Paragon 28, Inc.

Good afternoon and welcome to Paragon 28's third quarter 2023 earnings conference call. Currently, participants are in listen-only mode. We will be facilitating a question and answer session at the end of today's call. As a reminder, this call is being recorded for replay purposes. And I would now like to hand the conference over to your host today, Mr. Matthew Brinkman, Senior Vice President of Strategy and Investor Relations. Mr. Brinkman, please go ahead.

Good afternoon, and thank you for joining Paragon 28's third quarter 2023 financial results and earnings call. Presenting on today's call are Albert DaCosta, Chairman and Chief Executive Officer, and Steve Deitch, Chief Financial Officer. Before we begin, I would like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements made as to the company's or management's intentions, hopes, beliefs, expectations, or prediction of future events, results, or performance. These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from those forward-looking statements. All forward-looking statements are based upon current available information, and Paragon 28 assumes no obligation except as required by law to update these statements. Additional information concerning certain risks and uncertainties that may impact these forward-looking statements is contained from time to time in the company's SEC filings and in the press release that was issued earlier today. During this presentation, we will refer to the non-gapped financial measures of adjusted EBITDA and constant currency net revenue growth. A reconciliation to the most comparable gapped financial measure, net income, and reported net revenue growth is contained in our press release issued earlier today. And with that, I will now turn the call over to Albert.

Thanks Matt. Good afternoon and thank you for joining us for our third quarter 2023 earnings call. I will start things off with a review of our recent performance followed by highlights from the quarter. Then I'll pass it over to Steve to provide further details on our financial results, an overview of our new and improved credit facility, which we also announced today, and an update on our 2023 financial guidance. To kick things off, Global revenue was $155.8 million for the first nine months of 2023, representing 20% reported growth and 21% constant currency growth, respectively. Our balanced business model continues to drive our revenue growth well above the estimated market growth rate of 7%, with meaningful growth contributions from each of the five foot and ankle subsegments. Third quarter 2023 global revenue was $52.8 million, representing 15% reported and constant currency growth compared to the third quarter of 2022. I am very pleased with this performance given the tough 30% prior year constant currency growth comparison and the short-term supply chain disruption. We continue to execute on our U.S. strategies that have and will continue to drive strong and sustainable growth. During the third quarter of 2023, we increased our U.S. producing sales roster by almost 20% to 257 compared to the third quarter of 2022, while increasing our surgeon customer base by 9% to a record 2,061 customers. We also continue to see nice levels of year over year revenue gains from both legacy producing sales representatives and surgeon customers driven by new product launches combined with solid Salesforce execution and leading medical education. Further, We have several important and exciting product launches happening in the coming months in tandem with recent launches which will provide additional growth opportunities in the US. Our international business continued to perform exceptionally during the third quarter of 2023 and we continue to be excited by the opportunity we have in both our most established markets, as well as other increasingly important markets. Our growth is ultimately driven by our ability to bring innovative and relevant new technologies to market, which help our surging customers improve foot and ankle patient outcomes. As a reminder, we typically launch five to 10 products each year, and this year will be no different. This year, we've launched six products to date, including our second metatarsal shortening system, the gorilla super malleolar osteotomy plating and wedge system, the Jaws Great White Nitinol Staple System, the Beast Cortical Fiber Bone Graft, and two soft tissue products with the reinforced Extra Osseous Repair System and Bridgeline Adaptive Tape. I also continue to be thrilled about the depth and quality of our product pipeline with over 20 active projects in development, including several substantial launches planned in the next few quarters and beyond. Finally, We are closely following GLP-1 developments and potential foot and ankle market implications. At the same time, we are focused first and foremost on executing our business strategy to improve foot and ankle patient outcomes. I'll start by saying the market that we are exclusively focused on, foot and ankle, is truly a gem. Today, the global foot and ankle market is estimated to be more than $4.9 billion, growing rapidly at about 7% with potential for growth acceleration driven by new technologies such as Smart28 that we believe have the potential to reduce current levels of foot and ankle complications. We are positioned very well in this great market, and we expect share gains to be the primary driver of our growth in the years to come. Of course, it is impossible to speculate what impact, if any, GLP-1s will have on the future foot and ankle market. but our view is that anything leading to a more active lifestyle could ultimately benefit the foot and ankle market, which is our singular passion and focus. Our experience generally indicates that foot and ankle patients are typically younger and more active than in other orthopedic and med tech markets, and less obese patients also tend to be better surgery candidates. So we have quite a few reasons to be bullish on our market and our business. Our third quarter earning supplements on our investor relations website includes additional details regarding GLP-1s and the foot and ankle market, as well as a few other topics we are discussing today. With that, I will now turn it over to Steve.