Sanara MedTech Inc. Announces Second Quarter 2024 Results
Sanara MedTech Inc. (NASDAQ: SMTI) reported its Q2 2024 results, marking its eleventh consecutive record revenue quarter. The company achieved $20.2 million in sales, a 28% increase from Q2 2023. Despite this growth, Sanara reported a net loss of $3.5 million, compared to a $1.9 million loss in Q2 2023. The increased loss was primarily due to higher SG&A costs, executive separation expenses, and acquisition costs.
Positive developments include Adjusted EBITDA of $0.6 million, improved from -$0.3 million in Q2 2023, and expanded market presence with products sold in over 1,100 facilities across 34 states. Sanara also secured a $55 million non-dilutive term loan to support growth initiatives and made key executive appointments to strengthen its management team.
Sanara MedTech Inc. (NASDAQ: SMTI) ha riportato i risultati del secondo trimestre 2024, segnando il undicesimo trimestre consecutivo di record di fatturato. L'azienda ha raggiunto 20,2 milioni di dollari in vendite, con un aumento del 28% rispetto al secondo trimestre 2023. Nonostante questa crescita, Sanara ha registrato una perdita netta di 3,5 milioni di dollari, rispetto a una perdita di 1,9 milioni di dollari nel secondo trimestre 2023. L'aumento della perdita è stato principalmente dovuto a costi SG&A più elevati, spese per separazione di dirigenti e costi di acquisizione.
Tra gli sviluppi positivi spiccano un EBITDA rettificato di 0,6 milioni di dollari, migliorato rispetto a -0,3 milioni di dollari nel secondo trimestre 2023, e una maggiore presenza di mercato con prodotti venduti in oltre 1.100 strutture in 34 stati. Sanara ha anche ottenuto un prestito a termine non diluitivo di 55 milioni di dollari per sostenere le iniziative di crescita e ha effettuato importanti nomine esecutive per rafforzare il proprio team di gestione.
Sanara MedTech Inc. (NASDAQ: SMTI) informó sus resultados del segundo trimestre de 2024, marcando su undécimo trimestre consecutivo de ingresos récord. La empresa alcanzó 20,2 millones de dólares en ventas, un aumento del 28% en comparación con el segundo trimestre de 2023. A pesar de este crecimiento, Sanara reportó una pérdida neta de 3,5 millones de dólares, en comparación con una pérdida de 1,9 millones de dólares en el segundo trimestre de 2023. El aumento de la pérdida se debió principalmente a mayores costos de SG&A, gastos de separación de ejecutivos y costos de adquisición.
Desarrollos positivos incluyen un EBITDA ajustado de 0,6 millones de dólares, mejorado desde -0,3 millones de dólares en el segundo trimestre de 2023, y una presencia de mercado ampliada con productos vendidos en más de 1.100 instalaciones en 34 estados. Sanara también aseguró un préstamo a plazo no dilutivo de 55 millones de dólares para respaldar iniciativas de crecimiento y realizó nombramientos ejecutivos clave para fortalecer su equipo de gestión.
산아라 메드테크 주식회사 (NASDAQ: SMTI)는 2024년 2분기 실적을 보고하며 11분기 연속 기록적인 수익을 달성했다고 발표했습니다. 이 회사는 2020만 2천 달러의 판매액을 기록했으며, 이는 2023년 2분기보다 28% 증가한 수치입니다. 이러한 성장에도 불구하고 산아라는 350만 달러의 순손실을 기록했으며, 이는 2023년 2분기의 190만 달러 손실에 비해 증가한 것입니다. 손실 증가의 주요 원인은 SG&A 비용 증가, 경영진 이별 비용, 그리고 인수 비용 때문이었습니다.
긍정적인 발전 사항으로는 조정된 EBITDA가 60만 달러에 달하여 2023년 2분기의 -30만 달러에서 개선되었습니다. 또한, 34개 주에서 1,100개 이상의 시설에 제품을 판매하며 시장 입지를 확대했습니다. 산아라는 5500만 달러의 희석 방지 전환 대출을 확보하여 성장 이니셔티브를 지원하며 경영진의 주요 임명도 실시하여 관리 팀을 강화했습니다.
