All right. Afternoon, everybody. I know we're running a little bit late here. Matt O'Brien, I cover MedTech here at Piper, and we're extremely fortunate and lucky, to be redundant, to have the Paragon 28 management team with us today. Albert is the CEO, Steve is the CFO of the company. Matt's in the back there taking pictures of ourselves so make sure you keep it on that side. But thanks so much for coming out. Really do appreciate it. Thanks for having us. You bet. So, you know, it's been a tough space, generally speaking, this year, as far as MedTech goes, but you guys continue to execute really well. Yeah, you had a little bit of a, you know, hiccup with the supply and sterilization issue, but the Q3 results were good. Mm-hmm. Up, you know, up in Q3 sequentially, which, you know, I know there was some headwinds on the Q2 side, but I would love to hear what you're seeing, you know, under the hood that we can't see, as far as new clinicians or going deeper in certain, you know, certain accounts where you don't have sterilization issues. You want me to hit it? Yeah. Well, I'll say, generally speaking, to grow sequentially, Q3 over Q2, is the result of several factors hitting, right? We've always invested in medical education. New product launches have continued to be a tailwind. They bring surgeons to the medical education for us. They attract new salespeople. So we, generally speaking, despite the headwinds from the supply chain issues, had great momentum going in there. The fundamentals of the business are really strong. That part of it is actually carrying us with a ton of great momentum moving into next year. We actually have three products that are launching right now as we speak, and we've got a lot of great product launches expected for the first half of the year. So there, there's a lot of great momentum driving us there, and as the supply chain headwinds start to recede, we expect positive momentum moving forward. Do you think the supply chain issues are going to be behind you in 2024? Are they going to linger a little bit? I think for the most part, Matt, they're going to be behind us. Okay. You know, the—what we've really talked about and emphasized is the second quarter of this year really peaked from a headwind on our—uncertain of our products. Got better in the third quarter. It's going to get better again in the fourth quarter, and then next year, we think it's largely behind us. And, you know, one of the things that I would say also that, just to augment Albert's comment on the third quarter, it was broad-based. So, you know, one of the benefits of our business is we participate meaningfully in every foot and ankle subsegment. And one of those segments, in particular, the forefoot segment, which is bunions, which is hammer toe, we saw nice sequential improvement into 3 Q over 2 Q in that business as well, and double-digit growth. We're really excited about that market plus the other markets that we're doing well in, and we've got a number of new products, as Albert mentioned, that are going to come out and give us additional momentum as we go into 4Q in the next year. Okay. And that's kind of interesting. So I had heard, you know, some anecdotal commentary about a slowdown, especially on the forefoot side of things. That's not something you guys saw in Q3, and it's continued to be good here in Q4 so far, as far as the markets go, not necessarily, you know, how you guys are doing specifically? Yeah. I mean, look, we saw strong end markets in the third quarter, broad-based, you know, not experiencing any headwinds per se, that were not planned for. We know we planned and communicated the supply chain. We planned and communicated the two less billing days, and then also the third quarter was a 30% year-over-year growth comp. So, planned for seasonality, and the end markets are strong and we expect them to continue to be strong as we go into the fourth quarter. And our guidance accounted for, at the top end, strong end markets and better-than-expected supply chain headwinds, and the low end was to account for the opposite. Okay. And I know you guys don't like to give too much information out as far as, you know, which products specifically are leading the charge for you, but is there a specific area that is better than others? I don't know if it's forefoot, midfoot, hindfoot, ankle replacement. Just are there certain areas that are better than others as far as growth, or do they kind of ebb and flow in terms of the performance? There's some seasonality to some of that. Generally speaking, I'd say the, the universe of foot and ankle has been, balanced and productive for us. There are certain subsegments that have maybe higher complication rates or maybe they're younger in their evolution as a subsegment that you might see a little bit of a disproportionate growth opportunity. But for us, it's important that we're blended across the full spectrum of foot and ankle. Our development strategy is there, and the influence in Q3 and, and honestly, this year and last year and moving forward, we anticipate to still be, you know, kind