The Embla Report Exposes a Massive Prosthetics Opportunity with Joris and Brent

In this episode, Brent Wright and Joris Peels break down the 2025 Embla Medical Annual Report and explore what it reveals about the future of the prosthetics and orthotics industry. While Embla continues to post steady growth and strong profitability, the discussion centers on larger questions: Is the industry's future in acquiring more clinics or creating new products and markets? The conversation examines Embla's expansion into patient care, neuro-orthotics, and bracing, while highlighting a startling statistic that only 30-40% of new amputees worldwide receive a prosthetic solution. Brent and Joris debate whether the greatest opportunity lies not in serving existing reimbursed markets, but in developing affordable solutions for the millions of underserved patients globally. Along the way, they discuss innovation, 3D printing, AI, reimbursement challenges, acquisitions, and what it will take for the next generation of O&P companies to move beyond simply growing revenue and toward truly transforming patient care 

Special thanks to Advanced 3D for sponsoring this episode.

Transcript

Season Welcome And Mission

SPEAKER_00 0:01

Welcome to season 13 of the Prosthetics and Orthotics Podcast. This is where we connect with experts in the field, patients who use these devices, physical therapists, and the vendors who help bring it all together. Our mission remains the same: to share stories, tips, and insights that help improve patient outcomes. Tune in and join the conversation. We're glad you're here and hope it's the highlight of your

Independence, Disclaimers, And Real Impact

SPEAKER_00 0:25

day.

SPEAKER_02 0:25

Hello, everyone, and welcome to another edition of the Prostetics and Arthotics Podcast with Brent Wright. How are you doing, Brent?

SPEAKER_03 0:32

Hey, I'm doing well, yours. You know, on the screen here, this is not an endorsement. We don't have a new sponsor or anything. But uh we have the maybe we should ask them. I'll send it away. Now's the time. I I guess if we find it depends on what we find, huh? Or what we say. Yeah, exactly. There isn't a benefit of being independent for sure. Yeah, no surprise uh with this title slide that we're going to be talking about the Embla Medical Annual Report. But uh, you know, before we before we hop in, speaking of just like being independent and such, I know we say this all the time, but it really is neat to be able to talk to a myriad of things in orthotics and prosthetics. And I mean, well, I would say we have a filter, and we're not the filter is more like positivity, like, hey, yes, you need a clinician to be involved in your care. You can't do this necessarily in your basement. We need to work on education, we need to work on how we are going to 3D print this stuff. We got to work on strength. Like, it's not like we're bashing, it's just like, hey, this is what we need to do, and this is where we need to, where we need to go. But I think there is a, you know, a beauty in being able to, you know, give our unfiltered opinion. But I guess this would also be a good time to say that uh we are not trained lawyer professionals. Your mileage may vary and all that illicit.

SPEAKER_02 2:00

You would be stupid to to take our investment advice. I think I told a friend of mine to sell Apple stock. I think it cost him approximately a house. Yeah, and I've since then I never have given out investment advice to anyone and will never ever do so again. Yeah. And uh so so please don't. And and another thing, like I actually, yes, it's wonderful to be able to talk about this stuff. And actually, I was kind of a bit kind of, I don't know about nearly choked up, kind of really very in awe of what we've built here, because with our last episode, I don't know if if which episode is gonna go out when, but with our last episode, like actually, you know, the another previous episode being used by someone to inform her about a really momentous life-changing decision. That was like really like wow for me. That was like a really wow moment that somebody would find us that useful, you know, for a really, really important decision for their life. Uh so I was like a little bit kind of like wow, you know?

SPEAKER_03 2:51

Yeah, I mean, that's almost like the investment advice, right? That you gave. And people were people were taking it our uh discussion uh with with other people and loved ones chiming in on the decision. So that I am glad you brought that up because I didn't think about it that way, but to to inform a decision based on what's like I'm not saying we, you know, it's like it was like literally she used it as background information for her to make her decision.

SPEAKER_02 3:14

I thought that was like really like whoa, this is amazing. This is like for me, all of our effort in this would be totally worth it for just that one event. I'm really, really happy with that. I agree, I agree. So that's cool. Um, so now on to the Embla uh report. Again, I really don't like the name. It sounds like an army fighting for an African country in the 80s. Also, it does not help that all their executives

First Read Of Embla’s Results

SPEAKER_02 3:35

look like they're villains from the Harry Potter universe and have names to match. Come on, Conal Hart, no, that's not a real name. Good John Carson. Sounds like, you know, it sounds like a really early Bond movie or something. But, but uh apart from that, yeah, I did get a chance to look at not all of it, but a but a bunch of it. And I don't know, at first glance, like steady on the wheel kind of thing. You know, nothing really, to me at least, jumps out as crazy in their annual report, crazy new directions, crazy new um uh new things, you know. Uh, you know, the venue is uh higher, right? 10% higher. But uh gross margins are a little bit lower, a bit of margin is a little bit lower. Uh and net profit is a bit higher. Or actually no, the net profit's actually increased by by like a fifth or something, so that's actually quite nice. Free clash free cash flow is a bit better as well. But if you read the CO's letter, it seems very down-to-earth, but very kind of like, hey, we kind of we wanted more. You know what I mean? Yeah. So that's kind of like my my feeling. It seems like they're just continuing. There doesn't seem to me, at least on first glance, it doesn't seem like they're doing anything really crazy or really or have experienced anything really crazy. They did this acquisition uh, right, for this uh this German uh was it the production company?

SPEAKER_03 5:00

Yep, Fjorn Gens, that one. The strifeenator too.

SPEAKER_02 5:04

Yeah, exactly. That's a basic you know, business as usual, kind of.

SPEAKER_03 5:08

Yeah. Yeah, so I think I think that's yeah, one good take. I think another interesting take is how they are trying to move away from their roots of OSER, and OSER being the component manufacturer, and now you have this uh umbrella that's Embla, and then you have the clinics that are for motion, and then you've got things that kind of filter down there. So I think as we look through this report, though, this is what I this is what stuck out to me as I look into it, is you now have this kind of vertical and you see some wording of some things of showing where there have been some difficulties when you're trying to integrate and you're buying these other like clinical companies, and then you're trying to bring them under the umbrella, and maybe they're not as profitable as what you expected, and now you're also looking at talked about this in the education side, there's just not a ton of prosodus. And so they're also looking forward like, how are we going to take the prostodes and orthodists that we have and leverage their experience via software, machine learning, AI, we'll get to that part to be able to take care of this uh larger population of people. So I think that is interesting. And actually, we'll just get right into it. So on the screen, and people can, if you if you want to get to us, or you're following along at home, or you want to get to this, if you go to just Google and type in Embla 2025 annual report, it's going to be right there. And let's just come back up. So Embla actually does a really nice job of summarizing the market and the global stuff. So I've read a lot of these.

SPEAKER_02 6:48

This is a very good, very legible annual report. 100%.

SPEAKER_03 6:52

Yeah, so and I think it and it and it tells a lot about the orthotic and prosthetic field and industry globally as a whole. And so we're gonna be able to springboard on a couple other things, but I think it does a really nice job. So page four.

