MDXG - Earnings call transcript Q2 2024

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Operator

Greetings, and welcome to the MiMedx Second Quarter 2024 Operating and Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Matt Notarianni, Head of Investor Relations. Thank you, sir.

You may begin.

Matthew Notarianni

good and operator, you, afternoon, everyone. Thank the Results Conference to MiMedx Second Financial and Operating XXXX Call. Quarter Welcome With me on Capper; today's call are Chief Financial Doug and Executive Officer, Rice. Chief Officer, Joe

slides today's are webcast, As can part simultaneously of displaying follow. that we you

Investor the mimedx.com. the website at You can from Relations access slides

additional Joe will quarter. our of some opening goals. of conclude financial for the with off then discussion remarks of Joe summary with review a kick provide including highlights, operating a us And our will our and some a and updates, Doug will results financial

be We for will then available your questions.

subject and would Before materially cash and and we free unforeseen access Actual depend regarding for sizes begin, that delays differ to These other expected I including of including sales, actual include future from many factors. like flow, circumstances will and comments and results are and market forward-looking statements factors, expenses, those on market to statements, may factors. products. uncertainties, our reimbursement environment, margins our to will customers, today the cash sizes EBITDA, you number results due risks expectations and and balance a to anticipated adjusted remind future growth, competition,

our and XX-K the annual include report Form Additional and on XX-Q. could impact on our section of factors that outcomes those in Form Factors described results Risk our quarterly reports

financial non-GAAP release, a provide we today reconciliation measures and at comments available is which press measures, on in GAAP our our include our Also, mimedx.com. to website

to Capper. pleased I'm Joe? now over that, to Joe turn call the With

Joseph Capper

today's call pleased quarter. are everyone. We of thank Matt, for to another afternoon, us results very you Thanks, we and on solid joining as report the good

rate. utilizing and caused First, quarter, a second, substitutes artificially to to certain competitors factors QX in be targeted had growth albeit business growth: a providers second the tough setting practices Medicare office there and our line magnitude by slower in top and achieve at the we to questionable our the private strong due year-over-year are continued continues high-priced impacted that performance XXXX; X very comparison at of we There For beneficiaries. dislocation skin

total impact While to behavior. we the practices. this speak various the revenue you I is of on to settings, private less event are taken this later topic have the assure than these and in office in will of curtail felt adjacent options call. action no working XX% Medicare our I more on the is in tied we

and believe to navigate more business than to industry Importantly, a the We to will In have side we the realize emerge flourish. meantime, is it the of on rational before. ever data-driven to remainder reimbursement our regulatory our headwinds, and MiMedx to we other how expect continues positioned environment. must stronger return and short-term well just these important

the our continue year, I a enables which past and success we strategy, Over Moreover, we place disruption. as to for the near-term profile transformation greater optionality significant financial for plan have and have will ensure momentum. we financial navigate confident right on company, come. remain laser-focused much orchestrated am and improved in our we This flexibility to us team years executing our

the As effort private an an good to in help provide continue governing relevant the input governance bodies fiscal setting. industry and office lobby leader, the we to restore portion to Medicare of

quarter second are priorities. to regarding our progress on few a minutes making Now discuss highlights the and you then take we update the I'll of the strategic

million ended increase the the of prior million of cash, increase solid period. year $XX was in Adjusted sales quarter, $X Gross second the EBITDA marking was X% or XX%. profit XX% the another $XX with quarter. net growth in $XX quarter. sales of $X healthy net an in over We quarter, $XX million million, For million year-over-year by grew or a to representing million

announce surgical high-performing Kim is limited ago, reputation MiMedx We has scientific acquired MiMedx. We years with began today. few dysfunctional results leading the tissue. team remarkable promotion earlier pathological Commercial to in Officer over benefits done MiMedx excited the demonstrating And thrilled a of market we the and the literature, commercial building applications weeks in of publishing particulate have the for job X the to Chief a Kim bovine-derived for well-deserved year. peer-reviewed study Reports, which organization which fibrosis last journal were we allografts HELIOGEN, release name the the best-in-class commercial the a a into Nature's Scientific of placental-based publish is scarring Moller, it detrimental a were is in where the for

