Full Press Release Details
MIMEDX Announces First Quarter 2023 Operating and Financial Results
First Quarter Net Sales of $71.7 Million Reflect an Increase of 21.7% Over the Prior Year Period
Revenue Growth & Cost Controls Help Drive Improvements in Net Loss, EBITDA & Adjusted
Management to Host Conference Call on Tuesday, May 2, 2023, at
MARIETTA, Ga., May 2, 2023 MiMedx Group, Inc. (Nasdaq: MDXG) ( MIMEDX or the
Company ), a pioneer and leader in placental biologics, today announced operating and financial results for the first quarter 2023, which ended March 31, 2023, including net sales of $71.7 million, net loss of $5.0 million
and Adjusted EBITDA of $5.5 million.
Joseph Capper, MIMEDX Chief Executive Officer ( CEO ), commented, Our first quarter 2023
results demonstrate an excellent level of focus and execution across our organization, particularly among our commercial team. Our double-digit net sales growth this quarter was driven by robust demand for our new products in the surgical market and
an accelerated growth rate in the private physician office setting. Our entire product offering is winning across the care settings we serve, as we work to make our
best-in-class placental biologics products available to a large and growing number of patients each day.
Mr. Capper continued, In addition to delivering strong top-line results, we continued to make progress on
multiple structural and operational initiatives to improve the financial profile of the Company. Our gross margin improved sequentially, reversing the trend we had during 2022, and our operating expenses grew slower than sales, resulting in Adjusted
EBITDA of $5.5 million for the quarter, a substantial increase over the prior year period. We are encouraged by the initial improvement in several of these financial metrics, and we look forward to continuing to build on these results.
Recent Operating and Financial Highlights:
Key First Quarter 2023 Financial Metrics
| Three Months Ended March 31, | ||||||||
| (in thousands) | ||||||||
| 2023 | 2022 | |||||||
| Net sales | $ | 71,676 | $ | 58,894 | ||||
| Net loss | (4,983 | ) | (10,489 | ) | ||||
| EBITDA | (2,475 | ) | (8,268 | ) | ||||
| Adjusted EBITDA | 5,543 | (1,718 | ) | |||||
| Net loss per common share - basic | $ | (0.06 | ) | $ | (0.11 | ) | ||
| Net loss per common share - diluted | $ | (0.06 | ) | $ | (0.11 | ) |
MIMEDX operates as two reportable segments: Wound & Surgical and Regenerative Medicine. A summary of the Company s performance for the three
months ended March 31, 2023 and three months ended March 31, 2022 by segment is included below (amounts in thousands):
Months Ended March 31, 2023
| Wound & Surgical | Regenerative Medicine | Corporate & Other | Consolidated | |||||||||||||
| Net sales | $ | 70,629 | $ | $ | 1,047 | $ | 71,676 | |||||||||
| Cost of sales | 11,332 | 1,087 | 12,419 | |||||||||||||
| Selling, general and administrative expense | 37,666 | 14,613 | 52,279 | |||||||||||||
| Research and development expense | 1,522 | 4,974 | 6,496 | |||||||||||||
| Amortization of intangible assets | 190 | 190 | ||||||||||||||
| Segment contribution | $ | 20,109 | $ | (4,974 | ) | |||||||||||
| Investigation, restatement and related expense | 3,673 | |||||||||||||||
| Operating loss | $ | (3,381 | ) | |||||||||||||
| Supplemental information | ||||||||||||||||
| Depreciation expense | $ | 389 | $ | 64 | $ | 261 | $ | 714 | ||||||||
| Share-based compensation | $ | 1,383 | $ | 452 | $ | 2,510 | $ | 4,345 |
Note: Net sales in Corporate & Other reflect the Company s only sales of Dental products, from a contract
under which sales will terminate in 2023.
