Q4 2021 Airsculpt Technologies Inc Earnings Call

[music].

Good morning and welcome to AirScope Technology's fourth quarter and full year 2021 earnings conference call. Currently, all participants are on a

Good morning, and welcome to Air Sculpt technologies fourth quarter and full year 2021 earnings conference call current.

Currently all participants are in a listen only mode.

As a reminder, today's call is being recorded, and we have allotted one hour for prepared remarks and Q&A. At this time, I'd like to turn the conference over to Dennis Dean, Chief Financial Officer at Aeroscope Technologies. Thank you.

As a reminder, today's call is being recorded and we have allotted one hour for prepared remarks and Q&A.

At this time I'd like to turn the conference over to Dennis <unk>, Chief Financial Officer at Air Sculpt technologies.

Please go ahead.

Dennis Dean: Good morning, everyone, and thanks for joining us to discuss AirSculpt Technologies results for the fourth quarter and year-end.

Good morning, everyone and thanks for joining us to discuss air Sculpt Technologies' results for the fourth quarter and yearend joining me on the call today is our founder and Chief Executive Officer, Dr. Ian Rawlins, and our Chief operating Officer, Ron Zelle Hall.

Dennis Dean: Joining me on the call today is our Founder and Chief Executive Officer, Dr. Aaron Rollins and our Chief Operating Officer, Ron Zellhoff.

Dennis Dean: Before we begin, I would like to remind you that this conference call may include forward-looking statements. These statements may include our future expectations regarding financial results and guidance, market opportunities, and our growth.

Before we begin I would like to remind you that this conference call May include forward looking statements. These statements may include our future expectations regarding financial results and guidance market opportunities and our growth.

Dennis Dean: Risk and uncertainties that may impact these statements, and could cause actual future results to differ materially from currently projected results, are described in this morning's press release and the reports we will file with the SEC.

Risks and uncertainties that may impact these statements and could cause actual future results to.

To differ materially from currently projected results are described in this morning's press release and the reports we will file with the SEC.

Dennis Dean: All of which can be found on our website at investors.elitebodiesculpture.com.

All of which can be found on our website at investors Dot elite body Sculpsure dotcom.

Dennis Dean: We undertake no obligation to revise or update any forward-looking statements or information, except as required by law.

We undertake no obligation to revise or update any forward looking statements or information, except as required by law.

Dennis Dean: During our call today, we will also reference certain non- GAAP measures .

During our call today, we will also reference certain non-GAAP measures.

Dennis Dean: We use non-GAAP measures in some of our financial discussions as we believe they more accurately represent the true operational performance and underlying results of our budget.

We use non-GAAP measures and some of our financial discussions as we believe they are more accurately represent the true operational performance and underlying results of our business. A reconciliation of these measures can be found in our earnings release filed this morning and in our annual report when filed which will also be available on our website.

Dennis Dean: A reconciliation of these measures can be found in our earnings release as filed this morning and in our annual report when filed, which will also be available on our website.

Speaker Change: With that, I'll turn the call over to Dr. Aaron Rollins. Aaron.

With that I'll turn the call over to Dr. Aaron Robbins Erin.

Aaron Rollins: Thank you, Dennis. Good morning and thank you for joining us today. We had an exceptional first quarter as a new public.

Thank you Dennis good morning, and thank you for joining US today, we had an exceptional first quarter as a new public company.

Aaron Rollins: As you know, we completed our IPO during the fourth quarter, and with that milestone behind us, we look forward to continuing the momentum and success through 2022 and beyond.

You know, we completed our IPO during the fourth quarter and with that milestone behind US we look forward to continuing the momentum and success through 2022 and beyond.

Aaron Rollins: We generated $37.6 million of revenue reflecting growth.

We generated $37 6 million of revenue, reflecting growth of 64% over the prior year quarter and our adjusted EBITDA was $10 2 million, which was 26% over the prior year quarter. We achieved these strong results, while navigating challenges arising from the omicron variant, which impacted how we.

Aaron Rollins: 64% over the prior year quarter, and our adjusted EBITDA was $10.2 million, which was 26% over the prior year quarter.

Aaron Rollins: We achieved these strong results while navigating challenges arising from the Omicron variant, which impacted how we scheduled patients, as well as our surgeons and our nursing staff. Achieving our results for the quarter, despite these challenges, speaks to the resiliency of our business.

Scheduled patients as well as our surgeons and our nursing staff, achieving our results for the quarter. Despite these challenges speaks to the resiliency of our business.

Aaron Rollins: We were also able to make additional clinical investments at our facilities to enhance quality and safety for our patients, and we expect to continue these investments to further support our growth.

We were also able to make additional critical investments at our facilities to enhance quality and safety for our patients and we expect to continue these investments to further support our growth.

Speaker Change: Before we share more about our results, I want to recognize and say thank you to all of our employees and physicians.

Before we share more about our results I want to recognize and say thank you to all of our employees and physicians Covid brought a number of challenges over the past couple of years and our team has performed performed remarkably well and our outstanding financial results only tell part of the story.

Speaker Change: COVID brought a number of challenges over the past couple of years and our team has performed remarkably well in our outstanding financial results only to a part of the

Speaker Change: Now I'm going to provide a brief overview of the company for those who may be relatively new to Aeroscope.

Now I'm going to provide a brief overview of the company for those who may be relatively new to air sculpt, we arent experience best growing national provider accustomed body contouring procedures.

Speaker Change: We are an experienced, fast-growing national provider of custom body contouring procedures. We operate under.

We operate under the brand elite bodies, Sculpsure, and we deliver a premium consumer experience and a luxury spa like atmosphere, providing exceptional cluster body contouring using our proprietary air sculpt technology, our network of specialty centers focuses on the removal of unwanted fat while simultaneously achieving access.

Speaker Change: and we deliver a premium consumer experience in a luxury spa-like atmosphere.

Speaker Change: providing exceptional custom body contouring using our proprietary AirScope technology.

Speaker Change: Our network of specialty centers focuses on the removal of unwanted fat while simultaneously achieving exceptional skin tightening for our patients.

She'll skin tightening for our patients.

Speaker Change: We also offer fat transfer procedures, which allows patients to transfer their unwanted fat to other areas of their body, such as the breasts, hips, butt, or hands.

We also offer fat transfer procedures, which allows patients to transfer their unwanted fat to other areas of their bodies, such as the breaths hips, but warheads.

Speaker Change: I developed AirSculpt over 10 years ago because I saw a great need to deliver the highest quality results in body contouring and to provide a luxurious first class experience.

Develop their sculpt over 10 years ago, because I saw a great need to deliver the highest quality results and body country and to provide a luxurious first class experience.

Speaker Change: Unlike traditional liposuction, which uses a scraping or shearing technique, AirSculpt uses a cannula that moves over a thousand times per minute in a back-and-forth corkscrew motion to remove live fat cells, all while simultaneously tightening up.

Unlike traditional liposuction, which uses the scraping of sharing kicked inc.

