SRGA - Earnings call transcript Q4 2021 | Surgalign Holdings, Inc.

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Operator

Greetings. Welcome to the Surgalign Holdings, Inc. Fourth Quarter and Full Year 2021 Results Conference Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Chris Thunander, Chief Accounting Officer.

begin. may You

Chris Thunander

Good Surgalign operator. thank for you Thank Inc.’s afternoon fourth the Holdings, quarter joining you, and conference call.

on Executive Lyle, Joining President today the Terry are me Rich, and Chief Chief Officer our David and Financial Officer. call our

various the that me other will statements and management’s of based are risks on forward-looking. start, discussing The call conference current we disclosure. are on make general. These we the with earnings following expectations. subject associated Before will our be and this business let and economic matters involve to in They uncertainties environment statements are line with

the Our may Accordingly, we of you results during on our are to these to statements concerning urge made statements. about reliance information undue consider not expectations these to about the and call. actual forward-looking no the accuracy from events place make company that vary statements. future We all our as guarantees

certain year. I in then I well Terry over results through Investors will to call, recent to the GAAP non-cash of plans overview uses core non-GAAP release, performance and competitors on also indicative with tables During U.S. coming measures as are are between website. can our of Reconciliations as basis. and U.S. our that and our an Management our to our well call providing the conjunction and On performance by section results. fourth relative which performance other guidance to turn compare information the forecast will in our the decisions. found measures progress presented strategic that for we externally GAAP in Management against for call, financial our earnings not financial present and provide for compensation walk a financial begin taken accompanying non-GAAP excluding investors management believes to XXXX. as useful operating plans non-GAAP of our be non-GAAP today’s our quarter expenses benchmark the measures will both for information as certain certain

we then this revenue line compared the year $XX.X questions. decreased will million COVID-XX-related with primarily open Global due spine in was fourth was review million The revenue quarter period. demand Starting prior a the decrease of for We $XX.X for for $XX.X to result to the the fourth as a the of the $XX.X quarter. for in prior revenue revenue year million profit headwinds revenue Domestic XX.X% quarter compared million prior the was Gross closed of cash of compared or $X.X $XX.X in million administrative million fourth $X.X in and year to financing, or was million compared compared quarter. million million million ended quarter. XX.X% to was quarter expenses to of $XX.X of was of international in quarter to the approximately $X.X in the of revenue $X.X in quarter equivalent. proceeds $XX.X million and an the $XX.X We compared prior a quarter development Adjusted $XX.X net loss for Research the period. expenses and million equity the a the General Subsequent were in prior the year. XXXX. to year quarter, prior million $XX.X compared $XX.X quarter. fourth with with million were year fourth million cash in loss EBITDA the end of and raising million. to the $X.X

the continue digital will our investment allowing while for strategic strategy. cost we with continued Moving control into forward, efforts our

Turning to guidance.

million year in revenue we full $XX of be range million. the to the expect XXXX, For to $XX

but by headwinds in macro experience in the increased January to continue are and early We February demand encouraged March.

the but of down fourth in expect we quarters the XXXX. sequentially quarter of compared a the XXXX, would each of quarter remaining sequential first be As expect would result, we to to growth

remainder the to field during return a environment the like third Terry. from incremental in call as well into over the I HOLO placed of revenue to With would the We are to and XXXX late a forward to units contribution looking turn the more in year second a positive as operating quarters. normal that,

Terry Rich

Thanks, Chris.

continued His track helping and into our XXXX I’d turnaround He record in launching will technologies. as phase of recently like XXXX, and experience we HOLO. and high-growth success our efforts novel over immediately our accomplishments us welcome David of financial expertise our a providing of new move outlook public David? who a make early CFO, technology reviewing March. appointed turnarounds in Before decades for our company progress impactful X David be commercial Lyle, with has joined proven with to companies. leadership has in

David Lyle

the for am Terry. want Surgalign. to warm have how you to I joined I express welcome, Thank excited

care the health medical space been recent years, devices, blurred. companies and rapidly the advanced health digital in between lines has technology have As

cutting-edge the Terry. of While with learning exists the technology, building machine call Surgalign and the improved platform deliver already change to not With I’ve potential I this and the I the very AI Surgalign. spent and have level world-class the what at is tremendous its its health has future like am intelligence-driven believer here that to health exponentially, I that of is care with much believe involved to forward about with seen care is way most care. HOLO that I can technology technological am to revolution value a look what career velocity. sophistication increased outcomes patient of to my I’d shareholders across the firm offer, organization back over very provided. of health same Having an with working to turn excited

