Sanara MedTech(SMTI) - 2023 Q4 - Annual Results

Fourth Quarter and Full Year 2023 Results This section details Sanara's financial and operational performance for Q4 and the full year 2023, highlighting key achievements and growth drivers CEO Statement The CEO highlighted key 2023 achievements that position the company for continued growth, including acquisitions and new product launches - Key strategic milestones in 2023 included the acquisition of assets related to CellerateRX® Surgical Powder and Gel[2] - The company successfully launched two new products: ALLOCYTE® Plus Advanced Viable Bone Matrix and BIASURGE® Advanced Surgical Solution[2] Strategic and Operational Highlights in the Fourth Quarter 2023 Sanara achieved record Q4 sales of $17.7 million, significantly reduced net loss, and reached breakeven Adjusted EBITDA, driven by new product launches and strategic agreements Q4 2023 Financial Highlights (vs Q4 2022) | Metric | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | | Sales | $17.7 million | Not Stated | | Net Loss | $0.3 million | $4.2 million | | Adjusted EBITDA | Breakeven | -$2.5 million | - The company's products were sold in over 1,000 facilities and were approved for sale in more than 3,000 hospitals/ambulatory surgery centers as of year-end[3] - First sales of ALLOCYTE® Plus occurred in October 2023 and BIASURGE® in November 2023[3] - A retrospective study published in November 2023 showed CellerateRX Surgical Powder significantly reduced surgical site infection rates by 59% in elective surgeries[3] - In December 2023, the company signed an exclusive license agreement with Tufts University for patented peptide technology to advance the CellerateRX platform[4] Full Year 2023 Performance Analysis Sanara's full-year 2023 net revenue increased by 42% to $65.0 million, significantly narrowing its net loss and improving Adjusted EBITDA Sales Analysis Net revenues for 2023 reached $65.0 million, a 42% increase from 2022, driven by higher sales of soft tissue repair and bone fusion products Net Revenue (Full Year) | Year | Net Revenue | | :--- | :--- | | 2023 | $65.0 million | | 2022 | $45.8 million | - The 42% year-over-year revenue increase was primarily due to increased sales of soft tissue repair products (CellerateRX, FORTIFY TRG®, etc.) and bone fusion products (BiFORM®, AMPLIFY™, ALLOCYTE®)[6] - Growth drivers included increased market penetration, geographic expansion, and the expansion of the independent distribution network[6] Earnings Analysis The company's net loss for 2023 improved to $4.4 million, primarily due to higher gross profit, with Adjusted EBITDA also showing significant improvement Profitability Metrics (Full Year) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Loss Before Income Taxes | ($4.4 million) | ($13.9 million) | | Net Loss | ($4.4 million) | ($8.1 million) | | Adjusted EBITDA | ($0.3 million) | ($7.5 million) | - The lower net loss in 2023 was primarily driven by additional gross profit from higher revenues, partially offset by increased SG&A, R&D, and amortization costs[7] Financial Statements This section presents Sanara's consolidated balance sheets, statements of operations, and cash flows for the reported periods Consolidated Balance Sheets As of December 31, 2023, total assets increased to $73.9 million, driven by intangible assets, while total liabilities rose to $29.3 million due to long-term debt Selected Balance Sheet Data (as of Dec 31) | Account | 2023 | 2022 | | :--- | :--- | :--- | | Total Assets | $73,871,149 | $61,035,386 | | Cash | $5,147,216 | $8,958,995 | | Intangible assets, net | $44,926,061 | $31,509,980 | | Total Liabilities | $29,283,132 | $19,315,411 | | Long-term debt, net | $9,113,123 | $0 | | Total Shareholders' Equity | $44,588,017 | $41,719,975 | Consolidated Statements of Operations For 2023, net revenues increased to $65.0 million, gross profit rose to $57.1 million, and net loss attributable to shareholders narrowed to $4.3 million Key Income Statement Data (Year Ended Dec 31) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Revenue | $64,989,842 | $45,842,845 | | Gross Profit | $57,137,156 | $39,481,994 | | Operating Loss | ($4,215,153) | ($12,517,180) | | Net Loss Attributable to Shareholders | ($4,303,197) | ($7,937,497) | | Net Loss Per Share (basic and diluted) | ($0.52) | ($1.00) | Consolidated Statements of Cash Flows Net cash used in operating activities improved to $3.2 million in 2023, with a net decrease in cash of $3.8 million, ending the year at $5.1 million Cash Flow Summary (Year Ended Dec 31) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($3,245,556) | ($5,554,870) | | Net cash used in investing activities | ($10,207,346) | ($3,511,630) | | Net cash provided by (used in) financing activities | $9,641,123 | ($627,346) | | Net decrease in cash | ($3,811,779) | ($9,693,846) | | Cash, end of period | $5,147,216 | $8,958,995 | Non-GAAP Financial Measures This section explains the company's use of Adjusted EBITDA as a non-GAAP measure and provides its reconciliation to GAAP net loss Use of Non-GAAP Financial Measures The company utilizes Adjusted EBITDA to assess core business performance by excluding specific non-cash and non-operating items from net loss - The company defines Adjusted EBITDA as net loss excluding interest, taxes, depreciation, amortization, non-cash stock compensation, change in fair value of earnout liabilities, and gains/losses from asset disposals[9] - Management uses Adjusted EBITDA to facilitate consistent comparisons of core business operations across different periods[9] Reconciliation of Net Loss to Adjusted EBITDA The reconciliation shows a significant improvement in Adjusted EBITDA for both Q4 and the full year 2023, moving closer to breakeven Reconciliation of Net Loss to Adjusted EBITDA | Period | Net Loss | Adjusted EBITDA | | :--- | :--- | :--- | | Q4 2023 | ($262,444) | $7,696 | | Q4 2022 | ($4,163,485) | ($2,456,684) | | Full Year 2023 | ($4,439,902) | ($313,966) | | Full Year 2022 | ($8,092,328) | ($7,487,859) | Company and Investor Information This section provides an overview of Sanara MedTech, details for an upcoming conference call, and important forward-looking statement disclosures About Sanara MedTech Inc. Sanara MedTech develops and distributes surgical, wound, and skincare products in North America, also offering telemedicine consultation services - The company markets and distributes a portfolio of products for surgical, wound, and skincare applications, including CellerateRX®, FORTIFY TRG®, ALLOCYTE™ Plus, and BIAKŌS®[13] - Sanara's primary markets are North American advanced wound care and surgical tissue repair, serving hospitals, clinics, and post-acute care settings[13] Conference Call Information Sanara will host a conference call and live webcast on March 26, 2024, to discuss its financial results - A conference call is scheduled for March 26, 2024, at 9:00 a.m. Eastern Time[11] Forward-Looking Statements This section contains forward-looking statements subject to risks and uncertainties, as detailed in the company's SEC filings - The report includes forward-looking statements concerning product efficacy, potential benefits of acquisitions, development of new products, and business expansion[14] - These statements involve risks and uncertainties detailed in the Company's SEC filings, which could cause actual results to differ from expectations[14]