Sculptor uses of casuals that moves over a thousand times per minute in the back and forth corkscrew motion to remove lives that sells all while simultaneously tightening skin. We do this through a reckless sized hole instead of using a scalpel and fishing.

Speaker Change: We do this through a freckle-sized hole instead of using a scalpel.

Speaker Change: We perform this procedure in a minimally invasive fashion while our patients are fully awake and we use no needle, no scalpel, no stitches, and no general anesthesia.

We perform this procedure in a minimally invasive fashion, while our patients are fully awake and we use no needle no scalpel no stitches in no general anesthesia Eric.

Speaker Change: Airscope has two utility patents, which we directly own. They relate to proprietary processes of performing fat removal and the combination of multiple components to perform proprietary systems that are specifically configured for carrying out Airscope procedures.

Are scoped as two utility pet, which we directly own they relate to proprietary processes are performing fat removal and the combination of multiple components to perform proprietary systems, they're specifically configured for carrying out or scope procedures.

Speaker Change: We believe the systems and methods claimed in our patents provide impressive results with less patient trauma relative to other systems and methods of fat removal. These factors help us align with our goal of providing the absolute best body contouring that currently exists.

We believe the systems and methods claimed in our patent provided impressive results with less patient trauma relative to other systems and methods of fat removal.

Factors helped us align with our goal of providing the absolute best body contouring that currently exist.

Speaker Change: We further rely on copyright, trademark, and trade secret laws to protect our brand.

We further rely on copyright trademark and trade secret laws to protect our brands.

Speaker Change: proprietary technologies, know-how, data, and copyrighted content, which includes our library of before-and-after photographs. We have a gallery of well over 200,000 before-and-after photos of satisfied participants.

Terry technologies, Knowhow data and copyrighted content, which includes our library of before and after photographs, we've a gallery of well over 200000 before and after photos are satisfied patients, which we believe to be the largest in the world no matter what type of problems someone may have our Galleria.

Speaker Change: which we believe to be the largest in the world. No matter what type of problem someone may have, our gallery allows them to see patients we have helped with similar body concerns as theirs.

Awesome to see patients we have helped the similar body concerns was theirs.

Speaker Change: From time to time, I will see comments suggesting some of our pictures are not real or have been edited because the results were so dramatic, which I first took as a compliment, but then wanted to further prove it. So in 2020 we began broadcasting aeroscopes.

From time to time, I will see common suggesting some of our pictures are not real or have been edited because the results were so dramatic which I first took as a complement but then wanted to further prove it so in 2020 . We began broadcasting are scoped to be which takes them online audience inside a lot are spilt procedure.

Speaker Change: which takes an online audience inside a live air spill procedure. Additionally, we allow the online audience to ask the patient's questions while they are undergoing their procedure.

Additionally, we allowed the online audience to ask the patients questions. While they are undergoing their procedures.

Speaker Change: We believe this provides a never before seen transparency in our space and it speaks to our innovation in every aspect of the business.

We believe this provides a never before seen transparency in our space and it speaks to our innovation in every aspect of the business.

Speaker Change: We remain committed to driving Aeroscope's brand awareness. Many people who want our services don't know who we are. We aim to change that in the coming years. We are laser focused on increasing brand awareness of Aeroscope and intend to do this with a multi-pronged approach.

We remain committed to driving air sculptor brand awareness, many people who want our services don't know who we are we aim to change that in the coming years. We are laser focused on increasing brand awareness of air scope and intend to do this with a multi pronged approach of celebrity Influencers earned media one did.

Speaker Change: celebrity influencers, earned media, owned and paid media content, as well as utilizing social and digital media marketing. The results we provide.

Paid media content as well as utilizing social and digital media marketing.

The results, we provide the patient speak for themselves and we are confident that increasing brand awareness of air scope will produce enormous value in the years to come.

Speaker Change: And we are confident that increasing brand awareness of Aeroscope will produce enormous value in the years to come. Now turning to our final slide, I'd like to introduce you to a few of our finalists.

Now turning to our fourth quarter business highlights we continued to execute on our growth plans and opened two locations during the fourth quarter for a total of four new centers for the full year 2020 one.

Speaker Change: continue to execute on our growth plans and open two locations during the fourth quarter for a total of four new centers for the full year 2021.

Speaker Change: I'm also excited to announce that we opened our newest location in Las Vegas and began performing cases this week. We remain on target to execute on our de novo strategy of opening three to four centers each year, which speaks to the demand for our services across the U.S.

I'm also excited to announce that we opened our newest location in Las Vegas and began performing cases. This week, we remain on target to execute on our de Novo strategy of opening three to four centers each year, which speaks to the demand for our services across the U S. Not.

Speaker Change: not only is there runway for continued execution in the U.S., but we also believe there is an immense opportunity in the future to expand our network of centers internationally.

Not only is there a runway for continued execution in the U S. But we also believe there is an image.

<unk> opportunity in the future to expand our network of centers internationally, we anticipate opening a center in Toronto, Canada in the second half of this year and if identified other countries that we believe will be fantastic locations to provide air scope as.

Speaker Change: We anticipate opening a center in Toronto, Canada in the second half of this year and have identified other countries that we believe will be fantastic locations.

Speaker Change: As we mentioned in our last earnings call, we're excited to undertake a research project on the effects of our procedure on a patient's metabolic parameters.

As we mentioned in our last earnings call. We are excited to undertake a research project on the effects of our procedure on a patients metabolic parameters.

Speaker Change: We have begun the process of designing the study to carry out high-quality research.

We have begun the process of designing the study to carry out high quality research. We are developing standard procedures for all aspects of the study and we aim to submit to the institutional review board for approval in the first half of this year.

Speaker Change: We are developing standard procedures for all aspects of the study, and we aim to submit to the Institutional Review Board for approval in the first half of this year.

Speaker Change: We expect to complete patient enrollment this fall, and we anticipate having results from the study in 2023.

We expect to complete patient enrollment this fall and we anticipate having results from the study in 2023.

Speaker Change: We are excited about the opportunities ahead of us as we continue to expand the aerospace technology footprint, increase brand awareness, and deliver incredible results for our.

We are excited about the opportunities ahead of us as we continue to expand the air Spilt technology footprint.

<unk> brand awareness and deliver incredible results for our patients now I want to turn the call over to Ron <unk>, Our Chief operating officer Rod.

Speaker Change: Now I want to turn the call over to Ron Zellhoff, our Chief Operating Officer. Ron?

Ron Zellhoff: Thank you, Dr. Rollins and good morning, everyone. I'm going to direct my comments towards some highlights for the fourth quarter and then share some information regarding our business model and the attractive unit economics our centers produce. But before I do, I want to echo Dr. Rollins comments regarding

Thank you Dr. Rollins and good morning, everyone I'm going to direct my comments towards some highlights for the fourth quarter and then share some information regarding our business model and the attractive unit economics, our centers produce but before I do I want to echo Dr. Ron's comments regarding our team there were a lot of obstacles during the quarter.

