TCMD - Earnings call transcript Q1 2022 | Tactile Systems Technology, Inc.

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Operator

Welcome ladies and gentlemen to the First Quarter of Fiscal Year 2022 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 as well as our most recent 10-Q filing to be filed with the Securities and Exchange Commission. updated are in available be the filings may which SEC, on factors from our time-to-time with Such our website. obligation a information, no forward-looking undertake to or update We revise statements as events result future new of or otherwise. publicly our to include not accordance Accepted will Generally measures or Principles in financial references call that certain This GAAP. with Accounting also are calculated We generally refer to these as non-GAAP financial measures. accordance on the financial measures, of measures Investor presented in comparable earnings portion to calculated on available release most non-GAAP with the those our are of the Reconciliations Relations press GAAP and website. turn now like call would I Mr. to the over to Reuvers, Executive Dan President Medical's Tactile and Officer. Chief Please go ahead, sir.

Dan Reuvers

first going and Thank begin begin detail for focus first during we -- our prepared line the operator, the cover call. Brent performance and by I remarks of our joined our an we overview of results some today welcome sales earnings you, our guidance, highlights some am thoughts before outlook first quarterly release by quarter that areas review open I'll reaffirmed we on XXXX and in key in Financial which earnings of in saw additional to everyone to today XXXX, and our Chief line financial our financial quarter Moen, preparing with the on our our conclude in quarter. the Brent will with am greater questions. I Officer.

reported we pleased expectations of in ability quarter. $XX with me our first believe our mid-single of for team's quarter, in call deliver we on in was growth let XX% earnings million strong digits, saying the the a our peaked I In February. revenue to quarter host that which growth So exceeding we headwinds communicated start by year-over-year a to amid total the

acquired our clearance offset, sales growth our XX was sales first primarily in points of to quarter. decrease The Airway product includes products, clearance a which anticipated growth our revenue sales our products. and percentage Our products, product contributed airway X% sales by approximately our of airway stronger AffloVest lymphedema than driven recently rentals line. revenue total clearance the of in

provide airway our Beginning update lymphedema outlined the categories. that on in a and products; related in quarter call lymphedema first we Omicron XXXX. cases variant, paced the takes in of remained expected you me surge well saw clearance gaps as during in experienced half of COVID to Let staffing our as as puts earnings sales with the our February, the sales in our brief second we performance by effects force the we the and

along our Similar continued last we saw we prior related to own levels, of As we the anticipated on higher with the the call, within to staff, patient first and on of patient and much of quarter. absenteeism at COVID high access our rep case variant with and salesforce limitations the periods even headwinds facilities volumes, at serve. that some reduced throughput rates provider through the Omicron

patient these were to team's customers our existing recent case despite with with search. pleased headwinds limited ability engage and ultimately disruption their to this efforts we clinician new While by support the created our accounts,

testing. labor In that efforts, terms second the some market our impacted and recruiting challenges including remember of of XXXX, related half and salesforce we reluctance navigated the staffing, several vaccination to which during retention challenging and

ended getting in first with to headcount During our quarter quarter, XXX field the back continued the sales and to we target representatives. make progress

also of expansion getting we the during second second of that targeting field and the as our quarter, focused of with late since continued the trained enter improving field on onboarded reps We're XXXX. them productivity the expectation remain new joined Given half bolus sales of our clearance XXXX, airway forma were of end of months in during see during remaining strong approximately to to culminating the first XXXX. of pro XXX the year our channel, quarter the before pleased in the growth initial performance we year-over-year. DME headcount products, XXX% With to this sales respect we

