SMTI - Earnings call transcript Q2 2022

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Operator

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

Second Quarter 2022 Earnings and Business Update. At this time, all participants have been placed on a listen-only mode and the floor will be opened for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Mr. Callon Nichols, Investor Relations. you. to over Callon,

Callon Nichols

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

will in We our information this remarks reference today.

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

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

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

Ron Nixon

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

Healing quarter, our The detail. go a when primarily believe the go a record Scendia the three complementary offer detail models. In development we $X.X we are as million, compared same of which SG&A will loss the which to ownership which all being to and the will we company Zach further development quarter, Precision and quarter, remaining But other revenue completed it period the during a company. other million believe into also Healing as expenses, quarter. wound loss care the into But in advanced by biologic in at-risk Biologics. of new technology of of $X.X Precision our the projects. end types our of increased million into the net of will to later to several for Advantage, addition the $X Medicare we payers quarter component merger the had months of and portfolio higher added increased and Zach the will comprehensive of acquisition call. with our was detail, more generated well currently be Subsequent higher Mike In more that current revenue $X surgical million go costs, but Healing where that acquired health related product it of merger with our also previous offering. a company first key year R&D quarter, to impacted products a was second the Precision completed we significant our solution of acquisition dermatology in to strategy this at-risk under the

to expand In believe of surgical ability will addition, the provide suite products. systems acquisition we comprehensive more health and our new

in Fleming Zach accomplishments ask I'll our more detail. discuss Now to

Zachary Fleming

Ron. Thanks,

second areas. of further into managers a XX to base expanding At surgical quarter, employed. growth, geographic sales Our team had strong generate field sales also end total into we the continues penetrating new and existing the customer of

XX during was the across our products. in XX distributor We and At months individuals facilities. sold both growth end continue of approved sold partnerships number and XXXX, surgery our in the be CellerateRX X,XXX to was trailing the ambulatory QX of hospitals centers representing and states and in increased companies to XXX see

United XX,XXX surgical States hospitals before, discussed believe could we've be in potentially are approximately the for we ambulatory CellerateRX centers there As in used. surgery

on mentioned, We a products use beneficial Scendia Biologics. Scendia year, we above to of level. Bone We markets and believe we the believe multiple Sanara of Bone has Bioactive that Sanara Amniotic Ron generated did to can Advanced where been states long biologic where ALLOCYTE to advanced bringing we the the states physicians benefits Allograft. completed an prove XX Inductive focus Scendia revenue additional a the suite Membrane or ours. in products. BiFORM multiple of that partner acquisition, AMPLIFY Scendia Through sales Cellerate revenue Scendia into generated our Verified As in saw acquired Prior this products acquisition, of acquisition expand Cellular $XX,XXX Matrix, TEXAGEN per primary Matrix them to Matrix, our July, eight with same. line there's into that Sanara. opportunity to complementary Moldable at above

XX-months is XX, revenue May of Sanara states. Our XX was as unaudited all Scendia's expand million ultimate the goal to trailing Scendia's unaudited footprint $XX XXXX. for and XXXX geographic across all products revenue was million and $X.X full-year

For and stock. the would The Sanara of products QX I be had expect of price $X.X purchase initial acquisition Scendia for note we million were the million. comprised period, $X.X accretive $X.X same XX-months $X to to to Sanara's to XXXX. trailing of Scendia million that in sales in was in million, cash also EPS

thresholds the at payments sales two the of upon In in election. achievement addition, acquisition. certain one years are earn-out there based cash Sanara's payable and stock growth in following of or two the Those are

and comprehensive our Now turning strategy. to skin wound

proprietary company the biomarker and with that with an Precision of giving earlier, capability track, collect, EMR As be the ability the of be gathered. healing can Ron is believe adjusted the that progression wounds believe of strategy. consult component rapidly are by of and assay will and We the accurately platform further help and information continuum more goal the important mentioned patient's and data imager on as Healing wound cause our virtual Healing is treatment treat, to diagnose, diagnose integrated imager data multispectral the system to care. The we Sanara's Precision the analyze of across tailored root collected the the develop protocols clinicians intended

platform clinician guidelines. efficacy is enable -- of will suggested healing FDA Imager develop and for healing. time further lowering improve expected practice use Sanara the to for to this of in the Additionally, the expect Healing company prepared expected and cost help that clinical wound evidence-based The is algorithms to submission Precision to is XXX(k) healing be reduce overall while being filed treatment QX. early

that offering, that, Mike use financial our over As to to it offering. from the our I to WounDerm discussions turn advance the continue to complete partners of benefit it payer our potential discuss With relates comprehensive now with will could results. we

