TNON - Earnings call transcript Q3 2024

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Operator

Greetings, and welcome to the Tenon Medical Third Quarter 2024 Financial Results and Corporate Update Conference Call.

As a reminder, this call is being recorded.

Your host today are Steven Foster, President and Chief Executive Officer; and Kevin Williamson, Chief Financial Officer. Mr. Foster and Mr. of and the provide results September quarter present XXXX, XX, a will operations third for ended Williamson corporate update.

detailing the of release is press these released was A today available on company's Investor our section Relations website, www.tenonmed.com. results and

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

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

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

of in not discussion, forward-looking we may are is some affect our mind new revise statements our obligating in keep relating light or attempt that or will that important today's revision the Throughout any factors future events. to of that to Please present results to information we ourselves publicly predictions. release business

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

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

Steven Foster

help for Catamaran initiatives third to securing and focus for our In afternoon Medical. to today's results well market [indiscernible], System fund XXXX share quarter going pleased we our conference forward. Tenon as as to to quarter, good you financial call you, corporate to building Thank everyone. I proprietary growth the capital welcome am on continue and third update

year a revenue in same points X to XX% an XXXX, XXXX in increase months same X% the the Gross compared procedures of a margin the delivered utilizing basis we driven of XX% XX% ago in solid the X,XXX period. System. Catamaran Since for as rise improved year-over-year surgical beginning to by

mainly unexpected declined that the believe revenue quarter pre-authorization XXXX. to due year and X% over the was quarter, to X.X% in the over headwinds of reimbursement nature. quarter decrease second During third transient prior be we The

clarity, expect data these clinical We impact forward. issues combined recently coding published going will with our future positively

we and to maintain SE structure technical of cost forward a initiatives. at our sustainable to gross performance move access stable a profile. increases in term including revenue we've and recent commercialization improve growth, our second-generation and we the growth believe version due margin our considerable made the As planned will in revenue implant smaller Catamaran Across operations, near with advances, and levels

to study with during health sustainable introduce proceeds care-focused year gains to the SI result third our a institutional $X.X continue the analysis our SE we initiatives versatility strengthen and our maintain As anticipate from this in single the In our To a business the growth position and second commercialization. on to the took we momentum trajectory. opportunity growth to we share investment during balance September, sheet quarter, joint an market fund of of our for our advance the to of Catamaran publication investment approximately additional launch tranche of intend Catamaran of produced fusion expand system. sales proceeds post-market net with We quarter. equity This within use financings investor. the million new force, these next and combined received

Catamaran when profile offerings Catamaran, the of smaller line which implant prelaunch access and performing extends procedures. new the implant clinical a for physicians work joint fusion SI preferring initiated We've the alpha of

XXXX. the planned Catamaran clinical Catamaran October, Full procedures early partner SE physicians in in we implanting commercial performed reported has initial the subset launch Additionally, a is physician advisers from positive. Feedback that been SE. of late extremely of

in QX. referenced As restructured our call we operations sales in August, during earnings our completed

they strategy and With in develop QX team our we building continue as a to expand momentum 'XX balance Catamaran in saw solid in expect our area. future has significant of trend component efforts we Significant an is and been effectiveness the in late grow. be investment the System. of A into clinical this positioned place, progress plan to the With sheet, the to research growth. made for growth safety to and reinforce

joint As post-market Tenon's sacroiliac the study prospective, a treated disruptions patients joint evaluates of Catamaran multicenter, or clinical reminder, single-arm, outcomes with with sacroiliitis, degenerative system. SI fusion

this call period be Catamaran System study aims outcomes, reviewing a to patient-reported [indiscernible] its to show various In on events. that assessments adverse evaluated delivers up radiographic will and for months, we XX Patients the of short, promises.

across with the the early independent secondary we months SI experiences interim patients announced first study quarter, performed first primary during in peer-reviewed near clinical months. enrollment our the endpoint X completion this analysis. analysis treated of XX U.S. the in CT fusion publication fusion X we interim This radiographic As of clinical presents system and assessment an and radiologist XX with analysis joint sites Catamaran at by at consecutive

