TNON - Earnings call transcript Q1 2024

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Operator

Greetings. Welcome to Tenon Medical First Quarter 2024 Financial Results and Corporate Update Conference Call.

As a reminder, this call is being recorded.

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

made the predictions, statements judgment estimates, considered information may the we and everyone could begin like forward-looking. remind webcast future results holds, to the cause subject uncertainties be statements what current presentation, other on formal Before call represent These would materially. and I differ to are that actual on include our to and forward-looking may that they risks that

of we publicly release not these light cautioned ourselves statements, our as are forward-looking or this which are You to keep in information revise reflect date only presentation. or mind in revision not place these Please undue any to statements obligating future new events. that reliance on opinions the forward-looking the to of results of of

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

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

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

Steven Foster

progress sales the remain our our we of begin We learnings. second path to welcome began and update and our operational Thank building first commercialization to market conference organization you, monitor to We and year share. Tenon I'm XXXX considerable you for Medical. as based we've on Across XXXX on technical a focus right XXXX activities our restructured of aggressively today's Sherry, financial and afternoon advances commercialization. and call good quarter continued have pleased year and following results significant commercial operations, on corporate everyone. made

geographic X X had QX, we in regions. During of coverage

With are assigned move to these personnel we the addition areas, to poised now of new forward.

go-to-market our has with Catamaran network the joint System, adopting We patients partners continue we available believe sacroiliitis. competitive our field physicians in options and pain, approach chronic sacroiliac SI-focused degenerative broadened with in gain to proprietary of surgical for traction which

of a reflected with XX% System. quarter. prior as Catamaran is increase results of continued XX% by quarter fourth surgical positive the XXXX driven first utilizing steady revenue our gross XX% of Our year-over-year financial momentum the rise rate margin of profit a consecutive strong with in to a gross quarter procedures in compared This

believe gross will sustain stable we at revenue recent to structure we our continue cost maintain growth, As margin performance levels.

During announced post-market results the we ongoing study. from quarter, clinical our interim favorable

assess are reaching which first includes healing. now scan CT bone The XX-month a patients milestone, their to

bone assessed addition proof seeing bridging independent Catamaran indication as VAS delivers that scores, on seeing an In we are of and these to CT This clinical radiographic radiologist. by XX-month promises. improvements ODI marked in in further its is

system. Patients events. to of For sacroiliac Fusion and evaluated to those a reviewing outcomes sacroiliitis the post-market will evaluates Tenon, with various clinical this XX be or of assessments patients treated study radiographic Catamaran SI period with degenerative multicenter single-arm months, joint patient-reported up prospective the outcomes, adverse disruptions new Joint for

demonstrating patients the alike. to Joint. profile, optimize date performed from Of study, through of enrollment physicians exceptional our posterior inferior of XXXX. our we confidence fall validation approaching the combined in with Fusion design, interim invasive and the interim note, earnings the safety System the outcomes SI short-term an less are approach the a underscored as functioning to long-term is transfixing with benefiting of stabilization surgeries during mentioned patient Catamaran's call over that As is detailed in the data March, our and end anticipate XXX analysis This intended, their and further Catamaran

continued workshop activities and to by robust of valued we We our quarter, during continue our commercial build. supported infrastructure faculty the the first physician expansion

precise our SI XX professionals technologies. to demonstrated we training word results With this our of our workshops inflection that in and through reminder, validation important extensive drive order physicians a experience a As workshop system's the be quarter with Catamaran go-to-market hosted out take surgical broadening effectiveness to Tenon workshop delivers. we from approach that the backgrounds adoption and We a strategic of XXXX. physicians study, promotion our post-market and address reached technology. of will point will in and critical first programs get Catamaran during preliminary efforts and the medical have marketing, further in

in patent important Kristine portfolio the system. claims will application of our allowance patent Directors. of SI innovation a for provide further Board welcomed encompasses to which Catamaran focusing valuable We with field system U.S. Implant device issuance we company. Recently, for the of of on and our our our Patent an for the spine-related growing insight Office, technological Trademark experience Joint of notice Jacques medical strategies Her significant further enhanced receipt of the from go-to-market

pending Currently, patents and International and U.S. we XX X applications. issued International have and patents U.S.

sheet in Additionally, quarter the sales our retired fourth marketing accelerated stock the during million first We $X.XX and from we support we during raise million quarter, XXXX. secured initiatives. the of generated as preferred proceeds debt $X.X first from strengthened to our balance quarter of our simultaneously