Terry Rich

important of products several plate the navigated way chain best biomaterial products, the portfolio. ViBone We during our be put throughout our issues FibreX, successful headwinds that longer our Moldable and ourselves progress BiomaX. of number next-generation in several the the our XXXX, position cervical relaunched to the we impacted supply called and Thanks, over We our through of resulting a launch CervAlign, updates term. including David. made in to to year made solid faced hardware team Despite

the of steps new and line by portfolio U.S. a launching broaden interbodies We also to both in titanium the international markets. took

our support We the the evolution health made digital of our of to we our addition, and a the strengthen In business bolster throughout company. becoming in ongoing capabilities to continued hires key experience platform. HOLO health drive to development organization towards optimize digital help and

also our realigned across commercial organization We markets their to to them customers allow in serve globe. respective better the

we material during warehousing Most build XXXX, importantly, successful for team including RTI As is to foundational all their XXXX growth part I’m build believe ERP a our all organization implementation while for what year difficult we our solid year, we at foundation but the improved to continued thank the to same of was the healthcare our from a work I proud customers, of hard want what to all of remediated able this work. our system members a innovative the we time for efforts operations. developing of within a technology our our following reasons, for separation the were in operations while consolidation world-class new significantly accomplish weaknesses. as delivering most we and obvious of industry.

trajectory invest, healthcare macro the our financing. small our on existed more well the launch secure to bolster equity and it has support thoughts as to believe with balance context was XXXX, capital its functionality. as sheet. companies felt around critical recent our allow turning We across development our the the HOLO for associated events to ourselves initial the to want markets, platform continued to cap volatility in of uncertainty of significant that the we the to on capital I prudent Based provide valuations globe, ongoing equity commercial of Before

business. to January steps while growth to continue towards our strategic we of during the after on invest equity states. in surgery autonomously key XXXX, collaboration structures with and Portal, XXXX, ongoing their and we support our investment continued of squarely to and commercial a spine developed Turning to we INN. products INN medical identify the pathological partnership areas ability Networks a segment time it identify HOLO. fully of through has and Inteneural of possible first took with focus AI the neural we success We our In of HOLO be worked arena in the leverage the the evaluated our decided HOLO to help the for or platform development technology of hardware images early platform to new the launching and technology progress outside technology proprietary INN the which within focused

to Our apply learning believe work AI power and at ability the machine the fully will INN team with has us appreciate allowed and technology, of AI our accelerate transaction healthcare. to this to their we

potential disorders, future efforts stroke address Importantly, into piece HOLO neurosurgery. dementia, foundational a leverage and tumors, this this a autism, to and by platform, structures. We technology to plan introducing functionality brings combination to our of move facilitating neurovascular the variety another wide applications to technology development aneurysm, including intracranial

that lumbar we January, procedures. Receiving the represents FDA digital offer X the surgical analytics augmented has The to and and platform procedures potential critical System received surgery HOLO building is a clearance led use in Portal As and future predictive result over reality, culmination Portal toward initial way of the performed. XXX(k) foundation a System a of pioneers within milestone the for development, spine in HOLO clearance the the leap significant of years of AI in announced the step quantum is for and a the by fields. are surgical for

commercial now moved launch. early stages into in our clearance have With the of initial hand, the we

and We before efforts approvals to the negotiate as capabilities. various number demand has throughout exhibit at discussions our leverage platform’s new with technology. the the for the key conferences the extremely system and a a encouraging, focus will and currently year work demand drive to elements in organization of commercial implementing required they been hospitals to are we Early

from data completed in look during early year. to we have running commercial to second the We leverage benefits of shift support we and as be XX the real-world Using into and full U.S. first critical to in on adoption. These utilization generate XXXX. can learnings sites expect XX broader and we up early expect launch adopters a that be will these this sites, quarter cases to to the expect to platform the

We are future at Surgalign. the incredibly about excited

approval on by outcomes. a officially digital significant through approximately can navigated the and evolution transitioned organization are into have industry. focused the HOLO ways have since we a regulatory amazed who the I ago. HOLO of joined an I’m in and hand, INN it in revolutionize technologies company we as months patient improving power healthcare our health With initial We XX

spine application health was operating first inside the of offerings The digital room our surgery.

to a the contribute the core OR continuum one other individually the like can one that care are opportunity steps I’d see However, of for and component from we turn a advanced steps a patient’s technologies. spends journey. There Q&A. represent of of outcomes each variety intelligent to to massive involved benefit time today. with and capabilities those patient With our Each every collectively their in is that, just

Operator

[Operator Instructions] Lake from Please Our your with Capital first with O’Neil Street Brooks question is proceed question. Markets.

