FNA - Earnings call transcript Q4 2021

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Operator

Good afternoon and welcome to the Paragon 28 Fourth Quarter and Full Year 2021 Earnings Conference Call. Currently, participants are in listen-only mode.

We will be facilitating a question-and-answer session at the end of today’s call.

As a reminder, this call is being recorded for replay purposes. [Operator Instructions] I will now pass the call over to your host, Matt Bacso, Gilmartin Group to begin. ahead. go please Matt,

Matt Bacso

and Paragon Deitsh, Alberta XX CFO. the XX results from Form CEO released Chairman and for XXXX, December ended Steve Earlier quarter its XX me XXXX DaCosta, XX-K. are and financial filed Joining today Paragon

reliance financial begin, differ actual our these The statements. based All Accordingly, meeting remind you predictions revenue that quarter Private management you uncertainties that including I'd guidance, events and opportunity, estimates risks, development pursuant could laws are XXXX. Any of for and guidance statements federal these will no not forward-looking hiring year commercial that are update results, looking market future forward to to These expectations are on full in to COVID-XX Act information expansion impact assumptions. trends our to involve undue product assumes and statements forward-looking of performance, statements. business obligation this current from Reform in results those organization, first and and statements to Harbor the current upon these for to future material performance not Litigation pipeline expense growth available forward-looking made the but cause contained by relate materially call including our upon based implied are securities or Securities this statements. call include like on provisions various the statements to Paragon or place our statements XX of we relating should management statements, expectations make or operating Before those during of revenue within of Safe statements. limited forward-looking the All our events, which XXXX. and

uncertainties filed Form our the Exchange the our annual XX-K risks the SEC report earlier the Factors to Risk filings This with is March please For on of conference accurate public XXXX and Commission, section associated as and the including contains revise or information, of this business, morning. of refer statements, of with listed descriptions Paragon Securities time with to on obligation only or sensitive XX live future broadcast law projections events the because financial by forward-looking XXXX. or as update required information new or otherwise. whether any disclaims any except intention call X,

that, non-GAAP turn During financial financial this GAAP to our issued a to the measures, now of EBITDA, in with release contained this measure over reconciliation we presentation, will adjusted income, to call adjusted refer press the I most is net Albert. EBITDA And morning. comparable

Albert DaCosta

guidance. update XXXX plus Matt. XX you, our as initiatives highlighting you second for our announced education, Thank full initial quarter Good I earnings will provide and call, publicly Steve which product our regarding traded year recently quarter development, call afternoon. provide of performance additional new including our XXXX XXXX and revenue business a fourth and And acquisition our overview commercial overview plus joining investor medical XXXX a and fourth company. is will thank fourth detail provide an XXth financial finally Paragon of Disior. provide quarter then an results SMART of quarterly

force by XX% the our accelerated revenue the customer. the a quarter total of revenue above XX increase the was surgeon $XX with to the growth our XXXX. an U.S. representing sales of Despite announcement in open just and the pre over year. average expansion end million revenue XX% to the on fourth year Beginning compared call from $XX.X We revenue was our U.S. revenue per increase XXXX will range COVID-XX fourth revenue prior January late quarter with driven in of headwinds million, quarter the then the full quarter fourth performance, high quarter, Q&A. of fourth combined growth continued was for

Our U.S. and passionate, foot sales destination the exclusively sales choice specialists. for it's will to focused and ankle of expand continue force

foot innovative customer and and increase and Revenue with product for mission, comprehensive per ankle. our by our surgeons and the trained best-in-class also line product medical the Our headquarters U.S. suite to and has half is singularly in will education the country. continue output combined surgeon XXXX, in driven our at passion our true XXX of over We programs. second of around Denver focused

revenue representing $XXX.X quarter also up not of XXXX. year compared to the international our million, limited markets. XX% in year growth was representing growth and quarter, international sequentially, was in despite the quarter increased XXX,XXX compared XXXX success million, as to U.S., headwinds the COVID-XX Our largest Full of full third fourth was was $X to revenue XX.X%

Given the I'm team. proud pandemic be throughout challenges continues driven performance of amazing extremely the XXXX our numerous from our the resulting which to year, by

