Aurora Spine Corporation

Good day, and welcome to the Aurora Spine Third Quarter Financial Year 2024 Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Chad Klaus. Please go ahead.

Good morning, everyone, and thank you for joining us for the Aurora Spine Corporation quarterly earnings conference call. We look forward to discussing our performance for the third quarter of 2024. Before diving into the details, I'd like to remind everyone that this call will contain forward-looking statements. These statements involve risk and uncertainty, and actual results could differ materially. For a full discussion on these risk uncertainties and factors, you are encouraged to read or respond to documents on file with CDAR Plus, including those set forth in the periodic reports found under the forward-looking statements and risk factors section. Statements made during the course of this call may be considered forward-looking statements within the meaning of Section 27A of the Security Act of 1933 as amended and Section 21E of the Security Act of 1934. These statements reflect current expectations concerning future events and results. Words such as expect, intend, believe, may, will, should, could, anticipate, and similar expressions are words that are used to identify forward-looking statements, but their absence does not mean a statement is not forward-looking. These statements are not guarantees of future performance and are subject to risk and uncertainties and other important factors that could cause an actual performance or achievement to materially differ from those projected. ProRespond does not intend to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. On this call, management referred to EBITDAG, just EBITDAG, adjusted net income, or just EPS, which are not measures of financial performance under generally accepted accounting principles or GAAP. Management believes that these non-GAAP figures, in addition to other GAAP measures, provide meaningful supplemental information regarding a company's operational performance. Investors should recognize that these non-GAAP figures might not be comparable to similarly titled measures of other companies. The measures should be considered in addition and not as a substitute for or superior to any measure of performance prepared in accordance with GAAP, reconciliation of non-GAAP measures. The most directly comparable GAAP measure in accordance with Section C Regulation G can be found in the company's earnings release. We're joined today by Trent Northcutt, our CEO, and myself, Chad Klaus, our Chief Financial Officer. We will present our overview of our financial statements following by Q&A session. I will now turn the call over to Mr. Trent Northcutt, President and Chief Executive Officer of Aurora Spine. Trent, please proceed.

Thank you, Chad, and good morning, everyone. Detailed financials for the quarter are contained in the Q3 filing and the press release filed on Thursday. I'm pleased to share our results for the third quarter of 2024, which marked a pivotal profitable with net income of $71,000. This transition to profitability was made possible by strong growth in sales and continued focus on cost control. Our strategic focus on expanding the sales force and targeting underserved markets has yielded strong results and evidence by our significant sales growth and improved profitability. On Thursday, we issued a press release detailing our financial results. Hopefully you've had a chance to review the news release, but if not, a copy can be found on our website at www.auroraspine.com under the investor section or other financial websites. I'd like to discuss some of the financial and operational highlights for the quarter. We reported a $4.8 million market marking the fourth consecutive quarter of over $4 million of sales in which represents a 21% increase compared to Q3 2023 and a 23% year-over-year. Also, a 687K increase from Q2 to 2024. The quarter benefited from strong demand in the pain management sector, particularly in the siloed TFX and the ZIP51 implant, driving by targeted sales and lab training courses. Our net income for the quarter was $0.071 million and a significant narrowing from the net loss of $2.49 million in Q3. Transition to earnings per share of 0.0 in Q3 2024. Gross margin improvement to 60% in Q3 2024, or up 59.7% in the same period last year. The margin improvement is a direct result of the increased sales of proprietary products with higher profitability, particularly in markets with favorable pricing, dynamic surgery centers and ambulatory surgery centers. Operating expenses in Q3 2024, $2.81 million up from $2.61 million in Q2 2023. Expenses represented 59% of sales in Q3 2024 compared to 66% of sales in Q3 2023. The rise in expenses was primarily due to increased commissions and travel costs associated with expanding the sales force partially offset by reductions in research R&D and research and development and professional fees. We generated 0.519 million in operating cash flow, reflecting our strong operational performance and efficient working capital management of capital. Notably, the siloed TFX sales grew by 35% from Q2 2024 to Q3 2024, reflecting the success of the Aurora's expansion into the pain management market. Zip 51 sales have doubled in 2024 compared to 2023. The robust growth is attributed to intensified marketing efforts and increased adoption among surgeons. Aurora continues to scale the sales team, directly contributing to the sales surge. The addition of new sales professionals is expected to further drive growth as they're onboard more surgeons into the Aurora's ecosystem. The company maintained its commitment to excellence by conducting advanced training sessions in cadaver labs for top orthopedic, neurosurgical, and pain management physicians, showcasing the clinical advantages of the ZIP and the silo implants. I'll now hand over the call to Chad for further discussion on the financials.