NASDAQ:SMTI Sanara MedTech Q1 2025 Earnings Report $30.39 -0.60 (-1.94%) Closing price 05/23/2025 04:00 PM EasternExtended Trading$30.36 -0.03 (-0.10%) As of 05/23/2025 04:04 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast Sanara MedTech EPS ResultsActual EPS-$0.41Consensus EPS -$0.31Beat/MissMissed by -$0.10One Year Ago EPSN/ASanara MedTech Revenue ResultsActual Revenue$23.43 millionExpected Revenue$23.48 millionBeat/MissMissed by -$41.00 thousandYoY Revenue GrowthN/ASanara MedTech Announcement DetailsQuarterQ1 2025Date5/14/2025TimeBefore Market OpensConference Call DateWednesday, May 14, 2025Conference Call Time8:00AM ETUpcoming EarningsSanara MedTech's Q2 2025 earnings is scheduled for Monday, August 11, 2025, with a conference call scheduled at 4:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfilePowered by Sanara MedTech Q1 2025 Earnings Call TranscriptProvided by QuartrMay 14, 2025 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Welcome to the Sonera MedTech First Quarter of twenty twenty five Earnings Conference Call. Please note that this conference call is being recorded and a replay will be available on the Investor Relations page of the company's website shortly. The company issued its earnings release earlier today. Before we begin, I would like to remind everyone that certain statements on today's call include forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For more information about the risks and uncertainties involving forward looking statements and factors that could cause actual results to differ materially from those projected or implied by forward looking statements, please see the risk factors set forth in the company's most recent annual report on Form 10 ks. Operator00:00:50This call will also include references to certain non GAAP measures. Reconciliations of those non GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings materials available on the Investor Relations portion of our website. Today's call will be hosted by Ron Nixon, Executive Chairman and CEO, and feature additional remarks from Seth Young, president and chief commercial officer Sam Mupala, president and CEO of Tissue Health Plus and Elizabeth Taylor, chief financial officer. I would now like to turn the call over to Mr. Nixon. Operator00:01:30Please go ahead. Speaker 100:01:32Thanks, operator, and welcome, everyone, to our first quarter of twenty twenty five earnings call. Let me provide a quick agenda for today's call. I'll start by discussing a few of our financial and operational highlights from the first quarter. Seth will then discuss the commercial execution and progress made in our Synera Surgical segment and outline the multiple growth opportunities we're focused on pursuing. Next, Sam will provide an update on our Tissue Health Plus segment. Speaker 100:02:01And finally, Elizabeth will review our quarterly financial results in further detail before opening the calls for questions. Beginning with our first quarter highlights, our Sonera Surgical team delivered net revenue of $23,400,000 representing 26% growth year over year. This performance was consistent with our expectations for the quarter and represents a strong start to 2025. Our net revenue growth was driven primarily by sales of our soft tissue repair products, which increased 28% year over year to 20,500,000.0. Specifically, we saw strong growth in sales of both our Accelerate Rx surgical and biosurge products, which continue to fuel our performance. Speaker 100:02:46We were also pleased to see contributions from sales of our bone fusion products, which increased 18% year over year to 2,900,000.0, with growth across multiple products in this portfolio. As Seth will discuss in detail, our sales performance reflects impressive execution by our Centerra Surgical commercial team on our growth strategy. We remain excited by the large greenfield opportunity that remains ahead of us. In addition to our Synera Surgical segment revenue performance, we also enhanced our gross margins. Net loss per Synera Surgical segment increased by $200,000 year over year to $600,000 And importantly, we were pleased to see Sonera Surgical segment adjusted EBITDA increased by $1,500,000 year over year to $2,700,000 In our Tissue Health Plus segment, we continue to invest in the development of this value based wound care strategy as we prepare to launch our pilot program with a wound care provider later in the second quarter. Speaker 100:03:48We are in active discussions with multiple potential financial partners to invest in the execution of our Tissue Health Plus strategy and remain focused on allocating capital strategically and thoughtfully between our two business segments. In terms of our other operational highlights in the first quarter, as discussed in detail on our last earnings call, we enhanced our new product pipeline by securing the distribution rights to two additional technologies and expanded our senior leadership team with key appointments. We also amended the terms of our debt facility to provide increased financial flexibility as we execute our growth strategy. Lastly, our team has continued their work to strengthen our portfolio of clinical evidence. We look forward to having multiple clinical manuscripts submitted for publication in key medical journals in 2025. Speaker 100:04:40I'm proud of our entire team's performance this past quarter across multiple fronts and look forward to continuing our momentum over the balance of 2025. I'll now turn it over to Seth to discuss the commercial execution and growth opportunities in our Scenera Surgical segment. Speaker 200:04:56Thanks Ron. As Ron mentioned, our Scenera Surgical segment commercial team delivered net revenue growth of 26% year over year. This growth was driven by our team's execution with respect to the following three initiatives related to our commercial strategy. One, advancing and deepening our distributor relationships. Two, selling into new healthcare facilities, and three, further penetrating the existing healthcare facilities we serve. Speaker 200:05:26Beginning with the first of the three commercial initiatives, we significantly expanded our network of distributor partners. Specifically, at the end of the first quarter, our team had engaged and secured selling agreements with over 400 distributor partners compared to over two fifty of the first quarter