SMTI - Earnings call transcript Q3 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Sanara MedTech Third Quarter 2024 Earnings Conference Call. The company issued its earnings release yesterday and will post today's supplemental deck on the Investor Relations page on the company's website. With us today are Ron Nixon, Executive Chairman and CEO; Mike McNeill, Chief Financial Officer; Seth Yon, President, Commercial; and [ Sam Apollo ] who leads Tissue Health Plus.

Please note that certain statements in this conference call in our press release and in our supplemental deck include forward-looking statements within the meaning of the Private Securities Litigation Reform Act 1995.

For more information about the risks and uncertainties involving forward-looking statements and factors that could cause actual results to differ materially from those projected or implied by forward-looking statements.

most factors on in by Form Factors the risk recent company's the the on in report report annual XX-K company's see set the forth most Risk Form Please XX-Q. quarterly recent as supplemented and call, measures. certain release deck reference Also this earnings supplemental conference the non-GAAP these available In website. on that of regard, earnings the to refer in please our materials reconciliation the measures that are

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

Ronald Nixon

you, Thank and everyone. good operator, morning,

million our the of represented executing During exceptional sales revenue. value the record growth XXXX, is to in the $XX.X hard a and and of and to both and entire net QX was our our dedication generated year-over-year revenue quarter testament our increase an remain third performance of in customers strong This We organization company continuing and consecutive our quarter. XX% strategy. shareholders. delivering work The on focused XXth

achieved $XXX,XXX QX, $XXX,XXX generated same improved EBITDA Sanara of in adjusted for results. third Third compared adjusted XXXX In transition XXXX. the team quarter of reporting period segment during also with performance metrics to of EBITDA This Health of Plus we the EBITDA adjusted better our reporting began views leadership as the a additional business. how business segments. division our in aligns separate Surgical financial Tissue to quarter

loss a Our million Surgical segment generated year-to-date XXXX. a in the of $X.X net September $XXX,XXX quarter and net third loss through XX,

year-to-date generated September basis, segment during million the $X.X EBITDA third segmented On Surgical respectively. XX, the through and segmented and million EBITDA a of XXXX, quarter $X.X

severity like-minded in technology And launch partners expected in will and that in manufacturers through infrastructure ChemoMouthpiece, to $X which bring an we owns strong the XK platform Sam cleared pursuing continue cryotherapy plan and million LLC, exchange financial as of approximately to we $X.X both commercial in Seth THP for related capital. reduce chemotherapy-induced investing We to million detail. strategy, In see segments, are of will invested reminder, incidence oral which mid-XXXX. device value designed of to We continue percentage further a mucositis. in discuss growth and for including September, X ownership opportunities the and the

announced In which U.S. exclusive the InfuSystem This coverage agreement includes product for license an -- investment, execution of we JV the through the connection exclusive our distribution skin aligns and Sanara's with with strategy, Technologies care the with our the ChemoMouthpiece. wound and peptides University from X Sanara LLC, system. joint chemotherapy radiation of particular Top entity XX-XX and venture exclusive by focused Healthcare distributor dermatitis. kits our be peptide will Inc with on by partner owned SI a InfuSystem well

now with Seth We business results look XXXX. it this to product and I'll to in forward to discuss working our turn commercializing team surgical system momentum. over

Seth Yon

Thank you, Ron.

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

and into the XXXX. of third we QX, were territories facilities products facilities our over of sell. at Looking sold the quarter in over the to the growth in facilities compared which XXX XXX In

third grew to XXXX of XXXX. quarter of from quarter of in third third tissue million of from quarter soft $X.X million to the million quarter in products of the Sales grew XXXX. in our $X.X $XX.X $XX.X the million products the XXXX in Sales third of --

areas. or over of our momentum X,XXX diligently orthopedic We to core our continue network within to contracted our expand working in facilities, spine surgeon user approved build base and

managers, in nontraditional a on sales additional engagement particularly new top priority our also geography users intensified both of to and growth for have remains into regional drive active accounts, through We focus the our expanding is areas team our greater we focus constantly commercial operations all opportunities The a our serve. team the uncover analytics, working strategic partners. enhance across which that through basin to closely will sales with key

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

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

over With that, on Sam I'll to Plus. turn provide it to Health Tissue update an

Unknown Executive

Last outlined disrupt call, we Seth. to $XXX THB billion-plus wound care Thanks, strategies nonacute the market.

to was scale the care execution model. building enhancing distinctive As our QX and planned, on of support our focused capacity delivery the platform

technology and for execution The development release a our the integrated first real-time have clinical global XXXX. support innovative in the of with multidisciplinary has THP's established half in a wound extensive world-class medical of state-of-the-art is We expertise leadership to and team device of assessment EMR decision software care team. oversee track wound on

the Early previews been value. demonstrating community, received provider with transformative well its have

a enthusiastic partners. We pilot list are compiling of

On preparation say standard In our successfully innovative share with world. the alignment risk entry the in to firm an collaborated with of episodic to leading the www.tissuehealthplus.com we consulting and launched mid-XXXX, care program reimbursement payer model. a payer economics we for value-based have our website, reaffirmed hello refine infrastructure. have This to engagement efficacy model ensuring market side, introductory strategies

have recruited results overcome over adoption and Mike our discuss turn a I real-life more us luminary help to We hurdles. to would in to now to financial it also clinical advisory board like anticipate detail.