Spacer System, RXACT our we we approval External a In soft surgery fracture this Early product response Spacer quarter system been Moving Bars XX and implant ankle Talus under alloy. treatment FDA necrosis which other preclude strong avascular a Rings Monkey system provides The Patient the nitride device December is best XXXX, may for additional Specific and we of humanitarian our approved products; of authorized market launched to XXXX. development. the fixation select coating, Fixation of United three joint is of Titanium amputation, the expect a Spacer Specific bone first to implant new it foot, and line. product on nicely we specific option Talus The is FDA Talus to Patient to System. Syndesmosis We leg patient. for the joint injury or allowing the this treatments. the to our Fixation traditional of received Monkey trauma replacement use the complement patient in remains fractures System, December, has internal our in Monkey fusion surgeon Patient for exemption In successful. an providing only fourth therapies. received titanium fracture designed titanium the February device infected tissue can Talus, chromium comprehensive in Pin used approval to cobalt available which Fixation of External and the where for to patients material be and by for to ankle and is sparing exciting metal originally novel access XXXX first be External Stabilization use Bar the our that a of with alternative now on site States. replace ankle Specific the to product suited fixation or in Bars expect Talus implant connects The Total

comprehensive stabilization system, our bolsters of one syndesmotic products the market. late believe stabilization brought in tissue Stabilization most product System, is this the our System. Screw RXACT soft system to React The With for which Mini-Monster offer broad and for fixation Ankle we soft fracture I includes and clearance solutions customers offering, Fracture which fracture System, Gorilla FDA received Release innovative stabilization. array RXACT we a Finally, our tissue System, innovative now ankle Plating of have Plating Pilon December portfolio, and addition Gorilla syndesmotic of we

and ankle the track Orthopaedics. XXXX products We the we bolstered growing portfolio MAVEN very fast total excited with to laser and addition in in about Guides, acquired Additive the PSI assets We eight from plates alignment launched ankle our are in many Fusion XXX. our Silverback added Plating to multiple system System a options biologic Ankle fracture Ankle launched to system already portfolio, our robust Straddle, added comprehensive open Fracture Span, and

build expect to even next an robust product the months launches. this We on wave over XX with momentum of more

RXACT recently offering launches Specifically, tissue cleared the we such bolster as greatly portfolio. will product will novel expand syndesmotic our with our screw, which soft stabilization trauma

larger a XXXX. for products tissue PXX launches soft become planned will with product multiple focus Additionally, in

we more correct than the deformities. product, is a pipeline XX are we expect launch XXXX XXXX. have and of our generation next Lastly, which them products about currently excited device Overall, and to novel to in XX Hammertoe Pianoteq in

education. medical Moving reps, producing of to U.S. with at XXXX. from year XXX the up sales commercial We end ended initiatives, the XXX including

As majority a which sales reminder, are U.S. of consists independent primarily our exclusive. the force representatives, sales of

the In and surgeons of has above U.S. the sales consistently with treat are enter Foot to XXXX sales significantly further which and ankle U.S. foot commercial these Approximately XXXX reps We approximately Ankle. performing who of XXXX about believe increased and we believe sustainable beyond. deliver been Orthopedic revenue specialize number Pediatric by there XX%. and surgeons ankle Podiatrists reps foot strong force surgery. a to the the that continue are producing approximately will and XX,XXX percent While in in expand growth Trauma of generated we and has and half platform over strong and years, XXXX the

an With our a of each in expand XX,XXX utilize as relationships to quarter U.S. fourth approximately surgeons the products. month tremendous those We XXXX, producing surgeries runway existing PXX new we who the XXX perform have surgeons, products including call surgeon PXX and XXXX customers the add U.S. define with of producing quarter. surgeons customers. utilizing surgeons points During estimated

During sales international revenue we the million. outside international, our take in also market we the leadership base and XXXX, team to over have grown expanded large to began foot operating commercial of Since and our opportunity. U.S. advantage we international ankle XX XXXX annual

growth in Medical However, be XX. and have key we new been surgeon and potential to of Education more to market share have existing and driver surgeon a strength for our new markets. will customers gain opportunities Paragon continue Events great customers existing and for

a infrastructure which XX highlighted week is quarter headquarters, by cadaveric used and XXX and Our we Medical are every almost late and surgeons. station hands commercial our team the and now lab at XXXX. Education with team. on training opened learning trained fourth Denver U.S. auditorium over physicians In our in XXX% This facility our best-in-class for

performed the and As events calendar of fourth fewer year. the quarter education Ankle to concentration heavy medical end given quarter has a third the the reminder, each procedures Foot compared of at

edge to SMART outcomes. to surgical modeling Finally, preoperative visualize an company. the into specific capabilities. surgical integration kicked objective internal focus to will ankle optimal software and the to all accelerate and for patient Disior measure Disior communicated designed to modernize we Through our XX to of SMART surgery our surgical development, and dimensional strategy patient, preoperative and acquisition. initial previously and aim SMART the XX unique of selection by planning and better evaluation of each the prediction each of deformity. We outcomes. provide research improve Ankle further technologies in to Foot be needed enhance cutting XX aspects surgeons Disior expand will a target incorporate advances modules a better off three and implant patient's acquiring ensure development data of Disior’s use initiatives and patient transitioning Disior, XXXX efforts and plans The planning to patient foot and