Turning our priorities. strategic now to

on outlined prior in X areas. focused calls, As our is plan

innovate diversify continue and product we will our portfolio. to First,

EPIEFFECT, core We of development in a all our commercialization care. the emerging strong patient built to and Two have clearly to designed meet introductions perform product needs physician at of continue recent products of competency sites rapid and most in market grew continued and we AMNIOEFFECT excellent physician private launched last have show the and widespread year-over-year the acceptance to in in level. which strength surgical XX% feedback. Both products significant received nearly a high year, market; office. late

product xenograft. to building similar we we as move release market in Japan, we business continue EpiFix progress posted make another towards Building expect high the quarter first a of our these exceptionally where success full we our on introductions, growth. performance of recent of Additionally,

collagen a particulate, to to a and XXX(k)-cleared As bleeding. moderately heavily exudating we of is the matrix product for HELIOGEN new management bovine-derived control minor this is wounds have and reminder, indicated which branded

our been in applied tendon During Achilles launch, procedures, surgical successfully has product including soft various the repair.

scientific deploy use to footprint the past, we've of In our of the surgical market. area to and surgical That in the spoken importance focus, takes our a the about research variety procedures. real-world generating expand evidence is in me and our placental-derived to which support for allografts of programs intended develop demonstrating second of

the to market. in of surgical currently part data are opinion critical case leaders key in we with studies know evidence We this working produce especially is as

findings earlier, have seen for study time. and journal alone we importance of of publications The this some Reports end, quite prestige configurations more the their of in Nature's lyophilized in-vitro production, is mentioned proprietary of This that that exciting of homeostasis. of allografts The support the found amniotic potential The fibrotic To for and tissue scarring improved membranes healing the maturation the HELIOGEN to may enhanced This of article, pathological accelerated proprietary the significant work. I collagen reduced regulate immense. the demonstrates by Scientific processes of or interrupt enable placental-based X quality connected human modulation to of possibility and use outcomes of study superior dehydrated through MiMedx's and amnion/chorion deposition, the evaluated our fibrosis scarring that demonstrated tissue. from both are with restore of MiMedx surgical ability could ] one technology into or hypothesis proprietary in MiMedx practical improved procedure. recurrence. of function to membranes The these the implications results functionality membranes simply [ decreased cosmetic and incidence creates formation incorporating

We example, are and are already using seeing cases promote number applications to are our the numerous develop. a surgical real-world novel starting closure. help OB-GYNs, such benefits for in other healing tissue of applications. there And to use applications C-section of during

could of order for to research superiority of of applying surgeries technology the potential size opportunity the benefits investments The the other to staggering in of in importance the of U.S. be performed to and supporting the and study this that continue millions the be this Considering MiMedx. type overstated. demonstrate tens demonstrated our annually, in of cannot

particulate, xenograft to a the these cases course, appropriate our and up strategic we're excited for we opportunities. where to have in clinical promote We may full market into presence. move first of use which products will be of necessary squarely more continue release will support such pointed various the ramp in investments And reasons. HELIOGEN, marketing for surgical company's compass direction of greater we And surgical to

this have competing. parts the expect greater product provide to We for from access xenograft historically we been first markets of into precluded

to intimacy. third is to enhance designed Our introduce customer programs initiative

have and to reminder, other this is opportunity a dynamic focus initiative markets, turnover we believe ultimately an churn. this the build In facets As product and and processes to the margins. is relationships to of all develop and our which is expanded relative customer programs high a We to change primary development impacts management. our customer. which customer customer-centric embed industries, long-term visibility thereby improve through value lower to of customer-centric the each from of an inventory much in to offering, account mindset lifetime stickier organization associations The increasing plan

is As exceeding nearly such connection Connect ago, our portal, customers streamlined mentioned rate and months for with customer our practices. now we company the a few recently MIMEDX MIMEDX new launched expectations more providing our product as far interface adoption using verification to The with processes referring active insurance of XX% with ordering. Connect, a digital

advantage it company. for and set feature the become enhance to continue another competitive platform will believe eventually will distinct and We the

