Fuse Medical, Inc. Announces Third Quarter 2021 Financial Results

Rhea-AI Summary

Fuse Medical, Inc. (OTCPINK: FZMD) filed its quarterly report on Form 10-Q for Q3 2021 on November 10, 2021. For the nine months ending September 30, 2021, net revenues were $14.35 million, down slightly from $14.38 million in 2020. Gross profit rose to $5.9 million, representing 59% of revenues. SG&A expenses remained stable at approximately $5.01 million, while commissions decreased to $4.89 million. The company reported a reduced net loss of $1.24 million, down 24% from $1.63 million in 2020. CEO Christopher C. Reeg noted that COVID-19's Delta variant impacted results due to surgery restrictions.

Positive

• Gross profit increased to $5.9 million, up 2% year-over-year.
• Net loss decreased by approximately 24%, from $1.63 million to $1.24 million.

Negative

• Net revenues declined by approximately $29,503 compared to the same period last year.
• COVID-19 Delta variant restrictions hindered surgical procedures.

RICHARDSON, Texas--(BUSINESS WIRE)-- Fuse Medical, Inc. (OTCPINK: FZMD) (“Fuse” or the “Company”) an emerging manufacturer and distributor of innovative medical devices for the orthopedic and spine marketplace, announced that it has filed its quarterly report on Form 10-Q for the quarter ended September 30, 2021 with the Securities and Exchange Commission (“SEC”) on Wednesday, November 10, 2021.

Third Quarter 2021 Financial Highlights

• Net revenues for the nine months ended September 30, 2021 were $14.35 million, compared to $14.38 million for the nine months ended September 30, 2020, which was a decrease of approximately $29,503.

• For the nine months ended September 30, 2021, gross profit was $5.9 million, or 59% of revenues, compared to $5.8 million, or 60% of revenues, for the nine months ended September 30, 2020, which was an increase of 2%.

• Selling, general, administrative, and other expenses (“SG&A”) for the nine months ended September 30, 2021 was approximately $5.01 million compared to $5.02 million for the nine months ended September 30, 2020.

• Commissions expense for the nine months ended September 30, 2021 decreased to $4.89 million from $5.0 million for the nine months ended September 30, 2020, a decrease of approximately $101,998.

• For the nine months ended September 30, 2021, net loss was $1.24 million compared to $1.63 for the nine months ended September 30, 2020, reflecting a reduction in our net loss of $391,107 or approximately 24%.

“The unexpected emergence of the COVID -19 Delta variant impacted our third quarter results, primarily from restrictions on inpatient elective surgeries in multiple markets we service in the US, as well as surgical cases canceling due to patients testing positive for the COVID -19 virus,” said Christopher C. Reeg, Chief Executive Officer of Fuse Medical, “As the rates for infection, hospitalizations, and deaths from COVID -19 now appear to be on the decline, we are confident that the investment into our product portfolio development and launches of unique and clinically differentiated products in spine, biologics, orthopedics, and the foot and ankle markets will prove to be instrumental in securing our position as an emerging, relevant manufacturer of medical devices.”

About Fuse Medical, Inc.

Fuse is an emerging manufacturer and distributor of innovative medical devices for the orthopedic and spine marketplace. We provide a comprehensive portfolio of products in the orthopedic total joints, sports medicine, trauma, foot and ankle space, as well as, degenerative and deformity spine, osteobiologics, wound care, and regenerative products. For more information about the Company, or if you’re interested in becoming a distributor of any Fuse’s products, please contact us at info@fusemedical.com or visit: www.fusemedical.com.

Forward Looking Statements

Certain statements in this press release, constitute “forward-looking statements” within the meaning of the federal securities laws. Words such as “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend,” or similar expressions or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based only on information available to the Company as of the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including, without limitation, those set forth in the Company’s filings with the Securities and Exchange Commission; the failure of the Company to close the transaction; and integration issues with the consolidated company. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events, or otherwise, except as required by law.

FUSE MEDICAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in dollars, except share data)
		September 30, 2021				December 31, 2020
		(Unaudited)
Assets
Current assets:
Cash		$	1,765,282			$	1,187,458
Accounts receivable, net of allowance of $883,655 and $787,766, respectively			2,459,071				4,427,896
Inventories, net of allowance of $2,591,117 and $3,077,728, respectively			8,567,852				6,981,413
Prepaid expenses and other current assets			66,461				24,203
Total current assets			12,858,666				12,620,970
Property and equipment, net			8,938				17,791
Long term accounts receivable, net of allowance of $3,194,336 and $2,615,834, respectively			2,075,066				1,669,510
Intangible assets, net			1,100,181				1,138,080
Goodwill			1,972,886				1,972,886
Total assets		$	18,015,737			$	17,419,237
Liabilities and Stockholders' Equity (Accumulated Deficit)
Current liabilities:
Accounts payable		$	4,408,853			$	3,236,592
Accrued expenses			3,037,899				2,584,734
Convertible notes payable - related parties			150,000				150,000
Paycheck Protection Program Loan			-				361,400
Economic Injury Disaster Loan - short term portion			-				2,241
Senior secured revolving credit facility			913,352				913,352
Total current liabilities			8,510,104				7,248,319
Notes payable - related parties			200,000				200,000
Economic Injury Disaster Loan - long term portion			496,345				147,759
Earn-out liability			11,936,000				11,936,000
Total long term liabilities			12,632,345				12,283,759
Total liabilities			21,142,449				19,532,078
Commitments and contingencies			—				—
Stockholders' equity (accumulated deficit)
Preferred stock, $0.01 par value; 20,000,000 shares authorized, no shares issued and outstanding			—				—
Common stock, $0.01 par value; 100,000,000 shares authorized, 73,124,458 shares issued and outstanding as of September 30, 2021 and December 31, 2020.			731,245				731,245
Additional paid-in capital			1,406,190				1,184,222
Accumulated deficit			(5,264,147	)			(4,028,308	)
Total stockholders' equity (accumulated deficit)			(3,126,712	)			(2,112,841	)
Total liabilities and stockholders' equity (accumulated deficit)		$	18,015,737			$	17,419,237

