Pat Miles - Chairman and Chief Executive Officer Jeff Black - Chief Financial Officer.

Brooks O'Neil - Lake Street Capital Matthew O'Brien - Piper Jaffray Kyle Rose - Canaccord Sean Lee - H.C. Wainwright.

Good afternoon, everyone, and welcome to Alphatec's Third Quarter 2019 Conference Call. We would like to remind everyone that participants on the call will make forward-looking statements. These statements are based on current expectations and are subject to uncertainties that could cause actual results to differ materially.

These uncertainties are detailed in documents filed regularly with the SEC. During this call, you may hear the company refer to reported amounts, which are in accordance with U.S. GAAP, as well as non-GAAP or pro forma measures.

Reconciliation of non-GAAP measures to US GAAP can be found in the supplemental financial tables included in the press release, which identify and quantify all included – all excluded items and provide management views of why this information is useful to investors.

Joining us on the call today will be ATEC's Chairman and CEO, Pat Miles; and CFO, Jeff Black. Now, I will turn the call over to Pat Miles..

Thanks, much. And welcome, everybody, to the Q3 ATEC Conference Call. We appreciate having to provide some color commentary on our performance. However, first of all, I will remind everybody what we're building. And that is inorganic innovation machine.

And so our intention is revolutionize the approach to spine surgery by creating clinical distinction, and strategically, we believe we're positioned to accelerate growth. I'll wait a second for the slide. But you've got to know that our focus is, in what happens in the operating room. So, if we can create distinction there, we believe we will prosper.

So, on the next slide, I would like to really take a look at where we are year-to-date on the 2019 commitments. And so, I think there is a bit of a lag in the slides. So, I'll wait for a second.

When you start to think about our 2019 commitments, really what we set out to do is to create clinical distinction and we felt like 12 product launches would reflect that. And so year-to-date, we're at 11.

We've got expanding new product percentage of revenue from less than 10% to 35% would reflect a acceptance or some traction with the new products or 33%, drive revenue growth of 35% within the strategic sales network. We're at 41% growth and increase our revenue per surgery was Q1 as well, and that's increased 15% per surgery.

So, based upon where we are year-to-date and based upon the performance, we thought it’s appropriate to raise guidance from previously $104 million to $109 million in total revenue to $109 million to and $112 million. That makes for a U.S. number of $105 million to $107 million.

And so that contemplates a 26% revenue growth, while we're still working through some evolution in our sales network. So, if you look specifically at the numbers in quarter three, I would tell you that the right things are going on. And so, again, the slide is a bit slow, but 34% revenue growth year-over-year.

The average daily sales of 32% was strong as well, and really our strongest month was in September. From quarter two to quarter three, we grew 8% and that's a $2 million increase. And then from a consecutive quarter perspective, this is our fourth consecutive quarter of accelerating double-digit year-over-year U.S. growth and so excited about that.

If you think back at the beginning of the year 2019, we really said, we have really there key priorities. And the first one is really around creating clinical distinction. The second one is about compelling surgeon adoption, and the other one was how do we revitalize the sales channel.

And what I'd like to do is kind of review how we performed against those respective priorities. So, the first priority surrounds creating clinical distinction. And that's – how do you do things better in the operating room? And so, we thought that traction would be reflected. Our success would be reflected by 12 products, as I previously said.

And if we got 35% of our revenue from the new products, that would be good. So, new product revenue contribution for Q3 was 42%. That's versus 3% in Q3 of 2018. Then we said, gosh, 12 products would fulfill the obligation. We are 11 in year-to-date, and we feel really, really good about our 12.

And probably the one that creates significant enthusiasm is, what we're calling Alpha Informatics, but is the SafeOp part. So, the neurophysiology part of the SafeOp platform, and so, critically excited about that.

And so if you start to think about us as a company, you say, gosh, if our mantra is we're revolutionizing the approach to spine surgery, we better create distinction really within the lateral approach.

It's an area of the spine and its approach to the spine, but I would say that there is more familiarity here at ATEC then I would say anywhere else in the world. So, this requires, though, not just having part of the elements that are required within the approach, but having all of them. And that really, really requires information as number one.

And that's where the Alpha Informatics or the SafeOp platform is going to be best reflected. So that comes as a full launch in November. In October, we launched a number of implants that will support the utility in lateral.

And then, thirdly, what we did is we launched the AMP Plate, which is an Anti-Migration Plate, if you know anything about lateral surgery. Sometimes, your intend is to resect the Anterior Longitudinal Ligament and there's other times you don't.

