Earnings call transcript Q3 2022

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Operator

Good day, ladies and gentlemen, and welcome to the Sanara MedTech Inc. Q3 2022 Earnings and Business Update. [Operator Instructions].

It is now my pleasure to turn the floor over to your host, Callon Nichols, Director of Investor Relations. 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 XX, you ended September issued yesterday We release earnings afternoon. our that found And deck Relations page section to also website. I Investor highlight our would of the can the under be of SEC filings like today's available a deck for September ended the as the on page. release copy are this supplemental This well and earnings quarter XX, of as the XX-Q XXXX, Form

in our remarks will We this reference information today.

from comments Executive prepared time We Nixon, McNeil, Executive financial Chief today's expect last allow Fleming, Zach Ron minutes Officer; Chief Chairman; for Q&A. to Mike and approximately Officer, to XX

Private and our XXXX. of Litigation statements this forward-looking Reform the include Certain press the release within in supplemental conference Securities deck, and in call Act statements in of our meaning

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

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

Ronald Nixon

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

$X of included revenues quarter Third Scendia sales. million

'XX The historical well as business quarter third for quarter was for of our Scendia. before record another Sanara as we acquired

a increased a lower detail, QX. to income will higher net The tax of for The had related Mike intangibles. is after was the million loss acquisition. due recognition XXXX our $X.X benefit expenses acquired but $X million was to SG&A million generated quarter The the company in $X.X XXXX. of during Scendia QX before the of loss of million company higher to accounting our Additionally, a R&D go in in into was higher which purchase first noncash tax of in single the costs, XXXX third and of it month. further quarter also for income net amortization due the revenue loss $X.X loss taxes

beginning acquisition third the at detail Zach discussed our shortly. of previously will we completed quarter, Scendia. the As go into more of

worked from well During of and see of combination value business, the companies. the to synergies combination's to as as Scendia significant led proved X to into acquisition our quarter, Sanara's business. the the opportunities we through venture, this joint integrate Scendia we previous the which continue We

the end to announced partnership the InfuSystem Subsequent of we Holdings. quarter, our with

in capabilities distribution and sales in the pairs We this as call, billing line national expertise product will footprint. Sanara's as and deep complex our well later InfuSystem's and care discuss this and existing partnership but wound team

In plan We the electrical month XXX(k) the our QX, delayed to has an firmware Imager to that year. the of end Precision XXX(k) now we issue by file due Healing been our of submission next resolved.

strategy. and Turning our skin broader to wound comprehensive

We continue with in discussions strategy of XXXX. companies a to to this value-based have number launch and plan

I'd Now Fleming to the Dr. more in accomplishments discuss detail. quarter and like to ask

Zachary Fleming

Thanks, Ron.

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

We growth and our see distributor representing products. our continue partnerships to individuals in

Scendia approved Scendia during and was in in to facilities XXX in the ambulatory end centers was CellerateRX sold sold QX XX our across XX be since At acquisition by CellerateRX hospitals, of X,XXX were XXXX facilities. surgery the XXXX, July including states months, trailing of

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

commercially could believe our have the and care the Subsequent available. to surgical both product that surgical impact, sales cleanser. of for the significant wound when our XXX(k) BIASURGE. our is end a filed on market we the We quarter, This

to integrate worked As $X quarter, Rob mentioned, in Sanara. for Scendia in Scendia quarter. generated million the approximately into we revenue third the

matrix, mobile Texigen, either X bone our focus advanced inductive, continue believe CellerateRX used cellular conjunction Amplify, existing on could key and CellerateRX. We a well products be by products, or offering amniotic matrix Scendia and as that standalone membrane customers with these verified product bioactive fit with to allograft. We in

LLC's Turning partnership is is care InfuSystem care lowering solution, provider on PWT and new expected wound innovative Sanara's to InfuSystem and satisfaction. patient This devices and supplies associated complete patient and and negative pressure partnership. enable therapy increasing improving delivering target medical cost offer wound products, The partnership services customers. XX-XX wound advanced a product to to of a our true outcomes, to focused care the including and and line

partnership Sanara's capabilities, billing with care national and and complex InfuSystem's distribution expertise deep line existing and product pairs The in team footprint. sales wound

By pairing to capabilities, positioning patients. are company's we to offer we comprehensive the the believe a partnership successfully NPWT solution

our Mike Now discuss turn to I will results. over financial it to

Michael McNeil

Thanks.

