Paragon 28 Inc (FNA) 2024 Q3 法說會逐字稿

Thank you all for joining. I would like to welcome you all to the Paragon 28 third-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this call is being recorded for replay purposes.

感謝各位的參與。歡迎各位參加 Paragon 28 2024 年第三季財報電話會議。（操作員指示）提醒您，本次通話將會被錄音，以便回放。

I would now like to hand the call over to your host today, Mr. Matthew Brinkman, SVP of Strategy and Investor Relations. Mr. Brinkman, please go ahead.

現在我謹將電話交給今天的主持人，策略與投資者關係高級副總裁馬修·布林克曼先生。布林克曼先生，請繼續。

Good afternoon, and thank you for joining Paragon 28's third-quarter 2024 financial results and earnings call. Presenting on today's call are Albert DaCosta, Chairman and Chief Executive Officer; and Chadi Chahine, Chief Financial Officer and EVP of Supply Chain Operations.

下午好，感謝各位參加 Paragon 28 2024 年第三季財務業績及收益電話會議。出席今天電話會議的有董事長兼執行長 Albert DaCosta，以及財務長兼供應鏈營運執行副總裁 Chadi Chahine。

Before we begin, I would like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities law, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements made as to the company's or management's intentions, hopes, beliefs, expectations or predictions of future events, results or performance. These forward-looking statements are subject to a number of risks, uncertainties, estimates and assumptions that may cause actual results to differ materially from these forward-looking statements.

在開始之前，我想提醒各位，管理層將在本次電話會議中發表聲明，其中包括聯邦證券法意義上的前瞻性聲明，這些聲明是根據 1995 年《私人證券訴訟改革法案》的安全港條款作出的。前瞻性陳述包括公司或管理階層對未來事件、結果或績效的意圖、希望、信念、期望或預測所作的陳述。這些前瞻性陳述受到許多風險、不確定性、估計和假設的影響，可能導致實際結果與這些前瞻性陳述有重大差異。

All forward-looking statements are based upon current available information, and Paragon 28 assumes no obligation, except as required by law, to update these statements. Additional information concerning certain risks and uncertainties that may impact these forward-looking statements is contained from time to time in the company's SEC filings and in the press release that was issued earlier today.

所有前瞻性陳述均基於目前可獲得的信息，除法律要求外，Paragon 28 不承擔更新這些陳述的義務。有關可能影響這些前瞻性聲明的某些風險和不確定性的更多信息，請參閱公司向美國證券交易委員會提交的文件以及今天早些時候發布的新聞稿。

During this presentation, we will refer to the non-GAAP financial measures of adjusted EBITDA, free cash flow and constant currency net revenue growth. A reconciliation to the most comparable GAAP financial measures, net income, cash from operating activities and reported net revenue growth, respectively, are contained in our press release issued earlier today.

在本次示範中，我們將參考非GAAP財務指標，包括調整後的EBITDA、自由現金流量和以固定匯率計算的淨收入成長。今天稍早發布的新聞稿中包含了與最可比較的 GAAP 財務指標（淨收入、營業活動現金流量和報告淨收入成長）的調整表。

And with that, I will now turn the call over to Albert.

接下來，我將把電話交給阿爾伯特。

Thanks, Matt. Good afternoon, and thank you for joining us for our third-quarter 2024 earnings call.

謝謝你，馬特。下午好，感謝各位參加我們2024年第三季財報電話會議。

To start, I want to thank the Paragon 28 team for their continued dedication. Thanks to their collective effort, E28 has been able to help improve the lives of over 52,000 patients worldwide year to date. I am truly grateful for their commitment to always ensure we are there for our surgeon customers, and I am inspired by the impact we are continuing to make as a company.

首先，我要感謝 Paragon 28 團隊的持續奉獻。由於大家的共同努力，E28 今年迄今已協助改善了全球超過 52,000 名患者的生活。我衷心感謝他們始終致力於確保我們能夠為外科醫生客戶提供服務，我也為我們公司不斷產生的影響而感到鼓舞。

2024 has been one of the most pivotal years in P28's journey as a public company, marking a period of tremendous progress and transformation. This year was incredible with 13 launches year to date, which truly demonstrates our deep commitment to delivering best-in-class solutions to our surgeons and patients and raising the bar in foot and ankle. Our continued focus on innovation and commercial execution is why we have been able to grow well over twice the market rate in every quarter since going public in 2021 and really since the company's inception. And we are now quickly ramping up our operational efficiency to put us on a trajectory for sustainable and profitable growth. Our consistent growth, combined with the momentum we have in driving operational excellence has Paragon positioned exceptionally well.

2024 年是 P28 作為一家上市公司發展歷程中最關鍵的一年，標誌著公司取得了巨大的進步和轉型。今年迄今為止，我們推出了 13 款新產品，充分體現了我們致力於為外科醫生和患者提供一流解決方案，並不斷提升足踝領域的標準。我們持續專注於創新和商業執行，因此自 2021 年上市以來，乃至自公司成立以來，每季的成長速度都遠遠超過市場平均的兩倍。我們現在正迅速提高營運效率，以使我們走上可持續獲利成長的道路。我們持續成長，加上我們在推動卓越營運方面取得的進展，使 Paragon 處於非常有利的地位。

Now, turning to our third-quarter performance, global revenue for the third quarter of '24 was a record $62.3 million, representing 18.1% reported and 17.6% constant currency growth. We had strong growth across our portfolio at over twice the rate of the broader foot and ankle market and continue to have significant momentum from our recent product launches.

現在，讓我們來看看我們第三季的業績，2024 年第三季的全球營收創下 6,230 萬美元的紀錄，按報告匯率計算增長了 18.1%，按固定匯率計算增長了 17.6%。我們的產品組合實現了強勁成長，成長速度是整個足踝市場成長率的兩倍多，我們最近推出的產品也持續保持著強勁的成長動能。

Looking at the US business performance, revenue for the third quarter of '24 was $51.2 million, representing 14.8% reported growth. We had one extra billing day in the US this quarter, contributing approximately 150 basis points of tailwind in the quarter. We finished the quarter with 2,244 active surgeon customers, representing a 9% increase compared to the third quarter of '23. Over the same time period, we increased our US producing sales rep roster by 10.5% to 284 reps and saw a 4% increase in productivity across our rep base.

從美國業務表現來看，2024 年第三季的營收為 5,120 萬美元，年增 14.8%。本季我們在美國多了一個結算日，為本季帶來了約 150 個基點的利多。本季末，我們擁有 2,244 位活躍的外科醫生客戶，比 2023 年第三季成長了 9%。在同一時期，我們的美國銷售代表人數增加了 10.5%，達到 284 人，我們的銷售代表整體生產力提高了 4%。

Third-quarter international revenue was $11.2 million, representing 35.7% reported and 32.8% constant currency growth. International growth continues to be driven by our core markets of the UK, Australia, South Africa, Canada and Spain, where we have made focused investments in market expansion in recent years. Across all geographies, our top-line performance continues to be driven by our innovative product portfolio delivered by our dedicated sales force.

