TMCI - Earnings call transcript Q4 2021 | Treace Medical Concepts, Inc.

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Operator

Good day and thank you for standing by. Welcome to the Treace Medical Concepts First Quarter 2021 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to our speaker today, Vivian Cervantes Investor Relations, please go ahead.

Vivian Cervantes

Thank you, Jowel, good afternoon, everyone, and welcome to our first quarter 2021 earnings call. today hare John Chief company Officer, Chief the Mark and Financial from will tree, be Executive Participating Officer.

our released first During commentary the which financial we our a today, on offer close results quarter our The and can of of commercial be session. will the call, This call will activity website@investors.trees.com. and after investor our archived website. is in the the we answer and market recorded after the found press will release question being be of in section investor relations host review section

like estimates assumes those these Before results, place or current various these these as update undue information, based statements actual materially we materially differently, All upon statements call our begin, remind forward that our or assumptions, predictions to not relate securities well statements forward-looking litigation statements, events, is or should we to trees cause current material from implied forward-looking or All you differ statements looking risks, uncertainties and forward-looking by private statements. during based could the events would our all intent no and to market today's expectations, are statements upon Reform under made trends, future obligation anticipated, statements. and as that to statements. these available that involve estimated, of accordingly, Act any that on XXXX, forward-looking and performance, protected be or will you of are reliance

files with will john. April our in Exchange to factors section with business, initial XXXX, and with associated the over perspective our risk refer now of connection public please to risks the For call our and XX, the I offering, Commission the Securities description that, turn uncertainties list and on of with

John Tree

painful a journey to of and procedures board earnings company. market Treace surgical Medical, our of the started, Vivian, a we'd big team XXX,XXX off. shaved individuals, that over XX affect medical lapiplasty unmet for group anatomy been a generally that Bunyan and we to acknowledge opportunity, can severity in a from the for is of the drive million of and of candidates getting and X.X to need, good choose our natural and our of surgical we increase On welcome so so their plus time, billion only all and runway X.X foots in like these, a behalf At symptoms relatively system. the pain, US. us and X% in this approximately a in in year traditional surgical limitations annual surgeries call US each just This of thank novel, time, there this often million you have of bunnies conference patients population, over proprietary the penetrated back new it's supported and traded performed past, moment pain, attention annual share from estimated translating to X.X ahead were we who about afternoon, commercial Bunyan's adoption restore are first a the joining seek relieve to and normal lives that about And to toe worsen in thought Bunyan's procedures, side their emotional management you estimate everyone, as take addressing we're us, bump of our on surgery Thank population a on US, given Treace in limited the publicly Bunya million to shareholders activities, $X mobility, the market XXX,XXX of early where Medical, they large about so X.X% the we million US long efforts, doing, and bone burden debilitating surgical that can and candidates. are including considered suffers simply be a severe patients get about yet

However, actually bump, known dimensional three associate more producing unstable originating out the as has an in Bunyan. allows joint shift mid the from that to metatarsal entire foot, metatarsal that and of also recent the complex this joint demonstrated deformities fungus with the science joint, we are both clinical tarsal unstable bone rotate alignment it's and the

again deformity, corrected has this today, traditional realign clinical and metatarsal Due and metatarsal that indicate procedures, times deformity, these treatment address known fusion, fusion is very as greater literature, Lapidus, the that rotational shortcomings, to entire and fact, this cut to is approximately the contributing XX% of and recurrence to of is XX% recurrence are some bump correct osteotomy where important as a component. Bunyan plasty. observed rates. address joint, to the as much different in fails unstable focused high joint one in as surgeries deformity, the in as are to Bunyan fix, is high component historically be XX% of inconsistent surgeries and is metatarsal component of the in surgeon-to-surgeon. to this rotational even historically that rotational metatarsal Lapis more as studies which with been the that's outcomes That it nothing this sometimes from alternative of recent metatarsal have it technically while more and it bone, and origin lava XX% risk attempts with associated the rates, we performed procedures, from case-to-case recent the below said, conventional that component correcting the that such half freehand returning, osteotomy, challenging translates and to of surgical a tend is overlooked and a the its In with osteotomies, not is inward, do bone to it's addressing on important high cosmetic volatile operation, primarily rotational XX Bunyan's unstable to failure the the known the bump, the Approximately today Bunyan reliably does a shifted meaningfully

