Treace Medical Concepts, Inc.

Good day and thank you for standing by. Welcome to the Treece Medical Concepts fourth quarter and full year 2025 earnings conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to your speaker today, Tripp Taylor, Investor Relations.

Good morning, everyone, and welcome to our fourth quarter 2025. Company today will be John Treese, Chief Executive Officer, and Mark Hare, Chief Financial Officer. John and Mark will discuss our fourth quarter financial results in 2026 Outlook. We will then host a question and answer session following our prepared remarks. Our press release can be found in the investor relations section of our website at investors.treese.com. This call is being recorded and will be archived in the investor section of our website. Before we begin, we would like to remind you that it is our intent that all forward-looking statements made during today's call will be protected under the Private Securities Litigation Reform Act of 1995. Any statements that relate to expectations or predictions of future events and market trends, as well as our estimated results or performance, are forward-looking statements. All forward-looking statements are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. All forward-looking statements are based upon currently available information, and Treece Medical assumes no obligation to update these statements. Accordingly, you should not place undue reliance on these statements. Please refer to our SEC filings included on our Form 10-K for 2025 filed before market open today, February 27th, and can be found in the investor relations section of our website at investors.treese.com for a detailed presentation of risks. With that, I will now turn the call over to John.

Thank you, Tripp. Good morning, everyone, and thank you for joining us on our fourth quarter 2025 earnings conference call. During 2025, Treece Medical entered a transformational phase. building upon our leadership as recognized bunion experts, and evolving from a lapoplasty-focused company into a comprehensive bunion solutions company. With the recent commercialization of multiple new bunion procedure innovations, we are now positioned to address virtually 100% of surgeons' current technique preferences for all types of bunion correction, offering five best-in-class instrumented systems spanning all four categories of bunion deformities. We've been highly focused on accelerating our bunion procedure volume growth while also broadening our technology offerings to increase wallet share and expand our serviceable TAM. Our elevated case volume growth in the back half of 2025 reinforces our confidence that we have the right strategies in place to continue to expand our market penetration and restore top line revenue growth later in 2026 and into the future. We also drove steady improvement in adjusted EBITDA and significantly reduced our cash burn for 2025. Before diving deeper into our expectations for 2026, I want to note the dynamics discussed on our last call that pressured 2025, including case volume growth offset by headwinds related to broader economic conditions and softer consumer sentiment, as well as a product mix shift within our expanded portfolio, are still present to begin the year. Given these market conditions, we're initiating our outlook for full year 2026 revenue to be in the range of $200 million to $212 million, representing a decline of 6% to 0% compared to full year 2025. We expect revenue declines to continue until our seasonally strongest fourth quarter. We expect fourth quarter revenue growth will largely be driven by accelerating case volumes, the lapping of the mixed shift dynamics, as well as a contribution from our planned 2026 product launches. We remain focused on continued improvements in profitability and reducing cash burn in 2026. As a reminder of our progress to date, in 2024, we used $50.5 million in cash and reported an $11 million loss in adjusted EBITDA. In 2025, we used $27.3 million of cash, a 46% reduction versus 2024, and we reduced our adjusted EBITDA loss to $3.9 million in 2025, a 64% improvement over the prior year. We took several actions in 2025 to reduce our operating expenses and cash usage. Many of these changes will continue to benefit us throughout 2026. We therefore anticipate that we will again reduce our cash burn by approximately 50% in 2026 compared to 2025, and we're not done. We will continue to identify additional opportunities to drive our top-line growth and leverage our P&L in 2026. Now I want to focus on our strategies, the progress we made in 2025, and where we expect to deliver in 2026. To start, let me tell you about our strategies to improve our top-line performance in 2026 and beyond. First, we will focus on leveraging our large existing customer base to drive adoption of our new 2025 Bunyan product launches. Second, we'll continue to build upon our leadership position with lapoplasty technology, adding new technologies that can attract new surgeons. And third, we'll expand our product offerings to grow wallet share and tap into new TAM expanding procedural adjacencies. To start, I want to give you an update on the new bunion technologies we launched during 2025, their strategic importance, and the reception they're getting in the marketplace. We believe our three new bunion systems effectively double the accessible market that we have today with lapoplasty. So effectively driving these deep into the marketplace is a very high priority for us. First, our differentiated nanoplasty and perkiplasty 3D MIS systems expand our reach into the high-volume osteotomy segment which we estimate represents approximately 70% of the 450,000 annual bunion procedures performed in the U.S. We estimate that only 10 to 15% of metatarsal osteotomies are being performed using MIS approaches today. And we believe this is largely due to the steep learning curves, high variability of outcomes, and lack of attention to correcting the third frontal plane component of the deformity, the failure of which to do so has been associated with an increased risk of bunion recurrence. Our new 3D MIS bunion correction systems offer patients procedures that can result in less pain and fast recovery times with minimal visible scars. Importantly, these are procedures that are quick for surgeons to learn and are highly instrumented to enable a controlled correction of all three planes of the deformity to minimize risk of recurrence. We believe this expands the appeal of our 3D MIS osteotomy procedures to both surgeons and patients today and could encourage a much larger portion of the 4.4 million U.S. bunion sufferers