of scattered across there. We did have, at the end of 2020, actually, the end of 2019, we launched some of our ankle fusion products. In 2020, we launched our total ankle replacement. So you see a big bolus of development that hit in a single subsegment. So that one was carrying a little bit more juice for those first years of its launch. Last year, we launched external fixation, so that's carrying a lot of juice right now, but generally speaking, we expect a lot of balanced contribution from our subsegments. Okay, got it. Are you taking share in bunionectomy? I can tell you that our bunion business has grown nicely and continues to grow nicely. We happen to have kind of an influence coming in the product launch side of it that is forefoot driven here in the coming months. Okay. Generally speaking, our bunion portfolio is doing well. Okay. All right, trying to figure out if we should get to the new products right now because- Yeah ... that's an area that you love to talk about- Yeah And you, you're really good at. So, so maybe let's just go there then. Yeah. I don't know what you're sharing as far as new product launches go, but- Mm-hmm I think you generally launch about six-eight every year, or six-10, something like that? Yeah. Is that the same cadence we should expect next year? And then, you know, these three new ones, any kind of details you can provide? ... Yes, so I think we're going to be. We're having a press release here in the next couple of days. So there, we're okay. I got the thumbs up to go ahead and talk about the three new launches, but one of the launches we just introduced is, it's a console unit for MIS surgery, so it has an optimized torque in a completely disposable kit. So that allows facilities to turn more effectively, and it allows the surgeons to have burr speeds and torques that are ideal for MIS surgery. Okay. That's the FJ 2000. That's a console that we just launched. We also just launched a Bridgeline Tape, which is a soft tissue correction device. This one is really the result of a lot of years of research that we did some animal studies with CSU. But what it is, is a tape that goes in rigid day one. It has woven into the fabric a few strands of resorbable sutures so that it can actually release and introduce more of the physiologic properties of the soft tissue to see if we can generate more like-for-like tissue healing and less scar-mediated healing. That's the Bridgeline adaptive tape. And then just yesterday, we launched a fixture device to help with aligning bunion surgery. It's called the Bun-Yo-Matic. We are going to be doing a really cheesy infomercial around that, generating some excitement. We're looking for actors and actresses. So don't be surprised if we welcome you on the infomercial stage. I'm about as cheesy as they get. Think of MyPillow combined with, like, a Ron Popeil flair. But, that system- My bunion. Yeah, and it's really amazing because that system took us three and a half years to develop, but I feel like it addresses some of the limitations that still exist in the market. Things with shortening and really reflecting weight-bearing characteristics, which is what we're trying to align bones to when we're doing bunion correction. Really trying to perfect the weight-bearing characteristics in a non-weight-bearing situation, that is what surgeons experience in the operating room. Okay. We're actually, as much fun as we're having with the naming and some of that stuff, we really are excited about what this means to bunion correction. Okay. What can that do for that business? Because I think bunions, I know, don't get a lot of attention from investors. Yeah. But I think I've heard it's, like, almost a billion-dollar market just alone. Yeah. What can that, you know, what can that kinda do for you in that category, where you have a lot of competition? Yeah. Well, I would say that our impression is we have some of the best hardware for bunion correction. Our approach to bunion surgeries. There's at least four or five different pathologies, so not all bunions are the same. We really try to provide meaningful solutions for the patient-specific needs, and in some situations, it calls for a fusion at the base of the big, big toe. In some situations, it's more of a shaft indication, and sometimes the distal procedure is appropriate for that. And we want to make sure we have meaningful contributions for each one of those. Our idea is to see if we can customize the best solution for the patient's needs. That being said, putting a spotlight on our hardware, which again, for TMT fusion, one of the difficult challenges there is anything we put on the outside of the bone can irritate the skin where we wear shoes, right? Mm-hmm. So soft tissue irritation is a big complication. The other piece of it is just bearing weight puts a lot of forces on that joint, and it can be susceptible to nonunions and delayed unions. We have an intramedullary nail that we can provide for that. That gives us the benefits of the strength. We could dial in the compression, and it's completely benign to the soft tissue