TELA Bio, Inc. (NASDAQ:TELA) Q1 2020 Earnings Conference Call - Final Transcript
May 12, 2020 • 04:30 pm ET
Good afternoon, ladies and gentlemen, and welcome to the TELA Bio's First Quarter 2020 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the prepared comments. As a reminder, this conference is being recorded.
I would now like to turn the conference over to Stuart Henderson, Vice President of Corporate Development and Investor Relations for TELA Bio.
Thank you, Lauren and good afternoon, everyone. Earlier today, TELA Bio released financial results for the quarter ended March 31, 2020. A copy of the press release is available on the company's website.
Joining me on today's call are Tony Koblish, President and CEO; and Nora Brennan, CFO. Before we begin, I'd like to remind you that during this conference call, the company will make projections and forward-looking statements regarding future events. We encourage you to review the company's past and future filings with the SEC, including without limitation the company's Forms 10-K and 10-Q, which identify the specific factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include without limitation statements regarding product development, product potential, the regulatory environment, sales and marketing strategies, capital resources, the impact of the COVID-19 pandemic in our business or operating performance.
With that, I will now turn the call over to Tony.
Thank you, Stuart, and good afternoon, everyone. I want to begin by thanking our healthcare community, including all hospital workers and staff, for your dedication and sacrifice as you battle the COVID-19 pandemic. We greatly appreciate your heroic contributions to saving lives.
In addition to reviewing our first quarter results, I want to use our time today to discuss the impact of this global crisis on our business, and the various initiatives we have taken to position ourselves for continued growth. Nora Brennan will start with a review of our first quarter results. And then I will provide remarks on the impact of this pandemic on our business.
I'll now turn the call over to Nora.
Thanks, Tony and hello, everyone. Please refer to our press release issued earlier today for a summary of our financial results for the first quarter of 2020. Revenue for the first quarter increased 13% year-over-year to $3.7 million. The increase was primarily driven by the rise in new sales of product from the expansion of our commercial organization and increased penetration within existing customer accounts.
Total revenue increased over the prior year period. It was impacted by more than expected procedure volumes in the second half of March 2020 to the hospitals and patients deferring elective procedures and other factors related to the COVID-19 pandemic. Gross profit as a percentage of revenue improved in the first quarter compared to the prior year period increasing to 59% of revenue from 54% of revenue in the prior year period to the higher quarterly revenue and the decrease in the charge recognized for excess and obsolete inventory.
Sales and marketing expenses