SMTI - Earnings call transcript Q1 2024

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Operator

Greetings. Welcome to the Sanara MedTech Inc.

First Quarter Results and Business Update Conference Call. [Operator Instructions] Please note this conference is being recorded.

I will now turn the conference over to your host, Callon Nichols, Director of Investor Relations at Sanara MedTech. begin. may you Callon,

Callon Nichols

good MedTech's I'd the Earnings XXXX. March and you quarter to to XX, Sanara Conference morning, you, like everyone. welcome ended Thank Call for

XX, like release deck the today's the earnings are copy Form deck Investor XXXX, our the and We as have of on yesterday XX-Q page release quarter This our that we and on earnings I issued ended available for of would this website. to Relations well highlight posted a March morning, also the supplemental as page.

in reference this remarks will We information our today.

Nixon, With Securities release us our today Executive and Litigation deck include in in Private this within CEO; are Financial XXXX. statements Seth certain Ron Mike Chief McNeil, our meaning Yon, supplemental Officer; conference that and of statements the our our Reform forward-looking call press and our the of note Commercial. Please Act President, Chairman and

and that those results forward-looking about factors risk information involving report Form risk statements in uncertainties factors more implied set or most is projected differ our quarterly on factors and please recent to recent XX-K by forward-looking forth supplemented by the see For on annual most in statements, the the actual cause materially XX-Q. risks our report could Form from

available Also, non-GAAP these of measures supplemental and measures. our call, direct this certain to conference materials website. the reconciliation in are our deck, In that I reference on earnings release earnings you that regard, the

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

Ronald Nixon

everyone. good and morning, Callon, you, Thank

finalizing appointed of the agreement Zach, As Board CEO, process Friday. our in Zach separation former we Directors. Fleming, with release of on in been We're company's CEO yesterday, I've mentioned resigned the and by press our a

Board for departure, no in Directors of presenting of June. Shareholders Director result our at the on a longer be the the Annual will of the a of ninth Meeting election proposal Zach's As company

inception now a of know, to execution. the team executing looking I'm strategic Sanara leadership to the forward you leadership basis in continue intimately MedTech. involved working many Sanara's on As team vision daily I've and that developing since And of been with with the Sanara's

Turning to our first quarter results.

was course made record quarter. million the sales -- tenth First The of XXXX. quarter over in company's sales company advancements $XX.X 'XX force in revenue in QX data processes. We of XXXX generated and significant optimization analytics, consecutive the

before, that's to As that build need be I've improve, will of forward. growth. infrastructure, around in to and told pay to able analytics that details you order many been and you're high-growth implemented you able a to to business, processes continue believe dividends that data going in be We these when

These improvements position coming and March XXXX, and the in at over same momentum build forecast teams months upon for achieved to net the quarter, At continue believe we the us million, fourth X the adjusted helped of period. the in our ended exceed us to XX, first $X.X we've the periods. a success achieved quarter of while to $XXX,XXX the positive loss generated previous EBITDA we

with brief I'd provide update on to a InfuSystem. partnership like our

opportunity. are in partnership potential of on invest to continue and X We areas this focused

HYCOL, partnership care BIAKO¯S facilities and nursing as the advanced skilled into therapy is for to initiative centers. Sanara's care products, long-term including first products as The and distribute wound wound wound pressure negative well

this for exploring strategic outside the channel. objectives, we're advanced opportunities upon wound distribute Building of also emerging products InfuSystem to care our

care utilize key plans wound We to in prevention include that you've role is our partnership Health that before, which also heard treatment about our agree a standardized strategy and products. Sanara's many value-based care Tissue that Plus, planned wound times will play

