Paragon 28, Inc.

Q3 2021 Earnings Conference Call


spk_0: hello and welcome to the paragon twenty eight third quarter twenty twenty one earnings conference call my name is alex and i will be operator for today if you'd like to ask a question and end of the presentation you compress no one on your telephone keypads if you wish to withdraw your question you compress stella to oh now hand over your house much back so from the gilmartin group much over to you
spk_1: good morning and walk and appeared paragon twenty third quarter twenty twenty one earnings conference call currently participants analyst only mode will be facilitating a question and answer session at the end it's a score as a reminder this call is being recorded for replay purposes jodie meeks from paragon twenty eight or alberta costa chairman and ceo and steep date cfl earlier today paragon twenty eight really strange results for the quarter ended september thirtieth twenty twenty one and filed it's third quarter warm ten que before it began i like to remind you that it will make statements during this call that includes forward looking statements within the meeting of federal securities laws which are made pursuant to the safe harbor provisions of the private securities litigation reform act of nation and bought any statement contain him it's called relate to expectations are predictions that future events results for performance or forward looking statements all forward looking statements include but not limited to those relating to are operating trends and future financial performance including our revenue guidance for the fourth quarter twenty twenty one the impact of corbyn nineteen on our business expense management expectations were hiring growth in organization market opportunity revenue got guidance commercial expansion and product pipeline development or based upon our current estimates and various substance the statement involved mitre oh risk and uncertainty that could cause actual results are events to mature early differ from those implied by these forward looking statements all for looking statements are based upon current available information and paragon twenty eight assumes no obligation to update the statement accordingly you should not place undue reliance on the statements for list and description of the risks and uncertainty the ceci with her business please refer to the risk factors section of the public filings with the security exchange commission including the final prospectus bad with the se si pursuant to rule or to for before on october eighteenth twenty twenty one in connection with our initial public offering discoveries talk and him time sensitive information and it's accurate only as the live broadcast on november twenty second twenty twenty one hundred and twenty eight disclaims any intention or obligation except as required by law to update or revise any financial projections are forward looking statements weather because of new information future events or otherwise during a presentation we will refer to a non gap financial measure adjusted ebitda a reconciliation of adjusted ebitda to net income loss the most comparable gap financial measure is contained in our press release issued this morning and with that turn the color but albert thank you met in thank you everyone for joining us today for paragon twenty first earnings call it the publicly traded company paragon twenty eight completed it's ip on october nineteen and we are proud to be listed as at the ne on the new york stock exchange like our company name paragon twenty eight the ticker symbol epa name was selected to emphasize or companies exclusive focus on a large and fast growing foot nagel global orthopedic marketplace i would like to take this opportunity to thank our investors who participated in the appeal which raised a hundred and thirty one million dollars in net proceeds this capital of an important element of our company's strategy to continue the development of innovative new put nagel technology including smart twenty eight which will improve patient outcomes and ultimately expand the financial market pete twenty eight it's just getting started and twenty twenty one there are more opportunities available to us today as compared to when we started the company in late twenty ten in a basement in birmingham alabama the twenty eight now has greater financial strain which compliment it's established in culture and the energy and passion required to redefine and vastly improved but make a patient outcomes also thank you to the early be twenty eight investors including my mother who many of you know is our first investor i look forward to the ongoing support from this group as we continue the mission that be twenty eight set out to achieve since it's inception finally and most importantly thank you to the entire between eighteen and their families for their unwavering dedication and focus on our mission the pt a team includes are amazing three hundred and thirty one employees in the united states and around the globe our board of directors or us and international sales representatives who served patients insurgent everyday in the field and the clinicians around the world to use and put faith and trust in our solution now i'd like to tell you more about p twenty eight the financial market and our growth strategy paragon twenty eight is exclusively focused on the foot make orthopedic market which is an estimated four point three billion and twenty twenty one with approximately fifty five percent of that amount in the us growing approximately seven percent per year through twenty twenty five we have a full suite of innovative orthopedic solutions covering a wide range of foot nagel ailments including fracture fixation bunyan hammer toe ankle flat foot shark go flat and orca biologics abroad sweet of solutions comprises seventy two products system including approximately eighty seven hundred scuse to help fit the specific needs to each patient and proceed yaeger the solutions have enabled us to grow revenue above market growth rate and capture market share from twenty fifteen to twenty nineteen or