TMCI - Earnings call transcript Q3 2024 | Treace Medical Concepts, Inc.

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Operator

Good day, and thank you for standing by. Welcome to the Treace Medical Concepts Third Quarter 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Vivian Cervantes Investor Relations, Gilmartin Group. ahead. go Please

Vivian Cervantes

Mark Good Quarter operator. company and to Officer; welcome will Officer. Thank Earnings afternoon, Conference third and Executive Chief XXXX John the Chief Call. our Financial be you, Treace, everyone, Hair, Participating today from

offer John of followed today. review on our third market close quarter financial During by will commercial for Mark the commentary call, after a our activities, results released

remarks. host will a We following prepared question-and-answer our session

at investors.treace.com. Our the can website section found of and the recorded on Investors our website. in Relations call press Investor This will release be of archived being is our be section

not to All risks. undue for Form February available Medical for of these third our predictions Before our the on events Litigation could we involve implied today's our anticipated All we our from on differ as like these Act forward-looking These a place various statements reliance obligation trends Any XXXX estimated to filings, forward-looking filed cause XX-Q Reform as year filed statements assumptions. results for during under upon by to current call that are intent that XX, to remind no of assumes well detailed protected Accordingly, statements. statements. begin, results the and to of today is statements. or Please uncertainties Form those should that full information, XXXX. refer our are it upon made quarter including relate XXXX, risks statements. would our events presentation forward-looking that will and Securities XX-K SEC forward-looking based or and forward-looking statements performance expectations you based materially are Private future Treace actual market all estimates statements material be or you or estimates current and these the update

I call now over the John. that, With turn to

John Treace

country, XXXX quarter time joining important you Vivian. busy third on recognize to this is you and We greatly Thank a us and taking our earnings appreciate everyone, Good for conference thank we afternoon, and our for us. call. you, join day the

quarter Our solid while drive reflect growth leverage. steadily our in business our improving to operating third the results execution

a system our the release we first to large of bunion entry the limited representing strategy increase the market surgeon market, metatarsal supporting XD market MIS penetration continue announced overall into Nanoplasty base. customer addition, and In to significantly expand our into our osteotomy

to product by at needs presence report to strategy Related portfolio on our aimed patients our continued our and pleased address further broadening strengthening the to this market surgeons. bunion the we're commercial both evolving announcement, progress in of

represent the we performed segment to XXX,XXX second the in we'll as of Lapiplasty at our pioneering to estimated market, annual introduce by of procedure followed metatarsal cases Just our the with U.S., we unique osteotomy MIS system with the and now of the first, Nanoplasty segment, Fusion Lapidus end currently be more in later. system discuss year, are the excited bunion XD bunion to into osteotomy the our technologies did XX%

significantly to poised our offerings XXXX beyond. and through expand and loaded is pipeline and innovation R&D technology focused Our procedure

the quarter. to Turning

platforms other the procedure new shift our introduction share continued surgeon as Third committed osteotomy of This forthcoming to such driven of was MIS in increases technologies, in other our customers volumes as quarter. we strong growth as newer quarter on growing representing the well our new surgeon trends, our base surgeon adoption XX% revenue was growth our of by continued and third also commercial our expanding product product from over technologies. users while these Building attracting are and active with complementary execution $XX.X quarter of demand fueled by the offerings million, for mix Adductoplasty increased XXXX. SpeedPlate, resulted and from that

mind, that release provide share of me with Nanoplasty. our limited our With now market color you excitement additional in for and let

XD is visible technologies suite offer needs We of designed and the comprehensively can Lapiplasty a limiting bunion was and in systems system foot. instrumented an to ankle address pain to provides patients combined the and of osteotomy to procedure and scar. team elegantly Nanoplasty, This believe while invasive size our incision experienced that foot incision hidden correction internationally market-leading on side with lifestyle Our a of with powerful bunion be developed surgeons single the and XD of conjunction performed offers system differentiated a relieve and recognized their Adductoplasty Nanoplasty surgeons reproducible highly patients. discrete through X.X-centimeter surgeons, minimally evolving a minimizing and

deliver XX% And integrate practices. uniquely in focused bunion Lapidus successfully bunion the around procedures overall and today. we of clinical new We MIS to techniques today's into performed sales surgeons' with XX% are are approximately we to force XX% needed of support fusion osteotomies procedure these expert our technologies positioned is believe and comprised our volume to we estimate the U.S. osteotomies market metatarsal using XX% and estimate