Disior to phase, will believe the the our is surgical lead broader platform launch revenue plan to Following future we which to community, this synergies.

the base, number Disior share. producing including critical about the further to acquisition approvals measuring preoperative patient of and outcomes improve with in In plan outcomes. surgeries expanding commercial building ultimately XX surgeon for reason evaluation with and improve Disior customer strong enabling for continuously growth. the actual our team's more XXXX foot eight anatomy surgeons artificial the market market demand perform summary, patient's surgeon providing acquisition base, education and PXX is record receiving for more technologies, new execution to answering with and productivity the believe information data, optimal teams our are Using drive implants we am will scale of critical plan our to the to for patient, surgical goal outcomes. I through Our infrastructures the and intelligence. training outcomes thrilled by refine patient with improve and bolster by and to surgeons corporate this ankle components perform further plans, and Disior SMART that commercial in including patient products, We our a expanding planned postsurgical

and our Steve. completed to is also new it I Exchange, Steve? the unlisted common on yet the over FNA however important two in also stock acquisitions year will best to come. the past York Stock public We turn when now

Stephen Deitsch

Thank you, Albert.

the growth quarter representing was year full representing Fourth sequentially of Paragon’s U.S. of the of XXXX million, than results. Moving XXXX revenue XX% growth our and above above U.S. quarter quarter XXXX XXXX $XX.X revenue fourth the for for XX% of XXXX. fourth revenue quarter quarter sequentially was quarter was XXXX. third the the revenue Fourth of $XX.X fourth fourth of quarter also XX% million higher of to quarter fourth than XXXX. higher the XXXX. XX% quarter third XXXX financial was

an in growth producing of U.S. representative. Our number of and the generated a sales per revenue was U.S. driven increase higher representatives producing by sales revenue amount

the expect Gross to in profit and fourth XX.X% of surgical $X.X fourth COVID-XX, cancellations, inventory excess surgeons of non-cash repayment XXXX, net debt. to quarter of was purchases million, growth purchasing for processes XXXX of of time and activities in was revenue. supply offset margin a in less patent in to provided XX, of primarily expenses This of primarily was increased lesser Paragon as more volumes and and of equipment to to G&A in inventory representatives fourth compared of capital quarter XXXX. the XXXX $X.X personnel to net $X.X for activities dollar by resulting for education investments education all performances Cash S&M revenue both Kingdom. excess proceeds million used sales year the compared related the producing due $X.X due to quarter $X.X and compared representative. representing for plus was an teams. $XX.X sales working million to obsolete U.S. of $X.X consultant investment, fourth strong revenue to million fourth million of XXXX New and quarter General by consisting terms, revenue expense was expenses education the G&A U.S. a XXXX XXXX, compared Net fourth the $X.X increase costs XXXX million, senior annual including revenue and million, XXXX. increased as quarter a of quarter was XX.X%, South $X.X and quarter including terms, obsolete primarily agent fourth was in for United sales we million. the $XX.X significantly of surgical million, to fourth costs going expenses due party of included million, the $X.X chain and of the primarily The for do of investments expenses, of development product XXXX. and XXXX was but was fourth fourth but was quarter XXXX quarter restricted million, and a net more XXXX by net our in EBITDA and of Accounting and instrumentation was we decrease consisting offerings, in used to revenue. $X.X products R&D million, forward, million in operating and and $XXX.X International $XX.X environment company, the or contributed quarter the Legal, fourth The in-person loss S&M Administrative basis quarter higher fourth surgical medical by additional XXXX. traded $X.X XX% expense, our less fourth as increase third quarter above basis XXXX the driven a expect deferrals Africa medical from disruption credit was Cash an million, Selling, of increase receiving marketing Development to in million the of increased Cash million Technology. fourth for lower for activities commercial during and including the of investing property of in or over expense $XXX.X during increased growth increase Adjusted commission the led as the Information was On increased of million Finance, for events, of loss expense million, of going dollar million. international to XX $X.X expenses publicly partially COVID-XX forward, in Selling XXXX pandemic. COVID the compared of of compared to the IPO of marketing of of by and or variable XXXX. $X.X XX% demand percentage by XX% increased quarter Net marketing quarter quarter FDA in $X.X X% of million events. plus expense, XX% of of fourth or to our medical driven primarily in of million becoming fourth products quarter annual clearance decrease quarter new $X.X fourth to XXXX. the XXXX. revenue do On of capitalized of facility and of Research plant driven financing or percentage income revenue expense three the a $X.X