around it. So the Bun-Yo-Matic should put a spotlight on some of the hardware that we think is game-changing for this industry. Okay. Okay, and I want to get into that a little bit more here in a sec. Soft tissue is something that came up a lot- Mm-hmm. During the IPO process. Like, their soft tissues, you know, that's, that's an area where I use other people. We won't name names. Mm-hmm. But, like, love their hardware. Soft tissue, no. Mm-hmm. You continue to plug that hole. Mm-hmm. So the new one that you're talking about, I think CSU is what you called it. Where are you at as far as soft tissue launches go? And then that, what you were talking about as far as the woven, you know, feature that you have in there- Mm-hmm. How is that resonating? Or how will that resonate with clinicians? Yeah. 'Cause I think the thing that I'm, I've always wondered is, your products, I think, are really differentiated. I just wonder how hard it is to get that across to the clinicians, to the where they're, you know, figuring it out and like, "Why are we using other people? Why wouldn't we just use P28? Yeah, so there's a lot of questions in there. There's a lot of questions in there, yeah. For starters, I want to make it clear that our commitment is to developing meaningful technology. So not just making things fancy, but we're really trying to improve outcomes for patients. Yeah. That means that our product development side starts with a lot of research. The research that led to that adaptive tape is going to influence most of the soft tissue products that you see. So products that can emulate the healing phase, plus the physiologic phase, when, when things are recovering back to normal, is something we're really obsessed with. Back up a step, industry tends to think of deformities as bony deformities, 'cause that's what we see on X-rays and CT scans, right? But what is really underlying that is a soft tissue imbalance. So we are banking on that being a really critical piece to preventing recurrences and really improving outcomes for patients. So you're going to see a lot of soft tissue consideration and development and building out that to really match what what is a beautiful hardware side of it, to couple that with a really good soft tissue environment. And then even understanding, once we correct these deformities, what is the soft tissue balance? I talked about shortening for a bunion. If you shorten that big toe, you actually destabilize the soft tissue, which is pretty critical to weight bearing, right? So the plantar fascia, the medial band, there's no contractile fibers in that plantar fascia, and so it doesn't accommodate a deformity. It doesn't contract and remodel, so it's either going to stay lax and or it's going to regain tension. So that length is actually a really functional piece to consider, and if we destabilize the soft tissue, eventually, we change the mechanics of the foot. That's the spring and the pep in your step, right? So soft tissue, to give you a long, drawn-out technical response to that, we think is going to be a critical part to improving outcomes for patients, and we're going to invest heavy there. Okay, and then, sorry, we have to get to the financial side. Yeah. But how impactful is that to the top line for you guys? Because, again, you do so well on the hardware side. Yeah. I think it's meaningful. It's. I've always talked about foot and ankle procedures tend to be three, four, or five procedures done in tandem. Yeah. Soft tissue is a pretty critical piece to that. So capturing that side of it, one, eliminates the need for a competitor to be in there. But we, I think we're at a point in time where surgeons have started to appreciate that if Paragon's going to develop it, it's not just going to be a me-too thing. It's not stuff to fill our bag with more stuff. It's, we're going to try to make something better, and we're going to commit a lot of research to make it better. So surgeons having that trust in us and then being able to provide all aspects of that case is... I think it's important for top line. Yeah. I think it's important for our partnerships with surgeons. It's certainly meaningful for our relationships with hospitals, and it's part of our commitment to all things foot and ankle. Got it. Okay. What about SMART 28? Where are we at with that? It's on schedule. Okay. I'm as excited as ever for that, and I'm excited for a couple of reasons. One, I think we've gotten so many questions about SMART 28, and when people hear enabling technologies, they think of robots and lasers, and I don't think they really understand the software side of planning a surgery, diagnosing a patient, predicting an outcome, and then turning that into some intraoperative tool. When I get to actually show you that plan, I think it's going to have an aha moment for a lot of the investment community that's just trying to say: What does this mean to better outcomes? What does it mean to treating patients? It's, we're thinking that is going to be a pretty significant opportunity for us to just recharacterize deformities, really start to