Good morning, welcome to AirSculpt Technologies' fourth quarter 2022 earnings conference call. Currently, all participants are in a listen-only mode. As a reminder, today's call is being recorded, and we have allocated 1 hour for prepared remarks and Q&A. At this time, I'd like to turn the conference over to Dennis Dean, Chief Financial Officer at AirSculpt Technologies. Thank you. You may begin. Good morning, everyone, and thanks for joining us to discuss AirSculpt Technologies' results for the fourth quarter. Joining me on the call today is the company's Founder and Executive Chairman, Dr. Aaron Rollins, and Chief Executive Officer, Todd Magazine. Before we begin, I would like to remind you that this conference call may include forward-looking statements. These statements may include our future expectations regarding financial results and guidance, market opportunities, and our growth. Risk and uncertainties that may impact these statements and could cause actual results to differ materially from currently projected results are described in this morning's press release and the reports we will file with the SEC, all of which can be found on our website at investors.elitebodysculpture.com. We undertake no obligation to revise or update any forward-looking statements or information except as required by law. During our call today, we will also reference certain non-GAAP financial measures. We use non-GAAP measures in some of our financial discussions as we believe they more accurately represent the true operational performance and underlying results of our business. A reconciliation of these measures can be found in our earnings release as filed this morning and in our most recent 10-K when filed, which will also be available on our website. With that, I'll turn the call over to Dr. Rollins. Aaron? Good morning, thank you for joining us on the call today. During the fourth quarter, we experienced a healthy bounce back compared to the third quarter in our revenues and procedure volume, led by strong contributions from our de novo centers. Our most recent cohort of new centers, which includes Boston, Toronto, and Philadelphia, is off to a good start, and we are very excited for the upcoming launch of our flagship London location. We continue to be incredibly pleased with the patient enthusiasm around all of our offerings, including AirSculpt Plus and AirSculpt Smooth. We look forward to introducing additional innovative solutions that meet the needs of our patients. Our team accomplished a lot in 2022. The company's case volumes increased 18%. Revenue increased 27%, and we generated cash from operations of nearly $25 million. We refinanced our debt, which will generate considerable interest cost savings. We added four new centers and aggressively built our de novo pipeline, positioning us for five openings this year. We started our international efforts with our Toronto opening as well. I am also excited to share that we grew our earned media share of voice from less than 1% in early 2022 to 30% in recent months. This incredible performance was driven by the PR we generated through our influencer partnerships and is a model we will be accelerating in the coming year. We will share more details on this exciting area of opportunity as we progress throughout the year. At the beginning of the year, we were very excited to announce the appointment of Todd Magazine as our Chief Executive Officer. Todd has over 30 years of experience in brand building and retail operations, including over a decade as CEO of Blink Fitness, a national fitness chain created by the executives at Equinox, the luxury leader in the fitness industry. Todd helped scale Blink from four locations when he joined to well over 100 during his tenure. He brings strong leadership qualities to our team, and he is an excellent addition as AirSculpt moves to its next phase of scaling growth, both domestically and internationally. As previously announced, I have transitioned to Executive Chairman of the Board of Directors, and my focus and attention will be to work with Todd and the leadership team on vision, strategy, clinical excellence, and technological innovation. I plan on remaining active in discussions with the financial community as well. With that, let me introduce Todd to discuss more about why he joined AirSculpt and his near-term focus. Thank you, Aaron. Thank you to everyone on the call for joining us today. I look forward to talking with many of you in the coming weeks and months. Let me start my comments by sharing why I decided to join AirSculpt. While I didn't know the company, I quickly learned through lots of due diligence that it was an incredible opportunity. First, I learned that it's a revolutionary procedure that transforms people's appearance virtually overnight, which to me was mind-boggling given my time in the fitness industry and seeing the incredibly high failure rate of people who spent years trying to change their appearance. Second, I discovered that AirSculpt is truly in a category of one. No company or technology can do what AirSculpt can do, which enables us to recruit some of the very best plastic surgeons in the world. Third, I learned that our unit economics are very strong with de novo locations that get to profitability within their first year and provide a significant return on invested capital. Finally, I learned that