SPEAKER_02 7:06

Like first first thing, yeah, I wanted to check out page four because there's one thing that jumps onto me again when looking at this that I didn't expect. I don't, I don't really, yeah. And that's the middle thing there. Honesty, courage is courage also is a bit heroic wording for uh annual report. Usually not a lot of people go to like, you know, work for a multinational corporation with a courage is a as a mindset. And but the second one, frugality, I think is really, really brilliant to have that as a company, to have that as a uh, you know, that that that kind of makes you, if you're an executive traveling, you do you want to upgrade your seat? Do you want to go to the expensive hotel? You know, it does influence your decisions if you've got frugality everywhere. And I think it would help uh the owners of the business uh bring out more pro uh profit, and it would also maybe help people take really kind of smart decisions, like is this a frugal thing to do? Can we can we, you know, we have a net a finite amount of resources? How do we spend it wisely? I think I think so. I think it's a really nice thing to have that in there and and and have that as a value. I thought I thought I just wanted to uh talk about that. So what page do you want to go to?

SPEAKER_03 8:04

All right. So really this next page on the CEO page. I mean, you said it was a really interesting um uh and down-to-earth letter, but six percent organic growth. Yeah, not not crazy, but I thought this was interesting. Strong performance in the prosthetics and neuroorthotics. So we're gonna talk about this a little bit more. Uh-huh. Neuro is neuroorthotics is very interesting because I mean, a lot of people have had strokes and other things, uh-huh, and it far outnumbers any amputations. And so the fact that they're looking towards this means that you have just opened up, and while it's a lower margin, you've opened up a market for another revenue source that has a population that's much greater. I do not know that.

SPEAKER_02 8:53

So that's really helpful.

SPEAKER_03 8:54

Yeah. So the other thing that's interesting is you said, you know, definitely a healthy EBITDA, a margin of 20%. I I think what's interesting about this is even with all the acquisitions and everything, the fact that there's still a 20% EBITDA means that in a niche field like this, there's still money to be had.

SPEAKER_02 9:15

It depends. I mean, you would look at like if you were if you would have more software solutions, you'd expect that to be higher. If you would have more lower quality production, perhaps more solution type of subscription type approaches. There are different ways you can do it, but it does like really point to this being, you know, it's not gonna be really super aspiring for for a lot of financial folks looking at this, right? Steady is good, 62% uh margins off the top, I think, uh at one point is good as well. But uh but this eBay stuff is, yeah, it doesn't look it's not gonna make this very kind of like wow to Hollywood or Hollywood uh to to kind of like finance types. And especially also they they say somewhere else that the market itself is growing five to eight percent, they're going around six, so they're not outgrowing the market. The market isn't growing like gangbusters, so it's like it's kind of like you know, for the just a finance investor that could be uh investing in this or car companies or cruise lines or whatever, this it's probably not gonna be like the most like um inspiring uh thing financially for them.

SPEAKER_03 10:08

Right, right.

Values, Frugality, And CEO Letter

SPEAKER_03 10:10

So um, and then this is where this is get gets interesting, though. So, like what you said, the EBITA 20%, nothing like earth shattering, but you've got to remember that it's 20% after all these acquisitions. And then this is the key right here. We also strengthened our foundation in patient care following a year with lower than expected growth as we undertook important changes to better support our patients in clinic over the long term. Yeah, what did that mean? Because I did not understand that. So, so what that means is when you're buying practices, and we'll get onto this, it's it's a little bit further down. There is, I mean, it's people like clinicians like like me and like uh we, you know, Katie and other clinicians on, and and a lot of them have been independent for a long time or what have you, and you're trying to bring this um under their umbrella and trying to, you know, get get things moving as one larger company, and it's it's just a really tough thing. Okay. And I think like when you're looking at acquisitions of clinics, that has really slowed down, even from the hangar, Autobach, Ocer. I mean, equals doing some, but it's it's not guaranteed like I buy this $10 million clinic and I've got $10 million going back to the bottom line. It's there's definitely more nuance in there, and it's not necessarily dollar for dollar.

SPEAKER_02 11:37

So I thought it was And that that also points to maybe on the one hand, they can't do a McDrive strategy, like just pop the McDrives everywhere. And perhaps also this there is a limit as well to to just how many of these things can acquire uh they can acquire, right? Yeah, yeah. Which is not great news for people who want to get out of the business, because this of course drive up the price of their practices. Or it could be good news if you could make it, you know, knowable to people that, hey, you know what? Yes, we do have Sarah and Jane and they're great, but we have systems in place that make sure that we have the best contact center in the southeast. You know what I mean? If you have then systems instead of just people, only people, then maybe they'll they'll be more inclined to inquire you to avoid these problems in the in the future. You know.

SPEAKER_03 12:21

And then one other thing to note is I thought this was interesting to they put a clinic in Kyiv in the Ukraine.

SPEAKER_02 12:29

Yeah, that was nice. That was nice.

SPEAKER_03 12:31

So it is nice, but businesses don't do this to be nice. They they do it because there's money to be had there. And that that government, as well as the you know, incoming money from other places, really fund a lot of high-end prosthes. And you know, they're not putting a uh clinic in the jungle of Guatemala. There ain't no money there. But you know what I'm saying? So this is it's a good move in that, hey, you're getting brand recognition and that sort of thing. But this is definitely you follow the money and you want a piece of the pie because they're giving money out left and right because of the war and the the advertising and all the things that come with it. So there is this like feel good thing, but then there's uh, you know, there's the money side of like there's good money to be had out of Ukraine. So anyway.

SPEAKER_02 13:23

I have a question about the um was it the next page? Yeah. Yep. So this is the they're just talking, and I just wanted to know from you. Like, for some one of the things that that I noticed, we kind of talked about this before. Like one of the things one of the things in Q1 that said full launch of new Bionic Knee's icon by College Park and

Clinic Integration And Acquisition Reality

SPEAKER_02 13:40

Navi uh by Osir. You know, you as a practitioner, you know, is that you know, are these brands very different to you still? Because they're doing two bionic knee products in two different companies. Is one premium to the other? Are they different or do you not even know?

SPEAKER_03 13:54

So they are different. So the the icon by college park is a newer product to the market. I don't know the inns, full ins and out. I know we have a few of them out on that one. And then the Navi probably is some sort of iteration of a previous generation that's been around for a while. But it is hard. Like there's two bionic knees. How do you how does one not cannibalize the other? Um, and maybe that's what they're doing, you know? Maybe they're putting a uh, you know, Blu-ray and what was the other one at the same time, and whichever one wins, that's what you're gonna what you're gonna have there. But you know, this this market is starting to get very crowded. You've got uh companies like Brain Robotics, you still have the C Leg that you know most people are going to go to, C Leg X4 from Autobok. So it's a it's a crowded market. One interesting thing about the Brain Robotics side is they've actually created it to where you can charge it with a USB-C cable that you charge with your cell phone. Wow, that would be so so yeah, instead of like Autobock charges, I think seven or eight hundred dollars for the cord so you can charge in your car. Ouch. So that's not nice. But like Brain Robotics, they've they've done a lot of great things. And one thing is we give patients options and we'll let them try. And we've had multiple patients choose the brain robotics knee because they like it better. It just has a you know kind of new the newer technology, but it it also leverages some of the latest technological advances that come in the Bionics side of things. Uh, was there anything else on this page?