Then Now about our and over detail guidance. for I with will full let dynamic the Doug? comments close reimbursement more Doug call results. turn me on private year the to office financial

Douglas Rice

Joe, you, to good and for call. our I'm on again afternoon to today's pleased Thank all once today. everyone us. with you results joining you Thank share

regarding disclosures. as please call basis, our earnings and the of information reconciliations so a covered mentioned, Matt release reminder, are a non-GAAP further on many measures As today's financial for in refer non-GAAP today's to

materials encourage few review our item. this expense quarter, comments release we Beginning alongside of non-GAAP increase order today. tables by our to the adjustments in I added a out that in visibility, my to break back press these line you

during are my late XXXX the fourth quarter regenerative exclude regenerative financial comments which historical XXXX. cost in basis year, Accordingly, our our reporting results the suspended today quarter disbanded as results medicine discontinued second we recently reminder, Additionally, GAAP and on continuing operations. of on current last and was our a to a unit, segment business historical made beginning and as bifurcated of the reflect medicine QX operations the

For a recent please operations, and to full most XX-K filings. discontinued discussion of impact refer our these of XX-Q the

to results. Moving on the

growth $XX Our period. X% second net year the sales of million represented XXXX to quarter prior compared

each there particularly factors and this were sales you businesses, anomalies. growth consider some Joe drove in additional By category, our product that performance quarter, mentioned and certain net surgical was them. I the his on like several As when relatively wound would provide color to between in of balanced remarks,

as Second were continue AXIOFILL of and quarter Two our in products, sales markets, versus and quarter the and contributors dental $XX respectively. $XX the period, gain excluding AMNIOEFFECT wound second wound EPIEFFECT product of XX% surgical the sales X% which and of sales prior standout of period. to grew traction the the in in grew and reported the year the million year surgical X% quarter prior million

site our to by results Turning of service.

of While positive quarter first high-priced the of churn, service in the in deceleration the in as seen beginning sites private all these resulted a resulted These in a quarter. XXXX products customer beneficiaries. growth sale pressures we related during increase and through behavior have in rate sizable office we Joe second quarter, growth levels Medicare setting the artificially to has of competitive of compared the saw competitive our settings. our higher-than-normal mentioned, of about in This care each midway in of to associated employee for

during in to behavior challenge changes Additionally, service. the as introduction the beginning for portions site artificially clearly, for private the the skin of prompted the office continues But some of us. LCDs of the performance this in proposed evidenced marketplace pose the a of by high-priced quarter substitute, of

and Finally, and, to our a AXIOFILL year-over-year lesser mentioned basis. extent, earlier sequential declined as I sales a on of

line's accounts ordering product or having performance our with likely The toward this of the early While AXIOFILL will number certain product, is later and with year. on ongoing year routinely customers. have an ruling remains from schedule a the a FDA next court loyal this still with drive using on impact and matter this FDA matter the we

strong momentum many together, in otherwise regions. Taken and sectors softened these market items our

second to gross was $XX Our quarter XXXX million about last compared million year. profit $XX

acquired margin was from prior part period expense XX%, the to in compared Our to assets HELIOGEN incremental slightly transaction. in year gross due amortization the down intangible

$XXX,XXX this flat compared impact, gross XXXX. Excluding quarter were the our margins second of to

quarter a other net expenses, Selling, commercial the sales costs the our higher offset million period. spending the costs quarter XX% launch, prior in primarily was of to efficiencies The the with period, and was $XX second to including year general million compared Turning in other expenses. variety commissions, the by in to in in SG&A year of associated legal HELIOGEN both and administrative operating increase areas. to prior related increased periods. $XX SG&A in compared expenses, was including our fees SG&A, or

on X% a year R&D second in compared expect of were rate Our was to forward. with R&D effective for increase continue our Income million, to modestly reflecting sales. expenses about non-GAAP of quarter about $X or rate is roughly or a to our compared X% XXXX to million mid-single relative EPIEFFECT spend XX%. to $X net period. in our utilize RCC sales percentage sales $X of the we basis XXXX net This digits long-term that With tax of expense we an underway, million net expected tax as QX XX% tax effective going prior line

second year results operations, Our the period. of of quarter prior net our GAAP $X million income, compared was inclusive $XX the million in to discontinued