Sanara MedTech Inc. (NASDAQ: SMTI) a annoncé ses résultats du deuxième trimestre 2024, marquant son onzième trimestre consécutif de revenus record. L'entreprise a réalisé 20,2 millions de dollars de ventes, soit une augmentation de 28% par rapport au deuxième trimestre 2023. Malgré cette croissance, Sanara a signalé une perte nette de 3,5 millions de dollars, par rapport à une perte de 1,9 million de dollars au deuxième trimestre 2023. L'augmentation de la perte était principalement due à des coûts SG&A plus élevés, des frais de séparation des cadres, et des coûts d'acquisition.
Parmi les développements positifs, on note un EBITDA ajusté de 0,6 million de dollars, amélioré par rapport à -0,3 million de dollars au deuxième trimestre 2023, ainsi qu'une présence sur le marché renforcée avec des produits vendus dans plus de 1 100 établissements à travers 34 états. Sanara a également obtenu un prêt à terme non dilutif de 55 millions de dollars pour soutenir ses initiatives de croissance et a procédé à des nominations exécutives clés pour renforcer son équipe de direction.
Sanara MedTech Inc. (NASDAQ: SMTI) hat die Ergebnisse für das zweite Quartal 2024 bekannt gegeben und damit das elfte Quartal in Folge mit Rekordumsätzen verzeichnet. Das Unternehmen erzielte 20,2 Millionen Dollar Umsatz, was einem Anstieg von 28% im Vergleich zum zweiten Quartal 2023 entspricht. Trotz dieses Wachstums meldete Sanara einen Nettoverlust von 3,5 Millionen Dollar, verglichen mit einem Verlust von 1,9 Millionen Dollar im zweiten Quartal 2023. Der höhere Verlust resultierte hauptsächlich aus höheren SG&A-Kosten, Ausgaben für die Trennung von Führungskräften und Akquisitionskosten.
Positives sind ein bereinigtes EBITDA von 0,6 Millionen Dollar, eine Verbesserung von -0,3 Millionen Dollar im zweiten Quartal 2023, sowie eine erweiterte Marktpräsenz mit Produkten, die in über 1.100 Einrichtungen in 34 Bundesstaaten verkauft werden. Sanara hat auch ein 55 Millionen Dollar nicht verwässerndes Darlehen gesichert, um Wachstumsinitiativen zu unterstützen, und wichtige Vorstandsernennungen vorgenommen, um sein Managementteam zu stärken.
- Record quarterly revenue of $20.2 million, representing 28% year-over-year growth
- Positive Adjusted EBITDA of $0.6 million, improved from -$0.3 million in Q2 2023
- Secured $55 million non-dilutive term loan to support growth initiatives
- Expanded market presence with products sold in over 1,100 facilities across 34 states
- Increased number of contracted or approved facilities by over 1,000 through a national GPO agreement
- Net loss increased to $3.5 million from $1.9 million in Q2 2023
- Higher SG&A costs, including $3.4 million increase in direct sales and marketing expenses
- $0.9 million in executive separation costs
- $0.4 million in acquisition costs
- $0.6 million in interest expense due to new term loan
Insights
Sanara MedTech's Q2 2024 results show strong revenue growth but widening losses. The company achieved a record
The increased losses are primarily attributed to higher SG&A costs, particularly in sales and marketing (
The
Sanara's market penetration strategy appears to be gaining traction. The company has expanded its distributor network to over 300 distributors, a
The company's focus on soft tissue repair products is driving growth, particularly CellerateRX® Surgical Activated Collagen® and other innovative offerings. This product mix, combined with geographic expansion, suggests a strong foundation for continued revenue growth. However, the widening losses indicate that the company is in a heavy investment phase, which may pressure profitability in the near term as it scales operations to match its expanding market presence.
Sanara's product portfolio in surgical, chronic wound and skincare markets demonstrates a focus on high-growth areas in medical technology. The company's emphasis on "transformative technologies" to improve clinical outcomes and reduce healthcare expenditures aligns with current healthcare trends favoring cost-effective, innovative solutions.