MIS Notwithstanding the a and and ankle foot access. from adoption and bunion interest broader patients, MIS technically the thus challenging, limiting by remains in patient limiting predominantly surgery surgeons increasing freehand surgeon operation, community

follows and an Lapidus strategy system. freehand instrumented made foot we Nanoplasty, market MIS Lapiplasty community. changing in With This broad democratized XD making to doing where ankle with reproducible and correction we're surgeon the reproducible, osteotomy our the it elegantly accessible so, challenging playbook, it, procedure a paradigm XD

our will the we explain the makes be annual XX% the me average roughly and of Lapiplasty our further X,XXX why we case estimate into why opportunity and bunion mix, When look of customers, base penetration bunion space existing immediate XX% represents great believe at the now Let and up of metatarsal into expect for Treace Lapiplasty remaining significant majority over their entry osteotomies. our a to market. accelerate we osteotomy we it

to utilize customer bunions severe within that as to over have utilization progressively We great over moderate Lapiplasty shown success their nature in system it time are flagship most our experienced surgeons those with time. they repeatedly increased applying initially more our have average and Lapiplasty,

to capturing multiyear is Nanoplasty bunion contrast, other immediate we wait or without utilization a In their By surgeons X bunions. for with mild cases moderate to years experienced ramp an pathway consistently the we advancement patients more have a Lapiplasty. alike. words, don't in osteotomy for that surgeons and sophisticated to provides surgeons Nanoplasty to with moderate-to-mild benefits solution apply more Treace for surgery to strong

are are these delivering. asking solutions and Our for customer from surgeons Treace, we MIS

metatarsal to meaningful believe already Treace. surgeons a new another We've on the based patients. correction positive believe osteotomy with XD yet customers on setting. of appeal and rapid We its advanced have their cases Nanoplasty the curve trained lab also to cohort we space feedback, we to disrupt metatarsal due vast in And and of engage significant reason today learning majority cosmetic have prefer strong to surgeon their opportunity can capability, the who emerging osteotomies and for attract Nanoplasty its a MIS consistently now

offering geared their Nanoplasty. the specialized We offering a foot towards of osteotomies. MIS base of screw implants coming is just behind second also for existing have MIS osteotomy surgeons fixation This MIS who use

to them reproducibility that their to surgeons and importantly, greater correction consisting segment offer designs improved achieve here Treace elegant is instrumentation of and help option goal bunion the XD gaining XD superior implant a known correction Our this is of for outcomes.

to space platform We later the our bunion on this more forward as to release platform with our we initiate market lead this continue deliver second We're and limited the technologies. quarter. pioneering look excited correction details sharing new to in to

status. on just you I pipeline technologies to which previous systems, want to on the X update their provide I addition commercial In discussed, new calls and MIS on osteotomy discussed updates

Lapiplasty our surgeon minimally pleased customers. to allows XD Micro-Lapiplasty be patented procedure a performed Lapiplasty now report fully is the incision. I'm our through system. First, micro to This invasive available X-centimeter to

patient-specific for Lapiplasty procedures. IntelliGuide guides Our cut Adductoplasty and

these reminder, a our As Red PSI acquired technology. Point utilize

access to commercial We expanded during and IntelliGuide XXXX. a with on pathway the continue technology half expect exciting to availability perform within number we of surgeons, QX this of full of our first procedures surgeon

surgeons approach. a with incision Our Adductoplasty through XX% the standard procedure to midfoot mini allows which Adductoplasty Adductoplasty smaller perform than our instrumentation,

with to full instrumentation access within We expect XXXX. within this surgeon the fourth expanded half first access the of quarter

Micro-Quad micro approaches stability surgical anatomic And is Adductoplasty. a high our small and SpeedPlate for as mini incision in new and This specifically SpeedPlate such Lapiplasty designed implant. fit

a in fourth the quarter coming. reach Micro-Quad expect of commercialization half late limited full first the to of release there's more within begin and We And XXXX.

pipeline we loaded, and beyond. R&D are significantly technology and and focused is our expand through offerings to poised Our XXXX procedure

hospital I'd XXXX. and outpatient released and XXXX including now to changes take implants effect for cover services on These case. surgical reimbursement. X, surgical in like ASC CMS on update payment procedures, to give facility January the for Medicare rates costs its supplies used recently an final

the with represents of for ASC for see the specific an to of the Lapiplasty used and $X,XXX Lapidus payment and XXXX. which has that outpatient reassignment code in procedures XXX% final increase used reminder, payment compared a of to is now procedure This and rate are XXXX. As an In hospital its for used XX% a we're the for to covered a $X,XXX, CPT typically or accompanying well-established setting, codes, our $XX,XXX code primary over XXXX. one APC-XXXX pleased rendered XXXXX, rule by includes agenda, of $X,XXX XXXX CPT Fusion increase products CMS

painful Lapidus of correction lifestyle pleased value final suffering bunion Lapiplasty patients rule are pioneer recognizes Fusion bunion the that the that As system, we the from deformities. the limiting market-leading offers

