TNON - Earnings call 3 2023 | Tenon Medical, Inc.

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Operator

Greetings, and welcome to the Tenon Medical Third Quarter 2023 Financial Results and Corporate Update Conference Call.

As a reminder, this call is being recorded.

Your host today are Steve Foster, Chief Executive Officer and President; and Steve Van Dick, Chief Financial Officer. Mr. Foster and Mr. results XXXX, for update. and present ended third will XX, September provide Dick of the operations quarter Van a corporate press Relations results available these website, release today A is and www.tenonmed.com. was on of section released Investor the company's the detailing

begin estimates would to Before forward-looking. that be and that other the remind webcast and presentation, the considered on information made call formal may everyone I we like statements include predictions, might

they are these to what holds, While statements the that uncertainties current represent differ results to on judgment subject could forward-looking our actual and risks future cause materially.

not undue reflect the You to are statements, as of forward-looking date on which cautioned opinions of only place reliance presentation. these this our

of mind not forward-looking we are these in new revise statements obligating in keep light or or that revision the any future events. of to to Please results information ourselves publicly release

to will predictions. affect important Throughout attempt relating discussion, may present today's that our our to some business we factors

these a you of For Risk other our at with the is under XXXX, Factors, complete review the dated heading which risks, Exchange on should more April www.sec.gov. Commission and particularly file XX, discussion factors Securities and prospectus

At this Tenon Foster. Chief to go call time, the Steve Officer, I'll ahead, sir. over Please Executive Medical's turn

Steven Foster

to and to Devin, Tenon update corporate good XXXX Thank you, financial and to everyone. welcome I'm afternoon today's pleased you results quarter for third conference Medical. call

and surgical the driven of adoption programs, multifaceted fully used, materials interactive Catamaran commercialized our strategy, number experienced in system the increase our we ongoing of marketing the expanded in quarter, workshops. educational by During third System and which informational largely an including was procedures the

turning XX% the from of strong with we revenue an previous the profit important profit XXX% procedures second quarter, year-over-year with growth third margin In gross supported an and the gross marked positive. milestone quarter, quarter. increase sequentially and During

in from of in to third margin third the quarter to profit the XXXX. of and XX% improved gross second from the XXXX quarter gross the $XXX,XXX in second sequentially XX% up quarter, was XXX% quarter profit Now

of The Instrument X as milestone for System neuro Catamaran an use the the leading for JIB our by third surgical patient Fusion in the fields. physicians marked Kit and Tenon ortho treatment initial Joint spine quarter important for we launched SI

we've the the customers physician by system the overall as as encouraged our positive post-op encouraging results. feedback are received well from We utilizing early

We've access developed enhanced stabilization. with deliver and will navigation and upgraded smaller adjunct assist multilevel fusion profile tools utilizing our enhanced surgery, a upgrades handling, application of to These SI promise expansion SI procedures in imaging. access revision to software into graft

surgical with was increasing valued the fueled our physician quarter we commercial built. our and in growth procedures third strong by customers Continued support from infrastructure

chronic Our surgical options joint deliver with patients targeted failed degenerative refined is physicians. care with mission sacroiliitis sacroiliac continuing to or for that traction gain to pain conservative

and and with programs on physicians to local our surgical trained SI significant national reminder, distributors, technologies. procedures with local we or As frequent conduct relationships independent reach managers, SI who have been experience leverage managers clinical a and we sales workshop training have

creating a a Combined, workshops synthetic of acceleration the efforts System, completed supplement process and activities with the customers. System. critical We and clinical introduce of timely designed and model on these local focus are to advantages cadaveric to service. the and physician procedures lab continue Catamaran number We drive intensive efficient to our support combination for Catamaran with our these in

confirming increased strategic procedures return During XXX% investment quarter, of to solid the compared approach. year a ago the on third quarter, our surgical our

anatomy. and SI as how hosted XX to stabilizes to Our implant approach more learn the optimized inferior-posterior well transfixes as workshops the why programs the joint Catamaran the approach in the physicians about is

significant distinct advantages this broad and over market workshops, and implant we unmet system opportunity a competitors. the demonstrable produce addresses market designed During how highlight to

continue to we quarter, the surgical the our procedures on our team strategic System. of marketing, sales the third featuring and as Building Catamaran promotion momentum the workshops to expect grow of broadens number

our to I'll Van that, over Mr. Officer, our it turn Dick, Financial Chief to discuss With financials.