Speaker Change: There were a lot of obstacles during the quarter, but our team stepped up in the face of a challenging environment and performed wonderfully. And again, we thank you all for your contribution.

But our team stepped up in the face of a challenging environment and performed wonderfully and again, we thank you all for your contributions.

Speaker Change: It was a great quarter and we continue to be encouraged by our strong top line revenue of 37.6 million, reflecting 64% growth over the prior year quarter for the full year 2021 revenues grew to 133.3 million, which was more than double the prior year and over 3 times the revenue from 2019.

It was a great quarter and we continue to be encouraged by our strong topline revenue of 37.6 million, reflecting 64% growth over the prior year quarter.

Full year 2021 revenues grew to $133 3 million, which was more than double the prior year and over three times. The revenue from 2019, our growth continues to be driven by strong volumes and revenue per case expansion.

Speaker Change: Our growth continues to be driven by strong volumes and revenue per case expansion. Our total case volume...

Total case volume increased.

Speaker Change: 43.8% in the fourth quarter over the prior year quarter, of which 19.6% was from the same centers. And our revenue per case for the fourth quarter was $13,018, a 14% increase over the prior year quarter.

43, 8% in the fourth quarter over the prior year quarter of which 19.6% from the same centers and our revenue per case for the fourth quarter was $13018, a 14% increase over the prior year quarter.

Speaker Change: For the year, our total case volume increased 87.8% over the prior year of which 55.5% was from the same centers. We continue to be encouraged by our rate increases, which are a result of the patient.

For the year, our total case volume increased 87, 8% over the prior year of which 55, 5% was from the same centers. We continue to be encouraged by our rate increases which are a result of the patients.

Speaker Change: desire to have multiple areas treated at the same time.

Desire to have multiple areas treated at the same time.

Speaker Change: We point to AirScope TV as a driving force behind this growth as patients who watch AirScope TV are more educated about the different types of procedures we offer. Our fourth quarter...

We point to are sculpt T V.

Driving force behind this growth that's patients who watch Air School T. V are more educated about the different types of procedures we offer.

Our fourth quarter adjusted EBITDA.

Speaker Change: increased to $10.2 million, reflecting a 26% growth over the prior year quarter, and our adjusted EBITDA margin was 27.2% compared to 35.5% in the prior year quarter.

Increased to 10.2 million, reflecting a 26% growth over the prior year quarter.

Adjusted EBITDA margin was 27, 2% compared to 35, 5% in the prior year quarter.

Speaker Change: For the year, Adjusted EBITDA rose to $46.1 million, up 164% from the prior year, and our 2021 Adjusted EBITDA margin was 34.6%, up 670 basis points from 2020.

For the year adjusted EBITDA rose to $46 1 million up 164% from the prior year and our 2021 adjusted EBITDA margin was 34, 6% up.

670 basis points from 2020.

Speaker Change: Advertising costs, which include our digital, social, and traditional advertising, were $5.5 million for the quarter, which is approximately 14.6% of our revenue.

Advertising costs, which include our digital social and traditional advertising were 5.5 million for the quarter, which is approximately 14, 6% of our revenue.

Speaker Change: When combined with our marketing and sales personnel costs, our total customer acquisition costs for the quarter were approximately $2,599 per customer.

When combined with our marketing and sales personnel costs, our total customer acquisition cost for the quarter were approximately 2599 per customer.

Speaker Change: As a reminder, our marketing costs as a percentage of revenue.

As a reminder, our marketing costs as a percentage of revenue can fluctuate quarter to quarter related to timing of the investment we make compared to the related revenue increases we achieved after making these investments.

Speaker Change: fluctuate quarter-to-quarter related to timing of the investment we make compared to the related revenue increases we achieve after making these investments.

Speaker Change: Our centers have an extremely attractive unit economic profile. We ended the year with 18 centers across the United States. We have a modest upfront investment in our centers, which is typically less than $1 million and includes construction and equipment. Historically, our centers become cash flow positive in approximately three months and generate 100% return on invested capital in approximately one year.

Our centers have an extremely attractive unit economic profile, we ended the year with 18th centers across the United States, We have a modest upfront investment in our centers, which is typically less than $1 million and includes construction and equipment historically, our centers become cash flow positive and.

Only three months and generate 100% return on invested capital and approximately one year.

Speaker Change: Furthermore, we are 100% private pay with zero reimbursement.

Furthermore, we are 100% private pay with zero reimbursement risk for patients that requested we assist them with securing third party financing.

Speaker Change: For patients that request it, we assist them with securing third-party financing.

Speaker Change: At no recourse to us, patient financing allows us to schedule procedures more quickly and approximately 41% of our patients utilize the financing option during the fourth quarter.

At no recourse to us patient financing allows us to schedule procedures more quickly and approximately 41% of our patient to utilize a financing option during the fourth quarter.

Speaker Change: We anticipate opening three to four centers each year. As Dr. Rollins mentioned, we opened a center in Las Vegas this week and have plans to open Boston, Philadelphia, and Toronto centers later this year as we execute on our de novo strategy.

We anticipate opening three to four centers each year as Doctor Rollins mentioned, we opened a center in Las Vegas. This week and have plans to open Boston, Philadelphia and Toronto centers later this year as we execute on our de Novo strategy.

Speaker Change: As I mentioned, our third quarter call, we have plans to increase the number of procedure rooms in certain existing centers. All our legacy centers were built as a single procedure room centers and due to capacity constraints, we have been converting or in some cases, relocating those centers to larger facilities to accommodate an extra procedure.

As I mentioned, our third quarter call, we have plans to increase the number of procedure rooms in certain existing centers all our legacy centers with built in a single procedure room centers and due to capacity constraints, we have been converting wherein some casing relocating those centers to larger facilities to accommodate.

Date, an extra procedure room at the end of 'twenty 'twenty. One we have four remaining single procedure room centers, and we anticipate converting all of them through multiple procedure rooms.

Speaker Change: At the end of 2021, we have four remaining single procedure room centers, and we anticipate converting all of them to multiple procedure.

Speaker Change: during 2022. We are on track from a center conversion perspective with our first conversion taking place in the next couple of weeks.

2022, we are on track from a center conversion perspective, with our first conversion taking place.

The next couple of weeks, adding the additional procedure rooms will give us additional capacity and allow us to increase the speed of the efficiency of treating patients with that I'll turn it back over to Dennis to provide additional details on our financial results and outlook Dennis.

Speaker Change: Adding the additional procedure rooms will give us additional capacity and allow us to increase the speed of efficiency of treating our patients.

Speaker Change: With that, I'll turn it back over to Dennis to provide additional details on our financial results and outlook.

Dennis Dean: Thanks, Ron. Our first quarter as a new public company has certainly been exciting for us, and we are glad to be reporting continued strong results financially, plus demonstrating our abilities to execute on our de novo growth.

Thanks, Ron.

Our first quarter as a new public company has certainly been exciting for us and we are glad to be reporting continued strong results financially plus demonstrating our ability to execute on our de novo growth plans there.