Our in large second was associated quarter driven part officers. the involving former GAAP benefits net income resolutions the of recorded for we matters by with

Adjusted was net million in income or $XX share for per the compared $X.XX $X year prior per the period. quarter or million $X.XX to share

period. million sales about an $XX XX% XX% of Second quarter or in EBITDA prior compared sales year or was XXXX net adjusted net million of EBITDA of to $XX adjusted the

sheet reached cash history million, nearly $XX we balance quarter of us unlock we level by in the to cash grow position net free in enabled work The yet optionality to will the amount all our to to make flow strong cash during the our improvement of its business number entire the of Turning in balance second $XX we as liquidity. of value. ways investments have highest the quarter, to of company our flow different second generated another order that to marking a the by shareholder the end significant This in believe XXXX. at our generated free in strengthen our million

turn Joe. will call I to now the back Joe?

Joseph Capper

Doug. Thanks,

first or million the sales the or its in million We allografts. Gross EBITDA quarter. Net future the our XX% HELIOGEN, with for were potential cash. our ended and of in excited of just $XX have of began we We heard, was $XX net and product, foreshadowing million profit sales publication $XX limited XX%. in As had Adjusted solid release a were X% another quarter. you was see of we the xenograft to market applications vast quarter. Nature

on and the worse sizable reimbursement in the Medicare private reimbursement care to the private of to and their On participants provide time, new to ago, reached a increased in is approximately intricate return MiMedx as commentary office. billion single a has X.X time frenzied shocked, a CMS let's In at of self-enrichment using to market, disruption payments we I'm XXXX. by facing for future. and addressed for the with call put my situation situation crisis data. or were causing challenges billion dramatically a it of optimistic billion very sparse years immune. MiMedx be what substitutes the office the Now will dislocation due for by with the massively products $X.X the as XXX% very allowed overbilling in we supporting in first months, and certain Since settings clinical to this has described discussion situation in in state, To provided in adjacent earnings over we been year $X.X so skin loopholes XXXX from system gotten remain in in products. result this schemes using the for $X order near tremendous incentives that persist financial physicians the but in purpose Frankly, CMS recent not to perspective, has designed express long

practices pressure from fairly impact holding While has what we this consider business been we successful have at metastasizing. improper bay, the at been

who attrition of of As have of as be the what have people substitutes. employee Justice, the substitute gold. leave several The problem abuse overbill The a Medicare addressed. needs be a caught were case we big in involving experienced skin which practices too to the has fool's and could criminal pursuit result, and scam running to ignore allegedly skin Department above-average massive prosecution month last for of of attention customer in gotten individuals to market the announced a

While need door. the round the up in we desperate payer we applaud enforcement barn the action bad are close to action of actors, to front on

coverage a Medicare effect, few call Contractors, Coverage published or or MACs, to of LCDs, ago, unison, prior X a in in all Determinations, which national Local Just policy. our create proposed months would, Administrative the

are utilization in LCDs a on also proposed instances an The would needs wound patient's achieving the reminder, applications for for per XX call approved on office with of applications product products flagship proposed XXX EpiFix a would the closure. limit help when including additional more skin X at As X of allowance Two over XX based case, a necessity among cap for substitute and offered of LCDs the medical for the published reimbursement in based number clinical nonbiased private evidence approved prohibit our for reimbursement. other reimbursement products. our products

a on is the evidence. to of lack EPIEFFECT third, not published due list The sufficient

now randomized which evidence appears in EPIEFFECT, products for underway to trial coverage lead produce we efficacy clinical come prove to to controlled to the to However, should be moving appropriately requirement a towards have highly-powered as industry a future. The market.