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

Steven Van Dick

of succinct wire in breakdown release available Steve. Thanks, the press review I'll across full is our afternoon. our give results. this financial A a

procedures. profit to revenue in $XXX,XXX or XX% XX% to the number loss in $XX,XXX a the of first The compared XXXX quarter of or surgical an negative as in was the of Catamaran ago ago ago $XXX,XXX increase quarter -- due primarily Gross of gross XX% increase of increase of the comparable period in of Our was an $XXX,XXX year a of in revenue XX% revenues was comparable quarter. revenues XXXX, $XXX,XXX to same the year first compared first quarter the to year compared the for the period. in

for margins operating the absorption to in quarter with to growth result of surgical due $X.X internal have lower revenue infrastructure. to associated in decreases standard totaled of $X.X of relative improve the and more due we expenses the fixed increase due seen losses first resulted XXXX loss steadily compared of an sales development into the the implementation and third-party first of a to overhead Decreases the million million costs the leverage an in Importantly, expenses commercial quarter a Operating in primarily our of marketing cost. number which in XXXX. and procedures, Tenon's gross of expenses sustainable operating were research and

compared $X.X million period in in does loss first of quarter incur the XXXX losses of additional to a XXXX. The Net loss same was future. $X.X million company for the to the of expect

cash $X.X of as million equivalents March as of $X.X XX, XXXX. million our XX, to and compared As XXXX, December totaled cash

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

back Steve turn thoughts. that, With closing it for to I'll

Steven Foster

Thank you, Steve.

our first this quarter we fourth with will the in proprietary the continue strategy seasoned gross we system. momentum increases sales team. of attractive our surgical FDA-cleared We our drive We to year-over-year supported represented year-over-year market, in we management trajectory, positive and ended revenue the growth continue margin. of commercial infrastructure expanding by procedures, of consecutive commercialization growth As Catamaran the by implant our prioritizing are in believe scale quarter

to the We well our clinical emerging post-market clinical safety encouraged experience the by from date. interim are results our profile from clinical particularly as trial as

organization harm delivering of is count customers committed oath deeply technologies the physician do Our component on. no our first Hippocratic can believes and in to

post-market Our investment its on IRB reinforcing further Catamaran controlled in is the that data promises. gathering delivers System

pain objectives our refine further continue all I SI growth Joint innovate attending. to to will for patients drive thank quality the value and for to We our pursuing of for while you long-term of life suffering from shareholders. improve

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

Operator

Our Company. Instructions] with is Bruce from [Operator Jackson The question first Benchmark

Bruce Jackson

between First, What's a of workshops spine interventional physicians the doctors. the about and mix surgeons. composition the the pain the and question the

Steven Foster

Thank pain you, I of your spine customers. Bruce. neuro surgeon and mix a question. orthopedic Yes, we have and appreciate surgeon interventional and

is, between mix et of the or believe in training it specialties, range. about lot cetera. in XX-XX this not, Our right, debate space There's a in that

target that are necessary to agnostic issue. have a the making environment, that the to workshop that We deal the to invite SI a at pain answer physicians Joint, surgeon. spine versus question what about have focus with of interventional deal experience we're and But yes, great you. specifically, understand on procedure, we right We your type the and sure this into XX-XX mark

Bruce Jackson

a And Okay. the then question Great. study. on post-market

with And the can year. the Can the forward So you that data that first to was you back data were you I to some that great. patients group many March in script tell mentioned going you're be And released. release? we look what us more this next some how in data data later then released releasing think of looked in

Steven Foster

is Sure. can look Indeed, increasing forward really, you what to numbers.

a been that's their radiographic -- of things to first X.X months you monitoring set XX-month the press CT. very of and healing constantly good XX-month and few the Fusion Again, were that scores, their they're get patients we I was scores referring conclusion see the their first achieved. are to we we're do bridging taking the satisfaction, bone release, critical that place what to a milestone if that we're radiographic about hit nature. believe to month, in want a of around the improving, has were on have post-op So that do proof When we gone reporting pain that assessment ago, that we pain how the mark, out to we get drawing responding, quickly

a point, XX, it final the to was the it that that we're It just things start release about be milestone. what at as analysis. that X, teens landmark. involved will XX, will in on in draw a and be we it that's progress able be XX critical on conclusions I hit seeing compile What fall the see the That's you'll out. will but so X few Bruce analysis came landmark interim be press to had study, first We our data. this the nature. is we'll XX-month an numbers into document and was And patients, of increasing what that up interim And believe in of an instead that first to that

Bruce Jackson

Great. Okay. me. last then for And question

that's look give a some point at is will patients right? XX Or to enrolling going Is XX-month I data. going of And you And believe the think is for upwards of this be and data me to be wait try. the comfort me. study them what to eventually. XX-month the the Will this So the say for then data physicians at sufficient? do it will give that

Steven Foster

Yes, that. and thanks for

patients. maximum couple the set a One, of XX a is study of So for things.

question wildcard somewhere analysis and physicians want Others into a go that time Where will get out north and for XX to because together. down enrollment whole look, be to really gathering and study we're shut XX some moved do data the everything window. will wait process. of this at interim So play moved, and near assessment is see

the pain satisfied, arthrodesis a an bottom to something ago excited of since those looking Fusion so with is out a the the forward of has of see The to why clearly we've healed very all gone bridging This and are pictures months technologies a SI missing proof or Joint, line away X.X highly delivering conclusions, images radiographic are start if actual Joint. out they release put SI been that something bone and different see committed to, are and there day significant that's is that's SI much is early Fusion. patients we X of definitive and to level drawing the they clear

and So this you'll of assessment numbers milestones. the just what the data we as grow continuing I is through move think the Bruce, as periods see, follow-up the that's to

Operator

Anthony with Maxim is question Vendetti from next Our Group. the

Anthony Vendetti

Yes.