SPEAKER_02 15:34

No, just go to wherever you want to go.

SPEAKER_03 15:37

Right. So on page eight, um, we already talked about the EBITDA, but um I think that along with what all they had going on was pretty wild. The sales, uh like you mentioned, it was uh I think it was 8.7% revenue growth, but for that revenue growth, it increased the profit like 21.7%. Yeah, but that also might be weird stuff with the dollar and stuff like that as well, right? Potentially. But none none the well, no, I think it was all uh whatever number that was. It was just it was just interesting to me. What that means is that once you cover your main expenses, there there is gravy that can come a little bit later on. So as you drive revenue, your profitability potentially can go up at a different rate. It's not necessarily just linear.

SPEAKER_02 16:36

Okay. All right, that's interesting. Yeah, we'd have to look at what it is that's driving, but it could be interesting to to to look at it that way, to look at it not just as a as as as boring a business as maybe people think it is.

SPEAKER_03 16:47

Yeah. And then uh the other thing, as you mentioned, the the executive leadership does not necessarily reflect their gender ratio for the whole company, which Oh really?

SPEAKER_02 16:59

Is it is it like is it like not because okay, I'd like to talk about it's 75% male.

SPEAKER_03 17:04

So I think that's that's not good.

SPEAKER_02 17:07

But okay, but the fact that they're they're tracking it at all and they're trying to bring it forward, like they're putting it in this insight. That okay, that's something, I guess.

SPEAKER_03 17:14

Yeah, yeah. Yeah. So this is interesting. On this is page nine. Their business segments, 33% of their revenue came from patient care.

SPEAKER_02 17:24

So that's pretty quite astounding given the fact how long they've been doing. Well, it also depends on what they see of that's just all the clinic revenue, right? Yeah, yep. That's actually kind of astounding considering how deeply they were involved in all the other stuff for so many years, right? And then a third of the revenue comes from the the the service segment.

SPEAKER_03 17:42

Yeah, yeah. And I don't think I don't foresee that going anywhere. You're gonna continue to do that. And you know, that's the beauty of vertical integration, is you also sell to yourself, right? So you're you may have a four-motion clinic and you may sell a lot of OSA products, and now you're buying from yourself, and that's

Two Bionic Knees And Competition

SPEAKER_03 18:00

a that's a that's a good thing to do.

SPEAKER_02 18:02

And why do they have this bracing thing as a separate thing? They keep this is like the part where they keep talking about the bracing, bracing, bracing afterwards. Do you think that's such a huge thing? Because they they seem to have really small market, they're like giant in the spresthetics part. Yep. And in the bracing thing, they're just like a really small player. I think they have 5% of the market or something like this. Correct. Uh and yeah, you're s that just seems to me like, I don't know, maybe that could be anyone's game where you know what I mean? It seems like a really accessible thing compared to all the stuff they're doing, or is am I missing something in this bracing thing being more substantive and interesting for them going forward?

SPEAKER_03 18:36

Yeah. Well, you're you're absolutely right. I mean, they're known in the prosthetic side of things, not so much on the orthotic, but however, they have been in this kind of knee bracing game and that sort of thing. So this is interesting. They they create all kinds of knee bracing that are things for people that have had surgery or non-surgical candidates, injuries, that sort of thing, support for active people if they want to ski, do motocross, that sort of thing.

SPEAKER_02 19:02

So they're they're splitting this on because it's it's a part of a bigger group of people, just like the other thing. It's just part of a much, much larger patient population. You can get anyone with a sports injury or whatever.

SPEAKER_03 19:12

Correct. Yeah. So yeah, as you get your name known, um, it definitely opens up your your path for more revenue. And these devices, while a higher volume, the margins are smaller, but you can make up for it in volume, especially if it's uh a brand that's recognized. Correct, yeah, yeah. So if you're in good with the ortho guys and that sort of thing, then get like that next.

SPEAKER_02 19:38

Yeah, you could be at Target or whatever. Okay, okay.

SPEAKER_03 19:40

So this is this is very interesting. 90% of all their products were reimbursed by third-party payers. So that's great, but scary at the same time. When somebody else, so like for instance, you go to the hospital and you need a hand brace or uh let's call it, let's say a knee brace. It's a thousand dollar knee brace. Most people aren't yours. You're not paying a thousand dollars for that. The insurance is paying a thousand dollars for that. So who is the true customer? Is it you or is it the insurance? And so I think that's what what they're saying is like, hey, uh, we have we have this where 90% of all our goods are paid by a third party, but that could be a benefit and it could be a risk because what we're seeing is just like we've talked about on some previous episodes, is these insurance companies are squeezing you, not wanting to pay, that sort of thing. So there is a risk when you have all your eggs in that basket, but there's really no other way to get paid other than cash.

SPEAKER_02 20:42

Yeah. Also, I think I'm I'm bothered by this little circle graphic thing. Yeah. Because it isn't quite logical. I mean, the best companies have like a flywheel type of effect where you're basically kind of spinning up something, or you're putting a lot, a lot of force, a lot of market forces into building a system that once it kind of gets going, like a flywheel storing that energy, it kind of reinforces itself. And one of the classic examples of Amazon has a very famous kind of flywheel type effect where the the the more products that are there, the bigger the selection, the more people are drawn in, and then this then powers more products. So then it kind of like makes it more attractive for sellers, which more people go in and then they pay more, et cetera. And and I think the interesting thing about this page and having this little kind of circle y graph there, which maybe it's some some graphic design person's idea, innovation does not drive manufacturing, manufacturing does not drive sales and marketing, so it doesn't really make sense. If you wanted to do this, you'd do it the other way around. But also there is a real issue with, for example, so innovation, new product introductions every year, that's great. But if 90% of these are paid by insurers, it's gonna be up to the code acceptance for you to actually get money for those new products, right? That's right. Manufacturing, you know, it could be a pure cost thing if we look at it in this sense in this graph, right? Rather than it being something that drives your innovation or something that the the The that makes it cheaper all the time or something like that, right?

SPEAKER_03 22:02

Yep.

SPEAKER_02 22:03

Sales and marketing is just average sales and marketing is just kind of like you have to do it, kind of like HR. So we have to have it because everybody else does. And it doesn't like it would be nice to see here like how these kind of different elements reinforce each other. We're best at manufacturing, so we have the highest quality, and that keeps our patients happy, right? And our patients then recommend ourselves so we have lower sales and marketing costs. Ta-da, we outperform people, you know, something like that, right? That to me is the things I always look for as a story. It's nice in an annual report. Also, these are the kind of things where like, ah, wait, I believe now you can outperform your peers, right? I I believe now you've you've hit upon a method where you can continue to do better. You have something that looks like it could be the beginning of a strategy. And and then this kind of thing, this business model thing, it just seems like, oh yeah, we like patience and we do marketing. It's like, okay, okay. But how are you doing this better? Or how are you able to better compete than other people? You know, this is the thing I'm missing from here.