to Given our comment ended X. which strength. MiMedx's to June There commitment evidence-based long-term was medicine, period plays a this

to addition to directly stakeholders. and MACs, to other providing we've In recommendations CMS made the comments

awaiting will LCDs the the now proposed the substitutes. market for to the methodology for CMS from fee being cause at on of similar what most mechanism been of the this for which in case, few least some level to has their physician published MACs likely XXXX near-term term. the include rein a in Medicare proposed runaway word implementation That of is in schedule, short does pricing in not disruption ago, are format spend. to the This implementation We skin proposed plans the changes the weeks LCDs. A

to us reimbursement However, to under our well given rational structure. more improved our and the medicine, a to product expect end are we the much evidence-based financial believe benefit I positioned and in profile, the portfolio, balance of commitment changes our navigate

of specifically second update care year the positive will at reiterate, half the the revenue we the overall performance mid no bringing for very disruption. not business, it cleared clarity the proposed whether our and about until to while excitement that LCDs. our business path expectations think digits. to from linked prospects a our we for and or we way to with low we provides than as learn the to on double settings, our office diminishes full long-term to To have Again, by our a to the impacted MiMedx, XX% effective double net grow this growth adjacent specifically, settings terms we fine-tuning the implementation see the revisit as in is CMS line the point above high have private with this this prudent the stress want more. I the issue some thing continued challenge. for will the is MACs XX% plan in forward, low guidance, be Obviously, we acute implement digits once but to guidance, digits In reimbursement ability and is to single EBITDA in do of profile adjusted strong less top this

with efforts Importantly, as improve and open to questions. the entire large of delivering closing, technology for market, of confident the bright would products. for now call like LCDs current to I the our do portfolio quarter. think underpinning helping to we With of product our future the stay business, navigate our we proceed. that, on addressable discussed supporting our ready science people growing particularly question. our which treated MiMedx another first I challenges and in Please not we who as and the affect lives to are we continue a Operator, portfolio growing we team has expand with many are publication. In the will thank Nature the solid like I leverage a and am focused the strategy congratulate superiority surgical to would demonstrated the the the and

Operator

Ross Instructions] Cantor Osborn Fitzgerald. first [Operator comes Our question with from

Ross Osborn

year worst about to cadence guidance? the to going the So we starting for you then off, to your revenue be And should think balance curious of the to due hear this, think how off of attrition customers products. would the if of mid- get you've sales seen high of single-digit to force and high-priced

Joseph Capper

worst of of second half higher-than-normal seen the mentioned we've activity had I in the We second churn in a I bolus do turnover. think employee the kind it. of commentary, and like quarter, Yes. my of customer

little to adjacent rebuild more areas, rapidly areas the concentrated made which in of we in Frankly, moved to were limit was there, with a So bit that affected. cover of damage it pretty most difficult handful folks. it kind the a

pretty But So that. of worked think these, there's around refer to, through We said, it the high-priced shape in awful that good expect that we're as now artificially being of still we activity sales products. as an worst lot us. we've of and behind the is

going battle So to through it. we're

had The weeks was as the that the which best thing of soon that some see sort a it could schedule, action did humanly possible. happen We remedial ago. takes in is proposed as We not. to physician government hoped fee few

list. high So LCDs of on the can't we're the happen LCD in plan current kind That right predict we felt what implementation sales guidance when we upside thing or to approved the are it seeing best high-priced assumes is most for to could single case, the thing that to that with their prudent with But And those in the a of thought not Again, that curtail rate similar to the about guidance this down are have happen. behavior products because prudent being upside to was proposed worst. implement take LCDs was for implemented. But now. potential We in would because MACs do. the we next plan the that for that it digits we to format. similar to no the run the most will some super mid-

Douglas Rice

international think this continued vast a anticipate the as surgical cadence will recent of But and HELIOGEN. of gaps QX. the behind the out our traction a sort And the continue I'd the also Yes. expect off to to our half turbulence, grow. gaining playing and a second half our point health care happened of play happen, launch quarter. QX. start we've our Joe all lot we certainly AMNIOEFFECT also of second just And year for EPIEFFECT And in we've is filled our because good xenograft, that we this some already majority back in certainly this got that traditional Ross, with I'd continues momentum recover. suite. out add of business guidance perspective, From seasonality almost as indicated, at to

So say being QX. as I'd QX than more impacted

Ross Osborn

Okay, on got the lastly then before little in line, helpful. we jump spend the very time queue. time for EPIEFFECT bit it. That's for RCT there? more And I us a back Could just assumptions of cost size, in and terms

