Kyle Bauser

Kyle Bauser with Roth Capital Partners inquired about the key factors driving LeMaitre Vascular's operating leverage in 2026, which is projected to grow faster than sales. He also asked for additional color on the 8% blended price increase, the smoother transition compared to previous years, and the outlook for future price increases. Finally, he sought clarification on the cadence of sales rep growth, from 160 to 170-180 by year-end.

Answer

CEO George LeMaitre attributed operating leverage to stable headcount, growing sales pricing (ASPs), and manufacturing efficiencies, expecting a continuation of this trend. Regarding price increases, George LeMaitre explained that sending price lists out earlier (November 1st) facilitated a smoother transition in January, and that the 8.3% increase for 2026 felt like "business as usual" in the U.S. and Europe, following a trend of increasing price hikes in recent years. For sales rep growth, George LeMaitre stated that the company would provide annual targets (170-180 by year-end, including Poland) rather than quarterly updates due to the difficulty in tracking individual hires and departures.

Kyle Bauser asked about the key factors driving LeMaitre Vascular's operating growth exceeding its sales growth, the acceptance of the 8% blended price increase, and the outlook for future price adjustments. He also inquired about the cadence of sales representative hiring to reach the 170-180 target.

Answer

CEO George LeMaitre attributed operating leverage to stable headcount, growing average selling prices (ASPs), and manufacturing efficiencies. He noted the smoother price transition was due to earlier price list distribution and provided historical U.S. price increases, indicating a 'business as usual' trend. For sales reps, LeMaitre stated they would provide annual guidance rather than quarterly updates, with the target including Polish hires.

Kyle Bauser asked about the revenue cycle application's successful integration, its role in driving volume, and how it's anticipated to further help Wound Care, which saw 160% revenue growth in the last quarter.

Answer

Carrie Lachance, Chief Executive Officer, explained that the new revenue cycle system, now implemented for Wound Care and PCDs, allows for more productive volume ramping and will facilitate the migration of the Oncology business in the second half of the year. Barry Steele, Chief Financial Officer, added that the system removes a barrier to growth, enabling more efficient expansion in Wound Care.

The analyst requested information on the potential materiality and addressable markets for the ChemoMouthpiece and Dignitana businesses. He also asked about the key drivers for the guided EBITDA margin expansion and earnings leverage in the upcoming year.

Answer

The Dignitana contract is modest (hundreds of thousands) but demonstrates the scalability of their service team. ChemoMouthpiece has a very large addressable market (around $500-600 million) for a significant unmet need. The EBITDA margin leverage is expected from efficiencies in Biomed, the addition of new business, and the accretive nature of new product lines like ChemoMouthpiece. Excluding ERP upgrade costs, the underlying EBITDA margin is believed to be over 20%.

Kyle Bauser from B. Riley Securities requested management to size the potential addressable markets for ChemoMouthpiece and Dignitana, and to elaborate on the key factors driving the expected EBITDA margin expansion in 2025 beyond simple revenue growth.

Answer

Executive Richard DiIorio characterized the Dignitana contract as a smaller, strategic win, while describing the ChemoMouthpiece addressable market as being in the hundreds of millions. Executive Barry Steele and Richard DiIorio attributed the expected EBITDA margin leverage to continued efficiencies in Biomed, the accretive nature of new business, and lapping prior year expenses, noting these factors should lift margins despite the 2025 ERP system investment.

Asked about the timing, materiality, and margin profile for Chemo Mouthpiece, its competitive landscape, and the primary drivers for the company's overall margin expansion.

Answer

Chemo Mouthpiece is expected to contribute a couple of million dollars in revenue next year with an accretive margin profile. Its main competition is ineffective ice chips. Overall margin expansion is driven by a favorable product mix, leveraging fixed costs in G&A, rather than just gross margin improvement alone.

Kyle Bauser inquired about the significant sequential strength observed in Electromed's home care Medicare segment and the factors driving this robust performance. He also asked about the impact of the new drug Brinsupri on bronchiectasis awareness and HFCWO therapy adoption, particularly given the data showing a high percentage of qualifying patients not receiving HFCWO. Additionally, Bauser sought clarification on the company's sales representative headcount expansion plans and the expected trend in rep productivity.