Three Months Ended March 31, 2022
| Wound & Surgical | Regenerative Medicine | Corporate & Other | Consolidated | |||||||||||||
| Net sales | $ | 58,330 | $ | $ | 564 | $ | 58,894 | |||||||||
| Cost of sales | 9,129 | 807 | 9,936 | |||||||||||||
| Selling, general and administrative expense | 34,044 | 15,526 | 49,570 | |||||||||||||
| Research and development expense | 1,951 | 4,013 | 5,964 | |||||||||||||
| Amortization of intangible assets | 172 | 172 | ||||||||||||||
| Segment contribution | $ | 13,206 | $ | (4,013 | ) | |||||||||||
| Investigation, restatement and related expense | 2,552 | |||||||||||||||
| Operating loss | $ | (9,300 | ) | |||||||||||||
| Supplemental information | ||||||||||||||||
| Depreciation expense | $ | 455 | $ | 44 | $ | 361 | $ | 860 | ||||||||
| Share-based compensation | $ | 1,765 | $ | 263 | $ | 1,970 | $ | 3,998 |
Note: Net sales in Corporate & Other reflect the Company s only sales of Dental products, from a contract
under which sales will terminate in 2023.
MIMEDX reported net sales for the three months ended March 31, 2023, of $71.7 million, compared to $58.9 million for the three months ended
March 31, 2022, an increase of 21.7%. Net sales growth benefited from an improved environment in reaching customer accounts in 2023 following the challenges due to the Omicron wave of the COVID-19
pandemic in 2022. Increased net sales reflect solid contributions in both of the Wound & Surgical end markets, with continued uptake from new products, strong growth in the private physician office setting, one additional selling day as
compared to the first quarter of 2022, and initial sales of EPIFIX in Japan.
Gross profit for the three months ended March 31, 2023, was $59.3 million, an increase of $10.3 million as compared to the
Gross margin for the three months ended March 31, 2023, was 82.7% compared to 83.1% for the three
months ended March 31, 2022.
Selling, general and administrative expenses for the three months ended March 31, 2023, were $52.3 million compared to $49.6 million for the
three months ended March 31, 2022. The increase primarily reflects higher commissions associated with increased sales.
Research and development
expenses were $6.5 million for the three months ended March 31, 2023 compared to $6.0 million for the three months ended March 31, 2022. The increase was primarily driven by higher costs associated with the initiation of our knee
osteoarthritis ( KOA ) clinical trial program.
Investigation, restatement and related expenses for the three months ended March 31, 2023
were $3.7 million compared to $2.6 million for the three months ended March 31, 2022.
Net loss for the three months ended March 31,
2023, was $5.0 million compared to a net loss of $10.5 million for the three months ended March 31, 2022.
Cash and Cash Equivalents
As of March 31, 2023, the Company had $61.2 million of cash and cash equivalents compared to $66.0 million as of December 31,
2022. The decrease during the quarter ended March 31, 2023 reflects continued investments in working capital and seasonal employee compensation expenses.
The Company continues to believe the
business is capable of delivering sales growth in the low double-digits as a percentage annually, driven by continued uptake of new products, solid demand across its sites of service and ramping contributions from sales in Japan.
As previously communicated, the Company has goals to achieve a Wound & Surgical segment contribution margin at or above 30% of segment net sales and
corporate expenses as a percentage of sales below 20%.
Conference Call and Webcast
MIMEDX will host a conference call and webcast to review its first quarter 2023 results on Tuesday, May 2, 2023, beginning at 5:00 p.m., Eastern Time. The
call can be accessed using the following information:
U.S. Investors: 877-407-6184
International Investors: 201-389-0877
Conference ID: 13737183
A replay of the webcast will be
available for approximately 30 days on the Company s website at www.mimedx.com following the conclusion of the event.
