SMTI - Earnings call transcript Q2 2024

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Operator

Greetings. Welcome to the Sanara MedTech Inc.

Second Quarter Results and Business Updates. [Operator Instructions] Please note, this conference is being recorded.

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

Callon Nichols

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

will We information today. this reference in our remarks

our Officer; Chief Executive ], Sam our McNeil, our who Yon, Seth Nixon, Chief [ Tissue CEO; Commercial; Ron Mike Operating Health and are Jake Financial Chairman Apollo leads President today our of Waldrop, and us Officer; With Plus.

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

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

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

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

Ronald Nixon

good morning, Thank you, Callon, and everyone.

recognize XXth who and XXXX, the our to do the $XX.X continue our take entire an in outstanding sales, clinical, service, quarter quarter. growth second of to marketing team, finance; job revenue. customer record R&D, strategy. a surgical revenue I'd This moment to our contributing including is company consecutive like million During generated to record

Sanara positive separation adjusted EBITDA net for second of that of as $XXX,XXX expenses view including operations, former of CEO $XXX,XXX related partnerships. the EBITDA our a and our expenses $X.X to quarter, we loss legal in In costs generated as of Adjusted in net and noncore prospective as is $XXX,XXX. well acquisitions million and diligence

will recast in for. to been have But more reflect we earnings Health how detail. in we financial performance this began period as release of additional QX, business in in segments Prior our Mike Surgical segment and this could reporting press go our calculate metrics adjusted that Tissue account change into EBITDA. we separate Plus

change in this how transition with recent the Following view CEO aligns segment business. reporting the I position, to our better

and the of quarter a basis, Surgical Surgical loss quarter Our million $X.X half the net On EBITDA loss segment million generated in million second and in XXXX, $X.X a $X.X the second segmented $X.X segmented during million first EBITDA the and respectively. of generated XXXX. first net half of segment a

and Sam Seth continue in see detail opportunities will further which shortly. for to both will continue We -- growth segments, strong discuss

in half second detail of invest will later million to Sam build XXXX, THP strategy the to which XXXX, of the the During commercial $X in to we an million additional a $X out launch in of second presentation. expect anticipation half the

our Seth business that Surgical now in and will turn momentum it to over discuss results I to segment.

Seth Yon

Thanks, Ron.

sellers. in be across than distributors X,XXX sold District potential agreements end currently and have XXX facilities quarter, over in and X,XXX the the and were in products total. in Columbia trailing XX with representing the sold have approved states more ASCs of XX hospitals the been second of months X,XXX-plus As We selling of our over to

the in facilities the which Sales at were Looking and quarter over our second the facilities into in products of to XXX of quarter same Sales million grew to of from we products the XXXX. flat QX, period bone of tissue quarter-over-quarter $XX.X compared XXX million fusion $X.X were in our sold soft in XXXX. in $XX.X quarter at facilities of the products sell, second of XXXX. for over growth second XXXX territories the in million

for the now I'd some believe of performance. our to will continue we discuss like future opportunities key growth drive to that

X,XXX products quarter, be sold. a contracted we contract or signed are approved that facilities the a over second our GPO with national In added to where

the our working the Our to or penetrate are future in facilities team is sales further generate working sold. where while products existing -- also facilities new those

also we into As We general focus of are case spine. use the our in see surgery trauma, and proposition significant and ortho a usage outside expand our expanding on specialty value and areas. have focused are to those vascular discussed before, and products use in working into we ] diligently traditional markets [

we growth, for opportunities surgical opportunities. regularly M&A are partnership and In addition our evaluating organic to

sees team strong management strategy. growth driver potential complements our synergistic a Our growth as transactions that organic key

COO, I'd been overview joining a key on now Jake working introduce of our of give since Waldrop, us April. in some like the to to new brief he's initiatives

Jacob Waldrop

fulfillment system out Thank product customer building you, across map strategy focus Seth. focus phase morning, road infrastructure. Good IT on of team workflow next underlying and our for of an aspects has This been support, includes accountability centralize key our all digital IT support to growth. everyone. ownership and automation operations our The and of

experienced The to implementing customer operations side, selling company, focus and and significant on shipping [ to customer allow and the streamline our separate support. efficiently simplify and we're to On the process the the sales growth is sales ] internal best-in-class scale operations to team service for working both by service plans fulfillment sales Sanara external representatives.

