Tenon Medical Inc (TNON) 2023 Q4 法說會逐字稿

Greetings, and welcome to the Tenon Medical Fourth Quarter and Full Year 2023 results, financial results and corporate update conference call. As a reminder, this call is being recorded. And Your hosts today are Steve Foster, President and Chief Executive Officer, and Steve Van Dick, Chief Financial Officer. Mr. Foster and Mr. Van Dick will present the results of the operations for the fourth quarter and full year ended December 31, 2023 and provide a corporate update. A press release detailing these results was released today and is available on the Investor Relations section of our Company's website, www.tenonmed.com.

您好，歡迎參加特能醫療 2023 年第四季和全年業績、財務業績和公司更新電話會議。提醒一下，此通話正在錄音。今天的主持人是總裁兼執行長史蒂夫福斯特 (Steve Foster) 和財務長史蒂夫範迪克 (Steve Van Dick)。Foster 先生和 Van Dick 先生將介紹截至 2023 年 12 月 31 日的第四季和全年營運業績，並提供公司最新情況。今天發布了詳細介紹這些結果的新聞稿，可在我們公司網站 www.tenonmed.com 的投資者關係部分取得。

Before we begin the formal part of our presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates and other information that might be considered forward looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ material. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events.

在我們開始簡報的正式部分之前，我想提醒大家，電話會議和網路廣播中的陳述可能包括預測、估計和其他可能被視為前瞻性的資訊。雖然這些前瞻性陳述代表了我們目前對未來的判斷，但它們受到風險和不確定性的影響，可能導致實際結果與實際結果有重大差異。請您注意不要過度依賴這些前瞻性陳述，這些陳述僅反映我們截至本簡報發布之日的觀點。請記住，我們沒有義務根據新資訊或未來事件修改或公開發布這些前瞻性陳述的任何修改結果。

Throughout today's discussion, we will attempt to present some important or termination, some important factors relating to our business that may affect our predictions. For a more complete discussion of these factors and other risks you can review our prospectus dated April 26, 2022, particularly under the heading Risk Factors, which is on file with the Securities and Exchange Commission at www.SEC.gov.

在今天的討論中，我們將嘗試提出一些與我們的業務相關的重要或終止的重要因素，這些因素可能會影響我們的預測。如需對這些因素和其他風險進行更完整的討論，您可以查看我們2022 年4 月26 日的招股說明書，特別是「風險因素」標題下的招股說明書，該招股說明書已在美國證券交易委員會備案，網址為www.SEC.gov。

At this time, I'll turn the call over to Tenon Medical's Chief Executive Officer, Steve Foster. Please go ahead, sir.

此時，我會將電話轉給 Tenon Medical 的執行長 Steve Foster。請繼續，先生。

Thank you, Paul, and good afternoon to everyone. I am pleased to welcome you to today's fourth quarter and full year 2023 financial results and corporate update conference call for Tenon Medical conclusion of 2023 marks the successful first full year of nationwide commercialization for the Catamaran system and operating Tenon medical as a public company. This success is highlighted by Tenon significant progress in our revenue growth and improving gross margins. We've entered 2024 from a position of operational strength and continue our focus on building market share. We've made considerable commercialization and technical progress and continue to gain traction in our go-to-market approach with SI focused positions and network partners adopting our proprietary Catamaran system, which we believe has broadened the competitive field of surgical options available for patients with chronic sacroiliac joint pain for degenerative simulators.

謝謝你，保羅，祝大家下午好。我很高興歡迎您參加今天的第四季度和2023 年全年財務業績和企業更新電話會議。2023 年的結束標誌著雙體船系統在全國範圍內商業化和作為上市公司運營Tenon Medical 的成功的第一個全年。Tenon 在營收成長和毛利率提高方面取得的重大進展凸顯了這一成功。進入 2024 年，我們的營運實力強勁，並將繼續專注於建立市場份額。我們已經取得了相當大的商業化和技術進步，並且透過SI 重點定位和網路合作夥伴採用我們專有的雙體船系統，繼續在我們的進入市場方法中獲得牽引力，我們相信這擴大了患者可用手術選擇的競爭領域退化模擬器的慢性骶髂關節疼痛。