But just having operative flexibility is the reflection of sophistication, I think that this group has architected into the procedure. So, one of the keys to lateral surgery as I stated is information.

And there is a reason why there hasn't been significant competitive traction to the market leader in this space is because people have not invested into the very element that enables you to identify the nerve. And then what we've done is, we've gone a step further, and we're able to also determine the health of the nerve.

And so we feel like SafeOp really uniquely positions and provides the type of information required. And what gives us that capability is there is a signal acquisition capability that's unique to us. And so others will claim, gosh, we can do that. They can't.

And so one of the things – another element of SafeOp that's important to appreciate and where it provides value is it integrates in the posterior fixation surgery. In 2019, we developed a lot of tools that ultimately will be used in posterior approach surgery. And again, one of them is the Informatics side.

And so, in addition to the implants that we recently launched, we've launched a TLIF implant that's a posterior obliquely placed implant, we launched an entire posterior fixation system. And the opportunity to integrate these products really represents a great opportunity.

So, really Q3 was an outstanding quarter for us in terms of the volume of products that we launched. So, when you think of how SafeOp integrates in a posterior fixation, I think you have to realize that really the context of it all. And so the context is most surgery is three levels or less.

And so when you have the ability to integrate SafeOp and something like single step, which is part of our new pusher fixation system. What you do is you increased the accuracy, you increase the speed, you increased the safety and really you create an elegant workflow in terms of posterior fixation.

And so the combination to a large degree obviates the need for adjunctive technology that slows workflow and really does nothing to improve the clinical experience in short segment surgery. So, we’re hugely bullish about how these things integrate and what the effect is going to be on surgery.

So, the second key priority is once you create distinction, it's how do you compel surgeons. And so this is how we did in Q3. So, you look at the revenue per case, increased 17%. Also, we always talked about how we integrate technology.

So, what you want to see is, you want to see us continue to march up the number, the average number of products sold per surgery. And so that's marching up. That was 1.6. And then also if you look at the revenue growth from the top 20 surgeons, was 68%. So, all this reflects really an increasing surgeon confidence.

And it’s an increasing surgeon confidence gets reflected in surgeons giving us more complex cases, doing a higher volume and utilizing more of our technology within each individual surgery. And so, I would tell you that, that's kind of a reflection of the type of traction that we're after.

And I'll also mention that, really, we had a great showing at NASS. I think NASS is always a demarcation of where we are as a company, and you'll see us continue to march forward in a very methodical way. So, the next priority that I want to review is concerning how do we revitalize the sales channels.

You clearly want a sales force that can translate the technology. And so when you start to look at where we are on that front, the target was – is how do we create 40% revenue growth from a strategic distribution network, offset by discontinuation of legacy and non-strategic relationships? I would say that was an aggressive priority or metric.

And where we are is 48% growth from top 20 distributor’s year-over-year. 52% increase in a dollar revenue per distributor. So, remember, we talked about how do we lessen the volume of distributors and increase the footprint. Revenue contribution by the strategic network was 89%, and then the revenue growth was 42%.

And so, a lot of good things going on, and we feel like this is just the early phase of our effort. But I think that the metrics are reflective of traction and really where we're heading. And so, I will now turn the call over to Jeff and let him review some of the financials..

Thanks, Pat. This afternoon, I'll spend just a few minutes on key financial highlights for the quarter. More information is obviously provided in the press release today. Starting with the revenue on Slide 15. Overall, Q3 revenue results were above expectations on the strength of 40% growth from strategic distribution.

We’re seeing this growth, as Pat mentioned, a momentum from new product introductions, which represented 42% of our U.S. revenue in the third quarter. And while slower than anticipated, we saw revenue from legacy distribution continue to wind down as part of our planned transition.

This headway, we expect will continue in 2020, as we still have more than 10% of our U.S. revenue contribution coming from this channel. Revenue from our international supply agreement continue to decline and this is consistent with expectations as our supply agreement winds down over the next one or two years.

But based on the traction we're seeing, with new products domestically, we're encouraged by the opportunity to reenter international markets once the Globus contract run its course. Updated guidance of $105 million and $107 million in U.S.

revenue represents up to a 28% year-over-year increase and up to a 40% year-over-year increase from strategic distribution. It also represents a $9 million to $11 million increase to the initial guidance we provided in March. On U.S. gross margin, Q3 U.S. gross profit of $19.9 million grew by $3.3 million over the last year.