Michael McNeil

Sam. you, Thank

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

million profit compared increased $XX.X year. Third prior quarter or to gross XX% of $X.X million,

our of in costs related period marketing million $X.X increased to million compared $X.X third SG&A and of infrastructure. of sales quarter the SG&A and The profit same of million the XXXX. $XX.X same compared the higher the included XXXX. to for and in Year-to-date $XX million platform $XX.X or gross build-out $XX.X expenses million expenses direct million expenses THP to were for XX% period

Third $XXX,XXX plus to million and included compared respectively. to XXXX. quarter segment XXXX, Tissue attributable ended for R&D Health were R&D expenses expenses quarters September the the million during $XXX,XXX same and in $X.X $X XXXX, XX, period our

net R&D interest expenses higher for related value costs was for our the with XXXX, for $X.X of XX, interest expense quarter million plus loan The XXXX loss XXXX. the term were million related build-out ended related of expense segment third platform, loss the $X.X primarily XXXX, was associated primarily of to to to XXXX September to Tissue to our liabilities. for to Health third million same with interest due the The loss due in quarter new $X.X in to to The the quarters expense $XXX,XXX net period and projects XXXX. CellerateRX. compared million the CRG. $X.X was included loss Higher and had XXXX respectively. $XXX,XXX of of Sanara QX net primarily a of the change attributable our a quarter compared CRG earn-out term in in for to related higher expense higher THP higher fair loan SG&A and higher net

order operating Surgical have we our the of acute million and ended and Sanara investments, our $XXX,XXX our better in the rationale during respectively. segments, and consolidated earlier, generated separated comprehensive Tissue Health mentioned we inform and months X EBITDA of to be September X Ron post-acute strategy community of investor $X.X results Net As to Plus. financial XXXX, strategic positive believe not X the we expenses, of core operations, XX, of to

year-to-date $X.X third Our million of during segment million through September positive the generated Sanara XXXX quarter Surgical EBITDA and $X.X XX, XXXX. of

and -- $X.X negative All costs Health segment in all QX to Tissue generated our months relate activities during corporate these Plus development September in-house the X expenses operations EBITDA of segment negative and and supporting ended million overhead are million included as to includes team also $X.X of Sanara Surgical the Technologies. Surgical and segment. Sanara Surgical substantially during the XXth. research

at cash balance of the over closing the comments. quarter it turn Our will was million. $XX.X I Ron for now to end

Ronald Nixon

Mike. Thank you,

We strategic execute in to plan and care wound value-based our strategy. both on surgical continue non-acute

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

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

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

Operator

Fitzgerald. [Operator first will from Osborn Cantor be from Ross today Instructions] question And our

Ross Osborn

Congrats and how would ChemoMouthpiece investment progress. you fits off, it Starting for rationale on walk your strategy? in the the us broader through into the

Ronald Nixon

the care. XX from Sure. skin. our college skin centered Happy as licensed peptides to. strategy, skin many around always Ross, wounds wound We and a see of been are think We wound condition. of all Those up. people and has many,

condition wound strategy is We and oncology forward horrific have That in the skin that THP. a directly skin value-based impacts side, the chemotherapy on space. a and the is ChemoMouthpiece moving a

source, stores in mouth. wound is when is happens can what it, really is in they that and about cancer a to are ice solve antiquated. pretty these to your the use think used you historically mucositis you open is cubes, get problem treating if way be So able they only chemotherapy which or And that

one that. with background that engineer going cancer particular with by he's And gentleman mucositis, -- to had strategy a it's InfuSystem it bringing because means very which we're It's fits our a market de well. a a through up terrific had this gone unique, or product, so to treatment come experience overall of and novo it kind. he's and an decided with It's very

Ross Osborn

conducting turning to a I progressed? remember program THP. with group. perfect any the you Makes then Got Curious pilot and it. feedback correctly, were sense. podiatry If how that's there And

Ronald Nixon

that, it over that. to not talk I'll Yes. dated up We've about turn Sam but to

Unknown Executive

And quarter the said and first to are we to really the we on you, we early hoping list have discussed thank we were been Ron. last really, target on the So call, Ross, do first you in working in time with. a half, -- of targeting previous people And we pilots as have are if the we good. -- are as that. earnings really I will,

Ross Osborn

personnel how And Great. it far gone X new attracting has THP, on operational as as the to last there? join team then Okay.

