MiMedx Group, Inc

Good afternoon, and thank you for standing by. Welcome to the MiMedx Second Quarter 2025 Operating and Financial Results Conference Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Matt Notarianni, Head of Investor Relations for MiMedx. Thank you, Matt. You may begin.

Thank you, Operator, and good afternoon, everyone. Welcome to the MiMedx Second Quarter 2025 Operating and Financial Results Conference Call. With me on today's call are Chief Executive Officer Joe Capper and Chief Financial Officer Doug Rice. As part of today's webcast, we are simultaneously displaying slides that you can follow. You can access the slides from the Investor Relations website at MiMedx.com. Joe will kick us off with some opening remarks and a summary of our operating highlights, as well as a discussion of our financial goals, And Doug will provide a review of our financial results for the quarter. And then Joe will conclude before we make ourselves available for your questions. Before we begin, I would like to remind you that our comments today will include forward-looking statements, including statements regarding future sales, operating results, and cash balance growth, future margins and expenses, our product portfolios, and expected market sizes for our product. These expectations are subject to risks and uncertainties, and actual results may differ materially from those anticipated due to many factors, including competition, access to customers, the reimbursement environment, unforeseen circumstances, and delays. Additional factors that could impact outcomes and our results include those described in the risk factors section of our annual report on Form 10-K and our quarterly report on Form 10-Q. Also, our comments today include non-GAAP financial measures, and we provide a reconciliation to the most comparable GAAP measures in our press release, which is available on our website at mymedics.com. With that, I'm now pleased to turn the call over to Joe Capper. Joe?