$XXX financial our to revising over We're which our year X% outlook. increase guidance XX% This compares $XXX to our to full guidance to of of reflects revenue to $XXX Turning million revenue. an now million, million. $XXX XXXX previous to million XXXX

expect year XXXX. to full we adjusted to XXXX, approximately the For full EBITDA of compared continue year improvement XX%

an infringement October I'd announced infringement unfair turning and lawsuit we Mark, patent its filed the competition like recently to patent and unfair competition. a call we suit. against over on Stryker update and Corporation On filed subsidiary, Medical, provide alleging our Wright that to XX, Before

proud that we patent this building develop since patent strategy property creating and system, to is and We've our instrumented the are We been bunion new and the U.S. the assert our correction to with of inception an introduce bunion a market. segment corporate consistent are rights. company our our enforce first intellectual in portfolio lawsuit XD of fact XXXX,

me let now that, to With performance. over our Mark? call financial Mark to turn the review

Mark Hair

was Revenue year used by products was shift in quarter that increased John. million, third adoption bunion Growth the mix sales and and from driven technologies, the product increase Good cases $X.X of over newer surgeons million XX% prior increase period in of afternoon, you, everyone. an quarter. of resulted in active $XX.X increased in Thank ancillary an the

XXXX Gross margin to the in was third quarter quarter third of XX.X% in XXXX. compared of XX.X% the

third from million in $XX.X operating innovation were quarter quarter of corporate operating and margin of in reported was increased operating XXXX. expenses product expenses gross quarter share-based Total support increase XX.X% the expenses The the compensation the million for gross Total reflect unchanged in in XXXX. expense, Third margin other initiatives. were relatively $XX.X third in XX.X% QX. of investment

to was net or $XX.X $X.XX XXXX. for loss per net per a $X.XX $XX.X quarter Third share million the million loss or same of period compared share of

improvement the an EBITDA loss QX adjusted to loss to $X.X in improved million, quarter third quarter Compared second of $X.X loss XX% XXXX. EBITDA XXXX, compared in Adjusted was million the the of XX%.

$XX.X XX, marketable as Cash, were XXXX. cash securities and September equivalents of million

me concluding, Before XXXX. outlook year to for let our turn full

year which X% As compares previous reflects $XXX This increase XX% guidance to $XXX we of of million full revenue. revising $XXX million. our million XXXX John mentioned, XXXX million, to revenue to over to to are guidance $XXX an

approximately expect to XX% continue XXXX. we adjusted EBITDA XXXX, year compared of to year improvement the full the full For

to me operator questions. let turn that, for to open over the your the line the call With now

Operator

Instructions] of first from [Operator Marcus comes And question Robbie JPMorgan. our

Robert Marcus

the the new start, Maybe e taking to for ask product. MIS questions. on I wanted Thanks Great. osteotomy to

market Lapiplasty? without now able you you Is feel important? You do you drove think to you'll this market best-in-class that did do clinical same came data? what to data, Lapiplasty differentiation How in And that in years about with the with to really uptake. surgeons get you X the going with be got and market the door as with with was and product

John Treace

a the were we it's for gathering the first Robbie, marketed It's Lapiplasty, And solid yet. several evidence didn't have John. really question. -- data. years we thanks We question. great that for clinical I the

So that was years. an took ongoing project several that

Lapiplasty, that the it with they supported the seeing. business were the their in building data that reinforced and were we then we and seeing success hands, were further the with came customers outcomes As

correct we Nanoplasty, have demonstrates be committed X get the -- fix data X that component we're With adding of corrected. developing and the successful. if literature planes osteotomies correction, evidence Lapiplasty that all have benefit sets. that rotation that to durability osteotomy, to osteotomy, those that and higher where and the planes are are that you going rotational made there's than in can all third plane We're The we scientific not those planes, adding is all so those to the

like feel in multiple the that. there's sophisticated we ways surgeon interest a So quite in market, we're and to osteotomy we more of bringing high a believe forth degree

