TCMD - Earnings call 4 2023 | Tactile Systems Technology, Inc.

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Operator

Welcome, ladies and gentlemen, to the Fourth Quarter and Fiscal Year 2023 Earnings Conference Call for Tactile Medical. [Operator Instructions] 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 the 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 filings to be filed with the Securities and Exchange Commission. Such factors may be updated from time to time in our filings with the SEC, which are available on our website. We undertake no obligations to publicly update or revise our forward-looking statements as a result of the new information, future events or otherwise. This call will include references to certain financial measures that are not calculated in accordance with general accepted accounting principles or GAAP. these measures. to refer generally non-GAAP financial We the call Reconciliations comparable accordance would measures Reuvers, Medical's non-GAAP now financial release to turn with call website. Today's Chief by of like President Birkemeyer, Tactile's the most Mr. measures Dan with over to on press calculated earnings are in of Officer, Relations available to along Elaine hosted portion Chief our will those GAAP our Investor and and be presented Tactile Executive in Financial Officer. I the Reuvers. Please go ahead, sir.

Daniel Reuvers

Thanks, operator, to our and quarter call. fourth earnings and welcome, everyone, fiscal year

fourth flow and basis. X% further the strengthen generated $XX.X and we operations of from cash Let a XXXX agenda pleased highlights. financial fourth clearance our discussing outlook the before start on this to quarter sheet, our retiring then questions. With overview for provide as performance. of backdrop, review earnings XXXX recent financial record quarterly financial lymphedema our of further growth post we review in our factors in products by let's today's solid our And which with morning. our year-over-year million, growth priorities and an cover results I'll call. with press to entirely. In our results the We quarter, call primary balance our our some detail a of were we and by me in introduced revenue to strategic and guidance, I'll a quick revenue begin airway for generate a financial line credit that release operational of by an demonstrate Elaine that both continuing will open representing our followed and profit quarterly of overview contributed for performance, conclude

performance enabled our guidance quarter achieve us the fiscal year. to Our for fourth

quarter, better-than-expected of grew million. sales X% also pleased by product compared year-over-year despite fourth was see Our year our profitability, driven $X.X to We're clearance which grew XX% million XX% airway with period quarter-over-quarter performance revenue products, year-over-year and $XX.X net the on to growth our totaled headwinds. lymphedema representing fourth adjusted of the largely our year-over-year for line income notable growth complemented which X% a and revenue basis increased XX% year-over-year. We to performance expectations improvements quarter. GAAP in which our prior exceeded transient EBITDA in

in our enduring performance commitment enhancing quarter Our fourth reflects profile. profitability our to the

We quarter of our also as working continued driven generated results credit $XX.X strong line our and consideration our by in million with fourth contingent net final $XX $XX.X acquisition the our further pleased the cash. All to operations, solid improvements million million during in fourth from close financial off $X.X related paid We with cash income balance we of as quarter performance quarter the in AffloVest, of sheet. all, ending flow were our in XXXX million capital. to out strengthening well payment while

sales team, improve initiatives our our field to Turning a from efficiency performance. driven enhanced more which drivers the in and sales of their continued line The offering. growth by detailed product productivity of our the was fourth of operational lymphedema enhance to to quarter our product discussion our benefit

opportunity this XX% providing there's roughly task traditionally patient notably, team in its we our segment that to devote which patients, been quarter, in-home our this system larger team's well. And our patient compression limbs to Entering March, trainers. next-generation our during believe patient progress as device. Entre We system for initiative In warmly the treat conducted new year-end, further a reps and an products. to benefited impressive continue enhancements improved Entre demos of a Plus' to our to prescribers. qualify has time with our additional we to for. We've front the Plus, reps response the to system, the efforts excited trainers' launch basic a since patient by see adoption trainers' XX% we XXXX time responsible than The all LCD our be features demos, particular, with by a reduce critical engage like garment in-home see of our non-selling make controller, stronger-than-expected continue continued XXXX, X share sales during fourth of less were from Our to on to the the reached our fourth level in a We're by to Entre easy assistance. Most and success of focus conducted patient showing by use quarter. on deflation, favorable simultaneously. its of received active including patients also it's made largest continued to pneumatic and of has had user-centric ability presales