the tailwinds in the broadly defined aesthetics category are very strong, with a tremendous runway of opportunity. Despite all of this, I also learned that our brand awareness is still not where it needs to be, and our footprint is just scratching the surface of all the opportunities that exist domestically and internationally. As you would expect, my focus over the coming months is to help the team deliver on our top and bottom line goals. However, I will also be focused on three critical strategic areas. First, we will strengthen the organization by bringing in additional talent and improving our processes. Second, we will focus on revenue growth, which includes ramping up our de novo expansion program. Third, we will rightsize our cost structure and strengthen our capabilities to support a much bigger and more robust fleet of centers. I joined this company because I saw an opportunity to make AirSculpt the undisputed leader in the global body contouring space. Now that I am part of the team, I'm even more confident that this objective is well within our reach. I look forward to leveraging my experiences of building brands and scaling businesses to help Dr. Rollins and the talented team at AirSculpt grow stakeholder value. In a minute, Dennis will walk you through our fourth quarter results as well as our guidance for 2023. Before I turn things over to him, I'd like to share a few high-level comments. Our fourth quarter revenue was in line with our guidance and a significant improvement versus our prior quarter and our fourth quarter last year. This performance demonstrates that the softness we experienced in Q 3 was an anomaly, particularly given the fact that we have seen our momentum from Q 4 carry into Q 1 of this year. I'm happy to report that we are on track to meet our first quarter revenue expectations. Turning to Q 4 profitability, we were impacted by the investments we made in 2022 to bolster our infrastructure. Objectively, the company got a bit ahead of its skis on these investments and did not make the proper adjustments fast enough to impact our end-of-year financials. As I stated previously, rightsizing our cost structure will be a top priority of mine. We will share more details on this area as we progress throughout the year. Looking forward, we are committed to delivering very strong year-over-year growth on both the top and bottom line, with margin expansion in the back half of the year driven by our cost management initiative. Let me now turn the call over to Dennis to walk you through our financials and our outlook for the year. Dennis? Thank you, Todd. Our revenue for the quarter was $40.7 million, an 8.4% increase over the prior year quarter. Our growth was led by approximately 16% increase in case volumes, which was primarily due to the addition of 4 de novo centers versus the prior year base. As of December 31st, 2022, we operated 22 centers versus 18 at the end of 2021. Our average revenue per case for the quarter was $12,200, a 6% decrease over the prior year's quarter, driven by both procedure mix and some promotional activities, but was still within our target range of $12,000-$13,000. Thus far in the first quarter of 2023, we are seeing an average revenue per case at the midpoint of our projected $12,000-$13,000 range. Our cost of services, a percentage of revenue, was 38.7% versus 34.8% in the same period last year. The increase is primarily related to the addition of clinical staff to support our growth, which Todd spoke of in his remarks. Our customer acquisition cost for the quarter was approximately $2,300. For the quarter, our adjusted EBITDA was $9 million, and our adjusted EBITDA margin was 22.1%, which was a decline versus the prior year quarter and lower than our expectations, primarily due to our revenue per case being on the lower end of our projected range and a lack of progress related to rightsizing some of our infrastructure costs. Our liquidity position continued to be very strong. Our cash position as of December 31st, 2022 was $9.6 million, and our $5 million revolver remains undrawn. Our gross outstanding debt was $85 million, and our leverage ratio at the end of the quarter is calculated under our credit agreement was 1.75x. Cash flow from operations for the quarter was $6.6 million, which represents an adjusted EBITDA conversion ratio of 73%. For the full year 2022, our conversion ratio was 56%. We invested $2.2 million, primarily related to opening new centers, and we had a use of cash from financing activities of approximately $2.4 million, primarily due to tax-related payments related to certain vesting of equity-based compensation. In our earnings release this morning, we provided a non-GAAP measure reflecting adjusted earnings per share diluted for the quarter of $0.07 and $0.37 for the full year. We provided this measurement as a result of our interactions with shareholders and believe this presentation presents useful information to investors by highlighting the impact to earnings per share of selected items used in calculating our adjusted EBITDA. We expect another healthy year of free cash flow generation in 2023, with improved adjusted EBITDA conversion ratio due to our focus on margin expansion. We expect our primary uses of cash flow will be to fund growth investments for the business, such as adding de novo centers and driving technology innovations. We