As respiratory primary sales throughout providers providers a pulmonologists by United existing team specialists. product supported small DME that market breathing chronic of oxygen, States problems. respiratory in as acquisition DME are a natural tactile are they evidence therapies nebulizers uniquely other provide the is predicated complex relationships other to reminder, reps non-invasive DME the chronic a and line that traction the lead sold these compliment retain that The AffloVest secretions well was respiratory care through bronchiectasis, as the our disorders AffloVest belief positioned their conditions with reps on respiratory seeing due The therapy airway like to treat is that to that ventilation. to is initial AffloVest including clearance and and patients,

integration as during in make to progress also sales DME we Our efforts educating quarter airway the our training and specialized expected our within progressed continued force channel. and clearance awareness, raising

important of review some a highlights. to operational Turning

education we virtual as sponsors During power at host Forum American events service quarter, first as to the conferences. the continued and Venus well lymphatics

attended five and the Dr. our including of topics lymphedema. identification, where our management we to XXXX XX society Medical several increased diagnosis and American other Venus of presentations February, the O'Donnell the our key on Foundation Chief a Officer, opinion and key we related delivered educational Tom programs clinician that leaders meetings, podium variety participants nearly Specifically, by hosted Congress were in presence at

three were in Experts Society lymphedema to journal in in on on societies to and methodology In in consolidated at diagnosis arrived addition Vein the American American treatment stance the and Society. the published see expert independent Forum, from on a of a phlebology, notable used consensus Lymphatic items. It lymphedema reflected & disease these diagnosis pleased professional to venous societies, factors of treatment particularly these consensus Delphi including a opinion the for March. Venous of an related efforts, the among two Medicine, we number the Vascular and lymphedema

for CX be for compression patients. lymphedema be CX another to access through prescribers, stages persuasive this venous as as believe for all We engage compression should CX suffering be will the and to pneumatic patients insufficiency devices payers, lymphedema through CVI demonstrating pneumatic with First, lymphedema. tool as recommended patients from should need particularly prove well related considered chronic second, with we patient in

the our its leader blood experience diabetes. company acquired to and & supporting Qui development And in Their After app that we focused also We She experienced document years lastly, company. We glucose treatment This of Tactile app America and for lawsuit flavours and dropped monitoring the as of the is release Oracle a reputation our strengthens, Corporation, entirety, the definitive Valerie members, And train for filed the our their chapter the in lymphedema Valerie plaintiff, them proud organization North February, Brent we we earlier in diagnosis been solutions the digital chronic potentially former XXXX. solutions a better in former well our and diagnosis as allegations from health patients glad more and were for and their options the believed informed with believe close five their with them January, of market our bolstered to their Phillips President appointment partners of our therapies. new accessing solutions use to a the his further that work which of Tactile board of diabetes defending We're to in new paying Brent a our against inform them quarter Chairman this matter will allow years had on to as a resolve judge, CEO tools made He patient a garments business. their to spent improved Tam in a continued redesigned appeal. series with Asbury, intended arrive limited a quarter, the fully Medical's second treating this patients with served visit including global agreeing customers. development of further of and Executive as by Shafer. third by later symptoms our to board our about Officer helping right of in as with relief. both Among patient the ahead competitor J&J and always or prejudice Chief better the better track remain a learn previously engage of In to a experience. condition intact. rightfully in without that were to experience. toward depth progress of this progress release was directors full to have towards more defended enhance and introducing provide later increased conditions, a proud in federal with in plaintiff we is added engage well. which benefit it year. will for in addition government. Flexitouch patient journey, enable our and and suffer help by its and pleased CEO of the formally features, and journey to market them and to our all of as waive new president the use, anything and mobile educate LifeScan, case, global to Cerner path counsel ease with new including XX this with qualified and on Johnson We and of treatment comfort earlier its Johnson team continues meritless, and highly people specialist, the announce helping the were dismissed to of begin effectively, patients two and these

me our XXXX. our more let results along turn Now, Brent? financial to Brent with in for detail to it over guidance discuss