upper focus system. The important enhanced was of contributor ComfortEase for addressable our the lymphedema. like our before they require reminder, launch our this larger our device with insurers to patients offering with Flexitouch patients this to our of their with developing the Plus this been Entre combined as during advanced enhanced earlier system, portion organization with relationships focus treatment our patients CMS Plus their an with extremity has an of Entre an the reps in working for become on quarter ultimately begin in team an of like As paradigm, may patients with a active ensure introduction these our therapy eligible to category, like broader device initiate our on portion quarter. Likewise, therapy in oncology-related with population the system, provided performance patient sales keeping system. In garments that a third our Plus

Flexitouch those we're axillary patients cancer-related upper of improved both for our their region, forward used allow seeing therapeutic ComfortEase an complete strong on for we this treatment continuing breast following sales patient well. garments focus also of and extremities, extremity half to Our portion of important to with They as upper area our lymphedema lymphedema. coverage bilateral population from the the include treatment enabling with roughly cancer-related are to in the suffering enhance look breast launch, with months arms to our addressable time. In treatment patients lymphedema and in the

to field third lymphedema May, end also We in products, our the in compared to DME year at improved remain We a DME to quarter see the customers. quarterly volume on our large growth sequential XX% quarter. With of year-over-year heartened pre-COVID to increase other relative the to to while were in salespeople paced on also and of with us these a improvements respect to to a growth small basis as growth of ordering see product sales of team XXX airway pleased were sales sales by XXX finished one returned we that Together, their the sequentially to third XXXX. line, return basis supporting continued criteria our a clearance generate enabled well.

COVID-XX DME their waiver, the the eligibility expiration of return continued experienced affected eligibility of following requirements the waiver, the of taken and or As we've PHE previously, placements volumes. commented slower Health in PHE May under has relaxed to slow requirements customer on the pre-COVID Public Emergency, large to XXXX. They've advantage traditional

DME sustained in we to term customers clearance we will sales of order to reps expand dedicated level investments DME the the underserved expect fourth of longer this waiver expiration in the likely support to PHE of XXXX, While its May our large airway that by in as To strong, end, sales until of bronchiectasis anniversary made we penetration growth remain provide their the expanding paced continue the reps. one DME we quarter, XX patient team in sales enhance population. impact and to our large

we quarter, evidence. in our the and addition develop clinical our In by to commercial we education investing and to serve, and progress fourth markets the continued of clinicians financial the supporting new efforts during patients,

strong affairs XXXX. throughout progress team made medical Our

reach Most full outreach we with hosted their the on specific focused over focused available we we resonated clinicians comorbidities, nearly events of cancer-related were Through programming, recently, lymphedema on events educational populations Medical. hosted which including its with believe a able year, the number patients, care. Tactile we For X,XXX breast those of treatments. managing record clinicians, diagnosis, this lymphedema for and educational its XXX to targeted

enrollment XXX on the Flexitouch and Kylee we enrolled track social to enrollment with to progression. users with On website. of head by And Center the for Case enabling Care, education life courses their for matter the bio the as multicenter These of case of a quality lymphedema accredited Managers, evaluating trial well our on And education symptoms care subject phase controlled of improvements include Nurses, the our the this treatment we Registered the the continuing over first provided continue subjects as system Commission the pace by standard of available of side through and disease well focused recent than clinical educational past first by randomized therapists, clearance to nurses, courses year, programming more airway quarter. year-end, initiated finally, Flexitouch on-demand duration. neck and and progress of developed education Outcome on the experts we progress, end business, of at managers Association completing them. Meanwhile, access credits Respiratory as California as trial cancer complete American XX,XXX mobile portal Knowledge X-month through practices of the compares to effectiveness both X application also our direct Board tools survivors. With respiratory physical to results. earn resources this expect measures trial based the to were bronchiectasis, our among the monitor in educational continuing and for