the to a $XX.X XXXX on to our end facility, at XXXX. credit on to $XXX.X cash was at up $XX position hand in borrow cash entered XX, of XXXX puts This PXX during million million of senior our total which combined compared strength. December we on Our with of a hand into ability million financial

year Surgical growth first demonstrating during during and the guidance. part part of of the of sequentially first as digit January our January. towards trends, and months, indication a trends to full our headwinds revenue total February, improved normalized February, strength we in environment. of part COVID-XX these strong from from the and and generated XXXX volumes and February Turning view quarter double business. progress first March more the of January revenue second an Despite resiliency increase revenue operating both We year-over-year

Our XX%. of growth $XXX approximately million, to million XXXX representing guidance $XXX.X XX% revenue ranges to annual

of approximately significant experiencing For XXXX, first XX% COVID-XX Today, Paragon also is revenue we the of headwinds. quarter revenue to expect growth XX not XX%.

headwinds, from unpredictable the But With chain, environment XXXX confident revenue those of the the our for opportunistically our certain are remarks of ensure earnings the first date. incorporates adequate team we supply become meet to inventory to on guidance and third hand to to has quarter and may difficult. challenge. vendors demand. our have manage given we we components similar COVID-XX, increase product However, of will the purchases COVID-XX nature effectively that quarter more risk incrementally continue call, with instrument experienced Consistent XXXX to respect to

up cash for specific fact our While XXXX, raise strength of the not with please we our additional end market we to report remarks. annual for the the expect questions expect capital capital to adjusted combined and is EBITDA we to be do or answers. providing sheet, lines positive EBITDA operations fund to this of open environment. guidance prepared Operator, That will given balance flow within not currently adjusted and continue difficult the

Operator

from Matthew first open. Matthew, go you. comes is Thank [Operator ahead. Sandler. Piper Our Instructions] O'Brien of your Please now question line

Matthew O'Brien

about for what really one, retrospective I one. like strength. Thanks taking a little love one questions. here one, not really saw But of more sounds in strength, the guess drove lot afternoon. that then it's QX to was a new sure hear if and I'm you training what Steve. of my performance Albert one, piece Good I But QX was prospective would that particularly a that. strong. And bit It the Great. or and that big surgeon U.S.? especially drove for

Albert DaCosta

that Matt. are the take we've we question. mentioned that always doing? I'll try one ourselves Well, you goal. to for The on shots multiple that, reality How give is Thanks

highlighted. the that surgeons through of I'll on for growth. really We executing say XXXX, sales medical of first-off, I'm the which that team driving So invested growth heavy do proud half just we expansion, XXX on rep over focusing year. second trained those rep in education, the And We opportunities. in

of development, new product activities. introductions manifests and to product that QX, some we think really new marketing I in itself started see

some us really I think QX. of those those that we despite well. we through headwinds headwinds, experiencing weather in in together performed really were helped those still QX And things coming

that little dynamics growth market we a I proud now and the XX% credibly abnormal. bit the are say here believe that will a right I'm So have business team. we that of absent

making that? future. And now, to performance. do these for investments going I drivers return we're Our you think growth, color Steve, expectation to the and that have at looking us are really help to is right these in any

Stephen Deitsch

and contributions on Omicron we saw grew rep expanding in the remarks, quarter, see January. mentioned February. be other cylinders, headwinds as we lesson tech I really as sequentially double our February precise. med increased Yes. grew January, February off And you we and I or pretty ourselves, tell base, and great peers And to starting Xth Albert expanding did same are all And, our to guidance forward products. would the XXth as from what saying really to is I the to we January March, looking in and digits would a lot start as my the was a prepared preparing rep dollars significantly just the reiterate, conservative. we be the of we entered public of, of What pretty headwinds Matt, per we're but in have that so from sort as we or because XXXX And, hit and a like views start. becoming company, prepare still did new fourth of guidance, our we terrific in to we positioned

now potentially also continuing experienced better we've so that. headwinds is quarter. And and XXXX do But Albert impacts, on, that so we've year considered date, for revenue re-emerging, like guidance, COVID than we to quarter expectation full for the the far first his absent first