lower generally joint been rates Lapidus literature. Given clinical the in than recurrence a osteotomy, rates cited is the have with procedure Lapidus high fusion, unstable secured XX% although as this in as associated recurrence is

is sell than non-weight a restrictive a to as osteotomy, longer and often with Lapidus up a bearing an week’s involves and hard addition, more six In eight typically much patients, cast. recovery it to in to

couple patients allows only reasons, Lapidus this positive month backdrop novel have is against college just endpoint on on by XD of outcomes in half of isn't For the a post-surgery surgeons’ datasets, option. with Bunion those for recurrence lack consistent primary traditionally that readout that an to only clinical following At radiographic, the to protocol, a recurrence correct starting we that to all first the XX at follow XD, prospective for initiated consistently in a of months. our our interim endpoint consistent, delivers so this pleased correction the osteotomy interim which dimensions Align effectiveness of the a we've the the within to and point rate days reported the weeks combination the we scientific addressing post-operative clinical of of of of of we to are XX viable a with six and literature lapiplasty, bearing aligned previous the patients, a developed classy XD foot to to on XX programs a our still instruments, severe Bunion three final announce lap This patients, XXX of these classes Bunyan, well a as just to data total they're reliable of and Bunion encouraged for positive all recurrence a we presentation, of approach patient body ways quickly at both and few ankle rates to rapid at favorably recurrence boot, and embarked It's analysis, primary comprehensive of XXXX, prior provide proprietary post-surgery. maintenance including reported studies build data empower on methods classy at deformity, builds in typically several procedure, lab the drive In months maintain weight implants, and support, implied concluded, including one study fusion months dimensions out of positive Building a XX lower clinical believe the our provide an study novel evidence the return to recurrence component demonstrated podium go been wait reserved correction three recently as of designed the relative and system, rotational surgeons XXXX, annual X.X% for recurrence trend in has on upon American most this osteotomy joints. of rate a were correction evaluate multicenter patients conference, fusion. to and a in significantly and is weeks studies, XX adoption our of awareness we that surgical study, we unstable data compares were quite patient the and up Lapidus therapy.

with many traditional days the significant at quality also Importantly, life, at weight months maintain measured weeks in approximately to versus demonstrated a improvements and and for aligned an data data booth months. reduction early Lapidus pain the interim to XD eight bearing return six showed XX eight also of procedures, six

remain are of penetration that, to call financial of our annually lack procedure of satisfies to over data well the of growing by comprehensively encouraged treatment X.X% body of patient system, As procedure QX covering and deformity. needs of NET, effective education through abundant and pain, and clinical Strong such, deliver performed methods market surgical and in serve barriers, large to and education caused commercial all the go aim active penetrated we're that real by need from With than classy to to and our broaden of of we surgical datasets, life unmet to I'll are world [ph] with our XX,XXX Bunyan this combined, footing a our performance, we also more patients normalcy quality addressed Bunyan we our our XXXX. mouth, year. we classy impactful testimonies the surgeon believe data and with the in turn programs, seek know awareness the system in procedures flashy surgeon benefiting US addition in premium word believe the more XXX,XXX Mark servers, overlap who mobility in now we classy from on reduced the deformity. lab we We're as to initiatives, optimistic evidence direct of under lack efforts, and designed care adoption our traction market clinical relieve to solid which to reimbursement instrumentation Early We high performed a the positive a approximately expanding surgeries Bunyan differentiated favorable with US. team, creating quality economics. over demonstrating initiatives intellectual optimistic reproducible are sales return patient property cautiously positioned estimated Mark. their