also expect to continue to strengthen our balance sheet throughout the rest of the year, positioning us to consider stock buybacks, debt paydowns, and dividends. This morning, we introduced our 2023 revenue guidance range of $187 million-$192 million, representing 11%-14% increase over 2022. We expect contributions from our de novo centers to drive the magnitude of the year-over-year revenue growth. We expect to open our Austin and Irvine locations later this month, and we are on track to open our flagship location in London in May. Our final two de novos, Raleigh and San Jose, are expected to open late in the third quarter, which will give us a total of five new centers added in 2023. Our adjusted EBITDA guidance is $48 million-$50 million, which represents year-over-year growth of 11%-16% and margins of approximately 26% at the midpoint of both revenue and EBITDA guidance. Underpinning our guidance is the expectation that the second quarter will continue to be our strongest quarter, while we expect the seasonal patterns in the back half of 2023 to be similar to that of the back half of 2022. As we are almost 2.5 months into the first quarter, we are also providing a first quarter revenue outlook of approximately $43 million and adjusted EBITDA outlook of approximately $10 million. With that, I'd like to turn the call over to the operator for some questions. Operator? Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Simeon Gutman with Morgan Stanley. Please proceed with your question. Thanks, everyone. Good morning. My first question is on the relationship between case center volume and then new centers or new facilities. At one point, the spread was greater, meaning, case volumes were running greater than the number of new openings. Now it's flipped. My question is, how should we think about that relationship? Granted that new centers are not opening at 100% productivity, but should that be something that these two metrics narrow over time? Hey, thanks for the question, Simeon. From a de novo outlook, you know, the majority of our case volume increases are still coming from those facilities. One, from, you know, centers that we've opened up in the quarter, but also two, from those centers that aren't quote in our same-store metric that are still continuing to ramp up. We're seeing the majority of our volume increases from those. I would point to also, Simeon, you know, when you look back at the third quarter, you know, our same-store volume was about 7.6% off of the prior year. In the fourth quarter, we're actually 1.1% up. I think it just kinda shows that we had a healthy bounce back, not just in adding the de novos, but also in our, you know, our existing centers. A quick follow-up. Todd mentioned some expense items, just to sharpen up. Can you talk about the expense items? You mentioned there were some promotional initiatives, I guess, that hurt revenue, I guess less so margin. Anything else about the economics of this business that can be tightened up, as the growth story continues? Hi, Simeon, this is Todd Magazine. How are you doing? Yeah, let me just take that real quickly. I mean, really the focus for me and the team is gonna be really those areas of our P&L that have really been growing at a faster rate than our revenue growth. You know, that's our focus area. As I said in my opening comments, you know, we got a little bit ahead of ourselves in terms of some of those investments. You know, we're taking a hard look at those areas that are growing faster than our top-line growth. You know, we're gonna go hard at those and really try to make some progress there, particularly as we, you know, exit the year to get some margin expansion. That's really our focus right now. Okay. Thanks. Good luck, and see everyone next week. Hey, thanks, Simeon. Thank you. Thank you. Our next question comes from line of Josh Raskin with Nephron Research. Please proceed with your question. Hi. Thanks. Good morning. I was wondering, could you just speak a little bit more about that change in rate in the quarter? I'm curious if you have a sense of sort of, you know, if it exists or the same-store, same procedure, pricing metric. Are there any geographic variations, you know, or the new centers that are impacting rate? Lastly, I heard the promotional a-activities. Is that sort of traditional discounting or is that a little bit different and is that promotional activity new relative to what you've seen in the past? Hey, thanks, Josh. Yeah, from a rate perspective, you know, if you kinda look through the quarters, you'll see there's a lot of variability within our rate. It bounces from quarter to quarter. A couple of reasons for that, obviously, acuity and the types of procedures, the case mix, and those types of things. You know, we can't really control who walks in the door, obviously, as you know, but that's a component of it. Then we did take some promotional activities in the fourth quarter that did bring the rate down a touch there from what we had sort of forecasted. We had projected sort of to be in our high end of our sort of projected range of 12,000-13,000, as you see that we came in on the low end of that. you know, obviously, that did give us a little bit of revenue shortfall from a rate perspective as well. you know, our conversion metrics within EBITDA are so high that a little bit of rate did impact us from an