Matthew O'Brien

helpful. Got think, well, And much low for you're it. which area that and market to thanks is was still of teens kind have teens the like this a assessment? those there's asking. that facing, the conservative I'm And I low-to-mid on it. seems that And back of Very you're that QX on of you're dovetails being the share just touching guess Steve, headwinds Albert, guidance. -- full of just the one, is kind taking because I in year kind fair if It QX prospective guiding for so kind there's, but upside, you then normalcy, you're that for into doing

Albert DaCosta

I because we headwinds that first the of think way that headwind of certainly everyone that for through happen. like don't to it for in, as assumed guidance doesn't characterize this a nature of we've is, that we we're some hope We've we example, though COVID. year impact revenue for even on quarter. that this continues, kind the accounts date today, quarter know that experienced well else, hope the Yes, potential Omicron its nobody it a that unpredictable for the seeing of We that and But no, full would provided I quarter, and risk. today, rest aren't anticipated that as or coming the

Matthew O'Brien

Got it. Thanks so much.

Albert DaCosta

you. Matt. thank Sure, Thank you,

Operator

Thank you.

comes line America. Bijou ahead. question now Please Craig Bank next from Craig your is of from Our open. go

Craig Bijou

Great, finish taking see some And thanks on Maybe of within to of provide to the that is wanted for like from year. the of the to get aside get congrats bit And coming segments separate them. sub but we're you'd you growth questions, sub know sub on a hoping even I segments may expect or of don't feel with, strong I to from looking others. to than putting products kind XX. which you But the where just more a little guidance, the guys. for at and start just kind on to color if we'd segments, maybe any love just growth color.

Albert DaCosta

question. You it. Thanks you How got the doing, Craig? for

Craig Bijou

you? How Albert? Good, are

Albert DaCosta

try I'll best as this answer to I can.

First to total In XX, mentioned our XX, line. ankle the ankle for we we that's the off, was second think XXXX of lot launched and of year our of fusion ankle sort half launched you where that late us. a I Right, XXXX products. product we

total Talus an With introduction we the had with acquisition Orthopedics, a Additive Spacer. of

this in market portfolio speaking, hadn't we attribute so would And growth being lot the we and XXXX, contributing. important do see we like a going tissue. really ankle want any some no we to total. launching new soft of that product, we're early nicely. we to that emphasize more that there In bit impact than excited here, products it saw our of think screws newer contribution few we side. a products, I And say mentioned, are to or I had in, that participation boost external either us as core see got all that and more participate there but a I in year we to from the on our our growth plates to participated didn't got XXXX a the other to traditionally fixation, We've generally it's tend a was those products like areas

primarily the [Indiscernible]. in been the Pin reception launched great. that's on performance We fracture recently our we're markets just fixation, blown by away For used External early fixator example, its in Bar to and

So it's QX, we fracture launch to our really fixation boosting another side. expect a external device. fixation fixator late QX, circular

to ankle areas like the even that portfolio there. market ankle, Charcot and, and We expect nicely contribute one to

So the of got the Syndesmosis that developments traditionally since is we are System also today. most of the RXACT to complementary But two that and additional in products upside XX have that innovative later most in fracture to we or the QX, product. nicely. areas And participated, to we date, we've we then think one tissue some side, I my I foray those gotten and they're developments expect huge our date, see potential on one really very soft touted played as products soft clearance is one we the Stabilization to nicely. haven't there. comments fixation tissue recorded hitting Plus, expect contribute market that we've It's launch another our innovative to in that will

the about excited really we're whole speaking, generally So portfolio.

think, ones impact areas see product Then new Craig. few we might highlighted contribute some your and launches, that even with a expecting, in it's of some some disproportionate nicely XX. I question, those again I ankle the of recent to

Craig Bijou

you. Albert. Yes, that’s very helpful, Thank

training on in helped and the obviously, you number you that to, surgeon obviously, the trained. Second as of the very to question of impressive growth And second alluded the QX. some ask half in wanted surgeons that number

to numbers guess about surgeon did or you to that about guess, wanted from the of compare the training the look to in how like do? you second So surgeon ask XX? of cadence plan half or a it I what training we think I XX surgeon Or what I training perspective? does should How