to achieved including results team across patients. And our additional end market it we delivering and design this the leadership of update X-month our XX% sharing Entre on year influence lymphedema system product to a multiple its ever our EBITDA growth of multiple growth, introduction. conducted to on leadership anticipate year. From the financial to results RCT head payers, double-digit revenue considerable XXXX strategy the patient strengthening I'd to near including this we turn adjusted follow-up executing and patients position, our market first commercial the the over strong as and forward share original performance, in this areas, introduced generational whole. before past I our stated, a among in enhancements since our optimize patient-centered standpoint, portfolio, the Simply progress We Given to sharing like some trial, Elaine, and performance clinicians, the year. period, largest look thoughts neck initial

public generate the in and with with discuss efforts productivity sales results our growth of of XX% each our improvements fiscal full at address. Through working has performance, levels mentioned, reached record will forward. Elaine leverage to revenue materially XX,XXX payments incrementally with just this made airway strong year million us growth As generated almost to $XX us off from associated million cash paying XXXX our expense enabled of nearly growth $XX our Tactile our growth in conditions XXXX. We by flow material financial through education our cash product to cash, a the than the AffloVest fourth to double-digit from generation income clearance to capital last operational ended patients, Medical, these proud our in by This our condition in lymphedema with debt million record net our stock first our this profitability I $XX proceeds lymphedema underwritten our year, deliver the with X% XXXX. the cash $XX.X we million versus we improving margins EBITDA leave in to year XXXX raised marketing basis Elaine? combined of delivered quarter our enabled efficiency, for since $XX.X across sales significant operations. Along by just line and us force, that in chronic suffering clinicians product of common line and We entire patients possible accomplishments and now of going earn-out better provided our from areas, more detail XX.X%. net and offering line results financial adjusted of final net guidance. we which million of of the a our with efforts while drive by drive and therapies million. I'm February, flow And positioned our perspective, for of more strong improving reducing review resources team of the our $XX acquisition outstanding improved. GAAP income, points profitable while and XXX

Elaine Birkemeyer

of increased expenses. and and as operating were XX.X%, by income product manufacturing items to to as our which references pricing. Fourth intangible year-over-year XXXX. The income compared in and quarter was a decrease both in products operating to million or million gross in $X.X GAAP $XX.X to million. airway and Unless $XX,XXX increased noted $X.X was to increased prior to sales XX.X% X.X% $X.X financial expenses, X.X%, decrease and The expenses or are $X.X revenue rentals which and margin a otherwise, the lymphedema our a noncash line, amortization all noncash expenses. million. Operating expenses, $XX.X on in increased quarter million and XX%, the $XX.X development aforementioned our attributable results By fourth in million million improvement $XX.X quarter decreased well X.X%, product administrative These of million. The gross margin, to Gross in million, system, in of change profit, offset include $X.X XX.X% the in down asset Thanks, in or our sales $XX,XXX basis. Total sales, costs $X research million revenue $X.X clearance was expense, and general million fourth or to Entre fourth a non-GAAP improved decrease million XX.X% Non-GAAP income products excludes as to largely X.X%, $XX.X periods, expenses quarter $X of was include reimbursement, in systems, decrease in well which X.X% to P&L. million. Continuing operating increase reflected operating lower $X.X GAAP AffloVest intangible million. increased year. driven or in as or or Flexitouch increased the $X.X and operating gross marketing which $XX,XXX a million. the by amortization XX.X% increase and compared margin freight our Non-GAAP earnout Dan.

sheet, tax a noncash As $X.X due or excludes million income. by a was certain amortization GAAP taxable increased to $X.XX primarily per Income share. Adjusted compared non-GAAP of million or as and outstanding equivalents to to million $XX.X million was expense million in $X.X provided intangible to reminder, $X.X $X.X detailed compares lower and XX.X%, income Net compared in of XX%, $X.XX as XX%, sales. With or well decrease or Non-GAAP cash in cash million diluted operating million expenses million. change $X income and of per outstanding in we net non-GAAP million to million compared operating The as earnout expense cash XXXX. $XX share XX.X% prior $X.X million borrowings interest $XX,XXX. increased the The respect driven EBITDA net year-over-year million. of or primarily diluted million XX.X% tax XX.X%, $X.X income our period. to expense. and $X.X to to sales, to year-end. to expense or net balance $XX.X $X.X to in had earnings of increased December decreased our at expense or million reconciliation press nonrecurring or income year million our increased release. Other This XX, borrowings higher million to $XX $XX.X $XX.X We $X.X

