Albert DaCosta: Yes. Again, thanks for the question. We don’t typically comment on the exact time line for EBITDA. I could say it was a slight push so not terribly significant. The one thing I will say is the SG&A increase. We absolutely expect to start leveraging those investments. And so that increase, we took advantage of some opportunities to invest in the business there and we did. But we fully expect to start leveraging that and to see a much different profile for SG&A moving forward.
Operator: Our next question comes from the line Craig Bijou with Bank of America.
Craig Bijou: Good afternoon. Thanks for taking the question, Albert, maybe following up on some of the sales force investment that you’re making, I’d love to hear what you’re seeing in the market and kind of what’s driving or I guess the opportunity that you see and the rationale for making the investments was their talent available. Did you see, was that a competitive dynamic that maybe you could take advantage of, would just love maybe a little bit more color on the opportunity and the push or why you thought it was time to invest like you have. So maybe what you see over the next couple of years?
Albert DaCosta: Absolutely. I’m great to hear from you, Craig, and thanks for the question. And I will say every time we launch new technology, it generates a real nice buzz in the market and that brings some opportunities forward. I don’t want that to sound like we’re pretty flippant about who we bring on, we are very clinically oriented organization, our products and systems, the way we service that we take deep pride in being a real resource to our surgeon customers and ultimately impacting that patient on the table. So when we’re presented with those opportunities, what we’re really evaluating is the clinical approach to the salesforce and making sure we get not only the geography covered, but get the right partners in place, so that all of these things kind of feed together.
One thing that Paragon has always been blessed with is we have just a phenomenal culture around developing better solutions, we are not bag fillers. And when we launch these systems to the market, it means so much to sales people, it means so much to surgeons. It generates a buzz around medical education, those opportunities all connect and we are one part product development and an equal part salesforce, right. And we really have a sales culture here with most of us came from selling not only medical devices but selling foot and ankle products. We have a deep passion for the procedures themselves above and beyond the implants. And so that connection just is a really good recipe for us. And so windows opportunities present, and it’s the right fit.
We have to take advantage of those. We have to be committed to investing in the things that matter. And we can look at efficiencies and the things that don’t drive top line and don’t improve our organization. That was a long answer for that, Craig, I apologize, but that’s some it’s a real sweet spot for Paragon 28. We happen to be a spot that a lot of people aspire to go to.
Craig Bijou: No, I think that was great, Albert, thank you for that. And maybe just following up with a couple quick ones on the P&L side with your comments with the script, you talked about just against a higher variable sales commission. So wanted to get and just a little bit more color on that. Is that something that’s being driven by maybe competitive hires or competitive hiring in the market? And then secondly, and sorry if I missed this, but the cadence for your EBITDA during the year, I mean should we think of Q1 and the investments that you made, should the cadence improve sequentially throughout the year?
Albert DaCosta: It absolutely. On the last part, there was an increase due to the variable commission piece of it, just the increased sales driving that. There were some investments in bringing on new sales folks that also reflected in that number. We had some R&D spend, we had some additional headcount and we had some external professional services fees that also impacted SG&A. Did I answer the EBITDA part of it? We are 100% expect the year sequentially to improve over Q1.
Operator: Our next question comes from the line of Mike Matson with Needham & Co.
Mike Matson: Yes, thanks. So not to keep focusing on the SG&A OpEx, but I guess what I’m wondering it is you’re mentioning that you expect to leverage it, but does that just mean it will kind of stay flat and your sales will increase or were there because of these rep hires, were there any kind of one timer in there like upfront payments or something like that, that caused the dollar amount to actually be higher this quarter than it will be in future quarters?
Albert DaCosta: Yes. Thanks for the question. Mike. Maybe I’ll pass that one Krissy to you.
Krissy Wright: Yes, absolutely. Hi, Mike. Nice to meet you. In terms of our total OpEx spend as a percent of revenue. We do expect that to reduce our sequential quarters from what we see in Q1, both as a result of an increase in revenue and as a result of leveraging our operating expense investments we’ve made in Q1 and prior quarters over the remaining quarters for 2024.
Mike Matson: Okay. So my interpretation of what you’re saying is that don’t expect the dollar amount of OpEx to go down, but it should at least be stable, it has high test and the revenue grows. And so then you get leverage is that kind of what you’re saying? I mean that the run rate of OpEx stays in kind of the low 60s. Is that a reasonable assumption or?
Krissy Wright: That’s a reasonable assumption. We get leverage as the growth on those operating expenses is a slower growth rate than the growth rate on revenue.
Mike Matson: Okay. Got it. And then you did launch a number of products kinds of in the bunion market. I think you’re saying that those products along with some of the other products you introduced. So the latter part of last year and early part of this year haven’t really contributed yet. But I just wanted to see if you’re seeing any kind of share gains or anything like in the bunion category as a result of Bun-Yo-Matic and some of these other products?
Albert DaCosta: Yes, absolutely. I’ll tell you our forefoot franchise continues to grow nicely and on those products in particular, we believe we are definitely taking some share with some of the newer entrants like the MIS, a bunion portfolio has just been received really, really well. I think we really hit a sweet spot with patients’ interest right, what patients are looking for. And so that product is doing really well. It’s exceeding our expectations. Combination of that with the FJ 2000, the Power Console that really delivers the perfect torque and speed for the burr to do those MIS procedures. That tandem has just been really well received; it is early in the cycle. We launched that really in Q1. And so the normal ramp-up of a product, we would expect more meaningful contribution at the end of the year.