Michael McNeil

Thanks, Zach.

ended net compared million prior-year generated revenues to the June revenues of million June three increase for representing For the period. ended of the XXXX, XXXX, a we three from $X.X XX% XX, net months $X.X XX, months

from were expenses for $X.X six due SG&A XX, expenses six the our midyear of XXXX. markets. related representing XXXX period higher payroll The and compensation, independent the were for continuing We loss $XX.X the three and months increase Rochal net XX, XXXX, to marketing network expenses XX, increase to ended of new months the our a XX, penetration months loss our of increased and XX, revenues for XX% SG&A ended travel compared ended both million the surgical were XXXX, SG&A a ended last months our XXXX. XXXX, same higher $XX.X net $X.X net prior-year due the for to in expansion period equity the increased The a of strategy distribution in the revenues three three primarily in U.S. were compared promotional $X.X June months June was For due year. for and to as million XX, XXXX expenses for million had addition the June period. in attributable totaled XXXX. compared June XXXX, as July to for million direct SG&A to June workforce to million expand in-person of the $XX.X and ended wound million higher products also partly The activity months care year, three net million million net SG&A compared higher increased costs market sales in June to revenues of expenses $XX expenses higher sales non-cash existing last expenses. same geographic and ended of the to $XX.X a primarily XXXX result

million For Precision $X.X described of a on the million for loss equity year. and six-months ended minutes The loss in Healing. period method few R&D a expenses $X.X our of SG&A net losses compared June recognition costs XX, of investment to we higher loss had to ago, XXXX XXXX, period increased same a last the was due in higher net net the

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

Ron Nixon

Mike. Thanks,

quarters revenue record have to by continue wound Sanara we discussed, strategy. surgical we've As at driven

Scendia usage implementing we and our to for call thank are questions into Surgical our skin look continuing advancing questions, our That very and concludes Operator, open the Healing answering may remarks, Sanara. expand addition comprehensive and any we on wound you Precision the surgical forward to ready and we're our fully of to offering and you integrating In products much. have. division, focused to

Operator

floor issue is from technical Fitzgerald. have gentlemen, [Operator please is question and your apologize. Osborn for first Instructions] a the questions. Okay, coming the have Cantor do I now Ladies from there. opened Ross, Ross I ask slight we questions.

Ross Osborn

that had really taking quarter morning. way is good drove Since growth add, in think sharp in second a second hospital good and Hi, to for my Congrats net the about do think on quarter. questions. you thanks you admissions off, do you forward. think starting What this going the

Zachary Fleming

Ross, hearing. I'm trouble Hi, having

RonNixon

you. hear can't We

Ross Osborn

this better. is Hi,

Ron Nixon

better. Yes, much very much,

Ross Osborn

so step additions There's my the really Great, first the during just on strong quarter. a Okay. question is up. hospital

to you hospital a in forward? think new And thought drove step-up good way adds. if this Just curious new is going about the additions what

Ron Nixon

you to that? want do take Zach,

Zachary Fleming

I'll take that. Yes,

So sure.

and total into you're selling XXX we're just or so about to So the approvals -- talking the that clarify, X,XXX.

Ross Osborn

[indiscernible]

Zachary Fleming

long we've with new quite a people those few of you hard additions. Yes, the in obviously more active since And hired much as folks recognize. are each getting working We've markets. really can Total. been

number manager we he's system to to add been up as helps several and a that's able well accounts very drive well that as approvals. seasoned hired So that national

Ross Osborn

June Okay. the XQ? to of portfolio how sense. the I That just for acquisition. Are Got balance Scendia think year it. to disclosed maybe then able switching through makes revenue performed. but performed this how you curious of disclose And May their you

Ron Nixon

not have disclosed yet, We Ross. that

to mind. hold So like don't off that, if on we'd you

Ross Osborn

I to enough. be operating forward? of the but the earnings, with the acquisition supposed Okay. Fair expense think about we should it's going XQ Scendia, how to there, given Sticking company and accretive realize profile

Ron Nixon

at base. Scendia. actually need product that It's don't additional our adding They to Nothing offering to about is personnel. changing really existing add

fair a of doing so. there's by we accomplished amount So leverage that

that bringing in they limited in, were expand throughout number total other states, XX. to of know, continue to that you states we As a and the we're

it's So going addition a think I Sanara. great for to be

Ross Osborn

Okay. XQ. date in last will for one like a little I Great. to then Precision XQ And bit early me, slipped back queue. filing from Looks

Just if to out there? anything there's call curious

Ron Nixon

with supply started chain Yes, having it the issues.

electronic got in You've components there.