Brent Moen

to revenue $XX.X quarter $XX Dan. XX% of XXXX. in year-over-year to first the increased in Thanks million the Total million first quarter compared

year-over-year total products, line which equipment durable $X.X our sales product million and our AffloVest and products, $XX.X channel to revenue and state, and of disease Flexitouch was X% XX% Total the rentals contributed airway our includes Medicare, XX% decreased at entree XX% by commercial, by recently million. revenue lymphedema our clearance sales VA. which quarter of medical XX% acquired distributors for our systems Looking includes

XX, noted, margin first the Non-GAAP XXXX, first quarter medical distributors by to excludes both of to As the equipment and channels sales is our gross was from of comprised compared non-cash periods. total XX.X% year-over-year margin the a in commercial on a XX% Gross our XX.X% figures revenue last reminder, which September total the revenue Therapy acquisition VA and down to of compared sales compared the respectively. references on year. prior are Non-GAAP in of basis. gross was average XX.X% P&L margin Continuing revenue, XX.X% year. unless new intangible in results all These XX% to a represented XXXX. XX%, in channel of which of quarter Medicare Clearance channel business, closed durable Airway

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

were quarter the First asset of the non-cash increase driver million operating increase Airway million increase The business acquisition a related was operating expenses $XX.X intangible therapy year-over-year $XX.X in of or $X million, to Clearance the non-cash expenses expense earn-out and amortization. of in largest XX%. an

prior general marketing expenses, increases activities, development largely including research expenses in were The related Our commercial not in $XXX,XXX related $X.X these normalized a in and items. and compensation we by and reimbursement, increase driven expenses in related also a business non-cash due administrative the year $X expenses. addition operating travel return to million by personnel GAAP and million impacted increase in a was expense, increase the operating AffloVest of expenses sales expenses increase to as and

in net or compute $X.X non-cash XXXX year. loss to Non-GAAP periods, compared Adjusted $XXX,XXX million was relates year-over-year aforementioned XXXX quarter compared operating an and a was $X.X million million loss of the in The increased $X.XX or to net being million first loss benefit our of per net loss last non-GAAP period. used compared $X.XX loss $X.X $XX.X per per loss $X.X last costs compared operating a XX% of were loss valuation was all and year. to year. and loss a $X.X $X.X first loss loss shares diluted a net last current $XX.X expense of year Non-GAAP an adjusted to tax of EBITDA litigation million $XX.X was assets the to expenses Net $X.X year. share Operating million income allowance compared both full Income $XX.X share of in an diluted to compared to recorded quarter. million million against last million the average operating loss last $X.X million defense million was tax share diluted million in was Excluding $X,XXX year. respectively. tax to of expenses Weighted deferred EBITDA difference GAAP last the

million we equivalents XXXX. outstanding had $XX borrowings XX, equivalents XX, and cash March December in $XX.X cash compared million cash cash million and and outstanding as of $XX.X to and $XX.X million in XXXX, As of of borrowings of

XXXX to we representing guidance year our review total Turning today, release range XX% approximately reaffirmed million to in year which million growth a in outlook, XXXX press XX% $XXX revenue remains of our of unchanged over $XXX for earnings our the to year. full of

non-cash XXXX. approximately range adjusted million. $XX.X -- Our range, Clearance This certain $XX approximately to year. in is generate year-over-year, approximately and expense For XXXX estimated reflects our million to following by compensation increasing full for and products driven million range in to our $XX.X the low and XX% of contingent approximately the we approximately in million products operating EBITDA $X.X of expect stock GAAP of increase on million $XX of depreciation modelling Airway expense intangible million based including total revenue expenses the an expenses purposes, amortization XX% million a margins $XX to to assumptions sales the changes primarily X% sales of million, items, of $X in lymphedema consideration and total X% legal in $XX.X low range guidance Gross of the of million year-over-year $X our in

additional Lastly, second interest expectations provide to in revenue would transparency, on like the the our of we some quarter. for color

XX% sales of our flat X% to approximately lymphedema Specifically, and to year-over-year of expect to our of products total $X we sales of revenue million million in by growth $X driven the our growth not XXXX. some Dan impact sales back of our reminder, airway call products, Dan? for which clearance as a turn to second remarks. closing the that, in did quarter results I'll XX% With

