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spk_0: greetings not going to the extent medical fourth quarter and full year two thousand and twenty two finance result conference call at this time or participant on a listen only most he said he would require operator assistance during the conference please press start zero on your telephone keypad as reminder the culprits is being recorded i would now like to the conference over to met steinberg us in partners please go ahead
spk_1: the you operator and walk and to accent medical fourth quarter and four year twenty twenty two financial results call to me today is schoenborn president and chief executive officer and scott meals chief financial officer today's paul is being wiped out and will be posted on the company's website for flavor during the course of this whole nicer they make certain forward looking statements were going future events and the company's expected future performance he's forward looking statements reflect accents current perspective on existing trends and information and can be identified by such words as expert plan will they anticipate believe and other words with similar meeting but forward looking statements are not going she's a future performance involve risks an answer she's including those noted in the risk factors such as of the company's annual report on phones and che fault with the us fcc on march seven twenty twenty three and subsequent as see reports and plus releases actual results may differ materially the company's financial results a press release and today's discussion include certain not yup financial measures please refer to the non job to gop reconciliation which appear in the tables about us release and or otherwise available on our website note that or form ha fault with our financial results facilities provides a detailed narrative that describes er use of such measures for the benefit of those of you want the maybe listening to the reply this poll was held and recorded on tuesday march seventh at approximately nine am eastern standard time the company the flames a obligations of the it's forward looking statements such as required by applicable law now i like to turn the pull over to sundown
spk_2: thank you matt i'm excited to share with you today the significant progress made by accept medical response which is several major milestone centered around our for key growth initiatives that strengthen our long term business prospects
spk_1: notably we announced last week the acquisition the conflicts product line from search line this is accents first acquisition since two thousand and fifteen and is critical to our success as is natalie as scale to our business but also enhances our margin profile i'll discuss this acquisition more shortly first turning to our fourth quarter performance we close twenty twenty two on a positive note generate fourth quarter revenue growth of nearly ten percent driven by continued strength or a biologics business which continued to realize robust a man led by our new products biologics grew by forty percent you for and twelve percent year over year legacy hardware sales declined by sixty per se that for the year but only down seven sad for the fourth quarter showing that our new focus on the ac markets are starting to make an impact one of our biggest challenges in the biologics up man for our business to rob cisco your twenty twenty two was our ability to produce enough product to keep up with demand more pointedly we're to walk away from a significant amount of business if it's for your twenty two because we did not have enough labour to build a product be needed in order to meet this demand one of the most impactful things we've done was hiring marshalik burger to be are cheap operations officer markets and industry bachelor that brings a ton of experience or a company additionally we focus on ramping up our production workforce we started this process earlier twenty twenty two but given the length of odd boarding time to recruit and train or process is gonna go
spk_2: gradual progression to reach are targeted capacity levels supported by these efforts we are starting to see improvements in our supply chain concur with these efforts are laser focused on managing our costs prudently while enhancing are operational efficiency is mark will drive greater efficiency for our operations including the modernization of our production
spk_1: optimization of our processes and the diversification and development of new product lines now that our newly implemented enterprise resource planning or earpiece system has been activated it under marks leadership we recover their business is poised to achieve our key growth and operational objectives we look forward to marks contributions now before discussing what complex ads were business in more detail and like to remind you of our for key growth pillars one do product introductions to distribution network expansion three adjacent market penetration and for strategic acquisitions any conflicts to our business
spk_2: touches on all of these items making it a solid it with our leading spine brand offering specifically this transaction is highly complimentary to our spinal fixation business while and has rented are offering and the a see and outpatient markets we purchased the worldwide an intellectual property rights and lax and colfax for seventy million dollars with approximately forty nine dollars in annual revenues conflicts at nearly twenty five percent in annual revenue to access as an attractive gross margin profile taking it immediately a creative to our business and positioning us to become a key
spk_1: cash flow positive in the near future moreover it bolsters and already impressive not a future offering for our spinal fixation business coupled with are less invasive axles and or spiders device and our silex as i future products like the call flags and colfax products and complete are offering in the fast growing segment of a see an outpatient procedures
spk_2: with a complex product line we're adding two devices with this acquisition first the complex in or laminar stabilization device a posteriori non political supplemental fixation device that is the only after yeah p pm may approve implant with level one clinical evidence for the treatment of moderate to severe lumbar spine also
spk_1: analysis or otherwise known as alice us second we added colfax a supplemental fixation device that is minimally invasive system intended for use on all levels of lumbar spine
spk_2: what's most important about how flax is that the is a serious medical needs
spk_1: alice as is the narrowing of the spinal canal which puts pressure on the nerves and causes pain this can lead to pain during physical activity just everyday living overall moreover this is of motion preservation system versus a spinal fusion spinal fusion a patients fluid normal motions greatly diminished after most spinal fusions in only a few years that same patient has to then have more levels of the spine fused or what's known as a chases level fusion for the cause like devise a patient by many years of healthy living with most of their long range of motion preserved and twenty twenty one the number of patients diagnosed