EBITDA standpoint for sure. Josh, it's Aaron Rollins. I also wanna let you know that we did do a lot of promotion in the fourth quarter, and we did it because the data showed it worked, and it definitely drove case volume. What we're gonna do this year that's a little bit different is we're working on different ways to promote to actually drive ASP, such as bundling, and giving patient more value, but for a higher price point. Okay. Gotcha. Gotcha. Second question, just on, you know, the guidance for EBITDA. You know, overall margin sounds like relatively flat in 2023. I heard margin expansion maybe in the second half, so maybe there's a little compression in the first half. Could we just revisit that sort of variable cost versus fixed cost base and why we shouldn't expect more of the revenue growth to translate into EBITDA margin expansion? Sure. Just, I'll kind of hit the variable component first. When you look at it from an EBITDA standpoint, about 53% of our costs are variable. We still have a very high variable component. Obviously, physicians and supplies would be the number ones there as well as our advertising numbers. You know, some of the expansion, Josh, is really related to us taking a more measured approach in our rates. Again, as I spoke previously in the question, you know, we have such a profitable profile on our revenue that, you know, we took a little more measured response in how we looked at rate going into next year. We, you know, we think of 12,000-13,000 is kind of our range. We took a midpoint, which obviously is a little bit lower than where we finished out in 2022. I think it's opportunity for us there, and clearly because of the profitability aspect of it's not giving us as much EBITDA margin expansion as you would probably expect. You know, Todd talked about the cost structure and the management of that. You know, obviously, whenever you start looking at a lot of things across the board, it takes a while. That's why we're sort of assessing in the back half of the year of the impact there. We think we'll probably get $2 million in year for that, potentially. We think on a run rate basis, we're looking close to $5 million. You know, we're really taking a deep dive into that. Okay. Thank you. Thank you. Our next question comes from line of Korinne Wolfmeyer with Piper Sandler. Please proceed with your question. Hey, good morning, all. Thanks for taking the question, Todd, it's great to finally talk to you. I guess first question, kind of bouncing off of that margin question. Could you just expand a little bit on what we should expecting for gross margins going forward? I mean, it did take a pretty heavy step down in 22. Is that kind of the proper run rate we should be looking at going forward? What kind of expansion could we see there? Thanks, Korinne. We are extremely focused on a 30% margin. We believe that this business should be in that range or above that range. Clearly, this past year, we've invested a significant amount. I think, again, Todd Magazine, in his comments, has talked about that as well as how we've, you know, we've invested considerably and maybe got ahead of ourselves a little bit there. That obviously impacted our margins in the current year. Again, that 30% margin range is something we're extremely focused on. Again, we think it's definitely reasonable to look at it from a long-term perspective. Yeah. Korinne, this is Todd. Nice to chat with you. Thanks for the question. You know, just to add on to what Dennis said, you know, we're pushing hard on this. As Dennis said, we think we could, you know, accomplish a couple million probably this year. You know, we think on a run rate basis, as we turn the page on the calendar at the end of the year, that number should annualize to something closer to $5 million. You know, we're very focused on margin expansion. You know, I've looked at this in my relatively short time here, and I would tell you that there's no reason this business couldn't have, you know, a 30+ margin. Our focus really is to obviously continue to drive the top line aggressively, but also to really, you know, obviously go after some of these investments that, you know, need to be right-sized for our cost structure. We're, you know, we're very focused there, and I think we feel good about going after that, and we just, you know, need a little time to get some of that, get some of that, you know, in the bank over the coming months and quarters. Got it. That's very helpful. Just on these new center openings, can you just talk about what you're seeing in terms of ramp and productivity of these new centers and kind of what's baked into expectations this year? Also kind of along those lines, what kind of visibility do you have into, you know, potential case volume for some of these new centers, particularly the London one that's maybe a little bit more different than how a traditional U.S. center would operate? Thank you. This is Aaron Rollins. Hi. Something that we are doing this year that we haven't done before, in the vein of your question is, four of our de novos this year are actually opening up in states we're already in. That gives us the opportunity to train our doctors, actually in the existing center in that state, so that we can attempt to accelerate our de novo ramp, by instead of having two to three months of limited case volumes, free cases for