Mark Hare

lap the of expenses full direct months. per In first due the lack of active of increase first classy XXXX to the lack utilization year procedure versus an the the quarter, ASP of gross in lack kits with approximately representatives, and blended channel plasty with revenue in the $X,XXX, exited XX.X to the was including case of joining $XX.X expanded XXX which the rates, expenses a an trailing preliminary marketing X.X Gross range by our higher procedure of customer surgeon kits to blended XXXX expenses at the sales XX% general earnings Thank X.X surgeons XXXX were expenses quarter $XX.X compared sales XX.X% X.X% first of first development of you, as classy increases XX.X% sold, generated XXXX, was from year's point general thanks the administrative million results kits million and April research year-over-year million, improving year-over-year in of of X.X of utilization one for is and quarter number XXth. In XX.X% development increased including Margin review. in operational the our john. quarter million. up and $XX.X margin in quarter Revenue And the price the on the to sold, over afternoon, sales of first first operating first a in $XX.X a XX% versus procedure QX million procedure the of SEC quarter with and increased efficiencies. prior $XX.X first filed the and in average the million, $X.X million, our research quarter, our expenses quarter of average XX prospective administrative XXXX. selling plastic This for was were ago, compares particularly and million, grew quarter kits number in and to we of again us increase of quarter XXXX to The as months to good year and of in end purse expenses total provided and of X.X% the to X.X, Total XXXX, $XX.X increase The X.X the of XXXX. expenses everyone, a least XX% the expenses average employee XX% trailing our marketing active million at on sales for XXXX. number in high quarter base operating increased prospectus in expansion quarter of basis XX which of reps million performing and led in in XXXX, total sales of first quarter. million

of First $X.X XXXX, quarter was per the million. of net in as and public approximately share period million, cents March including initial completed $X.X of cash loss a per net cash $XXX.X XXXX. of were proceeds loss compared XX, forma April, our for loss in Pro of share, or $X.XX $XX.X seven million, were million equivalents to million offering loss same from net cash $XXX.X or

approximately $XX.X from XX% XXXX me million growth million, project outlook over year of $XX we revenue represents fiscal to XXXX for to our XX% XXXX, which million. Let range company's from to revenue full to turn the year $XX

in seen outlook normalization see the reported typically better came trends to Project March, of in Our the pandemic in first revenue QX continue QX, in pre anticipated, as in up we assumes QX, to revenue emerge continued we be now in the over revenue line step while strength from QX back half in a we pandemic of than roughly with revenue to the we of QX with half levels recent the year, year. therefore,

we in let commitment growth question. mentioned, for well on believe, our call of and and turn John to our drive reaffirms the operator classy the the are of outlook to As to system that, business. lack over our focus your adoption we execution, XXXX me positioned to open our line With

Operator

Marcus Our first comes with question Robbie Instructions] [Operator JPMorgan. from

is open. line Your

Robbie Marcus

your congratulations first and Great, on quarter public.

John Tree

Robbie. Hey, you. Thank

Mark Hare

you. Thank

Robbie Marcus

Hey.

better the far like you're an IPO, you than volume sounds it it So, seeing in just hoping to thought, was in second as you quarter you into so market, know, is give going I going second quarter maybe could recovery? us here in what update the relates on

John Tree

we that know, line QX, we're Yes, we're you related revenue in in you be that roughly to, transition that COVID. time still in projecting emerging believe so and, QX reported mentioned as in really from with are know, we to

how especially by QX. out may of sort will business and from the we that's usual, seeing, heard the difficult with those the thinking the in With trends in like is the activity quarter, it's that we're you so said, encouraged why the forecasting line roughly we're QX. while and QX, really doing think have than know, somewhat normal that so we're, more backlog you we're from out we that play well, all that's, it's demand So, to a latter the challenging that some others, bit part little

Robbie Marcus

expenses as over and thinking year? are Great, trend revenues the how the move Thanks. about you the up, of of balance

John Tree

Yes.

now. will a the how So, some of it's to as came our think will changes and we so are DNA continue, similar lot pattern, you or expenses, a we going that to know, think, shifts, of trend lot a what reported. see But, the we expenses of a QX of public increase, continue in, I QX, we not in trends be company from about as we

Robbie Marcus

Great, thanks a lot.