And we unit so commercialize. had needs unit, You've filed in production that when we everything the we to mode do got ready debugging experienced through get XXX(k) some we're just software. move order into the to through make be going to with working it all because be the and that production on complete XXX(k) we'll the as delays a

Ross Osborn

Okay, my questions. thanks quarter taking strong understood. the Congrats again for on and

Ron Nixon

Thank you so much, Ross.

Zachary Fleming

you. Thank

Operator

you. Thank

Cassel from from please your Your coming ask Ian, is questions. next Ian question IFCM.

Ian Cassel

be think I Zach. question directed towards Yes, my will

last in drop, annual Cellerate million $XX million years. done few a tremendous You've the from growing revenues over $XX to

have managers, field sales You states. out managers XX XX the in in sales field

the on think you still you to calls, think of XX need that the XX to number you ultimately reps? mentioned is Or States. right United XX to you previous has cover changed? that I XX Do think reps

Zachary Fleming

the place where that's specifically area path. that's We've build states. continue network out people they a we're go into focused we great out initiate start as and market on those development then through And couple and better spaces. do is ballpark. right build No, the a gain, those the the want in on. market, very And we hiring the got folks we some West, to distributor have what then We that we in starts and to that of business an

six states where that's or we put five we'll are now So is people in. in right identifying that the next

Ian Cassel

Okay.

Ron Nixon

state. we that first our the of one of we we we Cellerate, is when the for And Ian, every as leverage XX. expansion We've strategy that one would require on We it well. said of thought things were that the gotten developing said in early -- off

managers, we'll So which markets we gives with where I believe as more see -- be what it you'll existing the would on people, add more penetration that into as in is us filling territorial cost be more well. leverage

Ian Cassel

a Thank Scendia. you. Maybe follow-up on

that the the bulk their the piece revenues Scendia out And the were put at was looking those Or Cellerate. I brought a or of Does Scendia and effort? think is sales a of there, easy? products you've reps think, an presentation hard products surgeons of education your that current on, upsell to fact Cellerate those you positive. the are pretty big easy a your products a small purchasing lot it it revenue, I really how and in of take part was are that

Zachary Fleming

Yes.

an I we're know using of kind did lot are and There product. if this we think a of a all remember, there. test surgeons these learning with ran these don't JV of types is it's Scendia, usually recognize -- and gaining products. incumbent-type you I traction we that

for highly efficacious market. that are well we what very very products have so unique, priced is the some And

And off as Cellerate we had find our partners. and right than challenge different to selling start no had we the so when

But necessarily more to usage, in have just cost the not and products We done to products follow again, listen and in us used our now sale the goal in case. want those couple that well products, have get well. additional get Cellerate suit leverage fixed tend all products. we've gain used and Likewise, all up products with a a better in started not trust, surgeons as cases. that pick you each all these is their those that lot beginning very know to to these We they've of of earned efficiency have and of have to they're for realm our

So want products. to and these be, where -- I think and that's exactly doing we're what we with that's

use it's wouldn't the there. So marks I but guess do be can see to exactly I say directly, doctors products. of we are to answer types your those and need question really where easy, these We

Ian Cassel

you XX the And maybe about? development when Okay. are next end the out most of that over in months, what are products you XXXX, look through new excited

Ron Nixon

want you and do BIASURGE to stuff. talk about Zach,

Zachary Fleming

unique was that I very that is at say products a a Yes, product. have. that the going the in to they It are right space qualities don't of has BIASURGE other top. It's couple

market And I'd the there's of is highly and lot a very so because -- primed with are infections it's a say -- surgeons in tune reducing extremely it that specifically. for complications, healing

antimicrobial washing biofilm a product of post-surgical the help out can leaves kill. that and type this do so wound by behind And resistant and

non-cytotoxic, So you're meaning to going the good exactly what And doesn't it it's that's tissue. do. kill

