Q3 2024 Milestone Scientific Inc Earnings Call and Business Update
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Good morning, everyone and welcome to the milestone scientific third quarter 'twenty 'twenty four financial results and business update conference call.
At this time all participants are in a listen only mode and we will open for questions. Following the presentation.
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Speaker Change: I will now turn the conference over to your highest David Waldman Crescendo Communications, David the floor is yours.
David Waldman: Thank you Jamie good morning, and thank you all for joining milestone Scientifics third quarter 2024 financial results conference call on the call with US today are Neil Goldman Chairman of the board or you can have a halls chief Executive officer.
David Waldman: Keisha hard from Vice President Finance and milestone scientific.
David Waldman: We issued a press release yesterday afternoon containing third quarter 2024 financial results, which is also posted on the company's website. If you have any questions. After the call would like any additional information about the company. Please contact crescendo communications at two one to $2 70 1100.
Speaker Change: Management will now provide prepared remarks, reviewing the financial and operational results for the third quarter ended September 30 of 2024 before we get started I'd like to remind everyone that during this conference call. We may make forward looking statements regarding timing and financial impact of milestones ability to implement its business plan expected revenues and future success. These statements.
Speaker Change: Bob Another question from Jason a lot of fun.
Speaker Change: She is involved in.
Speaker Change: With respect to future economic competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond milestones control. Some of the important factors that could cause actual results to differ materially from those indicated by the forward looking statements are general economic conditions failure to achieve expected revenue growth changes.
Speaker Change: At our operating expenses adverse patent boys, FDA or legal developments competitive pressures changes in customer and market requirements and standards and the risk factors detailed from time to time in milestones periodic filings.
Speaker Change: Trees and exchange commission, including without limitation milestones report on Form 10-K, you're already at December 31, 2023, and milestones report on Form 10-Q for the third quarter ended September 32020 for forward looking statements made during this call are based upon management's reasonable belief as of todays date November 15, 2024 milestone undertakes no obligation to.
Speaker Change: Pfizer update publicly any forward looking statements for any reason.
Speaker Change: With that we'll now turn the call over at all and you have a hall Chief Executive Officer. Please go ahead.
Speaker Change: Thank you, David and thanks to everyone joining us on the call today.
Speaker Change: This quarter was an important one for milestone scientific as we achieved a 22% increase in year over year revenue, reaching $2 $5 million, primarily driven by strong growth in our dental division.
Speaker Change: In particular international dental sales increased by 57% as logistics Grateful where the challenge is seen in the second quarter of 2024 were resolved domestically our shift to an E. Commerce sales model is paying off by allowing us to connect directly with our customers and they'll fit.
Streamlines responsive experience that enhances customer loyalty and satisfaction.
Speaker Change: This approach has strengthened our gross margins, which remain high at 73%.
Speaker Change: And our medical Division, we continued to see substantial progress rolling out the content flow epidural system. This technology, which offers real time pressure feedback to assist physicians with precise needle placement and verification addresses a critical need in pain management and anesthesiology.
Speaker Change: Earlier this year, we achieved in Medicare part B physician payment rate assignment for complete flow epidural system, which applies across several major jurisdictional Medicare administrative contractors, J Mac regions, including New Jersey, Texas and Florida.
Speaker Change: This assignment has kept alive interest in our systems and we are excited to share that respected clinics, such as Hudson specialty care led by Dr. Jarrell bus and the ideal pain Center in Texas have now adopted the complete flow epidural system, demonstrating the traction we are gaining among top pain manage.
Speaker Change: And providers.
Speaker Change: Both clinics are renowned for their expertise in pain management and their decision to adopt comfy flow.
Speaker Change: Flex is a recognition of the system's value and improving patient safety predictability procedure of fish.
C and provider efficiency.
Speaker Change: Expanding Medicare reimbursement has been a cornerstone of our U S strategy as it addresses a significant barrier to adoption by making just system financially accessible to more providers and patients.
Speaker Change: Through our collaboration with Medicare jurisdictions, and the engagement of J Maxx, we are continuously working to educate payers on concrete close clinical utility safety benefit and predicted reliability.
