Tactile Systems Technology, Inc. (NASDAQ:TCMD) Q2 2023 Earnings Call Transcript

Daniel Reuvers: Yes. I think that we certainly expect, I think, this one to come back. I think that they’ve sort of reestablished a new baseline. That’s the headwind that we’ll be overcoming. We have continued to grow, as I said, in all of the others in the top 10 and expect to continue to do that. But there’s a little bit of a put and take there. I think to your question about what are we doing to continue to invest in the growth, first of all, the study, I think, is an important one. As I’ve said many times, I think most of our understanding of the units that have been placed by our DME partners have largely been organic growth that — with patients that would have otherwise probably not been introduced to a vest but we’re eligible.

I think the study gives us an opportunity not to be so binary. There’s no reason that we can’t compete for share at the same time. So that’s a new tool that we’re equipping these sales reps with as we speak. There’s — it’s a big universe as we’ve talked about also with sales reps across the DME community. It’s one of the reasons that we like the channel because the army is so big. But it also, I think, is indicating that we probably could use even more coverage. So we’re going to add a few more people. We’ve got 12 or 13 salespeople. We’re going to add a few more to make sure that we’re providing the kind of coverage that we think that the market deserves but those are a couple of things that we’ll be doing here in the back half.

Operator: Next question comes from the line of Suraj Kalia with Oppenheimer.

Suraj Kalia: Dan, can you hear me all right?

Daniel Reuvers: Hear you fine, Suraj.

Suraj Kalia: Guys, my apologies for the background noise. So Dan, may I quickly ask my two questions. So Dan, obviously, you talked about the number of reps, looking to add a few. Maybe I could just — if I could ask for a baseline in terms of how should we think about utilization metrics per site, accounts per rep, revenues per rep, how should be going on? And also specifically, Dan, have there been any changes in sales rep commission structures, just to incentivize one way or the other. I’ll hop here and pardon the background noise again.

Daniel Reuvers: Sure. Thanks for the question, Suraj. Short answer on the commissions is no. I think that we’ve got the right incentives in place with the goal of making sure that we want to continue to expand the awareness within our communities and continue to help more patients. But from a productivity metric standpoint, I think that we’ll continue to evaluate what are the right tools as we get a new leader in place that she’s going to want to see. But overall, I think the best metric to use is if you look at roughly what our head count is, it’s been flat and we’ve been delivering double-digit growth for the last couple of quarters. So that’s probably the best reflection, I think, of expanding productivity. We’ve continued to liberate our salespeople from some of the in-home demos.

We’ve got some of our patient trainers that are well equipped to be able to educate and introduce the devices to patients and as we can more resourcefully deploy them where it makes sense. It gives the sales rep more time to do their market development and education of the HCP community. And I think that we’re seeing some reflections of progress there for sure. But with sales expense down year-over-year, head count relatively flat and lymphedema sales up 16%, those are, I think, probably the best macro metrics at a more granular basis. Certainly, our field sales managers pay attention to target accounts and new accounts and referrals per site but there’s probably more detail than we get into on a call like this.