Ron Nixon

why got out seeing Ian, how products, our look And the new that in understanding I And surgeon it working how component into works or and them works of introducing that that, with and addition working well and it think that in getting think we've at evidence us it those there's working. is product efficacy a to products gaining regard. market. coming as very when to clear we're takes start that a it you component the an to products that got getting is go you And compelling you're -- is of using last that I assist is of success they're And and a we well BIAKOS that. to if that are of key to nothing performing. your studies that normally that more We're other caregiver and

Ian Cassel

partnerships be next-generation might you, time, more bringing of But or you've of the build out And money ones when maybe were first wound have. spend ecosystem. and acquired strategic, Ron. care kind now a you lot together they another important directed you. your two I and the they This Thank of kind questions Okay. towards to investments effort

of of P&L a expenses the game. going the of kind that currently. through playing seeing We're kind longer-term obviously You're

looking ecosystem have critical things be between the so Healing first for the needs or And launch? for as we there up I milestones to it what the should be Precision other relates be should that to the that then to maybe question obviously and payer filed the looking is now for looking I know Are launch? we'd we approved. itself are and be that leading announcements

Ron Nixon

not for have number will because differentiating at risk, They've of when and areas And our your the clearly, we looking from my that are partners, key partner. say will as some And for view. customers for been for there believe we if to become contracts, can the they begin a don't able think on go We we find is, go key we that I the a traditional time, partners be to area fee-for-service. quite really announcing solution component payers. we that A us this be prove payer when think component that's traction model. they're that to I there we're going in be

out. you healing because they your there works amount are cost, after overall their But to rates, going real we risk, in spending we're and be would the et for how are very at this we that If believe it that positive of if are and we'll help improve didn't are effort lower see they about it. on partner cetera, time long-term. this We and them all the

Ian Cassel

and Then you the this? I potential have game potential to Yes. what's this the last you, capital for mean five the given years? end Ron, think of Obviously, three it's should think I and question is the significant out about you're you how look when ecosystem of spending? the investors time

Ron Nixon

XXXX. Catalyst don't and initial I years, that in game. partnership an And started believe Well, determining XX was that out in end with

grow say, to competition it and and and is customers end skin you else of stay ahead keep our our keep how share, thing the continue and look into perpetuity happy. make to and building we the for really company improve next around area thing more of goes focus wound just me can the game and this getting it grow market this think and more to and I this for

So game. an I don't think of end

I it and your a think satisfy needs. build customers' constant as build and of and build

Ian Cassel

Okay. Thank you.

Operator

a questions the come for you timeline hospitals of in for webcast. what via couple Thank very have Could that hospitals percentage Cellerate? And have value-add utilization I Cellerate? much. just discuss sold in are surgeries the to cases into of of you use versus

Ron Nixon

that? Zach, do you want to take

Zachary Fleming

Can you understood just first that first Could question? want make you question? sure the to I repeat repeat I it.

Operator

the Cellerate? in into hospitals discuss of sold utilization you for timeline surgeries versus Could

Zachary Fleming

Okay.

I think I what saying. understand they're

timeline. So correctly, the understand I if

that what Ron, in So surgeries, it in terms if asking was looking for. they're I it. they're exactly sure understand I understand the of the I'm think you not do way question?

Ron Nixon

not that on I'm sure actually one. first No,

for you wouldn't operator. can So read that again you if us, mind,

Zachary Fleming

trying differentiate just to I'm trying what compare there. they're to

Operator

understand. difficult I discuss utilization the you Could that into, making sold of in it versus of phrase timeline Yes, maybe hospitals. versus surgeries hospitals that's

Zachary Fleming

It sold is into. hospitals

Ron Nixon

we not sure I'm that Zach. can question, answer

Zachary Fleming

I think essentially quick maybe utilized go what I'm guessing just like out. they're we get it that, asking that does how maybe misunderstand but is what is

Operator

From when when they when they it buy it use maybe, first buy to it? they

Zachary Fleming

they adopt when Potentially it. or maybe

So the can approval. essentially, be we gain what -- cycle we once fairly sales short

value committee That while a once can approved, with committee. to the get as course, VAC analysis And it's the doctors takes it's At Usually, it. analysis at So cost. usually immediate well they're it's little the get and as efficacy both schedule product the on approval. of looking to point, into surgeries. the almost request a that have

available. to make Our the representatives product there are sure is

approval asking. take may So for wasn't answer, six to And I but to that you're I up that nine apologize looking be that can the what if you're think then on what months.

too. asking that's there, another of what you're part maybe So

not if looking for. that's you're So I what apologize

Callon Nichols

Zach, that this had Callon. question. clarification come is in We some from

Zachary Fleming

you. Thank Okay.

