Full Press Release Details
MIMEDX Announces Fourth Quarter and Full Year 2023 Operating and Financial Results
Net Sales Grew 17% Year-Over-Year for the Fourth Quarter and 20% for the Full Year
Fourth Quarter Net Income was $53 million, Inclusive of a $40 million One-Time Non-Cash Tax Benefit
Fourth Quarter Adjusted EBITDA of $21 million, or 24% of Net Sales
Management to Host Conference Call Today, February 28, 2024, at 4:30 PM ET
MARIETTA, Ga., February 28, 2024 MiMedx Group, Inc. (Nasdaq: MDXG) ( MIMEDX or the Company ), today
announced operating and financial results for the fourth quarter and full year 2023.
Recent Operating and Financial Highlights:
Joseph H. Capper, MIMEDX Chief Executive Officer, commented,
We are once again pleased to report on another impressive quarter of top-line growth, profitability and cash flow generation as we closed out a transformative 2023, driven by the improved alignment and
focus of the Company. Moreover, the 20% top-line growth we achieved for the full-year 2023 exceeded expectations and provides solid momentum going forward. Additionally, in a very short period of time, the
team has successfully unlocked robust cash flow generation that should continue to improve with scale over time.
Mr. Capper continued,
Given the commercial strength of the organization, we expect 2024 to be another noteworthy year with low double-digit net sales percentage growth and Adjusted EBITDA margin above 20%. Our improved cash flow generation and balance sheet
enhancements also provide the necessary support to accelerate our growth plan as we capitalize on the opportunities before us.
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net Income (loss) | $ | 53,476 | $ | (415 | ) | $ | 58,228 | $ | (30,197 | ) | ||||||
| Non-GAAP Adjustments: | ||||||||||||||||
| Depreciation expense | 611 | 796 | 2,665 | 3,345 | ||||||||||||
| Amortization of intangible assets | 192 | 182 | 762 | 701 | ||||||||||||
| Interest expense, net | 1,593 | 1,450 | 6,457 | 5,016 | ||||||||||||
| Income tax provision (benefit) expense | (40,349 | ) | 28 | (39,780 | ) | 206 | ||||||||||
| Investigation, restatement and related expenses | 524 | 3,406 | 5,176 | 12,177 | ||||||||||||
| Share-based compensation | 4,385 | 1,868 | 17,178 | 12,666 | ||||||||||||
| Expenses related to disbanding of Regenerative Medicine business unit | 785 | 6,384 | ||||||||||||||
| Reorganization expenses | 1,412 | 3,105 | ||||||||||||||
| Adjusted EBITDA | $ | 21,217 | $ | 7,315 | $ | 58,482 | $ | 7,019 | ||||||||
| Adjusted EBITDA margin | 24.4 | % | 9.8 | % | 18.2 | % | 2.6 | % |
Fourth Quarter and Full Year 2023 Results Discussion2
MIMEDX reported net sales for the three months
ended December 31, 2023, of $87 million, compared to $74 million for the three months ended December 31, 2022, an increase of 17%. Net sales growth came from solid contributions in both the Wound & Surgical end markets and across
each of our main sites of service.
For the full year 2023, MIMEDX reported net sales of $321 million, compared to $268 million in the prior
year period, reflecting growth of 20%, which was also driven by a combination of contributions in Wound & Surgical and across our sites of service.
Gross Profit and Margin
Gross profit for the three
months ended December 31, 2023, was $73 million, an increase of $13 million as compared to the prior year period. Gross margin for the three months ended December 31, 2023 was 84.1%, compared to 80.7% in the prior year period. The
year-over-year improvement in gross margin was driven by favorable product mix and our continued execution on yield improvement projects.
year 2023, gross profit was $267 million, reflecting an increase of $47 million compared to the prior year period. Additionally, gross margin for the full year 2023 was 83.0%, compared to 82.0% for the full year 2022 and the improvement
was also driven by improved yields and a favorable product mix.
Selling, general and administrative ( SG&A ) expenses for the three months ended December 31, 2023, were $54 million compared to
$50 million for the three months ended December 31, 2022. SG&A expense during the fourth quarter 2023 included increased sales commissions due to higher sales volumes.
For the full year 2023, SG&A expenses totaled $211 million, compared to $209 million for the prior year period, reflecting year over year growth
of 1.1%. The increase was driven by higher levels of sales commissions due to higher sales volumes, as well as increases in stock-based compensation in 2023. These increases were partially offset by a decrease in professional services related to
certain administrative expenses, including severance expenses associated with the departure of our former CEO in 2022.
Research and development expenses
were $2 million for the three months ended December 31, 2023, compared to $3 million for the three months ended December 31, 2022. For the full year 2023, research and development expenses remained essentially flat at $13 million
compared to 2022. Our R&D expenses in 2022 and 2023 were primarily driven by the development and launches of our newest products in the portfolio - AMNIOEFFECT, AXIOFILL and EPIEFFECT - along with additional early-stage Wound & Surgical
products in development.