to seek surgical treatment over time. Next, our SPEED MTP system, which is designed to serve roughly 20% of bunion patients who have arthritic great toe or MTP joints, as well as patients who suffer from isolated MTP joint arthritis. This large patient population makes MTP fusion one of the most common procedures performed by foot and ankle surgeons, making it a strategically important area for Teresa to target with better solutions and continue to innovate. With our core lapoplasty system, we believe we've captured 25% on average of our 3,300 customers' total bunion-related procedure volume. And these three new systems are dialed in to target the remaining 75%, and we are laser-focused on penetrating that untapped opportunity. And our strategy is working. Just over two quarters into the full launch of these new systems, we're encouraged by the rapid adoption and resulting acceleration we're seeing in our overall bunion-related procedure volumes. As of Q4, over 25% of our surgeon base has already incorporated one or more of these three new bunion systems into their practice, and our Q4 procedure volume growth increased over the mid-single-digit rates we achieved and reported on in Q3. In addition to our new products, advancing our leadership in lapoplasty technology and expanding its user base remains at the forefront of our strategy. Lapidus Fusion represents approximately 30% of the estimated 450,000 U.S. annual bunion procedures and is the largest dollar segment of the market, where Treece is the recognized category leader. As MIS approaches are gaining in popularity among surgeons and patients, we continue to remain focused on advancing our lapoplasty platform, making the procedure simpler, faster, and minimally invasive, as demonstrated by our micro-lapoplasty platform, which was launched in 2024. In 2026, we plan to commercialize our next-generation lapoplasty platform known as Lapoplasty Lightning. Lightning combines next-generation 3D correction instrumentation and Speedplate TMT implants, which are built upon our proprietary Speedplate hybrid fixation technology. SpeedTMT is a high-performance implant designed to appeal to an incremental surgeon audience, those that prefer a single-plate fixation construct versus our traditional two-plate or bi-planar approach. Lightning instrumentation is designed to reduce procedural steps, improve efficiency, and provide surgeons with greater accuracy and control of their 3D correction. We expect full availability of our lightning instrumentation and our speed TNT implants later in the year. Another way we're appealing to more surgeons with lapoplasty is by advancing the shift towards personalized surgery, leveraging our Intelliguide PSI platform. Intelliguide is industry's first and only preoperative planning and patient-specific cut guide system for correcting bunion and midfoot deformities. Intelliguide offers surgeons improved efficiency and precision and is particularly helpful in complex and revisional cases. We believe the combination of Lightning, SpeedTMT, and Intelliguide position us well to extend our leadership position and attract more surgeon users to our lapoplasty platform in 2026 and beyond. Now turning to our third strategy, expanding our offerings to more broadly serve our growing customer base. In 2025, we expanded our speed plate and sterile instrument portfolios with multiple new offerings. We also entered the biologics market with our Cordafuse flowable cortical fiber graft, as well as our line of procedure-specific allograft wedges. These new biologic offerings allow our sales force to more comprehensively service our surgeons' needs in their cases. In 2026, we plan to launch additional offerings to grow our customer wallet share and tap into incremental procedure adjacencies. In the back half of this year, we plan to launch two new important products that expand our TAM by an estimated $300 million. First, our SuperBite variable pitch compression screw system. This is a very important addition to our portfolio as it equips our sales force for the first time with the most common form of fixation used in foot and ankle surgery. The SuperBite system features advanced design attributes, making it ideal from both minimally invasive and conventional surgical approaches. Next, we will make our first entry into the midfoot-hindfoot segment of the market with the launch of our new SpeedXM Fusion System. SpeedXM leverages our Speed Plate Fixation technology, bringing the benefits of dynamic compression and enhanced stability for fusion of the larger bones of the mid and hindfoot, as well as for flatfoot reconstructive procedures. SpeedXM is highly complementary with our SuperBite screw system, as the two technologies are often used in concert, along with biologics, to stabilize and fuse these larger bones, thus giving trees great incremental access to high ASP adjacent procedures that we do not serve today. And of course, with all our current and new product offerings, we continue to provide best-in-class education through our Bunyan Masters hands-on training programs. These events are designed to support surgeons and confidently integrating our procedures and technologies into their practices. And following these trainings to further enable successful patient outcomes for our surgeons. We provide additional initial case support from our fleet of dedicated clinical specialist and ongoing support from our bunion focus direct sales team. A team that we plan to expand in 2026 with the addition of more experienced foot and ankle sales professionals. Our confidence in the future is grounded in the success we've achieved in the past, as well as the early indications we're seeing, which reinforces our confidence that we have the right strategies in place moving forward. We've expanded our active surgeon base from nearly 1300 users in 2020 to over 3300 users in 2025. And these surgeons are using more of our products as they adopt our growing portfolio of best in class solutions. Fourth quarter procedure volume growth increased over the mid-single-digit rates achieved in Q3, reflecting the strength and effectiveness of our comprehensive Bunyan portfolio and strategy. As we look ahead, we believe we're well-positioned to accelerate our procedure volume growth rates while also growing our customer wallet share and expanding our TAM as we broaden our footprint in the foot and ankle market. We expect these initiatives, combined with disciplined investments, will continue to drive market share gains, improve profitability, and shareholder value. With that, let me now turn the call over to Mark to review our financial performance. Mark?