quarter the For from increase the representing compared for period. of quarter, third we revenues XXX% generated $XX revenues prior million a of the of to XXXX, $X.X million year

Third $X Scendia million quarter included revenues sales. of

sales of primarily volume, result result a a million XX% of SG&A expenses $X.X and million third higher primarily our accounted prior were sales compared SG&A of approximately expansion were as due higher direct expenses to to of The The million for the $X.X the operational commissions $X.X costs and $X.X to related sales and million XXXX. of compared marketing quarter travel to quarter increase sales for expenses the marketing as sales XXXX million for were as expenses product higher million in of which the $XX.X attributable force in of $X.X to of third higher costs support. direct and and increased increase or sales quarter year.

loss net for $X acquisition. compared by of loss XXXX the million of a $X.X a purchase net income the tax million recognition XXXX. quarter benefit related We to to of $X.X the net the of quarter for of loss had impacted third positively a third was for noncash million of Scendia accounting The

QX of end million. the was $XX.X at cash Our

on for With remarks. are it that, I'll to you back Ron turn Ron, mute? some closing

Zachary Fleming

to that all wrap up? me Do want you

Michael McNeil

yes, you would, please. If

Zachary Fleming

Thanks, Okay. Mike.

we addition by the in in you we as the of discussed, driven to with cerate record We ourselves on Sanara, distributed believe revenue updating and we've quarters our product to market NPWT sales As well have to the of forward InfuSystem future the partnership. look have drive products both as at continue by positioned line Scendia. that results

remarks, questions. our to concludes answering for the and look you. Operator, questions open have. forward may That we we ready call you to are Thank any

Operator

[Operator Instructions].

questions further appears the to no queue. there So be in

We question have Tall Chris with a Plahm Capital. minute from last Pines

Christopher Plahm

you with your guys could if you and on also little insight partnership more questions, InfuSystem Two folks how us give the opportunity BIASURGE? a see

Zachary Fleming

Zach. is Sure. This

InfuSystem group folks of the on to wound a us care space. For have focused partnership allows the

core We as have the to well systems, and our products. negative that now as team sales a has going selling outselling the they're be been system pressure

certainly that approach it's us So allow to will have an in people field. the

so which bit. billing care certainly capabilities, the space, quite They also a complex in have necessary should is a wound that help and

ship In X local the addition, they distribution and across U.S. the have store different have product facilities on can they levels, and where

So then help as well as start transitioning more. will markets. these little that we bit And a into to talking go new

that more was what question, time? second The one

Christopher Plahm

opportunity? you how BIASURGE, the guys On see

Zachary Fleming

They they're the the into irrigate going always approve be surgical in to hardware the that's cases. that on take leaving cavity way XXX(k) a BIASURGE, of into kind that on And filed to that like then it as time particularly as little is been premise of sold the said, I surgery. has that should BIASURGE. agency product we the Oh, way that. is and with product, just bit on into attend. working out, the The well that cases

all really So of spine, the they cases. that do a both podiatry, lot of orthopedics, surgical with

product for the cleaner this chance area, go And and procedure biofilms infection. in a reduce the and and of the would cleanse eradicate allow

Operator

have some questions. do We Instructions]. [Operator

back turn floor the to questions. with So those Callon we

Callon Nichols

Sure.

in We on Webex. for have any One Zach. on clinical there question coming from is updates studies publishing some Are questions the Cellerate?

Zachary Fleming

there studies. coming I not-too-distant about be some the worked will and We've say excited shortly. little and We're think when, seeing really are them I that those hard future. a like but talked studies. guys should we've by the can't in to say I who, on can't you say So

Callon Nichols

sense have Cellerate kind penetration you do rates the question, next the of of And any existing hospitals? in of

Zachary Fleming

book, a all an to and sense order Cellerate Sense? wound the of use that that open in specialties reduce surgical it's for complications. many we I appropriate have there's think are sort of

get because that's through that the forays orthopedics typically XX, that the spine XX in or can So is our leverage. XXXX into first product And additional groups we there, usually of it's one specialties. from then

So in it's hospital, different. given any quite

heal. a case it where a typical hard we ability of that can many, basis, they many because And it. that one is would answer, give certainly and the on to their an they're looking product for pick when patient see use using have what about appropriate reduce specialties can up that it's has time So comorbid edition X/X that they're to you but

just way, is that very, would that be X/X comorbid. their approximate is very a So number around cases of

Callon Nichols

sense Thank sense -- of earliest your But what similar I percent follow-up. of probably surgeries any surgeries a you. Any some Cellerate of think of I used this percent hospitals? of what in is think... is

Zachary Fleming

Yes, a that don't making you I be Do number. have we have that? number I'd told if a for I up that number.