Operator

Thank you.

Richard from Our comes next question SBB Carolina. with Liang, Newletter,

line your is So open.

Richard Newletter

Alright, Maybe start. you. thanks to question. guidance. taking just the for the for Thank Thanks

underlying little the ASP? activist expect of you to hire assumptions How rest year This bit you talk quarter, a maybe many you and that. the terms of, the of in appreciate surgeons? utilization Can for know,

John Tree

So, there. there's couple questions a

is the sales You surgeons, active So you're it year? active about how for reps? were mean, and talking last hiring many or

Richard Newletter

What are lower the of of the pitching to key talking firing? the what? to As assumptions? you to expect the and of balance any many Is accounts you the range, used we're that you build price range, some you bring assumptions the empty of just, upper about Or up the ends if build the up? and Red utilization? range? How on to

John Tree

new we've going that yes, so for the some are key of about to Yes, overall of utilization And, ASP. uptick of and come really in is so thanks surgeon. and blended our broader increase base back so lot a metrics which past, the utilization, and talked we question, really the which a this that surgeon across rate, those seen to in love customers, that we've

see So, to talked end know, that we're a just the that, play what's increases range factor high continue whether about. really you that of on those to, lower year-over-year, as we of that's going we

Richard Newletter

Okay. you Thanks is just in it quarter, the of calling the worth we're know, an and think is you you know. for just you the that. interesting trend, surprising in you calling, saw curious, know, anything that out that in you, And part that or the, first this second even I'm recovery early zone, into quarter,

good? year, doctor, the behavior kind during to more So, talked Xq to that baton know, it of you Xq, you taking to there's also if and osteotomy any is on the just be decisions as just the is curious, for I'm are kind the recovery, a cadence laughing the consumer, and of more full of then think

Mark Hare

more little know, know, we've far there. out we with With don't it's we've know so as pandemic, as there, bit that happening QX. year-over-year nice versus about, a from said, you we emerge to growth know, a the predict been QX versus encouraged that to versus talked be well. you shift you as, QX for substantial a we what had, a little osteotomy Yes, as you dramatic I challenging year-over-year, Lapidus, you we're other than a you bit growth what know, there's know, in know, said and, projecting, lapiplasty, year, last

we're we're that on guidance overall know our increased we're you guidance specific such on shifts year. I So, the qX. any we major year track know, the that, of and that for than know, don't the marketplace, we're not about giving you really other and in that qX feeling good seeing

So, we qX and now comments I don't portfolio. to how choose but know that many about your see too have we'll right qX,

Richard Newletter

you. Thank

Operator

Thank you.

Our next Gentlemen. question comes Morgan from Drury you Near with Stanley.

open So

John Tree

group. Hi

Drury Near

your that surgeons, quarter question. Hi, kind the, first COVID? of the training hey, you. talk But ankle how education some and Align interim data, how and and resonating just is the and of john. john, results. did you Mark, just demand to the start and more recent that conference getting pre even of on any company, gate foot the utilizers, But, for how's a the from thanks initiatives, Are just public out XD sense getting? feedback compared you maybe your taking coming the you presented Thank Hey, there? you meeting, you're could the among newer this your congrats current out and surgeons, as about just seeing your, just if for Are just

John Tree

thanks john. the question. it's Yes, Yes. Drury, Hey, for

a this sort the year, was from know, you standpoint, conference remotely. I attended. ACC also physical but offered lightly general, had it was some in They think, of limitations bass

good have So, turnout. they a pretty did

know, people right the of data bit, to I your work interim of that to know, just know, presented results, body think will, this just align about surgeon the towards said, you a and you more continuing news their the its is slowly build the XD as permeated our is operation. that relayed you been me more meeting treatment for that through convincing this clinical evidence way upon, in the

in firework very good data, incremental you definitely it looks the display, other you but, So, [ph] know, I data helpful procedures. that's, comparatively a think know, and wasn't internet that to general,