revenue kicker was fifty two percent we have over thirty new products in development with one hundred and forty million of revenue for the trout trailing twelve month period ended september thirtieth twenty two twenty one we believe we are the largest pure play for an egg or to peter company we compete with both large global diversified med tech companies as well as smaller and off and single product but nagel businesses a paragon twenty eight we eat sleep and brief what nagel we believe we can continue taking market share and overtime expand the flip nato market by improving patient outcomes the a new and innovative technologies and world class medical education or strategy to drive durable long term growth includes one new product development too smart twenty eight initiatives three expanded sales distribution for advanced medical education and marketing initiatives and five business development opportunities first starting with the new product development a proven ability to identify develop and much innovative technologies combined with our financial center culture and passion is the cornerstone of the success and growth a paragon twenty eight it has been the catalyst for us to grow our market share over the past several years however we believe the foot ankle market growth has potential to accelerate brother driven by advancements in technology that will improve patient outcomes increases impatient and clinician awareness the adoption of available treatments given that the foot ankle market as a young and emerging orthopedic segment we believe there's significant opportunity to improve outcomes to be on par with other more mature orthopedic specialties as a result of increased innovation and the product launches paragon twenty eight with it's exclusive focus on the for what make a patient and clinician and a proven track record of launching innovative new products will be a catalyst for improvements in for clinical results we also expect the market to benefit from favorable macro drugs including an aging population increased incidence of obesity and diabetes as well as the broader patient populations desire to pursue a more active lifestyle are smart twenty eight initiatives will also be an important driver of improving patient outcomes we have branded are enabling technologies initiatives are smart twenty eight smart twenty eight is the key focus area for us and as a key element of our mission to improve foot nagel outcomes and patient lives smart twenty eight has three elements a pre operative planning element into operative support and post operative evaluation within each category we have or expect to have specialized products designed to improve overall patient outcomes and improved surgical efficiency with in pre operative planning we are developing patient specific dahlgren comes to provide surgeons a better understanding of the patients need before they even get to the surgical center an interpretive support we have developed and continue to evaluate tools such as surgical guided technologies that can help improve reproduce ability and insists with the like procedure and finally for post operative support we will continue to evaluate opportunities around ai solution data collection and aggregation and tools to validate procedural outcomes additionally we will continue to make significant investments to expand our global salesforce leading an innovative product line combined with our entrepreneurial and politically oriented culture has allowed us to attract build and retain a leading salesforce exclusively focus on the put nickel market are you a cell force has grown significantly over the last several years and consists primarily of independent sales that the majority of whom are exclusive as of september thirtieth twenty twenty one it included approximately two hundred producing sales representatives which accounted for most of our us revenue in the third quarter we began selling outside the united states in late twenties sixteen as of september thirtieth twenty twenty one we saw our products and forty three countries and year to date to september thirtieth twenty twenty one or international business contributed approximately twelve percent of our revenue paragon twenty eight but in the us and international markets is well positioned to be the company choice for foot and ankle sales representatives looking for unlimited opportunities to grow with an exclusively pockets for nickel company that bought a full sweep of innovative products and is not part of a larger multi channel company continued excellent the medical education a new targeted marketing initiatives are also important parts of our growth agenda medical education the strength of paragon twenty and will continue to be a key part of our strategy to improve foot make a patient outcomes and grow our business or medical education team and infrastructure best in class late twenty nineteen we opened a new dedicated to hundred and fifty person auditorium and a forty station catabolic lab and are denver headquarters this is hillary is now used almost every week for hands on training and learning with physician in our commercial team in addition we are permitted regional medical education programs and virtual seminars digital and direct patient marketing initiatives are becoming a greater focus for paragon twenty eight a certain sub segments of the foot make a market are well suited for us to articulate the benefits of our products to patients insurgents we believe our marketing initiatives war raised patient awareness of the benefits of our solution with an approach that teach tradition as the ultimate and final arbiter a patient care finally business development is an important part of our future growth plan in the second quarter of this year hundred and twenty eight completed the acquisition of the assets about it aboard the peters this is a good example of the type of acquisition that we look for the compliment a portfolio with unique technology additive gave us the for just in the world and only f d a approved patented total tail a spacer this product and change the lives of certain for