Tactile Systems Technology(US:TCMD)2021-02-24 03:54Financial Data and Key Metrics Changes - Total revenue for Q4 2020 increased by 4% year-over-year to $59.2 million, exceeding the high-end of annual revenue guidance [7][28] - Gross profit for Q4 2020 increased by $753,000 to $41.9 million, with a gross margin of 71% compared to 72% in the previous year [29][30] - Net income for Q4 2020 increased to $12.1 million, or $0.61 per diluted share, compared to $4.3 million, or $0.22 per diluted share, in Q4 2019 [35] Business Line Data and Key Metrics Changes - Sales and rentals of Entre systems increased by 44% year-over-year, while sales and rentals of Flexitouch Plus systems were essentially flat [8] - Flexitouch systems accounted for 87% of total revenue in Q4 2020, down from 90% in the prior year [28] - VA revenue declined by 17% year-over-year to $6.3 million, representing 11% of total Q4 revenue compared to 13% in the prior year [17] Market Data and Key Metrics Changes - Revenue by payer for Q4 2020 was approximately 71% commercial, 18% Medicare, and 11% VA, compared to 75%, 12%, and 13% respectively in Q4 2019 [29][38] - The company served approximately 60,000 patients in 2020, indicating significant underpenetration in the market with 1.4 million patients diagnosed with lymphedema [54] Company Strategy and Development Direction - The company aims to expand its prescriber base and enhance productivity through the addition of field support specialists, which is expected to improve sales rep efficiency [50][51] - Focus remains on the U.S. market development due to the significant underserved community, with plans to invest in clinical evidence generation and education [56][86] - The company anticipates a revenue growth of 15% to 20% year-over-year for 2021, with specific growth targets for Flexitouch and Entre systems [41] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing COVID-related headwinds impacting Q1 2021, expecting a mid-single-digit revenue decline in the first quarter [43][44] - The company remains optimistic about returning to a normalized growth environment in the latter half of 2021, driven by improved market conditions and vaccine distribution [62] - Management emphasized the resilience and resourcefulness of the organization and its customers in navigating the challenges posed by the pandemic [51][56] Other Important Information - The company received 510(k) clearance for its solutions for lipedema and phlebolymphedema, expanding its market dialogue [25] - Two new board members were appointed, bringing over 20 years of healthcare experience to the leadership team [27] Q&A Session Summary Question: Guidance and Q1 Expectations - Analysts inquired about the guidance for Q1 and the impact of COVID on revenue expectations, with management indicating that the VA business softness and holiday-related COVID impacts contributed to the guidance [60][61] Question: VA Business Trends - Questions were raised regarding the future of the VA business, with management stating that they do not expect a return to pre-COVID operations in the near term [64][65] Question: Sales Rep Changes and Productivity - Analysts asked about changes in the sales rep structure and expected productivity, with management explaining the rationale behind adding field support specialists to enhance sales rep efficiency [69][70] Question: International Initiatives - Questions were posed about international market initiatives, with management indicating a focus on the U.S. market due to its growth potential and delaying international expansion plans [84][86] Question: Contribution from New Prescribers - Analysts inquired about the contribution from new prescribers, with management noting that new prescribers typically start slow but are expected to ramp up over the year [88][90]