During the fourth quarter, Catamaran system experienced a [312%] increase in the number of surgical procedures from the prior year, which drove strong revenue growth with an increase of 192% year over year. The quarter was also highlighted by a third consecutive quarter of positive gross profit. Moreover, as mentioned in prior quarterly updates, our revenue growth and largely fixed cost structure will continue to fuel our gross margin performance to be sustainable at recent levels. We believe our fourth quarter was a good proof point as we achieved 69% gross margin, representing a significant sequential increase 57% gross margin in the third quarter for the full year of 2023, revenue grew 324% to $2.9 million and gross profit increased to $1.2 million as compared to a gross loss for the full year of 2022.

第四季度，雙體船系統的手術數量較上年增加[312%]，帶動收入強勁成長，年增192%。該季度的另一個亮點是毛利連續第三個季度實現正值。此外，正如先前的季度更新中所提到的，我們的收入成長和基本固定的成本結構將繼續推動我們的毛利率表現保持在近期水準。我們相信，我們的第四季是一個很好的證明，因為我們實現了69% 的毛利率，這意味著2023 年全年第三季的毛利率較上季大幅成長57%，營收成長324% 至290萬美元，毛利成長至與 2022 年全年的毛虧損相比，虧損為 120 萬美元。

Continued expansion of our workshop activities during the fourth quarter, supported by our valued physician customers and the robust commercial infrastructure we built. As a reminder, we take a precise go-to-market approach through our workshop and training programs in order to address physicians and medical professionals with extensive backgrounds and experience in SI surgical technologies. We continue to focus on a hybrid approach with our local synthetic model and convert lab workshops to introduce the Cadomin system, creating a timely and efficient process for our physician customers. We supplement these efforts with intensive clinical support and service combined. These critical activities are designed to drive acceleration in the number of procedures completed with Catamaran system which we've experienced since we began the initiative, our program hosted 133 physicians and Catamaran workshops during the full year of 2023. During the fourth quarter we enhanced our marketing initiatives with participation in a series of immersive physician webinars training programs featuring the Catamaran system, attracting over 60 health care providers. Our partnership with Dr. Matthew Davies, of Orthopaedic Associates of Duluth, Minnesota provided a physician's perspective of our system as he discussed, his clinical experience performing over 50 Catamaran procedures. In addition to the presentation, Dr. Davies provided a demonstration of the simple inferior poster implantation technique of our unique transmitting SI joint implants. Building on the momentum of the quarter, we expect the number of surgical procedures to continue to grow as our sales team broadens our strategic marketing promotions and workshops featuring the Catamaran system. Additionally, we continue to enroll patients in our post-market multi-center clinical study and expect this enrollment to be finalized in the coming quarter. We expect a preliminary glimpse of early data in the coming weeks. Operationally in November, we were proud to pass a full quality system inspection technique or QC level to inspection conducted by the U.S. Food and Drug Administration. The QC inspection assesses the medical device manufacturers, compliance with quality system requirements and related regulations. The FDA's pass grade is validation of our ongoing stringent focus on our quality system, standardized controls and strict operational procedures that pan on medical. Additionally, during the fourth quarter, we entered a [125], $1.25 million secured note financing led by a cent special venture, which has been fully repaid by the issuance of Series A. preferred stock announced in February, we deeply value this investment and vote of confidence from a distinguished investor syndicate that veterans in the medical device industry. Because the $2.6 million of proceeds received from the February Series A. preferred offering was corresponding extinguishment of debt, will bolster our cash position and refined our balance sheet as we track toward 10 on's next stage of development, the growth, improved commercialization.