SI degenerative design Early and objective from patients includes to high as all time nonsurgical patient and pain safe technique optimize surgical and and sacroiliitis that scoring unique in pain months approach significant a This evidence the Results and throughout diagnosed invasive statistically months, or profile posterior posterior points. inferior Catamaran's failed outcomes effective with definitive joint provide analysis fusion approach efficient that invasive reinforces is our Catamaran X safety of analysis XX this and satisfaction results functioning thesis SIG at robust interim the reduction procedural Notable of less disruption is at Systems disability follow-up evaluations intended and interior, the reducing treatment. workflow. peer-reviewed outcomes. patient that disability response adult relieving minimally and in in solidify

lacking the peer-reviewed is The data. from and that data is performed and to surgeries demonstrating promises. compelling in It payers combined Catamaran our exceptional interim benefiting nearly of be a the with XXX with market clinical treating System date cannot for clinical importance be for profile note, physicians study, on this its the delivering within will Of overstated. research safety and an company segment physicians patients alike

activities expansion. physician workshop robust network us infrastructure of valued with the by commercial led for ongoing rebuild combined a prepared have faculty Our rapid

procedures medical them with on in experience and opportunities. with SI provide surgical Our efforts professionals and sales focus world-class workshop technologies targeting

approach provides interactive cohort Importantly, corresponding processes an X physicians XX contains to Tenon the during and the into when Catamaran business this process quarter our and physicians is patents We quarter joint. workshops structures include issued costs to third increase Tenon's delivery XXXX. in and and and unique to value U.S. our experienced our of restructured which faculty, hosted higher with and the enhanced bone the to SI joint overall. training approach proven processes Patent Subsequent within compositions, return sales prosthesis marketing in end, implanted us bone the the of about related enhanced in growth [indiscernible] that drug Office the

One directed with platform of serve alternative requiring industry. our implants protection commercial SI process competitive to implant. With position the our in is joint are and SI other structures configurations to removal the unique stabilization. to patent strengthen joint correct without SI meaningful technology These and joint failed of failed mechanisms

in related company an recently, CFO Finally, who spine our Steve during extensive technologies. on proven expandable as focus Tenon Van Kevin's we a be spinal he next the CFO leadership industry. we with smooth as Kevin early of into has the on of strategically a advance as and valuable implant in Inc., medical will of growth. of technology quarter, transition. Most has involved following medical ensure welcomed Kevin experience Dick, retirement role device the served record track to developing financial advisory a a Officer Chief instrumental Exelis remains our Williamson Mr. he also Financial phase

discuss our With that, I'll to financials. Kevin turn to it over

Kevin Williamson

Thank you, to Steve. today's join excited Medical part earnings Tenon of call and I'm be the journey.

in and for during CFO guidance foremost, appreciation my extend role transition Steve First leadership previous the Van and I period. Dick the to his

a release this is on of A [indiscernible] our financial give afternoon. I'll full wire results. that Now press crossed review our available breakdown the

quarter revenue a decrease $XXX,XXX XXXX, Our $XXX,XXX to XXXX. in of third compared third of X% in the the quarter was of

decrease was for Revenue the and the million ended compared the The XX% months number to months procedures respectively, of XXXX, of used. X as period period. the compared to were surgical in Catamaran increase to fluctuations in XX% which was year the ended in the X an XX, X%, increase million, primarily a for an XXXX, $X.X of growth due revenue system XX, $X.X in X of in same XXXX prior September and September

or and of sales third of for revenue quarter us platform reimbursement timing SE restructure experienced force, clinical Gross in $XXX,XXX $XXX,XXX was to combination our of impacts third new believe we become XXXX the XX% profit of will and and revenue operational XXXX. XX% quarter with of in or our that in moving We tailwinds QX forward compared in the initiatives. the data

XX% or ended was For year in XX, XX% September $XXX,XXX the to of of compared gross revenue profit months million profit a XXXX, or period. $X.X revenue gross of the prior X

Gross more of associated the third margin overhead our million Operating to $X.X higher third expenses costs to costs and increase of standard to costs revenue percentage for expenses of fixed totaled due compared XXXX million improved the operating number leverage the production in lower quarter created surgical XXXX. with procedures. of in absorption quarter due of $X.X the into as

XX, sales development. With period. the quarters. X a of XXXX, a in investment and compared priority are sales sales the million the that increases growth, future is expenses to marketing year expenses in totaled marketing to reduced the sales $XX in decline and decreased $XX.X force restructuring ended September operating and due and continued in months For expected a our expenses expanding expenses research in and operations million Operating prior

a loss XXXX. an $X.X the million Net third XXXX, of improvement net million from same the was $X.X loss for [indiscernible] quarter in of

$XX.X does XXXX, incur the For previous future. to XX, in in the period. net $XX.X September year the months losses The ended improving million, company million was from additional loss expect X

the Now turning balance to sheet.

