Sanara
MedTech Inc. Based in Fort Worth, Texas,
Sanara MedTech Inc. (“Sanara,” the “Company,” “we,” “our” or “us”)
(NASDAQ: SMTI), a medical technology company focused on developing
and commercializing transformative technologies to improve clinical
outcomes and reduce healthcare expenditures in the surgical,
chronic wound and skincare markets, announced today its strategic,
operational and financial results for the quarter and full year
ended December 31, 2022.
Zach Fleming, Sanara's CEO, stated, “In 2022 we
continued to build on the success we have had with our CellerateRX
product line by expanding the geographic coverage of our sales
team, increasing our average sales per facility, and offering an
expanded line of products. Our record sales results in both the
fourth quarter and the full year are the result of our team’s
continued market penetration and the efficacy and value that we
believe our products offer to patients and providers.”
Fourth Quarter
2022
Strategic and Operational
Highlights
- Generated over
$5 million of revenue in a single month for the first time
- During the
trailing twelve-month period, CellerateRX was sold in over 700
facilities across 29 states
- The Company
announced a partnership with InfuSystem focused on delivering a
complete wound care solution targeted at improving patient
outcomes, lowering the cost of care, and increasing patient and
provider satisfaction. The Company believes that by pairing
Sanara’s product line and deep expertise in wound care with
InfuSystem’s existing negative pressure wound therapy business,
including sales, distribution, clinical support, and revenue cycle
capabilities, it will be able to offer a compelling solution to a
broader patient universe, offering significant value and improved
outcomes for patients, providers, and payors.
- The Company
submitted to the FDA a 510(k) premarket notification for BIASURGE,
the Company’s sterile BIAKŌS™ product for use in surgical settings
on November 4, 2022
- Subsequent to
the end of the fourth quarter 2022, the Company entered into a
sales agreement with Cantor Fitzgerald & Co. for an “ATM”
offering of the Company’s stock. The Company entered into this
agreement for two purposes. The first is to raise capital for
opportunistic partnerships and acquisitions and the second is to
increase the liquidity of its stock.
- Subsequent to
the end of the of the fourth quarter 2022 on March 16, 2023, the
Company submitted to the FDA a 510(k) premarket notification for
its Precision Healing Multispectral Imager
Full Year
2022
Consolidated Financial Results
- Net
Revenues. For the year ended December 31, 2022, we
generated net revenues of $45.8 million compared to net revenues of
$24.1 million for the year ended December 31, 2021, a 90% increase
from the prior year. Our 2022 net revenues included $6.0 million of
Scendia sales. The higher net revenues in 2022 were primarily due
to increased sales of surgical wound care products as a result of
our increased market penetration and geographic expansion,
additional revenues as a result of the Scendia acquisition and our
continuing strategy to expand our independent distribution network
in both new and existing U.S. markets.
- Cost of goods
sold. Cost of goods sold for the year
ended December 31, 2022, was $6.4 million, compared to costs of
goods sold of $2.3 million for the year ended December 31, 2021.
The higher cost of goods sold was due to higher organic sales
volume in 2022 and our acquisition of Scendia, which added $2.0
million of cost of goods sold during 2022. Gross margins were
approximately 86% and 90% for the years ended December 31, 2022 and
2021, respectively. The lower gross margins in 2022 were primarily
due to lower margins realized on sales of Scendia products.
- Selling,
general and administrative (“SG&A”)
expenses. SG&A expenses
for the year ended December 31, 2022, were $46.0 million compared
to SG&A expenses of $28.1 million for the year ended December
31, 2021. Our 2022 SG&A expenses included $2.9 million of costs
related to Scendia operations. The higher SG&A expenses in 2022
were primarily due to higher direct sales and marketing expenses,
which accounted for approximately $13.6 million, or 76% of the
increase compared to prior year. The higher direct sales and
marketing expenses were primarily attributable to an increase in
sales commissions of $9.6 million as a result of higher product
sales and $2.7 million of increased costs as a result of sales
force expansion and operational support. Costs related to travel
and in-person promotional activities increased by $0.9 million in
2022 compared to 2021 due to the resumption of many in-person
activities that were cancelled or postponed in 2021 as a result of
the COVID-19 pandemic. The increase in 2022 SG&A expenses was
also partly attributable to increased noncash equity compensation
and higher payroll costs related to the mid-year addition of the
Rochal workforce in July 2021, the Precision Healing workforce in
April 2022 and the Scendia workforce in July 2022. We expect our
SG&A expenses to continue to decline as a percentage of net
revenues as our sales growth outpaces the costs of sales force
expansion and corporate overhead.
- Research and
development (“R&D”)
expenses. R&D expenses for the year ended
December 31, 2022, were $3.4 million compared to $0.6 million for
the year ended December 31, 2021. R&D expenses for 2022
included approximately $2.5 million of costs related to the newly
acquired Precision Healing diagnostic imager and lateral flow assay
for assessing patient wound and skin conditions. The higher R&D
expenses in 2022 were also partly due to costs associated with
several new development projects for our currently licensed
products.