Investigation, restatement and related expense for the three months ended December 31, 2023 was $1 million, compared to
$3 million for the three months ended December 31, 2022. For the full year 2023, investigation, restatement and related expenses totaled $5 million compared to $12 million in 2022. The decrease was related to negotiated reductions in
legal fees previously incurred. In addition, following the end of a legal proceeding, expenses under our last material proceeding involving indemnification of former officers and directors substantially ceased in 2023.
Net income from continuing operations for the three months and full year ended December 31, 2023, were $51 million and $67 million, respectively,
compared to a net income from continuing operations of $2 million for the three months ended December 31, 2022 and a net loss from continuing operations of $20 million for the year ended December 31, 2022. Net income from continuing
operations for the three months and full year ended December 31, 2023 were positively impacted by a $37 million income tax provision benefit, reflecting a non-cash reversal of a valuation allowance that
was previously recorded against the deferred tax asset balance. The reversal was a result of an analysis following the Company s conclusion that the Company s disbanded Regenerative Medicine segment qualified as a discontinued operation,
in concert with the Company s operating results.
Cash and Cash Equivalents
As of December 31, 2023, the Company had $82 million of cash and cash equivalents compared to $66 million as of December 31, 2022 and
$81 million as of September 30, 2023. The increase during the year ended December 31, 2023 was primarily a result of year-over-year increases in net sales, which drove increases in collections from customers, as well as year-over-year decreases
expenses, partially offset by the $9.5 million repurchase of a portion of the shares of Series B Convertible Preferred Stock, held by certain funds managed by Hayfin Capital Management, LLP
goal is to deliver net sales percentage growth in the low double-digits annually.
In 2024, the Company expects to see continued growth in both the Wound
and Surgical end markets, despite more difficult prior year growth comparisons. In particular, the Company continues to anticipate solid growth in the private office setting driven by the recent launch of EPIEFFECT and ongoing changes in purchasing
behaviors related to Medicare reimbursement. Additionally, the Company expects to continue to drive growth across a variety of Surgical use cases as the body of evidence for utilization of its Surgical products, such as AMNIOEFFECT, continues to
For the full year 2024, the Company expects its Adjusted EBITDA as a percent of net sales to be above 20%.
Conference Call and Webcast
conference call and webcast to review its fourth quarter and full year 2023 results on Wednesday, February 28, 2024, beginning at 4:30 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: 13743067
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
Important Cautionary Statement
release includes forward-looking statements. Statements regarding: (i) future sales or sales growth; (ii) our 2024 financial goals and expectations for future financial results, including levels of net sales, Adjusted EBITDA, and Adjusted
EBITDA margin; (iii) our cash flows; (iv)our expectations regarding the use of our products, including EPIEFFECT and AMNIOEFFECT; and (v) continued growth in different care settings. 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 expectations.
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 Company may change its plans due to unforeseen circumstances; (iii) the results of
scientific research are uncertain and may have little or no value; (iv) 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; (v) the effectiveness of amniotic tissue as a therapy for particular indications or conditions is the subject of further scientific and clinical studies;
and (vi) we may alter the timing and amount of planned expenditures for research and development based on 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 focused on
helping humans heal. With more than a decade of helping clinicians manage chronic and other hard-to-heal wounds, MIMEDX is dedicated to providing a leading portfolio of
products for applications in the wound care, burn, and surgical sectors of healthcare. The Company s vision is to be the leading global provider of healing solutions through relentless innovation to restore quality of life. For additional
information, please visit www.mimedx.com.
Selected Unaudited Financial Information
Condensed Consolidated Balance Sheets
(in thousands) Unaudited
| December 31, 2023 | December 31, 2022 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 82,000 | $ | 65,950 | ||||
| Accounts receivable, net | 53,871 | 43,084 | ||||||
| Inventory | 21,021 | 13,183 | ||||||
| Prepaid expenses | 5,624 | 7,315 | ||||||
| Current assets of discontinued operations | 1,331 | |||||||
| Other current assets | 1,745 | 3,335 | ||||||
| Total current assets | 164,261 | 134,198 | ||||||
| Property and equipment, net | 6,974 | 7,856 | ||||||
| Right of use asset | 2,132 | 3,400 | ||||||
