Sanara MedTech Inc. Announces Second Quarter 2020 Results
FORT WORTH, TX / ACCESSWIRE / August 13, 2020 / Sanara MedTech Inc.
Based in Fort Worth, Texas, Sanara MedTech Inc. (“Sanara” or the “Company”) (OTCQB:SMTI), a provider of wound and skincare products dedicated to improving patient outcomes, announced today its strategic, operational and financial results for the quarter and sixmonths ended June 30, 2020.
Ron Nixon, Sanara’s Executive Chairman stated, “Sanara’s second quarter 2020 results reflect both the impact of the COVID-19 pandemic on the Company and our team’s steps to mitigate this impact while continuing to develop new opportunities and execute on our strategy. Although April and May saw a significant slowdown in sales, June reversed that revenue trend with record sales for the month. We expect to continue to build on the success we had in June moving forward.”
Second Quarter 2020 Strategic and Operational Highlights
- As a result of the COVID-19 pandemic, the Company significantly reduced costs in areas such as payroll, consulting, business travel, and other discretionary spending. Additionally, the Company expanded the use of virtual technologies to reach customers for both sales opportunities and training.
- In May 2020, the Company executed a new license agreement with Rochal Industries, LLC for an autolytic debrider wound dressing currently under development.
- The Company worked with the World Reference Center for Emerging Viruses and Arboviruses at the University of Texas Medical Branch at Galveston to determine if BIAKŌS™ has the ability to inactivate SARS-CoV-2 in solution. Testing indicated a 99.96% reduction (below the limit of detection) of SARS-CoV-2 within 30 seconds in the presence of BIAKŌS™. An additional recent study conducted by Analytical Lab Group, an industry leader in specialty contract lab testing, determined that BIAKŌS™ is also effective against human coronavirus in solution by achieving a ≥99.96% reduction in viral load. According to the study director, “there was no evidence of viral infectivity so we would say the virus was completely inactivated.” Previous testing has shown that BIAKŌS™ ANTIMICROBIAL SKIN & WOUND CLEANSER achieves over a 99.9999% kill in solution within 30 seconds and a complete kill within 1 minute against MRSA and VRE, indicating that BIAKŌS™ is a wound and skin cleanser that remains effective even when these microorganisms are present.
- The Company has significantly invested in corporate infrastructure in 2020 with the hiring of a Chief Commercialization and Regulatory Officer, Dan Walsh. In early 2020, Sanara retained a Compliance Officer, Bill Fitzgerald, to oversee the Company’s ongoing compliance program focusing on policy development, training and compliance with the Company’s Code of Ethics.
- Sanara’s current sales team includes 16 surgical regional sales managers (RSMs) and 5 wound care RSMs.
Commentary on Future Products
- The Company expects to launch its BIAKŌS™ ANTIMICROBIAL WOUND GEL this year to complement its BIAKŌS™ ANTIMICROBIAL SKIN & WOUND CLEANSER. Both products are effective against planktonic microbes as well as immature and mature biofilms. When used in conjunction, the cleanser can be used initially to clean a wound and disrupt biofilms (removing 99% in 10 minutes). The gel can then be applied and will remain in the wound for up to 72 hours, eliminating biofilms between normal dressing changes.
Second Quarter 2020 Consolidated Financial Results
- Revenues. The Company generated revenue of $2,967,183 for the three months ended June 30, 2020, compared to revenue of $3,017,489 for the three months ended June 30, 2019, representing a 2% decrease in revenue from the prior year. The lower second quarter revenue was due to the suspension of elective surgeries and restricted access to patient facilities throughout most parts of the United States as a result of the COVID-19 pandemic. For the six months ended June 30, 2020, revenue totaled $6,491,514, compared to revenue of $5,504,385 for the six months ended June 30, 2019, an 18% increase from the prior year period. The higher revenue in 2020 was primarily due to strong revenues growth during the first quarter as well as the month of June resulting from the execution of the Company’s strategy to expand its sales force and independent distribution network in both new and existing U.S. markets.
- Cost of goods sold. Cost of goods sold for the three months ended June 30, 2020, was $348,675, compared to costs of goods sold of $334,829 for the three months ended June 30, 2019. Cost of goods sold for the six months ended June 30, 2020, was $678,863, compared to costs of goods sold of $624,169 for the six months ended June 30, 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 three months ended June 30, 2020, were $3,624,027, as compared to $2,983,248 for the three months ended June 30, 2019. SG&A expenses for the six months ended June 30, 2020, were $8,530,565, as compared to $5,333,611 for the six months ended June 30, 2019. The higher SG&A expenses in YTD 2020 were primarily due to increased payroll costs resulting from sales force expansion and operational support, and higher sales commission expense as a result of higher product sales. Direct selling costs represented the vast majority of the increase in total SG&A costs as we increased the size of our field sales organization from nine in June 2019 to twenty-one in June of 2020. The higher SG&A expenses are consistent with the Company’s strategy of building out a larger sales force and independent distribution network. New sales representatives generally take six to twelve months to begin generating significant revenue. The Company expects 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. The Company had a net loss of $1,129,557 for the three months ended June 30, 2020, compared to net loss of $352,471 for the three months ended June 30, 2019. The Company had a net loss of $2,970,569 for the six months ended June 30, 2020, compared to net loss of $515,043 for the six months ended June 30, 2019. The net loss was due to higher SG&A costs described above, which were driven by the Company’s strategy to grow top-line revenue through significant investments in sales force expansion and related sales support infrastructure. The Company expects SG&A expenses to decline as a percentage of revenue in the next two years as the revenue generated by its new sales force begins to offset the sales force expansion expense.
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. We are constantly seeking long-term strategic partnerships with a focus on products that produce efficacious outcomes at a lower overall cost. Our 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, HYCOL™ Hydrolyzed Collagen, and PULSAR II™ Advanced Wound Irrigation™ (AWI). 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 the press release that relate to the Company’s expectations with regard to the future impact on the Company’s results from new products in development and any other statements not constituting 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. Since this information may contain statements that involve risk and uncertainties and are subject to change at any time, the Company’s actual results may differ materially from expected results. This document may contain forward-looking statements concerning the Company’s operations, current and future performance and financial condition. These items involve risks, contingencies and uncertainties such as 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. The Company undertakes no obligation to revise any of these statements to reflect the future circumstances or the occurrence of unanticipated events.
SOURCE: Sanara MedTech Inc.