Speaker Change: By doing so we aim to build a foundation that will enable broader adoption across the country.
Currently additional J Mac regions are evaluating the system and we are optimistic about extending our copper rich.
Speaker Change: Notably.
Speaker Change: Concrete flow already serves a large addressable market with 3 million epidural steroid injection procedures performed each year in the J Mac regions, where we have received Medicare payment rate assignments Medicare patients alone represents an estimated two on this 50 million dollar market opportunity for these.
Speaker Change: Procedures offering us a robust entry point for growth.
Our strategic partnership with actual biologics is a key component of our commercial approach actual as a strong presence and deep relationship in the pain management space particular into J Mega regions Open New Jersey, Texas and Florida.
Speaker Change: By partnering with a specialized distributor like actual we can target T clinics more efficiently and deepen our footprint within these critical markets.
Speaker Change: This partnership enables us to deploy compute flowing through the hands of providers, who are best positioned to advocate for its benefits and build awareness among patients.
Speaker Change: In line with our commercial strategy, we are encouraged by the growing sales pipeline silicon to flow. We have additional pilot programs on the way with pain management clinics across the United States, which are designed to further validate assistance utility and showcase its value to practitioners. These pilots.
Speaker Change: <unk> has provided valuable real world insights and allow clinics to experience firsthand the clay.
Nickel advantages a safety profile that conference low brings to epidural procedures.
Speaker Change: Positive results from these pilots, we anticipate that clinics will continue to move from trial to full scale adoption contributing to increased sales in the coming quarters.
Speaker Change: On the International front, we recently secured as you know regulatory approval from Brazil's Health agency to market Compton flow for using that'd be dual procedures, Brazil represents a significant opportunity with over $2 8 million boots, and you will learn to large population experiencing chronic back pain.
Speaker Change: Our market entry strategy in Brazil involves establishing relationships with leading medical institutions and local commercial partners, who will help us launch comfy flow effectively within the region.
As the ninth largest economy globally.
Speaker Change: Zero opens the door to Latin and South America, providing a promising growth Avenue for milestone scientific and.
Speaker Change: In addition to Brazil, we are expanding our global reach by forging relationships with distributors in key markets. Each selected for the proven ability to introduce innovative medical devices within their territories by targeting these independent distributors, we are strategically entering markets, where there was demand per se.
With an effective alternative to traditional epidural procedures, particularly in regions with limited training and resources.
Speaker Change: As we look ahead, our focus remains on advancing reimbursement initiatives strengthening our commercial infrastructure and deepening our market penetration.
Speaker Change: With the traction we are seeing for Medicare coverage respected clinics like Hudson specialty care and ideal pain center adopting a comp with flow epidural system and only go in pilot programs contributing to a growing sales pipeline. We are confident in our ability to drive further adoption of Compton flow in both.
Speaker Change: The United States and international markets.
Speaker Change: Lastly, I'd like to briefly touch on our dental Division, we had a positive effect so about equal notice transition continue to be felt.
Speaker Change: By selling directly through our online platform, we've created the seamless spirit chasing experience, resulting in increased customer engagement and improve margins. This equal minutes model has set a strong foundation for steady growth in the domestic market.
Speaker Change: Over the nine months period for this year, we were able to grow the e-commerce business by 11, 4% and we are complementing this with sockets and targeted marketing campaigns aimed at expanding our customer base further.
Speaker Change: As I approach my retirement as CEO of milestone scientific at the end of this year I want to express how deeply fulfilling it has be to lead milestone scientific doing this transformative period.
Together, we have made substantial strides securing a stable financial and operational foundation, and achieving significant advancement, including the Medicare part B physician payment rate assignments for a constant flow of epidural system.
Speaker Change: This milestone along with our strengthened partnerships and broadened commercial reach has positioned milestone on solid footing for continued growth and innovation.
Speaker Change: Well I'm looking forward to spending more time with family and pursuing other interests I remain committed to milestone success I'm honored to continue contributing to the company's future as a member of the board.