Dan Reuvers

year we're Thanks, full be position pleased guidance. to reaffirm a in our Brent. And to

and in driven second garments We productivity recently growth the headwinds this of of app. and our combination of the moderation performance promoted profitability digital half of new the ease launch second commercial expect representatives, a the and hired improving increasing COVID-related quarter by and sales year, the of of and

As a growth year. half the to deliver we total the teens expect in second of mid-to-high revenue result,

the operational in following Looking on ahead, focused remain areas. driving we progress four

fill First enhancing improve our sales new and our roles force to hiring retention reps. productivity training, key of

we've entire been engagement. in towards was a improving XX Our able hosted the meeting sales solid recently national to April assemble our first forward and in time team months, step retention

Second, lymphedema and providing products, our their new our the efficient as support deeper base by well for increasing clinician of the penetration as prescribers referrals. training educating and clinical teams for

EBITDA their open support growth for bronchiectasis Medical. medical solutions, as mobile improved them and for thousands areas, help expansion multi-billion to margin their dedication I'd interest awareness organic lead. of penetrate raise complimentary call underserved and our and for we key our for we annual conditions. DME respect new offering with solutions to advocacy and extend ahead And existing respiratory execute direct Operator, new supporting those living today's our like by and our experience bringing markets expect before patient to us, coming to remarks integrate and garments of And years improve patients, sustained thank finally success their chronic and is we'll runway introducing set channel on their I'd significant revenue Flexitouch investors and of dollar these the questions. stage outcomes, also to among as as result well patients. the Third, to their continued to the among just physician serve. to Tactile Tactile with including continuing app the combined customers. the our and engagement, to competitive with related and to like lymphedema, partners now AffloVest patient of relief addressable call my that continue And treatment for the we to today, concluding employees dedication, of thank the in other

Operator

Please Ryan with proceed. [Operator Zimmerman come instructions] from will first And BTIG. question our

Ryan Zimmerman

the the Hey, that I for similar as was questions, moment what the about Brent. here If good well. was with to start lymphedema guidance think X% us guidance the you're to appreciate expected increase want back taking guidance for Dan the year evening. to the quarter, for last I and reaffirming. you're products think X% a today. And telling fairly I and AffloVest to to Thanks

at year Given a of kind and the and the AffloVest lymphedema with where in imply, of in then half pretty where the AffloVest in at slowdown given year. you're the big with the it increase would of in second half of you're second somewhat products, lymphedema

the your product of that the me help of and year. categories reconcile the pacing about thinking through of kind of each So kind

Dan Reuvers

Yeah.

let that some Brent clean then bit. will So up me back he maybe and have a can shot -- it at a take one on

AffloVest start Let me Ryan. with

First first year. a solid of were all, we fact with the we had quarter that of pleased the really

fact to important it the is the think some acquisition. had together it inherited I that from this of that how the preserve AffloVest to we specialist do team with group we and keep we know

think demonstrated our engage DME to partners. continue they've the I ability with to

I there's think addressing clearly positive clearance they And portfolio. gap was the one in a does needs to the from an first quarter, respiratory well we lot of service that with airway a the the opportunity just chronic is for. continue AffloVest patients other their thing with standpoint that we've as indeed saw recognized within collectively fit this

a that but there. the that Now this that cautious one said, we sure sustainability we're there's just to bit that wasn't I year low just want think fruit, we're and quarter little make into

but we our be really story, expectations. more still of the change. for AffloVest as we're really going So said expectation business, par second guided a didn't Basically the relates to half of any being no what change of think to I that's why was we've kind and on of it keep continued the the time to lymphedema pace to

once big in. think So have probably anything of don't introduced, but to want halfway you change know running think point, we're still I revisit trying the get some think got I expectations a to new have we'll so And and ultimately the help to a to some products Brent, no good chop if up know. to it. back amount in be those quarter get we the I I and that teams wood We well half, shape there. add. we trained, you of are variables, our

