Treace(US:TMCI)2025-11-06 22:30Financial Data and Key Metrics Changes - The company reported third quarter revenues of $50.2 million, representing an 11% growth over the third quarter of 2024 and a 49% improvement in adjusted EBITDA compared to the prior year [4][17] - Gross margin decreased to 79.1% in Q3 2025 from 80.1% in Q3 2024 [17] - The net loss for the third quarter was $16.3 million, or $0.26 per share, which is a 6% increase in net loss compared to $15.4 million, or $0.25 per share, in Q3 2024 [18] - Year-to-date net loss decreased by 10% to $49.6 million compared to $55.2 million for the same period in 2024 [18] - Total liquidity as of September 30, 2025, was $80.6 million, down from $90.7 million at the end of Q2 [19] Business Line Data and Key Metrics Changes - The company has expanded its product portfolio to include three new bunion correction systems, aiming to address nearly 100% of surgeon preferences for bunion correction [5][6] - Case volume growth was mid-single digits compared to the prior year, but below original expectations, largely driven by new bunion systems with lower average selling prices (ASPs) [10] - Sales to a limited number of stocking distributors contributed approximately $6 million in the third quarter, which is not expected to recur at the same levels in future quarters [12] Market Data and Key Metrics Changes - A survey indicated that surgeon customers reported a 7% decrease in bunion surgical volumes year-to-date through October compared to the same period last year [11] - Broader economic conditions and softer consumer sentiment have led to deferrals of elective bunion procedures, impacting case volumes [8][11] Company Strategy and Development Direction - The company is transitioning from a single technology focus to a comprehensive bunion solutions provider, with plans to capture market share in minimally invasive osteotomies and MTP fusion markets [5][9] - The strategy includes enhancing the sales team's capabilities and expanding the product portfolio to drive market share gains and improve profitability [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in the current growth trajectory and revised the full-year revenue outlook to $211 million-$213 million, reflecting only 1%-2% growth compared to 2024 [8][20] - The company plans to continue focusing on training existing customers and onboarding new surgeons to drive adoption of new products [13][22] Other Important Information - The company is taking actions to control costs and improve profitability, with a focus on reducing cash burn in 2026 [16][20] - The company has appointed a new Chief Commercial Officer and expanded its sales team to enhance market presence [6] Q&A Session Summary Question: Can you talk about the softness in the core Lapiplasty business? - Management acknowledged a trend towards minimally invasive osteotomies but emphasized the importance of Lapiplasty for significant bunion deformities, stating efforts to capture market share in this area [24][25] Question: What does the guidance imply for Q4 and 2026? - Management refrained from providing specific guidance for 2026 but expressed optimism about case volume growth and the reception of new products [26][27] Question: Has there been an acceleration in the shift away from Lapiplasty? - Management confirmed a trend towards minimally invasive procedures but highlighted ongoing efforts to capture market share with new technologies [30][31] Question: How will the company recoup deferred procedures next year? - Management indicated that improved consumer sentiment and enhanced engagement with new products would help capture a larger share of patients returning for surgery [38]