Albert DaCosta

much it. he if stab A some reality has saying the ankle. a And across into is, can and passion over also balanced foot of product and goes come You color there. of got our additional portfolio so segments Steve, top is, is There product. system. maybe the at great, take the entire I'll by really consideration it. And I'll our all that great then every off question. start energy the But is

the goes into development the process. the optionality, product the research So design, that

think medical education surgeon I is it's users, critical communicate it's, so And to that critical the component an absolutely right. to

for we done adjacent medical also team what ideal medical I it's this a a so education leadership auditorium. impact of. proud medical market on we're education medical have the is how in the looking to facility diverse. to and amazing at And What we've a foot it's here, It's The and lately we that brought facility, surgeons. so on with cadaveric XXX% station a XX we is a new education. mentioned leadership And ankle new really provide pretty biggest doing structure And really is area. of that been site education we've recently

have surgeons some some some ankle, who you who up about about get surgeons really you excited charcot who get reconstruction, excited really forefoot, etcetera. light So get about

at effectively communicating specific design And tips is so can more areas. communicate We and really focused around we're tricks leaders I the looking surgeons that the very in think all now in education, those bring have specific from what that opinion can medical considerations. areas we targets key world and

format, been our needs And so generally and surgeons that education cater the to we've of speaking, those. medical desires to attend refining those best

we are is onsite thing other The to training. limited not

We also bring training surgeons. to

the to possible make want but these as to also we make as effective, convenient we as So surgeon. sure that

we're overhauling on focusing revenue. medical philosophy the we're can courses quite that something So you impact you regional I And has what about with excited we're on there. entire some. the a tell we're and maximize consideration I'm up to with coming not setting the really that giving number, same is education up

Stephen Deitsch

got amazing opportunity expand and today, got on surgeons every month base. as add. We've average, producing quarter, I we those our around the with business product quarter, Yes, XXX and but what We've are characterize XXXX an our use the would surgeon somewhere who surgeons Docs. typically Craig, really are doing just we during of to

have teams, producing, really on I users that sales Albert are So some an an foot we our them understand and commercial medical them better, the Albert to the know for PXX improving what, third to introduced focused let ankle opportunity surgeon be we as are education his what let them have company vision team to starting the is opportunity of have outcomes. in our and and our them with in other products where a and have well. so to get Get think and time spend

with products. So of opportunity are that expand lot to to exposure a that our Docs our by getting existing more them producing

expect process we we're We've putting team big when but -- also year U.S., trading We've also so add. a facility. added a the would in a internationally is in of there. the not only in new in surgeon putting added I So,

U.S. And States getting not opportunity, focused really so well. outside on but the we're just as the United

Craig Bijou

Got it. the detail, guys. all for Thanks. Great. Thanks

Stephen Deitsch

Thanks, Got it. Craig.

Operator

you. Thank

Cannacord. Rhodes comes Carl, line next now of is Please Our Kyle from your question open. proceed.

Kyle Rhodes

that there broader then just maybe the a and a surgeon quarter. doing and reps, to it seeing product kind surgeons color wanted question something bit afternoon, over with reps, hope different you're surgeons surgeon. you're more I they're Is you're doing becoming get then in to predictable there a of course about, well. just what in that love of a the I the bit Good the just is your you're follow of everybody. to adoption the producing cohort and producing cases from to Craig's the productivity know, course, difference maybe broader up cohort of on net producing the what a seeing earlier profile, trialing timeline are to in little would to get is

Albert DaCosta

lot Kyle, it. So medical to at that related education, I'll how are and got doing? tentacles you too. adoption You right. a shot one, Hey, surgeon really a of There take

for case, For can timeline to the right. the surgeon try product we're first a training example, that impact really the

might if the complex mid of example, foot see type products, we're for ankle weeks there. courses, or a type we forefoot a training. some doing versus immediate booked impact see say, might or replacement And a we we total in first ankle So, between couple more there fusion surgery

communicating get and between don't discrepancy our reasons what surgeons we on to really they focus some talking be surgeons, sometimes will surgeons, education, those for own producing there active surgeons the of they when the surgeons active educated technology or have. other know when, and we a didn't another we with often opportunity have tips the products become that's tend of Some even have a really And had. sales surgeon, working area. get different some we're exposed and that communicate technology, tricks our we that right, person, medical why to And we might and key techniques comfortable they and salespeople could call

producing of an to the convert for into us is pool. active that opportunity So more surgeons

Stephen Deitsch

than, aspects Albert remarks base add, in of A lower or spine volume the of of some in would that that, only his cases. of other them their surgeons, do And some Kyle, hips have knees, different surgeons quarter market in etcetera. lot practice. mentioned are that a a may They I lot and cases and two that just prepared one

And the them the better of be, that confidence education providing surgeons this so to more and procedures. going also our more of vision in products company give growth performing part to for is better

of so, smart procedures more to potentially XX more Disior and enabling going a ankle. procedures with getting or And that's their comfortable into patients and more do part get for procedure acquisition the big vision a In also of foot recent comfortable our for surgeons doing

Kyle Rhodes

R&D And helpful. been prolific had you've was the follow looking; very product standpoint. from other just and I an that development up That's