Robert Marcus

Great. launches we Any the the as you've P&L? towards I trying next maybe come again, appreciate believe we product that. up EBITDA, adjusted Mark, a look recommitted the on as to Then year, the the of in 'XX end striving breakeven towards for of new lot year I cut of there's rest year. to 'XX. thoughts next down early on

Mark Hair

the we'll going Yes, last improve this how Robbie, talked EBITDA XX% last in this and get XXXX. over then year, we're our Mark. to adjusted we Yes, is call, remaining about year,

would year. we'll is be improved to started and do us middle down end that this what at just do that the to and an perspective we've from EBITDA adjusted should EBITDA XXXX. an leverage a breakeven showing drop better of the next continue the in of get P&L, year And position And to throughout so to

the in the EBITDA talked lot view. in the comes late in a fourth we've as again, year, full about that's year And the of quarter. past, A especially

Robert Marcus

And next into top comments on year? head as line any early we the

Mark Hair

early. that about products happy about we prepared what of new I a John lot these have remarks, bit a think talked coming. we're What in do little it's is his

marketplace. they to received will think just I want we how the really in see be

what get they're number, feel adoption we We line top a have more we that good But bit to about before EBITDA managing the But adjusted we want really about believe irrespective the as middle are time customers for. in asking more to of that think surgeon I P&L reason see every we the of XXXX. little to that cost the talk line.

on for come full the to year guide more So XXXX.

Operator

from comes question of Stifel. next Our Wise Rick

Unknown Analyst

hear to on year. positive we this during SpeedPlate, is start checks to continue This feedback Anton on earlier Rick. for our Maybe surgeon

the introduced I think SpeedPlate is these new XX% availability we majority with of quadplay the market, And being iterations the new you cases, highlight SpeedPlate ceiling for the supply in horizon. different do as utilization? in SpeedPlate where guess, recently with broadly, you've I And for cases design? SpeedPlate see of SpeedPlate the rollout on product used are now? the used was what the the being you larger and have but on design

John Treace

has Thanks for a been product SpeedPlate question. It's in game John. our real changer Yes, line.

cases. really are more Our of fixation certain in customers -- go-to they're their preferring it as more their and

We to design in allowing climb and that full more they're put good as but mini uptake. that Lapiplasty grow they the adopted sizes. be configurations have it's of the we fixation going coming, fusions getting really that seen exact and into the smaller surgeons and nicely did well percentage. percentage Adductoplasty, incision and larger launch embraced, without micro newer fixation overall with an now And new for think in We beyond giving are supply bone dovetail to robust it continues the larger is XX%, to foot, our numbers,

that and the So think in the market we keep we SpeedPlate differentiating advances further. making line driving even keep

Unknown Analyst

meaningfully And All reimbursement great a margin being the long-term seem to through right. previous CMS is of you decision. margin that narrow relative pricing and basically means about kind ASC kind still headwind. right for hospital to kind gap that rate think outpatient That's the stable? Treace's to trajectory through it of reimbursement may mean reimbursement lens, mean what to as setting I us gross think mitigate the from I new perspective? on of final would help a Could me hear. the

Mark Hair

ruling the those with and rates. reimbursement final pleased CMS with We're Mark. is associated this Anton,

into provide some event continue necessarily specifically. XX% greater some next our year. at access accounts, customer be or gross Lapidus this target procedure, far margin, And and this definitely can are Lapiplasty don't continuing we to are but sell change gross As type as look we'll a margin being to still looking minor these for our who it to patients a but we year, to may fluctuations there profile,

Operator

Richard of Truist comes Our Newitter next from Securities. question

Difficulty] [Technical

question next Ryan Our BTIG. from of Zimmerman comes

Iseult McMahon

This on for is Ryan. Izzy

think the thinking finalized you're are dynamics you just market right more in on competitive So particularly topic be stay Or it who the going be influence TMCI that How a you more will chance rate may now? on currently Do not tide about a of products? I the using to opportunity? to you surgeons for reimbursement see guys this gain how share, among rising of seeing the wanted might XXXX. do market

John Treace

particular really because at the could to with that report segment see be Lapidus patient a ways There is are we broadening access. us care. benefit -- It's to in to or a a on the and single report John. U.S. we may access year are market are this pleased out One those player we and we changes adjustments. that going With of interest general. outcome just largest see of different in to it next that were to of procedures They Lapidus significant Yes, demand how believe Lapidus play back the said, of we need in any sites lot