of twenty twenty four and over three fifty at the end of twenty twenty four. As a reminder, our expanded distributor network provides us with increased sales coverage and presence in key markets across The US. Turning to our second commercial initiative, we continue to add new healthcare facilities to our customer base by securing value analysis committee approvals and commencing sales to surgeons at these facilities. Over the last twelve months, our products were sold in over 1,300 facilities compared to over ten eighty facilities in the prior year period. Speaker 200:06:19With respect to our third commercial initiative, we increased our penetration of the existing healthcare facilities we serve by increasing the number of surgeon using our products within these facilities. While it's not our practice to disclose specifics related to our active surgeon user base, I'm pleased to share that we saw solid growth in the number of surgeon users on a year over year basis in Q1. With this as a backdrop, we're pleased with the execution of our team and the progress we're seeing on our commercial strategy. We believe our commercial performance speaks to the durability of our customer base as well as the value that our Sonera Surgical products provide. As surgeons gain first hand experience with the use of our key products like Celery Rx Surgical and BioSurg, the value they bring to their procedures often leads them to become dedicated long term users. Speaker 200:07:14Looking ahead, we remain focused in 2025 on pursuing these three commercial initiatives to capitalize on the multiple growth opportunities ahead of us. I'll now take a minute to outline some of these growth opportunities and our specific plans to pursue them over the balance of the year. While we will continue to add new distributor partners selectively, given our progress on the front over the last eighteen months, we are increasingly focused this year on onboarding recently added distributors and positioning their reps for success in selling our products. Our existing distributor network represents thousands of third party sales reps. Importantly, only a percentage of these reps are currently selling our products. Speaker 200:07:58This is especially true for our larger distributor partners and our distributor partners engaged in recent quarters. With this in mind, increasing the number of distributor reps selling our products within existing distributor relationships represents a significant growth opportunity for our organization. In 2025, our team is focused on onboarding, training, and providing the requisite technical support needed to help additional reps within each distributor to begin selling our products. In parallel, we will continue to focus on adding new surgeon users within the more than 1,300 facilities that we currently serve. The vast majority of these facilities are hospitals and importantly, our surgeon penetration within these facilities remains low. Speaker 200:08:44Adding new surgeon customers within our existing facilities continues to represent one of the largest untapped areas of growth for our organization. Lastly, we will focus on continuing to add new healthcare facilities to our customer base with a goal of selling into more than fourteen fifty facilities by the end of twenty twenty five. As a reminder, we have contracts or approvals with over 4,000 facilities. This represents a significant opportunity for our commercial team and distributor partners to begin selling into new facilities. For all these reasons, we continue to believe we're in the early innings of our commercialization effort. Speaker 200:09:21We look forward to capitalizing on the multiple growth opportunities ahead of us as we educate prospective surgeon customers about the benefits of our products. With that, I'll turn it over to Sam to provide an update on Tissue Health Plus. Speaker 300:09:36Thanks, Seth. Twenty twenty five has been a period of focused execution for Tissue Health Plus. Thanks to the hard work of the team, we announced the availability of the first release of THP's technology platform on May 1 as planned. This is a pivotal milestone in our journey to disrupt non acute wound care. The THP technology platform release included THP Co Pilot, our software offering which is designed to standardize wound care and reduce the administrative burden for wound care clinicians across all settings. Speaker 300:10:12THP Co Pilot consists of a mobile app designed for use by clinicians, which integrates both our software as a medical device and clinical decision support systems. These tools aid clinicians' ability to deliver precise and personalized wound care while not replacing their professional judgment. Additionally, THP Co Pilot includes an administrative autopilot, which for clinicians automates the process of enforcing reimbursement guardrails, optimizing billing codes, ordering medical supplies from durable medical equipment companies, and tracking the delivery of those supplies. THP CoPilot is also designed to integrate with the clinician's existing electronic medical record systems, which eliminates the need for charting after a clinician's encounter with a patient. THP CoPilot was developed on the top of CarePix technology stack, which we acquired on April 1. Speaker 300:11:20In advance of this acquisition, our team had been previously partnered with CarePix over the past year to leverage both their functionality and the technology frameworks, which form the foundation of our THP technology platform. Specifically, we use their mobile app functionality to accelerate the development of our THP Co Pilot app. Our THP technology platform release is being implemented with the wound care provider group in preparation for the launch of our first pilot program. The implementation process involves configuring the wound care providers clinical and administrative workflows to support an integrated wound care operating system aligned with their growth strategy. With this as a backdrop, we remain on track to launch our first pilot program with the wound care provider group later during the second quarter, as previously discussed. Speaker 300:12:20Our team is also focused on raising the awareness of our THP offering in the provider market. Our THP solution was very well received last week at the Symposium of Advanced Wound Care Spring Meeting, one