Important Cautionary
This press release includes forward-looking statements. Statements regarding: (i) future sales or sales growth; (ii) our 2023
financial goals and expectations for future financial results, including levels of contribution margin and corporate expenses; (iii) our expectations regarding the timing and impact of new product launches; (iv) our expectations regarding
the timing of clinical programs and trials; and (v) the effectiveness of amniotic tissue as a therapy for any particular indication or condition. Additional forward-looking statements may be identified by words such as believe,
expect, may, plan, goal, outlook, potential, will, preliminary, and similar expressions, and are based on management s current beliefs and
Forward-looking statements are subject to risks and uncertainties, and the Company cautions investors against placing undue reliance on
such statements. Actual results may differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ from expectations include: (i) future sales are uncertain and are affected by
competition, access to customers, patient access to healthcare providers, the reimbursement environment and many other factors; (ii) the status, timing, results and expected results of the Company s clinical trials and planned regulatory
submissions, and our expectations regarding the timing of any trial or regulatory submission, depend on a number of factors including favorable trial results, patient access, and our ability to manufacture in accordance with Current Good
Manufacturing Practices ( CGMP ) and appropriate CMC; (iii) the Company may change its plans due to unforeseen circumstances, or delays in analyzing and auditing results, and may delay or alter the timeline for future trials,
analyses, or public announcements; (iv) our access to hospitals and health care provider facilities could be restricted as a result of the ongoing COVID-19 pandemic or other factors; (v) the results
of scientific research are uncertain and may have little or no value; (vi) our ability to sell our products in other countries depends on a number of factors including adequate levels of reimbursement, market acceptance of novel therapies, and
our ability to build and manage a direct sales force or third party distribution relationship; (vii) the effectiveness of amniotic tissue as a therapy for particular indications or conditions is the subject of further scientific and clinical
studies; and (viii) we may alter the timing and amount of planned expenditures for research and development based on the results of clinical trials and other regulatory developments. The Company describes additional risks and uncertainties in
the Risk Factors section of its most recent annual report
and quarterly reports filed with the Securities and Exchange Commission. Any forward-looking statements speak only as of the date of this press release and the Company assumes no obligation to
update any forward-looking statement.
MIMEDX is a pioneer and leader in placental biologics, developing and distributing placental tissue allografts to help address unmet clinical needs in multiple
sectors of healthcare, including the Advanced Wound Care market as well as in surgical recovery settings. MIMEDX is also focused on advancing a promising late-stage pipeline opportunity targeted at decreasing pain and improving function for patients
with knee osteoarthritis. Our products are derived from human placental tissues and processed using our proprietary methods, including the Company s own PURION process. We employ Current
Good Tissue Practices, Current Good Manufacturing Practices, and terminal sterilization to produce our allografts. MIMEDX has supplied over two million allografts, through both direct and consignment shipments. For additional information, please
visit www.mimedx.com.
Selected Unaudited Financial
Condensed Consolidated Balance Sheets
(in thousands) Unaudited
| March 31, 2023 | December 31, 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 61,221 | $ | 65,950 | ||||
| Accounts receivable, net | 44,694 | 43,084 | ||||||
| Inventory | 14,657 | 13,183 | ||||||
| Prepaid expenses | 8,824 | 8,646 | ||||||
| Other current assets | 2,306 | 3,335 | ||||||
| Total current assets | 131,702 | 134,198 | ||||||
| Property and equipment, net | 7,562 | 7,856 | ||||||
| Right of use asset | 3,066 | 3,400 | ||||||
| Goodwill | 19,976 | 19,976 | ||||||
| Intangible assets, net | 5,706 | 5,852 | ||||||
| Other assets | 147 | 148 | ||||||
| Total assets | $ | 168,159 | $ | 171,430 | ||||
| LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 7,823 | $ | 8,847 | ||||
| Accrued compensation | 18,212 | 21,852 | ||||||
| Accrued expenses | 13,041 | 11,024 | ||||||
| Other current liabilities | 1,794 | 1,834 | ||||||
| Total current liabilities | 40,870 | 43,557 | ||||||
| Long term debt, net | 48,714 | 48,594 | ||||||
| Other liabilities | 4,027 | 4,773 | ||||||
| Total liabilities | 93,611 | 96,924 | ||||||
| Convertible preferred stock | 92,494 | 92,494 | ||||||
