Tactile Systems Technology(US:TCMD)2023-05-09 02:33Financial Performance - Total revenue for Q1 2023 increased by 23% year-over-year to $58.8 million, exceeding expectations [10][36] - Lymphedema products revenue grew by 22% year-over-year to $48.9 million, while airway clearance products revenue increased by 24% year-over-year to $9.1 million [10][36] - Operating loss decreased by 74% to $3.8 million, with non-GAAP operating loss down by 59% to $2.2 million [39] - Adjusted EBITDA was positive for the first time in Q1 since 2019, amounting to $0.5 million compared to a loss of $2.6 million in the previous year [11][57] Business Line Performance - Strong retention and engagement within the sales team contributed to the growth in lymphedema products, with a consistent headcount of 250 sales representatives [12] - New product launches, particularly ComfortEase, positively impacted sales performance in the lymphedema segment [13] - Airway clearance product line benefited from improved supply chain stability, allowing for expanded production capacity [16] Market Dynamics - The company observed improvements in patient throughput at clinics, indicating a recovery in staffing and patient volume [15] - A recent policy change by CMS eliminated the requirement for certificates of medical necessity, reducing administrative burdens for prescribers [14] Strategic Direction - The company aims to enhance productivity in the lymphedema sales team and deepen relationships with DME providers for airway clearance products [81] - Continued focus on product innovation, including the launch of the next-generation Entre system and enhancements to the Kylee mobile application [27][30] Management Commentary - Management expressed optimism about the operating environment and future growth, citing strong performance in Q1 and a positive outlook for the remainder of 2023 [80] - The company raised its full-year revenue guidance based on a strong start to the year, projecting growth of approximately 10% to 11.5% [58] Other Important Information - The company raised $35 million in net proceeds through a public offering, strengthening its balance sheet [31][42] - New appointments to the leadership team were announced, including a new CFO with extensive healthcare experience [33][34] Q&A Session Summary Question: What is the current patient adoption rate for Kylee and its intended use? - Management indicated that Kylee serves as both a compliance tool for patients and a data-gathering tool for payers, with ongoing enhancements to improve patient engagement [56][79] Question: How does the elimination of the certificate of medical necessity impact sales? - Management noted that the elimination of this requirement is expected to streamline the process for prescribers, potentially increasing patient access to therapies [67][70] Question: What are the expectations for seasonality in the upcoming quarters? - Management expects incremental growth throughout the year, with Q4 typically being the strongest quarter due to lower co-pays [75] Question: What are the near-term goals for the new CFO? - The new CFO aims to leverage her healthcare experience to improve revenue cycle management and drive top-line growth while expanding profitability [78] Question: How is the company positioned to meet market demand for AffloVest? - Management confirmed that they are in a strong position to supply the market without backorders, following improvements in supply chain capacity [96]