FUSE MEDICAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in dollars, except share data)
	For the Three Months Ended September 30,								For the Nine Months Ended September 30,
	2021				2020				2021				2020
Net revenues	$	4,250,554			$	5,738,662			$	14,356,328			$	14,385,831
Cost of revenues		1,861,620				2,043,722				5,935,093				5,823,281
Gross profit		2,388,934				3,694,940				8,421,235				8,562,550
Operating expenses:
Selling, general, administrative and other		1,609,739				2,185,487				5,016,594				5,021,632
Commissions		1,445,689				1,379,385				4,894,845				4,996,843
Depreciation and amortization		14,493				23,312				46,751				84,047
Total operating expenses		3,069,921				3,588,184				9,958,190				10,102,522
Operating loss		(680,987	)			106,756				(1,536,955	)			(1,539,972	)
Other (income) expense:
Interest expense		8,578				20,611				47,561				75,633
Gain on Payroll Protection Loan extinguishment		3,934				-				(361,400	)			-
Total other (income) expense		12,512				20,611				(313,839	)			75,633
Net loss before tax		(693,499	)			86,145				(1,223,116	)			(1,615,605	)
Income tax benefit		3,537				5,661				12,723				11,341
Net loss	$	(697,036	)		$	80,484			$	(1,235,839	)		$	(1,626,946	)
Net loss per common share - basic	$	(0.01	)		$	0.00			$	(0.02	)		$	(0.02	)
Weighted average number of common shares outstanding - basic		70,221,566				70,221,566				70,221,566				70,221,566

FUSE MEDICAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
		For the Nine Months Ended September 30,
		2021				2020
Cash flows from operating activities
Net loss		$	(1,235,839	)		$	(1,626,946	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			46,752				84,047
Stock based compensation			221,968				428,915
Provision for bad debts and discounts			95,889				186,407
Provision for long term accounts receivable			578,502				763,361
Provision for slow moving inventory			(486,611	)			-
Gain on Payroll Protection Program Loan extinguishment			(361,400	)			-
Changes in operating assets and liabilities:
Accounts receivable			1,872,936				1,848,177
Inventories			(1,099,828	)			872,971
Prepaid expenses and other current assets			(42,258	)			4,891
Long term accounts receivable			(984,058	)			(1,908,403	)
Accounts payable			1,172,261				(409,371	)
Accrued expenses			453,165				219,035
Net cash provided by operating activities			231,479				463,084
Cash flows from investing activities
Purchase of property and equipment			-				(20,757	)
Net cash (used in) investing activities			-				(20,757	)
Cash flows from financing activities
Payments on senior secured revolving credit facility, net			-				(714,149	)
Proceeds from Paycheck Protection Program			-				361,400
Payments from Economic Injury Disaster Loan, net			(3,655	)			200,000
Proceeds on Economic Injury Disaster Loan			350,000
Proceeds from related party promissory notes			-				150,000
Net cash provided by (used in) financing activities			346,345				(2,749	)
Net increase (decrease) in cash			577,824				439,578
Cash and cash equivalents - beginning of period			1,187,458				1,099,310
Cash and cash equivalents - end of period		$	1,765,282			$	1,538,888
Supplemental disclosure of cash flow information:
Cash paid for interest		$	32,091			$	52,188

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211111005452/en/

Fuse Medical, Inc.

Devon Morgan, Sr. Investor Relations Analyst

Office (469) 862-3030

Facsimile (469) 862-3035

info@Fusemedical.com

Source: Fuse Medical, Inc.

FAQ

What were Fuse Medical's revenues for Q3 2021?

Fuse Medical reported net revenues of $14.35 million for the nine months ended September 30, 2021.

How much did Fuse Medical's net loss decrease in Q3 2021?

The net loss decreased by approximately 24%, from $1.63 million in 2020 to $1.24 million in 2021.

What impact did COVID-19 have on Fuse Medical's Q3 2021 performance?

The Delta variant led to restrictions on elective surgeries, impacting Fuse Medical's third quarter results.

What percentage of revenues did Fuse Medical achieve in gross profit for Q3 2021?

Gross profit was $5.9 million, or 59% of revenues for the nine months ended September 30, 2021.