Sanara MedTech(US:SMTI)2024-08-13 16:09Financial Data and Key Metrics Changes - The company generated $20.2 million in revenue for Q2 2024, marking a 28% increase from $15.8 million in Q2 2023, achieving its 11th consecutive record revenue quarter [4][16] - The net loss for Q2 2024 was $3.5 million, compared to a net loss of $1.9 million in Q2 2023 [5][18] - Adjusted EBITDA for Q2 2024 was positive at $600,000, despite the net loss, influenced by noncore expenses [5][19] - SG&A expenses increased to $19 million in Q2 2024 from $13.8 million in Q2 2023, primarily due to higher direct sales and marketing expenses [16][17] Business Line Data and Key Metrics Changes - The Surgical segment reported a net loss of $2.2 million in Q2 2024, with segmented EBITDA of $1.4 million [5][19] - Sales of soft tissue products grew from $13.2 million in Q2 2023 to $17.6 million in Q2 2024, while bone fusion product sales remained flat at $2.5 million [7][16] - Tissue Health Plus segment generated a negative EBITDA of $0.8 million in Q2 2024 [19] Market Data and Key Metrics Changes - Products were sold in over 1,100 hospitals and ASCs across 34 states, with selling agreements with over 300 distributors [7] - The company signed a contract with a national GPO, adding over 1,000 facilities where products are approved for sale [8] Company Strategy and Development Direction - The company plans to invest an additional $4 million to $5 million in the Tissue Health Plus strategy in anticipation of a commercial launch in the second half of 2025 [6][20] - The focus is on expanding usage in trauma, vascular, and general surgery markets, alongside organic growth and potential M&A opportunities [8][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth strategy and market expansion, particularly in the Surgical segment, which is generating positive adjusted EBITDA [22] - The company anticipates significant opportunities in the post-acute wound care market with the planned launch of Tissue Health Plus [22] Other Important Information - The company closed a new $55 million debt facility with CRG, providing access to capital for growth without diluting equity [20] - The cash balance at the end of Q2 2024 was $6.2 million [18] Q&A Session Summary Question: Disruption in chronic wound space and diagnostic front of THP - Management acknowledged the disruption in chronic wound care and emphasized their strategy to generate hospital-based savings, with scalable diagnostic devices being a key focus [24][25] Question: Update on partnership with Tufts and CellerateRX peptides - Management confirmed ongoing activities with selected peptides and will provide updates in the near term [26] Question: Game plan for targeting new adjacent markets - The strategy includes expanding with distribution partners and hiring specialists to penetrate new specialties [27][28] Question: Impact of new GPO deal on strategy - Management stated that the approach to expand access at both local and national levels remains unchanged [29] Question: Progress on BIASURGE - BIASURGE has gained momentum since its soft launch, becoming a top product for the company [30] Question: Reasons for stagnation in bone fusion product growth - Management attributed stagnation to the approval process and is hiring specialists to enhance focus in that area [32][33] Question: Key areas for Tissue Health Plus pilot readiness - Key areas include finalizing the technology platform, economic model, and educational resources for staff and partners [34] Question: Profitability concerns in the Surgical segment - Management indicated that they are focused on growth and infrastructure development, with plans for future profitability through increased sales volume [35][41] Question: Cash burn and stock price concerns - Management does not view cash burn as a reason for stock price performance and remains committed to growth [42][43]