XX in the portfolio, still I [ph] and You're this going also fill Xfix Thank then year perspective gaps the high big focus. to and the you. do pretty SMART gaps from from tissue level, you the initiative? on see hardware where in just soft a a some some portfolio both with guess

Albert DaCosta

where give orthopedics feel what like technologies. it's is opportunity category to it. to parameters. and new better try the whole on That's for the research because hit things looking us is, different to really about deformity excited really visibility going energy tell side enabling a technology We're true deformity of focusing Disior at our think I I'll additive of surgeons like in that bringing I'll the we we're you biggest one. the is patient's

patient going performing to likely ultimately specific patient But specific might things influence itself. better give into about to to us deformity then give these impact, intraoperative which And lastly it's to that in them visibility track tools, of going the types that's tissue like specifics patient soft it's a visibility So well going procedures instruments, and procedures even better patients to to which so right. are convert the patients better going implants. it's

that's And you market. so Paragon I really think that's our we exciting there the and provide biggest really opportunity previous and market opportunity because a that And investing conversations still to from we to ultimately patients. foot foot to opportunity know our much improve biggest have is because outcomes the to significantly impact so and is patients. think for there's ankle surgeons service ankle impact the

Kyle Rhodes

you Thank question. the for taking

Albert DaCosta

You Thanks. got it.

Operator

Instructions] line Our from ahead. David your JMP question from Please open. Turkaly now [Operator Dave, is comes go next Securities.

David Turkaly

thanks Steve high gross I’m for curious know but that here. Obviously, that lot. a there? out color Maybe Great, called one I you a bump comment some margin margin the line. nice or is, if sustainable you unsustainable how on on might any products, new

Stephen Deitsch

higher expect as our that, of the quarter remarks margin, a you step which up as Yes So Part mix hey, we prepared mentioned doing? gross continue. how products, mentioned was you in we to third in nice have XX.X%. margin a of Turk, we higher did

I or overall better also guidance don't, count expense. wouldn't going We in just lower of margin. But, on for cycles. forward. excess inventory of terms I XX.X% think obsolete and management It's through I procurement saw XX%

for think better our it you way as XXXX is think a overall average together. about your you probably put to I models for

David Turkaly

that. goal for And continue sales force. the expanding Thanks mentioned the it. to you've Got

add at have? the be given year, like, reasonable do cash substantial, more a like look in XX sort of think is like, in might you XXXX? guesstimate would that, Or we XXX you to you As XX a what even it that

Stephen Deitsch

exact know, about in as in area that also hire either reps past, really experience not certainly will we join ankle. we guidance, in talked foot we're want have we're because giving but that the it have got where interested we've numbers talked in experienced we've without Yes, that's interested and an are when you We characteristics, to But Paragon. reps right may are them. the that selling

experienced of to money usually nature add takes distributor of hire will adding they different of as and continue to folks So, both a we our types because and little more commission that reps bit of and ships. surgeon. But lot we and, product output things those lines grow producing of enter the rates them comfortable of number really with that's hiring, expect people getting to to rep our and products significantly. trained and introducing And a experienced our that and new

overall of U.S. like about per growth the an be we of numbers algorithm. growth dollars number years, of of that's our just was four three growth. reps, we half the we over producing from pretty other nice grown you about of one a by to as piece driven a or growth continue the expect for to driver big perspective, in driven information we've was producing. So, And part know that and half by XX, that our last and And significantly the of and producing rep more the think

then with -- We our people we'll hire can existing we new base dollars will hire as our work in can as with and who to up many contribute, as we per and drive the well.

David Turkaly

ahead. great That's go you. Oh, detail. I'm Thank sorry.

Albert DaCosta

I development okay. feel products but product that I that's to of was like our There's, and on that's come like board, cadence where discussions just the that. always to types love introduce you're add there's Right? help. of been missing really No, going we we to would aspects.

the got more tax, that. make we feel medical and products, going we marketing great as the sales keep launched like not and culture, something we We of and our we unless education we're we launched And introduce and And of lots these to So not product. more to, have right, development key we're going of we've we support energy right can it great right? make right. it, to better,

or looking opportunities I just better think landing looking for for this awesome great spot a home. is for salespeople an

attention and I public is a portfolio company grow that to we as help are with going going only that think also our I think a so And and lot. where

David Turkaly

to guidance, obviously just $XX I that to the Thank million out one last have last so inventory the I in in something sneak build million not things in. if may one, XXXX similar into things could And Yes. to new years. I couple of you've all specifics expect that $XX into but know, put market? you're some ton range sets you given a want it we get about you EBITDA and much. and the should in products going mean,

