Treace(TMCI) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Fourth quarter revenue was $68.7 million, representing a 10.4% growth over the fourth quarter of 2023, at the top-end of previously announced preliminary results [22][28] - Full-year 2024 revenue was$ 209.4 million, a 12% increase over 2023, also at the top-end of prior guidance [28] - Gross margin for Q4 2024 was 80.7%, down from 81.6% in Q4 2023; full-year gross margin was 80.4%, compared to 81.2% in 2023 [28][29] - Fourth quarter net loss was $0.5 million or$ 0.01 per share, compared to a net loss of $6.3 million or$ 0.10 per share in Q4 2023 [30] - Adjusted EBITDA for Q4 was $11.1 million, an improvement of 322% compared to Q4 2023 [30] Business Line Data and Key Metrics Changes - The growth was driven by a product mix shift, increased adoption of newer technologies such as Adductoplasty and SpeedPlate, and an increase in active surgeon users [22][28] - The company aims to capture a larger share of the remaining 75% of bunion procedures performed by its surgeon customers [20] Market Data and Key Metrics Changes - The company has a growing base of over 3,100 surgeon customers, representing a significant audience for its technologies [10] - The U.S. sees approximately 450,000 bunion cases performed annually, indicating a substantial market opportunity [10] Company Strategy and Development Direction - The company focuses on expanding its portfolio of innovative bunion solutions, including less invasive procedures to attract a larger patient base [11][12] - The introduction of new technologies such as Mini-Adductoplasty and 3D MIS osteotomy systems aims to broaden the appeal to surgeons and patients [13][15] - The company is targeting all four classes of bunions with specialized solutions to maximize market share [20][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the setup for 2025, expecting revenue guidance of$ 224 million to $230 million, reflecting a 7% to 10% increase over 2024 [24][32] - The company anticipates break-even adjusted EBITDA for 2025 and a 50% decrease in cash burn compared to 2024 [32] Other Important Information - CMS has significantly increased material reimbursement for procedures associated with Lapiplasty, which is expected to positively impact the company [23] - The company has a strong balance sheet with cash, cash equivalents, and marketable securities totaling approximately$ 102 million as of December 31, 2024 [31] Q&A Session Summary Question: Thoughts on revenue pacing through 2025 - Management acknowledged Q1 as a tough comp but expects higher growth rates in subsequent quarters [38] Question: Impact of new products on ASPs and unit volumes - Management believes there will be more of a procedure volume play rather than a significant shift in blended ASP [44] Question: Profitability and leverage components - Management indicated natural leverage from a more experienced sales force and reduced aggressive hiring [52][54] Question: Early feedback on new products and competitive dynamics - Early feedback on new products has been positive, with some surgeons returning to Lapiplasty after trying competitors [58] Question: Thoughts on the Zimmer-Paragon deal - Management refrained from commenting extensively, focusing on their own growth strategies [66] Question: Clinical outcomes of new osteotomy solutions - Management emphasized the importance of three-plane correction in their osteotomy approach for better long-term outcomes [72] Question: Utilization of new osteotomy offerings - Initial users of the new osteotomy systems are high utilizers of minimally invasive techniques, with plans to expand the customer base [99] Question: Update on SpeedPlate attach rates - SpeedPlate's attach rate has increased to over 50% of the overall fixation mix [108]