Joseph Capper

our did put would terms is refer study already been not size line, it had year number of in the well-designed number forecast. just report within as budget frame. But out about And out patients. probably through like the talked a of I with around we Yes, IRB RCT. think X-month think at of enrollment. out underway. so well It's patient and a the it. the we'll I a we think I time outset in on we've We We're time to interim don't put highly-powered,

So have on percent huge a it will of a as our revenue. spend R&D impact

Douglas Rice

Thanks Cantor. appreciate coverage, initiating relationship We Ross. for with our

Operator

Our next with Capital Chase Group. Craig-Hallum comes from question Knickerbocker

Chase Knickerbocker

these Was was Obviously, last relative QX and was speak a some Maybe in first, to help just forward of in different others. year? churn of kind quarter ASP the speak players or me bit was to kind customers there been in driving different. to there's here, little what kind half these of and of of second products this reps new of to of Joe sales kind relative that additional strategy market. what and exactly happened in QX Just understand going from of high kind specifically what the QX

Joseph Capper

a of more just it's think I chase.

issues. us We've list. lobbying their be been lot report for field". then reporting now. required to couple about were issue a people ASP you a "playing level, high that start XXx ASP other Originally, a even and to products pricing out price this talking of in been We dramatically companies these and scheme You've causing to and that participants was to huge that while price we keep that multiple an high for prices. levels. to is were invoice this using rotate on have Folks what at in -- order following saw normal spike up the the started years. quickly, using, people migrate the the of a on to And number we to products rebates so of the those may WACC recall, market of of everyone's saw so playing Then price levels in not were things at

prices, taxpayers these some of members vulnerable chronic of which I a fortune there's get people game, of doing kind our lot a schemes couple think of more things. more this. ill with lot people when those is of there's There's at of just One, trust hurts and what's and dealing product people all, So Medicare the market. and elderly doing artificially wounds. think high using the to happened overbill a the of a a It my are I into these who about it because is what more society, makes in by stomach they're making most little

But while. a good unfortunate. it's to We've no point, to it's success. lobbying accelerated. We -- been have change make bay for did keeping job So at your a pretty and the had think government we've I been it

a then is that losing doing this of it. and frankly, money. you that and And So your a friends it, bunch be we're you are tough making telling is rich else people when shouldn't argument, credibility doctors It's they're everybody telling getting. see how little wrong in doing probably

-- was it it's addressed. So a hot be mess needs it to and

Chase Knickerbocker

bit that that are closed fairly because dynamic the effect LCDs in to of usage these of any there Do there's term? be potentially go now into and you out loopholes might some that think near these of there's spurring a some slated little

Joseph Capper

would to I to it. looks see love [indiscernible], New right?

CMS. looming I lawmakers. has think with up we the -- starting it, MACs. of is the they're now We're on to talking a is the lobbying or and that talking picking put LCDs fact be Justice media. should coverage We're We're some any at are day hear Department day to something fact talking spotlight that The media on any We're to to the it. helpful.

government. elaborate is to from So when chart there's XXXX starting very what this XXXX, indicated, using or than a members less as people pretty product life-saving saw It's the and that. like, you this is all new in or critical at some go a over does $XXX no it look the fairly million slope. And about. at -- that a are from It's other scam. of presentation, government, is. vulnerable This in $X elaborate for the to This our our see what, wasn't $XXX I drug. billion That's the When of million what overbill to mature if you to society. you some the category scheme overbill introduction products look

You shut down. a be cetera. periods, So process. it would of et to that be is right? has think There work That changes. to cetera, to has talking have get people said, being change, through to et to comment the proposed has that this publication to we're going a rule There

to that's after time. people that they're -- this DOJ process, Yes, great going the of through the they abusing it's need that close which is front are really the still end it. problem. working But So unfortunately takes

Douglas Rice

say, don't having this would is service And in. I we're X Chase, and this X of that that payer turbulence forget side

our but than growth total lot strong it's of generally, normalize I line. of top over a with remains expect of that the healthy and The drivers. believe XX% we So to business time, would remainder less that

