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SI Bone INC (NASDAQ:SIBN)
Q1 2020 Earnings Call
May 04, 2020, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Ladies and gentlemen, thank you for standing by, and welcome to the SI-BONE first-quarter 2020 operating results conference call. [Operator instructions] As a reminder, today's program is being recorded. I would now like to introduce your host for today's program, Carrie Mendivil, investor relations. Please go ahead.

Carrie Mendivil -- Investor Relations

Thank you all for participating in today's call. Joining me today are Jeff Dunn, president and chief executive officer; and Laura Francis, chief financial officer and chief operating officer of SI-BONE. Earlier today, SI-BONE released financial results for the quarter ended March 31, 2020. A copy of the press release is available on the company's website.

Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. All forward-looking statements including, without limitation, our examination of operating trends and our future financial expectations, which includes expectations for hiring active surgeons, new products, reimbursement decisions, and guidance for revenue are based upon current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements.

Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our most recent quarterly report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2020. SI-BONE disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is only accurate as of the live broadcast today, May 4, 2020.

And with that, I'll turn the call over to Jeff.

Jeff Dunn -- President and Chief Executive Officer

Thanks, Carrie. Good afternoon, and thank you for joining us. I hope you and your loved ones are safe and healthy as our communities continue to be affected by the coronavirus. Before we get into the details of the quarter, I want to take a moment to thank our partners in the healthcare community, all of whom are making extraordinary efforts to care for both COVID and non-COVID patients in these difficult times.

The year started off very strong. And for the first two and a half months of the quarter, iFuse procedures in the U.S. and in Europe outpaced expectations. We attribute the strong growth to the significant investments we made in 2019, including sales force expansion, surgeon training, and education and reimbursement.

However, beginning in mid-March, elective procedures began to be deferred in order to preserve resources for COVID-19 patients and to protect surgical candidates from potential exposure to the coronavirus. During the last two weeks of the quarter, we saw a significant decline in the scheduling of new cases, and 300 scheduled cases were canceled worldwide, including just the case scheduled through the quarter end. As of March 15, revenue growth for the quarter would have been 29%. Accordingly, our first-quarter 2020 performance was impacted.

Revenue for the first quarter was $16.8 million with $15.3 million of revenue in the United States, up 12%, and 14%, respectively, compared to the first quarter of 2019. In the short term, we expect our business to continue to be impacted by the deferral of elective procedures. However, we are confident that most deferred procedures will ultimately return and patients will eventually receive treatment. The robust procedure volumes we saw early on in the quarter confirmed the increasing acknowledgment of the SI joint as a pain generator and one that we can address.

Our teams in the field have done a wonderful job of staying positive, doing what they can to ensure the best possible customer service and continuing to prioritize the safety of our patients, people, and partners. About half of the states have resumed elective procedures, and things are continuing to open daily. We are already beginning to see pockets of optimism for procedures resuming both regionally and on a hospital-by-hospital basis. While we are unable to predict the ramp of iFuse procedures throughout the recovery period, we are prepared for a number of different scenarios and are monitoring the situation extremely closely to ensure that we are there for support as iFuse procedures begin to come back online.

Amidst this pandemic, our priorities are in three places. First, the health and safety of our employees, customers, and patients; second, the conservation of capital to weather this challenging period; and third, sustaining investments across our organizations so that we are well-positioned to support physicians now through the recovery and over the long term. As COVID-19 cases began to rise in the U.S. We took actions and implemented early measures to ensure the protection and well-being of our employees, customers, and patients.

All employees in the Santa Clara office and other office locations have been required to work from home with the exception of those related to order fulfillment and select others based on local restrictions and guidance. When the pandemic took shape, we pushed inventory out into the field so we could fulfill demand. Our critical suppliers are functioning, and we have not experienced any supplier disruptions to date. We are continuing to maintain streamlined shipping, receiving, and other related processes in order to continue providing products to our customers.