| Total stockholders (deficit) equity | (17,946 | ) | (17,988 | ) | ||||
| Total liabilities, convertible preferred stock, and stockholders (deficit) equity | $ | 168,159 | $ | 171,430 |
Condensed Consolidated Statements of Operations
(in thousands) Unaudited
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Net sales | $ | 71,676 | $ | 58,894 | ||||
| Cost of sales | 12,419 | 9,936 | ||||||
| Gross profit | 59,257 | 48,958 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative | 52,279 | 49,570 | ||||||
| Research and development | 6,496 | 5,964 | ||||||
| Investigation, restatement and related | 3,673 | 2,552 | ||||||
| Amortization of intangible assets | 190 | 172 | ||||||
| Operating loss | (3,381 | ) | (9,300 | ) | ||||
| Other expense, net | ||||||||
| Interest expense, net | (1,553 | ) | (1,126 | ) | ||||
| Other expense, net | 2 | |||||||
| Loss before income tax provision | (4,932 | ) | (10,426 | ) | ||||
| Income tax provision expense | (51 | ) | (63 | ) | ||||
| Net loss | $ | (4,983 | ) | $ | (10,489 | ) | ||
| Net loss available to common shareholders | $ | (6,667 | ) | $ | (12,075 | ) | ||
| Net loss per common share - basic | $ | (0.06 | ) | $ | (0.11 | ) | ||
| Net loss per common share - diluted | $ | (0.06 | ) | $ | (0.11 | ) | ||
| Weighted average common shares outstanding - basic | 114,398,813 | 111,615,839 | ||||||
| Weighted average common shares outstanding - diluted | 114,398,813 | 111,615,839 |
Condensed Consolidated Statements of Cash Flows
(in thousands) Unaudited
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (4,983 | ) | $ | (10,489 | ) | ||
| Adjustments to reconcile net loss to net cash flows used in operating activities: | ||||||||
| Share-based compensation | 4,345 | 3,998 | ||||||
| Depreciation | 714 | 860 | ||||||
| Non-cash lease expenses | 334 | 295 | ||||||
| Amortization of intangible assets | 190 | 172 | ||||||
| Amortization of deferred financing costs | 121 | 112 | ||||||
| Accretion of asset retirement obligation | 22 | 22 | ||||||
| Gain on fixed asset disposal | (15 | ) | ||||||
| Bad debt expense | (60 | ) | ||||||
| Increase (decrease) in cash resulting from changes in: | ||||||||
| Accounts receivable | (1,551 | ) | 2,679 | |||||
| Inventory | (1,474 | ) | (1,781 | ) | ||||
| Prepaid expenses | (178 | ) | 11 | |||||
| Other assets | 1,030 | (235 | ) | |||||
| Accounts payable | (1,023 | ) | 456 | |||||
| Accrued compensation | (3,347 | ) | (6,494 | ) | ||||
| Accrued expenses | 2,210 | 550 | ||||||
| Other liabilities | (398 | ) | (364 | ) | ||||
| Net cash flows used in operating activities | (4,048 | ) | (10,223 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of equipment | (633 | ) | (118 | ) | ||||
| Patent application costs | (44 | ) | (54 | ) | ||||
| Proceeds from sale of equipment | 24 | |||||||
| Net cash flows used in investing activities | (677 | ) | (148 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Principal payments on finance lease | (4 | ) | (11 | ) | ||||
| Stock repurchased for tax withholdings on vesting of restricted stock | (1,191 | ) | ||||||
| Proceeds from exercise of stock options | 166 | |||||||
| Net cash flows used in financing activities | (4 | ) | (1,036 | ) | ||||
| Net change in cash | (4,729 | ) | (11,407 | ) | ||||
| Cash and cash equivalents, beginning of period | 65,950 | 87,083 | ||||||
| Cash and cash equivalents, end of period | $ | 61,221 | $ | 75,676 |
Reconciliation of Non-GAAP Measures
In addition to our GAAP results, we provide certain non-GAAP metrics including Earnings Before Interest, Taxes,
Depreciation and Amortization ( EBITDA ), Adjusted EBITDA, and related margins. We believe that the presentation of these measures provides important supplemental information to management and investors regarding our performance. These
measurements are not a substitute for GAAP measurements. Company management uses these Non-GAAP measurements as aids in monitoring our ongoing financial performance from quarter-to-quarter and year-to-year on a regular basis and for benchmarking against comparable companies.
EBITDA is intended to provide a measure of the Company s operating performance as it eliminates the effects of financing and capital expenditures. EBITDA
consists of GAAP net loss excluding: (i) depreciation, (ii) amortization of intangibles, (iii) interest expense, net, and (iv) income tax provision. Adjusted EBITDA is intended to provide a normalized view of EBITDA and our broader
business operations that we expect to experience on an ongoing basis by removing certain non-cash items and items that may be irregular, one-time, or non-recurring from EBITDA. This enables us to identify underlying trends in our business that could otherwise be masked by such items. Adjusted EBITDA consists of GAAP net loss excluding: (i) depreciation, (ii)
amortization of intangibles, (iii) interest expense, net, (iv) income tax provision, (v) investigation, restatement and related expenses, and (vi) share-based compensation.
A reconciliation of GAAP net loss to EBITDA and Adjusted EBITDA appears in the table below (in thousands):