Chase Knickerbocker

likely the LCD Do model that Doug, EPIEFFECT being from for about having on effect even right, from us. we then how revenue in goes revenue we positive effect, quarter does XX% EBITDA. you do first into first you out Understood. of And should again, of whenever rolling if that think still that of for of about that year? then that or guys, in see positive X the a quarter? have that kind If LCD, it margins EBITDA quarter. And positive into that just remainder thinking trajectory having we just again a about quarter potentially to second, the through that just be quarter the So expect as the go the effect, some -- on despite think last we effect revenue

Joseph Capper

think the per inventory is I in after expect implemented. when it. at inventory don't people are of carrying don't I uptick square a these an things is a are just centimeter. priced lot burnoff Yes. would I think $X,XXX soon there the business lot of

Doug? So my guess market pretty the we'll quickly. is probably see shift

Douglas Rice

an in that Yes. scale, we're lot to EBITDA the about to the perspective, think guide we're of transient. just want to we EBITDA -- first the good we'll recover have. XX% today previously built built the I I is XX%. way maintain we adjusted thought back half certainly half And we is a grow, expect believe we but had the that of turbulence the we about we guided we've would the didn't that north be while and and certainly infrastructure year From would that already year, But of of

I approach XX%. think we'll

I the in And RCT the year. sort XXs we costs. back particular the margin in point be first this as I of that think XX% expect is that of to low the modestly of the cover of half at volume the ramps less service think And would I side we below fixed X% year. half our mid-single have at to at as that up, point run in would be so driver this closer EPIEFFECT they that look the digits gross of that or to we'll for R&D the as instead other here big

Joseph Capper

we're while. we're Joe. you talking that around the a it's are It's and with. transitory. is see really This we quarter the talked been indicated, We get And it. by long term. I'm it this impacted much of think Listen, do as as this know issue. it business revolve the Chase, a first to the I deal the that we've nuisance because to nature for about questions don't well on We it been as we've LCDs, going about sure a to of going the that have of impacts it's and going rest lot

is ever we still of adjusted and it to of lot highest quarter difficult recorded we're we've million cash revenue tied quarter, as generating in deal still had, for However, $XX EBITDA. is a a and which as lot the with, the of

So we this. will get through

lot this a point. in this run, the long it once once about past, a we're we'll think stability of you out play that get more heard side regulatory in it's at and more fix standpoint, on me industry, other in and I from And the and reimbursement investable. will indicate we all look reimbursement As back issue regulatory the some we laugh this and

Operator

O'Neil Street Brooks next with Lake Markets. comes question Capital from Our

Brooks O'Neil

following thing they Joe, a with X a additional I'm LCDs, comment of on wrong LCD that do comment Then Or got the you period, to curious. comment uniform MACs I of questions, we Obviously, just determined as withdrawn. do of X this a during guys significantly they some heard disrupted in across are these the proposals time? I've MACs think the you from on about out X reimbursement come you whether said, you see lot could comment at right were wobbling that, this is, year. year any The indication from this I've this don't so situation? period, the more. last by get MACs topic subsequently lot following think loophole

Joseph Capper

they're fairly not It's a implication they're in would implement Brooks. terms best close to to when implemented. whether of be sort And say would I or going and giving question, good they that any of the

a follow-up you, and for been sensitive, wish questions of though, and would had they're asking we've going in tell this to several, folks So I could. that what's to, we've that meetings lot I handicap calls. on, can't the able I I asking with my highly sensitive highly for to you. talk

apply if So which crystal I the logic, me you, had me I'd spend, they're it, be escalation work answer doing I soon. have the a and format some will given tells action But for some ball, which some -- of the buddy. of if level again, tells the look, in on taken

Brooks O'Neil

you. hear I Totally right. Right. All understand.

you how you dollar big. 'XX that begin it potentially me whether of sense think market for us you whatever And for revenue I is as year? to of sense yet you a xenograft is, just really or can And into incremental can think ball? meaningful that it look big big, you crystal sort think and Is give out more terms a full question, you X in it your event guys? more give rollout can a you you Is product? see this you for word think And I 'XX suggested event? ask any a us more use you the different Let the is the heard timing the of

