Tactile Systems Technology, Inc. · NASDAQ:TCMD
Tactile Systems Technology — Investor Presentation (November 2022)
24 slides from Tactile Systems Technology's investor presentation, Nov 29, 2022
Slide 1: Investor Presentation November 2022
November 2022Investor PresentationNASDAQ: TCMD
Slide 2: Forward-Looking Statements Disclosure
TACTILE MEDICAL | 2Thispresentationcontainsforward-lookingstatements.Forward-lookingstatementsaregenerallyidentifiablebytheuseofwordslike“may,”“will,”“should,”“could,”“expect,”“anticipate,”“estimate,”“believe,”“intend,”“continue,”“confident,”“outlook,”“guidance,”“project,”“goals,”“lookforward,”“pois
Slide 3: Use of Non-GAAP Financial Measures
TACTILE MEDICAL | 3Thispresentationincludesthenon-GAAPfinancialmeasuresofAdjustedEBITDA,AdjustedEBITDAmarginandfreecashflow,whichdifferfromfinancialmeasurescalculatedinaccordancewithU.S.generallyacceptedaccountingprinciples(“GAAP”).Thesenon-GAAPfinancialmeasuresarepresentedbecausewebelievetheyareuse
Slide 4: Tactile Medical At a Glance
TACTILE MEDICAL | 4Tactile Medical At a Glance FOUNDED 1995 HEADQUARTERS Minneapolis TOTAL EMPLOYEES 1,000+ 2021 REVENUE $208M PATIENTS SERVED IN 2021 >65,000 2021 GROSS MARGIN 71% Our Mission: To reveal and treat patients with underserved chronic conditions and help them care for themselves at home
Slide 5: At a Glance: Lymphedema and Bronchiectasis Markets
TACTILE MEDICAL | BRONCHIECTASISLYMPHEDEMA500K4Diagnosed bronchiectasis1.4M1Diagnosedlymphedema2,320M+Undiagnosed in the U.S. 5,64.4MUndiagnosed in the U.S. $5B+Current addressable market Total $10B+U.S. current addressable market $5B+Current addressable market5At a Glance 1. Data on file at Tactile
Slide 6: Key Market Drivers
TACTILE MEDICAL | Aging population Growing awareness of the disease states The Affordable Care Act penalizes for readmission of patients within certain timeframes after discharge Healthcare reform driving greater accountability through moving from fee-for-service to fee-for-outcomes Trend toward pre
Slide 7: Strong Revenue Growth
TACTILE MEDICAL | 7Strong Revenue Growth $62.9 $84.5 $109.3 $143.8 $189.5 $187.1 $208.1 $4.6 $7.0 $9.9 $17.3 $25.3 $16.0 $17.7 20152016201720182019202020212022 Revenues (000) Adj. EBITDA (000) Updated 2022 guidance16-18% y/y growth$242-$245Updated 2022 guidance$15-16(In $ millions)Trailing 6 yr. CAG
Slide 8: Significant Recent Progress Achieved
TACTILE MEDICAL | Major accomplishments and milestones: 8Significant Recent Progress Achieved2021 Treated >65,000 patients Crossed $200M revenue threshold Initiated largest-ever Head and Neck-related lymphedema Randomized Clinical Trial Completed largest acquisition in company history Bolstered
Slide 9: Strategies to Unlock Profitable Growth + Strong Cash Generation
TACTILE MEDICAL | Portfolio OptimizationPatient centric, connected and digital 1Improve Payor PolicySimplify coverage criteria 2Operational EfficiencyCreate leverageable infrastructure 3Clear priorities to optimize business performanceStrategies to Unlock Profitable Growth + Strong Cash Generation9F
Slide 10: Portfolio Optimization
TACTILE MEDICAL | 10Portfolio OptimizationCONNECTIVITYLaunch patient engagement app to provide educational content and improve user experience during order process, onboarding and therapy usage. 2 1Continuous product innovation that fits easily into thepatient’s lifestyle. PATIENT CENTERED DESIGN 3D
Slide 11: Improve Payor Policy
TACTILE MEDICAL | IMPROVE PATIENT ACCESS 2GOAL: 1CONTINUE INVESTMENTS IN CLINICAL RESEARCHMore than 275 million US lives have coverage for our therapies but barriers to access still existFocused on simplifying these coverages to ensure our patients have access Complete enrollment of our Head & Ne
Slide 12: Operational Efficiency
TACTILE MEDICAL | 12Operational EfficiencyYields better patient, provider, and business outcomes while lowering our cost to serve OPERATIONSPROGRESS TOWARD DESIRED STATE ORDER PROCESS Low/no touch automated processing, ease of referral for clinicians, and informed patient experiencePATIENT SUPPORT D