Answer

President and CEO Jim Cunniff attributed the home care Medicare segment's strength to effective sales strategy execution, an improved sales force, and increased awareness of bronchiectasis among prescribing physicians. Regarding Brinsupri, Mr. Cunniff clarified that while it addresses inflammation, it complements SmartVest's role in airway clearance, significantly boosting overall disease awareness and benefiting Electromed. He emphasized the opportunity to educate clinicians on the NTM Bronchiectasis Research Registry data, which highlights that 58% of qualifying patients are not prescribed HFCWO therapy, indicating a clear need for earlier intervention. For sales rep productivity, Mr. Cunniff explained that while Q2 saw $1.2 million per rep, the planned expansion to 61 representatives by fiscal year-end is expected to normalize productivity to the guided $1 million-$1.1 million range due to the training and ramp-up period for new hires.

Kyle Bauser asked about the current average of 58 home care direct reps, the target of 61 reps, and how this expansion might impact the previously guided productivity range of $1 million-$1.1 million per rep, given the current $1.2 million performance.

Answer

Jim Cunniff, President and CEO, confirmed the target of 61 reps for the fiscal year. He explained that while Q2 saw outstanding productivity at $1.2 million, the addition of new reps typically causes productivity to migrate back into the $1 million-$1.1 million guided range due to training and ramp-up time for new hires.

Kyle Bauser requested an update on the regulatory approval process for the 3870 pump in Europe and Japan.

Answer

Roger Susi, President and CEO, confirmed that CE mark approval for Europe was expected by the end of 2026. For Japan, he indicated that approval would likely take longer, not until the summer of 2027.

Kyle Bauser asked about the primary drivers behind the strong growth in disposables and services, the current inventory levels and backlog for the 3860 pump, any product adjustments made to the 3870 based on early feedback, and the regulatory timeline for the 3870 in Europe and Japan.

Answer

CFO Jack Glenn explained that disposable growth aligned with capital sales and anticipated increased utilization with the 3870's improved user interface. He also detailed the careful management of 3860 inventory to fulfill backlog while building 3870 inventory for upcoming shipments. President and CEO Roger Susi confirmed that minor tweaks were indeed being made to the 3870 based on real-world user feedback from the pre-launch. Mr. Susi further clarified that the CE mark for Europe is expected by late 2026, with Japan clearance anticipated by summer 2027.

Kyle Bauser asked about the potential gross margin impact from the new applicator production process, the current size and future plans for the sales force, the strategy for the upcoming marketing program, and the status of the senior secured debt refinancing.

Answer

CEO Morgan Frank and CFO Peter Sorensen explained that the new applicator design could improve applicator margins by 350-400 basis points, with the full effect expected in early 2026. Frank stated that the current sales team of 13 provides national coverage but may be expanded slightly. He also detailed that the new marketing campaign will be highly targeted toward specific user types and care settings. Regarding the debt, Frank confirmed they have selected an attractive refinancing term sheet and are working to close the deal.

Kyle Bauser inquired about the primary drivers of the 13% growth in software operations bookings and the outlook for large contract wins. He also asked about the key contributors to the strong EBITDA guidance, particularly the balance between software sales mix and expense management.

Answer

CEO Vincent Kelly attributed the bookings growth to a combination of new customer wins, competitive takeaways, and multiyear renewals from existing clients, all driven by recent enhancements to the Spok Care Connect platform. He noted that deal sizes are increasing and the 2025 focus is on accelerating license sales. CFO Calvin Rice and CEO Vincent Kelly clarified that the EBITDA leverage is expected to come from growing the high-margin software top line, improved professional services efficiency, and lower software churn, rather than significant new expense reductions.

Kyle Bauser of Lake Street Capital Markets inquired about the composition of the strong software bookings, the company's market share expansion strategy, drivers for the increase in Average Revenue Per Unit (ARPU), the international growth outlook, and the positive start to the fourth quarter.

Answer

CEO Vince Kelly and President and COO Michael Wallace explained that recent software bookings were primarily upgrades and managed services from larger, existing customers. Wallace detailed Spok's market share, noting it is heavily skewed towards large hospitals (>600 beds) where they have a 50% presence, versus only 5% in small hospitals (<200 beds). CFO Calvin Rice attributed the ARPU growth to recent price increases and the adoption of the higher-priced GenA pager. Kelly identified the APAC region, particularly Australia, as the key international focus for 2025 and confirmed a strong start to Q4, noting they are pursuing several large deals.

Kyle Bauser requested a profitability breakout for the lymphedema and airway clearance businesses. He also questioned if the 6-9% growth guidance for AffloVest implied market share loss and asked about plans to enhance its contribution. Finally, he asked for a specific 2025 goal for Patient Education Consultant (PEC) utilization.

