Tactile Systems Technology, Inc. (NASDAQ:TCMD) Q3 2019 Earnings Conference Call Transcript

Nov 04, 2019 • 05:00 pm ET

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Tactile Systems Technology, Inc. (NASDAQ:TCMD) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon, ladies and gentlemen, and welcome to the Third Quarter of 2019 Earnings Conference Call for Tactile Medical.[Operator Instructions] At the end of the companys prepared remarks, we will conduct a question-and-answer session. [Operator Instructions]

Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including those identified in the Risk Factors section of our most recent annual report on Form 10-K as well as our most recent 10-Q filed today with the Securities and Exchange Commission. Such factors may be updated time to time in our filings with the SEC, which are available on our website. We undertake no obligation to publicly update or revise our forward-looking statements as a result of new information, future events or otherwise.

This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles, or GAAP. We generally refer to these as non-GAAP financial measures. Reconciliations of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release on the Investor Relations portion of our website.

I would now like to turn the call over to Mr. Jerry Mattys, Tactile Medical's Chief Executive Officer. Please go ahead, sir.

Executive
Gerald R. Mattys

Thank you, operator. Good afternoon, and welcome, everyone, to our third quarter of 2019 earnings call. I'm joined on the call today by our Chief Financial Officer, Brent Moen.

Let me provide a brief update of -- a brief outline of today's call. I'll start with a review of our financial performance highlights during the third quarter of 2019, followed by some commentary on the primary drivers of our revenue growth. Then I'll provide you with a brief update on some of our recent operational progress during the quarter. Brent will then discuss our financial results in detail and review our financial guidance for 2019, which we updated in our earnings press release this afternoon. I will then share a few closing thoughts before we open the call for questions.

We achieved another quarter of impressive sales performance in Q3 with total revenue of $49.6 million, representing growth of 37% year-over-year. Our revenue growth was driven primarily by sales and rentals of our Flexitouch Plus system, which increased 34% year-over-year to $44.7 million. We also saw impressive growth in sales of our Entre and Actitouch Systems, which increased 64% year-over-year to $4.9 million.

As Brent will discuss in greater detail, our third quarter 2019 revenue results were favorably impacted by our adoption of accounting standard ASC 842, which contributed three percentage points to our third quarter revenue growth. Excluding this impact, we achieved revenue growth of 34% in the quarter compared to the same period last year.

Our third quarter revenue growth benefited from several important