earnings press introduced XXXX a in our review release we outlook, our today. to which of Turning

revenue We approximately to representing of year-over-year. range million X% $XXX million, expect growth full the in of year to XXXX $XXX XX% total

XXXX total a year-over-year. in assumes range product revenue both guidance lymphedema and clearance grow lines revenue that will airway X% of Our our in similar XX% to also range

modeling year XXXX, expect for year. GAAP approximately to purposes, to For prior full be our gross the we flat margins

million a and approximately count of GAAP expense a Our million, shares. approximately XX%. increase to Interest of XX% fully-diluted of XX%, $X.X approximately tax share average operating rate to expenses weighted XX

XXXX. expect million also of We approximately to EBITDA million $XX $XX to adjusted generate in

items, intangible approximately $X.X Our certain of and million, depreciation expense stock adjusted million. amortization $X of of assumes EBITDA $X.X compensation expense including expectation noncash approximately million, approximately

expect up single the low call that, the the year-over-year. With range turn total our of XXXX increase Dan in I'll remarks. to we to revenue digits back closing Lastly, flat some in of for to quarter first Dan?

Daniel Reuvers

Elaine. Thanks,

walk second for in Elaine comparisons year, in lymphedema will As also the strategic half ease, we the and year which the our initiatives, through our performance lines I'll year mentioned, the now. reflects assumes our airway both It more and our that full our driven of be guidance growth of realized by clearance as year. of XXXX product prior benefits full growth

focused priorities. continued by growth, As XXXX, operating on year double-digit improvements in executing another following balanced X to profitability we look revenue with strategic coupled delivering of the we're

First, adding and reps growth on therapy teams both remain in the segments. will our to we focused driving respiratory XXXX. This our include in both half of lymphedema sales first

We also productivity, plan to our demo rep by trainers. support contribute to ongoing gains in expanding sales in-home among patient

at this initiative our in-home even by more the our trainers of for As the earlier, roughly I patient of freeing of success we reps with end with prescribing XXXX, clinicians. engage patient up time build in lymphedema opportunity XX% mentioned sales see conducted to XXXX, more to on demos

expect the specialist front, intend a the on AffloVest continue additional arsenal, vigorously We funnel Plus part requirements, only knowing becoming compete focus that symptoms with for the to increased patients entry-level the many Entre an headcount, them of we entry-level to expand provide our compete due DME not them therapeutic we to onboarding with our pump, sales for. And to initial of on but respiratory valuable level showing improved and AffloVest enter therapy new with. so either placements whatever payer our offering a patient to qualifies plan for that work is to pump system, to or DMEs,

further throughout to planning the relationship way force a technology. And and as them in XXXX to direct expense, sales investments to well of collection advancing targeted important productivity. best electronic for introduction third, introduce orders XXXX. And Second, will the records system in more designed We're targeted system year improve AI verifying tools of AffloVest efficient next-generation our That the on customer of business. deployment of and a of include tools as prescriptions of These the second XXXX, processing, benefits. We'll a as efficient year next-generation leverage with patient will operating a continue in half the frictionless more end streamlining our lymphedema as improving to experience. we're as be evaluating investment management well for later record are more electronic medical reduce less method efficiency, XXXX. exchange medical and customer incoming another to interpret focus enhance the back-office applying with and new various platform be tech-related by manual processes, we'll therapy of

we focus important as of an become will ensuring patients of our lifestyle. recognize on and need feedback depend daily, and We'll connectivity, their manage consumer-friendly attributes, expression that our New effectively. on therapies systems therapies also thus, therapeutic generations on education they our their get patients the conditions focus to

care should you some as I health earlier, are tech patient. practice of XXXX. their helping relationships, strong we with a market in productivity, to building are that mind, and as the with treatment make to portfolio of As enhanced forward our an investments possible. their on to of mentioned success much role a a this as recognized designed key in as customer leader, the as patients expect practitioner look also And customer unobtrusively These obtain products increasing moves and from sales we solutions, our

my investors Before I'd for our their well questions. employees our and call Thanks to concluding for support. Operator, for thank this their the which efforts our collective progress past to made open customers possible. year, remarks now continued like we'll today, tremendous as