Year-over-year on a GAAP basis, gross margin decreased by 540 basis points to about 71% as compared to about 76% last year. But, however, consistent with last quarter on a non-GAAP basis, excluding non-cash obsolescence, our gross margin in the third quarter was about 79%, a 90 basis point drop from last year, which is primarily due to product mix.

And as we reported on our last three quarters, we continue to see margin pressure from non-cash obsolescence related to our legacy products as we introduce new products. We'll expect to see continued margin pressure over the mid-term, as we introduce new products and the obsolete legacy products.

So, we think a non-GAAP view of gross margin is a valuable metric to track through this transition. And again, we continue to believe that scale will be in the mid-70% range on gross margins. On the P&L highlights, operating expenses here are presented on a non-GAAP basis. They reflect what we considered more normalized R&D and SG&A.

They exclude non-cash stock-based compensation, litigation, restructuring, other non-recurring charges. And as you can see, we continue to invest in our product pipeline, which is reflected in increased R&D expense in both absolute dollars and as a percentage of revenue compared to last year.

We expect continued investment to support eight to 10 new product introductions each year and continued technology development. And as well, our SG&A increased in absolute dollars and as a percentage of sales, most of this increase is tied to variable sales compensation related directly to revenue increase.

We've also made opportunistic investments in the sales channel in new key geographies. But in fact, our core G&A expenses have remained relatively flat over the past eight quarters and we're still – and still well below where we exited 2016 when we initiated the ATEC turnaround.

We’ll continue to invest in the sales channel and should start to see SG&A expense leverage as new products drive revenue growth and enhanced predictability.

On the balance sheet, we ended the quarter with just under $58 million in cash following a successful follow-on offering that generated net proceeds of $54 million, and importantly, expanded our institutional shareholder base.

Operating cash burn ticked up some in Q3, which we expected as we made capital investments in instrument and implant sets to support new product launches, which have been a big driver of our revenue growth.

We expect these investments to fluctuate quarter-to-quarter based on the timing of product launches, but the bulk of this cash investment for 2019 is behind us. We continue to expect 2020 to be an investment year, as we support new product launches with CapEx from new instrument and implant sets and expand our distribution channel.

In addition to our existing cash balance, we have $20 million remaining on our line of credit with Squadron. Principal payments on our Squadron term debt don't commence until mid 2021. So, we are better positioned from a cash perspective than we have been in the last several years, and we have the runway now to support our planned growth strategy.

Before I wrap up and turn it back to Pat, I wanted to recap a couple of relevant trends. First, our commitment to drive revenue growth is continuing to be realized. Third quarter is our fifth consecutive quarter of year-over-year revenue growth. We saw 8% sequential growth in Q3, which is typically a flat to down quarter in spine.

And in Q3, we delivered our largest U.S. revenue quarter since the second quarter of 2016. Second, we continue to deliver on our commitment to transition sales channel to scalable committed distribution partners. And finally, we're making high-impact investments in R&D, sales and marketing, while holding the line on G&A.

R&D is now at 13% to 14% of revenue. Our SG&A growth has primarily been from variable sales compensation and strategic investments in the sales channel and product marketing. These are all enabling the revenue acceleration we've seen in 2019. And with that, I'll turn it back over to Pat for closing comments..

Thanks so much, Jeff. I think what you're going to see in the coming years is our focus on being methodical and running at being a growth company by creating clinical distinction, revitalizing a sales channel, and compelling surgeon adoption.

And so you'll hear these themes over and over again, and we believe that the traction is really just starting in terms of what are interested is in becoming a – one of the key players in this industry. So, anyway, thanks so much for your attention. And now, we'll turn it over for questions..

Thank you. [Operator Instructions] Our first question comes from the line of Brooks O'Neil with Lake Street Capital. Your line is open. Please go ahead..

Thank you. Good afternoon, guys. Congratulations on the progress. Pretty exciting..

Thanks, Brooks..

So, I have a couple questions. First, I'm very excited about Alphatec Informatics platform you're about to launch.

Can you just talk a little bit about how you see that pulling through product sales of the kinds of products you've been introduced in this year and plan to introduce in the future?.

For sure, Brooks. That was my intention with regard to the diatribe on both lateral surgery, as well as posterior fixation. And one of the – starting first, I guess, with posterior fixation is the lateral one is very straightforward. In posterior fixation, the surgeon's intention is to safely and reproducibly place fixation.