In doing so, we have taken essential steps to design and implement specific protocols in order to minimize contact time among employees working on site. We acted quickly to reduce spending in areas not critical to patient care to ensure our financial flexibility over the coming months. While our business will be materially impacted over the short term, we have a strong balance sheet with over $145 million in cash and marketable securities as of quarter end. As we carefully review our expenses, we are making exceptional efforts to preserve our sales force so that we are well-positioned when moratoria on elective procedures are lifted and volumes begin returning.

Over the last few years, we have built an outstanding team of top-quality reps and dedicated rigorous training efforts to ensure their success in the field. We ended the quarter with 62 direct sales reps and 52 clinical support specialists. We believe their strength will be essential in the recovery that follows. Importantly, while we are navigating the challenges of the current environment, we are continuing to sustain our commercial priorities to strengthen our long-term growth opportunity.

At the core of our commercial strategies is our focus on driving iFuse procedure volumes. On our last earnings call, we outlined three ongoing initiatives we are implementing to help us grow our active surgeon base, first, to train new providers; second, to reactivate inactive surgeons; and finally, to continue to grow KOL support for iFuse. To further these initiatives, our sales team is supporting healthcare providers via telephone and online technologies until conditions permit the resumption of more normalized healthcare operations. We are also ramping up our virtual education for both our SI-BONE sales force and surgeon customers to take advantage of the additional time to devote to training.

Our virtual education series has been a very well-received program over the last several weeks. We've completed seven programs to date and have an additional five programs planned through the end of May. The most recent webinar on adult deformity and Bedrock was attended by over 100 surgeons and led by Dr. David Polly from the University of Minnesota.

During the quarter, we also continued to build on significant reimbursement progress throughout 2019 and obtained a positive coverage policy by Health Alliance Plan, a commercial payer in Michigan. Additionally, we continued to make progress in expanding our portfolio of comprehensive sacropelvic solutions. On the last day of the quarter, we received FDA 510(k) clearance for an expanded indication for the SI-BONE iFuse Implant System to support our trauma program. This new indication applies to SI joint fusion in conjunction with the treatment of acute, nonacute, and nontraumatic fractures involving the sacroiliac joint.

We are launching the trauma education program in the United States in the second quarter. I personally have spoken to half a dozen surgeons about this program. Devices used in trauma have evolved little in the last 25 years, and we believe the use of our technology may well improve the outcomes for many patients that have been treated surgically and nonsurgically under earlier treatment paradigms. While additional work in both the lab and the clinic will be required to evaluate evolving treatment options for certain patient subgroups, there is considerable enthusiasm among the thought leaders with whom we are working on this initiative.

We remain in close contact with our customers, our community representatives, our employees, and our suppliers during this period. While the depth and duration of the current challenges are difficult to predict, I believe our mid to long-term opportunity is substantial, and our business is well-positioned financially and organizationally to weather this pandemic. With that, I will now turn the call over to Laura Francis, our chief financial officer and chief operating officer, to provide more detail on our financial results.

Laura Francis -- Chief Financial Officer and Chief Operating Officer

Thanks, Jeff. First-quarter revenue increased by 12% to $16.8 million. U.S. sales provided the majority of this revenue, just over 90%, delivering a growth rate across the quarter of 14%.

International revenue was relatively flat at $1.5 million compared to the corresponding prior-year period. As Jeff discussed, our case volumes dropped in the second half of March, which meaningfully impacted our performance. Gross margin for the first-quarter 2020 was 89%, compared to 90% in the first quarter of 2019. The change in gross margin was due to higher cost of operations to support the growth of the business.

We expect our gross profit and gross margin will continue to be affected by factors impacting revenue and cost of goods sold. Due to an expected decrease in overall demand in the second quarter of 2020 from COVID-19, we anticipate that our operations will run at less-than-normal capacity. Accordingly, certain labor and overhead costs will be expensed as incurred, significantly reducing our gross profit and gross margin. We cannot reliably estimate the extent to which the COVID-19 pandemic will impact our overall demand in the near term, however, we have sufficient inventory, our supply chain dynamics are well in hand and product flow is in good shape.