reorganized operations facilitate part of is chain consistent function our supply and of and product have the each supply Our also chain we to lines. a smooth across key our strategy,

our plans more Tissue Plus. on that, With discuss of it I over now to to will turn Health Sam

Unknown Executive

everybody. Good you, Thank Jake. morning,

disruption. discussed includes million care By diagnostic year medtech roughly the we ripe wound are referring in As services, wound wound tools. enabling products we corresponding care, treatment of the per is This settings. surgical outside to U.S. ] of before, nonsurgical nonsurgical and spend $XXX for care expenditure [

large this wound. for is X-year to a estimated to the Despite and XX%, healing cancer. roughly foot XX% chronic spend, only a of the of the diabetic over same age is ulcer the has mortality XX Moreover, be XX% rate XX% rate wound the as nonhealing population

hospital this hospital-based for million setting. payers ] THP other overused. offices inpatient either [ delivery to in expenditure the estimated hospital centers, $XX preventable at hospital ] highest billion [ or skilled is or and be cost this risk-bearing the generating homes. high-touch is -- care of which such goal plan wound to adjacent physician and of occurs entities. undermanaged is and home of We targeting community the as savings with settings expenditure wound orchestrate nursing comprehensive $XX in

deliver wounds. aligns providers and to value. program built program and payers, value-based patients integrates Our is prevention, science-driven, maintenance model a treatment compelling on THP's of care that first-of-its-kind

mix journey care our all a engagement the THP and assigned their education, navigator an virtual patient's wound needs. starts on, THP Care navigators care will consistent patients' coordination from navigator that targeted plan with outreach point unique adherence. be increase guide of center, From transparency a care for A leverage care Hub. a care to will our from care

detect to to value is the at least simple, implementing be rates improve An largely and healing them will on open XX%, prevent wounds XX%. care interventions. third-party our the early patients proposition boots ground Our network our

support to clinical as the We We decision patient monitoring. real-time with along plan THP and device will our enable deliver wound partners, to higher-EBITDA care. such partners patient enable enabling with state-of-the-art expect EMR counter groundbreaking transformative that for assessment streams network integrated medical revenue our network revenue Software-as-a-Service along new wound

quality-of-life our benefit in customers issue of to while of THP-generated alleviating from fees expect Xx payer a to we will for their members. Lastly, accrual THP the range Xx the savings major

on build launch focused and phase pilot the currently XXXX. of are We first plan in finishing the quarter to a

comparable multiple ] one millions. contract scope on is the and of care, market likely citywide industry to Based wound spend the in [ specialty in be THP's programs for single VBC

selecting exploring partnerships are We execution. supply derisk to also strategic

I to detail. discuss would more turn to now over to results Mike in our financial like

Michael McNeil

you, Thank Sam.

during compared prior-year million The to of market net penetration, QX increase the increased increased of period. sales was second expansion in $XX.X XX% of geographic both soft U.S. tissue result repair During products, strategy our the our quarter over including $XX.X as XXXX, to primarily new quarter, existing CellerateRX, markets. continuing in distribution a of and revenue million revenue Sanara a higher network generated and second the due to our expand

XXXX, Health compared SG&A $X.X quarter million period Plus second for attributable expenses expenses to were ended $XX.X June quarters and XXXX. XX, our XXXX, $X.X million and for to for the $XX Tissue included SG&A same respectively. the million in segment the million

the to legal and and expenses accounted approximately $X.X XXXX expenses $X.X acquisitions second year. compared The and were quarter expenses, marketing during of of million included SG&A higher primarily partnerships. sales million SG&A expenses million also costs to in due of of executive to and the direct increase which diligence prior 'XX QX prospective of related for higher separation $X.X

the the June expenses same XXXX. million million due during our for XX, precision attributable million respectively. $X.X were R&D in associated diagnostic ended costs expenses million XXXX, and compared segment in R&D period months LFA. XXXX, to the to June Plus expenses The ended lower primarily Health XXXX and to the included with R&D imager X for XXXX $X.X healing Tissue XX, quarters $X.X lower and $X were