第三季國際營收為 1,120 萬美元，按報告匯率計算成長 35.7%，以固定匯率計算成長 32.8%。國際成長繼續由我們的核心市場英國、澳洲、南非、加拿大和西班牙推動，近年來我們在這些市場進行了重點投資以拓展市場。在所有地區，我們始終依靠創新產品組合和專業的銷售團隊來推動公司績效的成長。

As noted during our previous earnings call, we saw some degree of choppiness in our sales trends entering the third quarter. Those fluctuations we experienced abated later in the quarter, and we continue to see steady demand for our products.

正如我們在先前的財報電話會議上提到的，進入第三季後，我們的銷售趨勢出現了一定程度的波動。本季後期，我們經歷的這些波動有所緩解，我們繼續看到對我們產品的需求保持穩定。

Our balanced portfolio offers a wide variety of product options to our surgeon customers, enabling P28 to continue growing despite shifts in surgeon preference or patient demand. We see tremendous growth opportunity for the foot and ankle market over the long term and believe we are well positioned to deliver sustainable, profitable growth.

我們均衡的產品組合為外科醫生客戶提供了多種產品選擇，使 P28 能夠在外科醫生偏好或患者需求變化的情況下繼續發展壯大。我們看到足踝市場長期來看具有巨大的成長機會，並且相信我們已做好充分準備，以實現可持續的獲利成長。

I will now turn to a few key updates on our product portfolio. We've done an incredible job as a company continuously innovating and bringing novel products to market, and 2024 really stands out with 13 new product launches to date, and many of our recent launches were in high-growth and highly strategic end markets, including our first SMART 28 module. I cannot overstate how pleased I am with our development team's ability to deliver such meaningful products at the pace and quality we've done so this year. And I am incredibly excited to see these products changing the standard of care.

接下來，我將介紹我們產品組合的一些重要更新。作為一家公司，我們在不斷創新和推出新產品方面做得非常出色，2024 年更是取得了顯著成就，迄今為止已推出 13 款新產品，而且我們最近推出的許多產品都面向高增長和高戰略性的終端市場，包括我們的第一個 SMART 28 模組。我對我們的開發團隊今年能夠以如此快的速度和高品質的方式交付如此有意義的產品感到非常滿意。我非常興奮地看到這些產品正在改變護理標準。

I receive updates every day, sometimes several an hour from both our sales team and surgeon customers with results from recent cases that demonstrate we are achieving our mission to improve foot and ankle patient outcomes. As a reminder, we launched 11 products through our last earnings call, including our first SMART 28 module. And in October, we launched two new products. The first was the Phantom Fibula Nail System designed to offer surgeons a less invasive option for treating ankle fractures. There is a lot of excitement for that product to start the fourth quarter, and it's also highly complementary to our broader ankle trauma and soft tissue products.

我每天都會收到來自銷售團隊和外科醫生客戶的最新消息，有時甚至每小時都會收到好幾個，這些消息來自最近的病例，證明我們正在實現改善足踝患者治療效果的使命。提醒一下，我們在上次財報電話會議上推出了 11 款產品，其中包括我們的第一個 SMART 28 模組。10月份，我們推出了兩款新產品。第一款產品是幻影腓骨釘系統，旨在為外科醫生提供一種創傷較小的踝關節骨折治療方案。人們對該產品在第四季度上市感到非常興奮，而且它與我們更廣泛的踝關節創傷和軟組織產品也高度互補。

The second launch was a short stem tibia implant for our APEX 3D total ankle replacement system, which allows us to cater to a broader range of total ankle patients, specifically those with complex anatomy. The short stem tibia implant and our recently launched Right-Angle Drill are both on limited market release, and we expect they will be key drivers for our ankle portfolio in the future.

第二款產品是用於我們的 APEX 3D 全踝關節置換系統的短柄脛骨植入物，這使我們能夠服務於更廣泛的全踝關節置換患者，特別是那些解剖結構複雜的患者。短柄脛骨植體和我們最近推出的直角鑽頭目前均處於有限的市場推廣階段，我們預計它們將成為我們未來踝關節產品組合的關鍵驅動力。

The products we launched so far this year are setting new benchmarks for the company and for our market. There are too many great products this year to go through each in specific detail, but the adoption and feedback across the board has been overwhelmingly positive from our surgeons and reps alike. We believe our strong foundation and the momentum from our recent product launches put us in a great position to drive sustainable growth moving forward.

今年迄今為止，我們推出的產品正在為公司和市場樹立新的標竿。今年湧現出太多優秀的產品，無法一一詳細介紹，但從外科醫生和銷售代表的角度來看，這些產品的接受度和回饋都非常積極。我們相信，我們強大的基礎和近期產品發布帶來的發展勢頭，使我們處於有利地位，能夠推動未來的永續成長。

We remain laser-focused on growth while also sharpening our focus on operational efficiency and capital allocation as highlighted in our last quarter's earnings call. Chadi will share details momentarily, but from my perspective, I am pleased to say our efficiency plan is progressing better than expected and resulted in substantial improvement to operating expense and free cash flow.

我們將繼續專注於成長，同時正如我們在上一季財報電話會議上所強調的那樣，更加重視營運效率和資本配置。Chadi 稍後會分享詳情，但就我個人而言，我很高興地說，我們的效率提升計劃進展比預期要好，並已大幅改善了營運費用和自由現金流。

In summary, we are pleased with our performance in this pivotal third quarter. We have incredible momentum driven by our new products, and we are tracking well against our key operational efficiency plans. We believe that now, more than ever, P28 is positioned for long-term sustainable growth and operational excellence. We are highly confident in our ability to execute and believe we are very well aligned to drive shareholder value with every dollar invested.

總而言之，我們對第三季這段關鍵時期的表現感到滿意。新產品的推出為我們帶來了強勁的發展勢頭，我們在關鍵營運效率計劃方面也進展順利。我們相信，P28 現在比以往任何時候都更有信心實現長期永續成長和卓越營運。我們對自身的執行能力充滿信心，並相信我們能夠充分利用每一美元的投資，為股東創造價值。

I will now turn it over to Chadi. But before I do, I want to say that Chadi has been an incredible addition to our team and as a partner to me in particular. His leadership has had a meaningful impact on our organization, and he has been critical in our ability to drive the results we are able to share this quarter. We are very happy to have him.

現在我將把它交給查迪。但在此之前，我想說，查迪是我們團隊的傑出成員，尤其是我作為合作夥伴的得力助手。他的領導對我們組織產生了重大影響，對於我們本季能夠取得這樣的業績，他發揮了至關重要的作用。我們非常高興能有他加入。

All right, Chadi, the floor is yours.

好了，查迪，現在輪到你發言了。

Albert, thank you very much for your kind words. Here we are, a little over 90 days since our last earnings call, and I believe we've made significant progress.

艾伯特，非常感謝你的鼓勵和讚揚。距離我們上次財報電話會議已經過了 90 多天，我相信我們已經取得了重大進展。

I have had the opportunity to immerse myself in every facet of the company, having met with many stakeholders across North America, Europe and Australia, including teammates, sales representatives, suppliers and surgeon customers. I've been inspired to see the team's dedication to driving Paragon 28 mission and continuously improving the business in every way. From our investment in innovation and sales force to our operational efficiency initiatives, it's clear to me that P28 has a strong foundation for sustainable success in foot and ankle.