Speaker Change: I will work closely with our leadership team to support the full realization of our shared vision for milestones role in enhancing patient care and take dropped delivery from the 19 stood at 21st century.
Speaker Change: With a remarkable groundwork we have laid I'm confident that milestone scientific is well equipped to achieve its next phase of growth and I'm excited for what lies ahead. Thank.
Speaker Change: Thank you now I'd like to turn the call over to Keisha Hawken, our vice President of finance to go over the financials in more detail Acacia. Please go ahead. Thank.
Keisha Hawken: Thank you art and revenue for the three months ending September 32024, and 2023 was approximately $2 5 million and $2 1 million respectively.
Keisha Hawken: U S E Commerce and digital service revenues for the three months ending September 30 of 2024, and 2023 was approximately $1 2 million for the three months ending September 32024 International revenue was approximately $1 3 million, an increase of a half a million compared to the.
Keisha Hawken: Timber 30 of 2023 international sales increase due to the company, we're solving the freight forward or delays from the second quarter of 2024.
Company recorded no revenue from China for the three months ending September 30 of 2024 and 2023 gross profit for the third quarter ended September 32020 for $1 8 million or 73% of revenue versus $1 5 million and 73% of revenue for the third.
Keisha Hawken: Quarter ending September 32023.
Keisha Hawken: Increase in gross profit was due to higher international sales.
Keisha Hawken: Operating loss for the three months ending September 30 of 2024, and 2020, Italy was approximately $1 5 million a decrease of approximately 38000 net loss was approximately $1 5 million or <unk> per share for the three months ending.
Keisha Hawken: Remember 30 in 2024 and 2020.
Keisha Hawken: For the nine months ending September 30, and 2024 2000, Twenty's rates revenue was approximately $6 6 million at $7 6 million respectively.
Keisha Hawken: E Commerce and digital services revenue for the nine months ending September 32024 was approximately $3 9 million compared to $3 5 million at September 32020 for the nine months ending September 32024 International revenue was approximately $2 7 million a decrease.
Keisha Hawken: <unk> 6 million compared to September 30 of 2023 international sales decreased due to issues with freight Florida carriers. During the second quarter of 2000 and funding for the company recorded no revenue for the nine months ended September 32024 compared to approximately 270000.
Keisha Hawken: For the nine months ended September 32023.
Keisha Hawken: <unk> profit for the first nine months of 2024 was $4 9 million or 74% of revenue versus $5 3 million or 70% of revenue for the first nine months of 2000.
Keisha Hawken: Twenty-three operating losses for the nine months of 2024 was approximately $4 7 million versus approximately $5 1 million for the first nine months of 2023 net loss for the nine months for 2024, it was $2 7 million or per share versus a net loss of 5 million and seven.
Keisha Hawken: As for share for the comparable period in 2023 the.
Keisha Hawken: The decrease in net loss was finally, driven by the Companys receipt of approximately 2 million net of.
Keisha Hawken: Expenses for the sale of New Jersey net operating losses.
Speaker Change: Now I would like to turn your attention to the liquidity and capital resources. We continue to carefully manage expenses and have maintained a solid balance sheet at September 32024, The company had cash and cash equivalents of approximately $4 8 million and working capital of $6 9 million and no long term debt at this point I'll turn the call back over.
Speaker Change: The origin of it all.
Speaker Change: Thank you Keisha and as Kishore mentioned, we continue to maintain a strong balance sheet with approximately $4 8 million of cash and cash equivalents as of September 30 of this year.
Speaker Change: Which we believe provides us sufficient resources to support our growth within both the dental and medical division's without the need for additional outside capital.
Speaker Change: We have maintained a lean operating structure and remain committed to driving shareholder value.
Speaker Change: On the medical side, we remain encouraged by the outlook for the business given our sales pipeline. The indeed, the addition of new pain management clinics as well as expansion of our international distribution partners.
Speaker Change: Most importantly.
Speaker Change: We are making progress advancing our reimbursement strategy around the comp with flow epidural system.
Speaker Change: We are advancing discussions with additional J Mac regions to further expand our coverage and we look forward to providing further updates.