在我們尊貴的醫生客戶和我們建立的強大商業基礎設施的支持下，我們的研討會活動在第四季度繼續擴大。謹此提醒，我們透過研討會和培訓計劃採取精確的市場進入方法，以便向在 SI 外科技術方面擁有豐富背景和經驗的醫生和醫療專業人員提供服務。我們繼續專注於採用本地合成模型的混合方法，並轉變實驗室研討會以引入 Cadomin 系統，為我們的醫生客戶創建及時高效的流程。我們透過密集的臨床支援和服務來補充這些努力。這些關鍵活動旨在推動雙體船系統完成的手術數量的增加，自從我們開始該計劃以來，我們已經經歷了這一點，我們的計劃在2023 年全年接待了133 名醫生和雙體船研討會。在第四季度，我們透過參與一系列以雙體船系統為特色的沉浸式醫生網路研討會培訓計畫來加強我們的行銷活動，吸引了 60 多家醫療保健提供者。我們與明尼蘇達州德盧斯整形外科協會的 Matthew Davies 博士的合作提供了醫生對我們系統的看法，正如他所討論的那樣，他執行了 50 多次雙體船手術的臨床經驗。除了演示之外，Davies 博士還演示了我們獨特的傳輸 SI 關節植入物的簡單下海報植入技術。憑藉本季的勢頭，隨著我們的銷售團隊擴大以雙體船系統為特色的策略行銷促銷和研討會，我們預計外科手術的數量將繼續增長。此外，我們將繼續招募患者參加我們的上市後多中心臨床研究，並預計此次招募將在下個季度完成。我們預計將在未來幾週內初步了解早期數據。11 月投入營運後，我們很自豪地通過了美國食品和藥物管理局進行的全面品質系統檢查技術或 QC 水平檢查。QC檢查評估醫療器材製造商是否符合品質系統要求和相關法規。FDA 的通過等級證明了我們持續嚴格關注醫療領域的品質系統、標準化控制和嚴格的操作程序。此外，在第四季度，我們進行了[125]，由一家特殊企業牽頭的125 萬美元擔保票據融資，該融資已透過發行2 月份宣布的A 輪優先股全額償還，我們非常重視這項投資，並且來自傑出投資者財團對醫療器材產業資深人士的信任投票。因為從2 月份A 輪優先發行中獲得的260 萬美元收益相當於債務的消除，隨著我們朝著10 世紀的下一階段發展、增長和商業化的改善邁進，這將增強我們的現金狀況並完善我們的資產負債表。

And with that, I'll turn it over to Mr. Van Dick, our Chief Financial Officer, to discuss our financials.

接下來，我將把它交給我們的財務長範迪克先生來討論我們的財務狀況。

Thank you, Steve. I'll give us a sync review of our financial results. A full breakdown is available in our press release that crossed the wire this afternoon. Our revenue was $808,000 in the fourth quarter an increase of 192% compared to $277,000 in the comparable year ago period. Revenue for the year ended December 31, 2023 was $2.9 million, an increase of 324% compared to the $691,000 in the comparable year-ago period. The increase in revenue for the year ended December 31, 2023 was as compared to 2022 was primarily due to an increase of 312% in a number of surgical procedures in which the Catamaran system was used.

謝謝你，史蒂夫。我將對我們的財務表現進行同步審查。我們今天下午發布的新聞稿中提供了完整的詳細資訊。第四季我們的營收為 808,000 美元，與去年同期的 277,000 美元相比成長了 192%。截至 2023 年 12 月 31 日止年度的營收為 290 萬美元，較去年同期的 691,000 美元成長 324%。截至2023年12月31日止年度的收入較2022年增加主要是由於使用雙體船系統的多項外科手術增加了312%。

Gross profit in the fourth quarter was $559,000 or 69% of revenues compared to a gross loss of $207,000 or a negative 75% of revenues in the comparable year ago quarter. Gross profit in the year ended December 31, 2023 was $1.2 million compared to a gross loss of $641,000 in the year ended December 31, 2022 Importantly, we have seen gross margin steadily improve due to the revenue growth associated with increased number of surgical procedures. Operating leverage created due to a lower relative fixed costs and the absorption of more overhead into our standard costs.

第四季的毛利為 559,000 美元，佔營收的 69%，而去年同期毛虧損為 207,000 美元，佔營收的 75%。截至2023年12月31日止年度的毛利為120萬美元，而截至2022年12月31日止年度的毛虧損為641,000美元。重要的是，由於與外科手術數量增加相關的收入增​​長，我們看到毛利率穩定提高。由於相對固定成本較低以及將更多管理費用吸收到我們的標準成本中而產生了營運槓桿。

Operating losses totaled $3.1 million in the fourth quarter compared to a loss of $7.9 million in the fourth quarter of 2022. For the year ended December 31, 2023, operating losses totaled $15.7 million compared to $18.7 million in the prior year. Period. Decreases in operating expenses were primarily the result of a decrease in sales and marketing expense as a result of the internalization of our commercial team and the termination of our distribution partnership during the prior period and decreases in general and administrative expenses.