Joseph Capper

Really And Yes. X reminder, get out marketplace. a particulate. this to collagen-based excited first this the into as a is

et it's used tendon So in procedures, to cetera. going be certain surgical repair,

a well. XX% for there's the that tissue think application We the covering good about and as xenograft products do we xenograft plan us. to as this a for more that lot skin remainder. up Amniotic just opens in of a So other neighborhood with submarket, launch And that product. accounts category total market only for in synthetics reminder, opportunity the

So we of competing big market been TAM. our have to at a areas doubling least from a market different that opportunity probably in precluded variety us in reasons. for These for are

it's some reasons. but year the cost, next think good start a for size use to pretty us. upside want see it's opportunity We'll it's year. up other this amniotic really product from People tissue. Sometimes I But to market ramp don't sometimes

Brooks O'Neil

with Good luck bad the guys.

Joseph Capper

Bruce. Thanks,

Operator

from next with Our Mizuho comes Group. Anthony Petrone question

Anthony Petrone

products in in detail many remaining you sort large xenograft. of in. need market, expect to First you How Thanks XX%. opportunity? just have one to How that there. Competing the XX% xenograft sort follow an add? You today products address of that initial xenograft to for product up many market more of the do gets on do you

was opportunity terms a there stay. over some And The that's to overall to think of a into U.S. to we sort forward being do in process MACs? as of this and Physician Office Medicare, of just path is out But have the going the going on be is back this quick some definitive of to evolving what at billing settles was of the When that of extended that that's follow-up in $X away, juncture, then revert billion. it that LCD. and ultimately, expectation sort once go some out the going you we this here from is data

Joseph Capper

xeno to back get me first. let So

need a sutured, of a it in strong can and that that be different sizes thickness, So yes, that accelerated product now cetera. with procedures, sometimes We'll can tissue. to out terms potential strength what use different similar want sheets in surgeries, product we you have to different we're portfolio. to in complex et use amniotic in of think round doing of I more

X, it's needs give can can't the have a we So SKUs marketplace but I you going to that whether levels. I at that would all X, so the number X, of -- meet a say compete X, we're variety of

of question see one overutilization? portion it that if of How we you how utilization. The is opportunity, Again, of can presentation, of the the about LCD's market that in line much much the slides -- had is at you is look priced? it the

of amounts So these massive money. to a the incredible opportunity result make there's of as overutilization

from in don't tissue to be sized us. opportunity care and amniotic another, it Anthony. settings some setting So to And compete number analysis of of -- current a is of goes rightsized. of line. up. put looking How it I a us back lot out done sizable at share us, cleaned down we've going the a this as I there, of to to would care obviously, sensitivity opportunity X think And market utilization for migrate shut decent an once is our cut for around have we then give given pricing way it's a back sort patients pretty in and once but for, opportunity is much want be this will

Operator

Northland comes Capital Carl question with next Our Markets. from Byrnes

Carl Byrnes

Do to the adopt MACs feel of questions that with expectations been might line lead Most you have respect X my any potential LCD? have to answered. or of events the time

Joseph Capper

working unlike for talked Carl. We did, obviously, are who asked we question, the as various lot there stakeholders sensitivity, going bit In they're from well. on. more setting already. we involved our a people process. in the I of stress a working least questions very through means go our perspective, would this back process. I wish are get Thanks the to these little in just asked the When the year, getting and question. time through tune what's I that much answer that at conversations, we're And a last is of rules. the No, heightened We're fact about that is

can't a elevated that this level have think substitute. various for was a on has on all. price agencies been I need But you Who to rub All gun high needed or go knew didn't back? that coverage a skin these you the to it either to So government determinations implement products. in fairly it responsibility

Operator

floor I to turn for There this time. comments. to Capper are no questions further the Joe closing like over back would now at

Joseph Capper

Thanks, it. the for and quarter. questions everybody. Appreciate appreciate Thanks your next and your continued company, participation. I to your in will you we interest talk

Operator

teleconference. today's This concludes

at You your your time. you lines may Thank participation. disconnect this for

MiMedx (MDXG) 31 Jul 242024 Q2 Earnings call transcript