The consistent revenue growth suggests strong product adoption and clinical acceptance. However, the increased investment in sales and marketing (
The appointment of new executives in operations and strategy roles, combined with the substantial term loan, suggests Sanara is positioning for a phase of rapid expansion and possibly new product development or acquisitions. Investors should watch for upcoming clinical data or regulatory approvals that could further validate the company's technology and drive adoption.
FORT WORTH, TX, Aug. 12, 2024 (GLOBE NEWSWIRE) -- 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 ended June 30, 2024.
Ron Nixon, Sanara's CEO, stated, “The second quarter of 2024 was Sanara’s eleventh consecutive record revenue quarter. Our surgical team continues to generate strong sales driven by the efficacy and value proposition of our products. All of our functional areas including clinical, research and development, customer service, marketing, and finance continue to do an outstanding job supporting our growth strategy. In addition to our financial success this quarter, we also took steps to strengthen our senior management team.”
Strategic and Operational Highlights in the Second Quarter 2024
- During the second quarter of 2024, the Company generated a record
$20.2 million in sales, representing an eleventh consecutive record revenue quarter for the Company. - For the three months ended June 30, 2024, the Company had a net loss of
$3.5 million , compared to a net loss of$1.9 million for the three months ended June 30, 2023. The Company generated Adjusted EBITDA* of$0.6 million for the three months ended June 30, 2024, compared to Adjusted EBITDA* of ($0.3) million for the three months ended June 30, 2023. - The Company executed an agreement with a national GPO, increasing the number of facilities where the Company’s products are contracted or approved to be sold by over 1,000.
- The Company currently has agreements with 300+ distributors (+70 since Jan 2024) with 2,500+ potential sellers (+400 since Jan 2024).
- During the trailing twelve-month period, the Company’s products were sold in over 1,100 facilities across 34 states plus the District of Columbia.(1)
- The Company’s products were contracted or approved to be sold in more than 4,000 hospitals/ambulatory surgery centers as of June 30, 2024.
- The Company announced the appointments of Jake Waldrop as Chief Operating Officer and Tyler Palmer as Chief Corporate Development and Strategy Officer.
- The Company announced that it has entered into a
$55.0 million non-dilutive term loan agreement with CRG Servicing LLC (“CRG”), an affiliate of CRG LP, a healthcare focused investment fund, to support the Company’s growth initiatives in 2024 and 2025. The Company received$15.0 million in gross proceeds at closing and, subject to certain conditions, has the option to draw up to$39.8 million (as of June 30, 2024) in additional funds in two tranches before June 30, 2025.
(1) Based on a minimum of
* Adjusted EBITDA is a non-GAAP financial measure. See the discussion and the reconciliations at the end of this release for additional information.
Second Quarter 2024 Sales Analysis (Consolidated)
During the second quarter of 2024, the Company continued to further penetrate existing accounts while also expanding into new territories, growing the number of facilities where our products were sold to 800+ in Q2 2024 compared to 600+ in Q2 2023. For the quarter ended June 30, 2024, Sanara generated net revenue of
Earnings Analysis (Consolidated)
Sanara reported a net loss of
The Company generated Adjusted EBITDA of
Earnings Analysis (Segmented)
Sanara Surgical generated a net loss of
Sanara Surgical generated Segment EBITDA* of
* Segment EBITDA is a non-GAAP financial measure. See the discussion and the reconciliations at the end of this release for additional information.
Conference Call
Sanara will host a conference call on Tuesday, August 13, 2024, 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 984768. A telephonic replay of the conference call will be available through Tuesday, August 27, 2024, by dialing 877-481-4010 (international callers: 919-882-2331) and entering the replay passcode: 50973.
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.
About Sanara MedTech Inc.
Sanara MedTech Inc. is 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. The Company 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 ACTIGENTM Verified Inductive Bone Matrix, ALLOCYTE® Plus Advanced Viable Bone Matrix, BiFORM® Bioactive Moldable Matrix, TEXAGEN® Amniotic Membrane Allograft, and BIASURGE® Advanced Surgical Solution 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, and BIAKŌS® Antimicrobial Skin and Wound Irrigation Solution. 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.
