Release Date: May 10, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SANUWAVE Health Inc (SNWV, Financial) reported a significant revenue increase of 53% for Q1 2024 compared to Q1 2023.
- Gross margin improved to 73% in Q1 2024 from 67% in the same period last year, indicating better profitability.
- UltraMIST systems sales increased by 54% and consumable applicators revenue rose by 64% year-on-year, showing strong product demand.
- Adjusted EBITDA loss significantly reduced to $59,000 in Q1 2024 from $1.8 million in Q1 2023, moving closer to breakeven.
- SANUWAVE Health Inc (SNWV) is expanding its geographic footprint and staffing, aiming to engage with larger customers and enhance market penetration.
Negative Points
- SANUWAVE Health Inc (SNWV) still reported a net loss of $4.5 million in Q1 2024, although it was an improvement from the previous year.
- Operating expenses increased by $761,000 due to non-recurring charges related to litigation and severance agreements.
- The company experienced some delays and uncertainties regarding the merger with SEPA and the uplisting process.
- Applicator revenues were higher than targeted, indicating potentially slower system sales in Q1, which is a seasonal trend in the medical device industry.
- Despite improvements, SANUWAVE Health Inc (SNWV) faced unusual operating expense charges around severance and ongoing costs associated with the M&A project.
Q & A Highlights
Q: Can you discuss the financial highlights from Q1 2024?
A: (Peter Sorensen - CFO) Revenue for Q1 2024 was $5.8 million, a 53% increase from the same period last year. Gross margin improved to 73% from 67% last year. The operating loss was reduced by $921,000 to $1.1 million, and the net loss decreased significantly to $4.5 million from $13.1 million in Q1 2023. Adjusted EBITDA was nearly breakeven at a $59,000 loss, improving from a $1.8 million loss last year.
Q: What are the expectations for SANUWAVE's growth in the upcoming quarters?
A: (Morgan Frank - CEO & Chairman of the Board) We are projecting a 45% to 55% year-on-year growth for Q2 and reiterating our 50% growth guidance for the fiscal year 2024. This growth trajectory reflects our ongoing strategic initiatives and operational improvements.
Q: How is the company managing its operational costs and profitability?
A: (Peter Sorensen - CFO) Despite facing some non-recurring charges, we've managed to improve our operational profitability. Our focus remains on managing spend effectively and driving towards profitable growth.
Q: Can you provide an update on the SEPA merger and uplisting plans?
A: (Morgan Frank - CEO & Chairman of the Board) The merger with SEPA has been extended to May 31. While there have been delays, we see a path to closing the merger by the end of May. Details are limited due to external controls, but we are optimistic about finalizing soon.
Q: What strategic moves are being made to sustain and enhance growth?
A: (Morgan Frank - CEO & Chairman of the Board) We've increased our sales and operational staff in Q1 to expand our geographic reach and engage with larger customers. We're also focusing on integrating UltraMIST into various healthcare settings, including nursing homes and acute care facilities.
Q: How is the UltraMIST system performing in the market?
A: (Morgan Frank - CEO & Chairman of the Board) UltraMIST system sales increased by 54% from Q1 2023, with revenue up 81% year-on-year. Consumable applicators revenue grew 64% from Q1 2023. The system's portability and ease of use continue to drive its adoption in various medical settings.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
