SMTI - Earnings call transcript Q1 2022

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Operator

Good morning, ladies and gentlemen, and welcome to the Sanara MedTech Inc.

First Quarter 2022 Results and Business Update Conference Call. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Callon Nichols. Sir, the floor is yours.

Callon Nichols

morning good and you everyone. Thank welcome I'd conference Sanara earnings to for like the to call XXXX. quarter MedTech's XXst, you ended March issued will afternoon also We our yesterday would page. earnings to like Investor and Relations highlight today's post I we deck on that our Form will deck, the be this well available earnings as transcript a supplemental a copy on and This our of of as release, XX-Q, this call, page.

in our remarks reference will this information We today.

Chief Nixon, Reform expect XX and supplemental Executive our meaning today's our for deck, in Fleming, the prepared in Chairman; We and Securities Officer minutes approximately conference release of statements this the time Officer; of Private Ron McNeil, last Executive include Act Financial from allow Chief Q&A. XXXX. forward-looking Mike Certain and within Litigation press call Zach comments to to statements

For statements, about XX-K most to or Form forward-looking for see statements, quarter. and and actual the and XX-Q uncertainties materially please factors implied from more involving results the on Form cause projected annual report those forward-looking vary could information our risks by recent that our

Now, I'd the like Ron. over to to turn call

Ron Nixon

Thank in from Callon representing $X.X of generated XXXX, XX% and million first everyone. period. good Sanara the you, In increase year the quarter prior a revenue, morning

net $X of in month significant a the month team, $X.X Additionally, a we had million our first which loss March, sales quarter. at million coming was -- sales milestone our in for

quarter and commissions less selling related to which respectively. related $XXX,XXX. sales were accounting approximately and increased net our costs $XXX,XXX impacted costs SG&A, related which R&D fees costs in were merger. by $XXX,XXX; impacted benefits compensation increased excluding was and $XXX,XXX. costs $X.X related for year-over-year. to to to also Sanara which $XXX,XXX, Precision were $XXX,XXX, the and Total which to benefits costs Healing Our and costs higher studies related million, to WounDerm, Precision equity in compensation were Losses clinical to total with costs, Rochal investment than Breaking million loss Total WounDerm were first down slightly total $X Total million. further, higher transaction our were Healing net by addition $X.X SG&A Rochal in due for marketing loss, associated in rose method our Technologies $XXX,XXX including and year-over-year

For our to of on we the a while continued offering. track XXXX. products, goal current in further seek synergistic we're sales, to current our basis rest breakeven the we additional are develop internal new the evaluate flow forecast, and being year, cash expect in Based see partnerships, opportunities on rates achieve in surgical our that to growth on new growth of

the wound to Precision Healing, quarter, adoption the team platform biomarker the imager Healing. month the product his Zach of been will to lead leading product to improving the increasing to will the data and algorithms products XXX(k)'s diagnosing on the the being skin aid before offering. existing and During develop also the biomarker by efficacy QX clinicians new supporting for driving condition our more research, remarks. offering. ultimately expected evaluating analyzed. to facility wound, more current prepared the collected wound Subsequent in assay the and be the platform allow are our wound in decreasing as expected expand quarter, will facilities, in upon focus this surgical end cost. development clinical and ongoing This of are and The of of continued approvals, guidelines of us. an end our Healing interest in used that XXXX. by to the of accurately owned acquired filed treatment this further technology and the important Sanara not Healing to assay are increasing comprehensive technology and We Prior healing transaction, submission Precision already is company further We rates remaining multispectral in and April, we ownership enhance to to which as technology and XX.X% Precision skin to the skin wound practice owned to view Precision believe company treat conditions imager FDA of the platform and evidence-based

Now, discuss detail. in accomplishments to Zach Fleming more our

Zach Fleming

Thanks, Ron.

we to areas. existing into Our penetrating expanding At – generate the new the territory first surgical further total team growth, sales end of these field reps into are and managers or employed. also quarter continues TM's. strong had territory XX of Eight sales territory

increase of the QX in our individuals At partnerships ASCs have across XXX XXXX, or hospitals and teams representing growth of distributor our in both products. XX been CellerateRX see to number continue end states. and We the sold

XX the facilities, trailing was approve X,XXX and of quarter. be to sold months the of end the During as in first

turn ASCs As in hospitals we used. platform we've now discussed there where our before, the approximately it CellerateRX discuss Ron to back – believe be over in XX,XXX over I'll Surgical to in WounDerm detail. States could potentially are United

Ron Nixon

Thanks, Zach.

