TCMD - Earnings call transcript Q2 2022 | Tactile Systems Technology, Inc.

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Operator

Welcome ladies and gentlemen to the Second 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 which 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 non-GAAP financial measures. press presented available the the Relations our most calculated earnings and to in Investor GAAP are comparable GAAP measures in on financial non with portion Reconciliations website. of accordance the release the measures of I would over now like Mr. call to turn to the Dan Reuvers, President Executive Chief Officer. Tactile Medical's and Please sir. ahead, go

Dan Reuvers

to year-over-year the ahead growth million, we'd in report were thoughts before on Thanks today. operator, of performance and Financial I'm Chief XXXX, time Officer, call. and key Brent to call May. of operational Moen. highlights growth our quarter earnings of sales during begin welcome overview anticipated our second of XX% and areas updated quarter Today to will our online Brent an total our financial revenue second guidance in joined greater XX% our which by in cover at our our I'll questions. performance, XXXX came our to and outlook on off in with which earnings $XX.X updated in second of conclude sales results we additional XX% line off financial with open focus Starting quarter. the the we our some for our earlier review I'll detail pleased we second quarter then with earnings release

lymphedema digit a low contributed includes clearance in year-over-year driven percentage million, the quarter to revenue X% to by to approximately products, flat our Sales $XX.X of AffloVest. was Airway second Our growth. outperformance which expectation of sales largely of single our products rentals in our and the with XX growth. total products consistent points increased clearance our quarter airway reminder as second

in return our were more performance product began the the sales more as at closely, airway to we headwinds modest pronounced clearance during some the a experienced categories growth lymphedema subside. Looking product to and first quarter pleased year-over-year lymphedema that we see of

compared ending sequentially recruiting revenue. sales our report recovering From XX% since end to on quarter we field our made reminder a surge, the our retention good XXX business performance provider backdrop, in second challenges we in business the year, second a our for staffing that an sales well Sales with of first to calls. a saw lymphedema perspective, our by force XXXX. related as headwinds this lymphedema rates COVID force our levels. COVID as paced during was of patient, training of quarter half we and discussed the to quarter, reps in progress first of quarter's and recent target pleased With XXXX related in earnings throughout force of lower as lymphedema sales XX experienced the we absenteeism I'm at and the staffing As the the case March. channel, hiring achieved the in second increase from gaps sales increased the

our for AffloVest value the airway period, patients clearance across prior standalone are the in example, DME sales of a on exceptionally partner the their that clearance with success deliver respiratory On year These sales to from have grew to the was well at-home we of our filling quarters DME and a second other existing been do respiratory private They're audiences performance another company reps addition brought new on have their effective patients nebulizers, the clearance focused appreciate of and strong we reps DME we in DME In oxygen, they within serving. quarter quick over bolus having the respiratory XX% sales in increasing the team, complex In portfolios. of in airway recent on qualified airway already indicates ensuring products were channel given partners in channel. complementary that seeing AffloVest their gaps the to productivity half may reps are finding we've to that the are not using non-invasive be sell complementary board remaining facilitate our product yet that who one treatment business, year-over-year. basis an ventilation, pleased of our trained for XXXX. needs. or nature Feedback

to expanding introduce Given the of to success coverage the further AffloVest their partners system more continuing are universe. our their are reps branches, DME seeing, our

shipping. specialists addition, on In also completed our and respiratory partnership while new an educating existing helping the operational stage lastly, develop we DME to progress supporting AffloVest May good making among And partners, manufacturing our is of of product standpoint, and small team opportunities. oversight by from our of of assuming integration reps final X,

and work supplier year support on growing track add capacity, expand by this to existing to supplier demand. of remain second end to with continue order the our production We our a in to

of respiratory leverage complex Our year-over-year, positive from our received the of continues reach year first effectiveness validate feedback the channel to DME half sales our strategy patients. this with performance this for along more over the channel of partners, to XXX% AffloVest to increased

other our highlights. to Turning review operational a of

second in we COVID. focus I we've lymphedema our our first to been hired time in XX training quarter assemble As that team national during able April, the the our recently in mentioned hosted due meeting and onboarding sales sales our Most was entire primary months to reps. sales earlier, notably, person

from our event the our selling event Our With allowed mind, of and vascular the leaders technical learn in reinforce with field goal included engage which to top sales with members' panels, medicine. key reps in and our interactive our and to primary for team this skills. goal new opinion members knowledge both was team performing