SPEAKER_03 22:59

Yeah,

Revenue Mix And Vertical Integration

SPEAKER_03 23:00

yeah. Well, this this is there's a lot here on this slide, and this talks about the if you would say that not the demographics, but who is receiving this? Um, 70% of all lower limb amputations are due to vascular related diseases, 20% due to trauma, 10% else, and then for the upper limb, 70% trauma, 30% something else. What is there something else then for for the upper limb amputations? You know, that's like it could be like people that are born without uh arms. I don't know what the other would be.

SPEAKER_02 23:37

That's a it's a because it's a sizable percentage, right? I mean, I'm thinking on the left side is like 10%. Okay, I guess that would be congenital or whatever. But but it says it calls for the amputations, right? Not for the patients, right? Yep. So I'm just saying if it's not trauma, what is it? Cancer? Is that not trauma?

SPEAKER_03 23:52

I know. So yeah, it's like, okay, so what part when does it become trauma?

SPEAKER_02 23:56

Yeah, exactly. Yeah, yeah. All right, anyway, that's a bit confusing. But but but but okay, but hey, it shocked me again how old the population is. That's crazy.

SPEAKER_03 24:04

That's right here. So but this also means that you don't need running blades and fast stuff. Like, this is the population that you're trying to serve, and that's not necessarily the stuff that you're seeing on TV and people, you know, hiking through the woods, running, that sort of thing. And so and I think throughout the report, you're gonna start seeing that they understand that this population is aging and they need to reach it in potentially another way. Now, you would gloss over this, but 30 to 40 percent of new amputees are fitted with prosthetic solutions. So, what do you think that means, Yoris? That would there's not being well, I I I don't know.

SPEAKER_02 24:45

What do you mean the cause? I don't know, actually.

SPEAKER_03 24:48

So, like what happened to the other 60%? So that means that there is there you go.

SPEAKER_02 24:52

So this is no, but this is like, and we saw their markets, these are people focusing on the rich countries in the world, right? So we're not talking about like I'm in Mali, I can't buy it, right? So so we're talking like we're talking about like this is the they're they're considering their market. So they're they're looking at like everybody or everybody's like.

SPEAKER_03 25:10

So this is a global market. No, so that what they're saying is that out of a hundred percent of anybody that gets an amputation worldwide, only 30 forty to forty percent are being fit with prosthetic solutions. So crazy. It is crazy, but it also does show that there is obviously room for improvement, but how do you reach those other 60% and monetize?

SPEAKER_02 25:35

Yeah.

SPEAKER_03 25:36

Uh, and that's that's that's a hard one.

SPEAKER_02 25:38

And not cannibalize yourself. Because I'm pretty sure that if they got their heads all together, they could come up with a solution for those other people. But it's an astounding group of population, you know?

SPEAKER_01 25:47

Mm-hmm.

SPEAKER_02 25:48

It's an astounding also market opportunity. But we talked about this last year when discovering this, when it was like, if we just did a lot better in Indonesia or something, you know, these count there's all these countries like where there's a hundred million people living in that country and they have no market access. So I do think that this is like, you know, it you know, look at the cell phones, right? Cell phones have done wonders for for people in underprivileged, uh, remote, austere kind of environments. Nobody set out to, well, you know, a lot of these companies are just set out to make money. But at one point they did make a cheap version that did trickle down and that did actually uh really make meaningful it changed these people's lives. But it in prosthetics, it doesn't seem it seems like we've got charities and then we'll focus on the rich people, you know. Right, right. And it's it's really strange to me that a company wouldn't be like, okay, let's make an affordable lower limb process just for the other, you know, you know, the other uh 60% of the market. It's it's completely crazy if you think about it. Yeah. So it would be like like I'm only gonna make like the iPhone and that's it.

SPEAKER_03 26:45

Yeah.

SPEAKER_02 26:46

Um yeah, it could work, but but for most companies it's it's not gonna ever work, right? To just only have the flagship products. It would be like kind of, yeah, only have the flagship products be sold to the few. That works for for well, it used to work for Porsche, but uh but but that works for like luxury brands, right?

SPEAKER_01 27:01

Mm-hmm.

SPEAKER_02 27:02

Luxury brands do that. RMS says we're only signed to certain people that want to you know spend 500 bucks on a tie. It's never, you know, we make them in France, because we do it ourselves, and that's you know, and we only have a limited number, and look at us, we're luxury products. They don't want to make an affordable one, because that's kind of the the whole point of them being MS association, right?

SPEAKER_01 27:20

Yeah.

SPEAKER_02 27:20

Um, but you know, is is a prosthetic to me isn't a luxury product. Cars, there is a lower limit of the car thing. You have to all of a sudden say, hey, with the quality, the pension funds, all the stuff we have, we we have a lower limit of we we have to get, you know, we have to sell cars above 30k or something, because otherwise it doesn't make sense for us to do it as a company, right? But as a prosthetic, there isn't that barrier either. You know what I mean? So it's not a luxury good. It isn't hasn't have a real technical or or manufacturing infrastructure barrier like a car company has or cost structure barrier. So why not do this? You know, is it is it, you know, also as just like not as a yours cuddly person yours, like save the world or whatever. No, just as a like imagine you're a shareholder and imagine you just want these guys to make money. Well, hey guys, let's make stuff for the 60% of the people that aren't being served, you know?

SPEAKER_03 28:06

Yeah, yeah. So I thought this was it's just an interesting way to put it. You know, like when you take look at these graphs and then you like you read this and you're like, ugh, okay, so what does that actually mean? So this, so this is another one of these things that is very interesting.

Recurring Revenue And Chronic Care

SPEAKER_03 28:20

It's like, what did you write that you needed to say, but you didn't necessarily want people to think about it much? And this is this right here, this underscores the potential opportunities in catering to the needs of chronic patients who need lifelong service and explains why 70 to 80 percent of the patient care revenue is recurring. So so what this means is that it's almost like the pharmaceutical industry now. Like, if if we get you on this drug, the the lifetime value of this patient, because they're gonna keep on using it, is X amount. And therefore, we need to make sure that we keep this patient, which can be very good patient care, right? Or and very good patient or uh customer service. But the fact that the the idea is how do we keep this patient in the ecosystem because the recurring revenue is so important to us is very, very interesting.

SPEAKER_02 29:19

Yeah, it's there's two ways of explaining this. One is a very bad one and one is a very, very good one, right? Yeah. So the the non-suspicious person is like, oh my god, they're amazing. So they keep paying back. And then the yeah, we should we should do operate slower on patients, you know?

SPEAKER_03 29:34

The best patients would never leave the hospital. So let me see what the next thing was

Bracing Market Size And Brand Play

SPEAKER_03 29:40

that I was wanting to. So this is where we were talking about. So they're really going after this this branding with the emblem medical. What do you do? We have these patient care.