of the premier annual conferences for healthcare professionals and companies in the wound care industry, and we are building a strong pipeline of interested providers. In addition to these efforts, we continue to focus on launching a pilot program with a payer during the second half of the year. I would like to now turn this over to Elizabeth to review our first quarter financial results in more detail. Speaker 400:13:00Thanks, Sam. I will begin my remarks at the gross profit line since Ron discussed our quarterly revenue performance. Unless otherwise specified, all growth rates referenced during my prepared remarks are on a year over year basis. First quarter gross profit increased $5,000,000 or 30% to 21,600,000.0 Gross margin increased approximately two forty basis points to 92% of net revenue, driven primarily by lower manufacturing costs related to Accelerate Rx Surgical. First quarter operating expenses increased $5,500,000 or 30% to $23,700,000 The change in operating expenses was largely driven by a 5,200,000.0 or 32% increase in selling, general and administrative expenses and to a lesser extent, a $200,000 or 18% increase in research and development expenses. Speaker 400:14:02The $5,200,000 increase in SG and A expenses primarily reflects $2,400,000 of direct sales and marketing expenses in our Syneera Surgical segment, 1,700,000.0 of SG and A expenses in our Tissue Health Plus segment and approximately $700,000 of costs related to the build out of our corporate infrastructure. Note, the Tissue Health Plus segment SG and A expenses are primarily related to the build out of certain aspects of the THP platform and infrastructure, which accelerated beginning in the second quarter of twenty twenty four. Operating loss in the first quarter was $2,100,000 compared to a loss of $1,500,000 last year. Importantly, our Scenario Surgical segment generated operating income of $800,000 in the first quarter of twenty twenty five, an increase of $1,000,000 year over year. Other expense for the first quarter was $1,400,000 compared to $300,000 of expense last year. Speaker 400:15:03The increase in the other expense was primarily due to higher interest expense and fees related to our CRG term loan. Net loss for the first quarter was $3,500,000 or $0.41 per diluted share compared to a net loss of $1,800,000 or $0.21 per diluted share last year. By segment, our Senera Surgical segment generated a net loss of $600,000 compared to a net loss of $400,000 last year, and our Tissue Health Plus segment generated a net loss of $2,900,000 compared to a net loss of $1,400,000 last year. Adjusted EBITDA for the first quarter of twenty twenty five was 700,000 an increase of 111% year over year. By segment, Synera Surgical generated segment adjusted EBITDA of $2,700,000 compared to $1,200,000 last year. Speaker 400:15:57And Tissue Health Plus generated segment adjusted EBITDA loss of $2,000,000 compared to a segment adjusted EBITDA loss of $900,000 last year. With respect to our balance sheet, as of 03/31/2025, we had $20,700,000 of cash, 42,800,000.0 of principal debt obligations outstanding and 12,250,000.00 borrowing capacity. This compares to $15,900,000 of cash, 30,500,000.0 of principal debt obligations outstanding and $24,500,000 of available borrowing capacity as of 12/31/2024. During the first quarter, we amended the terms of our CRG term loan agreement to provide more flexibility with respect to the timing and amount of potential future borrowings and borrowed an additional 12,250,000.00 As a reminder, our loan agreement provides for one additional borrowing of up to $12,250,000 on or before 12/31/2025. Lastly, a few considerations to bear in mind for the remainder of the year. Speaker 400:17:06As Ron mentioned earlier, our net revenue performance in the first quarter was consistent with our expectations, and we remain pleased with our start to 2025. Our team remains focused this year on delivering net revenue growth, driven by our Synera Surgical segment. We continue to expect improvements in our Synera Surgical segment profitability in 2025. With respect to our Tissue Health Plus segment, we expect our cash investment in the first half of twenty twenty five to be approximately $7,500,000 to $8,500,000 compared to our prior expectation of $7,500,000 to $10,000,000 excluding the acquisition of CarePix. This implies cash investment in the second quarter of twenty twenty five of approximately $4,000,000 to $5,000,000 Note, this expectation does not include the CareFix acquisition, which as Sam mentioned, we completed on April 1 for a total of $3,650,000 upon closing. Speaker 400:18:07We also remain focused on pursuing financial partners to invest in execution of our Tissue Health Plus strategy. With our existing cash on hand, the expected cash generation in our Scenario Surgical segment in 2025 and the available borrowing on our existing facility, we believe we have the requisite capital to continue to pursue our strategic growth initiatives. Lastly, with respect to tariffs, it is important to note that with the exception of BioSurg, all of our commercial products are manufactured in The United States. With this in mind, we do not anticipate a material impact from tariffs on our results of operations in 2025. With that, I'll turn it back to the operator to open the call for questions. Operator00:18:54Thank on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We do ask that you limit yourself to one question and one follow-up. If you would like to ask additional questions, we invite you to add yourself to the queue again by pressing star one. Please hold a moment while we poll for questions. Operator00:19:26Your first question for today is from Yee Chen with H. C. Wainwright. Speaker 500:19:34Good morning. Eduardo on Yee. Just to get a little bit more color on your rates of penetration, understanding intuitively that seems like the area where, you'd probably get the most, benefit in ROI approaching profitability. It's kind of your vision for how you're gonna improve penetration at existing facilities, and and your strategy there. Speaker 100:19:57Seth, would you mind taking that please? Speaker 200:19:59Sure, course, good morning. We do it with really a coupled approach between our RSMs, which we've talked a lot about in the past territory managers as well, and then our distributor expansion. So our