Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SANUWAVE Health Inc (SNWV, Financial) achieved the highest quarterly revenue in company history for Q2 2024.
- Revenue growth of 53% year-on-year, totaling $7.2 million for Q2 2024.
- Gross margins stabilized at 73%, despite additional costs from new contract manufacturers.
- Net income for Q2 2024 was $6.6 million, a significant improvement from a net loss of $7.3 million in Q2 2023.
- Adjusted EBITDA improved to $1.5 million from $171,000 in the same period last year.
Negative Points
- Operating expenses increased by $706,000 year-on-year, totaling $3.2 million for Q2 2024.
- Termination of the merger with SEPA due to the inability to acquire a national securities exchange listing.
- Current assets decreased to $8.7 million as of June 30, 2024, from $9.8 million as of December 31, 2023.
- Cash and cash equivalents dropped to $2.5 million as of June 30, 2024.
- The company is planning a reverse stock split, which can be perceived negatively by investors.
Q & A Highlights
Q: Can we talk actual numbers and acquisition units or new customers? How do these units impact the bottom line, cost of acquisition, and cost to implement?
A: The list price on an UltraMIST system is about $35,000. We view this as a razor-razorblade model, generating revenue from individual applicator sales. We have three sales channels: direct sales force, distributors on a 10-99 basis, and an internal commercial sales operation. The customer cost of acquisition is roughly 10% to 15% of overall sales.
Q: How are you generating more sales in this environment? Can you comment on the lack of attention to the stock?
A: We are focused on getting the company's fundamentals together. Cleaning up the cap structure is a priority to ensure the company is valued for its business. We plan to increase outreach towards the Street once our stock price is at a more respectable level.
Q: What are the financial highlights for Q2 2024?
A: Revenue for Q2 2024 totaled $7.2 million, a 53% increase from Q2 2023. Gross margin was 73%, and operating income was $2 million. Net income was $6.6 million compared to a net loss of $7.3 million in Q2 2023. Adjusted EBITDA was $1.5 million, up from $171,000 in Q2 2023.
Q: Can you provide more details on the termination of the merger with SEPA?
A: The merger was terminated due to no path to acquiring a national securities exchange listing. We now have sufficient capital to run the business without the dilution or complexity of the merger. We are simplifying our capital structure, including a reverse stock split to reduce share count.
Q: What are the future projections and strategic decisions for SANUWAVE?
A: We have increased our quarterly revenue growth guidance to 65%-75% for Q3 2024. We are adding to our sales force and commercial operations team, and stepping up manufacturing capacity. We aim to make the second half of 2024 a breakout period for SANUWAVE.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
