David Bailey: Yeah. So what we’ve been talking about, Dave, is just the scaling of the sales force. So when we acquired Boston and MD Orthopedics, literally there was no direct sales staff. We had a couple people that were kind of sales managers, and we have some really great folks that have been helpful, kind of one-person teams, really, leading in the United States, and then a few people outside of the United States that have done great for Boston and for particularly MDO. Now we’re trying to get those people and others an actual sales force. So, the aspiration here in 2024 was to have about 20 people added within the sales channel, and we want to partner those people with our current US and international distributors. We don’t want these people to be entirely separate.
So, they’d show up on the doorstep of a customer who they don’t know. Obviously we have very close relationships with really every pediatric orthopedic surgeon around the world. So we want to be able to leverage our relationship and the fact that they know OrthoPediatrics and then bring some people into the sales channel that focus exclusively on the non-operative side that aren’t obligated to stand in the operating room and work with surgeons all day long, but certainly can work in their clinics. So that’s what we’re really talking about. We have added, I would say, I don’t know for sure, but I think we’ve probably added the majority of those sales people already. So those costs have started to figure into our P&L already, and obviously we’ve got that forecasted for the balance of the year.
As that portfolio expands and clinics expand, and maybe even our business expands further internationally, you could assume that we will want to continue to scale the sales channel. We’ve talked about building a $100 million business here. I think you heard me say in the call, a business well over $100 million, I don’t want to put a number on that right now, but all systems are go here for us to build a very, very large business in this space. We love the financial metrics associated with it, and we see very little resistance to us continuing to do that over the course of the next several years. It’s just, this is a big new TAM with a big new growth opportunity all the way around that should drive really strong top line growth for us for the next several years.
Dave Turkaly : Great. Thank you.
Operator: Thank you. Our next question comes from the line of Sam Brodovsky with Truist Securities. Your line is now open.
Sam Brodovsky : Hey guys, can you hear me okay?
David Bailey: Loud and clear, Sam.
Sam Brodovsky : Great. Thanks for taking the question and congrats on a solid start to the year. I just want to start off a higher level question and appreciate the commentary on where system capacity is back at. Can you just remind us what’s contemplated in guidance as it relates to capacity coming back online and if there’s any sort of backlog component in your estimation out there in the market that could potentially come into volumes this year?
Fred Hite : Yeah, I don’t think we tried to anticipate dramatic increases in capacity in our guidance. So, it’s pretty much what we see today is what we try to use to forecast and include in the guidance. We honestly, other than a little bit of carryover from RSV, December into January, don’t feel that there’s some huge pent up demand that’s going to flow through the system in our guidance either.
Sam Brodovsky : Great, and then switching to EOS, just as we think about that opportunity, how quickly do you think the new products could see uptake there? Is it going to be similar to what we saw with ApiFix where they need to needs to mature a little bit before you can see broader adoption? Or do you think there’s room for that to potentially adopt even more quickly? Thanks.
David Bailey: Yeah, that’s a really good question. So, I think with the EOS, and what’s different about EOS than ApiFix is that the ApiFix surgery, this non-fusion spine surgery is a procedure that not every surgeon does. This is asking surgeons to do something different within their practice that they don’t currently do. The fact remains is that a child with early onset scoliosis, young kid that’s having substantial difficulties, there really isn’t a non-surgical treatment option available. These are procedures that are happening, and surgeons are struggling right now to find adequate technologies to do those procedures, perform those procedures. So, I think technology wins in this space. There’s a great hunger from the pediatric orthopedic community to have technologies that can benefit these kids.
A lot of times surgeons are forced to use kind of last resort types of products. So these procedures are happening, and so I think if we have better technology, which we believe we will, and then we can round that technology out with three different products, we think really the three products you would need to take care of this very tough set of indications gives us a real distinct competitive advantage. We do think that the uptick can be really strong with these product lines. Again, I think as much as the uptick in the EOS revenue, it also places the company and, I believe, a fairly prestigious spot in the minds of our customers that say we’re willing to take on the extremely difficult things that the majority of ortho is just not taking on.
I mean, these are pretty fairly rare conditions, but they’re very complicated, and surgeons haven’t historically had great partnerships to take care of these kids. So, we think that kind of creates, again, another halo around the business, gives us an opportunity to help more kids, but also probably drive usage profile of the balance of our other products.
Operator: Thank you, and I’m currently showing no further questions at this time. I’d like to hand the call back over to David Bailey for closing remarks.
David Bailey : Thank you. Well, I’d like to thank everybody for joining us today. We’ve got an exciting week here at EPOSNA. I think this will be the largest meeting of the pediatric orthopedic community in history. So we’re excited to get out there and meet with customers, show off what we’ve done, and it’s just no better place to talk about a fantastic quarter for us and all the momentum we have heading into the balance of 2024. So, appreciate everybody being on the call. Great questions, and we’ll look forward to reporting on how things go as we progress. Take care.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.