And so what happens is, is most surgery is not complex. And I think so often we move really to the edge of super complex surgery or revision surgery and that's less than 15% of the surgery. And so the way this integrates into, say, our InVictus system is that there are feature sets on InVictus that ultimately attach to the Alpha Informatics.

And so what the surgeon can tell is if he is in methodical. And you start to think about workflow and you start to think about most surgeries being three levels or less, the ability to have this really expedites the process and makes sure the surgeon knows that they've placed a screw safely is very, very high.

And so our bet on the major part of the market is that something like SafeOp integrated with InVictus and especially single step in percutaneous screw placement, is really going to be the way that people do things in the operating room. And so, we're bullish on that application.

As it relates to the lateral surgery, I would tell you with Luiz Pimenta as our Chief Medical Officer, our familiarity with lateral surgery is really what I consider over the top. He is the guy who popularized it. Don't want to get into an invention argument.

The reality is that he is exceedingly versed and exceedingly curious, as it relates to how to continue to evolve that technique. And so our opportunity to integrate SafeOp in a way that not only identifies and keeps a surgeon safe as to where the nerves are, but we can also tell how long has the nerve been retracted.

And what makes that – we're able to do that is really kind of a unique signal acquisition element, which is why we acquire the technology in the first place. So, the point is, the things that we expected are coming to fruition, and we're just trying to move methodically into the recreation.

I appreciate you calling it progress because that's what we think. This is just progress toward what our intentions are..

That's great. I really appreciate that. Let me just ask you one or two others that are kind of related to your commentary, right there. Number one, I'm sure you don't want to reveal any proprietary competitive information.

But can you envision that Informatics platform expanding to include other applications as you go forward? And then two, as you know, I had the good fortune to meet Dr. Pimenta at the NASS Conference in Chicago and he was talking a little bit about this new approach to lateral surgery that doesn't require flipping the patient.

How do you see that impacting Alphatec over the next year or two?.

Yes, the first part of your question is better than second part. The beauty of this platform is literally a lot of the computing technology has come so far.

And so our ability to deliver information and that's why we [know] the Alpha Informatics nomenclature is because neurophysiology is really the first thing that we're going to deliver through this platform. But if you think about – we always communicated that so many people say, pedicle screws equals’ spine surgery. And it's just an untrue.

It's much more sophisticated. So, if understanding where the nerves are, if alignment is an element. There is a lot of technology that we can deliver through the platform to be very consequential. And so our interest is to continue to deliver information through that platform that ultimately is what the surgeon requires at a time he needs it.

And I think these are hard things for companies. And that's why most companies as it relates to lateral has done a retractor and an implant, and they haven't embarked upon this design effort because it's hard. And so the great part is you're going to see our original reflection of it here in November.

And we can't be more excited about the walk, in terms of continuing to add value in the surgery..

That's great. So, you don't want to talk about Dr.

Pimenta or what?.

Yes. He is well. And no – if, we believe that there are ways to continue to evolve lateral surgery. I'll say it again. As I said in the comments, there is more expertise with regard to lateral surgery here than anywhere else. And what happens is, we built this company around know-how and there’s a ton of know-how here.

So, I would expect you to continue to see evolution in the things that we're doing surgically. And that means we believe single position surgery needs to be done different than it's been described elsewhere..

Yes, that's great. Thank you very much. I'm excited about the future..

Thank you..

Thank you. And our next question comes from the line of Matthew O'Brien with Piper Jaffray. Your line is open. Please go ahead..

Good afternoon. Thanks for taking my questions. I guess just for starters, Pat, the U.S. performance was pretty eye-popping this quarter.

Can you just deconstruct some of the performance that you saw, be it existing accounts going deeper in accounts, some of the new products that you're introducing, SafeOp? How that all ties together to deliver the kind of performance we saw here in Q3?.

Yes. I appreciate the question. One of the things that we've been talking about since we started to kind of redo the company has been how do you, first of all, create confidence.

And so, I think what you're seeing is you're seeing surgeons are having greater confidence in the mechanisms that we're designing from a very experienced product development team. And so what happens is, they say, gosh, I'll use this in very simple surgery and then they have success with it.

They continue to elevate type of complexity that they're willing to utilize our products. And then what happens is, is you start to add, say an interbody product to a posterior fixation product. And then you add a biologic to an interbody, to a fixation. And so what we're seeing is, we're a very pocketed kind of a distribution network.

And so we have significantly strong clinical people in different parts of the country that are prospering because they understand how to sell the clinical attributes of our portfolio.