Speaker Change: The medical segment represents a large addressable market and we remain confident and I believe that concrete flow will ultimately become the standard of care and epidural procedures with a focus on clinical precision in safety.
Speaker Change: So to wrap up we believe we have developed an efficient and scalable platform to help drive high margin recurring dental sales in the coming years and look forward to announcing further developments in our medical segment on both the commercial and reimbursement fronts.
Speaker Change: Like to thank you for joining the call today and at this point, we would like to open the call up to questions operator.
Speaker Change: Thank you very much we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on Youll find keypad now a confirmation tone will indicate that Youre line is Nicky you May press star two if you would like to remove your question from Nicky.
Participants using speaker equipment, it may be necessary to pick up your handset before you press the keys.
Speaker Change: Please wait a moment Wellesley pulse questions.
Speaker Change: Thank you very much. Your first question is coming from Nick <unk> of them.
Speaker Change: Nick Your line is life.
Hi, Good morning, Thank you for taking my questions.
Speaker Change: How are discussions going with pain clinics and hospitals following the positive reimbursement decisions.
Speaker Change: Yeah.
Speaker Change: Thank you for your question Nik and good morning.
Speaker Change: I am.
Speaker Change: Pleased with the initiatives that we undertook.
Speaker Change: Since we launched after the reimbursement to refresh our minds a little bit.
Speaker Change: On July 23rd we got our last reimbursement of positive surprises assignments by the Medicare jurisdictions in the Middle of August August 10, I think on the top of my head we were able to sign a partnership with <unk> Biologics we are finalized.
Speaker Change: Our pricing strategy and the week after labor day, So that was the second week of September.
Speaker Change: We officially launched the products.
Speaker Change: Thereby providing the different pricing options for clinicians and actively reaching out to cleaning to clinics are in three jurisdictions, where we received the positive Medicare price assignment and in particular through the knowledge that actual probe.
Speaker Change: <unk>, we have I think now about a 40 plus leads we saw hot leads and I would like to express that and explained it to you because.
Speaker Change: Our company did not have any background and history and private pain clinics actual biologics knows them in all these three jurisdictions. So that resulted immediately our opportunity to provide what we call pilots. So sales process is that we will do a number of cases with the clinicians.
Speaker Change: With support from our people and actual people munitions then.
Speaker Change: We'll do a number of procedures themselves.
Speaker Change: And then you know based on their patients schedule and their decision making process than a de wille decides to.
Speaker Change: Through the chase the equipment and chase the components. So that has actually resulted into two clinics that has already adopted this technology.
Speaker Change: As we speak last week, we had a major event in New York and New Jersey that was very successful, where we were able to sign up additional clinics for demos and pilot. So I'm pleased with the activities that we are undertaking and I do not have any complaints based on.
Speaker Change: Day activities look it's very simple, it's six days a week and we are aimed clinics are doing demos doing trials and to get people more interested in the technology that we provide.
Speaker Change: Understood and kind of following up on that a little bit.
Speaker Change: Mentioned that your ever growing sales pipeline, how are you balancing growing that sales pipeline, but also sort of converting on those leads.
Speaker Change: And like what the balances there where you are you trying to build keep converting them at the same rate, but build a large backlog or can you kind of just give me a little bit of insight into your analysis there.
Speaker Change: I think this is the basic principles of sales management, right and I don't want to sound.
Speaker Change: Arrogance here, that's not my point.
Speaker Change: But my comment is based on of course.
Speaker Change: When we follow the sales process you have to build up the funnel and on a daily basis I track a.
Speaker Change: We disclaim any extra R&D in an evaluation phase of we explained access received quotes. So it is a combination on the daily basis, we want to increase the sales funnel I'm not calling it a backlog.
Speaker Change: These sales funnels that I said those are clinics that have confirmed.
Speaker Change: To us that they would like to receive a demo and then of course Ah.
Speaker Change: At the same time, we are focusing on once we have been into clinic in a very short period thereafter to convert these clinics are into buying the products based on that patient scheduled so it's not that one day, we focus on this and the next day, we focus on the other thing no continuously focusing on two things.
