Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Hi, this is actually Lily on for Robbie. Thanks for taking the question and for me, maybe I'll ask them both upfront. And I guess can you talk through a little bit more what exactly happened in the quarter to drive the softness, it seems like demand and execution has been really strong. Otherwise, you have the expanded label. So how exactly did the change disrupt what's happening on the ground with the sales force. And then part two, you lowered the guide more than the amount that you missed by. So how much of that is conservatism versus actual softness in the business? And what you expect to see over the rest of the year?
A: Thank you, Lily, for the question. This is Kevin Hykes. Let me give you a little bit of color on what we observe operationally in the quarter and now have chair and discuss the impact on the metrics. In the quarter, we saw higher than anticipated sales force turnover, which led to a disruption in our selling efforts. There's a few reasons I think that this occurs. The first, the Dean's departure CEO after 17 years, may have been the trigger for a number of reps who were perhaps already on the fence about departing the Company. Secondly, the sales comp plan for 2024 that was rolled out just before I joined the Company in February was not in line with what the sales team was expecting, which contribute further to the disruption. Lastly, these first two issues were exacerbated by the time of year and the first quarter is often when reps seek to change roles. In response to these factors, we quickly took actions to solidify our sales team. We made significant changes to the comp plan, which were well received and allowed us to get the team refocused in the last month of the quarter, which was positively received. Also, as we announced today, we're making changes in the sales leadership as well. And I believe that these actions have stabilized the team and should allow us to regain our momentum into Q2.
Q: Hey, this is Phil on for Matt. Thanks for taking our questions. And Kevin, congrats on the new role. I'm just for starters, looking at Q2 implied guidance of, call it mid 20s growth. When I plug into my model on being a fairly aggressive reacceleration in the back half of the year, what does guidance assume as far as the disruption leaking into that back half, if at all? And what gives you that confidence in that steep ramp further second half?
A: Yes, I suppose the Jared, I can take that one. So when we put the model together for the rest of the year, we did take into consideration that we had some newer reps backfilling the existing territories in Q1, and we were only able to add one additional new territory. We did a really successfully bring on a bunch of new reps at the beginning of the year. We're really happy with the level of talent that we've been able to attract. That's going to allow us to continue to add more territories throughout the rest of the year, hopefully, getting us back on track to adding about three per quarter. And as far as the risks or uncertainties of what could happen in the back half of the year, you really just comes down to our ability to get these reps trained up and introduced to the existing active implanting centers and get them really out there working to activate some of these new active implanting centers, but we're feeling pretty confident in our ability to do that based on the history that we've had been able to show.
Q: Hey, thanks for taking the questions. And I guess just to put bluntly and make sure that we're all lined up. Are you continuing to see disruption in the sales force? Or do you think you've stabilized at this point and then you have the existing reps that you guys do have maybe you can kind of give us some metrics to help support how they've been doing, right. So if we take out the excess turnover that you had. Can you give us anything around utilization growth and productivity metrics for those reps and that kind of where?
A: Sure. Thanks, Margaret. And I appreciate the question. I guess the short answer is yes. We believe we have stabilized the team following a bumpy February for the reasons I described before. We're seeing a solid performance in March, and we're pleased with what we've seen going forward. So we think we have, in fact, addressed those issues.
Q: Great. Thanks for taking my question. I'm just curious, as you look at your account base and you mentioned it went up a little in terms of active accounts. And I think, Terry, you mentioned it would be a little choppy with the turnover of the sales force. Have you seen -- first of all, I don't know if you quantified what percentage of the sales force has turned over, how many regional managers are just local reps or if you if you could quantify that, you have and then second is on the accounts, yes, if you lose the rep, do you lose the account and they stop doing it because they need somebody there to hold their hand just help us understand what this has done to your existing set of accounts and maybe that's where you have the competence going?
A: Yes, good question, Bill. So when we saw the disruption in the first quarter saw some turnover. I wanted to emphasize that this is not at the leadership level within the sales organization. This is more at the sales rep level on the ones that are out there every day talking to physicians talking to the hospital administrators, we do see a bit of a pause, right as you go through a transition and handover of those active implanting centers from one rep over to another rep. It does take time to rebuild those relationships kind of work to connect the dots to make sure that this market development efforts can continue. And I just want to emphasize that piece, right? The market development portion of this, it's not us going in with a better mousetrap swapping out for a better device. This is us going out educating these physicians working with the nurses to help so that they can identify the right patients for this therapy and so as we make transitions from one team member to another, it just takes some time to get back into the swing of things for those active centers. And I think as we saw in March, a lot of those scandals had taken place. We were able to see productivity pick back up, giving us confidence that we can continue to grow this business and see increased productivity over time.
Q: Good morning, guys, and thanks for the time, and I'm going to have the onboard. Kevin, just want to dig in a little bit more on existing customer utilization. So it's actually down sequentially despite a better label and much better reimbursement, I think of the entirety. The only reason that it is down sequentially was because of the sales rep turnover. And then on the other side, of that just maybe speak
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
