Financial Data and Key Metrics Changes - Third quarter revenue was $48.0 million, a decrease of 6.7% compared to the same period in 2024 [12] - Procedure revenue declined 10.4%, while dietary supplements revenue grew 8.4% to $11.2 million [12][14] - Gross profit margin improved to 71.8%, a 150 basis point increase due to cost savings from vertical integration [14] - Net income was $9.2 million, with diluted earnings per share of $0.22, down from $12.7 million and $0.33 respectively in the prior year [15] - Adjusted EBITDA decreased 20.5% to $12.9 million, with an adjusted EBITDA margin of 26.9% [16] Business Line Data and Key Metrics Changes - Procedure revenue was primarily impacted by a slower rate of new clinic additions and lower procedure volume [12] - Dietary supplements revenue growth was driven by the continued growth of the e-commerce channel [13] - The company anticipates mid-teens revenue growth from the dietary supplements business for the 2025 fiscal year [13] Market Data and Key Metrics Changes - The company has secured 44 state licenses for its primary pellet production facility, Asteria, which is currently supplying over 50% of the pellets ordered by practitioners [14] - The ongoing transformation of the commercial team has created headwinds for procedure revenue in the short term [12][16] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating growth from new providers, maximizing value from top-tier clinics, and improving financial performance through greater accountability [5][10] - The company hosted its annual marketing event, which attracted over 800 attendees, reinforcing its leadership in hormone optimization therapy [9][10] - The company is committed to enhancing its sales team and improving internal processes to support operational excellence and long-term value creation [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic path set for the company, emphasizing the need for disciplined execution and alignment on vision [19] - The company reiterated its fiscal 2025 revenue guidance of above $190 million and adjusted EBITDA guidance of above $50 million [18] Other Important Information - The company repurchased approximately 1 million shares of its Class A common stock at an average price of $3.28 per share [17] - The company amended its settlement agreements with key shareholders, resulting in significant cash flow savings [17][45] Q&A Session Summary Question: What is the current pace of hiring sales personnel? - Management indicated that hiring has improved, with approximately 85% of the targeted sales rep headcount expected to be reached by the end of the year [22][23] Question: How is the transition impacting the number of procedures? - The transition has led to lower volumes due to slower new starts and higher attrition, but efforts are being made to remedy these issues [24][25] Question: What feedback was received from practitioners at the marketing event? - The event was well-received, with positive feedback on the speakers and the overall experience, reinforcing the company's value proposition [34][35] Question: Has the attrition rate stabilized? - The attrition rate remains elevated, similar to previous quarters, with competition and internal changes contributing to the situation [41][42] Question: Can you provide details on the Donovitz transactions? - The company achieved significant cash flow savings through the amended agreements with Marcy and Gary Donovitz, which also included extended non-compete clauses [45][70]

Financial Data and Key Metrics Changes - First quarter net sales reached $184.3 million, a 3.9% increase from $177.4 million in the same period last year [12] - Comparable sales grew by 5.5%, marking the fourth consecutive quarter of positive growth [4][12] - Gross profit for the first quarter was $55.3 million, up 6.6% compared to $51.9 million last year, with a gross margin increase to 30% from 29.3% [15] - Net loss for the first quarter was $14.3 million, or $0.79 per share, compared to a net loss of $16.8 million, or $0.86 per share, in the prior year [16] Business Line Data and Key Metrics Changes - North America net sales were $149.7 million, a 4.9% increase from the previous year, with comparable sales up 7.4% [13] - Other international net sales, which include Europe and Australia, were $34.6 million, down 0.2% year-over-year, with comparable sales down 2.3% [13][14] - The women's category was the largest positive contributor to comparable sales, while hard goods was the only negative category [14] Market Data and Key Metrics Changes - North America showed strong performance despite macroeconomic uncertainties, while Europe faced challenges with a slower start in 2025 [8][13] - Comparable sales for North America increased by 5.1% in May, while other international sales decreased by 14.8% [20][21] Company Strategy and Development Direction - The company is focused on three strategic priorities: accelerating top-line expansion, maintaining profitability, and leveraging financial strength for growth [5][6] - Plans to diversify sourcing to reduce exposure to China, aiming for a decrease from 50% to potentially 30% by the end of 2025 [5][36] - Continued investment in customer engagement and product newness, with a commitment to expanding private label offerings [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the global trade environment and maintaining profitability despite uncertainties [5][10] - The company anticipates total sales for the second quarter to be between $207 million and $214 million, representing