XXXX? of are you. Xx a so, settle prescription some attendees into Thank And the more especially prescribers potentially you of from those thinking contribution about

Dan Reuvers

And and that customers Clearly, an an by continued our the question. role. about is the of bit, digits. previously that a have spoken think from new of prescriber new that important you out new grow growth their talked we've double quite to start part X% constraints the some filling when somewhere that prescribers seen the prescribers story. play typically for expanding to slow. and Thanks seen have of we're Yeah. down We've throughput gap our throughput base the consider with surveys we've I many And important about prescribers

our patient prescribe products of prescriber in many often, a want recognizes to spite their a see for merit that and body responds. of will still new the of the of or evidence, So patient two, potential one how

follow a two for they and put months. patients them one or of may So, couple

patient be that put a to their got a and success it they into to patients a as to not until and start then and fact, we it so they experience that's through they've gone if compression patient on, population that. recognizing and see feedback recognizing try may that do able they want to can deeper eligible ultimately they've cultivating have on being share But when first they benefit. garment get the sale us typically, them more In even the may

the the of ramp products to in growth kind more certainly utility laid year that. to our will course we of and the out with I an we've of continued and important As over prescribers their expansion part expect new play year, continue think

Unidentified Analyst

you. Thank Perfect.

Operator

[Operator Our question. Oppenheimer. Instructions] from of your next Suraj state Kalia question Please is

Suraj Kalia

right? Good Dan. afternoon, Good afternoon, you all hear me Can Brent.

Dan Reuvers

Yeah.

Suraj Kalia

I Dan, of hopped – time, contractor me QX? forgive at usage few Perfect. independent a many in Hey, on What extent calls so so was same in I the going late. the minutes

Brent Moen

by a color. It's Suraj, happy you of bit little Brent, give way. the I'd to be

sure we help that the did number to fourth small contractors demand a actually us for actually meet the we quarter. was reactivate training a independent in independent of used So, The our number back fourth we The contractors of and portion we make quarter. satisfy patient to overall get small training. the interest only them the want that is pretty could during reason brought to

Suraj Kalia

was, utilization I how on should adding you patients specialists curious think basis in how the treated this mentioned of we with XX,XXX goalposts the field one, over either a Brent Dan, could curious about introduction it. per-center XXXX, Got FY for time? us some support how of this metrics think FSS, to and about are we look potentially just where – what give utilization is how and

Brent Moen

as follow-up up level we virtually. the seeing pointed interesting Dan where prescriptions remarks a this provide his from. facility have Suraj, Yeah. nice don't in prescribers prepared are of down the step is terms I metrics interest think coming is mean the But ton one in the are educated I to folks and we we number break I of of out relative prescribers that things from note questions and in that, of think, or to a

out that our to pointed will opportunity overall for about be revenue contributor Dan significant as presents and So, we're what growth. a excited XXXX

Suraj Kalia

Got it.

Dan Reuvers

– some in specialists product specialists Yeah, just Suraj, product have – think would associated that I geography. I we've got the that add,

including doing product manage that support the product we We of of about. rep specialist neither, some the tasks, talked have then specialists which a with have of markets, lot administrative have typically would some field to things all we've is there's a of some where burden. And in support non-selling a the the

use percentage sales to that's on may metric of because of supported be reasonable think I a that way. So, kind us, productivity we meaningful in it's anchor demonstrate to each here's expense rep different hard think a a number says, was that revenue single example little I for rep per for all But do a sometimes that the think as progress. that we're I can making a

Suraj Kalia

hop it. this there would segment? seem quarter, in question Thank little your a back what is taking embedded the already, and COVID segment are have guidance your in you you on any Brent, let for Maybe expectations of differential – Got maybe and the finally, because QX subliminal commercial in did impact in will your I soft my And for the I this you'll queue. commercial referenced questions.

Brent Moen

provide of that. on bit to color No. Happy Absolutely. a little

for the itself, compared of our revenue business essentially XX% year. in our to the revenue So, over and was of quarter that yeah, flat fourth XX% total and commercial the in prior total represented

vascular being some and might you the up up of a Flexitouch lower higher the which and with of usage As ended and space hospital of a extremity the focus limited in to Medicare. lot down expect access being drove the ended being VA of centers, percentage that

terms in also of apprehension that Suraj, of patients' the just the patient continuation that return I So, here, and facilities impact a what think we've is throughput you're COVID referencing experienced and experienced. we've to relative the to visits

QX, impact do face relates As in business. to in our it seasonality some we the

get because beginning commercial those their of areas of year. So, is where one the impacted the at co-pays reset patients it's certainly

our look certainly, we're to quarter, reason the will model QX, on first part in and one contributors. be guiding that mid-single-digit of a of that's but that continue the to So the execute in down to challenge

Operator

queue. That Thank no currently remaining conference today. does showing are the for We questions your you in for our participation. conclude

Brent Moen

you. Thank right. All

Dan Reuvers

operator. Thanks,

Brent Moen

everyone. Appreciate

Tactile Systems Technology (TCMD) 24 Feb 212020 Q4 Earnings call transcript