我有機會深入了解公司的各個方面，與北美、歐洲和澳洲的許多利害關係人會面，包括團隊成員、銷售代表、供應商和外科醫生客戶。我深受鼓舞，看到團隊致力於推進 Paragon 28 的使命，並在各方面不斷改進業務。從我們對創新和銷售團隊的投入，到我們的營運效率提升舉措，在我看來，P28 已經為在足踝領域取得可持續的成功奠定了堅實的基礎。

Last quarter, we said our top priorities beyond continuing to deliver above market and strong top-line growth are to achieve EBITDA positivity in 2025 and cash flow positivity in 2026 by maintaining a disciplined focus on operational excellence and optimizing our cost structure. As seen in our third-quarter results, we are pacing ahead of schedule compared to our expectations.

上個季度，我們表示，除了繼續實現高於市場平均水平的強勁營收成長外，我們的首要任務是透過維持對卓越營運的嚴格關注和優化成本結構，在 2025 年實現 EBITDA 為正，在 2026 年實現現金流為正。從我們第三季的業績可以看出，我們的進度比預期快。

While there is still work to do, we are confident in our ability to continue to execute on the cost optimization actions needed to drive further leverage in the P&L. We are working to ensure every dollar invested goes towards strengthening our market position, delivering innovative solutions and ultimately creating value for all stakeholders. I'm excited about the progress we are making and know that I speak for the entire company when I say this is just the beginning, and we remain committed to delivering on these operational priorities to position the company for long-term profitable growth.

雖然還有許多工作要做，但我們有信心繼續執行必要的成本優化措施，以進一步提高損益表的槓桿作用。我們致力於確保每一美元的投資都用於鞏固我們的市場地位、提供創新解決方案，並最終為所有利害關係人創造價值。我對我們所取得的進展感到興奮，我知道我代表整個公司說這只是個開始，我們將繼續致力於實現這些營運重點，使公司能夠實現長期獲利成長。

Now, turning to the rest of the P&L, gross margin for the quarter was 74.1%, a 90-basis-point sequential decrease compared to 75% in the second quarter of 2024. We expect gross margin will stabilize at around 75% for the full year of 2024 and have several initiatives in place to drive improvement, including actions to reduce pricing of legacy SKUs to pre-COVID levels and overall inventory optimization. In addition, we expect a tailwind over time as we sell through high-cost inventory.

現在，讓我們來看看損益表的其他部分，本季毛利率為 74.1%，比 2024 年第二季的 75% 下降了 90 個基點。我們預計 2024 年全年毛利率將穩定在 75% 左右，並已採取多項措施推動改善，包括將傳統 SKU 的價格降低到 COVID 疫情前的水平以及整體庫存優化。此外，隨著高成本庫存的逐步清空，我們預計未來將迎來利好因素。

Third-quarter total operating expense was $54.6 million, representing 87.6% of net revenue for the quarter. This represents a 969-basis-point improvement compared to the prior year period and a 500-basis-point sequential improvement compared to the second quarter of 2024. Operating expense in the third quarter included $986,000 of non-recurring severance costs, a 150-basis-point non-recurring headwind to our OpEx year over year and sequentially. We are proud of these results and the improvement we have made in the quarter to right size our cost base.

第三季總營運支出為 5,460 萬美元，佔該季淨收入的 87.6%。與上年同期相比，這代表著969個基點的改善；與2024年第二季相比，這代表著500個基點的環比改善。第三季的營運支出包括 986,000 美元的非經常性遣散費，這對我們的營運支出造成了同比和環比 150 個基點的非經常性不利影響。我們為這些成果以及本季在調整成本結構方面所取得的進步感到自豪。

Looking ahead, the fourth quarter will be our first full quarter where we expect to see the full effect following the implementation of our restructuring program. R&D expense in the quarter was $5.6 million or 9.1% of revenue compared to $7.2 million or 13.7% of revenue year over year. The $1.6 million improvement was driven by the implementation of cost-saving initiatives to lower outsourced consulting services, partially offset by increased investment in personnel. Furthermore, the decrease was driven by a shift in timing of certain development and regulatory activity to the fourth quarter of '24 and into '25.

展望未來，第四季度將是我們重組計劃實施後第一個完整的季度，我們預計將看到該計劃的全面效果。本季研發費用為 560 萬美元，佔營收的 9.1%，去年同期為 720 萬美元，佔營收的 13.7%。160萬美元的改善主要得益於實施節約成本的舉措，以減少外包諮詢服務，但部分被人員投入的增加所抵銷。此外，部分開發和監管活動的時間表轉移到 2024 年第四季和 2025 年，這也是導致下降的原因。

SG&A expense in the quarter was $49 million, a $4.8 million or 11% increase compared to the third quarter of 2023. As a percentage of revenue, SG&A improved over 500 basis points to 78.6% compared to the prior year period. The year-over-year increase in SG&A expense was primarily driven by increased variable commission expense related to net revenue growth and an increase in professional services associated with the restatement and remediation plan, which we expect will decrease over the next few quarters. These costs were partially offset by our restructuring program and cost optimization plans announced last quarter.

本季銷售、一般及行政費用為 4,900 萬美元，比 2023 年第三季增加了 480 萬美元，增幅達 11%。與去年同期相比，銷售、一般及行政費用佔收入的百分比改善了 500 多個基點，達到 78.6%。銷售、一般及行政費用年增主要是由於淨收入增長導致可變佣金支出增加，以及與重述和補救計劃相關的專業服務增加所致，我們預計未來幾個季度內，這些支出將會減少。這些成本部分被我們上季宣布的重組計劃和成本優化計劃所抵消。

Adjusted EBITDA for the third quarter of 2024 was a profit of $432,000 an improvement of $3.2 million compared to the third quarter of 2023 and a $3.4 million sequential improvement compared to the second quarter of 2024. This is an inflection point for the company and marks the first full quarter of positive adjusted EBITDA since the company IPO in October of 2021. We believe it's also a strong indicator that we are quickly delivering on our stated priorities to drive improved operating leverage.

2024 年第三季調整後 EBITDA 為 43.2 萬美元利潤，比 2023 年第三季調整 320 萬美元，比 2024 年第二季季增 340 萬美元。對公司而言，這是一個轉捩點，標誌著自 2021 年 10 月公司上市以來，首次實現經調整 EBITDA 為正的完整季度。我們認為，這也強烈表明我們正在迅速落實既定優先事項，以推動提高營運槓桿。

Now, turning to our cash flow and liquidity, free cash flow for the third quarter of 2024 was a use of $6.3 million, marking a 69.5% improvement compared to a use of $20.7 million in the third quarter of 2023. Sequentially, free cash flow improved 54.7% compared to $13.7 million in the second quarter of 2024. The step-up was driven by the company ability to drive strong earnings improvement, optimize kit and instrument CapEx deployment and reduce net working capital.

現在，讓我們來看看我們的現金流和流動性，2024 年第三季的自由現金流支出為 630 萬美元，與 2023 年第三季的 2,070 萬美元支出相比，改善了 69.5%。與 2024 年第二季的 1,370 萬美元相比，自由現金流季增 54.7%。此次業績提升得益於公司在提高獲利能力、優化設備和儀器資本支出部署以及降低淨營運資本方面的能力。

Taking a closer look at our net working capital, since it's a major driver of our free cash flow, we have seen solid improvements. Starting with our days sales outstanding, we ended the third quarter at 52 days compared to 58 days in the third quarter of 2023.