And so what you'll see over time is, you'll see really that combination of some of the Stryker prowess from a sales force know-how standpoint start to meld with a clinical prowess. And I think that, that's really our intention is of how we evolve the sales force.

But you're seeing that in the sales based upon the surgeon's confidence growing and than our capacity to continue to include more and more products per procedure..

And along those lines, Pat, as far as the growth in the revenue per case, I mean, up 17% is pretty very strong.

How do we think about the opportunities to keep growing that metric over the next couple of years?.

What's interesting is a metric that we follow very closely here, which is how many products are we selling in the surgery. And so if we have a specific approach, what our intention is to say, what products make up that approach and does it make it meaningful. And so when you start to think about what role does neurophysiology play in cervical surgery.

Our intention is to make sure that what we have the ability to do is to provide value neurophysiologically within that utility. And so what we want to see is the whole – the convoyed sales will ultimately pull revenue. And so every procedure that we have, what we do is we, in essence, identify how many products per approach we're showing in.

And that really reflects the lead indicator of how we're going to do from a revenue perspective because it just means we're getting more consequential as it relates to the application..

Got it. And then just last one from me is just – disruption in this space, there has been a couple of companies getting together and getting taken out.

What are you seeing as far as opportunities in terms of potentially capturing some new distribution folks and then some new accounts as well?.

It's – candidly, it's good. I think there's a lot of cynicism and a lot of people who don't see the world and as many distinctions as we do surgically. And so they think this is a commoditized space. And so what happens is when everybody else thinks it's a commodity, what we're going to do is creating enough distinction to compel them to come over.

And so what happens is you get a bunch of people who are excited about what we're doing. And what happens as you start to grow some. And last thing, we're going to do is get ahead of ourselves. But we are thrilled with the type of people who are wanting to sit around the ATEC table because they are a sophisticated bunch..

Very helpful. Thank you..

Thank you. And our next question comes from the line of Kyle Rose with Canaccord. Your line is open. Please go ahead..

Great. Thank you very much for taking the questions and congrats on a strong quarter here. So, I kind of wanted to start on and dovetailing on some of Matt's previous questions. I guess, you talked about the 11 products you've launched year-to-date. This comes on top of the products you've launched last year.

You've obviously brought on some distribution talent.

So, maybe just from a big picture, help us understand where you are in the lifecycle of those new products coming onboard? And then from a distribution side, I mean, how much of the productivity are we not seeing yet as far as sales reps that you've brought on, they're sitting on the sidelines? Or are just now becoming more productive? Help us understand where we are just from a growth standpoint?.

Yes. Great, great questions. I'll tell you, when a company is more mature, what you see is you'll see – you'll see it takes 18 months after our launch to really start to see products hit stride. And so, I'm not suggesting that, that everything is going to continue as methodically as we just reflected.

But our growth is yet to be reflected in the whole drag of a more mature company if that makes sense. And so, our enthusiasm is that – literally the products have just come out. And as you guys appreciate, it takes some time to get into the hospital. It takes some time to get through the approval process. It takes time to compel surgeons.

These things take time to get rolling. So, I would say that we're in such the early stage of people just having confidence in what we're creating and we've yet to see the reflection of all of these things coming together procedurally in a way that compels people in a very meaningful way.

And so, we love, again, this business – and where everybody else may be complaining, we love this business and we love the surgery, and the ability to continue to create distinctions. So, I think we're very – we're very early. And then the key is you not only create confidence in the surgeons, but also in sales people.

And so what happens is, as we bring sales people over and they start to see what we're doing, then it's kind of the residual. The new guys come on and they've got to sit out for a while potentially depending upon where they are at.

And so that's, I think, some of the financials that Jeff communicated, where you know what, we have some people sitting on the sideline. These are people who are serious about creating meaningful distributorships. And then we're getting growth out of the places that we've invested in last year. And so these are 18 month drags.

In fact, we made these decisions back 18 months to 20 months ago in terms of where we should be today. And so, our interest in, now as I say, gosh, what we'll look like 24 months from now, what decisions are we making today to get there.

And that's where it's like, we've got to make sure that we have the sophistication from a sales force perspective that can translate those things..

That's very helpful. I appreciate the color. I guess, just another way of asking that is when we look at the growth year-to-date, I mean, you obviously increased your guidance from the strategic channel closer to the 40% range.

But when we look ahead, I guess I just – without giving a specific guidance for 2020, I guess, is there any reason that we should expect this momentum to slow down when we enter into the New Year? I mean, obviously, you're going to have tough comps.

