Conformis, Inc. (NASDAQ:CFMS) Q4 2018 Earnings Conference Call Transcript

Feb 06, 2019 • 04:30 pm ET


Conformis, Inc. (NASDAQ:CFMS) Q4 2018 Earnings Conference Call Transcript


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Good afternoon. My name is Sarah. I'll be your conference operator today. At this time, I would like to welcome everyone to the Conformis Fourth Quarter and Year ended 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

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 security law, which are made pursuant to the safe harbor provisioning of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be considered to be forward-looking statements.

All forward-looking statements include, without limitation, statements about Conformis' strategy, future operations, future financial position and results, gross margin, product margin, operating trends, financial guidance, market growth, royalty revenue, total revenue, product revenue, and revenue mix with products and geography. The anticipated timing of the limited launch of our hip product offering, the potential impact and advantages of using customized implants, business initiatives and transitions in our commercial operations are based upon current estimate and various assumptions.

These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements, including those discussed in the Risk Factors section of Conformis' public filings with the Securities and Exchange Commission. Accordingly, you should not place undue reliance on these forward-looking statements.

While Conformis may elect to update these forward-looking statements at some point in the future, Conformis disclaims any obligation, except as required by law, to update or revise any financial projections and forward-looking statements whether because of new information, future events or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 6th, 2019.

I would now like to turn the call over to Mark Augusti, the Company's President and Chief Executive Officer. Mark, please go ahead.

Mark Augusti

Thank you, Sarah, and welcome everyone to Conformis' fourth quarter and year-ended 2018 earnings conference call. With me on the call today is our CFO, Paul Weiner. During this call, Paul and I will share prepared remarks on a variety of topics, including our fourth quarter financial and operating performance. Following the prepared remarks, Paul and I look forward to answering questions.

From a commercial perspective, we made good progress in the fourth quarter. Our US growth performance of 10% was an improvement over previous quarters and though our international business continues to face challenges, our OUS growth results were in line with expectations and represented a sequential quarter-to-quarter improvement.

Operationally, our gross margin improvements continued in Q4 as we realized 49% gross margin. Perhaps our biggest operational activity in Q4 was our announced operating expenses reduction plan for 2019 combined with the debt reduction and restructuring actions we took.

As announced on December 13th, we took significant actions in the fourth quarter