distributor expansion has jumped significantly over the last eighteen months, and that's been done intentionally, for that very reason. It's to get us access into new accounts, but also to penetrate, existing accounts deeper and further. So it's really a coupled approach between both the RSM and our distributor partners. Speaker 500:20:31Got it. And is there any kind of signal on reorder rates, that you could provide that, you know, you mentioned that people who use the product really like it. Do have any numbers on the reorder rates? Speaker 200:20:45We haven't provided that in the past. I will say this, our business tends to stick, both on the Celerate side and by a surge alike. Once surgeons gain comfort with those two products, and that takes some time to do that, oftentimes they'll start with high risk cases, to see how products perform. And then as they do perform highly and with highly successful rates, they continue to use that and expand that across more procedures. Speaker 500:21:14Okay, got it. That's really helpful. Thanks for taking the questions. Speaker 100:21:18You bet, sir. Thank you. Operator00:21:28Your next question for today is from Ross Osborne with Cantor Fitzgerald. Speaker 600:21:36Hey, guys. This is Matt Park on for Ross today. Thanks for taking the questions. I guess starting off with gross margin, came in very strong in the quarter. Can you, help us frame how we should think about gross margin cadence through the remainder of 2025? Speaker 600:21:49And any areas for further leverage as volume scales? Speaker 100:21:58Ross, this is Ron. So how I think about it is when we bought the technology from the original designer developer of the product. And last year, that actually gave us some advantage on the manufacturing side because there was some additional margin there to be had. So I would say that it's you never can tell what external other costs could come about. So I just think modeling it in your just kind of consistent with how you've done it in the past is probably good to go forward. Speaker 100:22:37I can't see us achieving a lot more leverage than what we have today on the gross margin side. Speaker 600:22:45Got it. That's helpful. And then just one more for me on Tissue Health Plus. Given that you remain on track for a pilot program launch in the second quarter, can you help walk us through what success will look like in this initial phase, whether that's clinical outcomes, patient volume or economic validation? And how quickly you anticipate scaling beyond the first site? Speaker 500:23:05Thanks. Speaker 100:23:06Yes, that sounds good. Speaker 300:23:11Sorry, Ron, I jumped the gun there. So Ross, to answer your question, we're really looking at the success of the pilot being measured in three sets of metrics. First is the clinician facing metrics. These include things like protocol and formulary adherence. So, to just remind you, one of the key things we are actually implementing as part of our platform is a clinical decision support, which guides the clinician. Speaker 300:23:40So, how well they adhere to the protocol and the formulary, that's a key metric there. Second metric facing the clinician again is helping them decrease their post encounter time. So, for every minute a clinician spends in front of a patient, they could be spending up to two to three minutes after the patient encounter completing the documentation. So, that is a key metric we are trying to influence. And the last is clinician metric is around completion of documentation. Speaker 300:24:13How well documented is the encounter. On the operating side, which is the second category of metrics, we look at things like increase in staff productivity. And the way we do that is before we started the implementation, we have actually done time and motion studies of their practice end to end. So, we have baseline timings, and we look at improvements based on our workflow technology, how we are helping them with that. We also look at increased capture in billing services per visit. Speaker 300:24:50And we also look to decreasing inventory, wound care related inventory costs and wastage. So, high level operational metrics. The third bucket of metrics we look at are adoption metrics, which is, for example, the percentage of clinicians using our THP Copilot, what's the user satisfaction surveys, NPS, so on and so forth. Speaker 600:25:16Got it. That's helpful. Thanks for taking the questions, guys. Thank you. We Operator00:25:24currently are seeing no remaining questions at this time. That does conclude our conference for today. Thank you for your participation.Read morePowered by Key Takeaways Sonera Surgical net revenues rose 26% to $23.4 M in Q1 2025, driven by 28% growth in soft tissue repair products and 18% in bone fusion, fueling segment adjusted EBITDA of $2.7 M. Commercial execution included expanding distributor partners to over 400, growing facility coverage to 1,300 sites, and targeting deeper surgeon penetration and new facilities to reach 1,450 by year-end. Launched the THP CoPilot technology platform on May 1, integrating clinical decision support and administrative automation, with a pilot program for wound care providers slated for Q2 and payer discussions underway. Q1 gross profit increased 30% to $21.6 M with 92% margin, operating loss was $2.1 M (surgical segment op income of $0.8 M), net loss was $3.5 M, and adjusted EBITDA doubled to $0.7 M. With $20.7 M cash and $12.3 M available borrowing, Sonera expects continued revenue growth and surgical segment profitability improvements in 2025, while investing $7.5 M–$8.5 M in THP strategy in H1. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallSanara MedTech Q1 202500:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Sanara MedTech Earnings HeadlinesFY2025 EPS Forecast for Sanara MedTech Lifted by AnalystMay 19, 2025 | americanbankingnews.comSanara MedTech Shares Down, Investors Sought For Pilot ProgramMay 15, 2025 | marketwatch.comHere’s How to Claim Your Stake in Elon’s Private Company, xAII predict this single breakthrough could make Elon the world’s first trillionaire — and mint more new millionaires than any tech advance in history. And for a limited time, you have the chance to claim a stake in this project, even though it’s housed inside Elon’s private company, xAI.May 25, 2025 | Brownstone Research (Ad)Earnings call transcript: Sanara Medtech Q1 2025 earnings miss forecastsMay 15, 2025 | investing.comEarnings call transcript: Sanara Medtech Q1 2025 earnings miss forecastsMay 15, 2025 | investing.comSanara MedTech Inc (SMTI) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amid Rising ...May 15, 2025 | finance.yahoo.comSee More Sanara MedTech Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Sanara MedTech? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Sanara MedTech and other key companies, straight to your email. Email Address About Sanara MedTechSanara MedTech (NASDAQ:SMTI), a medical technology company, develops, markets, and distributes surgical, wound, and skincare products and services to physicians, hospitals, clinics, and post-acute care settings in the United States. The company offers CellerateRX Surgical, a medical hydrolysate of Type I bovine collagen indicated for the management of surgical, traumatic, and partial- and full-thickness wounds, as well as first- and second-degree burns; and HYCOL, a medical hydrolysate of Type I bovine collagen intended for the management of full and partial thickness wounds, including pressure ulcers, venous and arterial leg ulcers, and diabetic foot ulcers. It also provides BIAKOS Antimicrobial Skin and Wound Cleanser, a patented product that contains synergistic ingredients that have been shown to impact mature biofilm microbes; BIAKOS Antimicrobial Wound Gel, an antimicrobial hydrogel wound dressing that helps against planktonic microbes, as well as immature and mature biofilms; and BIAKOS Antimicrobial Skin and Wound Irrigation Solution. In addition, it develops BIASURGE, a no-rinse surgical solution used for wound irrigation; FORTIFY TRG, a freeze-dried, multi-layer small intestinal submucosa extracellular matrix sheet; FORTIFY FLOWABLE extracellular matrix, an advanced wound care device; TEXAGEN, a multi-layer amniotic membrane allograft used as an anatomical barrier with robust handling that can be sutured for securement; and VIM Amnion Matrix, a homologous wound covering product. Sanara MedTech Inc. was incorporated in 2001 and is based in Fort Worth, Texas.View Sanara MedTech ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Booz Allen Hamilton Earnings: 3 Bullish Signals for BAH StockAdvance Auto Parts Jumps on Surprise Earnings BeatAlibaba's Earnings Just Changed Everything for the StockCisco Stock Eyes New Highs in 2025 on AI, Earnings, UpgradesSymbotic Gets Big Earnings Lift: Is the Stock Investable Again?D-Wave Pushes Back on Short Seller Case With Strong EarningsAppLovin Surges on Earnings: What's Next for This Tech Standout? 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There are 7 speakers on the call. Operator00:00:00Welcome to the Sonera MedTech First Quarter of twenty twenty five Earnings Conference Call. Please note that this conference call is being recorded and a replay will be available on the Investor Relations page of the company's website shortly. The company issued its earnings release earlier today. Before we begin, I would like to remind everyone that certain statements on today's call include forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For more information about the risks and uncertainties involving forward looking statements and factors that could cause actual results to differ materially from those projected or implied by forward looking statements, please see the risk factors set forth in the company's most recent annual report on Form 10 ks. Operator00:00:50This call will also include references to certain non GAAP measures. Reconciliations of those non GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings materials available on the Investor Relations portion of our website. Today's call will be hosted by Ron Nixon, Executive Chairman and CEO, and feature additional remarks from Seth Young, president and chief commercial officer Sam Mupala, president and CEO of Tissue Health Plus and Elizabeth Taylor, chief financial officer. I would now like to turn the call over to Mr. Nixon. Operator00:01:30Please go ahead. Speaker 100:01:32Thanks, operator, and welcome, everyone, to our first quarter of twenty twenty five earnings call. Let me provide a quick agenda for today's call. I'll start by discussing a few of our financial and operational highlights from the first quarter. Seth will then discuss the commercial execution and progress made in our Synera Surgical segment and outline the multiple growth opportunities we're focused on pursuing. Next, Sam will provide an update on our Tissue Health Plus segment. Speaker 100:02:01And finally, Elizabeth will review our quarterly financial results in further detail before opening the calls for questions. Beginning with our first quarter highlights, our Sonera Surgical team delivered net revenue of $23,400,000 representing 26% growth year over year. This performance was consistent with our expectations for the quarter and represents a strong start to 2025. Our net revenue growth was driven primarily by sales of our soft tissue repair products, which increased 28% year over year to 20,500,000.0. Specifically, we saw strong growth in sales of both our Accelerate Rx surgical and biosurge products, which continue to fuel our performance. Speaker 100:02:46We were also pleased to see contributions from sales of our bone fusion products, which increased 18% year over year to 2,900,000.0, with growth across multiple products in this portfolio. As Seth will discuss in detail, our sales performance reflects impressive execution by our Centerra Surgical commercial team on our growth strategy. We remain excited by the large greenfield opportunity that remains ahead of us. In addition to our Synera Surgical segment revenue performance, we also enhanced our gross margins. Net loss per Synera Surgical segment increased by $200,000 year over year to $600,000 And importantly, we were pleased to see Sonera Surgical segment adjusted EBITDA increased by $1,500,000 year over year to $2,700,000 In our Tissue Health Plus segment, we continue to invest in the development of this value based wound care strategy as we prepare to launch our pilot program with a wound care provider later in the second quarter. Speaker 100:03:48We are in active discussions with multiple potential financial partners to invest in the execution of our Tissue Health Plus strategy and remain focused on allocating