Dennis Dean: This truly is a unique company from both the services we offer to the attractive unit economics we deliver.

Truly is a unique company from both the services we offer to the attractive unit economics, we deliver where results focus in everything we do and I'm excited about what the future holds for us.

Dennis Dean: We are results focused in everything we do, and I'm excited about what the future holds for us.

Now diving into Q4 results revenues increased $14 7 million to $37 6 million, a 64% increase from the prior year quarter and our cases increased about 43, 8% to 2885.

Dennis Dean: Revenues increased $14.7 million to $37.6 million, a 64% increase from the prior year quarter. And our cases increased about 43.8%.

Dennis Dean: The increase is a result of adding four new de novo centers, which expanded our footprint from 14 centers to 18 centers.

The increase is a result of adding four new de Novo centers, which expanded our footprint from 14 centers to 18 centers and our number of procedure rooms from 23% to 32 as of December 31 2021.

Dennis Dean: And our number of procedure rooms from 23 to 32 as of December 31st, 2000.

Dennis Dean: Our revenue per case was $13,018, a 14% increase from the prior year quarter.

Our revenue per case was $13018, a 14% increase from the prior year quarter.

Dennis Dean: Revenues per case are determined by which areas of the body are treated. We also had favorable revenue metrics on the same center base.

Revenues per case are determined by which areas of the body are treated we also had favorable revenue metrics on a same center basis.

Dennis Dean: Same-center revenue increased 35 percent over the prior year quarter, primarily driven by case growth of approximately 20 percent.

Aim center revenue increased 35% over the prior year quarter, primarily driven by case growth of approximately 20%.

Dennis Dean: Much of our same-store growth can be attributed to expanding our social media and marketing capabilities.

Much of our same store growth can be attributed to expanding our social media and marketing capabilities.

Especially air sculpt TV to increase brand awareness and to attract more patients into our existing centers. We continued to see increases in our revenue per case, which we attribute to patients becoming more informed and having more areas treated at one time.

Dennis Dean: to increase brand awareness, and to attract more patients into our existing.

Dennis Dean: We continue to see increases in our revenue per case, which we attribute to patients becoming more informed and having more areas treated at one time. There are several variables.

There are several variables that determine our pricing primarily us based on the amount of time, a patient is in the procedure room, which can vary data the number of areas being treated the volume of fat being removed and whether a procedure involves a fat transfer.

Dennis Dean: Primarily, it's based on the amount of time a patient is in the procedure room, which can vary due to the number of areas being treated, the volume of fat being removed, and whether a procedure involves a fat transfer.

Dennis Dean: For the fourth quarter, FAT transfers continue to make up greater than 20% of our procedures performed.

For the fourth quarter fat transfers continue to make up greater than 20% of our procedures performed not every patient is a candidate for fat transfer and we expect to maintain this percentage as we continue to grow our case volumes.

Dennis Dean: Not every patient is a candidate for fat transfer, and we expect to maintain this percentage as we continue to grow our case.

Dennis Dean: Our cost of services for the fourth quarter, as a percentage of revenue, was $34.8 million.

Our cost of services for the fourth quarter as a percentage of revenue was 34, 8%. We saw a slight increase sequentially data clinical investments, we made at our facilities to enhance quality and safety for our patients and we expect to continue these investments to further support our growth.

Dennis Dean: We saw a slight increase sequentially due to clinical investments we made at our facilities to enhance quality and safety for our patients, and we expect to continue these investments to further support our growth.

Dennis Dean: We continue to see a bit of this in the first quarter of 2022, but are starting to see improvements as the Omicron variant appears to be declining as of late.

We continue to see a bit of this in the first quarter of 2022, but are starting to see improvements as the omicron variant and appears to be declining as of late.

Dennis Dean: Our adjusted EBITDA for the quarter increased $2.1 million to $10.2 million, a 26% increase over the prior year quarter.

Our adjusted EBITDA for the quarter increased $2 1 million to $10 2 million, a 26% increase over the prior year quarter.

Dennis Dean: This increase is due to the additional de novo centers we added and our same center revenue increase.

This increase is due to the additional de Novo centers, we added and our same center revenue increases as expected due to increased costs from being a public company. Our adjusted EBITDA margin for the fourth quarter decreased to 27, 2% as compared to the prior year quarter of 35, 5%.

Dennis Dean: As expected, due to increased costs from being a public company, our adjusted EBITDA margin for the fourth quarter decreased to 27.2% as compared to the prior year quarter of 35.5%.

Dennis Dean: The year-over-year decline in our adjusted EBITDA margin also reflects the additional clinical investments we made, as well as increased marketing expenses. Moving on to liquidity...

The year over year decline in our adjusted EBITDA margin also reflects the additional clinical investments, we made as well as increased marketing expenses.

Moving on to liquidity and cash flow items.

We have a very strong balance sheet our.

Dennis Dean: Our cash position was $25.3 million and we have a $5 million revolver that is undrawn and has no outstanding letters of credit as of December 31st, 2021.

Our cash position was $25 3 million and we have a $5 million revolver that is undrawn and has no outstanding letters of credit as of December 31, 2021.

Dennis Dean: Our long-term debt was approximately $82 million, and our leverage ratio at the end of the quarter, as calculated under our credit agreement, was 1.61 times.

Our long term debt was approximately $82 million and our leverage ratio at the end of the quarter as calculated under our credit agreement was 1.61 times.

Dennis Dean: Cash flow from operations for the year amounted to $26.6 million.

Cash flow from operations for the year amounted to $26 6 million.

Dennis Dean: An attractive aspect of our business model is that we are a 100% self-pay, meaning that we have no reimbursement risk.

An attractive aspect of our business model is that we are a 100% self pay meaning that we have no reimbursement risk.

Dennis Dean: We receive all of our payments up front, so we have no accounts receivable to collect.

We received all of our payments upfront. So we have no accounts receivable to collect additionally, our surgeons are contracted and receive payments only after a surgery is performed which allows us to manage our operating cash flow very effectively.

Dennis Dean: Additionally, our surgeons are contracted and receive payments only after a surgery is performed, which allows us to manage our operating cash flow very effectively.

Dennis Dean: From an investment standpoint, we invested $2.4 million during the fourth quarter, primarily related to opening our centers in Miami Beach, Salt Lake City, and Las Vegas, plus upcoming openings in Boston and Philadelphia.

From an investment standpoint, we invested $2 4 million during the fourth quarter, primarily related to opening our centers in Miami Beach, Salt Lake City, and Las Vegas, plus upcoming openings in Boston and Philadelphia.

Dennis Dean: As you know, we completed our IPO on October the 28th and it closed on November the

As you know we completed our IPO on October 28, and it closed on November the second we received net proceeds of $13 5 million after deducting underwriter fees and related offering expenses now.

Dennis Dean: We received net proceeds of $13.5 million after deducting underwriter fees and related offering expenses.

Dennis Dean: Now I'll provide some information on expectations for the upcoming year.