spk_2: with alice as was a proxy two point four million and represents the largest single growing patient than graphic and spine in total the allah says mark is expected to reach five point six billion dollars this year growing at eight point four percent annually is the number one reason and patient over the age of sixty five would have lumber surgery complex is uniquely designed to treat this condition has increasing in popularity for the following reasons first complex is clinically proven as is the first and only lumbar spine device with level one evidence from to perspective randomized trials against two different control groups in two different countries is widely adopted with over two hundred thousand have limitations and is clinically validated with more than ninety peer reviewed publications second it simpler integrate for surgeons training as quick and easy the complex devices a single piece sterile pack titanium and plan requires minimal instrumentation with only one small tray third phase pay should feedback has been extremely positive with many experiencing pain relief in their leg and back and improve physical function
spk_1: as part of the transaction we're adding a team of fourteen experience sales rats and support staff from surge which will enable a seamless transition and sure we can hit the ground running additionally were expanded our footprint with more new distributors and a significant number of new physician slash surgeons added to our network in summary to complex acquisition is a major milestone achievement for access we are larger and more diverse with an improved margin profile with a new product line that brings transformed of treatment options to a large and growing patient population importantly it now positioned accent on a path to achieve profitability and the near future
spk_2: our organization is sitting out each of our killer's that supports our growth objectors labeling us to achieve scale faster and work towards profitability this acquisition combined with a strong demand marmot for our do biologic products and actions taken to enhance our operating efficiencies are all testament to our really success and a broader gold maximizing share
spk_1: value now like and turn to crawl over scott's cool discuss or fourth quarter and four year twenty twenty two financial results
spk_3: thank you so on and good morning everyone
spk_2: total revenue for the fourth quarter of twenty twenty two fifteen point three million dollars compared to forty million dollars for the fourth quarter twenty twenty one for the four year twenty twenty two total revenue was fifty eight million dollars to their to fifty five point three million dollars for twenty twenty one and increase to five percent this is attributed primarily revenue from new products introduce turned twenty twenty one
spk_1: gross margin for the fourth quarter twenty forty to fifty four point four percent compared to fifty five point one percent for the same period and twenty twenty one gross margin for the for your twenty twenty two was fifty five point four percent compared to fifty eight point eight percent for the same period and twenty twenty one is the person or primarily due to higher what increase charges for excess and leading the tories have contributed to the for your decline fourth quarter twenty twenty two operating expenses with ten million dollars compared to nine point six million dollars the same period a year ago for the four year twenty twenty two operating expenses for thirty eight point nine million dollars compared to thirty six point three million dollars for twenty twenty one as a percentage of total revenue operating expenses were sixty five point seven percent and sixty seven point one percent for the three and twelve month period ended december thirty first two
spk_2: only twenty two respectively compared to sixty eight point eight percent and sixty five pull a present for the three a twelve month period ended december thirty first twenty twenty one respectively general and administrative expenses what four million dollars and fifteen point five million dollars that the three and twelve months ended december thirty first twenty twenty two representing a decrease of four percent and an increase of seven percent respectively over the prayer periods the decrease for the quarterly comparison resulted from reduce seven it's expose or the increase for the annual comparison is primarily attributable did additional expenses related various compensation plans product registrations and costs related e r p system upgrades partially offset by legal settlement expenses during the year
spk_1: they'll the marketing expenses were five point eight billion dollars and twenty two point five million dollars for the three and twelve months ended december thirty first twenty twenty two respectively
spk_3: an increase and ten percent for the three month period and an increase of seven percent for the twelve month period
spk_2: year over year increase included additional independent agent commission experts resulting from higher sales and a great a mix of independent agent sales an additional expenses associated with trade shows related travel net loss in the fourth quarter of twenty twenty two was two point three million dollars or two cents per share can pay
spk_1: do a loss of two point three million dollars for three cents per share in accountable twenty twenty one period that large for the four year twenty twenty two was a point five million dollars or nine cents per share compared to four point eight million dollars for six cents per share and twenty twenty one
spk_3: adjusted either down for the fourth quarter of twenty twenty two was a point eight million dollars last compared to a lot of point nine million dollars for the same period and twenty twenty one
spk_1: for the full year twenty twenty two adjusted eat there was a lot of three million dollars compared to adjusted leave it does point three million dollars for the year ended december thirty first twenty twenty one as of december thirty first twenty twenty two we had twenty point three million dollars cash and cash for less than point nine million dollars net accounts receivable seventeen point three million dollars of inventories and four point six million dollars available under our revolvers now are trying to call back to show for closing remarks
spk_2: thank you scott in closing we exited twenty twenty two on a positive note with solid revenue growth supported by strong demand for our leading spine products and started twenty twenty three unexciting now with the acquisition of the complex product
spk_1: adding complex provides us with the assets talent and network we need to add scale grow profitably or enterprises now twenty five percent larger and we're on a path to achieve profitability in the near term looking for we plan to continue to be active in acquiring other businesses the line with our strategy a diligence in our approach finally lee
spk_2: later this afternoon i'll be presenting the can accord muskal skeletal conferences six thirty pm eastern time or three thirty pm pacific time live webcast into my presentation will be available on the investor relations section of our website at www dot extent medical dot com
spk_4: we got many of you can tune and thank you for joining us today and for your continued support i will now turn it back over to the operator
spk_0: thank you
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