- Loss
before income taxes. We had a loss before income taxes of
$13.9 million for the year ended December 31, 2022, compared to a
loss before income taxes of $8.0 million for the year ended
December 31, 2021. The higher loss in 2022 was due to increased
SG&A costs, higher R&D expenses, the loss on disposal of
investment related to the dissolution of Sanara Pulsar and higher
amortization of acquired intangible assets.
- Net
loss. For the year ended December 31, 2022, we had a net
loss of $8.1 million, compared to a net loss of $8.0 million for
the year ended December 31, 2021.
The Company will host a conference call on
Tuesday, March 21, 2023, at 9:00 a.m. Eastern Time. The toll-free
number to call for this teleconference is 888-506-0062
(international callers: 973-528-0011) and the access code is
222930. A telephonic replay of the conference call will be
available through Tuesday, April 4, 2023, by dialing 877-481-4010
(international callers: 919-882-2331) and entering the replay
passcode: 47808.
A live webcast of Sanara’s conference call will
be available under the Investor Relations section of the Company's
website, www.SanaraMedTech.com. A one-year online replay will be
available after the conclusion of the live broadcast.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy securities, nor
shall there be any sale of securities, in any state or jurisdiction
in which such an offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of
any such state or jurisdiction.
About Sanara
MedTech Inc.
With a focus on improving patient outcomes
through evidence-based healing solutions, Sanara MedTech Inc.
markets, distributes and develops surgical, wound and skincare
products for use by physicians and clinicians in hospitals, clinics
and all post-acute care settings and offers wound care and
dermatology virtual consultation services via telemedicine.
Sanara’s products are primarily sold in the North American advanced
wound care and surgical tissue repair markets. Sanara markets and
distributes CellerateRX® Surgical Activated Collagen®, FORTIFY TRG®
Tissue Repair Graft and FORTIFY FLOWABLE® Extracellular Matrix as
well as a portfolio of advanced biologic products focusing on
AMPLIFY™ Verified Inductive Bone Matrix, ALLOCYTE™ Advanced
Cellular Bone Matrix, BiFORM® Bioactive Moldable Matrix and
TEXAGEN® Amniotic Membrane Allograft to the surgical market. In
addition, the following products are sold in the wound care market:
BIAKŌS™ Antimicrobial Skin and Wound Cleanser, BIAKŌS™
Antimicrobial Wound Gel, BIAKŌS™ Antimicrobial Skin and Wound
Irrigation Solution and HYCOL® Hydrolyzed Collagen. Sanara’s
pipeline also contains potentially transformative product
candidates for mitigation of opportunistic pathogens and biofilm,
wound re-epithelialization and closure, necrotic tissue debridement
and cell compatible substrates. The Company believes it has the
ability to drive its pipeline from concept to preclinical and
clinical development while meeting quality and regulatory
requirements. Sanara is constantly seeking long-term strategic
partnerships with a focus on products that improve outcomes at a
lower overall cost. In addition, Sanara is actively seeking to
expand within its six focus areas of wound and skin care for the
acute, post-acute, and surgical markets. The focus areas are
debridement, biofilm removal, hydrolyzed collagen, advanced
biologics, negative pressure wound therapy products and the oxygen
delivery system segment of the wound and skincare markets.
Information about Forward-Looking
Statements
The statements in this press release that do not
constitute historical facts are “forward-looking statements,”
within the meaning of and subject to the safe harbor created by the
Private Securities Litigation Reform Act of 1995. These statements
may be identified by terms such as “anticipates,” “believes,”
contemplates,” “continue,” “could,” “estimates,” “expect,”
“forecast,” “guidance,” “intend,” “may,” “plan,” “possible,”
“potential,” “predicts,” “preliminary,” “projects,” “seeks,”
“should,” “targets,” “will” or “would,” or the negatives of these
terms, variations of these terms or other similar expressions.
These forward-looking statements include, among others, statements
regarding the development of new products, the regulatory approval
process and expansion of the Company’s business in telehealth and
wound care. These items involve risks, contingencies and
uncertainties such as the extent of product demand, market and
customer acceptance, the effect of economic conditions,
competition, pricing, uncertainties associated with the development
and process for obtaining regulatory approval for new products, the
ability to consummate and integrate acquisitions, and other risks,
contingencies and uncertainties detailed in the Company’s SEC
filings, which could cause the Company’s actual operating results,
performance or business plans or prospects to differ materially
from those expressed in, or implied by these statements.
All forward-looking statements speak only as of
the date on which they are made, and the Company undertakes no
obligation to revise any of these statements to reflect the future
circumstances or the occurrence of unanticipated events, except as
required by applicable securities laws.
Investor Contact:
Callon Nichols, Director of Investor
Relations713-826-0524CNichols@sanaramedtech.com
SOURCE: Sanara MedTech
Inc.
Sanara MedTech (NASDAQ:SMTI)
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