Conformis, Inc.

Good morning and welcome to the second quarter 2022 earnings conference call for Conformist, Inc. My name is Justin and I will be your conference operator today. All lines have been placed on mute to prevent any background noise. After management's remarks, there will be a question and answer session. I would like to remind you that this call will include forward-looking statements with the meaning of the Federal Securities Law, which are pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements made during this call that are not statements of historical facts should be considered forward-looking. These statements involve material risk and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements, including those discussed in the risk factor section of conformance public filings with the U.S. Securities and Exchange Commissions. You should not place undue reliance on forward-looking statements. Conformist disclaims any obligation except as required by law to update or revise any financial projections or forward-looking statements, whether of new information, future events, or otherwise. This conference call will include time-sensitive information and is accurate only as of the live broadcast as of today, August 9, 2022. I will now turn the call over to Mark Auguste, President and Chief Executive Officer of Conformance.

Thank you and welcome to our second quarter earnings call.

We appreciate you taking the time to hear our business update. With me today is our CFO, Bob Howe. Let's begin with several positives from the quarter. First, our revenue came in at the midpoint of our expectations. Second, our international sales grew 6% in constant currency with our continued progress in several key geographies, including Australia. Third, our imprint need continues to receive positive search and feedback, and revenue from ASC customers continues to grow. And then lastly, we recently executed our first major national agreement for our Platinum Services program. Now, next, I would like to offer additional perspective on our updated outlook. As you will have noted in our release, we adjusted our full-year product revenue outlook to a range of $57 to $61 million. The main driver for our adjusted outlook is that we did not exit the second quarter with the accelerated business momentum we thought we'd have back in May. There are several reasons for this. First, the environment is still challenging. Despite the general recovery and elective procedures, staffing shortages remain at medical facilities and elevated levels of case rescheduling continue. Second, our portfolio transition to imprint continues to ramp as we shift our focus to the ASC. However, the commencement of the full commercial release of our imprint needs system has been impacted due to availability of several key components from our supply chain partners. To address this challenge, we have pivoted our launch approach to a rolling release schedule with the goal to be fully launched by late Q3. And then third, supply chain and internal staffing challenges have impacted our just-in-time model. This has led to an increased number of cases with product deliveries as well as additional cases being rescheduled. Moving to an update on our pipeline, we did have some changes this quarter due mainly to delays from various testing firms we use as well as supply chain partners. For Acterra, while I'm pleased to report that we received our 510 clearance this week, we nevertheless are now planning for a limited market release early in the fourth quarter. about a 90-day delay due to late shipments of instruments from a supplier. We remain encouraged about the commercial opportunity for Actera given the positive surge in feedback from our validation labs. Also, due to supplier delays beyond our control, we now anticipate an early April 2023 launch for our poorest coded need. This is particularly frustrating since the segment is one of the faster-growing segments in the order space and is conveying more and more interest from our surge in customers. we are exploring every option possible to expedite the timeline. As I've said on past calls, those two products are critical for us to address gaps within our existing product portfolio. Long-term growth depends on providing a more robust product offering so we can capture greater procedural share from our existing surgeon users and attract new surgeons. In closing, as I mentioned at the beginning of my comments, we announced last week that we had signed a contract with Vizient. which will allow us to begin contracting at the local level with its members for our Platinum Services Program. We believe this is further validation of the benefits that this program can provide for patients and healthcare facilities alike. We continue to add to the number of facilities under contract for Platinum Service Program. We've enrolled 21 healthcare facilities through the end of the second quarter. We anticipate that new facility enrollment in our Platinum Service Program will continue to remain choppy, but we encourage by the general interest from the marketplace. I will now turn the call over to Bob for some more details about our financial performance for the quarter and our outlook.