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 “aims,” “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 timing of commercialization of our 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 our ability to build out our executive team, our ability to identify and effectively utilize the net proceeds of the term loan to support the Company’s growth initiatives, 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 Relations
713-826-0524
CNichols@sanaramedtech.com
SOURCE: Sanara MedTech Inc.
SANARA MEDTECH INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| (Unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 6,150,375 | $ | 5,147,216 | ||||
| Accounts receivable, net | 10,495,742 | 8,474,965 | ||||||
| Accounts receivable – related parties | 111,412 | 8,400 | ||||||
| Royalty receivable | - | 49,344 | ||||||
| Inventory, net | 3,564,659 | 4,717,533 | ||||||
| Prepaid and other assets | 489,240 | 608,411 | ||||||
| Total current assets | 20,811,428 | 19,005,869 | ||||||
| Long-term assets | ||||||||
| Intangible assets, net | 42,977,404 | 44,926,061 | ||||||
| Goodwill | 3,601,781 | 3,601,781 | ||||||
| Investment in equity securities | 3,084,278 | 3,084,278 | ||||||
| Right of use assets – operating leases | 1,792,448 | 1,995,204 | ||||||
| Property and equipment, net | 1,116,266 | 1,257,956 | ||||||
| Total long-term assets | 52,572,177 | 54,865,280 | ||||||
| Total assets | $ | 73,383,605 | $ | 73,871,149 | ||||
| Liabilities and shareholders’ equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 750,538 | $ | 1,924,082 | ||||
| Accounts payable – related parties | 145,487 | 77,805 | ||||||
| Accrued bonuses and commissions | 6,715,062 | 7,676,770 | ||||||
| Accrued royalties and expenses | 2,475,488 | 2,047,678 | ||||||
| Earnout liabilities – current | 1,085,549 | 1,100,000 | ||||||
| Current portion of debt | - | 580,357 | ||||||
| Operating lease liabilities – current | 393,663 | 361,185 | ||||||
| Total current liabilities | 11,565,787 | 13,767,877 | ||||||
| Long-term liabilities | ||||||||
| Long-term debt, net of current portion | 14,371,485 | 9,113,123 | ||||||
| Earnout liabilities – long-term | 2,654,001 | 2,723,001 | ||||||
| Operating lease liabilities – long-term | 1,512,584 | 1,737,445 | ||||||
| Other long-term liabilities | 1,877,753 | 1,941,686 | ||||||
| Total long-term liabilities | 20,415,823 | 15,515,255 | ||||||
| Total liabilities | 31,981,610 | 29,283,132 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity | ||||||||
| Common Stock: | 8,747 | 8,535 | ||||||
| Additional paid-in capital | 75,085,515 | 72,860,556 | ||||||
| Accumulated deficit | (33,387,960 | ) | (28,036,814 | ) | ||||
| Total Sanara MedTech shareholders’ equity | 41,706,302 | 44,832,277 | ||||||
| Equity attributable to noncontrolling interest | (304,307 | ) | (244,260 | ) | ||||
| Total shareholders’ equity | 41,401,995 | 44,588,017 | ||||||
| Total liabilities and shareholders’ equity | $ | 73,383,605 | $ | 73,871,149 | ||||
SANARA MEDTECH INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net Revenue | $ | 20,158,823 | $ | 15,753,164 | $ | 38,695,461 | $ | 31,275,081 | ||||||||
| Cost of goods sold | 2,008,686 | 2,187,516 | 3,898,732 | 4,313,175 | ||||||||||||
| Gross profit | 18,150,137 | 13,565,648 | 34,796,729 | 26,961,906 | ||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative expenses | 18,957,608 | 13,811,476 | 35,149,867 | 26,780,545 | ||||||||||||
| Research and development | 985,651 | 1,177,128 | 1,931,949 | 2,494,452 | ||||||||||||
| Depreciation and amortization | 1,105,507 | 803,694 | 2,210,927 | 1,582,569 | ||||||||||||
| Change in fair value of earnout liabilities | (13,773 | ) | (360,470 | ) | (79,451 | ) | (813,157 | ) | ||||||||
| Total operating expenses | 21,034,993 | 15,431,828 | 39,213,292 | 30,044,409 | ||||||||||||