SPEAKER_02 29:50

One thing on the previous slide is one thing I noticed is they do some soft stuff in China. So that's probably like a bracing or like some pillow, kind of whatever thing.

SPEAKER_03 29:57

Yeah, some of their bracing, I would say like knee braces.

SPEAKER_02 30:00

Everything else is made in Mexico and uh Germany, Scotland, and the US, uh place like that. So that's actually kind of very interesting. They haven't outsourced everything crazily. And if they have outsourced it, they've uh outsourced it, which we talked about before, like to very close to the biggest market, which seems to be a really, really s very smart thing to do. So this is really interesting because they could save a lot more money if they push a lot of that stuff to to to China, but they've decided not to do this, which I think short term doesn't look too bright, but long term I think could be a really, really good decision as it allows uh it would let let less of their knowledge and ability and uh IP leak out, you know.

SPEAKER_03 30:35

Yeah, yeah. That IP side of things is is very interesting, especially like if you were to look at Chinese manufacturers that do prosthetics, it is like complete, almost like nut to bolt ripoff of what other big companies are doing. So making sure that you don't have all the secret sauce somewhere and allow somebody to reverse engineer your stuff is I think pretty important. Um so I think one of this is this is pretty interesting. They're looking for a two to three percent annual growth on these uh acquisitions uh from from that. Um and then on this one, the we touched on it, but the chronic mobility challenges, making sure that we're taking care of the older people is super important. So this is interesting. Increased bionic penetration among low activity or low active patients. So what they're saying is that some of these higher dollar value ones may not be right now covered.

K Levels And Microprocessor Access

SPEAKER_03 31:44

So in in the US, there's a system of levels of how active you are. For instance, it goes from K0 to K4. And I don't know that we've ever talked about this, Yoris. So I'll tell you. K0 means no idea what this is, so no, we haven't. So K0 means that you are not going anywhere, you are bedridden, that no, there is zero need for a prosthesis. K1 means that you might use a prosthesis, say for a transfer, maybe to get you a couple steps to the car, something like that. K2 is like you maybe in a nursing home, you walk like one speed, you know, here or there, you use the prosthesis for your everyday task, but you're not really it like going all out. Like this is uh this and most older people, this is what they're saying, low active, fall into that position. And then your K3, not only can I walk, I can walk at different speeds, I can go over uneven terrain, and that's where a lot of the more active people fall. And then K4, like, I'm gonna jump out of an airplane, I'm gonna do running. Like these are the highest of the high. But what's interesting is that for billing purposes, there's really no difference between K3 and K4. So a lot of people or some some people just say, well, why would I even put K4 if it doesn't actually get me something extra? And uh I actually agree with that sentiment. But those are the those are the categories. But what happens is that components that you sell are divided up into these categories. So K1 and K they have a certain, you can pull from a certain and bill a certain amount of components, and then K3, you get that kind of opens up another box that is more expensive. But what has happened over the years is that some of the expensive components, for instance, the microprocessor knees, which we saw that they had released too, are now being approved for older people because they are safer, they're smarter, they keep people from falling and breaking their hip, and therefore, in the long run, it can save money. So what they're saying here is we need more of the expensive stuff in this lower or low active population, which means that there is more money, which that's where the majority of your population is. And so, how do you get the stuff that you already make so you can sell to the thing where the largest population is?

SPEAKER_02 34:12

Yeah, and we expect that population to grow well beyond what the MPT population is, of course, right?

SPEAKER_03 34:19

Yep. Yep. So it feels like we're never gonna get through this thing. We're on page 18 out of 139. So we're gonna we're gonna uh do one, two, skip a few uh here. So we talked about the market. Yeah, we're still on 2025. Let me see where so this is where things get interesting.

Neuroorthotics Growth And Market Share

SPEAKER_03 34:40

Where's that? 18. Okay, so this is that neuroorthotics product market, 10 to 12% market growth. I thought that was um, you know, pretty interesting. It's a market that you don't you didn't have, and now you're starting to grow that even more. So this one is interesting as well. So Emblem Medical is estimated to be the third or fourth largest company operating in the market with a market share of around two percent.

SPEAKER_02 35:08

Well, where where's that?

SPEAKER_03 35:11

Uh this is page, uh, this is page 20, kind of right in the middle, right here. Okay, okay, yeah. So what's interesting is there's that means that you've got, you know, hanger, Audubok, or equal, and then you have the independence. And so you you think of like Emble as this big company, but they only make up two percent. So what that means is there's there's plenty of room for acquisitions, I guess is what I'm saying. But it's also a very small market share. I thought that was interesting.

SPEAKER_02 35:41

Yeah, but it's it's a it's a worrying sign that if they look so much like if if 30% of the revenue comes from this, they're only a 2% player, 3.53%, let's say it's a 5% a year growth market, and they can they know there's independent operators that are retiring all the time. People are gonna retire and they wan the they're they w wanna sell their business. There's no natural uh uh kind of company to do this at the time, apart from them and hanger. And and they want to improve their evident margins, then yeah, it seems like it's like, well, just keep buying clinics, you know what I mean? And I think I think that's just gonna mean that a lot of your revenue is gonna be directed at buying more revenue. We've seen this go go go very, very wrong in the outer manufacturing market. And and that would mean maybe that you would be starving the the innovation animal that is gonna like you know, lock up capital to invent new stuff. So I think that kind of, you know, that's a uh a bit of a worrisome sign if they really did go more into this kind of a acquisition of these clinics.

SPEAKER_03 36:37

Yeah. So this is interesting. The they talk about the growth. This is right here. Approximately 80% of all new amputees live in emerging markets, and it only represents a small share of Emblem's Medical. And I think they actually state it here. Yeah, so to develop markets, 5 million amputees, 200,000 new every year, 650,000 new every year in the emerging markets. So this is, you know, all and this is interesting, Russia not included. Yeah, I think that that I think that's actually really nice. Is right. I mean, this is definitely a differentiator from a company like Autobock, because Autobok does sell into Russia and they make a lot of money in Russia and they don't care. Yeah. So there you go.

SPEAKER_02 37:19

Yeah, I think ethically that's like yeah, that's it's still really difficult because yes, there are patients there, right? Uh but ethically

AI Talk And 3D Printed Silicone

SPEAKER_02 37:25

selling anything into Russia at the moment is is not a great thing, I think.

SPEAKER_03 37:28

Yeah. Yep. Um okay, so on 26, they t they do talk about the um what's interesting, so they talk a little bit about digitization and AI, but they don't hit a lot on additive manufacturing, at least from what I saw. But uh, you know they have it because they've got companies like Naked Prosthetics and some other ones. But I think this is also another situation where they also are significantly entrenched in the traditional fabrication market, which is a big time money maker for them. And there's not really a reason to innovate in the 3D printing space because they're making so much money otherwise.