Now I'll provide some information on expectations for the upcoming year as we think about revenue we expect to achieve approximately 172 to 176 million in revenues for the year.

Dennis Dean: As we think about revenue, we expect to achieve approximately $172 to $176 million in revenues for the year.

Dennis Dean: which would be a 29 to 32% increase over the 2021 level.

Which would be at 29% to 32% increase over the 2021 levels and we expect approximately $58 million to $60 million of adjusted EBITDA, which would equate to an adjusted EBITDA margin of 33, 7% to 34, 1%.

Dennis Dean: and we expect approximately 58 to 60 million in adjusted EBITDA, which would equate to an adjusted EBITDA margin of 33.7 to 34.1.

Dennis Dean: Our adjusted EBITDA guidance reflects an increase in costs we will incur as a public company, which includes increases in legal, accounting, insurance, investor relations, and other costs.

Our adjusted EBITDA guidance reflects an increase in costs, we will incur as a public company, which includes increases in legal accounting insurance Investor relations and other costs.

Dennis Dean: We also anticipate an increase in marketing-related costs as we continue to increase our brand awareness and drive additional volume into our center.

We also anticipate an increase in marketing related costs as we continue to increase our brand awareness and drive additional volume into our centers.

Speaker Change: As Dr. Rollins highlighted earlier, we are committed to investing in brand awareness initiatives.

As Doctor Islands highlighted earlier, we are committed to investing in brand awareness initiatives. These costs may impact our margins in the near term, but we expect EBITDA margins to return to the mid thirties and the midterm due to increased revenues.

Speaker Change: These costs may impact our margins in the near term, but we expect EBITDA margins to return to the mid-30s in the midterm due to increased revenue.

Speaker Change: From a modeling perspective, we expect to open four centers this year.

From a modeling perspective, we expect to open four centers this year.

Speaker Change: As you heard, we opened a center in Las Vegas this week, and we expect the remaining new center openings to occur in the second half of the year.

As you heard we opened a center in Las Vegas. This week and we expect the remaining new center openings to occur in the second half of the year.

Speaker Change: Also, there is a slight element of seasonality in the business during spring and early summer months as patients prepare for the bathing suit season.

Also there is a slight element of seasonality in the business during spring and early summer months as patients prepare for the bathing suit season.

Speaker Change: The first quarter tends to be a lighter quarter and volumes start to trend upward in March.

The first quarter tends to be a lighter quarter in volumes start to trend upward in March.

Speaker Change: As a result of our IPO, we reorganized into a C Corp, and we'll be estimating taxes accordingly.

As a result of our IPO, we reorganized into a C corp, and will be estimating taxes accordingly.

Speaker Change: Additionally, our stock based compensation will increase related to our IPO equity grants issued as part of the creation of our 2021 stock incentive.

Additionally, our stock based compensation will increase related to our IPO equity grants issued as part of the creation of our 2021 stock incentive plan.

Speaker Change: These initial IPO-related grants have a three-year vesting period and are expected to impact net income significantly over the next three years.

These initial IPO related grants have a three year vesting period are and are expected to impact net income significantly over the next three years.

Speaker Change: As Dr. Rollins and Ron discussed in their comments, we have a very strong business model, and we expect to continue to capitalize on our strengths of our technology and operations, as well as our attractive business model, which is fueled by favorable trends in the aesthetic space.

Doctor Robinson, Ron discussed in her comments, we have a very strong business model and we expect to continue to capitalize on our strengths of our technology and operations as well as our attractive business model, which is fueled by favorable trends in the aesthetic space with that I'd like to turn the call over to the operator for a few questions operator.

Speaker Change: With that, I'd like to turn the call over to the operator for a few questions.

Operator: Thank you. The floor is now open for questions. If you would like to ask a question, please press star 1 on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Again, that is star 1 to register questions.

Thank you. The floor is now opened for questions. If he would like to ask a question. Please press star one on your telephone keypad at this time.

A confirmation tone will indicate your line is in the question queue. You May press star two if he would like to open up your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Again that is star one to register questions at this time.

Speaker Change: The first question is coming from Simeon Gutmann of Morgan Stanley . Please go ahead.

The first question is coming from Simeon Gutman of Morgan Stanley . Please go ahead.

Simeon Gutmann: Good morning, everyone. My first question is around advertising and Dennis, I think you, you, the way you discussed it, it sounds like it was a bit of a change relative to whatever plans you were looking at previously. So.

Good morning, everyone. My first question is around advertising and Dennis I think you. The way you discussed it it sounded like it was a bit of a change relative to whatever plans you were looking at previously so the question around it is is what sparked what sparked the change are you doing it because.

Speaker Change: The question around it is what sparked the change? Are you doing it because of there's some pipeline issue regarding Omicron? Are you doing it because of any competitive threat or are you doing it just to press the advantage that you have and drive the volumes in the centers?

There's some pipeline issue regarding omicron or you're doing it because you know of any competitive threat or you're doing it just depress. The advantage that you have and you know drive the volumes in the in the in the centers.

Speaker Change: Thanks for the question, Simeon. I'll start, and if Dr. Rollins or Rons wants to add to the response, they can.

Hey, Thanks for the question Simeon.

I'll start and if Dr Robbins, Iran wants to add to the response they can but.

Really.

Speaker Change: It's not anything new. It was really, quite frankly, not unexpected. We did open two new centers, if you recall, during the quarter. And so we incur marketing costs on those new openings. And so the revenue hasn't come in on that. So that's a portion of it. We do continue to focus heavily on the marketing, and advertising, and

It's not anything new.

It was really quite frankly, not unexpected we did open two new centers, if you recall during the quarter.

So we incur marketing costs.

On those new openings and so the revenue hasn't come in on that so that's that's a portion of it we do continue to.

To focus heavily on the marketing and advertising and.

Speaker Change: you know expected significantly expand our brand awareness you know in the coming year as well uh... so a lot of it had to do with you know that the two new openings the marketing on those that that we did have the revenue in

We expect to significantly expand our brand awareness on the come.

Here as well so a lot of it had to do with the two new openings the marketing on those that we didn't have the revenue in.

Yeah.

So did you have any other questions.

Speaker Change: Sorry, one follow-up question. I was muted. I apologize. My follow-up question is around AirSculpt versus other technologies right now. Do you have a sense on an ongoing basis market share of AirSculpt versus, you know, either CoolSculpt or other, you know, freezing or fat-removing technologies? And so how do you measure, you know, on an ongoing basis how you're performing?

Sorry, one follow up question I was muted I apologize my follow up question is around air sculpt versus other technologies right. Now do you have a sense on an ongoing basis.

Market share of air Sculpsure versus you know either cool sculpt or other you know freezing or fat removing technologies and so how do you measure you know on a roll on an ongoing basis, how how you're performing.

Speaker Change: Thank you for the question. This is Aaron Rollins.

Thank you for the question this is Aaron Rollins.