Drury Near

with just levels. margins kind But, Okay, for But, like of might likely through forward? going be for thank getting margins about you, but pre-COVID sounds gross of quarter, they're margins thinking the you. more talked you. at ASPS And, to you for gross Thank what about should Mark, course, are XX% XXXX, stable. you be sustainability this the it just

Mark Hare

Drury. great Thanks, Yes. Great, question.

several here, year, products. is So the the of have goods overall go we into coming just into different as and factors we materials our definitely on our eyes one cost that were

open And you on if a concerns, and so, lot inflation, of you have, know, inflationary know, that so we've is that bit margin, impact there we there's that, an we're and keeping a our of do eyes wide can little have gross on seen hospital very for that to have potential be some about, talked and those little We've networks customers, continue impact. pricing pressure the could be bit that also into from a us that with to we right may some that do. but, there penetrate, as would thing and get larger

we're going overall, into, backup QX, pretty right now for know, feeling margins about you of hopefully going So, forward and our good the into

Drury Near

you. Thank

Operator

And next your line Instructions] comes from Magellan, you. Rick with open. is Wise steeple [Operator Thank question

Rick Wise

afternoon, Good gentlemen.

John Tree

Hi.

Rick Wise

Hi.

start I direct me a have revenues reps. came we the XX% said eventually from know, talk the to If sales from channel. third with quarter, I your that guess agency sales revenues you've rep sales independent the time, over off Let remember of of correctly, come majority over conversion. can the third, going I And direct about something you're in fourth if

remind you help that transition how that us you that with Just understand, and cadence unfold is this at , where least? are to year, going now

John Tree

to upon we is full next independent Sure, with a the direct long of for year, build in supportive and the, discussed very our process, as will through and, year a you It'll numbers That year, will john, have we around you this hitting our time, of year to at that our mix we agency continue program right. that partners believe they're coming revenue and that we're be know, we've QX very we a into for percentage channel. XX% said, going XX%. that we know, from one, This And to the year I'll last strong, continue the ended larger progressive be the excellent, before, hit. need we company them sales some have take

that's question there. that hope So, answers your

Rick Wise

on are the in of by terms front. just the main place, us surgeon launched the definitely. on prime XXXX And more the the we're an Where you the we launched in factors And the this Can incision give halfway where end XXXX, remind we, incision, pricing mini in that Yes, on system margin? in of existing year. the I took penetrating honestly, the and base? full out release of XXXX, through just year update should impact that pricing? be period? one us And Is about helped pricing expected

John Tree

base it have, you did as sold actually of to it factors didn't elevate multiple accessory the a know, more of products and price definitely there it own, well. higher our favorable our in selling a going were it pricing, its just in kits average including, tailwind there Yes, was being

mini it the and X-rays and to it. acceptance, system very know, itself more surgeons small seeing lot uptake, great, more incisions of we're pictures a traction as and think far enthusiastic gain about clinical As clinical you continues I broadened incision some of the and

to doing that to as practice, in more implement their still Doc's we've more future. it's for more to expect we're users see been swap of mini we're patient are apply the it it. build, communicated it training lap starting finding and this think in are broadly year, But, and I not going and available it's the before, already a So, back going for and I application, have existing the to their new and progressive it's ways rollout more for to incision half to doctors continue that's the system out selective, think of the a way that our conventional classy still of surgeons be

Rick Wise

Great. much. Thank you so

John Tree

Sure.

Operator

would not you. turn questions closing remarks. for showing the any back over to time. to Thank I this further call Cervantes Vivian now like at I'm

Vivian Cervantes

update our you. Thank call behalf XXXX. Medical, forward we our next This close Treace of quarter of joining today. look second for it, you thank to everyone following us the the On concludes of

Operator

disconnect. This you concludes today's Thank call. participating, for now conference you may

Treace Medical Concepts (TMCI) 26 May 212021 Q4 Earnings call transcript