$X.X expenses in Depreciation tangible due higher of Nutritionals the from XX, of to same $X.X ended million XXXX. XXXX amortization the Applied period were for in million were June in expenses quarter XXXX, 'XX. The for to assets depreciation acquired and and amortization compared August amortization the

our XXXX. $X.X million related The quarter loss to of the expense had June with our net of XXXX was primarily of million quarters million same new ended $X.X to a for a XX, term million compared the expense net Plus for ended XXXX, XXXX. $X.X interest segment Interest in loan X $X.X loss net for June the was higher CRG. in Health XXXX second The Sanara for in period to the $X.X loss to XX, respectively. and included attributable million and compared Tissue XXXX quarter

to quarter acquired loan, The higher R&D and expense lower in expenses. XXXX by the second term was value for intangible higher CRG higher higher liabilities our amortization fair primarily offset partially interest of of new profit earn-out higher gross change loss our net to of assets, SG&A related and costs, due

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

rationale earlier, the the our investor post-acute operating in better we investments, order out will Surgical Sanara and Health inform community mentioned results X breaking financial Ron As of our of Tissue Plus. of the segments, be acute and to strategy comprehensive

respectively. expenses, and X of XX, EBITDA during and we adjusted to generated consolidated months million of we or the $X.X operations, million believe ended Net X be noncore $X.X June

segment the positive ended generated XX, segment EBITDA EBITDA of Surgical $X.X XXXX. during X during the Sanara of million XXXX million ended the $X.X negative quarter negative during and segment months Plus XX, Tissue Our Health $X.X million QX $X.X June million and second months of generated XXXX. during X June

these All all Sanara and supporting corporate Sanara and Surgical segment Surgical in costs development also included of Rochal substantially are in-house relate as the and segment. to expenses research Surgical includes the overhead our team, activities Technologies. operations

going invest earlier, further to As Tissue half of $X the $X we're to the Ron in million strategy to XXXX. Health million second another Plus mentioned

nondilutive a As last million provided during position way us access helped CRG in $XX equity This we was with a to capital second our the closed cash new facility quarter. that and we in holders. our discussed strengthen transaction to call, debt

The as loan secured term X-year senior term. is a structured with loan a

and at access to us provides additional addition million capital $XX.X $XX to XX, capital before working close, the purposes. In transactions This general XXXX. an for draw we June may accretive facility drawn million

I now Ron closing over will it turn comments. for to

Ronald Nixon

Thanks, Mike.

and care to execute We continue surgical in strategy, post-acute both on strategy. value-based our wound

improvement surgical while generating EBITDA, and is results executing plan growth on continued Our and adjusted the to team expect we market operating expansion. see positive in

with we care see the a our discussed, XXXX commercial strategy wound As opportunity to anticipated value-based post-acute disrupt significant launch. market and

like the for now line Operator, open questions. to I'd

Operator

question Fitzgerald. is first Ross from today The Instructions] from Osborn coming [Operator

Ross Osborn

Congrats on quarter. another record

regards especially thoughts the market in THP, chronic Any I more on there's confusion. to starting space you're color the lot on you provide some some targeting the with of home And been off, believe space? care wound could a disruption reimbursement, that given So broadly? the diagnostic causing of front

Ronald Nixon

would want of CTPs I'm about that you're of is those CTPs be this around and the number and Ross, it for that broader to reimbursed Yes, the Sam, that But disruption use the not that, assuming you being address the is Yes. talking today. that great. and over if the fact to question, going to I'm And are Sam. the turn Ron,

Unknown Executive

Thank you, Ron.

In are is in into terms our especially chronic of the disruption wound factoring care we in that strategy. space, the something CTP,

savings mostly before, discussed hospital-based is we our As to savings. and strategy generate

CMS direction congruent to are payers the -- going. very is this where So moving the and in we're

we the one something of was diagnostic when device, scalable devices also of putting key of how the In this used and multiple terms looked the levels were diagnostic THP clinicians. settings in do across be you to things at we strategy which multiple can which and make cost

So you will that, be aim will -- see have as that's we come actually with achieved. key out the that, we

Ross Osborn

Okay. Got you your [ the switching ] to And timeline corporation partnership can TOP [ of ], it. peptides color provide [ then on CellerateRX with and any ]?