仔細觀察我們的淨營運資本，因為它是我們自由現金流的主要驅動因素，我們發現它已經取得了顯著改善。從應收帳款週轉天數來看，我們第三季末的應收帳款週轉天數為 52 天，而 2023 年第三季為 58 天。

Looking at days payable outstanding, we ended the third quarter at 118 days compared to 210 days in the third quarter of 2023. Lastly, on days inventory outstanding, we ended the third quarter at 545 days of net inventory compared to 683 days in the third quarter of 2023.

從應付帳款週轉天數來看，我們第三季末的應付帳款週轉天數為 118 天，而 2023 年第三季為 210 天。最後，關於庫存週轉天數，我們第三季末的淨庫存週轉天數為 545 天，而 2023 年第三季為 683 天。

We ended the third quarter of 2024 with $89.1 million of total liquidity, consisting of $39.1 million of cash on the balance sheet and $50 million available through our credit facility. At this time, we are comfortable with our existing capital structure and have enough cash on the balance sheet to fund operations. The sizable improvement across operating expense and working capital add to our conviction and demonstrate our ability to balance strong growth while also managing our cost and cash position effectively under our current capital structure.

截至 2024 年第三季末，我們的總流動資金為 8,910 萬美元，其中包括資產負債表上的 3,910 萬美元現金和透過信貸額度可用的 5,000 萬美元。目前，我們對現有的資本結構感到滿意，資產負債表上有足夠的現金來支持營運。營運費用和營運資金的顯著改善增強了我們的信心，並證明了我們有能力在目前的資本結構下，在保持強勁增長的同時，有效地管理成本和現金狀況。

Now, turning to revenue guidance and future outlook, we are increasing our net revenue guidance and now expect net revenue for the full year of 2024 ranging from $252 million to $256 million, representing reporting growth of 16.5% to 18.3% at current foreign exchange rates. Furthermore, we expect continued focus on operational excellence to deliver improved earnings and free cash flow sequentially in the fourth quarter.

現在，我們來談談收入預期和未來展望，我們提高了淨收入預期，預計 2024 年全年淨收入將在 2.52 億美元至 2.56 億美元之間，按當前匯率計算，報告增長率為 16.5% 至 18.3%。此外，我們預計，繼續專注於卓越營運將在第四季度帶來收益和自由現金流的環比增長。

Looking ahead at 2025, we have the track record to outpace the broader foot and ankle market growth. We'll be coming off a year with several significant product launches and remain highly confident in our commercial strategy. And as we have demonstrated in the third quarter, we are taking the necessary step to optimize all aspects of the company to improve operations, manage costs and preserve cash.

展望 2025 年，我們有信心超越整個足踝市場的成長速度。我們將迎來充滿挑戰的一年，期間我們推出了幾款重要的產品，並且對我們的商業策略仍然充滿信心。正如我們在第三季所展示的那樣，我們正在採取必要措施來優化公司的各個方面，以改善營運、控製成本和保留現金。

Last quarter, we communicated two major operational priorities to be adjusted EBITDA positive in 2025 and free cash flow positive in 2026. As you saw from our Q3 performance, we are executing well and ahead of schedule to deliver on those priorities. Considering our ability to execute against our strategy, we are comfortable with our current capital structure, including our cash balance and do not see an operational need for incremental dilutive capital to achieve our goals.

上個季度，我們公佈了兩個主要的營運重點，即在 2025 年實現調整後 EBITDA 為正，在 2026 年實現自由現金流為正。正如您從我們第三季的業績中看到的那樣，我們執行得很好，並且提前完成了這些優先事項。考慮到我們執行策略的能力，我們對目前的資本結構（包括現金餘額）感到滿意，並認為在實現目標方面不需要額外的稀釋性資本。

We will now start our Q&A session. Operator, may we have the first question, please?

現在開始問答環節。接線生，請問第一個問題可以嗎？

(Operator Instructions) Matthew O'Brien, Piper Sandler.

（操作說明）Matthew O'Brien，Piper Sandler。

This is Phil on for Matt. Congrats on the quarter. For starters, guidance for the year was taken up by a bit more than the beat today, especially the low end. Curious to hear your thoughts on how the foot and ankle market fared in Q3? Was there still softness that you called out on the Q2 call? And how do you expect this trend to continue into Q4?

這裡是菲爾替馬特報道。恭喜你本季取得佳績。首先，今年的業績預期比今天公佈的預期略高，尤其是低端部分。很想聽聽您對第三季足踝市場表現的看法？你在第二季財報電話會議上提到的疲軟局面是否仍然存在？您預計這趨勢將如何延續到第四季？

Thanks for the question, Phil. This is Albert. For starters, I think some of the other companies were characterizing that as softness. I think we called it a little bit more choppiness. And the reason being just ours wasn't really confined to a product segment or any particular region. It was more of a week-to-week fluctuation. I'm happy to say that, that mostly abated at the end of Q3 and some of the momentum going into Q4 has us optimistic that, that's behind us.

謝謝你的提問，菲爾。這是阿爾伯特。首先，我認為其他一些公司將其描述為柔軟。我想我們當時稱之為略微有些斷斷續續。原因在於，我們的業務並不局限於某個產品領域或任何特定地區。更像是每週的波動。我很高興地說，這種情況在第三季末基本上有所緩解，而且進入第四季度後的一些勢頭讓我們樂觀地認為，這種情況已經過去了。

That's helpful. And I guess just level setting us for 2025, and I understand you probably won't say much here. But is your expectation for the foot and ankle market to have more normalized growth, call it, the historic 7%? And then given all these products, 13% year to date, is your belief still that Paragon can grow somewhere in the two to three times the rest of this market?

那很有幫助。我想這只是為了讓我們對 2025 年有一個大致的了解，我知道你可能不會在這裡說太多。但您是否預期足踝市場將實現更正常的成長，比如說，達到歷史上的 7% 的成長速度？鑑於所有這些產品，今年迄今為止增長了 13%，您是否仍然認為 Paragon 的成長速度可以達到其他市場公司兩到三倍？

Yes, that's a great question. So one, I want to just remind you that the foot and ankle market for one is really exciting just because there's still really high complication rates. And for a company like Paragon that's really positioned with innovative technology to meet those needs it positions us perfectly. So I'm really optimistic that this market still has a lot of runway for growth. '25, I think, is going to have some nice energy around it, coupled with one of the most exciting years for product launches for us.

是的，這是一個很好的問題。首先，我想提醒大家，足踝市場非常令人興奮，因為併發症發生率仍然很高。對於像 Paragon 這樣擁有創新技術來滿足這些需求的公司來說，我們的定位非常完美。所以我對這個市場仍有很大的成長空間感到非常樂觀。我認為，2025 年將會充滿活力，同時也是我們產品發表最令人興奮的一年。

2024, I should say historically, Paragon 28 has had a really nice year-to-year trajectory of product introductions. This year was monumental. We launched 13 so far year-to-date meaningful product introductions that I think has carried a lot of excitement in '24, but even more so is going to be a real nice driver of momentum for us in '25 and beyond.