Callon Nichols

Okay.

harder hospitals? become environment operating into Cellerate As for a difficult in ASCs hospitals,

Zachary Fleming

always complexities, harder. There's not it has but become

comorbid. and their said, They're we are In help that these for are patients to fact, the facilities looking highly to doctors having it's like see solutions patients. just

them well And solutions just so heal help avoid they need to have be to complications. able to to as

no it's more difficult than ever. always, as now story same So

Callon Nichols

Next of utilization increasing question, what important within existing are drivers hospitals?

Zachary Fleming

So it's and training. adoption

to gain that get that our for hospital, product to and the in, find a approval. the So and initial have we certainly us, Analysis Value Committee would access physician take easily to supporter

through operating we there, train activities, surgeons, in our that in-servicing from then it's to well and have and that you're managers and suite. and to standing doing to in-servicing, regional as spread promotional means additional word do these begin some usually And the in managers sales training but go and different territory

Callon Nichols

agency update that is from the with the Could health went. us pilots fit there? how this then on market And the WebEx. there home last you I a question Is have

Ronald Nixon

Zack, like. Yes. take if And would you that, I'll

Zachary Fleming

Sure.

Ronald Nixon

ability to comprehensive the has side to specialist we been the to great in bed our so value. the of be they where care. health the get knowledge wound be value at at have care able home And link provider us that us terms a doing is of the in that So seen better side going added we've shown having that have that have pilots the complete strategy

make have that, the data we so be able wound to our order imager us give when in that's to high bed And to out just comes going decisions. more better at expectation

Operator

from Our call-in MicroCapClub. comes question next Ian with Cassel

Ian Cassel

there Maybe negative Ron and percentage and a maybe as Zach opportunity, of question or players curious you was core differentiated, whoever. or how medical market care that if my you could negative acute all? highlight pressure are the at kind either I'm pressure are product if how and side, market of just on is first the the big who large wound

Ronald Nixon

Yes.

So a -- as and care there been I'll one, the the it's KCI, be facilities by et are happy big nursing of of always wound hospital is But a and market, in post-acute it's -- that through home cetera. been and that XM, that is part Negative space. segment. [indiscernible] [indiscernible] down And market has the many to in health, but Ian. and large there's it is goes in dominated take and a skilled middle is post-acute pressure setting. in of which the part that KCI very acute players

billion device $X is so billion, that you wound worldwide is stats. at what the NPWT market for pressure very think I $X somewhere instances care. the a it there's as see -- where many $X to probably large is And overall been very billion But a between therapeutic advancing and negative know we if look market good close and we

better And at actually, we the hydrolyzed produce that some and believe combination, with we've results. antimicrobial that, products collagen in that even as got such our of our Sanara will

focused what on. And so we're that's

As Ian, and about is our lower long-term overall you always improving focus outcomes. cost know,

Ian Cassel

integrating there guys? follow-up was The distributors be, expense you significant to that that And good that Scendia a next would question initial out kind there that is, question targets for quarter? would Cellerate other acquisition acquisition be integration maybe there with of are the are during

Ronald Nixon

always us or hard In ways that. we're for either we and speculate to for geographically It's We're what unfolds looking in is as do, Yes. product-wise it expand will it kind on technology-wise. to unfolds. of always conversations

call. but -- in a so And

Ian Cassel

Is the know Maybe is mentioned cash on previous the breakeven of goal? you goal your question. 'XX. of be the flow to the call, by I end still last QX that

Ronald Nixon

It's still the goal.

Callon Nichols

There the thoughts hosts questions queue. our like Do are finish in comments with? no any they have remaining or would to closing

Ronald Nixon

our shareholders, Take call, our thank appreciate care. us being you on I you thank support. would everyone all and just for like the and joining to and we for

Zachary Fleming

Thank you. Bye, bye.

Ronald Nixon

Bye.

Operator

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

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

Sanara MedTech (SMTI) 15 Nov 222022 Q3 Earnings call transcript