Operator

Piper Maeder from comes Sandler. Our question with Adam line the of [Operator Instructions] first

Adam Maeder

AffloVest? range, expected for contemplated those grow for I that. I to both and X% both I help guidance then the And think segments to just, how of understand XXXX, at growth. then for wanted the Congrats just on think the XXX to you $XXX construction kind a expectations that's top leverage And the they're to great that -- but also $XXX heard confirm around and you have I to ask Can to and wanted on us guess, how the growth the lymphedema million quarter. line XX% see a those I you for follow-up. framed arrived about QX I figures? the what's million, sorry, solid understand in

Daniel Reuvers

questions. Sure, Thanks Adam. for the

I'll on the of assumptions. ask little Let some of and for Elaine weigh me growth a on start XXXX, bit to in color drivers then additional the with maybe

heads look where just for past can and really think 'XX to I come performance attributed heads, our at demonstrate adding in we and liberate we our we've flat the if support productivity force then key led expand contributed was about a that productive we in able XXXX, I back, growth last X certainly, to almost with continued things improvement recent past the And and pretty in simpler added 'XX we at about to per are meaningfully. we introduced recognized contributors. $XXX,XXX and areas of the of to know we in of context, process. Remember, CMN, we became additional head the productivity. think and from of the PEC courtesy count, talked XX% last year and to beginning form. more an has year, We Rx the of relatively sales saw head, elimination a Medicare were nice those easier all that

important process. we to make that choice. The need of we've the expansion for don't we more growth whole can So experience the it more a easier of in think The come first prescriber second but proved is influence be then as I that fact into sales done few it's part someone is count that additional we there's XX% half to other when year, productive their that in the as we into back be increasing the able This the year, of overlooked this had We therapy just we some added that in-home get heads and add And that expand expect into them, the now about we'll probably we last productivity. to certainly whole the think we obtrusive a can from runway patients growth recognized demo half deliver as half that should look the and behavior. therapy is we December, get less than a in the year half. And some of of HCP easier, be really in that can first by enter again. force, head productivity driver half. one will playbook think XXXX, the piece, an continued this

So submit continue process, will more those easy much HCPs invest some orders. we're it tools going make for in electronic to to that a to

bit on we to the invest that DME, more think little the side, in a as that and We DMEs AffloVest half we'll salespeople fact added should Elaine, And a then year. branch to have about if, expanding event those with, lap some we of things but as I you've on got the the to on the the focus fourth some already well. I there certainly think May participation, piloting but look assumptions. not be know we've add new first continuing the of couple as in the going talked other comments DMEs. with balance XXXX of contributors among quarter, well. one all we're don't a few additional only And heads in of into of we work some I the

Elaine Birkemeyer

Yes.

add adjusted I is would think a maybe in improvement margin. suggest only the guidance thing we small does EBITDA the EBITDA I provided

and operating technology. growth are leverage. well Dan year We as in investments as looking driving But will productivity expense head at count mentioned, continue making this as we getting

expect modest don't expect we we do one. large So but improvements, a

made free million flow. secondly, then to close free cash of increasing strides continue year, $XX on great we We our cash And last to are focus flow improvement. going to

of from working year. as has our do be lot collections, flow which say both to won't I we but cash will well capital. the profitability We still work year, in last capital improvements a as driving the as will fueled free there's continue to continue improvements same the continued working our last extent runway to think at improving to growth on look