Unknown Executive

able in which skilled as a actually team is efforts. platform is created lot thing X have in we India to well are as in the very U.S. this and space, experience been scale of development with team of, a That's help we our proud attract Ross, us book, a particularly we've to execution

able been One to into to being fast. execution. we far, productive so external integrated terms to been journey was did and of in of nice also talent, team and kind we've them derisk of a attract onboard things them the it's make partners really the But really the able the

Ronald Nixon

complements that Ross, needs this Sam needed to is thing, in attractive. is happen. well. and a the why this people known makes strategy and a very, interesting in for know One that charge decades this perfect that but Many he's that lead built strategy person have in very team complex, people that very it's and It's market also to

Ross Osborn

And then maybe to OpEx. turning

the pots as year How quarter, launched spend, going projects demonstrated on about you controlled R&D particularly in OpEx for the the in you of have tissue a health XXXX During line. think we should to you addition the other on? this balance

Ronald Nixon

and We going lay there. to think through out exactly and how Ross, we're carefully, we where plan very we that get

And to have so we don't of lot surprises that. related a typically

in it's So our budget.

so when our that say growth execute to EBITDA have expect -- that are adjusted budget in forward that appropriate on And moving continued we're EBITDA. we we that. see we also the strategy strategy, And we said, as we for -- our to on

part and moment. don't see all of it's So at this any planning surprises we overall our

Ross Osborn

the any -- on with And to relating then Perfect. lastly, Okay. your update peptide idea. work costs

Ronald Nixon

hear didn't again. Ross, the I'm I say sorry, question, it

Ross Osborn

Any with the to update you relating have? your peptides work XX on Tops

Ronald Nixon

Yes.

a preventative chemotherapy And havoc keeping And those the on radiation and the skin it's radiation. and the almost are you on is as a dermatitis with if been the And you about an minutes solution horrific identical radiation. regimen X for a a mucositis. a developed skin conditions wound think is solution there that So both that that their healing also for as has the of oral people and ago, of discussed condition same-sized I be strategy been dermatitis. really on few particular result no that market radiation skin just -- has

team for call at and on as team strong with that, technical complement our are because same see as we moving as we working it and it we be forward yes, InfuSystem a the quickly can Roche JV points. our So is will scientific that very

Operator

another question We Ian from did Instructions] from get come [Operator MicroCapClub. Cassel

Ian Cassel

Plus are talk Can conversations attract of types how Congratulations quarter. you're Tissue going. about the Health partners looking you Yes. just that the generally to on maybe generally for and those

Ronald Nixon

that. Sure. I'll over Sam and that him turn to let Sam? do

Unknown Executive

Thank you, , for question. Ron. Thank the you,

and types out, X actually looking the card partners, we out execution In for, terms second, we one, of looking partners. laid obviously, we financial for execution partners. partners of we dancing as filled have are partners: are And

terms at money, strategics well, execution if who you money, financial right? not some actually In bring will. partners, we're can really smart looking just as but of So

looking reach community. we're So into for have people provider the who

We're this we're looking reached also an or supply venture financial the looking execution -- have are people catalysts looking we in be space for are providers. product who like who as using chain investors, targeting. companies Outside DME that, potential in suppliers like THP, product have deep manufacturing so who into well. of have space track the health at care we typical people for we'll record people signs strategic for

Ian Cassel

get be profitability year profitable? you middle health Or launches One last immediately some that to needed be to commercially, Tissue of question. next there that When in segment Plus will segment? would to expect ramp-up

Unknown Executive

to needed get profitability. ramp-up a be will to There

Operator

Plahm question next line live. Chris, Capital. Tall your be from Chris The Pines from coming is will

Christopher Plahm

an One, can progress BIASURGE? Cellerate also get update questions. an with just on update IP we Two on and

Ronald Nixon

products talk going be that and I'll very front, products to continue the front, well our and the a let other year-end, we the we'll we've for priority but and like by in several file around things that as mentioned all Well, is provisional our had, it report that. Yes. IP of able patents and Seth on the is BIASURGE about calls, historically, success combination and to us, we IP of

quarter, of you good see. to could So through about this And we then introduction progress, the as Seth, talk relates really maybe what November you it from BIASURGE, just Chris.