Brent Moen

a that's expect think Yeah, XXXX. no, what of we summary of the I good remainder for

Ryan Zimmerman

Okay. Couple follows.

prescriber what's state on me, the that Just, at as lot access new know to of and kind the then meaningful point? VA briefly point. contribution questions. issue well, the last from second state any is like we for a existing at had an for base the are two the before, just you relative in taking that group the of picked of was state their and seeing ask of up It just it one, question, I'll this I guys for sounds terms prescribers? you Thanks year this

Dan Reuvers

access Sure. not I is a story Yeah, think much change. the VA really of

see see patients based lot of to those awful the an in these outposts, continue community centers. outpatient We

point. as that We've call to that through specialists. and growth the of on to additional well those targeted reestablish the as as certainly try of year. got got on and some product we the file the rest continued specialists we've part as We've some focus include rank progress centers So our of VA focus a some

posture continue us no last reporting. I but that see there, what quarter, the in to still been over for we certainly say opportunity change, VA the from to we've So there's grow would

prescribers, additional paced and deeply reset As of we've added still the we've QX, base, more we news some the rather the Certainly the I more to in that's to far our think expect half. -- priority certainly the back we of that through but into And the first has to some QX I that prescribers, the penetrate cautious when a these continued we've sales bit back is good last and do still quarter think we've certainly QX, but as to from demonstrate get to new and a little prescriber with ability of we've to penetration. the continue year think progressed the that's half game said fact plan force as approach I year. new have

hopefully I think of for relations to those certainly shape the some of think us year. the continue will policy through of we to to progress that some there's be and I friendlier to continue us also and all improve opportunities as payer

Ryan Zimmerman

guys. Thank you

Operator

question Piper is Mandel with Please Our Adam Sandler. next proceed. from

Adam Mandel

Brent. the Hi, Dan. Congrats taking questions. the Hi progress on for thanks and

dynamic wanted putting guys environment, over some as detail. played kind QX you with in of around of how of I broader that's Just it that it the the what I by kind commentary as the love so that extra and mildly, start out to QX kind and momentum didn't you and procedure color of talk It's a both April, AffloVest think course much well or on into just we month, hear exit saw had lymphedema about side. trends you environment.

So follow just then bit two. a little wanted had to flesh in that I out and progression of Thanks. up terms a or

Dan Reuvers

QX then Yeah, I'll a bit started it of we start a think beginning Brent of to Omicron. add with soft certainly as to something quarter off QX, I with with the ask little maybe relates just

I'd March. through as still continue we was in sluggish entered say to what We see but some a the quarter, modest bit positive you progression it

the that's think the on on little us side I got a expected what So, where lower lymphedema probably we business. of

I little what we a bit of, we what saw that on that's side. So, think

Brent Moen

Brent, between progressed year-over-year. we XX% lymphedema which between to certainly total and Yeah, performance, somewhere in products, X%. split we expectations look flat QX to uptick Adam be as into It's revenue it's just an for XX% expect our

way there, clearance Omnicon, enhancements QX our which you to million XXXX of So AffloVest. And that's Dan there. for of getting then $X half but all second really as in the improvement as but emphasizing million in know, growth looking obviously progress products, continued we sales out, productivity of airway as not of the through $X pointed

growth, we do we So more expectation. but we at pick the certainly profitability, second as of year, that up the have in the -- then particularly well. And -- half perform expectations improve will of to will that quarter well as as as second in we'll -- that continue be

relief of of year, the So and just of new in app of our and garments with the half second some commercial digital then launch the the omicron use of ease impacts, the

Adam Mandel

color that have. then and hire XXX And sounds he force that to it guys past. the timely if to appreciate initiatives pointed XXX on last heard is shy any with number force the helpful wanted I that in you correctly, guys, maybe follow getting that. heads. level, How to you you the the That's QX confidence one to Thanks. It think was a the in follow you sales better? and just like I continue maybe hiring guys. up Is for I And think just of scale up the environment today? had the just then sales finished fashion I Maybe