| Operating loss | (2,884,856 | ) | (1,866,180 | ) | (4,416,563 | ) | (3,082,503 | ) | ||||||||
| Other expense | ||||||||||||||||
| Interest expense | (644,346 | ) | - | (911,682 | ) | (6 | ) | |||||||||
| Total other expense | (644,346 | ) | - | (911,682 | ) | (6 | ) | |||||||||
| Net loss | (3,529,202 | ) | (1,866,180 | ) | (5,328,245 | ) | (3,082,509 | ) | ||||||||
| Less: Net loss attributable to noncontrolling interest | (25,188 | ) | (38,447 | ) | (60,047 | ) | (76,876 | ) | ||||||||
| Net loss attributable to Sanara MedTech shareholders | $ | (3,504,014 | ) | $ | (1,827,733 | ) | $ | (5,268,198 | ) | $ | (3,005,633 | ) | ||||
| Net loss per share of common stock, basic and diluted | $ | (0.41 | ) | $ | (0.22 | ) | $ | (0.62 | ) | $ | (0.37 | ) | ||||
| Weighted average number of common shares outstanding, basic and diluted | 8,468,835 | 8,226,271 | 8,444,101 | 8,200,173 | ||||||||||||
SANARA MEDTECH INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (5,328,245 | ) | $ | (3,082,509 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 2,210,927 | 1,582,569 | ||||||
| Credit loss expense | 155,930 | 86,000 | ||||||
| Inventory obsolescence | 259,577 | 69,990 | ||||||
| Share-based compensation | 2,214,931 | 1,724,637 | ||||||
| Noncash lease expense | 202,756 | 144,628 | ||||||
| Back-end fee | 52,500 | - | ||||||
| Paid-in-kind interest | 161,875 | - | ||||||
| Accretion of finance liabilities | 117,267 | - | ||||||
| Amortization and write-off of debt issuance costs | 100,883 | - | ||||||
| Change in fair value of earnout liabilities | (79,451 | ) | (813,157 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | (2,127,363 | ) | (371,094 | ) | ||||
| Accounts receivable – related parties | (103,012 | ) | 77,886 | |||||
| Inventory, net | 893,297 | (941,854 | ) | |||||
| Prepaid and other assets | 119,172 | 618,877 | ||||||
| Accounts payable | (1,173,544 | ) | (376,521 | ) | ||||
| Accounts payable – related parties | 67,682 | 62,620 | ||||||
| Accrued royalties and expenses | 402,610 | (248,769 | ) | |||||
| Accrued bonuses and commissions | (961,709 | ) | (1,859,029 | ) | ||||
| Operating lease liabilities | (192,383 | ) | (135,436 | ) | ||||
| Net cash used in operating activities | (3,006,300 | ) | (3,461,162 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (124,580 | ) | (40,650 | ) | ||||
| Proceeds from disposal of property and equipment | - | 650 | ||||||
| Net cash used in investing activities | (124,580 | ) | (40,000 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Loan proceeds, net | 14,112,747 | - | ||||||
| Pay off line of credit | (9,750,000 | ) | - | |||||
| Equity offering net proceeds | - | 1,033,761 | ||||||
| Net settlement of equity-based awards | (72,708 | ) | (431,366 | ) | ||||
| Cash payment of finance and earnout liabilities | (156,000 | ) | - | |||||
| Net cash provided by financing activities | 4,134,039 | 602,395 | ||||||
| Net increase (decrease) in cash | 1,003,159 | (2,898,767 | ) | |||||
| Cash, beginning of period | 5,147,216 | 8,958,995 | ||||||
| Cash, end of period | $ | 6,150,375 | $ | 6,060,228 | ||||
| Cash paid during the period for: | ||||||||
| Interest | $ | 549,227 | $ | 6 | ||||
| Supplemental noncash investing and financing activities: | ||||||||
| Right of use assets obtained in exchange for lease obligations | - | 1,369,164 | ||||||
SANARA MEDTECH INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES (UNAUDITED)