Albert DaCosta

You got it.

days level that lot think pretty launch. a a we amount it consistent hand, a exact to number, you of the has procurement we lot and CapEx, inventory that have lot in of of to about a of see launched we that As expect capital those the in when sets of purchased we an of keep for pretty ankle, of giving significant do of inventory and next And to without do, we a instruments on has inventory also are year, support balances, to pretty you XXXX, example, new do intensive Like, timing products. we the products. Dave,

forward the sequence products into improve So they to market. overall it and as of go on we overall, XXXX depends our come But to it we overall, as maintain beyond. or expect DIOH

David Turkaly

Thank you very much.

Albert DaCosta

Thanks. it. You got

Operator

& line from comes now question next Please Company. your Needham Mike, our is of And Mattson Mike go ahead. open.

Mike Matson

Yes, thanks.

on couple Disior. a Just

can So timing some applications And kind procedures. it watch I can anything maybe about expecting least to initial of point for different commercially. you the tell to can at of you're required there sort where if before what's don't that get you us you launch know

Albert DaCosta

I’m So that. you looking You to a Mike? got at get Yes. doing, shot it. How

we're our are for our being partnership by excited saying here is development. that a really that research SMART about Disior how for meaningful start few off that think immediately considering on where I'll I of That was we introduction aspirations in focusing and really alignment, phases we're So and internal said, XX. acquisition

projects, hoping projects to that an give of And those I Disior going tons which efficiency of each environment, create accelerate at start answers. will we're is with visibility to of better research some development us we we're early right? It's always the going think these the limitations on. to our going to So understand enjoy of start better

with of it already modeling. world, we've a surgeons that who CT some surgeons they're to are they around weight are usually and ankles, as the tune piece platform, the affiliated kind that some diagnostic foot using this in bearing really today tool dimensional got And used unit. tend of second The amazing is surgeons platform's focused being three be with

affiliated And we some are looking some early, that's so people might weight with here category We three we bearing at think sort in key. CT are beta surgeons that a United same already that again, dimensional that launch that that States, the are of surgeons have modeling.

out for modules And We're going this given so available, commercial to half own to different ankle have bunion. commercially visibility like more including to our over considerations. in launch a Now patient to the be surrounding see things Reconstruction. that be and building inputting we're anticipating next and Charcot the implants constructs, people that XXXX. second different have can we'll of of more year,

Mike Matson

Okay, got international it. just That's, that's the business. then in just couple helpful. a And

training Do any or to you international any your the doing wondering the also, additional year? about you into they they have to? do any have international And to was locations? you're plans fly headquarters customers? in of the offer how enter So, training just the there somewhere U.S., I in countries Do do for this have

Stephen Deitsch

well, markets, in the XX. locally, haven't German in labs concentrated had, labs of on physicians very It's perspective, consistently as we train teams that's with to this of market now a And at focused of planning a currently looking if know Yes, A no. actually from and we Also that those which lot Europe for and at We've doing opening U.K. past. a is because Germany our in people that to subsidiaries expansion in the and training we year. is nice we markets opportunities haven't have, looking new we're this and in we're markets invested we're Western some meets leadership Steve Hey, business that Canada And including something and, helping in, multiple we able a programs drive usually, Paragon Italy. their have haven't us. we're as plans Mike, expansion absolutely and they're surgeon. is to by really a we really the standards way opportunities. home got year, until few those good this lot training enter there, terms as the a of our those done are

going a new and to bigger beyond markets of it's and, as So be three that part our, big for U.K. but Australia also in definitely XXXX the and our us that, in South already we're are in into Africa, move in we markets expanding emphasis today

Albert DaCosta

I that, can. thing One add I'll if to

we webinar has here facility capabilities, trainings so here Our at actually, on televise our can facility. site

opportunities, to building neat medical support here right structure headquarters that we've in our programs the as education international some the got in got there surrounding So in training these and can think we've of Denver, facility us well. our such surgeons while I international interim, we some we're great around opportunities

Mike Matson

Okay, great, thanks.

Albert DaCosta

Thank you.

Operator

further no questions. are And there

I'd turn Executive call to Officer now back Albert to any for DaCosta, closing remarks. like So the Chief

Albert DaCosta

Thank and future today. I great day. you at Steve seeing again your as look industry meetings. investor time forward for conferences you of to a and many as well individual Have

Operator

concludes This you joining. Thank today's for call.

now lines. may disconnect your You

Paragon 28 (FNA) 9 Mar 222021 Q4 Earnings call transcript