michael patience patience who otherwise would require either a complicated procedure or possibly even for education in summary heard on twenty eight is exclusively in passionately focused on the large and fast growing for michael market we will develop technology enabled by smart twenty eight initiatives that we expect will deliver better clinical outcomes and dried market share games the are best in class sales channel and potentially acts alaric growth in the foot nagel orthopedic market i'm more excited now that i had ever been about the future paragon twenty eight and it's potential to shape it better future for fenagle patience i will now turn it over to ski to will provide a summary of our third quarter financial performance and provide revenue guidance for the fourth quarter twenty twenty one steep thank you albert moving to our third quarter twenty twenty one financial results carry guns revenue for the third quarter and twenty twenty one was thirty five point nine million dollars representing growth of eighteen percent of the third quarter of twenty twenty and forty five percent above the third quarter of two thousand and ten us revenue for the third quarter of twenty twenty one was thirty one point nine million dollars represent engrossed of sixteen percent above the third quarter twenty twenty and forty three percent above the third quarter twenty nine ten our us revenue in the third quarter of twenty twenty one was also two percent sequentially above the second quarter twenty twenty one despite token headwinds experienced in august and september our us revenue growth with driven by the strategy previously outlined by albert including new products outstanding medical education and expansion of our sales salesforce international revenue for the third quarter twenty twenty one was four million dollars represented growth of forty two percent above the third quarter twenty twenty and sixty eight percent above the third quarter twenty nineteen this growth was achieved despite coded related surgery deferrals and our largest international market served including australia south africa and united kingdom
spk_0: gross profit margin for the third quarter of twenty twenty one with eight point two percent compared to seventy six point seven percent in the third quarter twenty twenty aragon twenty eight so the greater mix of higher gross profit margin products and had decreased access and obsolete inventory expensive during the third quarter of twenty twenty one
spk_1: which both contributed to the improvement and gross profit margin during the three months ended september thirtieth twenty twenty the company incurred to five hundred thousand dollar or one point seven percent of net revenue accept an obsolete inventory adjustment resulting from disruption in the supply chain purchasing process during the and nineteen pandemic research and development expense was four point one million dollars or
spk_0: eleven point four percent of revenue for the third quarter twenty twenty one compared to two point three million dollars or seven point eight percent of revenue in the third quarter twenty twenty
spk_1: the increase in research and development expenses with due to additional investments a new product development efforts and our quality management system including increase personnel expenses telling general and administrative expenses twenty nine million dollars or eighty point eight percent of revenue for the third quarter twenty twenty one compared to seventeen million or fifty six percent of revenue in the third quarter twenty twenty
spk_0: the company was able to return to a more normalized level of sales and marketing activities during the third quarter of twenty twenty one including making additional investments in the expansion of our us salesforce and increased medical education and trade show activity
spk_1: additionally during twenty twenty one the company made investments in it's administrative functions including people processes and systems in preparation to be a publicly traded company the company also incurred additional third party legal expenses during twenty twenty one adjusted ebitda for the third quarter twenty twenty one was negative one million dollars compared to six point three million in the third quarter of twenty twenty the decrease was driven primarily by the previously mentioned increases and operating expenses offset partially by increase gross profit driven by higher revenues net loss was five point one million dollars for the third quarter of twenty twenty one impaired the net income of three point eight billion dollars in the third quarter of twenty twenty it's eight point nine million dollar decrease reflected the previously discussed and seven point three million decrease in adjusted ebitda plus a seven hundred thousand dollar increase in stock based compensation and a nine hundred thousand dollar increase in depreciation and amortization expense cash from operations was negative five point one million dollars for the third quarter twenty twenty one compared to negative five point three million dollars in the third quarter twenty twenty
spk_0: the third quarter of twenty twenty one operating cash flow was driven by the that lasted five point one million dollars and working capital usage of four point eight million dollars including inventory purchases at three point three million offset partially by noncash expenses a four point eight billion dollars
spk_1: free cash flow is negative nine million dollars for the third quarter twenty twenty one compared to negative seven point eight million dollars for the third quarter twenty twenty primarily driven by increased purchases of surgical instrumentation during the third quarter twenty twenty one our cash balance on september thirtieth twenty twenty one with seven point nine million dollars with a total of twenty six million of borrowings outstanding on our senior credit facility paragon twenty eight has approximately forty four million dollars of additional borrowing capability and or senior credit facilities on september thirtieth twenty two what our i feel completed on april nineteen twenty twenty one provided the company with a hundred and thirty one million dollars net cash proceeds finally turning to our financial outlook for the remainder of twenty twenty one hour estimated fourth quarter twenty twenty one revenue guidance rate is thirty eight to thirty nine million dollars representing ten percent year over year growth at the midpoint so did nineteen patient deferrals and surgical disruptions from staffing shortages have been taken into account in our fourth quarter revenue guidance that the end of are prepared remarks operator please open the lines for questions and answers