find patterns of successes and failures, and really customize a solution for a patient. Not only is patient to patient have different considerations that need to be considered, but your left foot from your right foot is different. The way... My right foot has a higher arch than my left foot, right? So modeling my right foot off my left foot is not even totally appropriate. And so I think that's the kind of specificity that ultimately is going to improve outcomes. Do you think that, you know, your company used to be at before, did that on the upper extremity side of things- Mm-hmm. saw a meaningful inflection in growth Yeah After they did that. Is this, is this the kind of product that can inflect growth for you guys? I think so. I really think so. And the nice piece about this is you're never going to receive a module that you say, "Oh, that's completely done." We're going to continue for years to keep adding layers of clarity and visibility to these things. We're going to find patterns over time, and we're hoping that close to every case is going to make us smarter, hence the name SMART 28. But that is almost like having a really elaborate registry. Yeah. But it's a registry that's dialing into very specific information that's going to guide our surgeon community, it's going to ultimately influence industry. It's going to. We're going to make better technology, having that kind of clarity, and I think it's just going to be really influential to the market. Got it. Okay, that's great to hear. I was talking fast, but. Yeah. No, no, I, I can hear how excited you are. Yeah. That's good to hear. Steve, some questions for you. Yeah. I don't want to make too much of this, but your growth in new clinicians last quarter, Q3, was 9%. That's the slowest it's been. Still good, right? Yeah. But, but the slowest it's been in a while. Is that something? Is there something to read into that, or is there just more seasonality that you're starting to see? No, in fact, we're really tickled, to use a word Albert likes to use. I don't... I can't believe I just said that. We were really happy with the 2,061 surgeons we had in the third quarter, and it was a record for us in the U.S., despite a seasonally lower time of the year. Yeah. So, so we're expanding that base and continue to expand that base, and, and that's important for us to get to new surgeons and have new surgeons use our products. But equally as important to us is focusing on our existing surgeon base and making sure that they have, and are using, almost every product that is relevant to them. So our medical education, for example, touches not only new surgeons, but also existing customers. So there's, there's nothing negative at all in the trends, and when you think about 2,061 surgeons, a record in the third quarter, the lowest number of billing days of any quarter- Yeah - In the year, we're really pleased with it. Got it. Okay. On the share taking side of things, it looks like you're going to capture around 45 basis points share this year, you know, with a big chunk here in the States. That's about what you need to do, in 2024 to hit where the Street's at, as far as what they're modeling, plus the growth in the marketplace. Is there any reason to think you couldn't do even better than that with all these new products that are coming out, with the, you know, second mobile lab, with, you know, bigger sales force, et cetera? Yeah, and look, we've talked about the fact that we've grown pretty consistently at three times the market growth rate- Yeah ... which is around 7%. We're just north of 20% on a year-to-date basis through September. And one of the things that we've talked about is, our view is that this is a 20% growth business or higher. And the reasons we think that is because of the opportunity to improve patient outcomes. Like Albert's describing, the complication rate and the complexity rate is much, much higher in foot and ankle than it is in more litigated areas of the orthopedic markets, like hips and knees, that have much lower rates of complications. So with better technology and with better training, we believe we can bring those complication rates down, and SMART 28 will be a big part of that. So the market today is a $5 billion market. We're a 4% player in it. That market's growing 7% today. We think it could expand if patients and physicians start to have more confidence in their hands, and that the outcomes will be successful. We think that the funnel can get larger in this space and grow faster. So we're—we believe 20% is the number. We've done better than that since we've gone public, and you know, that's our goal as we go forward. </transcript Okay, appreciate that. Sorry, one more for Steve, but and maybe an extra one. But as far as EBITDA goes, right now, all companies that aren't making money are just getting thrown out, you know, out the door, unfortunately. You said EBITDA positive in 2024. Your gross margins are great. Your boss isn't going to let you cut R&D. I know that. So it's going to come from SG&A. Can you talk about the SG&A leverage that you have in the