components to are mentioned the skin biomarker earlier, to system. and significant I of solution lower achieve to care care platform, that, believe to I and the WounDerm unique value why healing it's to assay we add and to review will As health comprehensive strategy a at use Healing rates critical wound of better our take cost imager multispectral a data we the Precision moment think drive power care. want to and the

settings skilled for can This and care hospital. cost the home specific and to management I've from episodic and focused back care inconsistent, diagnostics, based results the readmission reimbursement lead of as model setting, wounds. patients The in As facilities, hospital, before, outcomes wound often growth is such more on treatment care the with moving limited for across is This coordination is nursing on to care detailed to discussed care different continuing. including patients to suboptimal system, setting not site the the health. wound higher current the

oversight treat virtual through any wound maybe. patient consults and wound the the wound, diagnose based to and on clinician support the expected in wherever from is that care offering comprehensive data Our physicians setting, allowing

throughout slide believe We we've Precision have a the our diagnostic made impact investments mentioned. that while believe and Healing solution part platform, of the as will we the outcomes, to single arrangements technology-based includes lowering laid It we other our cost, detail believe these cetera. in of this of to strategic and payers components We out build offering X, bundles, proprietary important have and overall all complete number et – this products. and and first wound six through the such focus collecting all a through very We areas, is data a to is development Medicare wound in capabilities skin EMR Advantage our our proprietary these to in wound develop the treatments in platform, and patients. at-risk On the pieces consult diagnostics terms products strategy. scenario virtual from for further offering proprietary research mover as

to fee-for-service environment. in compete will We a continue

discuss ultimately it emphasis care will you that, answering value-based over our value-based to to where managed position offering be this on placed arrangements. this there offer Q&A. in results. and financial will However, us on I care a to wound and more questions With may turn companies the any look with to Mike I'll partner have these dermatological solution for forward

Mike McNeil

Ron. Thanks,

the commissions fees over expense as Rochal higher revenues selling first sales force down our of existing were the million and first primarily million. as in operational higher markets. sales, quarter First were expenses related in to related XXXX of strategy equity to new result expansion and non-cash the $X.X compared XXXX. from prior expansion costs workforce further, million July wound both product total The of SG&A payroll result higher of related and addition continuing the sales support, costs SG&A to quarter costs expenses the to were compared first first compensation of costs to increased higher for surgical Breaking of sales million The a quarter compensation XXXX marketing our our Total a independent quarter costs in related $XXX,XXX, revenues for associated Total care quarter and million representing a costs in were merger. expenses which were transaction sales $XXX,XXX. Technologies Total our costs XXXX. due Rochal benefits Precision and revenues accounted year. to respectively. totaled selling were including due for XXXX, expand were for WounDerm to XX% costs XX% sales, $X studies Rochal with our $X.X higher related US WounDerm, costs to $XXX,XXX. Total were Healing million, distribution clinical primarily excluding to of higher to SG&A increase products and network force increased $X.X -- and $XXX,XXX to related $X.X the in commission $XXX,XXX $X.X resulting SG&A of and $XXX,XXX, and

XX additional XXXX. had sales loss million to in March strategy our of new existing reach since and the markets, net employed our part The As sales we quarter. of in XX, manager company a $X.X expand field

our impacted higher losses approximately was Healing As by $XXX,XXX net which SG&A year-over-year. increased costs Ron related loss and previously, increased Higher $X our in year-over-year. Precision by by to increased method million non-cash increased R&D Investment equity $XXX,XXX mentioned costs,

was of Our for some remarks. it cash I'll QX $XX.X closing million. at the that, turn back end Ron With to

Ron Nixon

you, Mike. Thank you. Thank

the comprehensive including We our a sales. the to That on our answering key submitting concludes and we our the XXX(k) record wound questions generated with believe needed for and you any Operator, for first for ready team over may the forward remarks, Precision and in offering sales, first call quarter, the in we're As $X the components you. we've million discussed imager have to Healing focus look assay. Thank have. we questions. call -- month multispectral open biomarker

Operator

we Private from And coming Instructions] have one question [ph], Michael [Operator you. Thank Liou Investor.

live. is line Your

Unidentified Analyst

growth quarter additional from hospitals time Hi. growth growth that I'm for XXX continuing or congrats if or most maybe we're so strong you're been Thanks to hospitals on able into signed selling to question if you've and to the in is you've -- legacy be you'd the hospitals that of coming my coming coming quarter, into. the is older where grow, currently first taking Cellerate very is selling My the you're every the for from if already quantify coming it's or from? curious the exactly, related seeing quarter-to-quarter like the some on, question, like are that additionally is from where guys.

Zach Fleming

would and comes be that. that are to we to working -- This expand deeper is I reach, going answer of We're Sure, Zach. hospitals from. definitely where can that within most and our get hard

Unidentified Analyst

Okay, will how great. of main impact developing? wondering you're rolling the Like the with business? generation was line of the us that? you salary then differences if pricing what the could in update that expect if Thanks. is and margin any out on or that the And And time for or also purpose second you financials that I any

Ron Nixon

is -- this Yeah, we've Ron.

efficacy. that see to what to continue we We do on improve experimentation work of areas in to exactly can multi

high we're a around such efficacy for what is surgeons complementary improvement these it product have but or in looking We that product continued of Cellerate, our need products at require further the it. or

forward better have it, yet, a for that continue a for we So us on but date we don't are customers. top to specific and priority seek solutions out moving to our it's are

Unidentified Analyst

growing, you $X you where like see if the could elaborate this -- had business record on as new accomplishment. the I grow business the as stocking in quarter continues specific which was rate if to strong month month very is anything And and a your great. on or what I just a orders that Okay, were of was the or sales million you noticed said for or is run business there if this there or first that's in anything, usual, that's you history, that business too? representative wondering a

Ron Nixon

Zach?