To supplement the Company’s financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we present certain non-GAAP financial measures in this press release and on the related teleconference call, including Adjusted EBITDA and Segment EBITDA. The Company’s management uses these non-GAAP financial measures, both internally and externally, to assess and communicate the financial performance of the Company. The Company defines Adjusted EBITDA as net loss excluding interest expense/income, provision/benefit for income taxes, depreciation and amortization, non-cash share-based compensation expense, change in fair value of earnout liabilities, effects of noncontrolling interests, executive separation costs, legal and diligence expenses related to acquisitions, and gains/losses on the disposal of property and equipment, as each is applicable to the periods presented. Prior to the fiscal quarter ended June 30, 2024, the Company did not exclude executive separation costs or legal and diligence expenses related to acquisitions in calculating Adjusted EBTIDA. However, after reevaluation, the Company has determined that presenting Adjusted EBITDA without excluding such costs provides less valuable information about the Company’s core operations. As a result, beginning with the fiscal quarter ended June 30, 2024, executive separation costs and legal and diligence expenses related to acquisitions are now excluded from the calculation of Adjusted EBITDA. Certain prior periods have been recast below to conform to the current definition. Segment EBITDA is calculated in the same manner as Adjusted EBITDA but is presented on a segment basis.
The Company’s believes Adjusted EBITDA and Segment EBITDA are useful to investors because they facilitate comparisons of its core business operations across periods on a consistent basis. Accordingly, the Company adjusts for certain items, such as change in fair value of earnout liabilities, when calculating Adjusted EBITDA and Segment EBITDA because the Company believes that such items are not related to the Company’s core business operations.
The Company’s non-GAAP financial measures are not in accordance with, nor an alternative for, measures conforming to GAAP and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. The Company continues to provide all information required by GAAP, but it believes that evaluating its ongoing operating results may not be as useful if an investor or other user is limited to reviewing only GAAP financial measures. The Company does not, nor does it suggest that investors should, consider these non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Material limitations associated with the use of such measures include that they do not reflect all costs included in operating expenses and may not be comparable with similarly named financial measures of other companies. Furthermore, these non-GAAP financial measures are based on subjective determinations of management regarding the nature and classification of events and circumstances. The Company presents these non-GAAP financial measures to provide investors with information to evaluate the Company’s operating results in a manner similar to how management evaluates business performance. To compensate for any limitations in such non-GAAP financial measures, management believes that it is useful in understanding and analyzing the results of the business to review both GAAP information and the related non-GAAP financial measures. Whenever the Company uses a non-GAAP financial measure, it provides a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure. Investors are encouraged to review and consider these reconciliations.
Segment EBITDA is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the segments and assessing their performance. We have provided a reconciliation of this measure as it relates to our segments below.
Reconciliation of Net Income (Loss) to Segment EBITDA and Adjusted EBITDA (Unaudited):
| Three Months Ended | ||||||||||||||||||||||||
| June 30, | ||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||
| Sanara Surgical | THP | Total | Sanara Surgical | THP | Total | |||||||||||||||||||
| Net Income (Loss) | $ | (2,214,313 | ) | $ | (1,314,889 | ) | $ | (3,529,202 | ) | $ | 95,098 | $ | (1,961,278 | ) | $ | (1,866,180 | ) | |||||||