And max. So now just sites XX right the sites enrollment you many the is do complete, anticipate patients, study, is terms you going then XX of so of when on number patients? are many do? full in Where you up to how are following how XX to

Steven Foster

Yes. Sure, Anthony. Thanks about done. just question. We're for the

be will shortly XX down. in about and you, nearing and really that wrapped here anticipate and up I tell we're just with I'll what high shut the XXs, happening is do ahead enrollment. we'll go very that Here

don't We with have I study trial. right maybe, sites more X don't because XX know, X to down to that see expanding cases now. active in the radically the I enroll we're to

when a that probably X will sudden all it So done. of in range be

Anthony Vendetti

How do do Okay. playing assuming come and that And how out, rollout? the training, you physician then in see terms compelling. anticipate in results that it's of you

Steven Foster

Well, some the our a couple we did restructuring organization. of of sales things. I mentioned

So little frankly, number our in a lower of normal training QX was than that because transition.

that number board on one, have you, I number people expand and bringing expect, that to we're I and So now expect what grow.

podium Anthony, with get I inquiries. or that other posters out data front either component via goes really more what that, the we or is like the that's physicians to of you, have in and think anticipate it, publications important clinical or presentations

our physicians workshop to can Right data I interested, now, cetera, we setting, we're get will can people chasing, stuff and compelling trying with be story, will to et compel data tell hope et inquire a this get check it into hey out, about, cetera. that I

on believe So got all volume. cetera. up training We synthetic program pointing tight model training the down, et and nice are arrows our now, and we've our

So excited and we're it. ready go to about

Anthony Vendetti

in think the transition, go makes by sense you as of what's this terms end force, Okay. that And you through sales then number this of the year? just the

Steven Foster

organization? sales the in number The

Anthony Vendetti

Yes.

Steven Foster

Yes.

before, we've and handle to as sense XX, as volumes too go up a in of around to bigger personnel first these help make et personnel entrenched sales support, out to are X cetera, be our et So to regions with is surgeries, early go the geographical to there, put much it have X who stages. X a and for with anticipate training geography. as what we distributors, clinical support it of local the to build personnel direct sales to combination things in case surgeries, guys the gets grow, of that to well physicians as nature. to early management cetera, that about we country independent And here talked set regions things build nature. their of those And may really off coverage, services, to job people interface We the as into

that's way model throughout X our and be So at the works XXXX. year calendar we'll the

Anthony Vendetti

not early what's on know Okay. fixed maybe it's lot but I should you're at costs, systems kind pace, of single Great. margin if lastly, of systems? sort just volume, the you've a approximately the a X And up. normal these ramped terms then and these them in at, let's gross on of of of What be stage, but of, X say, building margin

Steven Foster

fair boat as leverage. at in as XX% from It's Yes. volumes that about volume, and I as jump the you're baseline, well, Dick let early I'll here we're we can when up at we question. stages Van the can see that gross we're not in say that go the there full talking but a in volume margin. Steve We will grow pushing

undue organization quickly? be to we going So Steve, our model can on do we're you encouraged. We think stress a forward organization. the comment with mid-XXs putting without margin want on real that

Steven Van Dick

it's Yes. the the add that Los material us right -- the not relatively much team cost the of just implant I related now, operations goods to the to which in in overhead cost comparison so total Gatos. would of sold, includes small that's located really for our because component

semi-fixed. of that as have are that we Steve go high our relatively indicated like are fixed, So volumes up, percentage a costs

and a and the Steve that our hospitals, revenue our as revenue margins getting XXs sales on we that should very so with of And mid-XXs doable. year, X. between think as the mix grows, begin And depending think volume margin the indicated, actual ramps, we margins kind during is the as maintaining into ASCs

Operator

would to I Mr. back call for now the over remarks. closing Foster turn like to

Steven Foster

and Well, your good questions, I thank MZ like than thank everyone update reach will you you, our growth. to And we today please with were assist. to forward you to some our reason, wish more ongoing and continuing answer progress IR unable any day. Sherry. of for our who be Group, firm, happy a of to out earnings on I'd conference joining for look to call each to If that,

Operator

today's Thank will you. conclude conference. This

participation. you for your at You may lines this time, and your thank disconnect

Tenon Medical (TNON) 14 May 242024 Q1 Earnings call transcript