Sanara MedTech Inc. Announces Fourth Quarter and Full Year 2020 Results
FORT WORTH, TX / ACCESSWIRE / March 31, 2021 / Sanara MedTech Inc.
Based in Fort Worth, Texas, Sanara MedTech Inc. (“Sanara,” the “Company,” “we,” “our” or “us”) (NASDAQ: SMTI), a provider of surgical and chronic wound care products dedicated to improving patient outcomes, announced today its strategic, operational and financial results for the quarter and full year ended December 31, 2020.
Ron Nixon, Sanara’s Executive Chairman, stated, “In 2020, Sanara continued to grow product distribution and geographic sales coverage while bringing together the components of its comprehensive wound and skin care strategy. During the last three quarters of the year, COVID-19 presented a number of challenges, from the temporary suspension of elective surgeries to limits on access to facilities where our products are sold. However, our team adjusted as necessary, resulting in a strong year and a record sales quarter for Q4.”
Fourth Quarter 2020 Strategic Highlights
- Closed on an exclusive affiliation with MGroup Integrated Physician Services, P.A. (“MGroup”). Pursuant to this arrangement, Sanara, through its subsidiary United Wound and Skin Solutions LLC (“UWSS”), has agreed to provide certain management services to MGroup, and MGroup has agreed to provide certain in-person and telehealth related clinical services to UWSS.
- Announced that Bob DeSutter has been appointed to the Company’s Board of Directors, effective October 12, 2020. Bob DeSutter is a managing director in Piper Sandler healthcare investment banking. He has 27 years of healthcare investment banking experience at Piper Sandler and served as global group head from 2003 to 2018. Over that period, the group became one of the leading and most respected healthcare investment banking practices.
- Sanara received approval to list its common stock on The Nasdaq Capital Market. Sanara’s common stock began trading on The Nasdaq Capital Market effective at the opening of trading hours on November 2, 2020 under the ticker symbol “SMTI”.
- Launched BIAKŌS™ Antimicrobial Wound Gel. BIAKŌS™ Antimicrobial Wound Gel is an antimicrobial hydrogel wound dressing. It can be used alone or in combination with BIAKŌS™ Antimicrobial Skin and Wound Cleanser.
- Through its subsidiary UWSS, Sanara closed an investment in and exclusive affiliation with Precision Healing, Inc. to commercialize its proprietary diagnostic systems to improve overall outcomes in the chronic wound care population.
- Announced that Sara Ortwein has been appointed to the Company’s Board of Directors, effective December 18, 2020. Ms. Ortwein retired from ExxonMobil in March 2019, after a 38½-year career. Prior to retiring, she was president of XTO Energy, a subsidiary of ExxonMobil, from November 2016 through February 2019 and was responsible for ExxonMobil’s unconventional oil and gas business.
- Subsequent to the end of the quarter, Sanara announced the closing of its underwritten public offering of 1,265,000 shares of common stock at a public offering price of $25.00 per share, including 165,000 shares of common stock issued pursuant to the full exercise by the underwriters of their option to purchase additional shares of common stock, resulting in gross proceeds of $31.6 million, before deducting underwriting discounts and commissions and estimated offering expenses. Cantor Fitzgerald & Co. acted as the sole book-running manager for the offering. Sanara expects to use the net proceeds from the offering to expand its salesforce and for further development of its products, services and technologies pipeline, clinical studies and general corporate purposes, including working capital.
Full Year 2020 Consolidated Financial Results
- Revenues. For the year ended December 31, 2020, we generated revenues of $15,586,976 compared to revenues of $11,766,763 for the year ended December 31, 2019, a 32% increase from the prior year. The higher revenues in 2020 were primarily due to increased sales of surgical wound care products as we continued the execution of our strategy to expand our sales force and independent distribution network in both new and existing U.S. markets.