Dan Reuvers

Yeah.

end at a up mind and So keep we XXX did that's in snapshot time. in

the are where the sit we of consistent. So, We at end we quarter. always report

or ahead a a later, it us number. week be could different asked a week you If

dynamic. and you As can it little bit moves imagine, a it's

I try that's four towards number got the back wanted up. XXX that QX, net upward think within us increase to over end the and us a of of XXX to said XX quarters. couple for last the QX, of of a course the of get we had good we and heads. And of point to of near had get and We recall the key amount just we work ahead we exited, sales we people end that, September, was when

able that to been attract some good really the good fact we about So, we've talent. feel

ads the good think have good I been us profiles. for ads made really some that particularly from coming we've of

Some outside well able of assemble before the we weeks it's of ago our were Sales couple Vegas, National from force been Meeting. sales a all of we had alluded then a as Las think and we I some that's but as promotion, just to coming to, had where in

years used COVID. to an had Omicron three we've to event. or rather First first one the This due is annual be in one

like So new going group really be restored as covered continue a, feel left in of some good that to that. benefits I that to the think And showed the lot engaging good some these encouraging investment we'll bring was some there we I this a things of to group. of together. some of lot certainly we and see it to we We was energy of garments well enthusiasm a opportunity was as be that's of get energy think that. as introducing our think for training, the it they that a we'll And

Adam Mandel

great just hear to prepared great heard remarks, one for one That's and a the And the maybe I not Dan it's color. me, it I'm in -- if a question. on last housekeeping sure just but Thanks is on supply have chain environment, anything or challenging flag street. there out just particularly to taking that notable the Tactile for standpoint, been the anything items worth calling from again to for a procure, questions.

Brent Moen

certainly then clean all the that centers up top be it think reaffirmed we to if our we in gross expect low any but, I Yeah. Adam and margin around we've Dan this revenue. of to and and Brent. I'll start gross wants reaffirmed it's XX% margins line

great to mitigate suffice job team that pretty and that's to of say are any ahead out a think have operations our I specifically at doing successful issues that there. stay been potential So we

we're think like in a good relative chain. so supply And spot feel I to we our

Dan Reuvers

I Yeah. shout think add I out do would on they've just job. team items Adam too. because me ops our just that a a done to couple let fantastic first, one a

been about. have that that a lot talking are to, certainly companies some of alluded to immune the of you've not issues We

finding things and our labor job buys But I things and plenty So, like good in really freight offsets. increase we've think team that. like and spot of a seen of has done

brought We the control during everything of going got the our direct product That have opportunity assembly had supplier to we delivering quarter. potential in trying fully the original add into upstream well update kind I into only but this bit and final just and capacity inherited, constraints. future, year, about source. growth little hobbyist. of we in one well quarter, mind, we now as would stages for with second chain secondary in supply they've before in what virtually completing as to this as are of it's that but a taking capable big keep said working a really of to stand up the of as of exception basically integration The the we that They're it a forecast. we're But to final enter a past but tempered be guidance, far on as relates other we one is this final that, good didn't not a as AffloVest. AffloVest We're some as midst see our opportunity the of we and

about I to right that well. a end that's in probably continue likely of we progress work that's as But the year. the now believe think

Adam Mandel

Okay. Thanks to extra color.