Steven Van Dick

results. breakdown full crossed press afternoon. available that our Thank you, release of is us I'll this synced Steve. give the review wire in our A a financial

third Our revenue respectively, an of $XXX,XXX XXX% quarter the months of of Catamaran XXX%, an for of $XXX,XXX September $X.X same XXXX, comparable increases the the the and the was in XXXX, used. revenue was the XX, the XXX% year XXXX, period. $XXX,XXX System period. the of compared in ended in to due September The ago Revenue X XX, procedures periods XXXX for in to number X compared surgical XXX% in to to was compared as increase year the increase ended comparable increase months the in ago primarily million, in and was which X

Gross third or a $XX,XXX of or quarter the quarter. year profit $XXX,XXX was of XXXX compared in of in revenues revenues the comparable the of loss gross ago XX% to XX% negative

XX, period. higher a revenues September ended was of continued to of loss months of increase comparable of revenues $XXX,XXX XXX% margin ago to gross procedures the Gross the due X negative XX% or compared a a result number $XXX,XXX surgical improve in in the or during year of gross profit the quarter. XXXX, as revenue For to

a the million for XXXX. of XXXX Operating $X.X the losses of totaled quarter of quarter in to $X.X loss third third million compared

losses continues initiatives to prior of XX, For marketing $XX.X further the largely the expenses of due function, higher to support totaled company ended infrastructure and enhance sales The XXXX, as expenses to future was operating period. loss growth. operating X year the in compared million its and to increase a the $XX.X develops marketing September sales frequency in million months comparable increases

a the of million $X.X period of loss of the third in for same loss $X.X million XXXX was compared quarter Net XXXX. to

$XX.X loss compared of For net the the year XXXX, previous $XX X comparable period. net XX, ended months September loss was million a to in million

additional We continue incur future. losses in to expect to the

to $X.X As million as compared cash as cash investments and of September XXXX. XX, XX, million and totaled of short-term XXXX, June equivalents $X.X

debt. has of the As no outstanding September XX, XXXX, company

to the thoughts. I for back will Steve call closing now his turn

Steven Foster

you, Thank Steve.

pace growth of continued surgical very in accelerating our the efforts, procedures proprietary of commercialization FDA-cleared and the continued marketing we With optimistic implant catamaran the and for expansion of sales are our strong seasoned margin commercial system. We and growth marked continue growth third our expanding sales can and this infrastructure quarter with management team. believe we and revenue gains with a the trajectory positive

address continue our SI clinical adjunct to of in with to and in revision We expand to product post-market outcomes imaging. reinforce and commitment the multilevel offering to differentiating fusion validating ongoing expect surgery, navigation procedures patient our radiographic application assessment utilizing software to and SI distinct studies

expand infrastructure and to objectives our updates sales all improve execute I to forward from of months look continue attending. our the long-term pain growth come to shareholders. suffering on you the of additional joint in We and to value of to bring SI thank for life as quality we our patients

our And to our Devin? now to call I'd covering session like hand begin analysts. question-and-answer to our with the operator over

Operator

comes question the first Bruce Jackson Our with Instructions] Company. [Operator from of the Benchmark line

Bruce Jackson

about regulatory on Congratulations couple in now? it Is all there of availability? the commercial And prototype are getting Instrument considerations? something And terms of the full A what being JIB that's into right questions progress. this are any a of Kit. your plans

Steven Foster

for your question. Bruce, this thanks Steve, is and

built system. is kit satisfactory it's our We've them anything its that the put enhancement We're we that of prototype them that haven't in these select delivering make physicians sure JIB missed of technologies the instrumentation So to now hands well our and is and to on an phase. past promises.

with of the the spent sure We about has day. The of like to month and We've from now October, are to regulatory the the Very, we procedures day JIB review XX technology. encouraged very all into go and all saw. what what been use feedback seeing and clear over really we procedures technology through we're our we making is of done there. expanding virtually

off with this running and we're now So technology. JIB

Bruce Jackson

And XXXX Are any you favorable in had a then Super. reimbursement fairly anticipated? Okay. for XXXX, changes there climate.

Steven Foster

Yes, indeed.

completed in the XXXX. a processes out early usually the to world. throughout As we SI CPT course, December their AMA has time always, comes final space in It very see anxiously The of wait the frame. And book. AMA dynamic

Cat will and professional RVU be Cat from fees this et code to a market, on SI the a focused new code on in is into we introduced establish their be cetera, What meetings are and code That's recommendations prior reimbursement world X.X that which values and new understand going devices, that And that reimbursement that recommendations range. will leads, from X XXXX. in establish establish X the there facilitating to many coming will there for for process through intra-articular the they've been code.

ilium the change -- little implanted see of patients. the that Catamaran and implants, of the draw we'll the to to the the in very implant conclusion XX-plus again it's We for anchored continue with preference percent We is XXXXX per of in XXXXX our that have XX-plus they various situations percent then sacrum. and because in that use and physicians once anticipate access

are device. not intra-articular So we decidedly, an by every definition,

XXXXX that the So leaves pretty XXXXX option. much and as

So it's pretty yet, out shake very we the have where year. know view spot. a don't a but going dynamic good to We this we think for all is everything for coming

Bruce Jackson

me. question Great. Okay. for And last then

post-approval You a had study underway.