- Beginning in March 2020, many states issued orders suspending elective surgeries in order to free-up hospital resources to treat COVID-19 patients. This resulted in a reduction in demand for our surgical products beginning in the second half of March 2020. Additionally, most states limited access to skilled nursing facilities to only resident caregivers, which impeded our ability to provide education and product training to the clinicians who use our products in these facilities. These restrictions resulted in an overall decline in sales for the second quarter of 2020.
- During the third and fourth quarters of 2020, we saw a strong rebound in product sales as restrictions on elective surgeries eased in our primary markets in Texas, Florida, and the southeastern United States. Fourth quarter revenues of $4,789,138 were up 43% compared to the fourth quarter of 2019, and represented a record high sales quarter for the Company.
- Cost of goods sold. Cost of goods sold for the year ended December 31, 2020 was $1,616,625, compared to costs of goods sold of $1,209,300 for the year ended December 31, 2019. The increase over prior year was primarily due to higher sales volume.
- Selling, general and administrative expenses (“SG&A”). SG&A expenses for the year ended December 31, 2020 were $18,683,594 compared to SG&A expenses of $13,067,569 for the year ended December 31, 2019. The higher SG&A expenses in 2020 were primarily due to increased payroll costs resulting from sales force expansion and operational support, higher sales commission expense as a result of higher product sales, and higher costs related to the expansion of our comprehensive wound and skin care strategy.
- The higher SG&A expenses are consistent with our strategy of building out a larger sales force and independent distribution network and the expansion of our comprehensive wound and skin care strategy. New sales representatives generally take six to twelve months to begin generating significant revenue. We expect SG&A expenses to decline as a percentage of revenue in the next two years as revenue generated by new sales representatives begins to offset the cost of the sales force expansion.
- Net income / loss. For the year ended December 31, 2020, we had a net loss of $4,445,145, compared to net loss of $2,835,778 for the year ended December 31, 2019. Our fourth quarter net loss of $266,453 was favorably impacted by the recognition of $586,174 of Other income related to the forgiveness of our PPP Loan, and a $342,930 reduction of SG&A due to the capitalization of certain SG&A costs as internal use software. The net loss in 2020 was due to higher SG&A costs described above, which have been driven by our strategy to expand our geographic coverage through significant investments in sales force expansion, operational support and the expansion of our comprehensive wound and skin care strategy.
About Sanara MedTech Inc.
With a focus on improving patient outcomes through evidence-based healing solutions, Sanara MedTech Inc. markets and distributes wound and skincare products to physicians, hospitals, clinics, and all post-acute care settings and is seeking to offer 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 MedTech markets and distributes CellerateRX® Surgical Activated Collagen® to the surgical markets as well as the following products to the wound care market: BIAKŌS™ Antimicrobial Skin and Wound Cleanser, BIAKŌS™ Antimicrobial Wound Gel, BIAKŌS™ Antimicrobial Skin and Wound Irrigation Solution and HYCOL™ Hydrolyzed Collagen. Sanara is constantly seeking long-term strategic partnerships with a focus on products that improve outcomes at a lower overall cost. In addition, Sanara is actively seeking to expand within its six focus areas of wound and skincare for the acute, post-acute, and surgical markets. The focus areas are debridement, biofilm removal, hydrolyzed collagen, advanced biologics, negative pressure wound therapy adjunct products, and the oxygen delivery system segment of the healthcare industry. For more information, visit SanaraMedTech.com.
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 “may,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “seek,” “target,” “project,” “contemplates,” “believes,” “estimates,” “predicts,” “preliminary,” “potential” or “continue” or the negatives of these terms, variations of these terms or other similar expressions. These forward-looking statements include statements regarding the expected use of proceeds from the February 2021 offering, expected SG&A expense and revenue for future periods and the development of new products and expansion of the Company’s business in telehealth and wound care. These items involve risks, contingencies and uncertainties such as the extent of product demand, market and customer acceptance, the effect of economic conditions, competition, pricing, 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.
Callon Nichols, Director of Investor Relations
SOURCE: Sanara MedTech Inc.