| Goodwill | 19,441 | 19,441 | ||||||
| Intangible assets, net | 5,257 | 5,852 | ||||||
| Deferred tax asset | 40,777 | |||||||
| Other assets | 205 | 148 | ||||||
| Noncurrent assets of discontinued operations | 535 | |||||||
| Total assets | $ | 239,047 | $ | 171,430 | ||||
| LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 9,048 | $ | 8,454 | ||||
| Accrued compensation | 22,353 | 20,856 | ||||||
| Accrued expenses | 9,361 | 10,934 | ||||||
| Current liabilities of discontinued operations | 1,352 | 1,479 | ||||||
| Other current liabilities | 3,894 | 1,834 | ||||||
| Total current liabilities | 46,008 | 43,557 | ||||||
| Long term debt, net | 48,099 | 48,594 | ||||||
| Other liabilities | 2,223 | 4,773 | ||||||
| Total liabilities | 96,330 | 96,924 | ||||||
| Convertible preferred stock | 92,494 | |||||||
| Total stockholders equity (deficit) | 142,717 | (17,988 | ) | |||||
| Total liabilities, convertible preferred stock, and stockholders equity (deficit) | $ | 239,047 | $ | 171,430 |
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts) Unaudited
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net sales | $ | 86,832 | $ | 74,375 | $ | 321,477 | $ | 267,841 | ||||||||
| Cost of sales | 13,841 | 14,369 | 54,634 | 48,316 | ||||||||||||
| Gross profit | 72,991 | 60,006 | 266,843 | 219,525 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 54,352 | 49,922 | 211,124 | 208,673 | ||||||||||||
| Research and development | 2,434 | 2,955 | 12,665 | 12,701 | ||||||||||||
| Investigation, restatement and related | 524 | 3,406 | 5,176 | 12,177 | ||||||||||||
| Amortization of intangible assets | 192 | 182 | 762 | 701 | ||||||||||||
| Operating income (loss) | 15,489 | 3,541 | 37,116 | (14,727 | ) | |||||||||||
| Other expense, net | ||||||||||||||||
| Interest expense, net | (1,593 | ) | (1,450 | ) | (6,457 | ) | (5,016 | ) | ||||||||
| Other income (expense), net | 16 | (3 | ) | (26 | ) | (4 | ) | |||||||||
| Income (loss) from continuing operations before income tax provision | 13,912 | 2,088 | 30,633 | (19,747 | ) | |||||||||||
| Income tax provision benefit (expense) | 37,375 | (28 | ) | 36,806 | (206 | ) | ||||||||||
| Net income (loss) from continuing operations | $ | 51,287 | $ | 2,060 | $ | 67,439 | $ | (19,953 | ) | |||||||
| Income (loss) from discontinued operations, net of tax | 2,189 | (2,475 | ) | (9,211 | ) | (10,244 | ) | |||||||||
| Net income (loss) | $ | 53,476 | $ | (415 | ) | $ | 58,228 | $ | (30,197 | ) | ||||||
| Net income (loss) from continuing operations available to common shareholders | $ | 44,829 | $ | 390 | $ | 55,796 | $ | (26,533 | ) | |||||||
| Basic net income (loss) per common share: | ||||||||||||||||
| Continuing operations | $ | 0.38 | $ | 0.00 | $ | 0.48 | $ | (0.24 | ) | |||||||
| Discontinued operations | $ | 0.02 | $ | (0.02 | ) | $ | (0.08 | ) | $ | (0.09 | ) | |||||
| Basic net income (loss) per common share: | $ | 0.40 | $ | (0.02 | ) | $ | 0.40 | $ | (0.33 | ) | ||||||
| Diluted net income (loss) per common share: | ||||||||||||||||
| Continuing operations | $ | 0.31 | $ | 0.00 | $ | 0.43 | $ | (0.24 | ) | |||||||
| Discontinued operations | $ | 0.01 | $ | (0.02 | ) | $ | (0.06 | ) | $ | (0.09 | ) | |||||
| Diluted net income (loss) per common share: | $ | 0.32 | $ | (0.02 | ) | $ | 0.37 | $ | (0.33 | ) | ||||||
| Weighted average common shares outstanding - basic | 119,367,482 | 113,676,496 | 116,495,810 | 112,909,266 | ||||||||||||
| Weighted average common shares outstanding - diluted | 148,076,079 | 114,233,567 | 145,962,462 | 112,909,266 |
Condensed Consolidated Statements of Cash Flows
(in thousands) Unaudited
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net cash flows provided by (used in) operating activities | 10,257 | (5,624 | ) | 26,775 | (17,893 | ) | ||||||||||
| Net cash flows used in investing activities | (481 | ) | (1,709 | ) | (2,155 | ) | (2,660 | ) | ||||||||
| Net cash flows used in financing activities | (8,940 | ) | 66 | (8,570 | ) | (580 | ) | |||||||||
| Net change in cash | $ | 836 | $ | (7,267 | ) | $ | 16,050 | $ | (21,133 | ) |
Reconciliation of Non-GAAP Measures
In addition to our GAAP results, we provide certain non-GAAP metrics including Adjusted EBITDA, related margins, Free
Cash Flow, Adjusted Net Income, and Adjusted Earnings Per Share ( Adjusted EPS ). 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.
These non-GAAP financial measures reflect the exclusion of the following items:
Adjusted EBITDA and Adjusted EBITDA margin
Adjusted EBITDA consists of GAAP net income (loss) excluding: (i) depreciation, (ii) amortization of intangibles, (iii) interest expense,
net, (iv) income tax provision, (v) investigation, restatement and related expenses, (vi) reorganization expenses related to severance charges for certain officers (vii) expenses related to disbanding of the Regenerative Medicine
business unit and (viii) share-based compensation.
Please refer to the tables at the beginning of this press release for reconciliation to GAAP net
Adjusted Net Income (Loss)
Net Income (Loss) provides a view of our operating performance, exclusive of certain items which are non-recurring or not reflective of our core operations. Management uses Adjusted Net Income to assess