Release Date: November 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sanara MedTech Inc (NASDAQ:SMTI) reported a 35% year-over-year increase in net revenue for Q3 2024, marking its 12th consecutive record revenue quarter.
• The company achieved an improved adjusted EBITDA of $800,000 in Q3 2024, up from $300,000 in the same period of 2023.
• Sanara MedTech Inc (NASDAQ:SMTI) expanded its product reach, with sales in over 1,200 hospitals across 34 states and the District of Columbia.
• The company is actively investing in its THP technology platform, with a commercial launch expected in mid-2025.
• Sanara MedTech Inc (NASDAQ:SMTI) has established strategic partnerships, including a $5 million investment in Chemo Mouthpiece LLC, aligning with its wound and skin care strategy.

Negative Points

• The surgical segment reported a net loss of $200,000 in Q3 2024 and a year-to-date net loss of $2.9 million.
• SG&A expenses increased significantly to $19 million in Q3 2024 from $13.9 million in the same period of 2023.
• The company reported a net loss of $2.9 million for Q3 2024, compared to a net loss of $1.1 million in Q3 2023.
• Interest expenses rose to $900,000 in Q3 2024, up from $200,000 in Q3 2023, primarily due to a term loan.
• The Tissue Health Plus segment generated a negative segment EBITDA of $1.7 million during Q3 2024.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Signs with SMTI.

Q: Can you walk us through the rationale for the investment in the mouthpiece and how it fits into your broader strategy? A: Our strategy has always been wound and skin care. The chemo mouthpiece directly impacts a skin condition in the chemotherapy oncology space. It addresses mucositis sores, which are essentially wounds in the mouth, and aligns well with our overall strategy. (Ron Nixon, Executive Chairman and CEO)

Q: How has the pilot program with a podiatry group for THP progressed? A: We are on target to conduct pilots in the first half of 2025. We have a list of partners we're working with, and early previews have been well received. (Sam Mapa, Leader of Tissue Health Plus)

Q: How has it gone attracting new operational personnel for THP? A: We've successfully attracted a skilled team with execution experience in this space. We've also integrated external partners to enhance execution. (Sam Mapa, Leader of Tissue Health Plus)

Q: How should we think about OpEx for the balance of this year and 2025 as you launch THP? A: We have carefully planned our budget to execute our strategy, and we expect continued growth in adjusted EBITDA. We don't foresee any surprises. (Ron Nixon, Executive Chairman and CEO)

Q: Can you give an update on your work with Tufts relating to the 18 peptides you have? A: Our technical team is working on solutions for radiation dermatitis, which is a significant market. This complements our JV with the system and aligns with our skin and wound strategy. (Ron Nixon, Executive Chairman and CEO)

Q: What types of partners are you looking to attract for Tissue Health Plus? A: We are looking for financial partners and execution partners, including strategics with reach into the provider community and supply chain, as well as venture capitalists with healthcare execution experience. (Sam Mapa, Leader of Tissue Health Plus)

Q: When THP launches commercially, will it be immediately profitable, or will there be a ramp-up needed? A: There will be a ramp-up needed to achieve profitability. (Sam Mapa, Leader of Tissue Health Plus)

Q: Can you provide an update on the IP progress for Accelera and BioSurge? A: We continue to file provisional patents around our products and are making good progress. BioSurge has been scaling well at the facility level since its launch. (Ron Nixon, Executive Chairman and CEO; Sethia, President, Commercial)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.