Eight to increase the sales funnel to increase the quality of the sales funnels to perform our demos and trials and pilots and then last but not least to make sure that we can convert those clinics as well.
Speaker Change: Okay, I understood and then fill.
If you'll allow me a third question can you share any information on utilization and reorder rates from clinics, who have been using the cop you flow for some time now.
Speaker Change: Yeah, no absolutely I think in those clinics that has been part of the advisory.
Speaker Change: Board advisory clinics that we used in the beginning.
Speaker Change: I think our flagship is definitely they claim they can talk to the massman are in are in New Jersey.
That's has a very strong reordering pattern.
Speaker Change: And as we speak also increases the utilization of our technology. So that's.
Speaker Change: That's probably the fifth.
Speaker Change: To your right in the sales process that I already explained to you.
Speaker Change: After converting then of course is making sure.
Speaker Change:
Speaker Change: That we are able.
Speaker Change: To increase the reordering pattern like for example, but you know I'm very pleased with one of the clinics that we recently appointed or.
Speaker Change: Third change to products that immediately.
Speaker Change: <unk> purchased a five boxes of.
Speaker Change: Consumables, which is a material for first 50 patients adult written a doctor in a in a couple of days. He already did 15 that is very encouraging for us and also east committed to pricing.
Speaker Change:
Speaker Change: Based on the volumes.
Speaker Change: That is very encouraging and very positive positive for us I think another question could be do we get any feedback or pressure on the price proposal, Florida consumable and the answer is no.
Speaker Change: You know so it tells us that the strategy that we choose and the sales strategy that we have defined and identified.
Speaker Change: Is quote unquote accepted by.
Speaker Change: By the clinicians as they see the immediate benefit also of getting a reimbursement fee. Once they have submitted the documentation and the medical necessity confirmation to the Medicare insurance providers within their region.
Speaker Change: Okay.
Speaker Change: Joe.
Speaker Change: Oh yeah.
Speaker Change: I guess, maybe just one last one you mentioned that the international dental had a really strong quarter or specific drivers of that and how do you plan on maintaining that momentum.
Speaker Change: Yeah.
Speaker Change: Yeah, So as I explained before in the second quarter there were let's.
Speaker Change: Let's say logistic.
Speaker Change: Call, it hiccups and challenges with which wasteful water.
Speaker Change: Those have been sold so it's not that that's only the reasons are another reason is that a.
Speaker Change: We were able to close the gap I think on the top of my head there was an.
Speaker Change: As you know a distance of about half a million dollars of sales compared to the quarter a.
Speaker Change: Last year for the business is growing and as we continue in the fourth quarter. The goal is of course too.
Speaker Change: To ensure it past the international dental sales in the fourth quarter of last year, and we made good progress on that so again.
Speaker Change: You know I'm positive.
Speaker Change: International sales will continue.
Speaker Change: Being of course is that we have.
Speaker Change: I have not sold anything to China, this year compared to last year, which was $270000.
E Commerce is going fantastic.
Speaker Change: Fantastic So the strategy that we had in the United States.
Speaker Change: By terminating the current agreements with other distributors as of September last year pays off so it seems that the strategies that we have chosen.
Speaker Change: Working out and at the end of the day, it's very simple, it's all about execution and that's what we are focusing on.
Speaker Change: We are focusing on everyday.
Speaker Change: Apart from other things of course that we are focusing on.
Speaker Change: Thank you for answering all my questions and I'll return to the queue.
Speaker Change: Thank you Nick.
Speaker Change: Thanks very much. Your next question is coming from Bruce Jackson of the Benchmark Company. Your line is live.
Speaker Change: Hi, good morning, and thank you for taking my questions.
Speaker Change: If I, if we could just talk a little bit more about the J Mac and the strategy for getting additional <unk> of course, there's like a process involved with that kidney.
Speaker Change: Can you kind of give us a sense of how long it takes to get a J Mac on boards and.
Speaker Change: We're going to see continued progress on that in the next couple of quarters.
Speaker Change: Absolutely good morning, Bruce and thanks for your question.
Speaker Change: Uh huh.