Operating expenses increased 20% to $26.8 million in the first-quarter 2020, compared to $22.3 million in the first quarter of 2019. The increase in operating expenses was primarily driven by higher employee-related costs due to higher headcount mainly from sales hiring, surgeon training, and stock-based compensation. As Jeff noted, we've taken pre-emptive steps to curtail spending while there is more clarity to the extent and duration of the impact from the pandemic. We've already implemented a number of cost-saving measures, including implementing hiring restrictions, eliminating discretionary spending, reducing executive salaries, reducing capital expenditures, reducing nonessential marketing expenses, and delaying clinical research projects.

We're taking an extremely thoughtful approach to spend and have also identified additional cost-saving levers that could further reduce OPEX amid this uncertain environment. Our operating loss for the first quarter of 2020 was $11.9 million, compared to $8.8 million in the first quarter of 2019. Net loss was $12.8 million or $0.47 per diluted share for the first-quarter 2020, as compared to $9.3 million or $0.38 per diluted share in the first-quarter 2019. Cash and marketable securities were $146.2 million at the end of the quarter.

This balance reflects the $63 million in proceeds from our January follow-on offering. Based upon our current operating plan, we believe that our existing cash and marketable securities will enable us to fund our operating expenses and capital expenditure requirements through at least the next 12 months. We withdrew our 2020 revenue guidance on April 2nd due to the evolving environment and continued uncertainties about the impact of COVID-19. We remain unable to estimate the magnitude or duration of specific impacts on our business.

And for that reason, we will not provide an updated outlook until the impact of COVID-19 becomes sufficiently clear. Looking to the next several months, we expect that our business will continue to be impacted by the deferral of elective procedures. As Jeff mentioned, about half of the states in the U.S. have resumed elective procedures.

We're planning for a number of different scenarios of what iFuse volumes may look like over the next several quarters. That said, as a company, we're well-prepared operationally, financially and strategically to navigate through this challenging period. I'll now turn the call back to Jeff for closing comments.

Jeff Dunn -- President and Chief Executive Officer

Thank you, Laura. Before closing, I want to thank our team at SI-BONE for their efforts and strength through these difficult times. I'm incredibly proud to be part of this team and believe that we will come out of this period even stronger as a company. While the immediate future is unclear, I'm confident that SI-BONE is well-positioned to navigate these challenging times.

The underlying fundamentals of our business remain strong. Through mid-March, we saw record procedure volumes resulting from the significant investments we made across our commercial organization to develop this market. And as Laura mentioned, in the near term, we are taking a very disciplined and thoughtful approach to financial decisions and capital allocation priorities. As we continue to do our part to battle this pandemic, we remain fully committed to support patients, customers, and our communities.

Stay safe and thank you for joining us. We will now open it up to questions. Operator?

Questions & Answers:


Operator

[Operator instructions] Our first question comes from the line of David Lewis from Morgan Stanley. Your question, please.

David Lewis -- Morgan Stanley -- Analyst

Good afternoon. Thanks for taking the questions. Jeff, a few from me this afternoon. The first is just I want to kind of get into COVID in a second here.

But obviously, the first two and a half months of the quarter, by our math, you had at least five, seven points momentum acceleration. I just wonder as you think about where the regions of the country that was strong, any sense of what the primary drivers were? How much was driven by new commercial expansion, new payer contracts? Or frankly, was it more national, which should be sort of more indicative that the benefit was tied to better physician reimbursement? Just any color in the first two months of the year in terms of the inflection would be great. And then I have a couple of follow-ups.

Jeff Dunn -- President and Chief Executive Officer

Yes. Sure, David. It really was absolutely all across the country for the first two and a half months. And that growth rate and that strength felt great.

And obviously, we had a lot of cancellations in the last two weeks. And those numbers, that 29%, didn't even include bookings that might have come in. So there really was good strength all across the country. And I think it's no different than what we saw in the previous quarters, things getting slotted in the five or so drivers of the business, more salespeople, more people trained, more surgeons trained, more reimbursement.

And of course, the surgeon payment didn't hurt. And we were really firing on all cylinders. It's a little bit different. As we get into COVID, we are seeing pockets, and I'm happy to answer that if that's where you want to go, where there's strength in the country that's coming back other than other areas.

