Sanara MedTech(US:SMTI)2022-08-16 17:28Financial Data and Key Metrics Changes - In Q2 2022, Sanara generated $9.7 million in revenue, a 54% increase from $6.3 million in Q2 2021, marking a record revenue quarter [8][21] - For the six months ended June 30, 2022, net revenues totaled $17.5 million, up 55% from $11.3 million in the same period last year [21] - The company reported a net loss of $3.3 million in Q2 2022, compared to a net loss of $1.2 million in Q2 2021 [24] - SG&A expenses for Q2 2022 were $10.4 million, up from $6.6 million in Q2 2021, primarily due to increased sales and marketing expenses [23][24] Business Line Data and Key Metrics Changes - The surgical team showed strong sales growth, with CellerateRX sold in 590 hospitals and ambulatory surgery centers across 27 states [12][13] - The acquisition of Scendia Biologics is expected to enhance the product portfolio and expand market reach [10][15] - Scendia's unaudited trailing 12-month revenue was $11 million as of May 31, 2022, with Sanara products generating $1.5 million in sales to Scendia [15] Market Data and Key Metrics Changes - The company is focused on expanding its geographic footprint for all products across all 50 states [15] - The Precision Healing platform is expected to improve wound healing efficacy and reduce healing time while lowering overall costs [18] Company Strategy and Development Direction - Sanara aims to integrate Precision Healing and Scendia into its operations while advancing its comprehensive wound and skin strategy [28] - The company is developing a multispectral imager and biomarker assay to enhance wound diagnosis and treatment [17] - The strategy includes expanding the independent distribution network in both new and existing U.S. markets [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory, citing record revenue quarters driven by the surgical wound strategy [28] - The company anticipates a significant decrease in losses and aims to achieve cash flow neutrality by the end of Q1 2023 [85] - Management highlighted the importance of securing payer contracts to validate their model and improve healing rates [60] Other Important Information - The initial purchase price for Scendia was $7.4 million, with additional earn-out payments based on sales growth [15][16] - The Precision Healing Imager 510(k) submission is expected to be filed early in Q4 2022 [18] Q&A Session Summary Question: What drove the sharp growth in hospital admissions in Q2? - Management attributed the growth to increased hiring and activity in new markets, along with the addition of a seasoned national accounts manager [36] Question: How did Scendia's portfolio perform in June? - Management did not disclose specific performance for June but indicated they would hold off on that information [38] Question: What is the expected operating expense profile post-Scendia acquisition? - Management stated that no additional personnel would be needed at Scendia, focusing on leveraging existing products [39] Question: What caused the delay in the Precision Healing filing? - The delay was attributed to supply chain issues affecting electronic components and software [40] Question: What is the potential of the ecosystem in the next three to five years? - Management emphasized a continuous growth strategy without a defined end game, focusing on market share and customer satisfaction [61]