Iseult McMahon

the Got seeing of the next relative we following lab understand. Do we're to actual it. you that rates utilization that, for osteonomies. or of awesome towards even Lapiplasty just procedures the really opacity more if think about utilization And on up drive mix change opportunity I the to given in year. see see that

John Treace

better become one to get just out say. and going a think like. to potentials see XXXX I early that's lot theoreticals, play on how it's what of in mean to we informed things And and I look into need of there's that's too Yes. them. But

Operator

Newitter Securities. from Truist again [Operator And have Instructions] Richard we

Benjamin Goldstein

I'm the in me? that trends seeing was there XQ. I wondering for they're a in you're some of competitor Rich. reacceleration market. Can terms foot commentary know Ben It's you what on and ankle So from some hear into expecting

if similar? wondering seeing I'm you're So

John Treace

the bunion Thanks kind there surgery. on the foot participate segment, John. Yes, segment ankle market. and elected that some X in for it's question. uniquely of comments We Ben, have been highly

those other other companies and of portfolios Some diversified trauma include have that products reconstructive products. more like things

So our QX, led softening QX, to comparison other late in We our might a some guide what saying seeing. and with May. in these identified to be hard to business into make continued space in that our revised it's and companies direct which early

that we every year, largely and that QX an that end procedures see quarter And we said, in of as as expected QX of kind quarter. you pleased came third the fourth progress through the then accelerates them. starts With in tail we're acceleration bunion the at and

So pattern ankle would the in market, the market. the kind that bunion and foot of that's to we segment see of seasonal expect our specifically

Operator

And Danielle our comes of Antalffy question UBS. next from

Danielle Antalffy

good quarter a on Congrats here.

quick down at a implication for the XXXX question high for growth, Just QX midpoint. step single digits. is in on particularly updated It's and I a the guidance think, the

what Just quick number? XXXX. then curious sort are. in on And puts that of a push of the follow-up just that little bit Any a and hurricane to takes impact

Mark Hair

is Mark. this Danielle,

John fill sales execution projections. me growth in pleased and color start QX, definitely can force any Let in in yes, our maybe largely that our missed. the line was that with really had we're with XX% I But

activities talking like and launches QX provide was factored in tailwinds these in felt we as as As last been has really of this the some full when guidance year competitive the you May, think headwinds we back appropriately product did that of comp an well easier about about. all us. John for new of And year, we year

that rationing few in mentioned, our here bag have new of respect with you up are to backyard variables some as Florida. a Just a here come candidly we're there and couple in hurricanes maybe IV, lingering that

results, believe just So with really quarter it's guide of felt that but uncertainty. bouncing given pleased it, our all prudent to some QX of maintain our we third for

Danielle Antalffy

it. Got

bit it's or things Okay. I mean That's incrementally right better. actually high Treace helpful. little And growth feels on mean a like have it then bit I now thereabouts. a I sits, single-digit just to little push think gotten where XXXX.

year? mean the launches Appreciating say I that -- You've not cadence year-to-date conceptually. any of little probably but reason low next giving would grown believe, to end. product there actually far. to bit think growth double digits new you just about it trying Or the is given that safe thus is you're just this decelerate on double low is to a Treace guidance, have

Mark Hair

question a we that's talk something here. Danielle, Yes, great and lot it's a -- that about

rate a beginning we an market. barely got QX. to about, as had talked QX of and get and guide the implied has the things rate to single-digit we in growth we're As pipeline, them that growth in in been just have lot well single-digit We've

really of the just X Some in is fourth talking out are that these MIS coming John systems quarter. about

history So just have lot of a we don't yet.

got I Now has about But a a and year. sitting sales some There good our that been systems like and coming. we where for all We including coming, think lot lines. Nanoplasty right year some this feel out coming in We've product existing feel products are as several -- been we well. and about we order. -- now, as think products Lapiplasty next we think really great things I have a There's next those are there we're great challenges change. lot we've other And of force. year, of strong got

bit little a going customers bit bit as we're new it guidance and our adopt time, and this at more of gets we'll be then think closer. to ready a little little a to next wait give surgeon these systems, see year and prepared more I how into

Operator

I'm questions closing showing for would Vivian I remarks. time. it this back no to further turn to at like Cervantes

Vivian Cervantes

of close Thank fourth everybody, Treace behalf concluding look us Thanks, update of our On the our this we next to of XXXX. are we following operator. Medical, for forward you, call, and quarter afternoon. joining the

Operator

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

Treace Medical Concepts (TMCI) 5 Nov 242024 Q3 Earnings call transcript