Aaron Rollins: All I can say is that as our awareness increases, we expect to take more and more market share because we strongly feel we have by far the best technology and results.

All I can say is that as our awareness increases we expect to take more and more market share because we strongly feel we have by far the best technology and results not to mention patient experience, but.

Aaron Rollins: not to mention patient experience. But as I'm sure many people on this call know, fat-freezing technology took a big hit in the last couple of months with...

As I'm sure. Many people on this call know fat freezing technology took a big hit.

And the last a couple of months with.

Aaron Rollins: the Linda Evangelista articles and information.

Linda advantage at least articles and an information.

Information and.

Aaron Rollins: It seems to be something that we hear is less and less of from patients.

It seems to be something that that we here is <unk>.

Less and less so from patients also aeroscope provides an excellent solution to people who are not happy with previous that freezing experiences. So yeah. As we've always stated we expect to continue to increase their market share.

Aaron Rollins: Also, Aeriscope provides an excellent solution to people who are not happy with previous fat freezing experiences. So as we've always stated, we expect to continue to increase our market share.

Thanks, everyone.

Thank you.

Speaker Change: Thank you. The next question is coming from Josh Raskin of Nefron. Please go ahead.

Thank you. The next question is coming from Josh Raskin of Nephron. Please go ahead.

Josh Raskin: Hi, thanks. Good morning, everyone. I was wondering if you could provide color on the new markets on Vegas, Boston, Philly and Toronto and maybe any of the characteristics that specifically attract you to those markets. And then as an aside, anything special to think about Toronto, the Canadian laws and anything that would be different than the U.S. that we should expect?

Hi, Thanks, and good morning, everyone. I was wondering if you could provide color on.

The new markets on Vegas, Boston, Philly, and Toronto, and and maybe any of the characteristics that specifically attracted you to those markets and then as an aside anything special to think about you know Toronto, the Canadian laws and anything that would be different than the U S that we should expect.

Good good.

Josh Raskin: Thanks for the question. This is Ron Zelhoff. In regards to Boston, Philadelphia, Vegas that are out there right now, they've always been, you know, high on our list. And as we said on some previous calls as well, you know, our pipeline for our domestic growth continues to be really strong right now. So we're just executing on our de novo strategy there. They're obviously extremely big cities. Right now, the demographics

Thanks for the question surrounds they'll have in regards to Boston, Philadelphia Vegas them that are out there right now they've they've always been high on our list and as we said in some previous calls as well you know our pipeline for our domestic growth continues to be really strong right now.

So we're just executing on all of our de Novo strategy. There, obviously extremely big cities right now the demographics.

Josh Raskin: just really line up to what we want to go ahead and to do. So those are the reasons for there. As for Toronto, that's a market that, as everyone knows, is...

I'm, just really line up to what we wanted to go ahead and to do.

So those are the reasons for there as as for Toronto.

That's a market that as everyone knows is X you know very very financially viable for us there are some differences in the regulations there they.

Josh Raskin: you know, very, very financially viable for us. There are some differences in the regulations there that we're definitely accustomed with now through our attorneys that are helping us navigate those.

We're we're definitely accustomed with now through our attorneys that are helping us navigate those and.

Josh Raskin: And we feel extremely comfortable with operating in Toronto by the end of this year.

And we feel extremely comfortable with it with operating in Toronto by the end of this year.

Speaker Change: I'd just like to add, I'd like to go ahead, please, please, Dr.

Just like I'd make that Oh go ahead. Please please back around again.

Speaker Change: I'd just like to add that we're very excited about going internationally with Toronto, and it really comes from a lot of demand from Canada and Toronto.

I'd just like to add that we're very excited about going internationally.

With Toronto and.

Really comes from a lot of demand from Canada in Toronto, specifically.

Right.

Speaker Change: And then my second question was just the metrics that you measure. You know, Miami and Salt Lake were open last quarter. I'm just curious, what metrics do you look at in terms of, you know, bookings and scheduling and things like that? How are you measuring the progress? And, you know, is there any way to judge sort of versus plan how you guys are feeling and then just a quick aside, were those two or three procedure room openings?

And then my second question was just the metrics that you measure you know Miami in Salt Lake where open last quarter.

I'm just curious like what metrics do you look at in terms of bookings and scheduling and things like that how are you measuring the progress and is there any way to judge sort of versus plan. How you guys are feeling and then just a quick aside where those two or three procedure room openings prejudice.

Okay.

Speaker Change: Josh, this is Dennis. These were two procedure room centers, and while we don't remark specifically about the details of individual centers, I will say that they're going really well. We're actually very excited about how well they're going, and again, very good start out of the gates.

Josh. This is Dennis these were they were two procedure room centers and while we don't remark specifically about the details of individual centers I will say that they are they're going really well, we're actually very excited about how well theyre going and.

And again, a very good very good start out of the gate.

Alright, that's helpful. Thanks.

Okay.

Speaker Change: Thank you. Our next question is coming from John Ransom of Raymond James. Please go ahead.

Thank you. Our next question is coming from John Ransom of Raymond James. Please go ahead.

Speaker Change: Hey, how's it going? This is Parker on for John Ransom. So I know you alluded to some impact from the Omicron variant. Could you maybe just give us a sense? Maybe the number of nurses quarantined or cases deferred kind of during the peak and then.

Hey, How's it going this is parker on for John Ransom. So I know you alluded to some impact from the Micron variant could you maybe just give us a sense, maybe the number of nurses quarantined or a.

Cases deferred kind of during the peak and then how are you seeing things we'll cover it in February and kind of early March.

Parker: How are you seeing things recover in February and kind of early March?

Speaker Change: Thanks for the question, Parker. Yeah, we did experience, obviously...

Hey, Thanks for the question Parker, Yes.

We did experience obviously as you would expect some challenges in the.

Speaker Change: You would expect some challenges in the latter part of the quarter related to the Omicron variant.

Latter part of the quarter related to the to the Omicron variant.

Speaker Change: The thing about our team and the work that they did to be able to get cases scheduled was actually remarkable. They did an excellent job of if a patient were to call in with a, you know,

The thing that the thing about our team and the work that they did to be able to get some cases scheduled.

What's actually remarkable they did an excellent job.

If a patient were to call in with the.

With that.

Speaker Change: needing to reschedule, we were quickly looking for, you know, other patients that were scheduled maybe the following week to kind of reschedule them in those slots. So a lot of work was done around that. So we didn't have a significant amount of case volume that was lost in the quarter due to that.

Needing to reschedule.

Quickly looking for other patients that were scheduled maybe the following week, they kind of reschedule them in those slides. So a lot of work was done around that so we didn't have a significant amount of case volume that was lost in the quarter due to that.

Speaker Change: And again, it was a remarkable effort by the team. We did have nurses at time that were in quarantine. We had physicians at time in quarantine as well. And we were able to get those areas covered.

And again it was a remarkable effort by the team we did have.

Nurses at time that were in quarantine, we had physicians at time in quarantine as well and we were able to.

To get those areas covered.

Speaker Change: Certain physicians we have have license in multiple states, so in certain situations we were able to move doctors to other states where we needed to cover cases. So again, a remarkable effort by the team. But we did continue to see that, obviously, in the first couple of months of this year.

Certain physicians, we have have licensed in multiple states. So in certain situations, we were able to move doctors.

To other states, where we needed to cover cases, so again, a remarkable effort by the team.

But we just continue to see that obviously in the first couple of months of this year and we are experiencing what we seem to be.

Speaker Change: And we are, you know, experiencing, you know, what we seem to be an easing from the variant as it relates to impacting our team. And so we hope that obviously continues, not only as a company, but also as the country and the world.

An easing from the variant as it relates to impacting our team and so we hope that obviously continues.

Not only as a company, but also as the country in the world. So.

Speaker Change: Okay, great. And then you had really strong revenue per case was up, you know, like 400 bucks sequentially. How much of that is just a shift in mix? I know you said roughly 20% of cases are fat transfers. How much is that, you know, that increase from mix shift and how much of that is just price increase?

Okay, Great and then you had really strong revenue per case was up you know like 400 Bucks sequentially. How much of that is just a shift in mix I know you said roughly 20% of cases or fat transfers how much is that that increase from mix shift and how much of that is just price increase.

Yes.

Speaker Change: You know, as we had said previously on on other remarks, we don't do or we have not to date done, you know, price increases.

We have said previously on other remarks, we don't do.

We have not to date done price increases.

Speaker Change: It's really a mix and really even more than mix.

It's really a mix and and and really even more than mix. It's just patients having more procedures or more area is done and so when they are coming in.

Speaker Change: It's just patients having more procedures or more areas done. And so when they're coming in, historically we've seen, you know, patients would just maybe have their chin done, which is a very quick procedure and very profitable procedure for us, but a revenue per case because it's quite a bit lower because they're, you know, only in the procedure room for a short amount of time.

Historically, we've seen patients would just had maybe have their churn down which is a very quick procedure and very profitable procedure for us, but our revenue per case, because it's it's quite a bit lower because they're only in the procedure room for a short amount of time, what we're saying is those patients are doing more and more areas it wants and.

Speaker Change: What we're seeing is patients are doing more and more areas at once, and because they're in the procedure room longer, it drives up the revenue per case.

Because they are in the procedure room longer it drives up the revenue per case, I will say that from a revenue per case perspective, we were.

Speaker Change: I will say that from a revenue per case perspective, we were pleasantly surprised by the $13,000. That number is somewhat variable.

We were a little pleasantly surprised by the 13000.

That that number is somewhat variable and.

Speaker Change: And so, again, seeing the $13,000 per case was a surprise for us, a pleasant surprise. But again, because of the mix and the shift that can happen, you know, from month to month and quarter to quarter, you know,

And so again seeing the 13000 per case was what was a surprise for us a pleasant surprise, but again because of the mix and the shift that can happen from month to month and quarter to quarter.

Speaker Change: That's a surprise number for us, but it's something that as we look into this next year, we don't necessarily think it's going to decline significantly, but we just want to say that that number can be variable from quarter to quarter.

That's again.

Apprise number for us, but it's something that as we look into this next year.

We don't necessarily think it's going to decline significantly, but we just want to say that that number can be variable from quarter to quarter.

Speaker Change: Okay, great. And then, last question. Are you seeing any second derivative kind of effects from maybe a slowing economy, inflation, increasing gas prices? Is there anything there kind of affecting maybe customers' willingness to spend up for more expensive procedures? Or just because of your kind of customer archetype, is that, you know, is that not an issue?

Okay, Great and then last question are you seeing any second derivative kind of effects from maybe a slowing economy inflation, increasing gas prices or is there anything there kind of affecting maybe customers' willingness to spend out for more expensive procedures or just because of your kind of customer.

Archetype is that you know is that not an issue.

Speaker Change: I can take that. It's Aaron Rollins. So no is the answer to your question and having been in this business during

I can take that Oh, they're enrolling.

So no is the answer to your question and having been in this business during two.

Aaron Rollins: 2008 recession, I remember absolutely no decrease in demand, and as I'm sure you guys know, we're actually doing more procedures than ever before in our 10-year history.

2008 recession.

I remember a.

Absolutely no decrease in demand and as I'm sure you guys know, we're actually doing more procedures than ever before in our 10 year history.

Aaron Rollins: We're very happy that our industry and our market segment that we go after is really not being affected by this, at least our patient demand is not.

Hum, where we're very happy that our industry and our market segment that we go. After is really are not are not being affected by this at least start patient demand is growing.

Alright, great. Thank you.

Thanks.

Speaker Change: Thank you. The next question is coming from Corinne Wolfmeyer of Piper Sandler. Please go ahead.

Thank you. The next question is coming from Karen both Meyer of Piper Sandler. Please go ahead.

Corinne Wolfmeyer: Hi, good morning and congrats on the quarter. So to start off, to kind of piggyback off of the last question, I'd like to ask about the broader supply chain challenges going on in the macro environment. Is that impacting your ability to build out new facilities or the cost to build out new facilities in any way?

Hi, good morning, and congrats on the quarter and so to start off to kind of piggyback off of that.

I'd like to ask about the broader supply chain challenges going on in the macro environment is that impacting your ability to build out new facilities or the cost to build out.

New facilities in any way.

Corinne Wolfmeyer: Hey, Corinne. It's Ron. How are you? Thanks for the question.

Hey, Karen it's Ron how are you. Thanks for the question.

Ron: No, not at all. We do have some supply chain issues that do pop up in our construction projects, but it's already really built into our timeline for it. So, as we've done in the past, we've been able to execute on our de novo strategy there.

No not not at all we do have some supply chain you know.

Issues that do pop up in our construction projects, but it's already been really built into our timeline.

For it so as we've as we've done in the past we've been able to execute on our de Novo strategy there.

Speaker Change: Awesome, thank you. And then, just touching on AirSculpt TV and how that's helping with your customer

Awesome. Thank you and then just touching on Eric called T V.

And that's helping with your customer reach.

Speaker Change: Do you have any way of tracking customer conversion from the Aerosculpt TV, and if so, what percent of patients do you think are coming from that method of advertising? I'm just curious what kind of impacts you're seeing from this. Thank you.

Any way of tracking that customer conversion from Eric's called T V and if so what percent of patients do you think are coming from that.

Head of advertising.

What kind of impact you've seen from us again.

Speaker Change: Thanks for the question. It's Aaron Rollins. We don't have any way of directly tracking that because you can view something on Instagram and, you know, think about it and go on a pay-per-click ad a month later or tell a friend, watch a YouTube video and just call, just visit the website organically. There's really no way to know, but I can tell you anecdotally that.

Thanks for the question, it's Aaron wrong, we don't have any way of directly tracking that because you can view something on Instagram and you know think about it and go on a pay per click out a month later or tell a friend watch a Youtube video and just call just visit.