Answer

CFO Elaine Birkemeyer stated that the company does not break out profitability by product line as it reports as a single segment. CEO Sheri Dodd clarified that AffloVest is accretive to the business and expressed confidence in the growth guidance, citing a full year of contracts with top 10 DMEs, some with preferred placement. Regarding PECs, Dodd confirmed the goal is to increase their utilization for in-home demos but declined to provide a specific numerical target for 2025, emphasizing the focus on overall role clarity and team effectiveness.

Kyle Bauser asked for the key factors driving the increase in full-year EBITDA guidance despite a reduction in revenue guidance. He also questioned the impact of using Patient Education Consultants (PECs) for training and what prevents a 100% conversion to this model. Lastly, he asked if the stable Medicare claim success rate implies a growing backlog of orders.

Answer

CEO Sheri Dodd and CFO Elaine Birkemeyer attributed the improved profitability to significant gross margin expansion, driven by lower warranty costs from product improvements and manufacturing efficiencies. Regarding PECs, they noted the model provides S&M leverage, but a full conversion is not pursued as some clinicians prefer in-office demos conducted by their established sales rep contacts. Dodd clarified there is no significant claims backlog; the company is caught up and focused on efficiently processing new referrals with its streamlined systems.

Kyle Bauser of B. Riley Securities asked for details on the cargo inspection business, including its current size within the Industrial segment and the delivery timeline for the recent $14 million order. He also requested the specific revenue figure from China for the quarter and the outlook for that region.

Answer

CFO Shubham Maheshwari stated that the security inspection vertical is about 40% of Industrial sales, with cargo inspection being the majority of that. He and CEO Sunny Sanyal confirmed the $14 million order is expected to be delivered within 12 months. For China, Shubham Maheshwari reported Q1 revenue was approximately $35 million, or 18% of total sales, but noted that the company was previously operating at a higher run rate in the region.

Kyle Bauser of B. Riley Securities asked about the dynamics behind the stabilization in the oncology segment, the basis for confidence in the destocking timeline, and the expected trend for capital expenditures.

Answer

CEO Sunny Sanyal attributed the oncology segment's stability to the broader trend of customer destocking beginning to subside. He noted that confidence in the destocking timeline is based on stabilizing inbound order rates and direct customer conversations. CFO Shubham Maheshwari clarified that capital expenditures will remain elevated in fiscal 2025, in the $25 million to $30 million range, primarily due to the ongoing manufacturing build-out in India.

Kyle Bauser sought clarification on whether the new $15 million contract mentioned was the same program that had previously slipped from Q2. He also asked for the reasons behind the better-than-expected EBITDA despite lower sales and for guidance on G&A expense trends into 2025.

Answer

CEO William Febbo confirmed the $15 million figure represents the expected in-year revenue from the previously discussed client contract, which is entirely within the HCP business. CFO Edward Stelmakh explained that the strong EBITDA performance was driven by gross margin expansion from a favorable product and channel partner mix, as well as cost-cutting initiatives. For 2025, Mr. Stelmakh advised to model G&A based on the current run rate plus typical merit increases and small headcount growth, suggesting a 5-6% increase as a directional guide.

Kyle Bauser inquired about the number of net new weight management subscribers added in Q3 and the current total. He also asked for an update on the company's plans and timeline for divesting the WorkSimpli business.

Answer

CFO Marc Benathen disclosed that LifeMD added 15,000 net new weight management subscribers in Q3, bringing the total to approximately 75,000. Regarding WorkSimpli, Benathen confirmed the plan is still to divest the business, but a transaction was delayed by its soft performance earlier in the year. He noted that with the business now returning to growth, they expect to proceed once it demonstrates a sustained positive trajectory.

Kyle Bauser inquired about the potential for quarter-over-quarter earnings leverage, the sustainability of the current rate of new implementations, the company's capacity to handle this growth, and the comparative profit margins of the commercial versus government businesses at scale.

Answer

Rohit Ramchandani expects earnings leverage to increase, approaching an EBITDA inflection point next year. He clarified that the focus is on the dollar value of new implementations, aiming to meet or exceed last year's $18 million, rather than the number of contracts. He affirmed that the company currently has the capacity to handle the growth and that Project Turing will support future scaling. He also noted that commercial and government business margins are expected to be similar at scale, as the government side's lower margin is offset by a higher conversion rate.