應該說，從歷史角度來看，Paragon 28 在 2024 年的產品推出方面一直保持著非常好的逐年發展軌跡。今年是意義非凡的一年。今年到目前為止，我們已經推出了 13 款意義重大的產品，我認為這在 2024 年帶來了許多令人興奮的消息，更重要的是，這將在 2025 年及以後成為我們發展勢頭強勁的真正動力。

So really excited about '25. We'll be commenting on '25 at our Q4 earnings call in February. We'll be offering a little bit more information on the year. But as far as your question goes, I think 2025 is going to be an exciting year.

非常期待2025年。我們將在2月份的第四季財報電話會議上對「25」發表評論。我們將提供更多關於今年的資訊。但就你的問題而言，我認為2025年將會是令人興奮的一年。

Caitlin Cronin, Canaccord.

Caitlin Cronin，Canaccord。

Congrats on a great quarter. So you talked about Q4 being where you will see the full effect of your restructuring program. Any more color you can provide for where you expect the rest of these cost savings? And do you still expect kind of the $8 million in annualized OpEx savings on the whole in the second half?

恭喜你本季表現出色。所以你說過，第四季將全面展現重組計畫的效果。您能否進一步說明一下，您預期剩餘的成本節省將反映在哪些方面？您是否仍預期下半年整體營運支出將可節省 800 萬美元？

Thank you, Caitlin. This is Chadi. Really, the way I would like you to look at this is we had somewhat onetime and non-recurring restructuring program that we've announced where it was a reduction in force, and we announced it in in August. The purpose of this was to right size the organization, streamline our processes. And this is largely complete. And this is what we've spoken about when we spoke about the $8 million savings on an annualized basis.

謝謝你，凱特琳。這是查迪。實際上，我希望你們這樣看待這件事：我們有一個一次性且非經常性的重組計劃，我們已經宣布了這項計劃，其中包括裁員，我們在 8 月宣布了這項計劃。此舉旨在調整組織規模，簡化流程。這項工作基本上完成了。這就是我們之前提到的每年可節省 800 萬美元的內容。

We expect most of this to happen from a phasing point of view in Q4 and some of it will be completed in 2025. Having said that, there is another portion that is the overall cost optimization. And this is something that I'm driving to make sure that our investments are in the right areas serving our surgeon customers and our patients. And that is an ongoing effort starting, and I can share with you with a zero-based budgeting for our operating plan to make sure that we allocate our funds in the areas that drive surgeon -- supporting surgeon customers and patients.

從分階段實施的角度來看，我們預計大部分工作將在第四季度完成，部分工作將在 2025 年完成。話雖如此，還有另一個方面，那就是整體成本優化。我正在努力確保我們的投資投向正確的領域，從而更好地服務我們的外科醫生客戶和患者。這是一項持續進行的努力，我可以與大家分享，我們的營運計畫將採用零基預算，以確保我們將資金分配到推動外科醫生發展的領域——支持外科醫生客戶和患者。

That's great. And you also talked last quarter about your expectations to achieve EBITDA positivity in 2025 and talked to it this quarter as well. And having hit that on a quarterly basis this quarter and expectations for the Q4, can you talk about the cadence of just the quarterly EBITDA positivity going forward in 2025?

那太棒了。上個季度您也談到了您預計在 2025 年實現 EBITDA 為正的目標，本季您也再次談到了這一點。鑑於本季已達到季度目標，並且對第四季度也有所預期，您能否談談 2025 年季度 EBITDA 為正的節奏？

Sure. So let's speak about '24 first. Really, we are very happy with where we -- what we delivered in Q3 and expect this to be incrementally better in Q4.

當然。那我們先來談談24年吧。說實話，我們對第三季的業績非常滿意，並預計第四季會逐步改善。

In regards to 2025, as you know, our market is seasonal, and we tend to have a lot of our expenses happening in the first half of the year versus second half. Having said that, the actions that we are taking to be EBITDA positive are well in place and ongoing. And I expect really significant improvement year on year when it comes to EBITDA deliverables in 2025 versus 2024.

關於 2025 年，如您所知，我們的市場具有季節性，我們的許多支出往往發生在上半年而不是下半年。儘管如此，我們為實現 EBITDA 為正而採取的措施已經到位並正在持續進行。我預計 2025 年的 EBITDA 實現額將比 2024 年有顯著的逐年改善。

Mike Matson, Needham & Co.

Mike Matson，Needham & Co.

I guess, first, just given all of the new products that you did launch in 2024, how should we think about how the impact of those carries through into '25? I mean I would imagine that you still get a pretty big benefit, particularly from the ones that were launched maybe more in the second half of '24. Is that a reasonable assumption?

我想，首先，鑑於你們在 2024 年推出了所有新產品，我們應該如何看待這些產品的影響會延續到 2025 年？我的意思是，我想你仍然會獲得相當大的好處，特別是那些在 2024 年下半年推出的產品。這種假設合理嗎？

Yes. Thanks for the question, Craig. The product launches typically have about a six-month to a year ramp-up period. It takes a little while for our sales reps to get acquainted with the technology and our surgeons to become familiar with it. It also takes a little bit of time to get the hospitals open to bringing some of that new technology. And so generally speaking, we see about a year lag in the real ramp-up phase.

是的。謝謝你的提問，克雷格。產品上市通常需要六個月到一年的準備期。我們的銷售代表需要一段時間來熟悉這項技術，我們的外科醫生也需要一段時間來熟悉它。醫院需要一些時間才能接受並引進一些新技術。因此，總的來說，我們看到實際的成長階段大約落後一年。

This year, in particular, we've been pretty excited. It's overperformed our expectations, some of the products we've launched, the ones in Q1, but also the ones in Q2 and even Q3. In October, we launched the Fibula Nail, and we launched the short stem tibia component, which is a complement to our total ankle franchise and really a critical piece for patients with more severe deformities. Those products are off to an incredible start beyond our expectations.

今年尤其令人興奮。它的表現超出了我們的預期，我們推出的一些產品，包括第一季的產品，以及第二季甚至第三季的產品，都超出了預期。10 月份，我們推出了腓骨釘，並推出了短柄脛骨組件，這是我們全踝關節產品線的補充，對於畸形程度更嚴重的患者來說，這確實是一個至關重要的部件。這些產品的開局表現令人驚艷，遠遠超出我們的預期。

So to answer your question, yes, we'd expect to see some real boost in the energy going into '25, more so maybe for the ones in the second half of the year. But this has been, like I mentioned before, has been pretty monumental for products. So we're excited about what that means for '25.

所以回答你的問題，是的，我們預計到 2025 年能源市場將會出現真正的成長，尤其是在下半年。但正如我之前提到的，這對產品來說意義非常重大。所以我們對2025年的發展前景感到興奮。

Okay. Got it. And then just one on the balance sheet. So it was good to see that the inventory came down as much as it did the inventory days, but it's still pretty high, I guess, by orthopedic industry standards. So what are you doing to get that down to more normal levels?

好的。知道了。然後資產負債表上就只有一項了。很高興看到庫存和庫存週轉天數都大幅下降，但以骨科行業的標準來看，庫存仍然很高。那麼，你們採取了哪些措施來使這個數字降至正常水平？

And I guess what is a normal level or appropriate level for Paragon? It seems like most orthopedics companies are kind of in the one-year range, but I don't know, 365 days, I don't know if that's right or not.