David Lewis -- Morgan Stanley -- Analyst

OK. Let me just shift to COVID for a second here. And kind of maybe a couple of part question here, Jeff. But people are generally doing spine procedures as being fairly deferrable than some emergent procedures.

How do you think about SI-BONE kind of relative to traditional spinal procedures? And maybe just some more color on sort of what are some of the characteristics on where you're seeing these pockets of strength? I know you have a very significant outpatient mix. And I wonder how much of that is participating. Are you seeing more procedures shift to the outpatient market? So just sort of where you are from an electric perspective relative to spine and sort of what are the characteristics of some of these places you're seeing recovery?

Jeff Dunn -- President and Chief Executive Officer

Well, I think, David, first of all, if you talk to surgeons out there, I think most, maybe a big percentage, say, this is something they love to do. It has tremendous success rates. The patient satisfaction is tremendous. So I think it's a very popular surgery, and it has a great impact very quickly.

And now with the payment, I think it's a very attractive procedure from that aspect as well. And so I think we certainly are going to see more procedures that are outpatient as a percentage over the last number of weeks. We've seen more in AFCs, but I think that's more a result of slower numbers in the hospitals themselves. So the percentage certainly has gone up from what we talked about traditionally at 10% out in AFCs.

As to what we're seeing now, the last week, we certainly are seeing procedure volumes come back on with the opening of -- I think we're at 25 states as of today with Florida opening up, and that's more than 70% of the potential volume, a little bit higher than that of our traditional volume across the country. So it's hard for us to parse out what percentage of those cases are actually cases that were canceled in March, those hundreds of cases or their new procedures. So that's a mix that's a little more difficult. But certainly, over the last five, six days, we've seen strength coming back to the business.

David Lewis -- Morgan Stanley -- Analyst

OK. And just lastly, Jeff, from me. Just international, that number actually fared better than expected, and that may be just relative to your exposure in Germany where procedures have been a little better. But just your thoughts on kind of international and any recovery you've seen outside the U.S.? And I'll jump back in queue.

Jeff Dunn -- President and Chief Executive Officer

Sure, David. So, yes. We're seeing strength in Germany. Prior to, call it, March 15th, we saw strength in Germany and the U.K.

and in France, so some of the bigger countries. As to the COVID effect, we are seeing Germany come back; the U.K., as I'm sure you've heard from other companies, as well as France is slower at this point. And we'll just have to see how that develops from an opening standpoint.

David Lewis -- Morgan Stanley -- Analyst

Great. Thanks so much, you all.

Operator

Thank you. Our next question comes from the line of Bob Hopkins from Bank of America. Your question, please.

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

Thank you. Good afternoon. Jeff, just curious, I'm happy to hear you say in that last five, six days, you've seen some improvement. Sorry if I missed this, can you give us a sense the last week? Are you guys -- is the business down 30% or 60%? Just some sense as to what the year-over-year growth rate looks like the last week or so.

Jeff Dunn -- President and Chief Executive Officer

Yes. The numbers going into May year over year, so what I'm talking about is the first day of May, how bookings look like, how big the backlog was going into May compared to a year ago was not hugely down from a year ago. So it's hard to say how much of that is those cases that came back on that were canceled again. But April was quite honestly very, very rough, down very significantly, but I think we're seeing a nice recovery in May.

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

OK. And then one other question I wanted to ask was, obviously, for a period of time here, you've been unable to be out in the field in a regular sense and probably not able to kind of be out there kind of developing your market, which I know is a huge part of the story. How much do you think that sets you back, the sort of inability to go out there and tell your story just over the last month or month and a half?

Jeff Dunn -- President and Chief Executive Officer

I don't think it's that much, Bob. I think the sales force is anxious to get back to work. They are getting back to work in the middle of the country. And in places like Texas, we're seeing cases come back on very strongly.

I think the surgeons, and I've talked to quite a lot of them, they're very anxious to get back to work. And as you might recall, we went deeper as a team into the accounts that we have and increased the number of cases per surgeon last quarter. I don't remember the exact number. I think it was 3.14 or 3.41 or something like that.