capital strategically and thoughtfully between our two business segments. In terms of our other operational highlights in the first quarter, as discussed in detail on our last earnings call, we enhanced our new product pipeline by securing the distribution rights to two additional technologies and expanded our senior leadership team with key appointments. We also amended the terms of our debt facility to provide increased financial flexibility as we execute our growth strategy. Lastly, our team has continued their work to strengthen our portfolio of clinical evidence. We look forward to having multiple clinical manuscripts submitted for publication in key medical journals in 2025. Speaker 100:04:40I'm proud of our entire team's performance this past quarter across multiple fronts and look forward to continuing our momentum over the balance of 2025. I'll now turn it over to Seth to discuss the commercial execution and growth opportunities in our Scenera Surgical segment. Speaker 200:04:56Thanks Ron. As Ron mentioned, our Scenera Surgical segment commercial team delivered net revenue growth of 26% year over year. This growth was driven by our team's execution with respect to the following three initiatives related to our commercial strategy. One, advancing and deepening our distributor relationships. Two, selling into new healthcare facilities, and three, further penetrating the existing healthcare facilities we serve. Speaker 200:05:26Beginning with the first of the three commercial initiatives, we significantly expanded our network of distributor partners. Specifically, at the end of the first quarter, our team had engaged and secured selling agreements with over 400 distributor partners compared to over two fifty of the first quarter of twenty twenty four and over three fifty at the end of twenty twenty four. As a reminder, our expanded distributor network provides us with increased sales coverage and presence in key markets across The US. Turning to our second commercial initiative, we continue to add new healthcare facilities to our customer base by securing value analysis committee approvals and commencing sales to surgeons at these facilities. Over the last twelve months, our products were sold in over 1,300 facilities compared to over ten eighty facilities in the prior year period. Speaker 200:06:19With respect to our third commercial initiative, we increased our penetration of the existing healthcare facilities we serve by increasing the number of surgeon using our products within these facilities. While it's not our practice to disclose specifics related to our active surgeon user base, I'm pleased to share that we saw solid growth in the number of surgeon users on a year over year basis in Q1. With this as a backdrop, we're pleased with the execution of our team and the progress we're seeing on our commercial strategy. We believe our commercial performance speaks to the durability of our customer base as well as the value that our Sonera Surgical products provide. As surgeons gain first hand experience with the use of our key products like Celery Rx Surgical and BioSurg, the value they bring to their procedures often leads them to become dedicated long term users. Speaker 200:07:14Looking ahead, we remain focused in 2025 on pursuing these three commercial initiatives to capitalize on the multiple growth opportunities ahead of us. I'll now take a minute to outline some of these growth opportunities and our specific plans to pursue them over the balance of the year. While we will continue to add new distributor partners selectively, given our progress on the front over the last eighteen months, we are increasingly focused this year on onboarding recently added distributors and positioning their reps for success in selling our products. Our existing distributor network represents thousands of third party sales reps. Importantly, only a percentage of these reps are currently selling our products. Speaker 200:07:58This is especially true for our larger distributor partners and our distributor partners engaged in recent quarters. With this in mind, increasing the number of distributor reps selling our products within existing distributor relationships represents a significant growth opportunity for our organization. In 2025, our team is focused on onboarding, training, and providing the requisite technical support needed to help additional reps within each distributor to begin selling our products. In parallel, we will continue to focus on adding new surgeon users within the more than 1,300 facilities that we currently serve. The vast majority of these facilities are hospitals and importantly, our surgeon penetration within these facilities remains low. Speaker 200:08:44Adding new surgeon customers within our existing facilities continues to represent one of the largest untapped areas of growth for our organization. Lastly, we will focus on continuing to add new healthcare facilities to our customer base with a goal of selling into more than fourteen fifty facilities by the end of twenty twenty five. As a reminder, we have contracts or approvals with over 4,000 facilities. This represents a significant opportunity for our commercial team and distributor partners to begin selling into new facilities. For all these reasons, we continue to believe we're in the early innings of our commercialization effort. Speaker 200:09:21We look forward to capitalizing on the multiple growth opportunities ahead of us as we educate prospective surgeon customers about the benefits of our products. With that, I'll turn it over to Sam to provide an update on Tissue Health Plus. Speaker 300:09:36Thanks, Seth. Twenty twenty five has been a period of focused execution for Tissue Health Plus. Thanks to the hard work of the team, we announced the availability of the first release of THP's technology platform on May 1 as planned. This is a pivotal milestone in our journey to disrupt non acute wound care. The THP technology platform release included THP Co Pilot, our software offering which is designed to standardize wound care and reduce the administrative burden for wound care clinicians across all settings. Speaker 300:10:12THP Co Pilot consists of a mobile app designed for use by clinicians, which integrates both our software as a medical device and clinical decision support systems. These tools aid clinicians' ability