a slight change from the prior year [23] - There is an expectation of modest year-over-year growth in product margin, despite challenges from tariffs and market conditions [26] Other Important Information - The company repurchased 1.8 million shares in the first quarter, representing 9.4% of outstanding shares, and announced a new buyback plan for an additional $15 million [9][18] - Inventory levels increased by 2.1% year-over-year, with expectations to end fiscal 2025 with lower inventory than the previous year [18][19] Q&A Session Summary Question: Can you walk us through the impact of tariffs? - Management highlighted proactive measures taken to mitigate tariff impacts, including sourcing adjustments and cost management strategies [31][34][36] Question: What is the outlook for product margins given tariff exposure? - Management remains optimistic about achieving year-over-year product margin growth despite tariff challenges, focusing on strategic pricing and bundling [38][39] Question: What is the strategy for improving performance in other international markets? - The company is focusing on profitability and cash flow in Europe, with plans to drive top-line growth through product innovation and margin expansion [41][44][46]

Financial Data and Key Metrics Changes - The first quarter results exceeded expectations, driven by same unit revenue growth of over 6% and NICU days increasing by 2% [3][4] - Adjusted EBITDA was just over $49 million, significantly above expectations, leading to an increase in the full year 2025 adjusted EBITDA outlook from $215 million - $235 million to $220 million - $240 million [4][12] - Consolidated revenue decreased by just over 7%, primarily due to non-same unit activity declining by about $63 million, partially offset by strong same unit growth [8][9] - Practice level operating expenses reflected favorable impacts from cost management initiatives, with salary growth decelerating significantly year over year [4][9] Business Line Data and Key Metrics Changes - Strong volumes in hospital-based services contributed to the overall growth, with NICU days increasing by 2% and modest growth in maternal fetal medicine [3][4] - Same unit pricing was up over 4.6%, driven by favorable payer mix shifts and modest improvement in contract administrative fees [8][9] - Practice level SW and B expenses declined year over year, although increased on a same unit basis due to higher incentive compensation and salary increases [9][10] Market Data and Key Metrics Changes - The accounts receivable DSO was just under 48 days, flat compared to the previous quarter but down over four days year over year, indicating improved cash collections [11][12] - The company ended the quarter with cash of $99 million and net debt of $512 million, reflecting net leverage of just over 2.2 times using the midpoint of the updated adjusted EBITDA outlook for 2025 [11][12] Company Strategy and Development Direction - The company is focused on methodically reinvigorating relationships with hospital and health system partners and aims to be the employer of choice for clinicians [5][6] - The strategic focus is on core areas such as neonatology and maternal fetal medicine, with plans to acquire several NICU, MFM, and OB Hospitalist operations [5][6][43] - The management emphasizes the importance of being a reliable partner for hospitals, which is expected to drive growth opportunities [35][36] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the uncertain healthcare environment and economy, which influences their conservative guidance [16][19] - The company is actively monitoring changes in the economy and potential impacts on family expansion decisions, but does not see specific concerns at this time [17][18] - The management is confident in the company's ability to navigate challenges and believes that their strong balance sheet will provide opportunities for acquisitions [44][46] Other Important Information - Depreciation and amortization expense declined to $5.3 million compared to $10.3 million in the prior year, primarily due to practice dispositions [10] - Interest income on cash balances contributed to strong performance in investments and other income, which is expected to remain favorable [48] Q&A Session Summary Question: Updated thoughts on guidance - Management stated that initial guidance was conservative due to uncertainty, but first quarter results exceeded expectations, prompting an upward revision [16] Question: Concerns regarding economic conditions - Management noted that there are many changes in the economy and administration, leading to a more difficult economic environment [18][19] Question: Hospital contracted subsidies - Subsidies have always been part of the business and continue to be a normal aspect of partnerships with hospitals [24][25] Question: Seasonality expectations - Management does not foresee any changes in seasonality for 2025 and is not concerned about changes affecting the numbers [27][28] Question: Collections and DSO - Management indicated that there are no concerns regarding DSO or accounts receivable, and collections are improving [29][30] Question: Potential hospital contract wins - Management believes that focusing on strong partnerships and reliability will lead to growth opportunities in hospital contracts [35][36] Question: Update on divestitures and acquisitions - Management is comfortable with the current portfolio and sees favorable conditions for acquisitions, indicating potential opportunities in the market [43][44]