| Adjustments: | ||||||||||||||||||||||||
| Interest expense | 644,346 | - | 644,346 | - | - | - | ||||||||||||||||||
| Income tax benefit | - | - | - | - | - | - | ||||||||||||||||||
| Depreciation and amortization | 698,407 | 407,100 | 1,105,507 | 396,597 | 407,097 | 803,694 | ||||||||||||||||||
| Noncash share-based compensation | 1,046,321 | 36,429 | 1,082,750 | 1,064,516 | 62,816 | 1,127,332 | ||||||||||||||||||
| Change in fair value of earnout liabilities | 89,330 | (103,103 | ) | (13,773 | ) | (436,004 | ) | 75,534 | (360,470 | ) | ||||||||||||||
| Executive separation costs(1) | 904,780 | - | 904,780 | - | - | - | ||||||||||||||||||
| Acquisition costs | 225,088 | 172,685 | 397,773 | - | - | - | ||||||||||||||||||
| Segment EBITDA (on a segment basis) / Adjusted EBITDA (consolidated) | $ | 1,393,959 | $ | (801,778 | ) | $ | 592,181 | $ | 1,120,207 | $ | (1,415,831 | ) | $ | (295,624 | ) | |||||||||
| Six Months Ended | ||||||||||||||||||||||||
| June 30, | ||||||||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||||||||
| Sanara Surgical | THP | Total | Sanara Surgical | THP | Total | |||||||||||||||||||
| Net Income (Loss) | $ | (2,691,798 | ) | $ | (2,636,447 | ) | $ | (5,328,245 | ) | $ | 614,061 | $ | (3,696,570 | ) | $ | (3,082,509 | ) | |||||||
| Adjustments: | ||||||||||||||||||||||||
| Interest expense | 911,682 | - | 911,682 | 6 | - | 6 | ||||||||||||||||||
| Depreciation and amortization | 1,396,908 | 814,019 | 2,210,927 | 768,616 | 813,953 | 1,582,569 | ||||||||||||||||||
| Noncash share-based compensation | 1,799,936 | 86,200 | 1,886,136 | 1,609,729 | 114,908 | 1,724,637 | ||||||||||||||||||
| Change in fair value of earnout liabilities | (14,451 | ) | (65,000 | ) | (79,451 | ) | (627,132 | ) | (186,025 | ) | (813,157 | ) | ||||||||||||
| Executive separation costs(1) | 904,780 | - | 904,780 | - | - | - | ||||||||||||||||||
| Acquisition costs | 225,088 | 172,685 | 397,773 | - | - | - | ||||||||||||||||||
| Segment EBITDA (on a segment basis) / Adjusted EBITDA (consolidated) | $ | 2,532,145 | $ | (1,628,543 | ) | $ | 903,602 | $ | 2,365,280 | $ | (2,953,734 | ) | $ | (588,454 | ) | |||||||||
(1) - Includes
| ANNEX | ||||||||||||||||||||||||||||
| Reconciliation of Net Income (Loss) to Adjusted EBITDA: | ||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||||||||||
| Consolidated | Consolidated | Consolidated | Consolidated | Consolidated | Consolidated | Consolidated | ||||||||||||||||||||||
| Net Income (Loss) | $ | (1,799,043 | ) | $ | (262,444 | ) | $ | (1,094,949 | ) | $ | (1,866,180 | ) | $ | (1,216,329 | ) | $ | (4,163,485 | ) | $ | (1,529,252 | ) | |||||||
| Adjustments: | ||||||||||||||||||||||||||||
| Interest expense | 267,336 | 269,783 | 188,294 | - | 6 | - | - | |||||||||||||||||||||
| Income tax benefit | - | - | - | - | - | - | (1,702,890 | ) | ||||||||||||||||||||
| Depreciation and amortization | 1,105,420 | 1,094,783 | 997,674 | 803,694 | 778,875 | 814,316 | 814,881 | |||||||||||||||||||||
| Noncash share-based compensation | 803,386 | 860,559 | 857,526 | 1,127,332 | 597,305 | 781,097 | 683,202 | |||||||||||||||||||||
| Change in fair value of earnout liabilities | (65,678 | ) | (1,954,985 | ) | (681,753 | ) | (360,470 | ) | (452,687 | ) | 111,630 | 109,689 | ||||||||||||||||
| Loss on disposal of property and equipment | - | (242 | ) | 376 | ||||||||||||||||||||||||
| Acquisition costs | - | 423,513 | - | - | - | 19,538 | 68,180 | |||||||||||||||||||||
| Adjusted EBITDA* | $ | 311,421 | $ | 431,209 | $ | 266,792 | $ | (295,624 | ) | $ | (292,830 | ) | $ | (2,437,146 | ) | $ | (1,555,814 | ) | ||||||||||
| *Adjusted EBITDA has been recast from prior period presentations to conform to current period presentations to include adjustments for acquisition costs. | ||||||||||||||||||||||||||||
FAQ
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