spk_0: thank you we will now proceed the any if you'd like to ask a question you compress spell one on your telephone keypad if you would like to withdraw your question you can press start a please show your unmetered likely when asking your question authors question for day comes from craig biggio from bank of america craig your line is now open
spk_2: good morning as thanks thanks for taking questions and congrats on their strong quarter
spk_1: shrunk first quarter let let me start with just the queue for guidance and and how you got to where you did maybe to talk a little bit about the trends that you saw august september and then october and and maybe even into dog amber and what the assumption the underlying assumptions for your guidance are or recipes years it's status quo that the get a little bit better
spk_2: any color on that would be great
spk_3: great maybe greg
spk_1: as as you know our guidance for the fourth quarter is thirty eight thirty nine million dollars and and what we've incorporated into that guidance is because it had wings that we've experienced in the fourth quarter to continue on and in a similar to the third quarter where we experience can't wins we forecast to do to continue into the fourth quarter and in what we know in our business is resilient and performs well despite these challenges from the covert headwinds with our eighteen percent growth in the third quarter to pivot and continue to make progress and drive growth with with up with many of our product lines and train a number of new surgeons to use our products as well so so we we continue to assess the market assess the headwind to dynamic environment it's you know and three of our largest market outside the united states are in i'm south africa the united kingdom in australia which really can't sort of stop and go environments from time to time with coven so so we take a temperate approach when we're looking at our growth prospects for the fourth quarter and we continue to assume you know significant fairly significant amount of headwinds of similar to what we've seen the last three or four months great that's helpful and maybe can taken a step back and a little bit of a bigger picture a longer term question i'm obviously you guys have highlighted the growth of the foot nikon market and there are several different categories within that market as as you guys had laid out soak a with with different growth rates and different dynamics and each of them so maybe if the if there's any color you can provide on can where you see strong opportunities with in the fanatical market a places where you where your poised to either take share or or grow above the market i just trying to understand can have your your focus areas your target areas and am were you guys think he can really drive the growth
spk_4: thanks question credits albert
spk_1: then i'll i'll happily answer that torsion evidence as much as i can other the reality is we define the market has pretty broad and diverse which is why the things that excites as the most were classified it really is six different sub segments seven if you include biologics which really is blended across all the sex i'm and each of those have different opportunities and and different indications for us to address i'll tell you one of the things that really benefited paragon twenty eight is our approach to the market has been really balanced across all those sub segments and moving forward we expected continue to do the same i would tell you there's different levels of complexity and considerations for some of these segments that are are definitely attractive for a company whose had done a really nice cadence for product development and things like ankle is is really maybe in a younger phase vs some of them yet more traditional segments like flat foot reconstruction might be at and so on our purchase going to be a very similar we're going we're going to look at all of those in a blended fashion and i'll tell you that that we're excited about that the market and what it presents to us in terms of opportunities for product development if i look at our or pipeline of development i can tell you it's really nicely blended across all it does sub segments i'm and we got him thirty projects in development today of which we expect around twenty two of those projects to be launching in the next two years and and again i'll i'll repeat that those projects that were go be launching are are blended across all the some segments pretty nicely
spk_2: i've got it helpful and thanks to that all of hop back in cuba congrats again on a strong first quarter
spk_1: i give thanks great
spk_0: pancake craig on next question comes from matthew i brian from piper sandler mathy your line is now open
spk_2: ah thank than the procedure as taken that questions a matter of that's for alberta are steep it just and looking at the cute three results that mess equally and eat out of their growth sequentially of not something where speedy across most that surgical my second not an orthopedic can you talk a little bit more about what drove that gross a quite silly and i know he had some of the duck training a little
spk_5: that but but again it was surprising a fee great the see what really drove that sequential improvement
spk_6: hey amen thank you
spk_7: as our our attack tackle that one it's well
spk_1: you know it's really the basics of paragon twenty eight business that i'm a it's almost reminiscent of the twenty twenty year where we made some investments and in sales rep training and medical education as the as a whole with surgeons