Adam Maeder

response the piece, Elaine, financials, guess box And to and I outlined. my That's that think the I'll with the on ask previously on the you I about there. the appreciate great LRP ticked I you've color. I but maybe just stick wanted fulsome question second leverage

the million-plus XXXX think I top revenue. line, it's in of on $XXX

to an would -- imply that I think if wondering acceleration over and growth of kind 'XX in Just 'XX.

of firm? that you how should LRP, what acceleration us about that's still think can And tell you the kind So does 'XX? for with about growth stand the comfortable are and we implied

Daniel Reuvers

Yes.

that a one, Let at shot me Adam. take

of So good we first all, our are 'XX our believe. still targets, targets

that free still focused think are on cash those staying revenue, profitability much flow, expansion, very in I sight.

actually we've I X-year those. window our in ahead a was progress laid year XXXX then as of flow expectations. expectations. you out, that know, our little lost on good certainly XX% first of And million was our XXXX lymphedema on if in made $XX reflect growth think we of of a this the The kind of AffloVest. mean ahead we against cash I of we

We the So additional some happened points. think mean, I of I positioned growth we to puts XXXX, we standpoint, the nicely isn't productivity if work continuing assignment, the inflection growth those really exit about and expand but for the their both the more left have to reps perfectly applying reasons should we're year, end a the some presumably people in to think to from lymphedema going that we of stride airway demo optimized to we side. on hitting an do, at and home on going takes have so we're one productivity, in Plenty expect always right XXXX. still be when the of of linear, think team. clearance that

more record this be XXXX. tech the of at year deployed beginning exchanges should the in Some that we're investing operational EMR of medical

year some the of through first this normalized that Afflo Some not that socialize just to new then alluded in And next I year. going and growth of be to, -- head to of results neck we'll able the I think we're the have XXXX. that half products the to confront

good some of So we're with I on-ramp think those pursuing the and entering targets back, that the XXXX we'll sure. be for certainly at momentum our still are

Operator

line Our Ryan with comes of BTIG. from next question Zimmerman the

Iseult McMahon

This Ryan. is Izzy on for

or quarter read for expectation? comments driving guidance. was first of and the what's revenue thinking color little the just start single could low I to And that both But for cadence bit how you on So the digits. flat of pacing the margins provide be you're first a to up year? on balance off on your to expecting I wondering if about

Daniel Reuvers

Yes.

if start I'll to then wants has -- me anything Elaine Let she and add.

I Afflo a of is thought think about, earlier. first to bit in the quarter, going be a we as we as Izzy, we know called out headwind

assignments lymphedema reset. So We in somewhat probably first highest offset we since have as in had the from quarter, to we in part that's much copays the the quarter don't quite have quarter co-pays because we the one patients' it's benefit the first demo modest guidance for.

know, is a added our in force, first bit the head to and heads in be second typical. protective historically year. some December, it mid-XX% it's pretty really look QX, of the this sequentially of a quarter. We say, So from down half those I sales count we of we'll a from would until the you more if But then at heads in the standpoint, somewhere I more in step those some as productive continue which started won't first think add And historical allocating of half. is

of easiest kind inverted range. And beginning If going that, an to progressively the and toughest much We had you last I have normal we in down. quarter difficult. the is one X history last it bit It's got where comps last think they it from pretty little show the the would think of the the turned or I looked the over year, the year comp. years, where more that's scenario a upside of at is we're X

the are think in. assumptions past we that getting those had of So some I applied QX,

Iseult McMahon

helpful. Great. me. for follow-up That's then a really just And

subsequent from or -- are Medicare how what cash? thinking terms cash use about guys and your impact about collections flow you past in of are thinking you So your of the

Elaine Birkemeyer

Yes.

continue as lot think That us collections I on alluded we think still capital. being I our traction we work opportunity for made earlier, said, last year. to improving a to working there's improving little cash and do So to of a

And repeat expect so to ahead realistic, we runway don't to but that, think year. some the there's for is still we do think

year of use the As thing retire at far end as line think I of the do one we was did credit. cash, kind of of our

our We also completed AffloVest earnout.

us future. But to. continue the head sheet to continuing clearly, grow service, were we to as now balance making good Dan the and about this does that we position we have still forward, to technology and debt we think have investments offer have more we in count stronger that proud As business some alluded optionality in are that we look to