to deliver precise and personalized wound care while not replacing their professional judgment. Additionally, THP Co Pilot includes an administrative autopilot, which for clinicians automates the process of enforcing reimbursement guardrails, optimizing billing codes, ordering medical supplies from durable medical equipment companies, and tracking the delivery of those supplies. THP CoPilot is also designed to integrate with the clinician's existing electronic medical record systems, which eliminates the need for charting after a clinician's encounter with a patient. THP CoPilot was developed on the top of CarePix technology stack, which we acquired on April 1. Speaker 300:11:20In advance of this acquisition, our team had been previously partnered with CarePix over the past year to leverage both their functionality and the technology frameworks, which form the foundation of our THP technology platform. Specifically, we use their mobile app functionality to accelerate the development of our THP Co Pilot app. Our THP technology platform release is being implemented with the wound care provider group in preparation for the launch of our first pilot program. The implementation process involves configuring the wound care providers clinical and administrative workflows to support an integrated wound care operating system aligned with their growth strategy. With this as a backdrop, we remain on track to launch our first pilot program with the wound care provider group later during the second quarter, as previously discussed. Speaker 300:12:20Our team is also focused on raising the awareness of our THP offering in the provider market. Our THP solution was very well received last week at the Symposium of Advanced Wound Care Spring Meeting, one of the premier annual conferences for healthcare professionals and companies in the wound care industry, and we are building a strong pipeline of interested providers. In addition to these efforts, we continue to focus on launching a pilot program with a payer during the second half of the year. I would like to now turn this over to Elizabeth to review our first quarter financial results in more detail. Speaker 400:13:00Thanks, Sam. I will begin my remarks at the gross profit line since Ron discussed our quarterly revenue performance. Unless otherwise specified, all growth rates referenced during my prepared remarks are on a year over year basis. First quarter gross profit increased $5,000,000 or 30% to 21,600,000.0 Gross margin increased approximately two forty basis points to 92% of net revenue, driven primarily by lower manufacturing costs related to Accelerate Rx Surgical. First quarter operating expenses increased $5,500,000 or 30% to $23,700,000 The change in operating expenses was largely driven by a 5,200,000.0 or 32% increase in selling, general and administrative expenses and to a lesser extent, a $200,000 or 18% increase in research and development expenses. Speaker 400:14:02The $5,200,000 increase in SG and A expenses primarily reflects $2,400,000 of direct sales and marketing expenses in our Syneera Surgical segment, 1,700,000.0 of SG and A expenses in our Tissue Health Plus segment and approximately $700,000 of costs related to the build out of our corporate infrastructure. Note, the Tissue Health Plus segment SG and A expenses are primarily related to the build out of certain aspects of the THP platform and infrastructure, which accelerated beginning in the second quarter of twenty twenty four. Operating loss in the first quarter was $2,100,000 compared to a loss of $1,500,000 last year. Importantly, our Scenario Surgical segment generated operating income of $800,000 in the first quarter of twenty twenty five, an increase of $1,000,000 year over year. Other expense for the first quarter was $1,400,000 compared to $300,000 of expense last year. Speaker 400:15:03The increase in the other expense was primarily due to higher interest expense and fees related to our CRG term loan. Net loss for the first quarter was $3,500,000 or $0.41 per diluted share compared to a net loss of $1,800,000 or $0.21 per diluted share last year. By segment, our Senera Surgical segment generated a net loss of $600,000 compared to a net loss of $400,000 last year, and our Tissue Health Plus segment generated a net loss of $2,900,000 compared to a net loss of $1,400,000 last year. Adjusted EBITDA for the first quarter of twenty twenty five was 700,000 an increase of 111% year over year. By segment, Synera Surgical generated segment adjusted EBITDA of $2,700,000 compared to $1,200,000 last year. Speaker 400:15:57And Tissue Health Plus generated segment adjusted EBITDA loss of $2,000,000 compared to a segment adjusted EBITDA loss of $900,000 last year. With respect to our balance sheet, as of 03/31/2025, we had $20,700,000 of cash, 42,800,000.0 of principal debt obligations outstanding and 12,250,000.00 borrowing capacity. This compares to $15,900,000 of cash, 30,500,000.0 of principal debt obligations outstanding and $24,500,000 of available borrowing capacity as of 12/31/2024. During the first quarter, we amended the terms of our CRG term loan agreement to provide more flexibility with respect to the timing and amount of potential future borrowings and borrowed an additional 12,250,000.00 As a reminder, our loan agreement provides for one additional borrowing of up to $12,250,000 on or before 12/31/2025. Lastly, a few considerations to bear in mind for the remainder of the year. Speaker 400:17:06As Ron mentioned earlier, our net revenue performance in the first quarter was consistent with our expectations, and we remain pleased with our start to 2025. Our team remains focused this year on delivering net revenue growth, driven by our Synera Surgical segment. We continue to expect improvements in our Synera Surgical segment profitability in 2025. With respect to our Tissue Health Plus segment, we expect our cash investment in the first half of twenty twenty five to be approximately $7,500,000 to $8,500,000 compared to our prior expectation of $7,500,000 to $10,000,000 excluding the acquisition of CarePix. This implies cash investment in the second quarter of twenty twenty five of approximately $4,000,000 to $5,000,000 Note, this expectation does not include the CareFix acquisition, which as Sam mentioned, we completed on April 1 for a total of $3,650,000 upon closing. Speaker 