Thanks, Matt. Good afternoon, everyone. We appreciate you all joining us for today's call. I am pleased to report that we had an excellent and, as you will hear today, action-packed second quarter. We grew our top line by 13%, generating the highest quarterly revenue, and highest adjusted EBITDA in the history of the company. Both our wound and surgical franchises rose by double digits. We also posted improved margins and generated solid cash flow. Naturally, we are very happy with this exceptional performance and expect it to continue. Therefore, we are raising top-line guidance today to reflect the strong momentum we anticipate the second half of 2025. We are also preparing the company to operate under the long overdue reform to Medicare reimbursement system, which is now set to take effect January 1st, 2026. I will discuss these steps in more detail shortly, but first let me touch on some of the highlights of the quarter, as well as an update on our strategic priorities. During the second quarter, net sales grew year over year by 13% to a record $99 million. representing another excellent performance by the team. Our adjusted gross profit margin was 84% in the quarter. Adjusted EBITDA was $24 million, or 25% of net sales. We continued to build cash ending the quarter with $119 million, an increase of $12 million for the period, and we expect to end the year with a cash balance of more than $150 million. Our surgical business grew by 15%, with contributions across the portfolio, including another uptick in Heliogen sales as adoption gains traction. We continued enrollment in our randomized control trial for EpiEffect. We began collaborations to offer a few complementary wound care solutions, and we continue to evaluate additional products to expand our portfolio for both our wound and surgical businesses. Turning to a quick update on our strategic priorities. As articulated on prior calls, we have our team's collective efforts organized and focused on three primary areas. Our top strategic priority is to continue to innovate and diversify our product portfolio. As a reminder, this objective stems from our belief that there remain numerous unmet needs in both the wound care and surgical markets for which placental-derived allografts are uniquely capable of assisting. we are confident we can continue to strengthen our market position by adding complementary skin substitutes and other adjacent products and services. This was the thinking that led us to add Heliogen to the portfolio and that continues to guide our evaluation of additional solutions. To that end, we have made recent progress worth mentioning, starting with EpiEffect. As a reminder, we launched this product at the end of 2023 and began a randomized controlled trial late last year. We are still in the enrollment phase and expect to soon be positioned for an interim report out. This is a critical milestone given the reliance the LCDs place on RCTs. Next, we received a TRG letter which confirms a product is regulated under Section 361 by the FDA for another product line extension named EpiExpress, clearing the way for its launch later this year. EpiExpress is a fenestrated allograft designed to be used in cases where the flow or extraction of fluid is of critical importance to the healing process. As mentioned on our last call, to remain competitive in the private office marketplace until reform is enacted, we began marketing Solera, a higher-priced Amion-Corion allograft. During the quarter, we also began selling another iteration of this product called Emerge. Naturally, we expect these products will be de-emphasized next year as Medicare reform takes hold. Last, we were excited to begin pilot programs for a few non-skin substitute complementary wound care solutions, the most notable being the collaboration we began with Vaperox Incorporated to co-market their Vaporous Hyperoxia Therapy, or VHT, device. At the same time, we made an investment in Vaperox, providing us with certain limited acquisition rights. VHT is a 510 a clear device that delivers ultrasonic mist and concentrated oxygen for the treatment of nine types of hard-to-heal chronic wounds, including diabetic foot ulcers, venous leg ulcers, and pressure ulcers. Vaprox's VHT has been researched in three IRB clinical studies, demonstrating wound healing rates exceeding 80% at 20 weeks when combined with standard wound care. Additionally, VHT is an adjunct therapy that has shown promising signs of efficacy in real-world use cases with Mimetics' advanced wound care products, such as EpiFix. Together with our leading placental allografts, VHT provides clinicians across numerous care settings another innovative option to treat chronic, hard-to-heal wounds. We view VHT as highly complementary to our portfolio. Our second priority is to develop and deploy programs intended to expand our footprint in the surgical market. In addition to seeking opportunities to expand our offering, this objective requires significant commitment to the production of real-world clinical and scientific research. As such, we continue to fund work to produce tangible evidence in support of our technology for a variety of surgical procedures. The May 2025 issue of Journal of Drugs and Dermatology included a study on the cost-effectiveness of using mimetics placental allografts following nose surgeries. We also had the opportunity to highlight the growing body of evidence that supports the use of our products in certain surgical procedures while attending high-profile conferences during the spring months. These efforts and the expansion of other commercial activities continue to pay dividends as evidenced by our Q2 top-line surgical growth of 15%, led by amnio effect. As stated in the past, we believe we are in the early innings as it pertains to the use of placental-derived products in many surgical applications. The development of these markets will take time and perseverance, but the potential clinical benefits for patients, the healthcare economic payoff, and the immense business opportunity for years to come make it well worth the investment. Our third initiative is to introduce programs designed to enhance customer intimacy. As we prepare for the transition to a reimbursement environment where profit potential is no longer a primary driver in product selection, we believe a company's comprehensive value offering will heavily influence vendor selection. As such, we have been focused on developing programs which improve customer relationships and ultimately lower turnover. We have several initiatives underway aimed at institutionalizing customer-centric behavior throughout the organization. We continue to experience excellent adoption of Lymetics Connect, our proprietary customer portal, and we are actively developing additional features designed to improve workflow and strengthen the bond between Lymetics and our customers. We believe our commitment to this approach will lead to enhanced customer relationships, improved net promoter scores, higher margins, and ultimately an increase in the average lifetime value of the customer. In addition to our superb performance in the court, the other big news of the day relates to recent announcements by the federal government on the steps they are taking to finally address the wildly inappropriate Medicare reimbursement for skin substitutes in private office and associated care settings. As you know, we have spoken about this issue at length on numerous occasions and have been longtime ardent advocates for action necessary to address the obvious fraud, waste, and abuse that have plagued this industry and taxpayers. We have met with or spoken to nearly every relevant three-letter agency which could enact or form, and we enthusiastically welcome these recent developments. First, at the end of June, CMS announced the introduction of the Wasteful and Inappropriate Service Reduction, or WISER, model, which is focused on leveraging artificial intelligence and machine learning in concert with human clinical review to curb fraud, waste, and abuse in healthcare. This voluntary model which aims to encourage safe and evidence-supported best practices for treating Medicare beneficiaries, will run from January 1, 2026 to December 31, 2031 in five states and will examine several product categories, including skin substitutes. Next, several weeks ago, CMS posted the Proposed Physician Fee Schedule, or PFS, and the Outpatient Prospective Payment System, or OPPS, for calendar year 2026. CMS will accept comments until September 12th, and the final rules are expected to be published in November to take effect at the start of the new year. According to the proposed schedule, CMS is moving away from the ASP methodology, the private office, and away from the bundle in the wound care centers. Instead, CMS will move to a fixed payment for skin substitutes of $125.38 per square centimeter in all outpatient sites of care. private offices, and root care centers alike. We plan to submit comments in support of the new reimbursement methodology with certain recommendations regarding payment levels and requests for clarification. Before I turn the call over to Doug for his detailed financial review of the quarter, I want to share with you a few comments regarding our updated guidance. As a result of our strong performance year-to-date and the current momentum in the business, we increased our full-year revenue growth outlook from the high single digits to the low double digits. We also expect our full-year adjusted EBITDA margin to be above 20%. Importantly, our expectations regarding long-term prospects for the business are even more positive given the changes pending to the Medicare reimbursement methodology. Now let me turn the call over to Doug for a more detailed review of our financial results. Doug?