Paragon 28, Inc. (NYSE:FNA) Q3 2023 Earnings Call Transcript

Caitlin Cronin: Great. Thanks for taking question.

Albert DaCosta: Thank you.

Steve Deitsch: Thanks.

Operator: The next question comes from George Sellers with Stephens, Inc. George, please go ahead. Your line is now open.

George Sellers: Hey. Good afternoon and thanks for taking the question. Maybe to shift your pipeline a little bit, clearly, some exciting things coming by the end of the year and then also next year. I am just curious if you could give us some additional color on where some of those devices are in terms of the sub-segments, maybe if those devices are extensions for things that are already in your portfolio or entering new indications? And then also any detail on maybe the cadence of some of those launches? I know I put a lot on that one question. Hopefully, I can repeat anything if I need to?

Albert DaCosta: Yeah. Hi, George. This is Albert and I will maybe take a stab at it. You know this is my sweet spot and I love you trying to get as much information you can about future launches, which is always hard for me not to divulge. But look, we are as excited as we have ever been about some of the products that we are expecting to launch next year. And the short answer to most of your questions is yes, yes and yes, right? We do have a few line extensions that we expect to introduce next year. We are expecting to cover every aspect of foot and ankle surgery. So all the sub-segments, we have got some introductions going into next year. I wouldn’t say that any of my children are more special than the other children, but there are a couple of products that we think have a pretty significant opportunity, at least we are anticipating they could be pretty significant in terms of improving outcomes for patients, which is a pickle point for us.

So, yeah, we have got a couple of really exciting things launching next year, including our first module of Smart 28, which we have been kind of letting the world know. We expect to launch that early next year or at least the first half of next year. We might see some limited launches a little bit earlier than that based on some regulatory approvals, but that is something that we have got a lot of excitement around. Not to underplay some of the product launches we have launched this year, and we still have somewhere between two and four products that we might be launching at the tail end of this year. So a lot of exciting stuff in terms of product development. And our goal is to influence everything that could possibly afflict a lower extremity patient and every time we launch one of these products, I think, we get closer and closer to that goal.

So we have got a lot of exciting things coming and I love that question. So product development is what really tickles me every day that I get to come to work and see what we are doing there.

George Sellers: Okay. That’s really helpful and we are looking forward to hearing some more details about those in the future. Maybe to shift back a little bit to the performance in the quarter. Could you give us some additional color maybe on how some of the sub-segments trended on a monthly basis and specifically relative to your expectations?

Steve Deitsch: Yeah. Maybe I will start and then Albert can come back in, George, and thanks looking forward to seeing you next week. Look, every one of our segments performed well in the third quarter and also on a year-to-date basis, that’s kind of the benefit of our business having such a strong presence in each of these segments and that’s going to continue to be that way as we go forward. And Albert says he doesn’t have favorite children, but other than a few things like Paragon 28 is one of his top six children. So, look, everything is performing well, and singling out things, we typically don’t do. So we don’t want to break stride with that. So each sub-segment is important to us and grew for us.

George Sellers: Okay. Understood. Thank you all again for the time.

Albert DaCosta: You got it. Thanks, George.

Steve Deitsch: Thanks, George.

Operator: Our next question comes from Brandon Vazquez with William Blair. Please go ahead, Brandon. Your line is now open.

Brandon Vazquez: Hi, everyone. Thanks for taking the question. Congrats on a nice quarter. I want to ask one on the guidance. It implies a nice rebound in Q4, but I am kind of curious if you use kind of the low end versus the high end for what’s implied in Q4? It’s a relatively wide range, at least for Q4, specifically. If I am doing my math right, something like low-teens growth to over 20% growth for Q4. So maybe you can talk about what gets you to the low end of the high or the high end of that guidance as you go into Q4?

Steve Deitsch: Yeah. Yeah. Happy to do that and thanks for the question and it’s nice to have you on the calls and picking up coverage. So I would say that, we intentionally left the range of $2.14 to $2.18 just to account for some potential uncertainties on the downside at the low end of the range related to supply chain and just uncertainties in the macroeconomic environment. There’s certainly nothing that’s going off plan right now and what we are experiencing with the supply chain is consistent with our previous expectations, but the low end accounts for potentially some additional headwind there. And also just the potential, which we are not experiencing now, to be clear, but the potential for headwinds from a macroeconomic perspective. In the high end, we would assume the opposite, just continued improvements in supply chain and just a really robust foot and ankle elective and non-elective procedural environment.