Brooks O’Neil

I talking and I have are can hospitals, bringing to Terry, commercial the as welcome of with finding couple you Good with the guess a David. you it afternoon environment. Terry of HOLO bit to sort a and relates start you I a would of off, about tell are in what into out questions. just doctors like marketplace little as us economics

Sort the How little things? will revenue, product on us of generate? give generate of will the – what what of a revenue Can those will you that? product color kinds kind it

Terry Rich

absolutely, Brooks. Yes,

There very we excited these help technologies we is how that looking first things articles guess think are and put on been all, deliver suggest about I has Internet can them that I out disruptive that the contemplate much surgeons the conversations So, are outcomes. of technology. everybody to as the patient having, forward numerous

has it believe system about our and offer. excited is advantages everyone some that to So, significant

and already we really the per models Brooks, on we suggested unit variety plan depends established the other The a have million And just of per $X that’s of or it or generate As market, in combination really robots there, year. $X.X and whether between it’s things. out million prior, the hospital. to systems guidance are things

there options, fee are leading rental, with sale capital is there is but we use a agreements. or So, lease per

to going need that types customers to are in to technologies. helping the these We of our aim have flexibility secure

Brooks O’Neil

to great. to the based working in say, a That’s revenue product earnings on kind evidence as the you seeing way? potential that success are so the marketplace suggest enough And of it the you in you and what through are be significant sort far, would has commercial classic have of you

Terry Rich

Brooks. absolutely, Yes,

excitement are and conversations to, continues excited the to we of clearance showing very are that the we interest We as product the the we the of are high. level encouraged and we having. currently universe continue, that by And be to have surgeons since expand very

looking the order. we very here to short commercializing in So, forward are much begin product

Brooks O’Neil

Great.

one me ask just Let more.

I you products about talk say Can as for you the thinking in of heard are to the XXXX new that and sort you device invest traditional in business. of how I what of portion are continuing spine think I just you about now think beyond?

Terry Rich

Yes, absolutely.

we Brooks, took procedures. in out business hardware that broad innovate. could as to over handle have came and we you So continually application you spine, of know, what was as But had and RTI most that be very traditional updating orthopedics

And so it’s time us some get here. to taken

we XXXX. quite them, a out Today, in RTI, fully of number engineers As came are had of zero of we got we have staffed. July

exceptionally MIS be there. look compete two of that are the market. process introducing currently, new have with in HOLO interbodies, releasing are top in will and in believe we systems an We we will later in launch we well will screw to systems of year, our pedicle we And the course, titanium compatibility. system And this open

Brooks O’Neil

Great. excited And Thank I see how unfolds. very to much. you am XXXX

Terry Rich

We too, Appreciate it. Brooks.

Brooks O’Neil

Yes.

Operator

next with Craig-Hallum. Matt Our from question. is Please question with Hewitt proceed your

Unidentified Analyst

like be Thanks are guys. or for performed to progresses? on the Do still thinking Hewitt. with margin for This on in we the it first that those launch expect first sounds for as benefit you should this about procedures QX. be Hi HOLO taking initial I procedures to initial Matt you how is Lucas guess gross off, track questions.

Terry Rich

the but have units to units Yes. to Absolutely, by end they the will again, of get XX looking an XX impact, year.

QX we will would their greatest suggest and place QX units the I in that contributions have in QX. So,

Unidentified Analyst

Okay. it’s then with finding fade, starting are that guess your Fair in variant sales get to enough. I Omicron front of And to reps now? the easier surgeons

Terry Rich

Yes.

you we the quarter companies, So our out to look, with we the to freeing their January, And enjoying are we returning be opportunity nicely. of normality, of see next access that having but most reps coming fourth get will over optimistic I out the quarters. are like will, very if felt up customers. impacts back think yes, and couple things And into

Unidentified Analyst

much. very all you That’s had. Thank Okay. I

Terry Rich

Lucas. Thanks

Operator

We have question-and-answer will the reached and for to the call session, of closing now I over management end the remarks. turn

Terry Rich

and operator all today. joining us you Thanks, thank for Great.

innovate the of with health future as on digital forward are look about next We excited updating incredibly our call. to to solutions Surgalign you we continue our and quarterly

Operator

time. participation. you and may lines concludes disconnect this your you This for your today’s conference, at Thank

Surgalign (SRGAQ) 16 Mar 222021 Q4 Earnings call transcript