Ronald Nixon

on at that time, taken to. in are that, XX We're ones various right the term, not be now several with more and on you're to one referring take XX activities near obviously hearing going on you'll to we certain with but that got We've Ross. have going the selecting peptides all about

Ross Osborn

then And you Do Great. the it of as doors? just could through such color game need targeting would data? be to helpful. lastly, the you more to adjacent plan more walk trauma, out, generate there Any called factor new a on Okay. knocking your such you driving adoption? Is key for steps markets

Ronald Nixon

please? Yes. taking would Seth, that, you mind

Seth Yon

other We'll right will to Sure. continue well, looking alongside as even as distribution expand in unique that partnership partners expand a specialties, spaces at to those so with into be well of the focus. opportunities those

And so we well that, can the focused that, some some complement to to those space think of a well. be we've that hired great bone that addition as specialists In get additional into into specialties. specifically also are as

Ross Osborn

on Okay. another again Congrats Great. strong quarter.

Operator

The question from from be Tall will next Plahm Chris Pines Capital.

Christopher Plahm

on that deal, to shift in questions. more a can since that after into? then And little a sold color Two X,XXX launch. we the One, does strategy get progress if new GPO BIASURGE's also, update the aren't with cause approved go

Ronald Nixon

would, Yes. Seth, why please? of both you don't take if those, you

Seth Yon

at continue we'll to and national look at facilities. both to these level level access expand to gain Yes, a local into

faster it to us that's having us success. GPO a change. which So that local done as for us also, success, obviously partners, track allows far that access won't progress and that That the great great at thing to level also change a as for wonderful IDN national the level. with won't that's one. But brings the approach distribution attraction so well, at We've both as

you The second question again ask was specific to what that again? -- could

Christopher Plahm

BIASURGE? how that's Just To going...

Seth Yon

launch and Sure. has but BIASURGE some as started surgeon-level a that looking of sales We a soft facility-level the we're not in contracting at of a just the fourth on again, late conversation. quarter carry not had XXXX. really It to conversation, a side, as up only pick organization, momentum,

product. with second happy being progress already again, the really well. into its with nicely And of through overall with the that's quarter, the as for We're that the performance. fits really X with progress us made, a It being specifically that made happy product top product growth in

Ronald Nixon

you it. the also about used Chris don't a why feedback surgeons the that from tell have Seth, bit little

Seth Yon

different specialties. way the of as think us OR all that's the that's and I as we've and spaces a of and reached single surgeon the And the reaching to specialties. Every around, into that's expand such type general wash, into complementary some is plastic to Yes, well. that piece us using allows again, another trauma into other number

into in again, and orthopedics very satisfied made progress spine, from window. with product. everything, a the And there really early specialties from that multiple feedback wonderful with, being had we've But vascular, in that's general; happy

Operator

MicroCapClub. from [Operator Ian is Cassel coming Instructions] The next from question

Ian Cassel

question curious bringing for there's if what -- ago. couple very product stagnating of beneficial. relating why any specifically into their maybe of few last seemed fusion the has kind answered the bone was to questions whole is growth first is I the a color this Maybe Seth Thanks team, in my been quarters.

Seth Yon

that answer I'm can sure I well. as

have greater FORTIFY the So based a number of part and of an where I this, maybe and access CellerateRX opportunity such like that approvals. process, bit the upon products ] would [ one, for little say approval is

the just that we that tackling different in managers the did hired XX a recently, is help ways bone well will to build specialists we're not as we distributors days, of only that regional in the have addition out local. and One at -- But last be in that and to a today. level that few national we've markets

into to soft whereas space think tissue of a that complement our see been into should to from focused you as into great space. that being out We start has can coming that that's really space, rise of a markets focused those it hyper result people the performance and performance, see bone a

the one year. point the this So in us half great for we to think a of second is

Ian Cassel

I be Tissue get ready need Plus that are What Sam. to the of in for solidify QX question appreciate 'XX? would key you that. areas My next pilot for to Health

Unknown Executive

you. Thank

the there key In of are terms areas, X.

are we the finishing in partners. off of are network our finishing of And economic well payers, of we're economics, the putting our that is build-out we first validating front the which both The our technology platform. from as and model build-out second as is

The third staff network and onboarding onboarding assets for preparing well our piece as both our is really as partners. education

Ian Cassel

And maybe Tissue versus can apart Surgical. you, last appreciate at profitable in being What Plus more Surgical breaking one so segment for we the is what you financials, run doing from see your you preventing current in Health I Ron. rate?