Zach Fleming

Yes. Thanks question. for the

territories. a new are few at hired to running to and So our rate. having mentioned now starting to doing speed keep up we they start quite representatives in fast as business their impact earlier, we know, and are a you that get And we everything

path So doing. great and exactly been we've we expect to what continue do on a

Unidentified Analyst

offering And trying Okay, great. that the accomplish? was, updates right you're question guess, my wondering of this what, any be pilot Thanks. would there you're I if now? the to like maybe milestones like everything WounDerm product expansion And on year that for doing the last for I pilot were was the and

Zach Fleming

complete the imager will the a Yeah. looking WounDerm, is thing forward let the able larger all that, pilots, but can this that work But, We're issues it's pilot it And progressing when we we're And to today to from. as include we we data we to agencies nor through does continuing shareholders up, had nicely. know. assay. strategy. the to that. going we The fine. have well it biomarker of incorporate draw into some pool patients be not have that to logistical one the full when getting set from With just expanded is

Unidentified Analyst

one have I Okay, And excellent. Thanks. more question. did

So, you anticipating XXXX. achieving breakeven mentioned by related -- think to I

Just get think I'm just create Cellerate expenses, breakeven And could the as Cellerate R&D sort that to curious, just you covering business? itself, the of you that. whole clarify you and and that cover there, a to across of continue is also if if the by can even the breakeven sales can those WounDerm, side cost clarify

Mike McNeil

Sure.

for its of high continue expectations on have to Cellerate We path success.

have that we will expectations beginning hopefully, XXXX. However, WounDerm also by be the platform the implemented, of

from expect we So do the well. to contribution platform see WounDerm as

Unidentified Analyst

Excellent.

my and great the on questions taking you for Thanks quarter. congrats thanks. Okay,

Mike McNeil

Thank you, Michael.

Operator

Up IFCM. Instructions] with we next, have [Operator Ian Cassel

live. Your is line

Ian Cassel

less reps, sales going or solution will as or Healing. be solution, through care When is through would be kind sold -- question Precision through to the be bundled devices My Yeah. comprehensive something a that about that that that whole, be sold more sold a your current that that's your through sales of can or Is force? wound approved.

Zach Fleming

nothing can biomarker the wound assay both, -- Ian, aspect especially it just combination Currently and there can the both. and a lot being our It our It centers, reimbursement is Precision market, is like on infection. imager be because to one Technology, of is around Healing there diagnostics. which And currently be with paid of in attention healing. -- is

going And going We be so it's to the application have throughout we continuum. that think think it's to impactful.

It in home in it should should in facilities. skilled should wound It the application nursing So have have application have health. centers. application

patients need have you to wound go only or tool you ultimately, where anywhere you're diagnostic a think we guessing. So

-- channels. it And through so, a do types going see we multiple of

all -- in those but settings. selling described so on reach are terms the different And channels the just to are care what side of I

Ian Cassel

about And market Both point question enthusiastic update track. you one previous call. give if you which I believe then, on hope really product Can that have asked and at I on think the still it's Zack a were earnings maybe in I XXXX. to in and you some BioSurg,

Mike McNeil

Sure. Zach, you're going to that? take

Zach Fleming

still that, at Yes, Sure. said, looking as be still track, on We'll XXXX. you it's enthusiastic. in

Ian Cassel

you about Okay. excited the into it part? little bit portfolio could that and Maybe Zach, a how you're fits explain product why

Zach Fleming

wound, lot into sense that talked kind a and that on right outcomes post-surgical and Yes. of as the the the sure in long-term. Sure. those It these fits -- in about, making are we now focus bundles of -- owning there's patient good

surgical reducing So this product fits an on the into that in wound. bacterial load terms or incision of

so the as that decreased, a to and And patient has therefore, chance heal gets outcome. better get very

Ian Cassel

-- a displacing or of that product is sort that is a Biosurg there you're opportunity? is with greenfield And that

Zach Fleming

that cocktail it's I treatment wash market products medicated a that so wound phase in think over kind incision the been of this just do to and the is things do you and years, as next be saline the a whether well. of a or doctor's other for some the and with see standard this out

Ian Cassel

you. Thank

Ron Nixon

Thank you.

Operator

I'd like questions we Ron for closing Okay, in remarks. queue. Nixon like to further floor back have to Instructions] turn it no [Operator looks the

Ron Nixon

us. for it, the appreciate look Thank and was again hope today quarter. We you, in we we the you, All really helpful everyone, and next information to to forward joining right. speaking

Operator

you, conclude Thank and gentlemen. conference ladies today's This call. does

You at this and your a for participation. may Thank disconnect lines you have wonderful phone time your day.

Sanara MedTech (SMTI) 17 May 222022 Q1 Earnings call transcript