SPEAKER_02 38:11

So I mentioned that have on it is on in this page, it's on the AeroFit liner with the 3D printed silicone in it. Yeah. Which we think that I think could grow significantly, right? If they look at these liner kind of solutions and silicone 3D printing in a much more kind of expansive way, they could really be coming up with a bunch of products that just make that interface better. And then 3D printing is a very, very uh logical kind of way to use this and to use it on the skin in a kind of way to to to relieve heat and all that kind of stuff. I I really like that as a product. I really think that that's something they could be deploying much more broadly, let's say if they do master the silicon 3D printing stuff, but I still don't know what they're using, by the way, uh what technology they're using. Uh and uh but the idea is just to make more breathable salt sockets in part through silicon 3D printing. I think is a really great application of the technologies. Yeah, they don't seem to be doing a lot, but what they are doing kind of makes sense and is kind of where you want to use additive, rather than you know, imaging it some flashy way that's not really gonna mean be meaningful for uh patients or meaningful for for yourself. So I think, you know, I think I think what they are doing is seems to be quite smart. Yeah.

SPEAKER_03 39:19

This is interesting. They're sales by segment. So the prosthetics and neuroorthotics, 10% growth, bracing, negative 1%, and then patient care is 1%. So all that's saying is that this patient care side of things is a little bit more probably difficult than what they had expected. So there's plenty of room for growth here.

SPEAKER_02 39:40

And this whole but this patient care thing is really very focused on the states and kind of Europe, right?

SPEAKER_03 39:46

Yes. Yep. Um, so the EBITDA

Risks, Tariffs, And Share Buybacks

SPEAKER_03 39:50

of 186 million, and they talk a little bit about some tariffs and such, and there's definitely some uncertainty, but it seems like that isn't a big part of what they're calculating. So a couple other interesting things. We're gonna skip down actually a little bit to so it's just funny when you take a look at this, these some of these risks assessments, they do talk about uh corruption bribery and a reimbursement changes um are material risks. So it's just uh it's an interesting thing to talk about, especially when you're dealing with a global company. And it's and just like what you said before, it's a great report, it's a transparent report, and I think it's it's really great that they include that in there. Um let me get that.

SPEAKER_02 40:39

They also they also they talked about that. I did a share buyback program in 2025, they're gonna do another one in 2026. And that again is like, you know, if money's super cheap and you're Apple and you're never gonna get that much cheap money in the rest of your life, you know, then maybe it makes sense. But for most people, like the share buyback is is not a sign of like very inventive management, you know what I mean? Or very inventive kind of, hey, we can do great things with our own capital. We're just gonna buy shares to um have a short-term effect that's great for whoever has options, but maybe not so wonderful for for for you know the company building a future for itself. I always think I'm I'm a bit paranoid when I see share buybacks. I'm always like, this is really good for 18 months and not good for 18 years, you know? So I'm always a bit paranoid when I see that. Okay.

SPEAKER_03 41:24

So this is where things get interesting. We we did one two skip 60 pages. Okay, okay. But these these these small words are always interesting. Okay, and we're rare on so I can find it 106.

Goodwill, Debt, And Auditor Flags

SPEAKER_03 41:39

And this is the independent auditors report. Yeah. All right, so this is interesting. This idea of impairment of goodwill, the book value of goodwill at the year end amounted to 600 or 836 million dollars. So why is that important? And something to to to take into consideration is what they're saying is when you buy a company, you're you're buying their name as well. And so what they're saying is there's a potential that we're overpaying for companies, or it's gonna take us a long time to get this goodwill kind of off of our books.

SPEAKER_02 42:19

Yeah, maybe, maybe, but I think this is could be, you know, we have had companies take a hit with this, SM Solutions took a hit with this, where they really adjusted it downward really, really spectacularly at one point. Uh so this is something to track. I think, I think, you know, this is like it's not necessarily a very it's it's maybe just like there's there's the note number 33, which we would have to look into to really look uh deeper into this. Yeah, right.

SPEAKER_03 42:44

So I think yeah. So I think what's interesting about this, and we see this all the time, really, is you want a business to be incorporated in your vertical strategy. And you're going to pay them, you know, market, maybe a little bit above market or a lot above market to make sure that they're part of your kind of philosophy and company for an extended period of time. So it doesn't mean that they've overpaid. It's just something that this idea of buying goodwill with not assets behind it is something notable.

SPEAKER_02 43:19

Well, I think it's it's very important because like we saw that I think I don't remember what what is exactly wrote off on the Makerbot acquisition, but it was more than they paid for makeup.

unknown 43:31

Sure.

SPEAKER_01 43:31

Sure.

SPEAKER_02 43:32

But they had it, they they they wrote that the that whole thing. They kind of wrote that off on the Makerbot acquisition. They wrote off like hundreds of millions of dollars on that. And that was also a goodwill kind of reduction as well. So so so I think it's an important thing to a be careful with if you're a company accounting for that, and and also to be careful with as an acquisition partner as well.

SPEAKER_03 43:50

Yeah. So all I'm saying is not not necessarily good news for people that are looking to sell to a company like Embla in that they're they're bean counters. Or their accountants or the person that the people that are doing this, they know that this is already on the books, and they're going to be very, very careful not to overpay for the quote unquote goodwill that your company may have.

SPEAKER_02 44:12

But it can also be just accountants being careful, which is good for accountants to be. That's what you pay them. Yeah, I totally. It also I can't find this mysterious note 33, which everything refers to again. So that that's also kind of and that does actually explain some of these actual impairments and what they're doing with these companies. So and I can't find it anywhere. So it's it's probably me, but uh I can't find it right now. Okay.

SPEAKER_03 44:36

So and then the the really the last thing is you you have your EBITDA, and then it's the also is what are what are your liabilities? And then so it looks like somewhere in the neighborhood of six hundred and thirty million dollars of being leveraged of some sort, which you know, if you're making money, it doesn't doesn't matter. So I think it's but I think like what we've said before, having all this, and I know they probably have to be even more because they're uh an Icelandic company, uh it's very, very transparent. I I think it's I think it's good. I mean, my my big takeaways from this 139-page report is uh growth is happening. Uh we are moving forward with some technology. I find it interesting that additive manufacturing isn't mentioned much in this, but we know that they're doing it. And um, you know, I think it's also interesting where that you're still able to have uh 20% EBITDA uh even after acquiring so many companies and being involved in the patient care side of things. So I think after that the patient care side of thing gets stabilized and they truly start recognizing revenue after they start buying from themselves, I really foresee these numbers to keep on going up.