Speaker Change: The last part of your kind of your question. If there is continuous progress the answer to that is absolutely, yes, and we.
Speaker Change: We.
Speaker Change: Our approved or we got the price assignment in the three Texas, Florida, and New Jersey.
Speaker Change: We are in advanced.
Speaker Change: Depths in for all the J Maxx.
We have reached out to the J mix that goes back to proud of your question what the process is.
Speaker Change: Because based on the positive response, because we got from the first three we reached out to the other four that has resulted.
Speaker Change: Without going into details who they are that we will have our meetings similar to what we did with the first three where we are able to explain.
Speaker Change: Educate and explain in detail our Watson technology is about with the support of clinicians in those J Max and then.
Speaker Change: Clock starts ticking again, depending on the J maxx, whether and how fast they will make their decision on a on the on the positive.
Speaker Change: Icing assignments for our technology, so against there as well with a limited team did we ever having I'm positive and I'm encouraged.
Speaker Change: That we are able to move forward with that process as well.
Speaker Change: And then.
Speaker Change: A follow up to that in conjunction with that process do you have.
Speaker Change: Do you have distributors and other partners identified.
Speaker Change: For those genetics to that once you get the J Mac.
Speaker Change: And you're able to.
Speaker Change: Commercially we quickly yes, yes, we have a we have a group.
Speaker Change: What I always call it target list of distributors in those J Max I think in all fairness you know.
Speaker Change: These distributors will only want to jump on a on that once there is a positive and a confirmation that there is a price assignment that sort of a little bit the situation in.
Speaker Change: And through that but yes.
Speaker Change: We know where they are and.
Speaker Change: It's up to US then.
Speaker Change: To make sure that again, we identify the right partners like I explained in the past we are interested in those distributors that have a very sticky relationship with the customers that know the paint segment that knows the pain clinics that can provide lead what I would call hopefully.
Speaker Change: Leads to us in those J maxx, instead of having a national or a larger distributor where you'll have to fight.
Speaker Change: To become top of mind or to have a seat on the first row, I always say to be able to execute on the commercialization.
Speaker Change: Okay and then.
Speaker Change: Moving over to the revenue numbers you mentioned that.
Speaker Change: Yeah.
Speaker Change: Just the state of Florida issue internationally and that revenue there should be up year on year for the fourth quarter.
Speaker Change: In general so the total revenue number will that also be up year over year.
Speaker Change: While the goal the goal of course is without making a forward looking statement. The goal for US is of course to reduce that gap.
That we have seen compared to the nine months last year.
Speaker Change: And we're trying to reduce that gap.
Speaker Change: With all the efforts and all resources that we are having.
Speaker Change: You know we are pushing it all so domestically.
Speaker Change: Then we will have a special.
Speaker Change: Thanksgiving.
Campaign that was very successful last year. So we are doing whatever we can to.
Speaker Change: <unk> not only I.
Speaker Change: I would say develop existing customer base are we actively reach out to reactivating customers.
Speaker Change: Dormant customers so to say and at the same time also to acquire new customers. So there isn't there a yield.
Speaker Change: Pele old activities to further support and enhance.
Speaker Change: The total year results for 2024.
Speaker Change: Okay, Great. That's it for me. Thank you for taking my questions.
Thank you Bruce.
Thank you very much well we appear to have reached the end of our question and answer session. I will now hand back over to you for any closing remarks.
Bruce Jackson: Again, thank you for joining the call today.
Speaker Change: Our purpose and our goal is to continue to put pressure on the monitor film the clinicians will continue to put pressure on the organization.
Speaker Change: So that we can obtain the results that are not only I'm looking for but I think more importantly, also that all the shareholders and the investors are looking for.
Speaker Change: If you have any questions.
Speaker Change: Where to find me please.
Speaker Change: Please do reach out to me.
Speaker Change: That would be available to answer any further questions that you might have.
Speaker Change: The.
Speaker Change: I wish you, a good and safe day, and we talk soon.
Speaker Change: Thank you have a good day bye bye.
Speaker Change: Thank you very much. This does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day and a wonderful weekend. Thank you for your participation.
Okay.