第四季營運虧損總計 310 萬美元，而 2022 年第四季營運虧損為 790 萬美元。截至 2023 年 12 月 31 日的年度，營運虧損總計 1,570 萬美元，而前一年為 1,870 萬美元。時期。營業費用的減少主要是由於我們的商業團隊內部化以及前期分銷合作關係的終止導致銷售和行銷費用減少以及一般和管理費用的減少。

Net loss was $3.1 million for the fourth quarter compared to a loss of $7.9 million in the same period in 2022. For the year ended December 31, 2023, net loss was $15.6 million compared to $18.9 million in the prior year. The Company expects to incur additional losses in the future. As of December 31, 2023, cash and cash equivalents and short-term investments totaled $2.4 million as compared to $8.6 million as of December 31, 2022 as of December 31, 2023, the company had $1.2 million of outstanding debt related to our secured note offering in November, which has been fully repaid subsequent to quarter end with the series Series A. preferred stock. As of today, the Company has no outstanding debt.

第四季淨虧損為 310 萬美元，而 2022 年同期淨虧損為 790 萬美元。截至 2023 年 12 月 31 日的年度，淨虧損為 1,560 萬美元，而前一年為 1,890 萬美元。公司預計未來將遭受額外損失。截至2023年12月31日，現金和現金等價物以及短期投資總額為240萬美元，而截至2022年12月31日為860萬美元截至2023年12月31日，公司有與我們的擔保票據相關的未償債務120萬美元11 月發行，並已在季度末透過 A 輪優先股全額償還。截至目前，公司無未償還債務。

I will now turn the call back to Steve for closing thoughts.

現在我將把電話轉回給史蒂夫，讓他結束我的想法。

As you see with the accelerating pace of Catamaran procedures and continued expansion of our sales and marketing efforts. We're very optimistic for continued growth from the commercialization of our proprietary FDA-cleared surgical implant system. We ended the fourth quarter with solid momentum in revenue and a third consecutive quarter of positive gross margin for the year of 312% increase in surgical procedures followed by 324% increase in full year revenues, we believe will continue this growth trajectory with our expanding commercial infrastructure and seasoned and sales management team. We continue to reinforce our commitment to validating and differentiating patient outcomes and radiographic assessment for the ongoing post-market clinical studies, we expect to expand the application of our distinct product offering to address s SI revision surgery is an adjunct to multilevel fusions. We are dedicated to executing our growth objectives as we prepare to prioritize improving the quality of life of patients suffering from SI joint pain while pursuing long-term value for our shareholders. I thank you all for attending. And now I'd like to hand the call back over to our operator to begin our question and answer session with our covering analysts. Paul?

正如您所看到的，雙體船程序的步伐不斷加快，我們的銷售和行銷工作不斷擴大。我們對 FDA 批准的專有手術植入系統的商業化的持續增長感到非常樂觀。截至第四季度，我們的營收勢頭強勁，全年毛利率連續第三個季度實現正增長，外科手術量增長了312%，全年收入增長了324%，我們相信，隨著我們不斷擴大的商業業務，我們將繼續保持這一成長軌跡。基礎設施和經驗豐富的銷售管理團隊。我們繼續強化我們對驗證和區分患者結果以及正在進行的上市後臨床研究的放射學評估的承諾，我們期望擴大我們獨特產品的應用，以解決 SI 修正手術是多級融合的輔助。我們致力於實現我們的成長目標，我們準備優先考慮改善骶髂關節疼痛患者的生活質量，同時為股東追求長期價值。我感謝大家的出席。現在我想將電話轉回給我們的接線員，以開始與我們的分析師進行問答。保羅？

Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue, you may press star two if you'd like to remove your question from the queue For participants using speaker equipment it may be necessary to pick up your handset before pressing the star key one other, please while we poll for questions.