Seth Yon

Sure. Chris. you. Thank Great question,

of So BIASURGE turn this last year. at year time, soft formally the launched the at launched

gone It's We are really scale we're not with level at the a to pace level really facility surgeon sale, and right only on quarter. gaming third sale, well. facility that's but the happy a just product approvals not starting how and as that through level

Operator

Twin -- next Equity. question The from from John Oaks is coming

Unknown Analyst

$XX The year-to-date, Congratulations I asked highs was it's our just where have on X wondering, say, have has another in about could and to I growth there? questions. makers quarter, results. And the million mid-XXs. I bit years, been Sanara -- to in Just $XX low out $XX you been about to the the X quick tell us $XX. price $XX year-over-year market million, a fantastic $XX the the time last little have what been last, for share and

we're levels had And both so buy now around at and people $XX. we've in those of we'll say

on reviews that? to lot guys' you but get on growth. have we And this higher investors to because price maybe X about how see much I course, I -- at losses until of with for profitability our and you you it's I couple more felt for a you for of takes know access have guys share thoughts capital something know money some we was get question. look out out try to Is just these it's that of do burn it market profitability. big grow, was But so down that point, borrowing it. the that continuing road. it to wanted I little the it makers million? up Is and a of to our cash, I will wondering price. I how how years like what And -- A $XXX say a the then out with there affect there our net the know

Ronald Nixon

of we're our pace speak the John, like we're cash. exactly adjusted on can actual planning. to the as We Mike progression EBITDA.

to that do of doing, to talk want I I keep Last and to time And continue going exactly is what checked, straight so frame, XX that's what tell a our would Mike, to that we pace. now. we're continue do. lot you That's could about we're you, plan But to quarters.

that have market care And will before I partnering and of have have produce we We to and to events we we calls we us, a accretive any dilutive don't think do the from many our itself. surprises and that we've activity. to event. need results, -- take would continue for to highly said extremely where All to M&A is would are expect look on

bit talk great. the little to Mike, -- flow, would projections about your on if a cash be so you that And want

Michael McNeil

Yes. we And the actually flow a cash. activities. operating cash cash Yes, during from strong of in a performance we had positive quarter, Thanks, generated couple of million Ron. in quarter dollars the

of somewhat year, And through has so we've activities. borrowing investing and most been the neutral of most the been for

don't the expect we and So future be cash to forward. in burning or even operating going activities near

Unknown Analyst

also. course, hear it to And Ron, the money because it's That's I investors know know get to of Mike. raised mind that hear. to that, certainly there. really thanks that thanks, nondilutive. our guys Well, you has you've then in great what And good are news on takes been you've focused I got growth.

So I appreciate that.

Ronald Nixon

you. Thank

Operator

no give THP, go of questions from were lines. on now. other those first in, There so pilot some the half webcast a for I'll the did granularity will some of questions through be get a right the few launched line time We 'XX? in you Can more

Ronald Nixon

want you Yes. that? take Sam, to do

Unknown Executive

Yes. Sure.

in first We a planning are to the of 'XX. launch product half

Operator

Yes.

Okay. color remains work of mid-XXXX, majority Can is cetera? some give in that on partnerships, to launch engineering order THP et the where you by

Unknown Executive

there going of -- majority The in are really of at THP, you look the streams X work. work work Sure. if on

work, of care we you locus tell I partnered. while platform the work have scale not model. building which where is stream we the our which is areas can really partners, the are to first And The delivery the naming of partnerships that's in of

integration We have with area EMRs. partnered of the in

that into our take and of development rest able to of tax. have data being being able area data it and innovative management the partnered We techniques have able in the of partnered the in use being our area and to we leverage accelerate to efforts,

things already is we in to really in and we which any do are building are sure on the what what's not marketplace. are to make trying top of marketplace, So rebuilding the that we're

So with the partnerships really helped that. have

model continuously its input of stream efficacy. platform. our the signs second are expanding clinical really to is testing And what we and behind the essentially our The and it model an become doing clinical

progress very work And on continues have some that. good there, the made So example. we for

have wounds, the the that standard constitute of done of and model some qualify being care to of wound We clinical which population work about atypical there expanded our those. out to first for include XX%

That -- identify of them to piece, includes we work around the with able partners on creating is are which third this. and pilots. being is The working really and going commercialization network

piece it feedback also and pricing understanding it models, the very second really testing good we've And is well. that of The in received marketplace. as on

So really X work the which those that right on of on Hopefully, helps. are are now. streams we working

Operator

ChemoMouthpiece's The regarding next expectations to question, top what are line? and bottom contribution your

Ronald Nixon

and get not at And back XXXX from We're to that the and big we and come in expectation this prepared InfuSystem, wide give open commercially my terrific is. report marketplace obviously we'll answer it's enthused partner of start as in market accepted product But through very a very with We launch of then front perspective. this to is time. opportunity it are us. progress a this in introduction think and the our our what on

Operator

you're And M&A what for target the characteristics some a are for in of potential looking Surgical?

Ronald Nixon

what Yes, when we'll them let will -- close we that that it. is know

Operator

Okay.

conference today. at That Thank seeing currently no you are time. We remaining participation. this for conclude for your does questions our

Sanara MedTech (SMTI) 13 Nov 242024 Q3 Earnings call transcript