spk_4: looking at some of the marketing aspects new product development
spk_1: and really salesforce force expansion would be areas that i'd highlight earlier this year we made an acquisition the we acquired the assets of that and aboard the be next and that product line compliment so nicely with our portfolio and down and and some of that also contributed to and the tailwind that we saw going into que three to really offset some of the admins that we were seeing with coven out the marketplace aware we're proud of that and that sequential quarter over quarter growth and were also really problems the growth that we achieved in twenty twenty and given the abnormal year that we were experiencing there and it really prove to us that the fundamentals were when place and to highlight even last weekend here we had three different courses being conducted at our medical education facility on sides and we had around twenty five sales wraps that were present for a week of training here on site and during the weekend we actually had to separate course is going on simultaneously were one was called pushing the limits we had a surgeons and from all over and we were we believe there's around thirty surgeons attending that course a really successful covering really complicated areas of foot and ankle surgery am and then in tandem we had a eight surgeons being trained on our our new total ankle replacement system apex greedy and in in our labs so one were making use of the medical education facility our were really aggressive looking at said sales rep expansion people that match us clean ugly and an egg can represent the line well and service these cases best and i think you're seeing a lot of those being support the growth that we were able to see in in que three as well
spk_2: okay that's that's where appreciate that and then albert you started touching on this there less than that he senses and what you're saying but
spk_1: as far as the salesforce goes you had a lead a competitor that consolidated you know about a year ago at eight and i get last sweet you just finished the idea of can you talk about the response you think i know it's early from turning into a public company in terms of sales rep are interested in p twenty eight and then your ability to to add the folks the know it's challenging for some folks that are some company that not and network the right now
spk_2: add rats that guy just their responses into parsons yet yeah i and ability to continue adding wrapped
spk_5: over the next hour several quarters like
spk_1: absolutely and thanks for the question and yet you know the reality is that paragon twenty eight has a few key attributes that make it's a really attractive landing spot for salespeople one the company was really founded by sales people and specifically foot and ankle sales people so the culture of sales the way we support our so salesforce the way we infused that passion of standing in the operating room representing a product line when we recognize that someone young someone's family members sitting on the table is really important to us in it shapes the culture here at b twenty eight so for sales people to look at paragon twenty culture it's really in attractive landing spot for people right they they want to go to a company that understand the needs of standing in the operating room and represent that in high quality product and differentiated products product that really addresses meaningfully addresses needs and options on a disservice these cases best so we happen to be a great landing spot and our culture also lot of fun yeah we we enjoy what we do here we we love the team we really work well together and we have a lot of fun doing what we do so all those things make us a natural attraction for sales people out in the industry the reality is that transitions have been happening on what since the beginning and paragon twenty eight am which seems yeah a lot of movement in the industry that push people are way i would tell you that one of the biggest concern sales people have had it looking at paragon twenty eight is the fear that we were gonna be acquired
spk_8: and i think the ip oh really did an amazing
spk_1: the transformation of that perception and now i think people realize that i were looking at a long term vision of what paragon twenty eight can accomplish and that's given sales people are at a new found comfort it looking at paragon twenty eight as a potential landing spot so i think that's really helped us at in in regards to salesforce expansion i think it's been a real positive for be twenty eight
spk_0: a cute
spk_9: yep
spk_1: thankyou matthew on next question comes from town rise from color code kyle he on line is now open great thank you very much for taking the car
spk_4: and so i had of just a one more big picture question yeah we albert i think you've spoken a lot about it the smart twenty eight ecosystem and is kind of will bring in enabling technologies and what you want to build at the organization maybe could you can to help frame us or help frame for us you when you expect some of those initiatives to just
spk_1: showing through from a commercial perspective and media does any milestones we should have on our calendar over the course of the next twelve months dakota your monitor somebody's some of the progress in there a and work but be done to the development perspective yeah hey think so the question the reality is that the financial market is is a relatively young segment of orthopedics and and it's broaden diverse there's some really complicated areas three dimensional complexity in considering some of these deformities for patients not to mention the soft tissue contributions and other a patient profile type demographics i could influence their procedure on account and so what i'm describing really is a perfect environment for enabling technologies the pair guns also invested over the over the years into non product related research research that we believe is going to help contribute to a better understanding of some of the ailments of foot and