謝謝。我們現在將進行問答環節。如果您想提問，請按電話鍵盤上的星號一。確認音將表示您的線路在問題佇列中，如果您想從佇列中刪除您的問題，可以按星號二。對於使用揚聲器裝置的參與者，可能需要在按星號鍵一之前拿起聽筒其他問題，請在我們投票時提問。

Our first question is from Bruce Jackson with The Benchmark Company. Please proceed with your question.

我們的第一個問題來自 The Benchmark Company 的 Bruce Jackson。請繼續你的問題。

I guess some Thanks for taking my questions.

我想有些感謝您提出我的問題。

Just real quick, how many surgeons did you change in the quarter?

快說一下，本季您更換了多少位外科醫生？

So we I think thanks, Bruce and good to hear from you. So we put we trained 28 physicians over the quarter and 133 over the entire year.

所以我想謝謝你，布魯斯，很高興收到你的來信。因此，我們預計本季培訓了 28 名醫生，全年培訓了 133 名醫生。

Okay, super and then on lithium, the post-approval study, what's the final enrollment number?

好的，超級，然後是關於鋰的批准後研究，最終的註冊人數是多少？

Yeah. The the study was approved, Bruce, for a 50 patient study, we may wind up anywhere between 40 and 50 on this thing. And we feel like we've got a good data set cooking and what have you. So very much towards the tail end of that enrollment expect for it to ramp up here in the coming quarter. And as I mentioned, very excited about getting an early glimpse at the things we're focused on here.

是的。Bruce，這項研究已獲得批准，針對 50 名患者進行研究，我們最終可能涉及 40 到 50 名患者。我們覺得我們已經有了一個很好的數據集，你有什麼。因此，在入學人數接近尾聲時，我們預計下一季的入學人數將會增加。正如我所提到的，很高興能夠儘早了解我們在這裡關注的事情。

First safety profile. Second, of course, is the of the efficiency and the effectiveness of the procedure to relieve patients pain. And then as a secondary endpoint, the radiographic assessment not seeking a healed and fused SI joint so far, we see that we see that early glimpse coming here very soon and enrollment wrapping up here shortly.

第一個安全設定檔。其次，當然是手術的效率和效果，以減輕病人的痛苦。然後作為次要終點，到目前為止，放射線評估並未尋求癒合和融合的 SI 關節，我們看到我們很快就會看到早期的景象，並且註冊很快就會在這裡結束。

Okay, great. That's it from me.

好的，太好了。這就是我說的。

Thank you.

謝謝。

Thank you, Bruce.

謝謝你，布魯斯。

Our next question is from Anthony Vendetti with Maxim Group. Please proceed with your question.

我們的下一個問題來自 Maxim Group 的 Anthony Vendetti。請繼續你的問題。

Yes, thanks on so you did you trained 28 physicians in the fourth quarter. Do you have a target, the four per quarter training a approximately or a goal for 2024?

是的，感謝您在第四季度培訓了 28 位醫生。您是否有目標，大約每季訓練 4 次，還是 2024 年的目標？

Sure, Anthony. We of course, we do have objectives and goals there internally. And really we focused primarily on quality rather than quantity or I could train 1 million people if they don't adopt, I'm not making any headway. So it's really about targeting how we hope to achieve 25 plus well targeted a good profile, physicians, everything every single quarter and really focus our energy look, we're a relatively small operation. We need to aim small, Miss small and really focus our energies to make sure we finish were successful in achieving adoption. So probably right in that 25 to 30 areas, our sweet spot, and we'll continue to build on that as time progresses.

當然，安東尼。當然，我們內部確實有目標。事實上，我們主要關注的是品質而不是數量，否則我可以培訓 100 萬人，如果他們不採用，我不會取得任何進展。因此，這實際上是關於我們希望如何實現 25+ 目標良好的形象、醫生、每個季度的一切，並真正集中我們的精力，我們是一家相對較小的企業。我們需要瞄準小目標，著眼小目標，真正集中精力，以確保我們成功實現採用。因此，可能就在 25 到 30 個領域，這是我們的最佳點，隨著時間的推移，我們將繼續在此基礎上發展。

Okay, great. And then from a utilization perspective, I know it's early and so it could be a little lumpy quarter to quarter, but what trends are you seeing in terms of the utilization of the Catamaran system?