Laura could probably help me there. But I honestly don't think that this 1.5 months of sort of being on the sidelines has any material effect over what we think about the business midterm and longer term. I think there's greater realization. We've seen -- this is a problem.

There are surgeons actually who don't have time to learn because they're so busy in their practices. And one of the things that we have seen is the sales folks are communicating with these surgeons. The webinars that we had, and I mentioned one earlier where we had over 100 surgeons in the adult deformity webinar for an hour, that actually brought in some surgeons who traditionally just haven't had time to meet with our people. So the world is changing a little bit.

And so there are some positive things around some of these education initiatives. And I find that the surgeons are staying on the phone with me and staying on I suspect with the salespeople a little bit longer because they have a little more time on their hands. So ours is a story, as you know, Bob, about understanding education, differential diagnosis, including the SI joint. And I think that momentum continues.

And I think that these webinars and the salespeople reaching out to these surgeons and the sales management is continuing that momentum. Well, clearly, we didn't wish for this. We were, as I said, firing on all cylinders and been a very rough period for everyone. But I don't see anything different about the opportunity for the business in the future.

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

What do you think -- last quick question. What do you think better might have done in the quarter? Without COVID, how is that trending?

Jeff Dunn -- President and Chief Executive Officer

It's getting a lot of traction, particularly from an education standpoint. I mean I have to tell you, Bob, when Tony Recupero told me that there were going to be over 100 surgeons on the adult deformity webinar, that was way more than double what I thought would be on that webinar. So I think we have a really good strategy in place. I think that there has been, as I've said before, pretty lousy development from a technology standpoint in the SI joint before we came on the scene.

I think the adult deformity results we're seeing and I just got a report on revision rates, which we track, and they're terrific on the SI joint, and they're unbelievably good on the adult deformity cases. And then thirdly, I think that the whole trauma space, which we're just starting to enter, has had pretty substandard technology development. And with our technology now entering that, we've seen a tremendous interest there. And so I think all three areas are going to contribute and be a force multiplier with each other for our company.

So I didn't quite tell you exactly how many adult deformity cases we did, which are -- but we are seeing strength in all three of those areas.

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

Thank you very much.

Jeff Dunn -- President and Chief Executive Officer

You're welcome, Bob. Good to talk to you.

Operator

Thank you. Our next question comes from the line of Kyle Rose from Canaccord. Your question, please.

Kyle Rose -- Canaccord Genuity -- Analyst

Great. Thank you very much for taking the question. I kind of wanted to dovetail a little bit on some of the previous questions from David and Bob. Jeff, when I think about the sales trends through April, I think there's been at least our survey suggests anywhere from a 70% to 80% decline in procedure volumes for the month of April.

But you had some encouraging commentary about the 50% of states opening back up in May, and those represent about 75% of your business. So maybe kind of help us frame how we should think about that month-over-month improvement when we get into May and June. Does that go from 70% to 30% to 40% decline? Just trying to understand on a relative basis how we should think about the business trending.

Laura Francis -- Chief Financial Officer and Chief Operating Officer

Jeff, maybe I can help out on this particular question because I do have some data on it. Kyle, as Jeff had said, the month of April looks like it was a trough. And what we experienced was a decline, compared to our plan of over 80% in terms of case volumes in the United States. So we were off by over 80% on cases in the month of April.

But when we look at May bookings, and it's just looking at May 1st and where the bookings are in the United States for the whole month of May, this is our primary leading indicator that we use to understand what the month is going to look like, a typical case will be booked two to three weeks prior to the time that it's performed. And if we compare that metric to last year, we're at approximately 80% of last year's bookings on the same day as of May 1st. So if you compare that to more of a plan, we would be more in the 60% of plan or 40% down from where we would have anticipated. So a big jump from 80% down in April.

It looks more like 40% down in May at least with that one indicator.

Kyle Rose -- Canaccord Genuity -- Analyst

That's very helpful. And you also touched a little bit on the trends in the outpatient in the AFC setting. I just want to make sure I heard you correctly. Jeff, did you say that 10% of your historical business is in the AFC? And then I just wondered if you could break out the mix with respect to outpatient versus inpatient.