But like you just said, you've been – you've got new products that are kind of on 12 months to 18 months lifecycle that kind of hit productivity. It feels like we've got another cadre of both distribution and in those products, you are coming up that curve to support next year.

I guess, is that a fair way to think about it, or how should we be thinking about growth on a go-forward basis?.

Yes, I guess the way to think about it is, this thing has been so lumpy since we've gotten here. And so, I would say that be conservative. We haven't figured everything else out. We haven't figured everything out yet.

And so what we're trying to do is just be, how we continue to be very predictable in all things; clinically, surgically, financially and otherwise. And so, we're still a new little company. And so we're doing our best is put our best foot forward. And so last thing we want to do is get ahead of ourselves and start making outlandish predictions.

All we want to do is, how do we make surgery better through the means by which we know how to do it, and we'll put that together and compel people quarter-to-quarter. So, it's out there. We are going to be at this for a long time.

I've got to say, it's great living in San Diego, and we have a ton of people who want to live in San Diego and work at San Diego. And so our interest is to build a monster over the next, however, many years..

Terrific. Well, I'll leave it there. Gentlemen, thank you very much..

Thanks. Thank you, Kyle..

Thank you. [Operator Instructions] Our next question comes from the line of Sean Lee with H.C. Wainwright. Your line is open. Please go ahead..

Hi, guys. Congratulations on another great quarter. And thank you for taking my questions. My first question is, maybe to get a bit more color on the growth story here. Like you mentioned strong growth from revenue per surgery, no additional products used per surgery, and also growth from surgeon – revenue per surgeon.

So, I'm just wondering like what are some of your metrics for these – what are some of your goals for these metrics that you hope to reach overall? And how do you feel about the balance between increased penetration per surgery versus increased footprint to getting to more surgeons – to getting in touch with more surgeons who are expanding geographies?.

Yes, it's a great question. And really the interest clearly is both. And what happens is, as you become more meaningful from a feature set within the context of a spine procedure, what happens is you compel more people.

And usually when you see more products use per procedure within a specific procedure, what will happen is there will be more reason why the surgeons should utilize that company because what they've done is architected a solution that ultimately creates predictability. And so the types of metrics are the very ones that we described in the deck.

And what we do is, clearly, you guys see that the aggregate. But we go down to every procedure and identify what are the elements of this procedure that ultimately creates distinction.

And what will happen is, is it's rarely one product that creates distinction within the context of a procedure and knowing that ultimately reflects the compelling of a surgeon. So, we will expand the number of surgeons we do business with, while we continue to drive the volume of products within each individual procedure.

And so, when you're chasing perfect surgery, that ultimately is how you get there and so that's our interest..

I see. Thank you for that. My second question is on gross margins and SG&A.

I was just wondering how will those numbers hold up over the next couple quarters? And for example, also how do new products compare on those figures versus your older products?.

Yes. So, this is Jeff. The question on margin, I think the expectation is that we'll continue to see some pressure from legacy products. I think we expect to see a similar margin profile, new versus legacy products. There will be potentially some mix in that that might impact margin one way or the other.

But I think, overall, at scale, once we get through the non-cash obsolescence charges, think about a margin profile of new products that are very similar to the legacy products..

I see. Thanks for that. And my final question is on – more on the strategic side. So, as we are approaching the end of 2019 and into next year and the company, obviously, has experienced great growth this year.

So, I was wondering what are some of your top takeaways from how the strategy has worked out this year and what are the key areas you feel like you should – you will be focusing on next year?.

Yes. So, I would tell you that what you're going to be hearing in 2023 is we're going to create clinical distinction. We are going to revitalize the sales channel and we're going to compel surgeon adoption. And that is this business. And having done this before, the strategy hasn't changed much for the 17 years I was doing this before.

And the beauty is, is it's the right strategy. And so, you've got to continue to obsolete your own stuff and that's why you're going to continue to see us do that and you've got to be meaningful clinically. And it's not anything more cosmic than that.

And so, I would tell you the better we do that in terms of the number of distinctions we draw to the subject, the more prosperous will be. So....

Great. That's all I have. Thank you. Thanks, again..

Thanks a lot..

Thank you. And I'm showing no further questions at this time. And I would like to turn the conference back over to Mr. Pat Miles for any closing remarks..

Yes. Just, thanks everybody, for your interest in ATEC's spine. We still in the early phase of revitalizing this company and excited about our prospects. So, thanks so much. Take care..

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect..