Good day and thank you for standing by. Welcome to the TELA Bio Third Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the prepared remarks, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Louisa Smith.

Thank you, Operator, and good afternoon, everyone. Earlier today, TelaBio released financial results for the third quarter ended September 30th, 2026. A copy of the press release is available on the company's website. Joining me on today's call are Heather Getz, Chief Executive Officer, Jeff Blizzard, President, and Jim Hagen, Senior Vice President of Strategic Commercial Operations and Marketing. Before we begin, I'd like to remind you that during this conference call, The company may make projections and forward-looking statements regarding future events. We encourage you to review the company's past and future filings with the SEC, including without limitation, the company's quarterly reports on Form 10-Q, which identify the specific risk factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include without limitation, statements regarding product development, pipeline opportunities, sales and marketing strategies, and the impact of various additional risk factors as identified in our regulatory filings. Heather will begin with the Q3 results and the changes made to strengthen TelaBio. Jeff will discuss the commercial performance, and then Heather will finish with review of the financial results in more detail before we take your questions. With that, I'll now turn the call over to Heather.

Good afternoon, everyone, and thank you for joining us. Last week marked my 90th day as CEO of Telebio, and I want to use this time not just to walk through our Q3 results, but to share what I've learned, what's already in the process of being changed, and where we're headed. When I joined in August, I made a commitment to our board, our employees, and all of you that I would listen first, but act swiftly to stabilize the company and extend our runway. Over these past three months, I have done just that. I've met with surgeons, investors, and employees across the organization. Three things became clear. First, we believe our core product portfolio is best in class at providing both value and performance and is supported by robust clinical data, even more than I originally appreciated. I will be discussing today additional evidence of Ovatech's outstanding clinical profile which was issued recently. Second, our capital allocation needed to be much more focused. We've been spreading investments across too many initiatives and too quickly without clear prioritization. Third, when we adjusted our go-to-market strategy late last year, we created some gaps that also need to be addressed. The good news is that we have already made meaningful progress on addressing these items as you will hear today. I'll start with the $17 million cost reduction plan commenced on September 1st. The program was intended to preserve capital while maintaining investment in our core growth priorities as well as product innovation. We intend to translate the lower cost structure into reduced cash consumption as we improve commercial execution. Second, on October 5th, NASDAQ notified us that we had regained compliance with its minimum bid price requirement and Tela Bio will remain listed on the NASDAQ global market under the symbol Tela. Importantly, as disclosed following our October 8th special meeting, we do not intend to implement a reverse stock split at this time but have the option for 12 months if so needed. We implemented an adjusted go-to-market strategy that centers our commercial resources on selling the whole bag with a focus on winning complex, higher ASP procedures, as well as targeted selling and other segments that leverage access and opportunity. To do this, we aligned all of our resources that touch the customer, including medical affairs, strategic contracting, and sales operation. We enhanced Field Training of those clinical and sales processes, and we updated our sales incentive structure to reward both retention and growth. While I believe we will see sequential improvement in Q4, this is not a one-quarter fix. It is a multi-pronged, multi-quarter process. I am proud of how the team navigated the third quarter, selling against the continued practice of anti-competitive contracting and bundling in hospitals, overcoming the disruption from the organizational realignment, as well as a challenging market dynamic in which many hospitals and other medical device companies reported that elective procedures were down. Despite these headwinds, we finished Q3 with $19 million in revenue. We delivered sequential revenue and unit growth in the U.S. hernia portfolio, year-over-year volume growth in the U.S. hernia portfolio, and continued year-over-year growth in Europe. These results are encouraging signs of our portfolio's strength and our team's commitment. We also recognized that PRS remains below where it needs to be, and we believe with our recently fine-tuned sales strategy, we will return to previously strong adoption rates in the coming quarters. To be clear, there is no issue with the product, but changes need to be made on how we are addressing the market. Jeff will provide specific details in his commentary about our plans to grow PRS sales. Clinically, we continue to validate the strength of our portfolio with four new peer-reviewed publications and podium presentations on both Ovitex and Ovitex PRS, demonstrating Thank you for joining us. despite being used in patients with increased risk factors and comorbidities. Another was the publication of our largest PRS study to date that has been accepted for publication in the Plastic and Reconstructive Surgery Journal. This study demonstrates no statistical differences in major infections or operative complications while showing lower odds of seroma formation. I also want to recognize our engineering, quality, and regulatory teams for the FDA 510 clearance of the Leora monofilament scaffold. Leora is a fully reabsorbable surgical mesh for soft tissue reinforcement and our first implant fully developed in our Malvern cleanroom. Our ability to develop and produce a product in-house creates a foundation for greater ownership of the path from product design through manufacturing. We are proud of this achievement and the capabilities it represents. We are taking a disciplined approach to the next steps with Leora. We will provide you with an update to the commercial plan in early 2027. As you have just heard, we have made significant operational progress across the organization in a relatively short period of time. Going forward, our strategy depends on disciplined execution, We are doubling down on our core products and selling our whole bag in areas where we have opportunity while continuing to add access at the GPO, IDN and hospital level. Every dollar of capital needs to be allocated to where we will see the highest ROI. Now I'll turn the call over to Jeff to discuss our commercial results in more detail.

Thank you. As Heather just highlighted, Our third quarter results demonstrate meaningful progress and positive momentum across our global commercial organization. At $19 million in total sales, the U.S. revenue was $15.4 million, while European revenue ended at $3.6 million. Breaking down the $15.4 million in the third quarter, our U.S. hernia revenue was up slightly sequentially, while volume grew both year-over-year and sequentially. Liquifix also delivered its strongest performance to date, setting a new TeleBio quarterly sales record with its customer base expanding 60% year-to-date. As discussed in previous calls, a gap has been created between unit and revenue growth as continued adoption and minimally invasive and robotic hernia repair has shifted demand towards smaller product sizes. In Q4, we expect this gap to continue to narrow as year-over-year comparisons stabilize the product mix. While we do not anticipate immediate convergence, our revenue growth should be more in line with our unit growth. Turning to plastic and reconstructive surgery, we were able to slow the decline and refocus and retrain the sales team. Ovitec's PRS revenue was down 20% year-over-year and 6% sequentially. It is important to note that the decline in PRS revenue has been concentrated in a limited number of markets rather than broadly across the organization. In 2026, in addition to some turnover, we had several key surgeons experience personal or professional circumstances forcing them to step away from their practices which adversely affected procedural volumes. We are supporting a renewed focus on PRS with enhanced product and procedural training alongside expanded medical office capabilities to provide deeper clinical and educational support to both our sales teams and surgical customers. Collectively, these actions are designed to strengthen commercial effectiveness, deepen surgeon engagement, and rebuild momentum in this strategically important part of our business. Given the longer sales cycle in PRS and the more concentrated surgeon community, the progress we have made in several high-volume centers have not yet offset the declines. Shifting to our international business, in Europe we've maintained strong momentum, delivering double-digit year-over-year growth at 18%. This year-over-year growth was driven by higher-value complex cases, particularly in the UK. In late September, we hosted 120 European surgeons in Madrid for a two-day educational event entitled Advancing Reconstruction. This program brought together several multiple surgical specialties to exchange clinical experiences, share best practices, and explore innovative approaches to improving patient outcomes, all challenging the notion that hernias are a chronic disease. Innovations in surgical techniques and Ovitex products provide surgeons with a greater opportunity to achieve a successful outcome during this initial procedure. Ultimately, the goal is to deliver durable repair minimize the risk for recurrence, and reduce the need for subsequent interventions. We believe initiatives like these strengthen our global surgical community and support long-term portfolio growth. I'd now like to touch on our initiatives and strategic contracting. While we continue to face market access barriers from large competitors, we're not sitting idle. Our field is making progress in developing clinical champions, and our contracting team is complementing these efforts in establishing Obatex agreements site by site. While this process takes longer, these practices are necessary to get Ovitex used within these hospitals and their health systems, given the contracting environment in the U.S. In parallel, TELA will continue to pursue a national agreement to broaden access and simplify contracting. The focus remains on translating access into hospital approvals, physician adoption, and sustained utilization. As I close, I want to emphasize the most important takeaway from Q3. The resilience and execution of our commercial team. In Q3, we constructed a data-driven plan that built around our top markets, strategically positioned our team in the areas with the greatest opportunity to win. By aligning territories with contract access, surging partnerships, and high potential programs, we have concentrated our talent to where we have the clearest path for revenue growth. This disciplined approach ensures that our strongest commercial resources are deployed where we have access, relationships, and opportunities. all while preserving continuity across key accounts. In the midst of these changes to our organization, we delivered sequential US hernia growth that accelerated post-realignment, achieved a record quarter for Liquifix, and posted another quarter of double-digit European growth. These accomplishments reinforce our confidence in the direction of our entire commercial organization. Heather, I'll turn it back to you for the financial review.

Thank you, Jeff. As we discussed, revenue was $19 million in the third quarter of 2026, a decrease of 8% compared to the third quarter of 2025. The decrease in revenue was driven by a decline in Ovitex PRS of $2 million, partially offset by growing international sales. U.S. hernia revenue was down slightly year over year, and we saw sequential increases in the U.S. hernia products, both volume and revenue. Growth profit was 12 points. Thank you for joining us. Total operating expenses excluding other expenses was $17.6 million in the third quarter of 2026 compared to $21.4 million in the third quarter of 2025, a decrease of 17.8%. Loss from operations was $7.3 million in the third quarter of 2026, a $300,000 improvement compared to 2025, adjusted EBITDA loss was $3.4 million in the third quarter of 2026, an improvement of 40% year-over-year and 56% sequentially. These improvements can be attributed to our realignment in the third quarter, which totaled $17 million of annualized savings across the organization, including a targeted headcount reduction of approximately 20% and the streamlining of external resources. while preserving our ability to invest in our core growth priorities and product innovation. We ended the quarter with $22.7 million in cash and cash equivalents. Also to note, Perceptive agreed to suspend minimum revenue covenant testing for two quarters under our credit agreement. That covenant will not be tested for the quarters ending September 30th and December 31st, 2026. We appreciate their support as we execute our cost reduction program. This consent is specific to the minimum revenue covenant. We continue to manage the business against our other obligations under the facility. Before we open the line for questions, I want to again thank our employees for the important work they do every day to make Ovitex an option to patients around the world. The U.S. sequential hernia growth and the continued European growth are encouraging, particularly given the organizational changes during the quarter. We built on our strong clinical foundation with the four peer-reviewed publications detailing Ovitex and Ovitex PRS's outstanding performance. The LEORA clearance is another achievement we can be proud of. In addition to these achievements, we have taken meaningful steps to reduce operating costs and strengthen TelaBio's foundation, extending our runway. Our objective moving forward is to convert our operational and commercial progress along with our lower cost structure into a more durable business model. The renewed energy and commitment I have seen is contagious, and I am proud to be a part of the mission to build the best in class solution for soft tissue repair. With that, we are ready to take your questions. Operator, please proceed.

Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. We do ask that you please limit yourself to one question and one follow-up. Our first question comes from the line of Frank Takanan of Lake Street Capital Markets. Your line is now open.

Thank you for taking the questions. I was hoping to start with a bigger picture question off the bat. Obviously, you're only 90 days in, Heather, but I think a key question many investors are asking is, what can the growth potential of this business be? I mean, previously, I think we thought of this, the potential at definitely a 20% plus growth profile over time. I'm curious now that you've been there for a little bit, what kind of growth company do you think this can become? Not necessarily looking for a timeline once that's achieved, but maybe a longer term thought process of the growth profile this company can carry.

Let's hold for one moment. Speakers, we're not hearing any audio from your line. It's all. There we go. Your audio is back.