And how that may have changed even in the first quarter to date with a better physician reimbursement.

Jeff Dunn -- President and Chief Executive Officer

Well, Kyle, it has traditionally been 10%, 12% in AFCs. We don't have the exact number in the hospitals, i.e., both the outpatient and inpatient. But certainly, we think that about 80% plus of the surgeries that are done at hospitals are actually outpatient procedures. As to the change in that, there really wasn't much change through the first two and a half months in the first quarter.

In the last two quarters, there wasn't much done at all. But in April, we certainly saw the AFC numbers. Even though we were working off a smaller base, as Laura alluded to, with being down 80%, more were done in AFCs, a significantly greater percentage was done in AFCs. But I think that's really a little deceptive in the sense because the number that was actually done in hospitals was quite small.

Kyle Rose -- Canaccord Genuity -- Analyst

OK. Thank you very much for taking the questions.

Operator

Thank you. Our next question comes from the line of Kaila Krum from SunTrust. Your question, please.

Kaila Krum -- SunTrust Robinson Humphrey -- Analyst

Great. Hi, guys. Thanks for taking your questions. So you've mentioned that you're curtailing operating expenses as you navigate COVID.

And you've talked about the hiring restrictions and delaying clinical projects. So can you speak I guess to how significantly those plans have changed? And just help us understand or give us comfort that if there were any major changes, how do we think about your long-term growth from here? Is there any impact to your confidence there?

Jeff Dunn -- President and Chief Executive Officer

So why don't I just talk in general and then Laura can add on here, Kaila. As we talked about in the past, variable expenses, some of those were cut naturally obviously with conventions and annual meetings and those kinds of things. And I don't think that's going to change all here. I don't think those expenses are coming back, and they're not in our control.

So I think that expense, you have to sort of take them one at a time. The expense was related to surgeon training will go up, and we will support whatever a surgeon wants to get trained and slot those back in as surgeons are allowed to be trained. Within that training area, I have alluded in the past to a new training system that we're developing, which is an advanced training system that can be used that will be able to train surgeons on different kinds of anatomy. This is a proprietary system.

This will allow us to do the surgeon trainings more locally, which means surgeons won't have to travel, and we'll be rolling that out in the second half of the year. So actually from an expense standpoint, I'll let Laura comment on that, but there's some capital equipment expenditures in there. But there'll be travel expense changes within that whole program. As to variable expenses and marketing, we have cut back quite a bit on things like Facebook and those kinds of things.

But we have been doing webinars. And I think as things evolve over between now and the end of the year, we'll begin to ramp that up as we see fit. And there will be a little more change in the percentage of money that we spend on direct-to-patient marketing versus going to these annual meetings because that number is not, as I said, going up. Laura, anything you want to add to that?

Laura Francis -- Chief Financial Officer and Chief Operating Officer

I think probably the most important thing to add based on your question, Kaila, is we did not make any changes from a people perspective with the exception of a hiring freeze and management salary reductions. We have spent the last 18 months since we went public building a quite extraordinary group of people, both at our headquarters operation, as well as in the field, and we were seeing a significant acceleration of our revenues. And so our goal was to keep our people intact and supported during this difficult period so that we could come out of this pretty rapidly. And I just talked a little bit about what happened in April, which was a low point for us, but May is starting to come out of this, at least based on early indicators.

And we have the people in place with the relationships with our surgeons in order to get those cases going again, and we have the support staff in order to drive sales. In addition, we're keeping our project prioritizations in place as well, major projects that the company was working on, we are continuing to push forward on those. And so the real focus was on expenditures that would not have a significant impact long term on the business so that as things return, we're ready to jump on the opportunity and reaccelerate the business. Yes.

And from a percentage perspective, when we were looking at variable expenses, we tried to cut out 10% to 15% of operating expenses with those variable costs that we took out. And so we went through every single expense, and Jeff talked about quite a few of those already. We also looked at working capital just to make sure we were being prudent with our inventories and our payables and our receivables and all of those items. And then Jeff also mentioned that we looked at capital expenditures, for example, not purchasing certain items that we had intended to or just pushing those out a little bit.