ankle surgery and and and what we think is that the enabling technologies environment enables us to really bring in a dozens of inputs from different research him there's things like city weight bearing assessments looking at at the a analysis finite element analysis models mathematical models looking at m r i data looking at all of these even psychological or information relative to a patient that can help us shape these procedural considerations and help give different disability or surgeon users and so the outsmart twenty eight ecosystem was branded really to identify our opportunity there were really excited about what that means in terms of improving patient outcomes really accelerating those improvements and even our research considerations are accelerated with some of these tools were really excited about it and weep broken smart twenty eight and two three different buckets there's a pre operative bucket which and i would be like your software planning algorithm looking at a software platform that can help give the surgeon visibility to that three dimensional deformity and plan that surgery and and even understand what the outcome might be from that predictive plan and then create from that assessment tool that might be useful in the operating room settings said things like patient specific instruments or patient specific implants are we could look at things like laser alignment guides or robotics or navigation type systems are p of sensors and different tool that can reproduce that plan in a in add reproduce reproducible setting and then lastly looking at the post operative bucket that would be evaluating how well we recreated a three dimensional position of that side and frankly how satisfied the patient as with the outcome and then feed that back into the pre operative plan with some sort of a i tools what i just described it was really the the premise for the acquisition of the assets of additive orthopedics that we did earlier this year they have the first in the world f d a approved total tail a spacer
spk_8: and now we can actually take a seat you scan from a patient and evaluate that deformity and reconstructed tail us and provide an option to a patient that really didn't exist years ago
spk_1: an option that really avoids complex ankle fusions because these are pretty big spaces were even amputation in some cases so i'm what i'm describing is both are smart twenty eight initiative but also the fact that we've got some of these tools already at play and commercial for us the made them in ps i system which we license that from conformists earlier and we we can out do the same for total ankle replacement where we can take a seat you scan of a patient plan the case and create patient specific instruments to greet reproduce balkans for our apex three be totally inculcation say and we've also got the first ever laser alignment
spk_9: that we designed for total like or replacement so now surgeons in the in an operating room setting can look at but to be all alignment they could also look at hip alignment a very simply we can also said i you rotation and so we're looking at those types of tools some of which you'd seen commercial but we're just getting started really in the smart twenty eight initially
spk_10: if and damn and were excited about that other opportunities that exist in that area
spk_11: great thank you for that it's very helpful and then just it not a question i haven't just i think what i think about the market one of the thing that impressed me over the last several years is just the ability to you drive patient awareness
spk_8: i know some your competitors have done that very well could you maybe just talk about the a what plan you have oil or does a product lines or any specific segment of the market that you think you can you can drive patient awareness and in it did in and really try to drive more procedural growth
spk_1: yeah i'll take them into he you know if you break up the fenagle market by it's six sub segment you really see different personalities and each of those right different patient types and and a different atmosphere for each i would highlight to areas that i think are relatively prone to direct a patient type marketing campaigns patients that are really scouring the internet looking for better options lucian looking for the best surgeons to to treat their conditions are the ankle and so for ankle fusion in total ankle replacement and i would say the bunyan market is wow those are two areas that we'd seen a lot of patient activity
spk_9: or better solutions looking for better outcomes looking for betters surgeons i would see some investments and
spk_1: in marketing related to those two segments it's not to say that the other segments are done opportunities as well just not maybe to the extent of the to that i highlighted
spk_0: great thank you very much
spk_12: course next guy you
spk_2: you kyle or next question for today comes from dave totally from j m p securities dave your line is now open
spk_12: hey get money and get as well
spk_1: yeah i imagine oh yes expansion and he should surely highlighted a bunch of places the email it to go in your filings you know brazil colombia japan as as you look at some of these more near term targets i guess just to get your thoughts on you know timing other than and which are the most important any sort of details there would be appreciated yeah it's or qaeda in the state so as as mentioned we are focused on those markets that were also focused on us markets that are you know much closer to hit us here in the us and canada for example we're starting to look very closely about market we're looking at expansion and western europe
spk_13: our team in the international market has done a terrific job of bringing in really strong leadership on with great knowledge of our western european market opportunity so that's going to be an area of focus for us to pan as a longer term area because of the regulatory requirements there