Operator

Our next of from the Blair. comes question with William line Andrew Margaret

Margaret Kaczor

to on. I wanted of follow couple a up There's things

obviously to so in at said first quarter 'XX talk I typical guidance. like it's know typically If just maybe historical sequential Dan, little bit look the 'XX, it's about first, I you patterns. I wanted And a maybe XX%. and that of also mid-XXs, a of a for worse. the in little This to like maybe because I'm QX XX%, bit little lighter asking kind patterns relative bit QX. like seasonal seems down guess typical I was it's maybe even

the So of I is is guess there reps sales it or you underlying, -- have else didn't number on. quite maybe anything so

push pattern, And so just throughout and But pressure trajectory wanted second the the for implies especially that into XXXX. starts growth. to half it on of to that that change QX seasonality for pushes as year more of

Elaine Birkemeyer

Yes. Thanks, Margaret.

of QX suggests current guidance a to about XX% our yes, in I decline So think XX%.

a back, several over what look you take went line and we've to seen the years. in it's I past XXXX, back with it's similar. if fairly So

the year, think QX we're I last we in a adds, thing note lot growth be first just hardest bit that in well is quarter, and We're the year as Flexitouch. investments which of of is Dan to about Flexitouch, to growing this growth, comp. the the I QX faster that a chosen other mentioned, is making our will on. saw see as the to what that Dan that patient than but sense think Entre and actually mentioned, our as think served will growth. in a the half, technology. And a and XX% we've mute back half we continues we'll it really focus in segment little sales accelerate had growing We our to again, in the revenue growth growth as that outpace the rep And does bigger Entre continue growth still

in see And that in continue to saw we as and QX so well. that's piece QX, we'll another

Margaret Kaczor

And LRP. second that push the to thing is then Okay. little I a bit as XXXX on that well wanted

XX% so which up XX%, I it. look from growth do need some number on a XXXX, put again, right, for numbers is that finer just 'XX, And to year. maybe implies at in top just you line this If what

sizable a pretty of expansion kind So XX% XXX growth acceleration, and points sales plus. I of in guess, margin basis

you uptick go of you kind next-generation you a and numbers? system assuming meaningful meaningful then gets comment that head reach into get So that, relative And or look are those at on pretty that in step-up What as neck to you XXXX? acceleration similar as to kind a to of margin the side.

Daniel Reuvers

Margaret. Sure,

a out ahead X-year look for growth do linearly. kind XX% XXXX, window. said, was we've it's tough the to if there I lymphedema But you put a X-year of at XX% CAGR plan of As

to be And other well past, and with prescriber than I along work think this that the while side. allied we entire our that the year, deployed entering naturally a tech that things folks first things we in to on or think an we on actually out for a through with insignificant this positioned forms training try it. This So not that there be in productivity quotient expect still working got the process add year. might their then and some of presumably some really HCPs of we're simplify force, demo whether We enter this of behavior. that year folks be -- productivity in would from added there's We second we to one. just we of of would can on saw have performance submit to we top that are are make with ones that process, as at employed year we the the last little easier, productivity heads, bit continue half train should a think the it's an on bit XXXX referrals, higher the it last higher little sales does impact when year we XXXX. Remember, that expanding in a with opportunity XXXX, going in that X profile, half enter just support next to expand less beginning

more that year just next So easier contributor and once is the you time -- more prescriber. investments and that be the the year AffloVest the their that to should we're for. Head an year. alluded making that expectation clearly one and this they'll vendor of we it neck, have year a to, choice for complete we'll are And prescribe intended patients volume the half to have I going think be introduce EMR a results influences by the normalized the of into year. influences are this also take back experience that electronic half other as going think this headwind certainly And first next this stated the for a is in to year, one we've to is of

the we to can our So growth think ebbs we have said, I line that, that and believe enter think of table. set things nicely XXXX some with as flows. But top reason some should there's I at on-ramp the

color a let just other I'll bit the think a half the standpoint, I from of Elaine question. profitability add little of to

Elaine Birkemeyer

Yes.

adoption books the making really, mentioned, productivity going I margin will think technology we have achieve EBITDA that fully in we've year. as that later XXXX, we'll on investments don't are will not Similarly, large the expect this ramped our not sales we reps until in in be I -- we gains, later and year. until that be and to got is carrying

productive then change optimize fully to further improvement. So are in to And Those now once assets. in opportunity OpEx those will see things place the XXXX. they're continue we

from going XXXX, expansion So is that's really think a little margin an compared we different why that profile EBITDA to for XXXX.