那麼，Paragon的正常等級或合適等級是多少呢？似乎大多數骨科公司的合約期限都在一年左右，但我不知道，365天，我不知道這樣是否正確。

Thank you for the question. We're really very happy about what the team have done in a relatively short period of time in reducing our inventory levels. This is not an easy -- not to crack, and it's going to take time because we are a growth company, and we need to invest in our capital deployment. But what's where we can be smart is how we deploy and the efficiency in deployment.

謝謝你的提問。我們對團隊在相對較短的時間內降低庫存水準所取得的成就感到非常滿意。這並非易事——難以攻克，而且需要時間，因為我們是一家成長型公司，我們需要投資資本部署。但我們真正可以發揮聰明才智的地方在於如何部署以及部署的效率。

All I can say at this point in time is I'm laser-focused on reducing our inventory over time, and I expect this to be a continuing effort year on year and quarter on quarter, notwithstanding that, there could be some seasonality in that inventory reduction. But the focus is there.

目前我只能說，我正全力以赴地逐步減少庫存，而且我預計這將是一項持續不斷的努力，逐年逐季進行；儘管如此，庫存減少可能會受到一些季節性因素的影響。但重點確實在那裡。

And as you mentioned, the orthopedic, I would caution you, as usually, we are much more on the trauma side of orthopedic than on the high joints, and that is much less predictive. And therefore, we need more inventory in the field to manage it. Having said that, we are absolutely right, and I agree with you that there is room for improvement, and we're going to continue to improve our inventory levels for the rest of 2024 and going into 2025 and beyond.

正如您所提到的，關於骨科，我要提醒您，通常情況下，我們更關注骨科的創傷方面，而不是高位關節，而創傷的預測性要差得多。因此，我們需要更多的現場庫存來應對這種情況。話雖如此，我們完全正確，我也同意你的看法，我們還有改進的空間，我們將繼續在 2024 年剩餘時間以及 2025 年及以後提高庫存水準。

David Turkaly, Citizens JMP.

David Turkaly，公民聯合軍事警察。

I'd say go get, Albert, but it's a tough one. I think you guys mentioned a 4% increase in rep productivity in the quarter. And I just wonder if you might give us any color as to like what is driving that?

我想說，去吧，阿爾伯特，但這可不是件容易的事。我記得你們提到本季銷售代表的生產力提高了 4%。我想知道您能否透露一下，是什麼原因導致了這種情況？

Yes. Thanks, and we'll talk about the [Gators] maybe after hours. But we've actually had a really promising year in terms of bringing new reps on board and the timing of that has been pretty excellent with some of the product launches we've had this year. And so I think what you're seeing is we're expanding the base of producing sales reps while at the same time, we're really penetrating some of our existing accounts with some of this new technology. So it's been it's been a great year.

是的。謝謝，我們下班後或許可以聊聊佛羅裡達鱷魚隊。但就招募新銷售代表而言，我們今年的業績其實非常出色，而且時機也與我們今年推出的一些產品非常吻合。所以我覺得你們看到的是，我們正在擴大銷售代表的隊伍，同時，我們也正在利用一些新技術真正滲透到我們現有的客戶群中。所以，今年真是很棒的一年。

Usually, when you add reps to that producing base, they come in at a lower level. And so you see some fluctuations in productivity this year, again, just highlighting the product launches and some of the excitement around that. It's been a pretty exciting year for both bringing on new reps and to seeing that productivity increase.

通常情況下，當你在現有基礎訓練的基礎上增加重複次數時，這些重複次數的水平會降低。因此，今年的生產力出現了一些波動，這再次凸顯了產品發布以及圍繞這些產品發布的一些興奮情緒。對於招募新銷售代表和看到生產力提高而言，今年都是相當令人興奮的一年。

And then as a follow-up, you mentioned the short stem tibia. I'm just curious, what percent of that market do you think has a complex anatomy? And could you maybe even talk about the competitive landscape there? Do other people have that as well?

然後，作為後續問題，您提到了短柄脛骨。我只是好奇，你認為這個市場有多少百分比的產品結構複雜？您能否談談那裡的競爭格局？其他人也有這種情況嗎？

Yes. That's a great question. One thing I'll point out is I've made this comment before that I think the total ankle franchise is one that's going to grow for the foreseeable future. And when I say grow, it means we're going to keep considering more and more deformities in our optionality that we're building into the system. This is one of those options.

是的。這是一個很好的問題。我想指出的一點是，我之前也說過，我認為全踝關節置換手術這一行業在可預見的未來將會發展壯大。我說“發展”，意思是我們將不斷考慮我們在系統中構建的選擇權中越來越多的缺陷。這是其中一種選擇。

So for patients that might present with more tilt in their ankle, more various valgus deformity, they tend to have more soft tissue instability. And those patients, we look for augmenting that with a little bit more stability in the tibia in particular. And so that's what we're calling out with the short stem tibia. We're really careful not to call it a revision component because some of these patients are presenting as primary patients for their total ankle.

因此，對於踝關節傾斜度較大、外翻畸形程度較重的患者，他們的軟組織穩定性往往較差。對於這些患者，我們希望透過增加脛骨的穩定性來增強其穩定性。所以，這就是我們所說的短柄脛骨。我們非常謹慎地避免將其稱為翻修手術，因為其中一些患者是作為初次踝關節置換患者前來就診的。

And so it's just more of a complex consideration, but really helpful in our entire ankle franchise. So I can't break down the volume of patients that are presenting with that. And some of this is surgeon preference. Some surgeons just like to see a little bit more fixation in the tibia. And this is an implant that I think is just going to keep complementing that franchise.

所以這確實是一個更複雜的考慮因素，但對我們整個踝關節產品線來說真的很有幫助。所以我無法統計出現這種情況的患者數量。這其中一部分是外科醫生的個人偏好。有些外科醫生喜歡讓脛骨有更強的固定。我認為這款植入物將繼續為該系列產品錦上添花。

And by the way, sorry, one more thing there. We're also coupling with that, the 90-degree drill, which is it's game-changing in our opinion. This is now an instrument that can really improve the precision with that short stem and even our existing primary component to get that installed into patients with either harder bone or just difficult to access environment.

對了，不好意思，還有一件事。我們還將90度鑽頭與之結合使用，我們認為這將改變遊戲規則。現在，這種儀器能夠真正提高短柄的精度，甚至可以提高我們現有的主要部件的安裝精度，使其能夠安裝到骨骼較硬或環境難以進入的患者身上。

Craig Bijou, Bank of America.

克雷格‧比茹，美國銀行。

I've been hopping around calls, so I apologize if you guys have already touched on this. But Albert, I guess I wanted to ask, I know I try it every quarter, but just in terms of your segments or the segments of the foot and ankle market, if any stood out more than others?

我一直在忙著接聽電話，所以如果你們之前已經討論過這個問題，我先道個歉。但是阿爾伯特，我想問的是，我知道我每個季度都會嘗試這樣做，但就你們的細分市場或足踝市場的各個細分市場而言，有沒有哪些細分市場比其他細分市場更突出？

And maybe ask again this quarter just because there have been comments this year of some of the segments having some more pressure than others from some of the other players in the space. So just wanted to get your sense or get a sense for your portfolio and how that's performed? And then if you're seeing any pressure in any one of the segments within the market growth?