training, et cetera, et cetera, actually be doing real cases at real prices day one. This is our first foray into doing that, but we're able to do that in actually four de novos this year. Obviously, London is a completely different story. I'll tell you that, after our calls today, I'm off to London for a press tour. I'd say this is the most robust de novo marketing we've ever had. I have around 20 press interviews in London on Sunday, and we've never seen interest like this before. We also have a wonderful doctor pipeline there. We just signed another wonderful doctor who we're really excited about. Even one of our doctors from the U.S. is licensed in the U.K. and will be pinch-hitting there sometimes, [Dr. Dovekia]. All I can tell you is that I haven't been this excited about a de novo in a long time, and, you know, I'm expecting really good things from London. In terms of the London ramp, you know, there's no way I can really say what that's gonna look like. Awesome. That's great to hear. Thanks so much and looking forward to next week. Thanks. Me too. Thank you. Our next question comes from the line of Parker Snure with Raymond James. Please proceed with your question. Hey, thanks for the question. Yeah, this is Parker on for John Ransom. I just wanna go back on the promotional activities. Is this centered around the new de novos and just trying to ramp up productivity when they're brand new? Is this centered around some of the existing facilities? I guess I'm just trying to get at, is there kind of weakening demand in the same-store cohort, or are you just trying to kind of ramp up the new cohort? Just kinda going back on that, I believe you were previously kinda talking about, hey, you have the ability to potentially raise price in the future, but now you're maybe kinda talking that down a little bit and doing some promotional activities. Just think about, you know, what are you seeing in the consumer and your ability to kinda raise price or your pricing dynamics going forward? Thanks. I'll take that. Thanks for the question. First of all, the promotional activity has been across the board. It hasn't been office specific. We've used it because our data showed that it was an impetus for people to get the procedure, not that they wanted it or not that they didn't want it, but they perhaps would have delayed it, and we saw it to be a very effective tool in the fourth quarter. We did see a 16% increase in case volume over the fourth quarter. It's been great. However, I think how we promote going forward is something that we're working on in order to actually drive ASP by giving patients more value, but for a higher price point. If you want, let's say, your tummy done, which is our bread and butter, you have other areas too. If we can ramp up our ASP and give the patient a little bit more value, it's good for everyone. Parker, this is Todd. I'll just jump in on that. I would tell you, we're not seeing any indication of any kinda headwinds, you know, related to macroeconomic challenges. You know, as we said before in the first quarter here, you know, our rate is right back in line of where we historically have been, and our case volume is growing very, very nicely. There's no indication that there's any, you know, headwinds, broadly speaking here, and we feel, you know, very good about, you know, the prospect ahead. We feel right now we're in a pretty good spot and, you know, we're excited about the balance of the year. We're also right now, for the first quarter, right at the midpoint of our range. In terms of ASP, we're right where we wanna be. You also mentioned, or I know you guys have been rolling out some kind of ancillary offerings like the skin tightening and the cellulite. How is that, you know, tracking just, you know, cross-selling and upselling on customers and just anything that you can kinda note there? I'm glad you asked. Something that's important to understand about AirSculpt+ and AirSculpt Smooth is that it's actually meant as a case driver. First of all, we wanna be on the edge of technological innovation. We wanna really offer the absolute best treatment in body contouring that exists. That's number one. What we've seen with it, now that we have more quarters of experience, is we're finding it's a case driver. Whereas patients with really loose skin would have been told, you know, "Go get a tummy tuck," or, you know, "We can't help you," now we can. We're also seeing new patients that we would never have treated before for cellulite, and we're also doing AirSculpt on them. The only, the only thing to understand about it is a lot of these patients aren't our typical patient that's, you know, let's say, has areas all over their body. They typically have, let's say, arms with, like, really loose skin and some fat. Instead of turning them away, we can treat them, but we're not doing their whole body. As a case driver, it's been great and, you know, as you see, that, it really did drive cases in the fourth quarter, and we're seeing that trend continue in the first quarter. All right. Thanks so much. Thank you. Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Dr. Rollins for any final comments. Thank you for listening and for your interest in AirSculpt. We're really looking forward to speaking with you next quarter. I hope everyone has a good weekend. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.