Serving The Unserved And New Markets

SPEAKER_02 46:08

I'm I'm like kind of like it looks like a company that that is doing what it's doing, but doesn't necessarily have a really great path forward. To us, it's really obvious. I think it's we both would just say, hey, let's look at these poor people everywhere as a market, make a product that looks them straight in the eye and treats them as as customers and delivers on value, and let's let's tackle that other uh the other hundreds of millions of patients. That to me seems like a really, really logical thing to do. And maybe they're worried that then, you know, some insurer in the US is gonna say, hey, if you can make that foot there for a hundred bucks, so why do we why are we paying a grand? Um so I think that that that I think is the the the one issue they should tackle because that could really give them instant access to a a much larger patient population. And let's not forget, like we keep coming up with these things where even in the in a rich country like the United States of America, there's maybe people that would want an extra leg or want a swimming leg that don't have it, or that want another prosthesis for work or whatever, they're not paying it. So so there isn't an additional if we'd make those things cheaper for patients to buy extra stuff, if we'd make then more people in the in the developed world, let's say, would also buy multiple prosthetic uh devices or different devices for different occasions to to make their life a little bit easier as well. So so that's the most obvious thing to be doing, you know. The other stuff, innovation, always hard, and then, you know, and and you know, and and also expensive, right? And also unsure. Uh, and then also just like uh there's this revenue acquiring machine, like let's put our clinics everywhere. And it just seems like if they're gonna go this way and they're doing the share buybacks, it just seems to me it's like, yeah, we're just gonna buy clinics, but we're gonna be a bit more careful with it now, you know? You know what I mean? And there's just gonna be some MA guy flying up and down the country and and there's gonna be like a uh a big clinic, but it's like a hanger than with some some many more manufacturing and then hanger has attached or more branded products than hanger houses, you know what I mean?

SPEAKER_01 47:55

Yeah.

SPEAKER_02 47:56

And I think that to me is is is kind of um interesting. I would focus much more on the poor people and then the bracing stuff. If you could bring really super mega high uh tech braces to people, like using 3D printed silicone and air systems and all this kind of stuff, if you can make that kind of thing, if you could be the role source of that kind of thing, that kind of thing. There's people spend a ton of money on that, the kind of running as a hobby, recovering, these kind of things. There really isn't like if you look at these uh anything for these braces and these tapes, usually there's like one really boring version available in your local pharmacy, or there's maybe kind of a local kind of like shoals kind of alternative, like maybe some local company offers you kind of a little bit of expensive one. There's no real Rolls Royce with this, you know. And to me, it'd be really tempting to say, well, this one's a hundred dollar, the other one's a 30, but hey, it has a 3D print air in it or something, uh, and it will help you recover 20% faster, something like that, you know? And then uh, you know, you get some basketball players to wear it on the court, you know. To me, that's the way I would go. I would uh I'd say let's tackle this poor people problem and and and see it as a market, you know? And the problem is that it inhibits our revenue, and let's get some uh, you know, really famous basketball players to uh wear a bright orange brace that is pumped up, right, just like the the reebok was, and has 3D printing inside of it and make it ridiculously expensive, and then people will start using the brace of the basketball players who use, you know, something like that. That to me would would be a way to consumerize the offering and give them a lot of revenue. Because there's a ton of people I know that have braces or or that that keep messing up their knee or they keep doing this stuff like that. And I think that's just a a huge market where there, you know, there isn't a super premium. You know, people are buying sweaters for 300 bucks or even more than that. People are buying, you know, one of the things was like if people can sell you premium tequila, people can sell you premium everything.

SPEAKER_03 49:43

Right.

SPEAKER_02 49:44

If that works for people, then there's no reason why there's like one brace available and it looks like it was designed in the 40s, you know? It should be there should be an option there to, at least in a lot of pharmacies or a lot of hospitals or a lot of like uh appropriate doctor's offices, have like, you know, this is the best thing, sir. Because there's a lot of people that that would just buy that best thing if it would help them recover a little bit faster or would be a little bit more comfortable, you know? Right. Uh to me, that's where I would really pursue growth and I'd wait for the US thing to sort itself out. And I'd I'd try to focus more time on that innovation thing. Companies always say that innovation is hard, and but companies don't pay a lot, uh they don't don't really devote a lot of money on it. There's there's only very few companies that devote a lot of money on RD, and it's it's it's a very difficult thing to spend. And even like medical companies sometimes do like three and a half percent or whatever. So it's not even that much. I think one of the highest companies I've ever seen is Hilti and they make drills and all sorts of other stuff for concrete people working with concrete.

SPEAKER_03 50:40

Yeah.

SPEAKER_02 50:40

So, you know, you could do a really innovation-led company, but I think the worst thing is if a company believes it's innovative and really kind of isn't, you know, and that and and it seems to me that they're going from a path of strong IP portfolio and a really strong brand into kind of like, yeah, let's just buy revenue and become like a big service bureau or service provider, you know?

SPEAKER_03 51:00

Yeah. You know, one other thing that I didn't see in this report was much focus on the exoskeleton side of things. So, like what your example of the Hilti, and I know like Autobach and some other companies are very involved in the the worker side of things. So, like, how do you hold something above your shoulders to hold something in place on the manufacturing floor? Or if you're working, like how do you get up from a kind of a bent knee position and where you're gonna be there for a while, but then you need to walk over here and make sure that people don't get tired. I think it like their envelope would be actually very well positioned to even acquire, say, a small company in that space to do things. And I think it's interesting. So this was Yeah, totally.

SPEAKER_02 51:51

I think I think that that I think, you know, also to look at just worker, you know, construction industry, worker replaced injuries and all this kind of stuff, safety gear, that kind of stuff. Exoceleton thing, I don't know if it's gonna work, it's gonna take a lot of time, but that is a huge market. But yeah, I don't know. I thought I think I think there's there's there's there's they should work more on on on opening up really opening up new markets generally, whether being an exoskeleton or the developing world or in in in this like bracing with a brand kind of thing. Because uh, you know, for example, I just looked it up by the way. Hilti spent 7.3% of their total revenue on RD.

SPEAKER_03 52:24

Wow.

SPEAKER_02 52:24

And what was their what was their Ebita? I don't know because it's in a weird currency that I don't understand. Uh they spent 459 CHF in uh RD. That's 70.3. So that's uh we could do the math, or we should be able to do the math. Uh that'll be 6.3 billion, whatever CHF is. Um so uh that that's uh Swiss francs, by the way. And then that's $6.8 billion in in revenue. Wow. In drills. But okay, so this is this is something