wanted there's So know update I if to just any that. on

Steven Foster

along moving very it's nicely. Yes,

for we're patients As targeted a XX said point. be And targeted at at site the It -- and this anticipate, will by be trial would that I is when enrolled and had quite we we this target XX today this my end of bringing probably QX, end and the is for a Bruce, fact, that about. post-market that XX excited patients. anywhere trial between X could matter range is somewhere anticipate enrollment that in all done. here of online

reporting then be fused. they for healed course, to reports and scores ultimately media ongoing we'll and point, look on in follow-up to set of scans forward, immediately that of did seeing At appropriately prove that the and And they've postop. a how patients in preop radiographically come some their OR as the pain we for both

So as to rolls. it really looking that forward data

Operator

line Vendetti Group. of next Maxim comes with question from Anthony Our the

Anthony Vendetti

the signed signed so of you Steve, post-market up today, expect just far? on to follow patients XQ end number Two what's study, by 'XX. said, yes, and you the up XX to conclude, to XX have up total

Steven Foster

the low now now, several coming the are December Anthony. We're that for in in and November months We've XXs up. low and we're teed patients got XXs Yes, enrollment. right up

get XX end to do by XX of that really that anticipate we we'll into XXXX. range So QX in the

Anthony Vendetti

sites again. remind many that Just how And Great. me Okay. at? is

Steven Foster

that actively patients. country the around sites are active X recruiting have enrolling and now We

Anthony Vendetti

physician I get aware you in up that then And ramping to System? up the the the more physician Are are training in doing here enrolled and you going? doing Catamaran quarter. have physicians you know is third Okay. what numbers obviously, some and great of How procedures, And training? XXX% you're

Steven Foster

great is question. This a Yes.

a compel other we that ability and wait then possible. model right? The to a city Saturday a convenient, opportunities, us technology like the with have them as things the and where any So of way with at is or we're physicians of technology of synthetic technology lot and We've course, as a do have our the company, for work a to the fly and that look on only to tell efficient to locally, got the a that nature. funnel bring lab something how so don't to in the and fill they take on make to travel allows and frankly, to to they we're workshop do story like to trying know that a

technology. what by the gets stress, us the course, fills and adoption it target funnel moving very of towards it's that accelerating and efficient. use carefully. by sort Look, convenient our We're I'll eventual very, we making see. we're And of we and of encouraged So engine

objective our train. how so we people many can isn't see And to

and their business objective and how day. and we choose worth it's train is investment, really that worth Our we about to that's so go time our to time our it's well, when someone, target every

Anthony Vendetti

great. That's

with? process vetting train surgeons on to make Just it do work just out color referrals a Is sure maybe them and vet you right that and orthopedic from surgeons that the in little work terms orthopedic ones goes. you figuring the with, more which KOLs? to How of they're how

Steven Foster

physician relates as the the learning being pelvis we vetting, if with Yes. our key say, to at, with the will, lot who sort SI do they invite we Anthony, have What you look what technologies. into of leaders pelvis is training sessions. The Certainly, experience and the opinion curve image. a implants is you you placing an has this. it to what their of et imaging environment have a cetera, technology they're ahead adopt interesting and there, experience to comfortable game way If in to like have

training So in past, been story session. their for training they've sessions cetera, tells how experience things in in, a the involved with SI us us et would technologies go about the

their down we for the been through gives SI establish folks to becomes so And part pathway. we who experiences that and this on and those developed practice. do, background of what We're have have frankly, the things, their have referral networks target with us who and specific we meaningful target imaging target. have as comfortable have synergy and you that that's a When us these

Anthony Vendetti

one just maybe then And question. financial Great.

So this was bit Anything gross sustainable it'll I fluctuate quarter? than expecting the margin that for came at in here in that or would a significantly attribute that term? better you margin strong is little gross to And near XX.X%.

Steven Van Dick

Anthony, margin it's growth tied this is that Steve. revenue. Yes, to believe I is in we gross do our sustainable. mean, think I the

margin another small procedure or goods is we we and I our have. revenue, I the is, right people the because or of normally cost incremental procedures revenue good grows refer what think good the as of either to associated or increase the goods of earlier, our the extra versus is that semi-fixed earlier, incremental but cost like a I of sold now have in mentioned costs increase we mentioned of portion currently amount that leverage of have percent so to overhead additional with a facility fixed and sold -- costs piece

So we to continue we're grows. in, happy really margins as where to and grow I with revenue be expect will the they that think came able do

Operator

further for turn no comments. to at Mr. There time. questions are to back I'd over the this like floor closing Foster

Steven Foster

you any happy out today, on earnings Well, look assist. IR progress reach continuing I'd to questions, of and were answer to MZ thank more to update we each than your unable be like please conference Devin. our ongoing thank to of you, call who If for our you joining would forward to growth. our firm, and to Group,

that, With everybody a I evening. wish good

Operator

This concludes today's teleconference.

wonderful this Thank a your You you have lines participation, time. your may disconnect and for at day.

Tenon Medical (TNON) 14 Nov 232023 Q3 Earnings call transcript