As these develop, will continue opportunities updates. to additional we provide

of participating the having Plus the with execution discussions And in partners as mentioned strategy. last our we're in Health I Tissue call, potential

we we to commercialize XXXX, do in and that not spending we strategy, During have that but also will place in we're believe anticipate continuing looking of invest these that and the capabilities very existing focusing so product technology, the financial to expansion partnerships for partners We're execute. required are the this surgical are And alone can we process, we're are by partners, our in offering. partners. they infrastructure hope strategic to well-designed not continue continuing just us this

able we significant through the to this it's to us that as product in we different Lastly, and we've We around Cellerate that been get of we believe IP many a for times ability specialties. line about the manufacturing made product more significant something intellectual progress property advance many be itself. talked got to and continue area processes the for for has think this of

out multiple teams, to I'd team and you to instrumental since our position been I'm President building now years, and times national with multiple including responsibility. XXXX, and marketing, has as business and closely In of our promoted execution current him Seth been the Commercial, internal Sanara, at and team our looking on national Commercial. of sales been introduce of over sales infrastructure roles company in our customer like to his with has operations. Yon, of He's forward strategy. to working increasing he Seth leads President support, accounts the the

Seth, surgical I'll you now turn our to it to sales results more over in detail. discuss

Seth Yon

over of XX quarter Columbia. of were Ron. across and Thanks, products In District facilities our states in first X,XXX XXXX, the the sold

our our the We into continue usage existing products on sales. use of facility expanding to current and new territories, and in increasing specialties new focus increasing

March in XXXX. than facilities Our XX, as approved sold more be products X,XXX to were of

facilities our the Subsequent a to be went new approved in to sold. number a the effect, had are of into GPO a quarter, large impact which has products the contract end which of with significant on

million decreased soft to products Sales million $XX.X XXXX. XXXX our the quarter the first products XXXX $XX.X million of from tissue first returned quarters. BiFORM, in to in in previous slower-than-expected million as larger-than-normal XXXX This bone grew from subsequently quarter to facility ALLOCYTE of a in of fusion was $X.X as which of XXXX. a subsequent $X.X a Sales in order of of to QX well Plus adoption due levels from in of slightly

Mike? our now will it recent most to to agreement our discuss over well CRG the Mike financial of McNeil details turn as as recent results. loan with I

Michael McNeil

$XX Thank you, debt cash equity CRG. additional holders. and a our option. new Seth. announced This The in draw that facility event and We nondilutive strengthen to believe to the at facility. of for like beyond allows acquisition the be we transaction flexibility ability the has given to transaction capital with the was provided recently the growth way a our accretive in discuss position company helped to would access the us initial million capital I'd fact

revolver an potential is facility, which CRG currently give under capital in with million additional discussions we $XX We the immediate the us secured as proceeds. a aggregate with in permitted be bank are commercial as million to senior a needs. The will what loan term structured to could loan cost access X-year and for term lower for $XX up expect

million to can addition draw drawn $XX June additional to XX, an close, the XXXX. at $XX up In we million before

into of million go increased expand recent first and as existing independent result detail XXXX. the period. both sales Higher revenue for our March and year revenue CellerateRX for XX% our increased now results about to ended million network markets. new the a XX, X of most of quarter penetration, repair prior the financial products, strategy increase XXXX, over Sanara distribution in compared was market a to $XX.X months expansion U.S. I'll more net of our $XX.X including XXXX due to soft tissue geographic in continuing generated

direct expenses year the SG&A for period the the million approximately in for in prior higher of were and XXXX period. sales expenses which compared quarter $X.X same SG&A with to first expenses, of quarter XXXX. the compared $XX.X primarily 'XX accounted or The to XX% were marketing million higher increase of $XX due million the for first

increased were of and sales marketing costs operational expansion force commissions expenses and an $X.X primarily sales product of to as million in higher a as direct a result $X.X and sales result attributable sales support. Higher million of increase of

the with due expenses million the expenses Diagnostic the $X.X compared period for months in primarily XX Imager XXXX. 'XX and Healing R&D $X.X million ended LFA. were lower to for to lower The Precision in same R&D costs associated X March were

first higher our in loss lower same $X.X Sanara to gross higher loss XXXX profit due intangible was and of net had the by of assets, partially a and a A in R&D costs acquired period during $X.X of amortization loss net to SG&A million XXXX. higher net higher compared expenses. quarter million offset