400:18:07We also remain focused on pursuing financial partners to invest in execution of our Tissue Health Plus strategy. With our existing cash on hand, the expected cash generation in our Scenario Surgical segment in 2025 and the available borrowing on our existing facility, we believe we have the requisite capital to continue to pursue our strategic growth initiatives. Lastly, with respect to tariffs, it is important to note that with the exception of BioSurg, all of our commercial products are manufactured in The United States. With this in mind, we do not anticipate a material impact from tariffs on our results of operations in 2025. With that, I'll turn it back to the operator to open the call for questions. Operator00:18:54Thank on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We do ask that you limit yourself to one question and one follow-up. If you would like to ask additional questions, we invite you to add yourself to the queue again by pressing star one. Please hold a moment while we poll for questions. Operator00:19:26Your first question for today is from Yee Chen with H. C. Wainwright. Speaker 500:19:34Good morning. Eduardo on Yee. Just to get a little bit more color on your rates of penetration, understanding intuitively that seems like the area where, you'd probably get the most, benefit in ROI approaching profitability. It's kind of your vision for how you're gonna improve penetration at existing facilities, and and your strategy there. Speaker 100:19:57Seth, would you mind taking that please? Speaker 200:19:59Sure, course, good morning. We do it with really a coupled approach between our RSMs, which we've talked a lot about in the past territory managers as well, and then our distributor expansion. So our distributor expansion has jumped significantly over the last eighteen months, and that's been done intentionally, for that very reason. It's to get us access into new accounts, but also to penetrate, existing accounts deeper and further. So it's really a coupled approach between both the RSM and our distributor partners. Speaker 500:20:31Got it. And is there any kind of signal on reorder rates, that you could provide that, you know, you mentioned that people who use the product really like it. Do have any numbers on the reorder rates? Speaker 200:20:45We haven't provided that in the past. I will say this, our business tends to stick, both on the Celerate side and by a surge alike. Once surgeons gain comfort with those two products, and that takes some time to do that, oftentimes they'll start with high risk cases, to see how products perform. And then as they do perform highly and with highly successful rates, they continue to use that and expand that across more procedures. Speaker 500:21:14Okay, got it. That's really helpful. Thanks for taking the questions. Speaker 100:21:18You bet, sir. Thank you. Operator00:21:28Your next question for today is from Ross Osborne with Cantor Fitzgerald. Speaker 600:21:36Hey, guys. This is Matt Park on for Ross today. Thanks for taking the questions. I guess starting off with gross margin, came in very strong in the quarter. Can you, help us frame how we should think about gross margin cadence through the remainder of 2025? Speaker 600:21:49And any areas for further leverage as volume scales? Speaker 100:21:58Ross, this is Ron. So how I think about it is when we bought the technology from the original designer developer of the product. And last year, that actually gave us some advantage on the manufacturing side because there was some additional margin there to be had. So I would say that it's you never can tell what external other costs could come about. So I just think modeling it in your just kind of consistent with how you've done it in the past is probably good to go forward. Speaker 100:22:37I can't see us achieving a lot more leverage than what we have today on the gross margin side. Speaker 600:22:45Got it. That's helpful. And then just one more for me on Tissue Health Plus. Given that you remain on track for a pilot program launch in the second quarter, can you help walk us through what success will look like in this initial phase, whether that's clinical outcomes, patient volume or economic validation? And how quickly you anticipate scaling beyond the first site? Speaker 500:23:05Thanks. Speaker 100:23:06Yes, that sounds good. Speaker 300:23:11Sorry, Ron, I jumped the gun there. So Ross, to answer your question, we're really looking at the success of the pilot being measured in three sets of metrics. First is the clinician facing metrics. These include things like protocol and formulary adherence. So, to just remind you, one of the key things we are actually implementing as part of our platform is a clinical decision support, which guides the clinician. Speaker 300:23:40So, how well they adhere to the protocol and the formulary, that's a key metric there. Second metric facing the clinician again is helping them decrease their post encounter time. So, for every minute a clinician spends in front of a patient, they could be spending up to two to three minutes after the patient encounter completing the documentation. So, that is a key metric we are trying to influence. And the last is clinician metric is around completion of documentation. Speaker 300:24:13How well documented is the encounter. On the operating side, which is the second category of metrics, we look at things like increase in staff productivity. And the way we do that is before we started the implementation, we have actually done time and motion studies of their practice end to end. So, we have baseline timings, and we look at improvements based on our workflow technology, how we are helping them with that. We also look at increased capture in billing services per visit. Speaker 300:24:50And we also look to decreasing inventory, wound care related inventory costs and wastage. So, high level operational metrics. The third bucket of metrics we look at are adoption metrics, which is, for example, the percentage of clinicians using our THP Copilot, what's the user satisfaction surveys, NPS, so on and so forth. Speaker 600:25:16Got it. That's helpful. Thanks for taking the questions, guys. Thank you. We Operator00:25:24currently are seeing no remaining questions at this time. That does conclude our conference for today. Thank you for your participation.Read morePowered by