Operator

is proceed. Suraj with next Please from Our question Oppenheimer. Kalia

Suraj Kalia

questions So if the on side, Dan, lymphedema all may. I three

The that VA, all to three XX 'XX for expecting lymphedema? segments how in contribute up-print do required step-up buckets lymphedema guidance, the these we within matter, to you how second more reach half second Medicare and what i.e. -- about think why within are commercial half lymphedema should you

Dan Reuvers

don't that's end one it's think user segments. maybe a little We I to a answer, tough by payer. forecast we little -- Yeah, on because focused

or the phlebolymphedema the of growth patients well those primary to represent as we combination to clearly probably of continues to that related. be patients some thirds contribute would the extremity call demonstrate or CVI the lymphedema opportunity. lower two the Suraj So as points market, oncology That's or biggest expect

would that that's looks probably reasonable. be a mix akin that expecting So, to probably something

Suraj Kalia

had side, exiting the and does Got many QX? the stand productivity And annual reps lymphedema where tenured it. on Dan how

Dan Reuvers

Was question? have? Suraj, where So what's it the repeat can reps number you of we the

Suraj Kalia

levels at productivity, the and tenured many, many how reps, onboarded the much and to are of just versus, in how terms No, newer we -- remaining are terms fully ascertain capacities remaining reps? where trying full in how in

Brent Moen

Suraj. Yeah, at I'll shot take a

Don we've had as So earlier, net of our pointed since ads XX out had heads period. QX

probably than So that, XX say organization. suffice to have left more the

benefits think but And I the along second in second about tell we're or that talking in what of from you would the ramping we as far we And been to the in half, as would particularly my be. second up perspective of that's as to starting half so in like the productivity quarter, terms XX-year I we've see XXXX. not

associate think that, And historical hiring in in, of them brought bring also ads our only product is in ramp specialists. not and as them, had product talked that in about so to of the also to specialists, QX we faster productivity all now I than the bring new rep methodology that to not but has. specialist expanded kind in We've order QX associate historically product that it we

has is get And to have that to so expectations to year roughly push be than that through productivity historically less a something we as what XXXX, going taken we

Suraj Kalia

you thank -- a made, and Dan, many and the Brent on Are push million would rate last ask differently, may growth unique commercial if the subpart let's one and the questions. say that or hop growth Gentlemen, back how last segment a of One queue. I or are, a dynamics reflect levels any I'll million? you a the Brent, you or then different one-time it. perceived you between taking as in maybe point just reps of me there you for let over productivity commercial little side, my -- Got to sort characterize the

Brent Moen

can a the side, I little talk bit about On that payer Suraj.

a In the and we've terms piece no than a, two, perspective. this from is one seasonally, what commercial of so experienced, COVID different

Omnichron then we early an that, as and from on commercial that with a really you flare slash period, opportunity sizable the to fact the the also is due other capitalize hospitals. that handicapped have that you experienced on might the expect that certainly get So that experienced And in the the highest up. further you institutional ability by impact you large co-pays on piece then has then our when pretty COVID the reactions

and limit and -- that of have majority that piece access you the when the historically prescribed the flareups like which really that's they So Flexitouch.

both then So those I XXXX, you'll see little relieving symptoms. rebound we of push bit a QX think as of and the commercial COVID back in of seasonality business and half that from the latter the into also more some

Dan Reuvers

that's is a have as it's productivity, have give isn't They got give a number them. may than useful. and consolidated useful associate that's excess number I hard that a you an could And number solo the one rep try Yeah. you you one far as one reps, support probably to because rather helping and could an really -- we've have two think as

filled one that's of a that is in year. think I talking feels sales group, is this been some need thing we've half last retooled, year, like the corner. the for the sure not it out turned first I we've quarter. think we've back these about roles we overall in first do I it where of the the part And as productivity what would concede that Suraj our we've is

if our I more point. force as engaged got we're think at this we've that feeling sales

was for an at now focus an I that's the think follow And events came and We had time. the meeting was And of a coming training. there didactic up. up on assemble that to I lot opportunity host Sales we've group why training content will of think National the then kind represented got energized, only opportune a not be such ongoing as there different well. get but of

is general point time, So are on the confidence the and stronger go not less I The think one is to is add more last frankly the is back would than first and the year right? I why half things weighted as much we training gets seat for The device that story always our progresses just unique between NSM those half. and, the believe down. some us, additional co-pays heavily expensive this second a

in real think of feel patients with products, but a and I quite for the with the I it's another additional a still that think good some introduction phenomenon we force, sales emerging new we're stability good to, and along really energizer is time thing think that. I So which about yet some seat used

Suraj Kalia

you. Thank

Operator

William Blair. [Operator – question from Kaczor instructions] Please Our proceed. next is Margaret

Maggie Boeye

on for I bit this to little Boeye just Margaret is one Hey guys, a ask Maggie on AffloVest wanted today. differently.

So it obviously came this in quarter. than stronger expected

talk and dynamic just give breakdown us So into that you of and seeing can a what kind drove about April? of what you're that

Dan Reuvers

we Maggie the place. in asset reps it first appealing reason for us drove DME out what respiratory like that there. founded X,XXX same as were ultimately is Yeah, the is remember thousands there's

call the we what some opportunity this So the portfolio of when emerging was product the DME. still of I'd an respiratory within explored

point the there's clearance and bit like little if nebulizers, like there's patient, that, to puzzle, was there about provide a fact airway middle, missing therapy. devices, the glaring you a respiratory piece was continued a the OX, it in and there's Our think there's effective pep to one complex diligence NIV, to ability

and this more to think the by recognizing attached serving that active same seeing benefit, with. introducing dialogue already which that that they're referral help are patients same I about serving trying seeing well So very these patients is we're we're respiratory recognize DME we're complex these an that docs and and pleased out fits sources call they can reps what that rate are

of So characteristics. I think some are as the

is early said, you respiratory QX. reps, a we've DME of thousands days when this had even we're we think with market As of in and big penetration about what really still in the kind

So it to us and some have was in QX do. good off for to a still way get we work

Maggie Boeye

as the launching well Got the And your for just got I you've mobile core as garments want then it. you're ask business, app. new to Thanks. lymphedema

the specifically can growth that then for back can half in drive we our the questions. year? So within lymphedema into what And type momentum Thanks business? the taking see core that of how translate of

Dan Reuvers

question, Maggie. Yeah. fair

more expect timing, market release, QX. and new little bit So a limited of quarter release market just Back we early limited on a you the this release this full precision to half got quarter. or our market for in give garments we've a is

we're any early but typically like like introducing that this can new light by in it QX, as have as it a that early an product, turn switch, doesn't optimistic impact So QX. on

employs gives can would easier developed, to patients some one. the one Lots It's earlier. It's in new put into but one of also shortly early basically So, it's but app some into it, believe looks the that. year, QX. a that weight nice pay on XXXX, digital and better and by of for that's QX when our of market we an us market It's much limited engage lighter patients hopefully release ultimately that in The a carry feeling probably features we And like. into opportunity more probably as expectations. end follow will that's of zippers get things it's dividends garment, what got with been what us and built to thereafter. we that we have full momentum release like this will that for

their having shows can that they their condition remain iceberg symptoms that track that app they that you've of point of kind we an educate slide If lymphedema our the themselves about to majority seen that a documented them lesser underdiagnosed, the and better can lot, the better some they'll patients underrecognized tried for, of and kinds can already ultimately when would of pictures that, limb. see of met they have their take hopefully they already be the allow qualified, have progressions interventions to they'll specialists of

and kind we've a host one. little digital some their All as of able of that training, well. we of can that other a for And that's extended well. of least as get we're that's from easier in help be fairly things which those to journey There's value well, internally think of kind vignettes laid other lots is And the engage of video do there's some features kind self-administered patients the not patient -- ways there step then earlier we'll journey. of features in roadmap optimistic, as out to

Maggie Boeye

Thank Great. you.

Operator

Thank no seeing this That currently time. remaining your are questions conclude our We at conference participation. for you today. does for

Dan Reuvers

everyone. you, Thank

Tactile Systems Technology (TCMD) 3 May 222022 Q1 Earnings call transcript