cash end on at of million. Our the hand the was quarter $X.X

back turn With that, it remarks. closing to Ron I'll for some

Ronald Nixon

results We're business multiple progress into This for pleased had areas Mike. that long we surgical quarter, to existing growth the continue our striving and do that the a to obviously quarter. product to that continue and opportunities is seek that build profitability. continue a it other the are play and our in our other We This had specialty play. to revenue we've plan we is first first -- as Thanks, so. Related review not expand to to continued business, to to well a hospitals. our products as build complement offering, in we of term, with

how to the continue that hospitals today, want You across to know many we that in are we advance U.S. and

call This we're may open concludes have. our to you the ready remarks, and Operator, answering for to we look any forward questions. questions

Operator

coming Instructions] have Cassel And [Operator from we question Ian a did IFCM. from

Ian Cassel

momentum has the had you've the the one that for just question I in transition, My jump back CEO and disrupted queue. can I was Ron, sales QX? question shown recent transition

Ronald Nixon

him you, Ian, tell the And disruption. is been. we're it's period Seth that a been time. is team of stronger at ever to there's long -- see driving I team Not quite would sales X for Yon this frankly, all. than has sorry but go, the

Ian Cassel

believe that follow-up year-over-year. disruption speak bone been wondering in question products, of A became maybe that fusion I I to noticed you abated flat of was supply QX. maybe if since could they've kind Okay. for kind Seth. I the the

Seth Yon

Sure.

did do a Plus. as is I ALLOCYTE with that earlier, As related timing. And bit to we little I of we of lot have a mentioned return softening believe

inventory imagine, else. can becomes replaced then an have at that something issue when with level inventory, issue facility it's an and you you a As with

reengaged cycle, get as process to that had than cycle, and well. And process we that that so product And we our again to bit taken distributors start longer that in a has back had that little get with expected.

Operator

other Okay. an Cassel Ian a coming were questions have the We Instructions] lines [Operator this with did follow-up. There time. no from at

Ian Cassel

I to said happen was that and what the partnerships you to being partnering When able by we Plus expect of your trying something remember to that, with about is but 'XX, you that think Tissue in some prepared hopefully is end the have remarks, and Health -- on that?

Ronald Nixon

Yes, what anticipate. we is it

designed Ian, done this. done really actually, we thought approach So strategy we no for care. is wound ever value based how thoroughly actually what you And a in have has have out one

because complicated got you've got got payers, is patients products, you've it traveling got So you've the through you've providers, continuum.

not issue of in in -- take of the there's comorbidity we've patients that the rise about typically, the they're wound just setting, these so timing home historically of where do well from because how -- they're that episodic LTACHs. And the the care they're on because focus primary does fit for care, you standpoint, in is with have SNFs, You -- discussions had you keep -- care they're wound. have all a gave in to the home

we And to but do be this. monitoring build this that work allow and how able to coordination so you care also us to will do navigation have really for we how its platform patient, have in a through journey, to have through, that think continuous of catch

with would a all strategy. look bring add to steps, ideal So a we partner and that value think that that as us, you would well partner of when participate as those those forward be some overall to are financial our partners

Ian Cassel

Okay. follow-up. maybe a And

do in company. this you you You're the view thing? now see staying here Do Or a as yourself of CEO permanently? temporary

Ronald Nixon

spent not I'm I'm was by in Sanara. I day. started go talking somebody It seat. actually a temporary in thing a when there's the from seat to the And and not every X.X day years that

position journey. so And So I'm just trying dodge a my to and I plans it's me onward have as when and soon. really, And going anytime for can, looking many to the I I'm to And change unforeseeable happens, from this line perspective, communication of something cetera. And forward upward. of no as out et we're better everyone. to cars just to

for that that not going the are one but I'm have passion. execution So it. this go that It's passion of thing. passionate we people And competent, have is do, me. wanted a done and This concept because and was what And forward to we I continuing my originally see it's my do don't anybody build that doesn't remarkable strategy. happen, from and to are about in highly this business. is company. It's job. what doesn't And we of we've forward looking our think This only I that something they are our