或許本季可以再問，因為今年有評論說，該領域的某些細分市場比其他細分市場承受更大的壓力，這些壓力來自該領域的其他一些參與者。所以，我只是想了解一下您對投資組合的看法以及它的表現如何？那麼，如果您發現市場成長的任何細分領域面臨任何壓力呢？

Yes. Thanks for the question, Craig. And I know you're bouncing around, so we really appreciate you jumping on the call. To start, maybe this is an area for us to do what we would call a humble brag, right. And that's our business model has been really focused on the entire foot and ankle environment.

是的。謝謝你的提問，克雷格。我知道你最近很忙，所以我們非常感謝你抽出時間參加電話會議。首先，或許我們可以在這裡做點“謙虛的炫耀”，對吧。我們的商業模式一直專注於整個足踝領域。

So all five sub-segments really matter to us. And we feel like addressing those means a lot to our foot and ankle surgeons, but it also means we're creating a more diverse business. And that diversity really helps us when there's fluctuations in the market. This year, in particular, has been a little bit unusual for us to try to rationalize what we're hearing in the space because of the energy around some of our product launches. For example, this has been a pretty strong year for us in launching both 4-foot procedures.

所以這五個子部分對我們來說都非常重要。我們認為解決這些問題對我們的足踝外科醫生意義重大，同時也意味著我們正在打造一個更多元化的業務。這種多樣性確實能幫助我們應對市場波動。今年尤其有些不同尋常，因為我們的一些產品發布引發了極大的關注，所以我們很難理性地看待我們在這個領域聽到的各種說法。例如，今年我們在推出 4 英尺手術方面取得了相當不錯的成績。

So we've launched a lot in the distal MIS environment for bunion correction. We've launched a power console there. We also launched our SMART 28 Bun-Yo-Matic module, which has had a lot of excitement. And so in one sense, I feel like we're growing through any sensation in the market. The choppiness for us we couldn't characterize it by any one particular segment.

因此，我們在遠端微創手術環境中推出了許多用於拇外翻矯正的方案。我們在那裡推出了一款高效能遊戲主機。我們也推出了SMART 28 Bun-Yo-Matic模組，這款模組引起了極大的轟動。所以從某種意義上來說，我覺得我們正透過市場上的任何波動而成長。我們無法用任何一個特定的部分來描述這種斷斷續續的感覺。

It was more of a week-to-week fluctuation, and we were growing and our fracture franchise also had a lot of excitement. We launched a couple of key products around soft tissue repair, particularly related to ankle fractures, game-changing technology and the R3FLEX and the R3INFORCE products there. They were pushing a lot of energy there. And then even more recently, we launched the Fibula Nail, which has had an incredible reception. The short way of saying, we've heard some of our competitors talking about softness in the market.

當時的情況更像是每週的波動，而且我們的業務也在成長，我們的骨折業務也發展得非常順利。我們推出了幾款針對軟組織修復的關鍵產品，特別是與踝關節骨折相關的產品，包括顛覆性技術 R3FLEX 和 R3INFORCE 產品。他們在那裡投入了大量精力。最近，我們推出了腓骨釘，並獲得了巨大的迴響。簡單來說，我們聽到一些競爭對手在談論市場疲軟的問題。

We looked carefully. We feel like we've grown through that. We also feel like our business model positioned focused in foot and ankle, but spread across all of foot and ankle has really helped us to weather any of those types of headwinds.

我們仔細查看了。我們感覺自己從中成長了。我們也覺得，我們專注於足部和踝關節，但業務範圍涵蓋整個足部和踝關節領域的商業模式，確實幫助我們抵禦了各種類型的逆風。

Got it. Maybe I'll touch on free cash flow as well. Obviously, you saw a big improvement this quarter. It was a focus of your initiatives on cost control. So I guess the question is maybe big picture, how to think about what you're doing from a free cash flow perspective, how and what you're going to do going forward?

知道了。或許我還會談到自由現金流。顯然，本季業績有了很大的提升。這是你們各項措施的重點，也就是成本控制。所以我想問題可能在於從大局來看，如何從自由現金流的角度思考你正在做的事情，以及你未來將如何以及打算做什麼？

And I guess, also the ability to ensure that you can maintain the top-line revenue growth while still managing the free cash flow, managing your spend. So maybe just a little bit of perspective on how to think about that for, obviously, Q4, but then even as we look forward for the next couple of years.

而且我認為，也要確保在維持營收成長的同時，還能管理好自由現金流和支出。所以，或許我們可以稍微換個角度來思考這個問題，顯然是為了第四季度，但展望未來幾年也是如此。

Sure, Craig, thank you for your question. I think a great question because this is not about the P&L or about cost, this is about the company. And Albert, in the last quarter really set the tone in highlighting the key operational priorities that are being EBITDA positive in 2025 and cash flow positive in 2026. As you saw from my prepared remarks, we are not only delivering on these priorities, but really very happy to report that we are exceeding these deliverables starting with Q3. This is not only about cost containment.

當然，克雷格，謝謝你的提問。我認為這是一個好問題，因為這與損益或成本無關，而是關乎公司本身。而 Albert 在上一季真正奠定了基調，強調了關鍵的營運重點，即 2025 年實現 EBITDA 為正，2026 年實現現金流為正。正如你們從我事先準備好的發言稿中看到的那樣，我們不僅在實現這些優先事項，而且非常高興地報告說，從第三季度開始，我們已經超額完成了這些交付成果。這不僅僅是控製成本的問題。

This is really cost optimization. This is rightsizing the organization, but this is also looking at the balance sheet, looking at our inventory and putting actions in place and owners to make sure that we also right-size the inventory over time. In addition, looking at our receivable, make sure that we are collecting on time, make sure that we are also a partner to our suppliers, and we pay them on time.

這才是真正的成本優化。這既是對組織進行規模調整，也是對資產負債表、庫存進行審查，並採取措施和指定負責人，以確保我們隨著時間的推移也能對庫存進行規模調整。此外，也要查看我們的應收帳款，確保我們按時收款，確保我們也是供應商的合作夥伴，並按時向他們付款。

So this is really about our DNA going forward that we want to make sure that while capitalizing on the growth prospect of Paragon 28. And Albert rightly discussed the market, the company, we also are able, and we proved that in Q3 that we are able to grow at two and three times the market while delivering EBITDA positivity and improving our cash position. And I expect this to continue, especially when you compare year on year in the rest of 2024 and 2025 and beyond.

所以，這其實是關乎我們未來的DNA，我們希望確保在充分利用Paragon 28的成長前景的同時，也能維持這種DNA。阿爾伯特正確地討論了市場和公司，我們也有能力，而且我們在第三季度證明了這一點，我們能夠在實現 EBITDA 為正併改善現金狀況的同時，以兩到三倍於市場的速度增長。我預計這種情況還會持續下去，尤其是在 2024 年剩餘時間、2025 年及以後的年份之間進行比較時。

Brandon Vazquez, William Blair.

布蘭登·瓦茲奎茲，威廉·布萊爾。

Thank you for taking the question. Albert, maybe just for you to start, we're a couple of months into the launch of SMART 28. That's, of course, been a big focus for you for a long time here. Can you just talk a little bit about how the first cases are going? What are you excited about? What's kind of the future going on there? And any updates we can expect from SMART 28 going into 2025?