So we went through a full list of items and made some decisions to be both prudent from a capital perspective, but also make sure that we did not impact the long-term opportunity for the business.

Kaila Krum -- SunTrust Robinson Humphrey -- Analyst

That makes a lot of sense, Laura and Jeff. I guess just as a follow-up to that, you're still continuing your efforts with trauma. Can you just give us a little bit more detail on your efforts there? And how you're in fact planning to launch into that space?

Jeff Dunn -- President and Chief Executive Officer

Well, the first thing, obviously, Kaila, is we use this time with our field organization to train them up in the trauma area. So that actually was well-spent time. We've implemented a whole new training system called Brainshark, which allows us to push out educational content to the field, and it's a paced learning, tracked learning. And so I think the team actually has had the opportunity to come up and understand the opportunities and get trained in the trauma space more rapidly than they might have if they were at work every day.

So Tony and the team along with this training team are most of the way through a lot of that, and it's launching now. And certainly, we're starting to see some nice trauma cases. And so that actually worked out OK in that sense. And there are going to be some investments in the clinical area.

We've seen a few surgeons step up and say, we want to do our own study because we just said we're going to hold on some of these clinical investments for a few months. And so I think we're going to see some doctors validate some of this on their own. And so we're pretty excited about the trauma space and what we see going on and more to come on that front.

Kaila Krum -- SunTrust Robinson Humphrey -- Analyst

Great. Thank you.

Jeff Dunn -- President and Chief Executive Officer

You're welcome.

Operator

Thank you. Our next question comes from the line of Dave Turkaly from JMP Securities. Your question, please.

Dave Turkaly -- JMP Securities -- Analyst

Thanks. So just wondering, Jeff, if you could remind us, the average age of the patient treated. And then I think you talked a little bit about CMS versus private payer mix last quarter. But I guess what I'm trying to get at is the age of the patients.

It seems like some of the elderly may not be as willing to be in the hospital, and I know that still is kind of a majority of the procedures today. So if you could just remind us where that age stands today and then the mix between private or CMS.

Jeff Dunn -- President and Chief Executive Officer

Sure. Happy to, David. So we have patients that are 20 to 80 years old. The average patient is 50 and two-thirds are female.

So that's the landscape. The percentage of patients in 2019 that were Medicare patients was a little shy of 50%. We certainly expect that to change. And we expect over, call it, the next year or two for 80% of our patients to be non-Medicare patients.

So the commercial side to increase.

Dave Turkaly -- JMP Securities -- Analyst

Makes sense. I'm glad to hear that you're going to have that kind of -- those numbers. I guess the other one I had quickly was in terms of the procedures, what percent would you say today that your sales force or the assistants are actually in live? I guess you mentioned some of the places bouncing back, but I know rep access has been a problem with some hospitals. So I'm imagining that some of your accounts don't need somebody there all the time, but any thoughts on that as places begin to reopen?

Jeff Dunn -- President and Chief Executive Officer

Yes. David, as you know, virtually all of our procedures in the past have had our reps in there. We certainly hope we can continue on that front. They add value.

We are adding training capability to actually, I think, train the surgeons better so they can practice on male patients, female patients, dysmorphic patients, etc., where we haven't had some of that capability, we'll roll that out. We view our sales force as highly skilled and adding value. As you know, some of these surgeons do just a few procedures in a quarter. And you might have a sales rep who've seen an order of magnitude larger than that.

So they absolutely add value. As to actual access, I think it's too early to tell exactly how that's going to play out here. I think it's going to certainly see reps and I get emails from reps with pictures of them in their car on the way to work these days and say, I'm going to do a case, Jeff. And I've asked them to send me those pictures because I want to know that that's going on.

So there are certainly a few instances where we've seen reps that haven't been allowed to go in. But at least what I've heard so far, and I may want to get back to you on this after talking a little bit more with Tony, but I think in almost all the cases, the reps have been allowed into the cases that we've done in the last sort of week or so.

Dave Turkaly -- JMP Securities -- Analyst

Thank you.

Jeff Dunn -- President and Chief Executive Officer

You're welcome.