Slide 13: Lymphedema: Chronic, Progressive, Underserved Market
TACTILE MEDICAL | 13Lymphedema: Chronic, Progressive, Underserved Market The lymphatic system enables the transport of fluids containing infection-fighting white blood cells that rid the body of toxins and waste throughout the body.Sources of lymphedema include chronic venous insufficiency, cancer t
Slide 14: Lymphedema: Growing Body of Clinical Evidence
TACTILE MEDICAL | 14Lymphedema: Growing Body of Clinical Evidence ESTABLISHED SUPPORT 20 clinical studies28 peer reviewed articles37% reduction in total lymphedema-related costs per a study of 718 lymphedema patients published in (JAMA) Dermatology, Oct. 2015>HCPCS code (E0651/E0652)NEW/EMERGING
Slide 15: Lymphedema: Positioned to Win
TACTILE MEDICAL | 15Lymphedema: Positioned to Win CLINICALLY PROVEN FLEXITOUCH AND ENTRE PNEUMATIC COMPRESSION DEVICES EXPANDING CLINICAL EVIDENCEDIRECT SALES FORCE BACK OFFICE SUPPORT BROAD INSURANCECOVERAGE275M U.S. LIVES UNDER COVERAGE #1MARKETSHARE$5B+ TOTAL ADDRESSABLE MARKET
Slide 16: Bronchiectasis: Chronic, Progressive, Underserved Market
TACTILE MEDICAL | 16Bronchiectasis: Chronic, Progressive, Underserved Market Bronchiectasis (BE) is permanent scarring and dilation of the airways with excessive mucus productionRecurring lung infections, pneumonias, lead to progressive damage of airway wallBronchiectasis identified in nearly 1 in 4
Slide 17: Bronchiectasis: Current Treatment Paradigm
TACTILE MEDICAL | LEFT UNTREATEDCommonly missed diagnosis due to overlap with COPD; BE occurs in up to 42% of COPD patients.1,2Inability to clear mucus leads to a cycle of infection, inflammation and worsening damage 117Current Treatment Paradigm BASIC APPROACH Antibiotics for commonly-occurring
Slide 18: Airway Clearance: Positioned to Win
TACTILE MEDICAL | Airway Clearance: Positioned to Win PORTABLE DESIGN BROAD DME CHANNEL REACH MEETS RESPIRATORY PATIENTS’ COMPLEX NEEDS STRONG REIMBURSEMENTCOMPELLING ECONOMICS FOR DME PARTNERS #2MARKETSHARE(based on units)$5B+ TOTAL ADDRESSABLE MARKET 18
Slide 19: Long Term Objectives For Profitable Growth
TACTILE MEDICAL | Long Term Objectives For Profitable GrowthFUTURE: FY 2025 GOALS*Implied 3-year revenue CAGR based on FY’25 revenue vs. FY’22 revenue guidance range of $242 -$245 million. **Non-GAAP measure. Free Cash Flow defined as cash flow from operations less capital expenditures. Cumulative f
Slide 20: Compelling Investment Highlights
TACTILE MEDICAL | 20Compelling Investment HighlightsATTRACTIVE END MARKETSLarge, growing and underserved patient segmentsBroad payer adoptionExpanding clinical education/awarenessUNIQUE ASSETSClinically proven therapiesLarge, well-developed distribution channelsComprehensive back-office capabi
Slide 21: Thank You
TACTILE MEDICAL | Thank You21
Slide 22: Q3'22 Financial Results and FY'22 Financial Outlook
TACTILE MEDICAL | 22Q3’22 Financial Results and FY’22 Financial Outlook Three months ended September 30Nine months ended September 30$ Millions2022202120222021Lymphedema products$54.2$51.6$146.5$145.5Airway clearance products$11.0$0.9$26.4$0.9Total revenues$65.3$52.5$172.9$146.3Gross profit$46.8$37.
Slide 23: Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA
TACTILE MEDICAL | 23Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA ($ Millions) Net (loss) income$(11.8) $(0.6) $11.0 $6.6 $5.9 $2.9 $1.4 Interest expense (income), net0.5 (0.1) (0.3) (0.4) (0.4) (0.0) 0.2 Income tax (benefit) expense9.5 (1.6) 0.2 (3.1) (1.7) 1.4 1.9 Depreciation and
Slide 24: Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA (Quarterly)
TACTILE MEDICAL | 24Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA (Dollars in Millions) Net loss $(2.3) $(3.4) $1 (32) %$(22.5) $(4.3) $(18) N.M.% Interest expense, net0.7 0.1 1 N.M.%1.8 0.1 2 N.M.% Income tax (benefit) expense(0.1) 1.9 (2) (104) %0.1 (1.4) 1 (108) % Depreciation and
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