skills. held also workshops selling clinical evidence, enhancing reviewing interactive as as on dedicated sessions We to latest the well focused

also of their meeting ahead introductions release. new opportunity market team on was full sales national our our a to bring product to speed great Our up

of these positive on as our as we events heels training national helped our meeting, along has in-person been with we second the hosted support newer reenergize the enter team On well. new XXXX. of to half sales our has to Feedback regional our sessions products, reps and

efforts, to sales addition our We educate participants. In we hosted clinicians. programs X,XXX training clinician continued nearly U.S. to XX by educational attended

continuing And to educate, awareness about new and the recommended and and market represents treatment should part we a panel payers be important with in authors train collective compression As stages the in lymphedema build our to our creating patients. an clinicians lymphedema team treatment of for renewed patients effective lymphedema physician concluding experts. recently awareness hosting lymphedema to focus contributing for of They solutions and patients. to the we for raise that disparate new lead opportunities by By societies clinicians staff. expert discussed consensus professional that lymphedema, this of their along identify, identification pneumatic of with the and final considered new should which programming, on the new lastly, continue of with published pre-launch R&D and webinar the publication patients on development, with all our two keeping among stance devices venous insufficiency completed be product three chronic the we're

joined athletic new these designer in Tactile and more garments over these by The of led is them Medical of who feedback of use with ComfortEase goal the patients obtained and easier patients, XX,XXX experience the extremity first train fitting. is development therapists. our informed for by series points garments a ComfortEase comfortable apparel from improve lower Flexitouch to a The our background series of of was making user The to our new better and for system.

are requires malleable. is daily Our new are management. lighter condition which prior than from generations that and garments materials and cooler a our more Lymphedema made

medical team dressed So garments device. comparable of experience our the off was focused design on wearing taking and versus putting getting making more to on our a

improving prior garments market During improved garments feedback believe lower the of use, in use on and outcomes. market quarter, comfort, its of our a of and press received July, our ultimately, and we a a began ease generation targeted announced emphasized our And we Comparisons from the between ComfortEase treatment excellent. accounts. which optimal we with second that I'm week. limited last limited fit report we to garments release we Based across nature external success and ComfortEase the has trainers favor and our ComfortEase conducted assistance group ComfortEase required. adherence, pleased release, By of of our less via market will patients patient ease of extremity full of intuitive was release release

to our and addition Android Kylee garments, the In we the application platforms. of announce ComfortEase were iOS for new to pleased mobile our launch

of conducted patient five obtain go definitive we for an an following XX,XXX onset we've underserved over As it first of years lymphedema years. untreated Based with average that previously, to undiagnosed on and year condition diagnosis often took on a analysis the lymphedema for discussed their is patients patients symptoms. three period, found a lymphedema a and

engage found step often tools patients digital providers and their We for journey. our in and that assist also with represents to this treatment. on of launch path to support three them mobile our Kylee healthcare The diagnosis along or patients multi-year with first more app providing information

Kylee easier option, positioned and product to progression qualified of chronic enable with app self-training use treatments. easy status, our for by effective training, visit which system our their stay should and educate with of track our and designed in-house them Patients Entre lymphedema via helping to better Flexitouch for working when contains will their specialist, is approval or effective verification Our and app the will and with update training, treatment. videos, ComfortEase of our either help and ahead garments, Armed including swelling features that them to patient be patients about them informed on disease with their arrive that are their with help. their to application help be its arrive tutorial one assist with devices or It better informed then of them Plus able track one trainers. and to pictures measurements prescribed benefits through their document will mobile insurance will and FAQ and help

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

Brent Moen

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

sales the airway the includes and products, includes Flexitouch Plus of product XX% rentals total quarter. distributors systems lymphedema revenue Medicare, revenue Total XX% XX% product September VA. was in our our $X line, million by clearance Sales at durable our to equipment acquired commercial, XXXX, of AffloVest XX% increased which contributed medical X% year-over-year and which our Entre million. source products, line of by we and Looking for $XX.X

business, therapy which is reminder, from on to XXXX. revenue equipment P&L. As compared XX.X% non XX.X% a our sales by in in medical the revenue Non-GAAP excludes XX% and payer September of a our a X, was references last total to margin acquisition quarter both XXX closed all basis. comprised to Continuing the the margin The of figures represented amortization second VA source clearance cash XX% durable source points are the of approximately These intangible distributors periods. compared both new Non-GAAP year. margin XX% to sales year-over-year gross Medicare increased of noted, compared and quarter XXXX, prior second respectively. to mix. in of in was basis year-over-year Gross down total the gross revenue attributable Unless gross commercial, of in and increase on which airway year. product to XX.X% XX%, margin

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

related team, million increased quarter was expenses sales sales year-over-year expenses driven and addition in as in Second business business to marketing also increase and non-cash increase increase largely by asset was were increase by therapy primarily expenses an related increase driven expense million, new in XX%. of of in with million, to the in-person held our hires lymphedema to due travel our expenses introductions. sales AffloVest return or The year-over-year expenses earnout million sales and we $XX.X in to costs airway $X.X clearance product related operating $X.X non-cash a operating national the the normalize team, of acquisition operating added and to a expenses, $XX April, The amortization. along activities, associated meeting our new with intangible

items; not increase expenses. administrative these and an expenses Our operating by non-cash research were expenses $XXX,XXX increase prior in and $XXX,XXX general a reimbursement year GAAP and in development impacted

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

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

stronger Turning a XXXX, months earnings for the expected growth year balance review outlook, our which press first well of the range as for are guidance today, during six release we performance XXXX raising updated in updated as the to our year. our the of to our full account of expectations we than

million expect we of total to now revenue to This XX% prior of growth approximately XX% XXXX, $XXX the range growth $XXX guidance million approximately to XX% For representing million, revenue revised range represents to $XXX outlook in year-over-year. of million, $XXX XX% our year-over-year. was which to of compares

which updated the Our increased in approximately sales products range approximately guidance $XX revenue XXXX; in year-over-year, of to of XXXX our X% airway lymphedema assumes million. to second the X% X% of products the in million range range our $XX total sales year-over-year clearance of growth of reflects half

For XX%, for primarily for in compared the fiscal our acquisition XX% full expense to XX-month expect the of of year to margins year gross operating fiscal year from we the XX% GAAP purposes, by driven in increase partial to AffloVest period the XXXX, range to operating our modeling as expenses XX% period XXXX. incremental in XXXX

of changes our expense approximately $XX compensation of consideration expect a shares. of of also EBITDA interest of adjusted million. to to continue certain and noncash of approximately approximately legal million, We expect continues expectation weighted $XX generate expenses in million; contingent we items million. amortization $X include million EBITDA share In of And diluted including expense stock and fully estimated to $XX.X expense approximately XX.X million $X count $XX intangible and depreciation XXXX, average approximately million to adjusted million $X.X

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

total XX% of of XX% and to lymphedema in $X X% remarks. growth in approximately turn call that, Specifically products. With our million products, by to our year-over-year closing clearance some revenue sales growth driven airway sales X% for I'll of million Dan $X to we back Dan? the expect to

Dan Reuvers

this this towards far on to ramp for We're lymphedema updated to to seen steady in assumptions support half today assumed. recovery of based had increase clearance business strength expect additional our business, We're sales raising the our product contemplate guidance continued performance second see year, Brent. so underpenetrated significant we've Thanks, with a With expectations for our the our XXXX. to demand impressive our in we guidance airway AffloVest, help the and pleased demand as market capacity slower prior move than the respect guidance XXXX. consistent and from

discuss to Let me just take minute a why.

to restored While our We're issues been ramp the basic clinics compression favoring by we pneumatic assumptions vacancies challenged reps, assumed recover product to a saw force made that coverage, little the an seen of and progress prompted new productivity two improved productivity. pleased We've a evidence unrepresented half And to revise sales second at sales advanced leakage -- by dynamics seen and under clinics in payers Broadly the little now commercial we've patient us late staffing. we at remain that of expected. accounts with We also our 'XX looking productivity at serve eligible not and other in training an them been to some sales as device related to speaking, recoup a have pneumatic receive device. we with to we've guidance. lineup. have than becoming volumes hiring our seeing slower for precondition the early also of some impacted prior 'XX use and are yet reports continue

in With our our in lymphedema a for our and second date, cautious XXXX. half of sales of in force anticipated mind, view assumptions these the the business our productivity considerations more progress to ramp of on stance reflect updated guidance

we sequential quarter, again Importantly, despite to sequentially fourth quarter. and the slower expect the in the improvement ramp recovery, third further in improvement

respect XX% Taken we're growth the sales our second In together, force half of mid to in organic second hires. year-over-year to in four the revenue continued productivity objectives: coupled continue profitability. expect improving above in focused of new high-teens and XXXX, growth total our on the half the with to of we XXXX, improvements following execution the with First,

engagement, garments and app Second, patient Kylee experience outcomes. and facilitating to mobile the ComfortEase introduction of our improve new

clinically the second integrate to positioned and clinicians sales large a feature remain meet underserved and Having AffloVest bronchiectasis profitability staffing, now challenges prescribing half network we force underserved demonstrating two well targeting patient proven very segments and Third, with well-developed year. long-term capacity and in to of collectively future success respiratory the helping related current navigated therapies to expanding the distribution and our demand; patients lymphedema in recent partners channel surges for to that and and DME improving successfully represent finally, and COVID markets.

Looking will back organic well sales growth point for against beyond solid Medical enable for XXXX, and as a into margin strong objectives year of stated position four us as year, expansion our Tactile this to deliver entry the half XXXX. our the EBITDA execution in

success serve, open the that like remarks open our thanking I'd their questions. the will organization. the call my to and an for our for we by prepared Operator, to we we now questions, call to employees for Before commitment conclude customers as

Operator

first with Our come Instructions] from [Operator will question Ryan Zimmerman BTIG.

Ryan Zimmerman

I with start want the appreciate you think in lymphedema in lower guess, guidance. commentary contributions, as terms I to the your guidance the -- gave year, contemplated what on about the half I product sales? back of new for is guidance given of

Dan Reuvers

modest, you updated as So to side. add our lymphedema color on Ryan, bit the just I relatively guidance, based little maybe a think, can of on imagine,

that things showing So, second saw, been that necessarily a of in the the volumes quarter, I'd what patient vascular the we clinics, for. we've couple call not particularly, improvement in looking progressive

we've progressive so see into expect improving levels, saying each that and and even been not of didn't in to quarter, consistent improvement, much we back I pre-COVID certainly but July. in think that QX

some of is vacant I the -- the think the there reps also that that the educating year. besides created be We education the others, caution. two is And more bit a one patient in And so and the play. what our of roles, that understand did a we've the absence can territories territories. leakage noticed some presence the result here consequence like. had clinic, of business. key some in is, first demos, the therapy And of second we of rep the in to one open One going when So as was, of part there's see were had little that they're things a hosting probably patient then our on among

that think sure people that that's making coverage, half backup. is our now really the products, sales the rest with sure back the back pick have business to accounts, focusing So would original expectations. I new back with grown in we're continue with new to on we think those a If half, those better the on consistent weren't those some we the focus and make with of leak that the

Ryan Zimmerman

And follow-up, of then and just of ASP on had app? you to any -- to are lift one Kylee of or to the the follow but questioning, some going get of do use new expect I type you this garments line

Dan Reuvers

side. we application, so journey, see it's their on some And to but home function at -- those in trying ensuring don't app, Kylee having about and ASP qualified, courtesy as first, as try a to of educate ASP, a they good not visit, think the but more to I unearth trying early the on to expect a can the guy the margin modest, much lift, garments, Yes, patients less specialist sent to basic and there's the that be patients perhaps their only better earlier. arrive and interventions we're of gross

know can swelling conditions, they with of being goal specialist's their of they visit qualified do time. with a what to at better the So chronicle photos arriving some including able over on their own, even

Ryan Zimmerman

just last pneumatic putting this a I but been in moving circulated for material And more advanced one idea this of lymphedema payers with in increased challenge? back patients color these rigmarole enough? basic through commercial are has this Okay. there I'll always this newer that has me, space think, Because why then one become a the before phenomenon, has is compression, compression. queue, the just that device this has to hop Love around topics

popping this of kind is up? So now why

Dan Reuvers

a think administer commercial I we've programs seen Advantage. of the Medicare bit little that

have Some which and aligned is we of Medicare's know policies, them approach. more failed a tried with

more. few Keep contributor, did to plus a wasn't sequence a following X, expectation to certain flat of we posture originally, low-single-digit, but up Advantage some, a guidance mind the there's patient So we're in so our was some that And has of follow. programs see our the we huge that it bit pockets saw a it. up

Operator

with Mandel Piper Sandler. is next from Our Adam question

Simran Kaur

on This is Simran for Adam.

to QX love commentary that and as course looks the of from momentum around well the month some into like both kind progression on you the the month, over the quarter. just AffloVest exit I what on lymphedema congrats and and you color July, extra what had side? QX or as saw First, would of

Brent Moen

Simran, I'll a color nature. you Brent little progressive on here. give the

quarter. commented, XX% over So we as our grew know, we sequentially you and as first

be So relative absenteeism, and started to activity. normal, as to a our what much from access we but to to normal certainly pertains specifically, It to see back QX certainly consider it return XXX% get I'll to improved rep our experiences. didn't

the it The saw thing AffloVest, understand it strong how it momentum associated one, really portfolio to leverage they ultimately to performance certainly sales that, finding of continued and good in second things in with as of truly had then gain relates are coupled some success it. fact as force. with the our product, start we take from new to talent to the partners the DME with QX, include Those saw can experience that and that our their in augment advantage overall we

sales to plus QX net reps. are on QX we XX So

thing of of we're the we be that that the into given take as helpful addition, to over half a experience productivity the see that The little course contributor one just one longer will is ramp to and perfect second should the a XXXX. those of So things bit starting move half. second that and

quarter. the are of we the saw some So those in second that on things

Simran Kaur

your outlook? guidance my July of with expectations latter question, your AffloVest learnings and in for early of that's guiding just sort part both lymphedema any the and And

Dan Reuvers

to think, the an we guidance so outlook, updated relative range. I provided

we on couple I of are see low of vascular in go patient on and productivity try if the one. of And the some those side sort the that didn't we that as a any underpinnings incremental and baked caution that’s recover some accounts. volumes, out ramp, said, as think -- into of the I also improvement on

Some assumption, of feel Afflo confident can bit. low end that a The meet there. the leaked that those we had we certainly

the products. of improved the things could the of On actively I of about really first a volumes imagine, patient July sure market if trainers range some some we the from reps got out impact that of sales And just much talking clinics, a influence just as you We're and with and the new slightly that all garments. the as through can July think see equipped we but with we making promoting new release, faster full spent that some end half the higher garment. our

I what based year. July. to that be little on to source based and on the backdrop supplier early impact range of a through right So to going on we think try now, the provided come AffloVest, to a the it's that that's have continues a the conclusion single make we balance

weight I our are last supplier that about just their a there call that, capacity bit this think range. components million is support. mentioned we constraints us that other kind had into some less they sourcing was on And that that and they above to has, there's already businesses get punching of up the $XX

an an source. additional as pursue to alternative continuing we're supplier So

XXXX get end additional the to our up goal some into -- built But the of an year. the have We supplier is numbers. not by that

Simran Kaur

ask And on then quick if I one the could one sales just force.

in your target does full year a you it quarters like sound advance. hit So of couple

they're what full be like you and year productivity expect full maybe looks So maybe talk at that quite yet? to if strength this this rate about exiting not can group productivity, when running at

Dan Reuvers

month we've peak always think I to so get a said at it's Yes, they term least productivity. six up before can in

close say end that pretty the of ahead the this we our hiring by were I the were was wouldn't was of year, think to certainly it hiring typically QX. encouraged We to of so do try So ton fact and goal of ahead I a much get don't the with. end QX. our we of in

the that drive belt. going group extra that's number. It wanted hiring, remains think more more to also us the ahead allowed year impact it -- to So an under stability less be position to I as Frankly, take that we of retention 'XX, to from exit be. it's a be we'll certainly about where indication able that were sales their in would how we're seen It we was a better the quarter half. probably the and back enter us probably good a to have net we quarter that get up with much of new in shape. about is gross to starting to force

assembled that So good a certainly stability with the I to new sign from fruit I a them products sales time force. the was enthusiasm bearing at the and having is sales the group meeting, on bringing think that some think spending national more

Operator

from is Margaret William next Our question with Blair. Kaczor

Margaret Kaczor

of referenced I couple maybe what but discussion that guess it wanted I have to And requirements assuming as spreads included? are may relatively percentage stable all or plans best One, questions I And be they’re with you within MA tell? primarily of a trends they this this. point this basic a headwind you and at to Two, accelerating their as can back three, around towards like know this something first. further? comes start so at going are these payers was multiyear plans you

Dan Reuvers

not it's months. dialogue also had talk CMS would rampant over say fairly with I it's we the a the continue of last and we've Yes, that a and active been CMS, few the Margaret. trend, reasons certainly administrators one And engaging to with about

on only look sometimes improve on guide. which to think other us an the as policy, an not or has to as Medicare, that a Medicare for impact a also, barometer but opportunity we them there's know, I continue to payers

we what was the some -- we those of So within saw primarily plans. Advantage Medicare

they to us engage And ultimately, be So, for I their is we're I but efficiency available get, continuing with modest, try both deliver whichever with on able products. and think, to patient to opportunity journey, we're an the each we them go. and it's to help which that improve relatively to work path them still think

Margaret Kaczor

sales my any XXX detailed Piper think some million, roughly of kind use rep, per annualized chime reps, use And I to that number. million historic around But and a million colleague can and guys X.X me from number said $XXX lymphedema what if the provide on had between productivity. of X revenue sales will earlier. somewhere $XXX I which of million, was to gets I you the

'XX? about thinking kind a right especially historic would how why there's curious I as going guess right thing and look reason any but associates, So, be the not versus those that, that to I measures at we forward? the wouldn't know just that number, think mixed with you're of specialists metrics be

Brent Moen

Hi, that, for which to would opportunity forward actually think what Margaret, I about methodology you it’s might continue as Brent. that is exist certainly a we tell well.

the that APS. product towards access territories know been those you slanting specialists, into will specialists has such. gain It’s XX-XX and mix which past and certainly more as increase the start to specialists between So product product in productivity that rep

in We believe also that lymphedema nothing's systemically business. changed the certainly

bolus and about they is ultimately, such reps that move averages. the new this closer overall getting So really to our productive of up

Dan Reuvers

Margaret, add, the the one feel we've I now really for the us -- just of in coverage right the have I is number we news like of solid reps think that field. good would with we national got

we've got I So coverage think good markets. thorough virtually all in

some submit need other on collect ultimately we resourceful and sales to become pilot Payer got productivity. well underway. inside patient. behalf continue productivity, relates direct impact programs internal in on records, processing as how to continue to we to efficient with as and in teams think the policy rep on impact we has it As rep identify have I support some claims necessary work things of will to We're we've more a of as also our And productivity. continuing the make the that advances with can more referrals, can medical a we ways the direct to

of I idea we'll number. the have group, look do good a there's with don't can So and this much know of but about those take we variables, we a I feel think that we've this got we as with -- that we at handful get we it's better a coverage as think and static where variables number

Margaret Kaczor

so of briefly, know into, I there give capacity you huge DME the year-end? of success there versus moving can sort you're in existing seen to that AffloVest And us far. look just constrained. at many But And maybe growth of you've DME we you're that sense how selling accounts? accounts growth obviously, a how kind through should

Dan Reuvers

very been affirmation pleased we've is something The the we channel, been really with. something of think has I AffloVest continue the to see. Yes, Sure.

the purchased business. with, before we're DMEs, working lot majority we We of acquired had have frankly a the AffloVest that the

airway is is already share had realizing of we phase, that are they're diligence, just their the what when our it They're call they're and this deployed necessarily demonstrate we're they think learning to prequalified bigger much deeper but in they're This branches, would one. did that and Most fit in And patients what the taking not really in wanted I pilots pockets I it's candidates they So penetration. accounts, small existing They competitor, and is this a pilot organic acquisition. did clearance organic. an few still that important new only serving. the from an growth. completed DMEs, it's these mostly not about but with

think they when serve, you they or nebulizers. they and they've a about that need needed So lung a been oxygen discharged nebulizer just had infection, Or to either either antibiotic or exacerbation. tend they therapies, patients from the they've had an hospitalization,

them qualify those for of therapy. All airway clearance

they're well, are, are in. fact So patients the therapy to and given serve these clearance receiving that comorbidities all these that introducing when think, prescribers them these they've DMEs needs, And I the would patient airway come with overlapping embracing condition that. probably the

that So are participating. those as us inherited And the good relationship one. all forward, of to continue see their larger that of we don't seen. DMEs on they've we we'll of the success. the all as we've some Even we're I have a we see seen look really that this with branches branches for signs still number thinking expanded expansion think And

and with it rest get and and we're trained, solve try airway can running, how AffloVest. of to branches still familiar the working the issues and hard clearance with the they So up the mark

do continuing three think penetration, plenty new their to done more And probably we've So There very runway think the an are as right that still in then there's for partners. And we little DME with existing now partners I expansion. opportunity channel working VA of for I expansion. there's not opportunity still in yet well. and support we about us over to some and of DMEs deeper the continue are one things, there's do adding DME them about an time, with less

said, into as so to and got we as we've hobbyist pretty So we're do we weren't seen this about when far. it enthusiastic what going we a