Hilti’s Model And Leasing Prosthetics

SPEAKER_02 52:52

that's actually really interesting. I'm obsessed with Hilti, by the way. It's a completely insane company. So Hilti, well, you could think you could buy a drill from Hilti, but they don't want to buy it from you, right? They don't want to sell it to you, right? What they do is there's a dude with a car and he comes and he'll look at all the tools of theirs that you need. And sometimes he'll lend you one if he wants to. This is not like snap on with a truck debt, right? This is different. Yeah. Right? This is this is different. So and then they they talk to your boss and they want to lease you all the equipment and they'll replace anything that's stolen and they'll replace all the stuff that doesn't work. And every once in a while they'll they'll be like, hey, you can lend this really cool vacuum cleaner or whatever for a couple days, and then they hope they lease it as well. So basically they want you to lease everything from them. And of course, normally it's better to buy the tool and then have it for what is it, 10 years, right? Then you're making total lot of money on it. But there's two smart things. Is one is, well, you know, you're not gonna have the tool for 10 years because some dude will break it or it'll get lost or get stolen. Right. So the risk then goes to Hilti, right? They then track everything and are better able to deal with this risk. And of course, because Hilti make really good tools with a lot of RD at really high cost, it actually really makes sense for them to make some things that are really super reliable. And they're gonna put their money behind it because they'll collect it if it doesn't work and they'll give you a new one. Like a dude will come in a car. Uh that's why they're not everywhere. Maybe the Hilti wouldn't be uh available in your area or the wood, but but uh because they literally have a guy with a car, right? Uh that comes or a lady. And uh and she'll then come and then and replace it for you the next day or on the day uh of the job site on the at the job site. So this of course means that you as a developer or the construction crew, whatever be spending more money, but you have more peace of mind. And also, of course, you know that that that job or that project will only last for a certain amount of years anyway. So you're actually kind of not calculating that tool for 10 years, you're calculating it for three. So for them, it's it's it's very, and especially if they're the guy making the decision doesn't care about the profit of the company, then of course paying more for the tools may be better. And for the company, it's better because they're not, they don't have to buy this thing for 10 years, they're only going to be renting it for the the the cost the time of the project. So it's kind of a business model that aligns really well with everybody on the value chain. Everybody always talks about that, but they don't really develop these models. But that's that's a kind of way if somebody's taking a tool, and this is literally that they make really good drills, right? If you ever want a really good drill for concrete, it's amazing. They're completely amazing. And if you hold it, it's like it's it the thing is feel it feels bulletproof. All their stuff feels bulletproof, it's amazing. Um, I don't know if they make them for for for other stuff like this, but um, but uh so so Hilti has this model that is is beneficial for everyone and it has them not owning the thing. Now that not owning the or not selling the object. There's also there's no Hilti at Lowe's or whatever, there's no Hilti at the on Amazon that I know of. I don't know, maybe there is now, but you can't just go out and buy this stuff. So they they're doing stuff that really doesn't make sense. It's completely insane if you look at it to through low-value players like Stanley Mleckendecker and stuff. That's completely different, right? But they're really innovating and they're really spending a ton of money on RD, which of course makes sense because they want everyone to keep renting their tools all the time. Uh so they need to come up with really specific solutions that like, you know, cut around a corner in a concrete block of a certain density, like faster or whatever, that kind of stuff. Uh or safer, right? So they're really doing it in an innovative way. But we what we see a lot of other companies do is they don't do that degree of innovation. There's nobody that'll, well, I don't know, will people rent you legs or prosthetics? You know? Will people like rent you these or lease you these objects, or will they align themselves such such that that that what makes sense for them will make all their partners save money and will make their customers save money as well? You know? That kind of thing is very different. But we see that very rarely that companies are that innovative. So I always like, I'm always a little bit worried if people are innovative without innovating. And and and we can think of things like renting out prosthetics or renting out equipment or renting out kind of families of tools or things like that. That kind of thing could make this a lot more attractive business and could really transform it. But they're not thinking in a transformative way. They're just thinking in the, you know, it just seems to me if I read this thing or what I've read of it so far, it's like, yeah, we're just gonna buy clinics, dude. Right. That's what it feels like, you know. Right. Anyway, and uh, that's why my little mini, mini hilty obsession, which as a as a tool company that has like, I think it's larger or it's like something like two-thirds of the GDP, their revenue is like two-thirds of the GDP of Liechtenstein, which is where they're based.

SPEAKER_03 57:03

Wow.

SPEAKER_02 57:04

Which is just completely crazy. It's like there's a tiny country. I think the company employs more people than there are people in Liechtenstein. It's one of the biggest employers and stuff. It's the biggest employer in the country as well. So and it's a it's a completely insane company. But it's like my standard example of like a company that does everything different, you know? Uh and then I'm thinking, yeah, that we don't really have players like that in in OMP, really. Right? We don't have anybody looking at this in a complete. We have always like somebody that says, I invented the magical arm. Now for $25 you can have a robot arm and it used to cost you $30,000. We have a lot of those guys, right? Um but we don't really have a lot of people that think of this business in a completely new way. I'm saying that renting or leasing out prosthetic limbs is the way to go, or does it actually make sense? But there's no one really saying, let's look at this business in a completely different way, you know?

SPEAKER_03 57:46

100% Yeah, 100% on that. And I and I think that there's I think there's a lot of white space. And there's a lot of white space in this underserved population that could be very interesting. And just I mean, it was not too long ago when we were talking about like the wheelchairs that are premium wheelchairs that are made for people that have money that they will pay thousands and thousands of dollars so they don't have to be in the regular hospital wheelchair sort of thing. So I think that there is a play, and and I don't know that there's a lot of people playing in that space, I guess you would say.

SPEAKER_02 58:21

Yeah, totally. I think I think I think just I think there's a lot of like options. It doesn't have to I always use this premium example because it's really easy, right? It's also easy to explain. It doesn't have to be the best, but but there there could be really different ways to to to to to to serve populations. There could be really different ways to make technology available, you know? Uh there could be different ways of making uh a lot of this stuff modular, for example, and then making it easier to manufacture at scale, you know, uh customizing only very much smaller parts, for example. You know, it's things like that that I think uh is not really being done in this industry if we look at it, you know, compared to other industries. I thought this

Hopeful Takeaways And Listener Feedback

SPEAKER_02 58:57

was super interesting. I hope you thought it was super interesting. I thought it was a great idea to talk about this annual report. It's quietly hopeful. I mean they're not doing badly, they're not doing uh uh they're not doing anything completely crazy or what seems to uh to us at least to be quite stupid. They seem to be just uh sailing s rel relatively smoothly uh with some hiccups. And uh yeah, I think I think I think uh yeah, I think I think I think I think it's a good sign for the industry, at least they're not in trouble and they're doing quite quite stable, uh, quite well. It's a good sign the industry that's a company that has its is doing so many things is is kind of generally growing in all of them. And that's that's quite a hopeful note, I think, a quite hopeful note for everyone, I think. So uh yeah, did you did you have fun, uh Brent?

SPEAKER_03 59:37

Yeah, I thought this was good. And I always appreciate your perspective as we dive into some of the things, especially like I don't know, Brett, I don't know if that's what it actually means or not. So uh, but it's always good to have those discussions. And I think the biggest thing is shout out to Embla for providing such a great report that we could talk about a myriad of things that uh are specific issues to the ONP. And uh, you know, we wish them nothing but the best to uh keep on growing so we can uh do the one for 2026.

SPEAKER_02 1:00:08

Yeah. Okay, and I still and probably I'll still be looking for that note 33 because I can't find it anywhere. Uh anyway. Um, anyway, and yeah, thank you so much for listening. I hope you guys like this content. Tell us if you want to do more of this, or if you're just like, guys, uh no, this is horrible. Why why did you waste my time? Just tell us that because um we like doing this, we think it's interesting, uh, but maybe you don't. We'd rather hear a clinician story or something like that. So tell us or tell us that hey, it's okay to for us to you guys to do this every once in a while. Don't do it too often. That's that's fine, uh, good feedback as well. And uh yeah, thank you guys for listening to the prosthetics and orthotics podcast. Have a great day.