好的，太好了。然後從利用率的角度來看，我知道現在還為時過早，因此每個季度可能會有點不穩定，但您在雙體船系統的利用率方面看到了什麼趨勢？

Yeah, I knew the market is extraordinarily dynamic. There were some new reimbursement coding that came out in 2024. That always creates a lot of questions in the marketplace and things of that nature, very dynamic. What I can tell you is that the number of procedures is still growing spaces is seeing a lot of innovation, a lot of dynamic activity, but certainly you're right with a relatively small base of customers. We do see some lumpiness here and there as being a patients defer from one quarter to the next we see cancellations or what have you. But generally speaking, physicians are making progress in making SI a part of their practice there's some work there in the diagnostic component of the equation, in particular to start building SI as part of their offering and their practice. But a lot of progress there. And a lot of growth in this marketplace.

是的，我知道市場異常活躍。2024 年推出了一些新的報銷編碼。這總是會在市場和類似性質的事物中產生很多問題，非常動態。我可以告訴你的是，程式的數量仍在增長，空間中出現了很多創新，很多動態活動，但當然，你的客戶群相對較小，這是正確的。我們確實看到一些不穩定性，因為患者從一個季度推遲到下一個季度，我們看到取消或其他什麼情況。但總的來說，醫生在使 SI 成為其實踐的一部分方面正在取得進展，在方程式的診斷部分方面做了一些工作，特別是開始將 SI 作為他們的服務和實踐的一部分。但那裡取得了很多進展。這個市場有很大的成長。

Okay, excellent. And then lastly, just the I believe you launched the new instrumentation kit with where what's been the reception from that. And then just general thoughts on on the physicians that you've gleaned from the from the fourth quarter?

好的，非常好。最後，我相信你們推出了新的儀器套件，其反應如何。然後是您從第四季度收集到的關於醫生的一般想法？

Yeah, the risk of sounding a little over to the reaction to our gym technology has been outstanding. That's a smaller profile and that doesn't just mean a smaller incision for the patients. It also means improved visualization during the radiographic process for the physician, and that's extraordinarily important, they need to see the surrounding landmarks and what have you this new profile is really allowing them to do that. So the reaction has been outstanding as to the the customers have been trained and put through workshops in Q4. Of course, that begins the process of moving them towards adoption, getting approvals at their facilities and things of that nature. And we continue to work through that and Sprint if get them to that through surgery and get them adopted.

是的，對我們健身房技術的反應聽起來有點過分的風險是非常突出的。這是一個更小的輪廓，這不僅僅意味著患者的切口更小。這也意味著醫生在放射線照相過程中的視覺化得到了改善，這一點非常重要，他們需要看到周圍的地標，而這個新的配置確實讓他們能夠做到這一點。因此，對於客戶在第四季度接受培訓並參加研討會的反應非常出色。當然，這開始了推動它們被採用、在其設施和類似性質的事情上獲得批准的過程。我們將繼續努力解決這個問題，如果讓他們透過手術實現這一點並讓他們被收養，那麼 Sprint 就會繼續努力。

Okay, great. Thanks so much.

好的，太好了。非常感謝。

I'll hop back in the queue.

我會跳回到隊列中。

Appreciate it.

欣賞它。

Thanks Anthony.

謝謝安東尼。

Thank you. There are no further questions at this time. I would now like to turn the call back over to Mr. Foster closing remarks.

謝謝。目前沒有其他問題。現在我想請福斯特先生致閉幕詞。

Thank you, Paul. So I'd like to thank each of you for joining the earnings conference call today and look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any of your questions, please reach out to our IR firm MZ Group who would be more than happy to assist. And with that, I wish everyone a good day.

謝謝你，保羅。因此，我要感謝大家今天參加收益電話會議，並期待繼續向您通報我們持續取得的進展和成長的最新情況。如果我們無法回答您的任何問題，請聯絡我們的投資者關係公司 MZ Group，他們將非常樂意為您提供協助。在此，我祝福大家有美好的一天。

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。