business to- Yeah. To keep expanding? Yeah, this has been an area that we've improved upon, I think, every quarter sequentially over the last four-five quarters, and we expect that to continue as we go forward. We're going to continue to invest important dollars into R&D, 'cause that is literally the tip of the spear for our success. We're going to see that be 10% or higher of revenue as we grow forward, or go forward for the foreseeable future. We're going to continue investing in our sales and marketing functions and our global expansion, but we aren't going to invest in G&A. We've done a really, I think, a really nice job of building out the infrastructure over the last two years since we've gone public. Everything from legal to finance, to IT, to HR, those are all in place, so we're going to be able to leverage that infrastructure as we go forward and continue to make the important investments that propel ourselves to multiples of the market growth rate. Okay, got it. Appreciate that. What about on the burn side of things? Yeah. How do we think about that metric? 'Cause again, it's another one that gets a lot of attention. When can you turn cash flow positive, do you think? So, you know, I think importantly, we put in place a new non-dilutive credit facility in the third quarter with Ares, $150 million facility, upsized from 90 million previously, with generally the same terms and provisions from a pricing perspective and covenant perspective, really covenant-lite. And so we're really confident that that facility gives us the pathway to cash flow breakeven. We were really—actually, Albert and I were really confident where we were at before, but, you know, there was a lot of questions from some existing investors and some new investors out there that said to us, "You know, we'd like to see you bolster the balance sheet, 'cause we don't, we don't see, you know, the pathway yet to cash flow breakeven." But it's, it's, for us, it's clear, and we believe this 100 million pro forma on our balance sheet of cash at 9/30 gets us to cash flow breakeven. We're going to see significant improvements next year in cash flow. We've had a couple of atypical years where we've built some inventory levels above the operating levels that we need to be efficient. So those are going to come down and provide a tailwind for us in cash as we go forward. And then also, we've, you know, we've had EBITDA losses for the last two years, where we've made really important baseline investments that we're leveraging now and, and going to be EBITDA positive next year. So, so those two things are really important, tailwinds for our cash flow as we go forward. Understood. And last one, and I really hate to finish with this one, but I would love your perspective, Albert. Mm-hmm. On the GLP-1 side of things, you know, I can see where maybe it'll help a little bit with the knee, right? Mm-hmm. You're taking a lot of, a lot of load there. Aren't you taking a lot of load with your foot as well? Yeah. And so if you're lighter, maybe it doesn't hurt as much. Maybe you don't have some of these degenerative conditions. Is that the right way of viewing it? Or, hey, look, there's a lot of people that couldn't have had it because they were too, too big. Yeah. Maybe you could see a tailwind from that. I mean, how do we think about that dynamic? Yeah, I'd probably characterize this best by just saying we generally speaking have a pretty young and active population for us. So most of what we see, I think in the ankle segment, the statistics are somewhere around 7%-8% are osteoarthritis, right? The rest of those are post-traumatic arthritis cases. So these are people who have been really active in their lifetime, and their wear and tear has you know manifested in some arthritic changes in the joints. That means that for us, weight only becomes a tailwind, right? It creates options that a patient might not have if they're obese. If you're obese and you need. You have ankle arthritis, you might only qualify for a fusion. If you lose weight, it might allow you to pick between the total ankle replacement and a fusion. So that's one way that, you know, to characterize this. We have a pretty young population. Okay. Then you've got just this desire for activity, pickleball, things that are allowing people to be more active. Our goal is to get people as active as soon as possible. So I think that's a positive. Anything that makes our patient population healthier is great. Yeah. On the other side of it, we just keep looking at correlation. So just the United States is somewhere around 40-42% obesity rate, you know, per capita. If we look at the Japanese market, it's about 4% obesity, and they're the second or third largest orthopedic market. So we're just thinking that this could possibly be a positive for us. I don't want to underplay it. Yeah. If there's people that are concerned about it, we're looking at it actually pretty optimistic. Got it. Got it, okay. Yeah. It looks like we're all out of time. Yeah. So I'll have to wrap it up there. Guys, thanks so much for all the feedback. Thank you.