Operator

with Suraj Company. Instructions] Our question and from Kalia Oppenheimer [Operator is next

Suraj Kalia

of case just And in if ask in number has here the have of and Dan, identified at are a rates docs reason me with quite already of in different remember calls, prescribing physicians, growth was What X,XXX and proprietary prescribing volume contextualize that you penetration? time curious, between up I'm the lymphedema brought in perspective? specifically the will maybe I that in bear referenced this. multiple just so is there can this we terms changed, high So hopping in looking back, cohort? you of Tactile I it us where with terms constantly Dan, just some product, database buckets, kind had give was a

Brent Moen

Suraj, it’s a in refer to to taken talking And We prescribing the deciles. that -- because formally we've Brent. actually partially but and top physicians COVID. publicly, used about step back of of the three onset from

fact now, train, clinicians we're so with new education in that and And just given the to our invest there. continuing out

interactions second the clinicians we -- the quarter webinars X,XXX about through course So trained as on there’s during of our referenced and we lymphedema. educating

the we're high go talk clinics to continues base. forward, going to there. number we of the knowledge So expand But of out about terms it not prescribing in as

Suraj Kalia

back queue. other one in hop and Gentleman I'll question,

in Dan, at problem? a in some improve in adherence, about this Medicare, the and terms again, it patient issues more seeing of you of -- commercial the field? mitigate we the rates at would in is patient do VA and look help when in the least problem your terms and your comments you're growth Or of patients adherence garments, So envision ComfortEase, a new that buckets more helping view compliance demand different

Dan Reuvers

say, our that users want Suraj. has can it's that continue been make nice we to for even I to think want with of we compliance We though introduction the it that. the Yes, to the sure And less customers to is ComfortEase patients to a would winning obviously for the use. think are a products, lead the going continue And advance garments listen our make I of we think experience to about make feedback But to it this of best portfolio. compliance, among good, be. that and is easier closely sure I

clearly we think that think this realized I had implications of the us gaps, had we the fully I growth now, as territories. from see to some that turnover open standpoint issue, piece we’ve where

resolve. think more lingering one components I hangover to of we have the that that's probably So we recognize

sales force, place getting focusing experience starve think a then handful years the running. reps fact that And it's new we now and on but up got even experienced restaffed with new. that for for go same and selling folks territories trained of new a equipping I have a the we've been the these in story the see a sales something that addition patient, to the our customers. of coverage good have back in better reason solutions and for and

So well go giving newer accounts. opportunity I the can think that tenured back reps folks, help that that's an some as as optimistic of reenergize what we're to our into

noting. worth So I that a variables are those couple are of think

Operator

question next Ryan Our is from Zimmerman with BTIG.

Ryan Zimmerman

margin coming I to Hey, around I XX%, guidance think more XX%. just this in the year, one If for the in. and look want gross Brent, get thanks follow-up. the at I it's for at

back on of sales, step benefit. some it did mix guys Why essentially of back got Because the think gross the of I kind product XX% some you new margin half with the You year? would this AffloVest is quarter the products, in the benefit. incremental

the of margin thoughts curious gross your back the Just the kind of on year? half for

Brent Moen

then the Yes. inflation out kind of primarily Hi, What manufacturer, is tell I that question. no there. same and experiencing freight. also kind good from those would is, company We're Ryan. It's any pressures, some of med-tech wage different in inflationary you of other we're

of of starting some we taking to of account kind are -- out focused the inflationary companies year, that on So, pressure managing med-tech kind can, possibly but back certainly, as experience. half into we're of other effectively we same for those project the we that are as as that

Operator

you. Thank

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

Dan Reuvers

Thanks, operator, joining. and thanks for

Tactile Systems Technology (TCMD) 2 Aug 222022 Q2 Earnings call transcript