Ian Cassel

you announced adding on that, And them Can maybe talk more team. board you your management you folks with to to them? experience recently X why working brought about the and

Ronald Nixon

Absolutely.

great growths, and you a begin have with. do we're these going But have to through to higher is We team growth. what you're anticipating

higher of anticipate we you opportunities. have have the people lot seat, when growth, So in to and a look at more you

So person that a Corporate background. dedicated Development also we got felt like needed strategic we a has

And And Waldrop, so somebody that's ortho well. us. that's came a need space, he that in Jake Operating that's complement adapted being and financial Tyler a strengths many wound he for with I Jake years, ortho real former experience Palmer then Officer. Officer lower we it got do. Financial a And that He's well Chief together Chief he long-standing is also what that understands have and care. And out business joined really to the and extremity got and of we worked operational also to and focus the

we have those So of are delighted in our to camp. both

we performers that laser that a come about to you and all that support is just kind of about you've the strategy excited on go this with board the just from getting side, keep all don't out. trainees if people. What high seek people focused are just other more sales a new are. remarkable our on come of And talk effort, the that identify the what new our we we're got people needs company, those because coming on and sales all are we and needs, good growth on And right also

And the with to I'm always the depth order going in is about about positive the and up very of of team. the And advance very depth stopping. to so we're where I this feel We'll the not good keep team infrastructure. continue

said, that's they how that they to don't can up. continues They've up companies always sideways then just infrastructure build greatness. got and go go I've journey, As collapse and to to it back again. a It's support so and happen, you go build

Operator

while the [Operator come for we we any couple a did Instructions] web. other And in have wait questions, from

to faster than the fast profitability quarter-over-quarter? and in some SG&A to increasing revenue as also, can the how the it you to speak And R&D profitability step a you And color share then can relation increase increasing, taking decreasing, back? the but revenue appears be around or the

Ronald Nixon

Yes.

So costs we're are come speaking depending to how advancing that sales. is start on And of I the by will depending in. lumpiness hiring, how we on how

As That in you coming know, sales SG&A, big variable commissions with well on our that the in. SG&A -- is goes very more a paid. correlates

period our good in make levels you about I'll balance striving are to to we But of have sales opportunity profitability time made. it's just of operational That's also that, way. let be what investment which means is are really us that we're got think we prudent Mike, And about we that to want make we to value us, do cash We want the from we some not just we talk if it But bet second. multiple sure we for level will and a might capital of that we something -- building where all of be that efficiency adequate be. -- achieved value, mind. need available take are that forego be in to to business, But we a going a don't we to we on when and that to as we've profitability. to add if although going long minor for know that you is, profitability, the we efficiency, our significant a the shareholders able a and sure that want top believe see think profitability for that we to opportunities term to

anything to Mike, like you'd is there else add?

Michael McNeil

of as the significantly. this of year change I benefits credit have loss up Ron. had we P&L, Yes, then big accounts net higher for our to in last year. really value XXXX. intangibles didn't earn-out like And such a the liabilities. that also couple that included a to And went add. would amortization just the We in fair XXXX

Operator

now There for this to hand would Ron time. were no I remarks. other the questions closing in like back at Nixon queue call to

Ronald Nixon

the for thank We very Okay. given thank today. that the much people the for you And on It the shareholders all continued Thank transition. very the you much. our call support being love matter lot. you've is, support shareholders a besides this to our firm, and We us.

As and do confidence for will But you believe your firm, and all. many talk it. we it to called thank that at said, with about have we be you appreciate disruptive greatly of not we our

thank in very to talking to much. the shareholders near you So We our care. forward Take term. look

Operator

does This conclude you. today's conference. Thank

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

Sanara MedTech (SMTI) 14 May 242024 Q1 Earnings call transcript