Operator

Our next question comes from the line of David Saxon from Needham. Your question, please.

David Saxon -- Needham and Company -- Analyst

Yeah. Good afternoon. I guess just one on the recovery. What have you been hearing from doctors about their capacity if they reopen and how long it might take to work through the backlog? And then you mentioned 300 cases were pushed out.

I was just wondering what portion of those do you think will be ultimately rescheduled?

Jeff Dunn -- President and Chief Executive Officer

So, David, as to the surgeons' capacity, I think that they can go up 20% or so from where they would normally be. The surgeons I've talked to and I know the sales force have talked to because I've heard this in multiple different places is, I think everyone fully expects in Q3 and particularly in Q4 as the country hopefully fully opens up to work Saturdays and work a lot of evenings. And I think our sales force is super dedicated and not just willing to go back to work, they're excited to go back to work and get into the game and help these patients. And so I suspect we're going to see a bunch of Saturday soccer games missed, and we're going to be in the operating room pretty often.

And remind me what the second portion of your question was.

David Saxon -- Needham and Company -- Analyst

You mentioned 300 cases were pushed out. Just wondering how many of those -- yes.

Jeff Dunn -- President and Chief Executive Officer

I suspect it's hard to say. But I wouldn't be surprised if 95% of those cases come back on the books. I don't think that a lot of people that are ready to go to the operating room for three days is just front. I think these people are in severe pain, and they're convinced and their surgeons are convinced that they can be helped in a significant way.

And so I don't think we're going to see a lot of loss there. I think it's more a question of when as opposed to if. I think in certain places like the Northeast where we're going to see and I think all companies are going to see a lower recovery of the surgical rates. Those ones are going to take longer to come back.

Those places may not get back to normal to Q4 or Q1. I don't know. I'm not the Oracle here. In that sense, I don't think anyone is.

In places like the South, in Florida, in Texas, and some of these other places, I think you're going to see much, much faster recovery in those 300 cases or the portion thereof there in those particular geographies should come back pretty fast.

David Saxon -- Needham and Company -- Analyst

OK. Yes. That's helpful and encouraging. And then I guess my second question is, I mean, previously, you've talked about the decorticator and the iFuse Bone and that as a kind of a move to attract new surgeons.

Just wanted to hear up through mid-March how those products were doing in terms of bringing new active surgeons.

Jeff Dunn -- President and Chief Executive Officer

They're -- I think that we're very different from every other company that's competing in this space in the sense that we have a full bag. And so absolutely, new surgeons are coming on. I think we've got a couple of big things in our pocket that will come, call it, by a year from today or so in that kind of time frame, and we're going to add to our strength there. So the strategy is enter all three of those markets with the SI joint fusion space as the foundation of the whole company, but expand out in the trauma and adult deformity spaces to increase the awareness and increase the revenue, and then bring these other products so that we're even more competitive in the next year.

David Saxon -- Needham and Company -- Analyst

Great. Appreciate the color.

Jeff Dunn -- President and Chief Executive Officer

You're welcome.

Operator

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Jeff Dunn, president and CEO, for any further remarks.

Jeff Dunn -- President and Chief Executive Officer

Sure. Just a quick thank you for joining today. Obviously, challenging times. I honestly feel pretty good about how the team has held together.

In fact, I feel great about how the team has held together and are excited to get back to work. And I hope all you guys and gals out there are safe and the families are healthy and look forward to getting back to whatever the new normal is in the not-too-distant future. So thanks again for joining.

Operator

[Operator signoff]

Duration: 53 minutes

Call participants:

Carrie Mendivil -- Investor Relations

Jeff Dunn -- President and Chief Executive Officer

Laura Francis -- Chief Financial Officer and Chief Operating Officer

David Lewis -- Morgan Stanley -- Analyst

Bob Hopkins -- Bank of America Merrill Lynch -- Analyst

Kyle Rose -- Canaccord Genuity -- Analyst

Kaila Krum -- SunTrust Robinson Humphrey -- Analyst

Dave Turkaly -- JMP Securities -- Analyst

David Saxon -- Needham and Company -- Analyst

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