spk_14: and then when we look to south america and central america you know we also focused on making sure that we get into markets and and with distributors and partners there that we trust them and believe that they have the same kind of focus on doing things the right way and the way the paragon when he know that every day so you know i'm afraid
spk_12: the nearest term opportunities would be western europe canada south america and then ah on a selected based south america central america and then more longer term the asian markets gotta take that and that
spk_1: can get any reason that i think a client i guess that as we look at sort of xx about it's kind of surprised that is your first offering the i know yeah i think that like over twenty internal take then fracture products but gathered that the largest part of your product make that a bloody if not then at that product and and sort of them the opportunity there should we expect more external product coming down the pipeline thank you it's so maybe i'll i'll take that one as well look what one of the things that i think is really exciting right now is an as our portfolio expands into other indications we're we're really able to become the premier foot and ankle provider for our surgeons and ultimately for for our customers that that the and the patients here external fixation was an air rated that we were a bit delayed in addressing as a company and one of our internal philosophies is that if we can make it better we're not going to develop it right and and so we were really looking at the external fixation market it's a it's an important compliment to the rest the portfolio and and i'd mentioned that the financial market really is every procedure we do tend to be at a combination of three and four different procedures in one different in in one surgery so the ability to address all of those possible indications in a single surgery i think gives us a really nice position in the market it gives us great conversations with hospital systems and the surgeon get a level of comfort like being able to have a single company there to service all the needs of the any one particular surgery inside the yeah expects does that really nicely circular fixation was was that the beginning of that focused for us
spk_15: i would expect to see maybe some of that kinda bar activity there and many rail would be another interesting area but for them the forefoot and bunyan type indications as well as trauma in some of those cases so the external fixation was i was a missing piece for us in a portfolio
spk_0: yeah we're excited that we got the attention now and our products hitting the market here in the near future and i would just add add turned on apple that particular product line i think it really speaks to the ability of our company to brain products to market that are differentiated and in him in a short period of time you know when i joined back at the end of september last year this was a product line in an area that the team have outlined his we need to get into this space and here we are at just over just over twelve months later on with a with a product on the market our first offering and a differentiated products that we expect the do well
spk_1: thank you
spk_5: thank you dave as a reminder if you'd like to ask a question you compress star one on the telephone keypad
spk_1: a next question comes from mike mattson from me and mike your line is now open
spk_4: hi good morning this is david on from i congratulate the first earnings call and and thanks for taking a question
spk_1: and maybe add another product question for you guys are the i mean it seems like maybe one of the last product apps and i'm currently is
spk_16: soft tissue repair to maybe you can talk about you know what you had going on there and and maybe timing on a potential soft tissue repair launch
spk_1: yeah thanks for the question david this is average again i i would tell you that soft tissue it's really an exciting aspect of fun ankle surgery it's it's really i am a missing piece in terms of our consideration we we tend to think of the bony deformity aspect of some of these elements but damn the soft tissues really critical driver of that deformity and so soft tissue is a focus for us we've got a lot of activity i'm in that particular arena of that's part of the twenty two projects that were expecting they hit the market here in the next two years and we're really excited just like external fixation i wanted art the ability to identify the real needs of that particular indication and develop differentiated products to address those needs but then also we're really excited about what that means in terms of complimenting or portfolio in the cases that we service today with additional products to to again be the premier foot nickel spot so soft tissue and you're right it was it was a piece that we were desperately looking at just like external fixation am and were really excite it about what we've been developing their and dad will be hitting the market here soon great place for that and then maybe one for steve i he called out from the beach higher margin products benefiting the gross margin and so i mean would it be safe to assume that those continue and and maybe in the fourth quarter and and twenty twenty two weeks on continued marginal improvement thanks for taking the questions
spk_17: well ah ethics that data without giving you know specifics on what we expect our future gross profit margins to be i would tell you that we're comfortable in the eighty percent gross product margin range that we've been in the last two years and and what we saw
spk_0: when in this particular quarter compared to last year was we did have some new products to come the market including many different people offerings that we have that ends up in many cases have a higher overall gross profit margin so that was contributing factor year over year in that regard but you're all of our products by and large
spk_4: kids have had pretty solid gross profit margins they're just happens to be a few that and that do better than a bit better than others and and some of the ankle products are are those and we saw a nice contribution from those in the third quarter
spk_0: keep

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