Ronald Nixon

That's Yes. a question. good

products out help the set be very to from products with want to surgeons complete then able ancillary we support for be beyond adding launch the we their surgery. products, frankly, of and can of quite them in Ian, So the to a beginning additional Cellerate portfolio that

other our and their that adding tissue both better. to make our products, bone. BIASURGE we've and by Cellerate successfully along and work, done their protect soft with And So that, work soft

with of want plastics, constantly or to and vascular this knowing X doing because as to about, stopping that and continue We're we're to and get go to after, our there And there. related can we continue, go to acquisitions, the others. needs we areas that through want partnerships organization. we for to in Seth talked to either different want either new or these we're acquire And looking infrastructure how what and we support else not we partner where have want for general. build they may to But us, going

growth slowing just we everywhere, can today. why heard efficiencies the profitability And Jake I future move call to we as Jake We that's as down aboard, organization. came in interested to maximize sure make believe -- to cost that on not he's and across profitability the getting to helping increase today. continue we support today. our You high-growth what leverage us we're doing we're we maximize the into and our wanted fixed more more add by can

from So I a question, plan we're profitability, increased headed. your hope where we've profitability that where eye plan, that's keen game on we and that's but are got a And answers a today. to

Ian Cassel

last back here your been of is see. one have onetime normal It of one Maybe last year, in stocking sales kind good rate or QX cadence? would tag there last really order robust like made Was which does more to from it middle that. look to to anything it growth on late than bounced year that under

Ronald Nixon

believe so. don't I Mike...

Seth Yon

entire a like May, type really that of That April answer And just things the steady the order well. from second really order number. shot-in-the-arm climb. can continued April of kind wasn't or that, quarter. throughout stocking the and We as not I the that inside growth happy big occur and it had to to quarter. It did in of inflated incremental or growth

really of a strong a order. progress I So result was overall, really, that say onetime the wasn't just it and would

Ronald Nixon

your I Yes, yes. Ian. think misunderstood And question, I

that. about Sorry

Operator

Oaks [ John And will ] Sidoff question the from LLC. Twin next from Equity be

Unknown Analyst

the congratulations growth. Mike, million on that's rate to be guys $XX run an -- mean and I is fantastic. Ron continued

have done over guys a Congratulations. You years. X job great the last

Ronald Nixon

Thank you, John.

Unknown Analyst

out the You you all can't company new to course. of -- And that Ian a it certainly that. run cash you've money. great of facility. had a I for costs we like a much need I about And bet because grow you gotten how see that and question the know

takes to certain do on you that do always know -- to is be breakeven? foresee a you grow? you you you -- a the you're see a you're number when to do When that there you money going want Ron, as growth. see focus burn some I grow to that continue Or where because cash have like and it

Ronald Nixon

that we are Tissue Well, have of early and we're can of that we XXXX, of in and believe the Plus in us talked as which Plus, which success Tissue Health to threshold, that crosses contracts a always success separation will move Tissue that seek ultimately, the will if to early, separation that going Plus want partners we've we've about it the Health continue to Health to the be -- help very once it very profitability it launches awarded. other

happens, is momentum And by going from know a then own on We've got great to its effort. that got we've so itself fine great just margins. is it stands once be We surgery in and the -- standpoint. sales profitability

it, continue and our infrastructure think off around leverage just to build to see start what our be I of We significant SG&A. you'll We then will expand.

Unknown Analyst

you certainly agree I there. with

what You've stock Do for the I depressed get -- forward. to reason got that you think enough got our to negative burn force to a cash price? burn, is going this -- a as see cash get to

Ronald Nixon

I never me. [indiscernible] I don't actually understand always -- the confuses vision. stock market

to directors. in frankly. going to of All really a company. [ a can't that, of believe not I all have and that I believe growing share this successful know And stock, is very speak is we quite nor sold our we ], I've So be most

So forward, we just going to continue the enjoying to John. and we're go are ride,

Unknown Analyst

see how it, show growth us Well, the neither you. in Thank investors, have wanted are that appreciate there appreciate I take doing and to -- you out market. we're and to I you that I. yours the just guys I the for and on guys. get Mike's continuing

Operator

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

Ronald Nixon

and shareholders that our the going future. thank all about there. the thank feel we believe we're and you our very, very, that. and best-in-class. think, Thank to very We continue in team that's, a going ones to proud there, of for we your we're that very get and read We're want in it, today And we'll how to I attended for excited just all build you support. all hanging call Just about where I

And so and for attending soon. thank you all talk we'll today, to you

Operator

you. Thank today's conclude does This conference.

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

Sanara MedTech (SMTI) 13 Aug 242024 Q2 Earnings call transcript