Callon Nichols

that does there ramp is in And it's a to maturity. immediately Cellerate, surgeries? mean used

that. covered you think I kind So of

Zachary Fleming

time maturity. we've And a as available close. It's of ordered takes then close was at all immediately once which stock, getting the in approval. I to -- is gained far ramp to. I was as it pretty no pretty just matter

almost I and in specialties. time think across out the this is figuring the -- we're used reason terms it because can it's of be still of length product many

done. the you've orthopedic to and just, So say, folks it's and not you're orthopedics, then all talked

specialty across surgical In does fact, every it's surgery. that

hospital in targets every So more. you've potentially got maybe XX, XX or

And conversations adoption so it's continue And and those endless. continues.

here continuing to since longstanding we And today. I've that very grow so And accounts have are now been XXXX. still working

that mature. of it that idea So takes gives an fully kind while you to a

Callon Nichols

That's a good thing.

Operator

other the value of percentage what think of I also Cellerate? actually part is using the cases added see

Zachary Fleming

not to healing or surgeon try patients, could really the space folks maybe difficulty. the are in talking where have approach We at-risk heal potentially likely of that about some to we're sort

all so those in target patients probably don't are have that, but like. that of I and I'd guess Certainly, difficult the say risk, more at to the dirtier an and a And it's that the would dangerous than for tend abdomen surgeries involve something I and/or exact And we more number, on the maybe higher be groin and are surgeries type. surgical that little healing. depending XX%

little that be probably a just would So an higher as number example.

Ron Nixon

the if more comorbidities. that look those you you healing age, And have challenge as in more up key we aging the high of at that one demographics, and with thoughts end we on is

I XX you the the disease, is like If look, stat that's just people on saw very and kidney a population. chronic large of percentage have a million, that recent which

comorbidities these compromised. cetera, all have the is growing. et say, could patient that that It's shrinking, cause to things I've surgeon the that be a got not diabetes, people So that

So therefore, the let's it. on Cellerate use

Operator

Great. Okay.

question we stable, decreasing? is or have Another Cellerate increasing pricing is,

Zachary Fleming

Yes.

mentioned as on in result, an supply some supply across the see that price. go the a companies board. chain is And I'll the chain most -- So We world. just you'll seeing going have taken things on increases say are

the factors what We our determine are all to considering is. plan

been of As now, we've right stable.

these But building that's been our we we facilities. our chain given stalwart relationships penetration impacts. we is some see supply growth with are make course, and a where in of strategy date think of and us become and sure to be the that's favor and for that rate a believe do good partners with our to good we to I hospitals,

from business a course, And at impact. so that look a taking of

Operator

much. Great. very Thank you

have question. another We

Directionally, to you the to this seems going set medium are year are generating Just SMTI term? should in model. supposed half the back consensus to investment positive. expectations of level be end for as next and losses surprising continue earnings, an forward This year's

Ron Nixon

No.

will have the cash significantly the by be anticipate we that losses potentially that that we neutral stated the -- quarter. We will and first flow previously decrease end of

a to been fact have building the comprehensive have have we Most strategy the that we not been have out been of pieces. all surgical generated decrease So our high revenue we the the yet those. division. costs, by because It's expectation significant don't of though component off

as leverage So get you And we've fixed we that. get which got really contracts, us. know cost heavy of those off is we valuable of to immediately a R&D, obviously, abundance

And so we have to cover those costs as well.

So in we is planned none our us. have a plan, very in -- all surprise and -- our planned of are or of increases They turnover neutral cash to SG&A our our flow. become are much positive so our to

Operator

don't further have Thank We at moment. the you very much. queue questions in any

So any for will it remarks. over Ron closing now hand back to I

Ron Nixon

this support. to you your We're we Sanara, everybody with being about thank on where and being at the supporters want going for thank morning. Thank we're for loyal just us very continued We for you call of Sanara. positive

And so everyone the for you thank participating in call.

Operator

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

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

Sanara MedTech (SMTI) 16 Aug 222022 Q2 Earnings call transcript