XX, XX, with Steve, On XXXX, study, to aggregate as as proceeds main and care equivalents expansion million $X.X compared force cash XXXX, sheet million third including investor net cash growth space runway previously by of This of sales cash with $X.X discussed $X.X health investment Tenon balance our company continued supported our commercial in from initiatives, the equity and as received recognized of gross data the December investment sales our provided XX, access ample of proceeds further $X.X an a As launch million. on Catamaran additional SE. in fortified have to with and September efforts, to the September quarter. million totaled approximately market September, and capital focus Tenon's of is and during combined XXXX. in financings accelerate

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

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

Steven Foster

you, Thank Kevin.

trajectory and the ended first advancing We We supported our X expanding steady growth commercialization increase are of our growth this progress with notable the next year-over-year the Catamaran and revenue with increases our growth SE procedures. of in months our into capital strategy infrastructure and will a phase introduction strategically year-over-year resources, by new We believe margin. we gross continue platform. commercial in

larger of growth we have resources and to for We are coverage, momentum accelerate catalyst into also our the to maintain line will balance the sales be Tenon gains share a patient sheet, upcoming post-market excited which data believe strengthened of sight growth With drive will our to XXXX. next and of cohort payer the Medical. to market have phase

covering you I back session our I attending. like call with to now all our hand analysts. operator thank to to over for would begin the And question-and-answer Operator?

Operator

Anthony Group. from Our comes Vendetti first question Mr. Instructions] of Maxim [Operator

Anthony Vendetti

that? specifically say do it press case-by-case release, that whatever resolved? unexpected fourth into experience in been the that quarter? do the So issue you you Has believe your prepared a Or basis? What you occurred has caused preauthorization in reimbursement remarks you think was did headwinds. that Or continued

Steven Foster

the I No, appreciate Anthony. question, great.

as know, So regional. reimbursement you is very

are hey, was procedure there big codes discussed I'll What the hit recent meeting. we depending physicians always coding good a where at procedures the into pipe everything clarity confusion, miss they it, finalized get which was approved. and a of bit of lot and coming topic AMA anticipate conversation as meetings, And with belong run publish call from of down trying it's is that and a submitting good on to so preauthorization we've coding, which they

goes them coding think the tremendously show is then is I other of right? that data, review part to able to equation So go data exceptionally payers shows technology. we our and and Being in sure space cover the delivers and there It this lot competitors that make technology here a saying longer been is our has to recognize they are that than have. out clarity interface going help peer that with without important

And to and there. do so work do to have the we've now do And got catching tools we up so. to

right it do it XXXX. we into to improve, So improving, will do continue it we and as see believe, transient. as We see

Anthony Vendetti

Okay. you of only coding we'll the alleviate should pre-authorization In clarify some recently published think clinical but some the headwinds? not some data, of that, and

Steven Foster

our want of sure is that data what I'm coding. undue do does data a thing don't in is things without cetera, think the CMS, it does between manner, it's of picture clear. quickly issues and forward. right, to the There I with and back effective controversy our just But help in to forth frankly, Yes. supposed nature. really safe, clarity clarifies I adverse been coding clearing and The et technology that AMA, reinforce here, things, a make events believe says those thing. will We on a specific data and combination of the our X big the pretty coverage anticipate issue. going different we lot has that's and coding us

Anthony Vendetti

on system, some the in And the you have system feedback, terms just feedback. made recent feedback any that? physicians the based that describe you from then Great. changes Okay. of on to And would how of

Steven Foster

We Yes. have. absolutely

we these surgeons So we look smaller be anatomy things SE. and at these remarks, about in of version all portal spine is and prepared to differently. trained the talked to to And differently, every Anthony, smaller the access down a really As a of all we've technologies. the that SE do get And looks using all mentioned They things Catamaran therefore, interventional a smaller physicians pain right? a and aspects differently. work the physician implant combination before, were needs they the of and system, simply done. at have

positive incision, more the size, more miniaturization, our et to more going be be want simply answer. comfortable catamaran the believe, for with the for cetera. requirement a in They now wrong don't fits them. We sensitive graph, of technology. for to the et better big robustness better. patients. the the is those physicians. just time desire or is that format and cetera, with believe fixation, I that more that bigger that technology, physician the there's a And Catamaran right Some are want initial in be frankly, that's Others to SE size confident

this and like. is what -- needs their that respond to effort desires a so And system fits their fits our they for to

Anthony Vendetti

something terms then of expanding that doing Okay. Or more Great. XXXX? in sales is currently? the And force, something is that for you're

Steven Foster

Catamaran quarters, do targets et about settings focused, over on bird-dogging at, cetera. again, something cetera, That technology, active we practice to we're coming need expand months the street the is as areas, can opportunities, et Yes. feet or key be will we they happening the the really so of very the workshop in learn and Tenon where the into That are compelling currently. look and physicians geographically technology hear story where with into be very

street. where really out going energy that's So our now is on the right

Operator

remarks. over I no to this time. his are turn for now questions Foster There further closing call at would back the like Mr. to

Steven Foster

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

Operator

Ladies participation. and call. today's you Thank concludes conference your gentlemen, for this

may You disconnect. now

Tenon Medical (TNON) 13 Nov 242024 Q3 Earnings call transcript