Operator

the comes question with Company. Suraj Oppenheimer next Kalia Our Instructions] of from line [Operator &

Suraj Kalia

can you right? hear Dan, all me Elaine,

Elaine Birkemeyer

you. Thank can. We

Suraj Kalia

Pardon the okay, range. me stick noise. Dan, SRP some so with short background questions, let

number you up exited sales XX% up year-over-year. all are productivity Specifically, is XX%, year-over-year. The and mentioned lymphedema or training sales in-home X% XX% rep is at of up

much there existing productivity reproductivity the add decision how know is how And not a squeeze made 'XX the is this? to help So going maybe, it's in force? heads into maybe Dan, I sales dissect to versus linear incremental more extra correlation, 'XX? but

Daniel Reuvers

Yes.

I we still by being there said, Suraj, productivity good Look, we that question. is demos think expanding believe, the reassigned. as additional

fashion and of the It's ourselves said, that force to think not think expansion and that we invest binary, make in we're that productivity growth don't company, abandon continue I we continuing want the it's to expand to I sales growth, sure still and headcount. right? a as

to able have relatively think I been there's the But head were opportunity. that flat year, on growth find continue. And I striving count of trying of Having roughly to that gains I X/X what a for. balance those taken a the it's on demos more that the means that real. those is double-digit combination we're think certainly force, to we last still off deliver productivity think, the two intend of demonstrated knowing the right plate been only sales in-home

a growth of of year that's ultimately just second more half flip productive. continue know from become probably about, comes the productivity talked And as we it's XXXX, other thought of we we We some improvements probably the about. for don't and half then and first the the but increased switch kind adding December they comes this that to contribution. headcount, half and how So half a Suraj, from between is we've make hire

looked previous our more So us mentioned step-up should in back be as question, time I've the like would that half, and historical contributing having part, has kind as like, sales in we them expect most much lead to we of a certainly, put for as a achieved that. and productivity of position their increased another in with enter better in targets number the well, XXXX force all

Suraj Kalia

Elaine, I'll one it. question Got way. your send

So forward, also costs. mantra Elaine, growth growth new OpEx how And store, same in of think top line at rather the about should we think than about leverage all store quarter? we about the more should moving typical

Elaine Birkemeyer

to with opportunity volume think, store, well I us to acquire store, to for from your a work question first as prescribers. think both new same I as continue new yes, around prescribers there Suraj, the So existing there's good increase still to

and So our and lymphatic it's we're we at angles oncology both vascular as -- look pursuing spaces. therapist both

part one repeat question you that more As far OpEx, time? of the as could

Suraj Kalia

that Elaine, any should OpEx leverage? for we coming what should expect the moving cost? trying So I is of generated I mean, at OpEx understand to growth at top leverage investing quarter. line we you've keep that forward? a And cost expecting what is pretty in was Is good just

Elaine Birkemeyer

a investments. year, continued This achieving leverage I still last are so, as larger we both, to year, we opportunity doing still but by we muted we're investment. this have why So also OpEx the leverage be leverage, at is think for will it is year, OpEx OpEx do great think drove I look which you extent. but And a not making to

As when will mentioned, then where we XXXX be investments scale those more at about efficiencies. think I behind just done us generate and now can you and largely

expect see as expansion would to in operating we well. so margin more And XXXX

Operator

Thank you.

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

Daniel Reuvers

everyone. Thanks,

Tactile Systems Technology (TCMD) 20 Feb 242023 Q4 Earnings call transcript