Outside organically Theres really no way to know, but I can tell you anecdotally that when I go to different offices and talk to people in the waiting room Air scope T. V is a big topic and a lot of people say jeez I would never be here, if it wasn't for aeroscope television because watching a patient.

Aaron Rollins: When I go to different offices and talk to people in the waiting room, Aeroscope TV is a big topic and a lot of people say, geez, I would never be here if it wasn't for Aeroscope TV because watching a patient laugh and talk and get interviewed while fat's leaving their body was just incredible to me and it made me not scared.

Last and talk and get interviewed warfare, leaving their body was just incredible to me and it made me not scared.

Thank you.

Sure.

Speaker Change: Thank you. Our next question is coming from Whit Mayo of SCB Lering. Please go ahead.

Thank you. Our next question is coming from Whit Mayo of SCB Leerink. Please go ahead.

Whit Mayo: Hey, thanks. Maybe just to follow up on that last question, maybe a little bit more broad of a question, just around the marketing strategy, I think

Hey, Thanks, maybe just a follow up on that that last question and maybe a little bit more.

Broad of a question just around the marketing strategy.

The.

The question really is cyclical.

Whit Mayo: what you guys are changing, how the marketing strategy is evolving, how you think about YouTube, Aeroscope TV versus other social media outlets, just maybe some of the investments that you're making, just anything as you look at your plan and how that's evolved sort of over the last 12 months that might be helpful.

What you guys are changing how how the marketing strategy is evolving how you think about Youtube their skull TV versus other social media outlets, just maybe some of the investments that you're making just anything as you look into your plan and how that's evolved over the last 12 months that might be it might be helpful. Thanks.

Whit Mayo: We're continuing our strategy that we've always had and we're making opportunistic investments as opportunities arise.

We're continuing our strategy that we've always had it and we're making opportunistic investments as opportunities arise.

Speaker Change: Okay, and I know you guys aren't providing guidance around the first quarter, but it might just be helpful to think about normal seasonality and.

Okay.

I know you guys aren't providing guidance around the first quarter, but it might just be helpful to think about.

Seasonality and maybe what might be a little bit different about this year versus prior years anything that you could you could frame might be helpful.

Speaker Change: Maybe what might be a little bit different about this year versus prior years, anything that you could frame might be helpful.

Hey, Whit this is Dennis.

Speaker Change: Yeah, as it relates to the guidance for the coming year, there is some seasonality within the business, but interesting also that center by center there may be different periods of time they experience seasonality.

Yeah as it relates to the guidance for the coming year.

There is a there is some seasonality within the business.

But interesting also that center by center, there may be different periods of time they experienced seasonality.

Speaker Change: You know, Scottsdale, uh, you know, Arizona's extremely hot, you know, in the, in the, you know, July , August , you know, time period. And so they're, they're seasons a little bit different than, than maybe a, a, a Nashville or a Beverly Hills. But, um, you know, we do see a little bit of a pickup from a seasonality perspective in the second quarter, as, uh, as people are preparing for, you know,

Scottsdale.

Arizona is extremely hot.

The July August time period, and so their season's a little bit different than than maybe a nashville or Beverly Hills, but.

Do see.

A little bit of a pick up from a seasonality perspective in the second quarter as if people are preparing for.

Speaker Change: beach, bathing suits, swimming pools, those types of things. So we do experience an uptick in the second quarter. We tend to be a little softer in the first as we come out, but that tends to ramp up in the March time period as we, again, kind of get closer to that second quarter and that swimsuit season. So there is that bit of seasonality, whereas the second quarter tends to be one of our better quarters.

Beach fading say swimming pools are those types of things. So we do experience an uptick in the second quarter, but we tend to be a little softer than the first as we come out but that tends to ramp up in the in the March time period, as we again kind of get closer to that to that second quarter and that that swimsuit season. So.

There is a bit of seasonality.

Whereas the second quarter tends to be one of our one of our better quarters.

Speaker Change: Right. I mean, any way that maybe frame as a percentage of your full year EBITDA that you think you might.

Right I mean, any way to maybe frame as a percentage of your full year EBITDA that you think you might.

B.

Speaker Change: Budgeting for in the first quarter. I just want to make sure that we're not all off the reservation with how you're sure Sure first quarter and that from a full year from the guidance number. You're looking in the low 20% range

The budgeting for in the first quarter I, just want to make sure that we're not all off the reservation with how you're sure sure first quarter and that from a full year from the guidance now, but youre looking in the low 20% range perfect perfect perfect.

Speaker Change: And the last question really is, you know,

Last question really is you know.

Speaker Change: You guys are kind of a new company for a lot of us. And as you reflect back on the last year, maybe the biggest surprises.

You guys are kind of a new company for for a lot of us and as you reflect back on the last year, maybe the biggest surprises.

Speaker Change: uh... good or bad relative to your internal plan you know what developed at the surprise you you know if you could share might be helpful thanks

Good or bad relative to your internal plan you know what developed it that surprised you.

Anything that you could share it might be helpful. Thanks.

Okay.

Speaker Change: I'll start and then I'll let Ron and Aaron complete. I think probably from a surprise standpoint for me is probably the rate.

I'll start and then I'll, let Ron and Erin complete I think probably from a surprise standpoint for me is probably the right we really have.

Speaker Change: We really have, you know, obviously shown very successful results from our revenue per case and so that would be something that's probably a little ahead of where we had expected and forecasted. Again, it's a very variable number and we do see it from month to month shift up and down based on mix. And so from my perspective, I think that would be one area that was a surprise a bit for me.

Obviously shown very successful results from our our revenue per case, and so with that that would be something thats, probably a little ahead of where where we had expected and forecasted again, it's a very variable number and we do see it from month to month shift up and down based on mix and so from my perspective I think.

That would be one area that was up that was a surprise a bit for me.

Okay.

Speaker Change: I echo Dennis's remarks on that, really no surprises being in this business for as long as we have.

For my I I Echo Dennises remarks on that are really no surprises being in this business for as long as we have.

Yeah.

Okay well great.

Thanks, a lot guys I appreciate it.

Yeah.

Speaker Change: Thank you. At this time, I'd like to turn the floor back over to Dr. Rollins for closing comments.

Thank you at this time I'd like to turn the floor back over to Dr. <unk> for closing comments.

Aaron Rollins: Thank you and thank you for joining us on this call and your interest in Aeroscope Technologies. I also want to thank our patients, our staff, and our surgeons for such a wonderful quarter, their hard work, and we just really appreciate our patients and all of your interest in Aeroscope Technologies.

Thank you.

And thank you for joining us on this call and your interest in <unk> technologies I also want to thank our patients our staff and our surgeons are for such a wonderful quarter. Their hard work and are we just really appreciate our patience and are all of your interest in air scope technologies.

Speaker Change: Ladies and gentlemen, thank you for your participation. This does conclude today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Ladies and gentlemen, thank you for your participation. This does conclude todays event you may disconnect your lines of log off the webcast at this time and enjoy the rest of your day.

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