感謝您回答這個問題。艾伯特，或許你可以先說，SMART 28 的發布已經過去幾個月了。當然，這長期以來一直是你們關注的重點。能簡單談談首批病例的進展嗎？你最期待的是什麼？那裡的未來發展趨勢如何？那麼，SMART 28 在 2025 年會有哪些更新呢？

Yeah, thank you Brandon, for that question. I'm really happy that you brought it. We spent a lot of time on the last earnings call talking about some of the technology. So we really wanted to focus on the financial performance, but I'm sitting here trembling because I really want to talk about the success of some of these products in particular. Look, I think one of the best ways to characterize SMART 28 so far, that first module is once you see what you see with that, it's hard to go back, right?

是的，謝謝你，布蘭登，問了這個問題。你把它帶來了，我真高興。在上次財報電話會議上，我們花了很多時間討論一些技術問題。所以我們原本想專注於財務業績，但我現在坐在這裡激動得發抖，因為我真的很想談談其中一些產品的成功之處。我認為到目前為止，描述 SMART 28 的最佳方式之一就是，一旦你看到了它所展現的東西，就很難再回到過去了，對吧？

The ability to really, on a fine scale, understand the deformity better, what these patients are truly presenting with, what the combination of deformities are and then mapping out a solution that's really patient-specific. We're really mapping out a solution based on how exactly that patient is presenting. When a surgeon sees that valuable information and we're able to recreate that in the operating room, I think it's really hard to go back, and at least that's the feedback that we've gotten. One of our surgeons described it, as he's a surgeon out of Utah. He said, it's like flying a plane at night.

能夠真正細緻地了解畸形情況，更了解這些患者的真實情況，了解畸形的組合方式，然後制定真正針對患者的解決方案。我們正在根據患者的具體病情制定解決方案。當外科醫生看到這些有價值的訊息，並且我們能夠在手術室中重現這些訊息時，我認為就很難再回到過去了，至少這是我們得到的回饋。我們的一位外科醫生這樣描述它，他是一位來自猶他州的外科醫生。他說，這就像夜間駕駛飛機一樣。

You're flying that plane instrumented. That's how he sees the value of SMART 28 now. He's in the operating room and some of the tools that we use in the operating room, in particular, fluoroscopy is a very imperfect science. So depending on the position of the foot and the position of that C-arm, it can really show us a distorted view of what that patient is really presenting there. This gives us the ability to not rely on that imperfect imaging to correct these patients, but to use that imaging only to confirm that we've corrected these patients.

你駕駛的是配備儀表的飛機。這就是他現在對 SMART 28 價值的看法。他現在在手術室裡，而我們在手術室裡使用的一些工具，特別是透視技術，是非常不完美的科學。因此，根據腳的位置和 C 臂的位置，它可能會向我們顯示患者實際病情的扭曲影像。這樣我們就不必依賴不完美的影像來矯正這些患者，而只需利用影像來確認我們已經矯正了這些患者。

So it's a really, really comforting perspective that he used, and I was excited that he said that because I hadn't thought about it that way. But it's so far, the short way of answering that, Brandon, is the response has been really strong. This is a new way of thinking about, in particular, forefoot procedures. And it happens to be a really, really three-dimensionally-complex environment for surgeons to replicate in the operating room, and we're happy that we can improve that.

所以他提出的觀點真的讓人感到很安慰，我很興奮，因為我之前沒有這樣想過。但就目前而言，布蘭登，簡單來說，反應非常強烈。這是一種全新的思考方式，尤其是在前足手術方面。而且，對於外科醫生來說，手術室中要複製的三維環境非常複雜，我們很高興能夠改善這一點。

Great, and maybe since on your note that you mentioned we're talking a little bit more finance, maybe, Chadi, for you. As you look at gross margins, I appreciate the comments you gave in your prepared remarks that you have line of sight to improvement. Can you just talk a little bit about what are kind of the milestones you need here to kind of get back up to 80% plus gross margin? And how does that progress over the next several quarters as we think about 2025 and '26 for updating our models?

太好了，既然你剛才提到我們要多談談財務方面的事情，那麼，查迪，也許這對你來說…就毛利率而言，我很欣賞您在準備好的演講稿中提出的觀點，即您有改進的方向。您能否簡要談談，要讓毛利率恢復到 80% 以上，您需要達到哪些里程碑？那麼，在接下來的幾個季度裡，當我們考慮在 2025 年和 2026 年更新我們的模型時，情況會如何發展？

Yes. Thank you, Brandon. Really, since last quarter, we moved away from the 80%. The way I'm looking at our business and all the priorities of EBITDA positivity and cash flow positivity assume this is we have somewhat a floor of around 75% that we expect to improve from as we move into 2025. Now the level of incremental, we will be talking about this in February for 2025.

是的。謝謝你，布蘭登。實際上，從上個季度開始，我們已經不再追求 80% 的目標了。我看待我們業務的方式，以及所有關於 EBITDA 為正和現金流為正的優先事項，都假設我們有一個大約 75% 的最低水平，我們預計隨著我們進入 2025 年，這個水平會有所提高。至於增量水平，我們將在2月份討論2025年的相關問題。

But really, we're moving away from the 80% and I would like us to focus on where we are today and the actions that we are taking are across the board, negotiation with our supplier to reduce our cost of purchase of inventory. However, this is going to take time to flush through the P&L. We are looking at our freight expense and looking to reduce it and stabilize it. We're looking at our inventory adjustments. So we've highlighted some significant inventory adjustment in prior periods, and we're aiming to reduce that.

但實際上，我們正​​在擺脫 80% 的局面，我希望我們專注於我們目前的狀況，我們正在採取的行動是全方位的，包括與供應商談判以降低我們的庫存採購成本。然而，這需要時間才能在損益表中體現。我們正在審視貨運費用，並尋求降低和穩定貨運費用的方法。我們正在調整庫存。因此，我們已經強調了前幾個時期的一些重大庫存調整，我們的目標是減少這種情況。

And the way we reduce it is by reducing our inventory, and buying what we need and having that product where we need it. These are the actions that we are taking, but this is going to be a continued effort to improve on our margin over time, but this is not going to be overnight.

我們減少庫存的方法是減少庫存，只購買我們需要的產品，並確保產品在我們需要的地方供應。這些是我們正在採取的行動，但要隨著時間的推移提高我們的利潤率，這將是一個持續的努力，但這不會在一夜之間實現。

All right. If there's no further questions, operator, we'll go ahead and wrap things up here. So thanks, everybody, for your time today. I really appreciate you jumping on here. If you have any further questions, please reach out. Otherwise, we look forward to seeing many of you at our future investor conferences coming up.

好的。操作員，如果沒有其他問題，我們就到此結束吧。謝謝大家今天抽出時間。非常感謝你抽空來這裡。如果您還有其他疑問，請與我們聯絡。除此之外，我們期待在即將舉行的投資者大會上見到各位。

That concludes our call. Have a great day. Thank you.

通話到此結束。祝你有美好的一天。謝謝。

Thank you.

謝謝。

Thank you all for joining today's call with Paragon 28. I can confirm today's call has now concluded. You may now disconnect from the call, and please enjoy the rest of your day.

感謝各位參加今天與 Paragon 28 的電話會議。我可以確認今天的電話會議已經結束。現在您可以掛斷電話了，祝您今天餘下的時間愉快。