MiMedx Group, Inc

Greetings and welcome to the MiMedx Third Quarter 2026 Operating Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I will now turn the conference over to Matt Noorani, Head of Investor Relations. Thank you, Matt. You may begin.

Thank you, Operator, and good afternoon, everyone. We are pleased to welcome you to MyMedx's third quarter 2026 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 MyMedx.com. Joe will kick us off today with a summary of our third quarter 2026 operating and financial highlights, and Doug will provide a detailed review of our results for the quarter. And then we will conclude with some additional updates before we open the line 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, expected market sizes for our products, and expectations regarding the scenario acquisition, including expected benefits and financial performance of the combined company. 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, and 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 mymedx.com. Furthermore, all our statements are as of today, October 28, 2026, and we have no obligation to update any forward-looking statement we make. With that, I'm now pleased to turn the call over to Joe Capper. Joe?

Thanks, Matt, and good afternoon, everyone. Thank you for joining us on today's call. The results and trends of the third quarter reinforce the strategic rationale for the direction we are taking the company. Our surgical business performed well despite somewhat softer procedure volumes, a trend that has been reported across the industry, while our wound care business continues to work through the reset precipitated by the changes to Medicare reimbursement. Additionally, we made significant progress preparing for the acquisition and subsequent integration of Senera MedTech. However, as previously announced, the FTC has issued a second request for information, which extends the Hart-Scott-Rodino waiting period. We will work diligently with the Commission to satisfy its inquiry, and we remain fully committed to the acquisition. We believe the combination of the two companies will enhance our ability to serve the marketplace and benefit patients. By combining Cenara with our surgical franchise, which delivered mid-teens volume growth in Q3, we will create a more compelling regenerative medicine business and accelerate the shift of our business mix toward the surgical market. In wound care, although we grew volume in targeted sites of care, the market continues to work through a range of issues resulting from the 2026 Medicare reimbursement changes. Third quarter market trends were very similar to those we reported in the first half of the year. Continued disruption, pricing pressure, lower overall market volume, and a gradual migration of patients into wound care centers, where we achieved 7% sequential growth. Once the wound care market establishes a stable and predictable foundation, We believe our commitment to generating clinical evidence and to technology innovation will drive our long-term competitive advantage. Regarding the Cenera acquisition, I would like to reiterate several key points from last quarter's call. This transaction is consistent with our well-established strategy to expand our surgical portfolio. All of Cenera's more than $100 million in revenue is generated from surgical procedures that are highly complimentary to our business. Following the merger, approximately 75% of iMedx's revenue will come from surgical and 25% from wound care. We believe this is an exceptionally strong strategic and cultural fit. Sonara is a growth company that is profitable and immediately accretive, even before synergies. Sonara's products are 510 cleared and open up $4 billion in addressable markets in which we do not currently compete. We would expect the combined company to generate run rate revenue of close to $400 million with double-digit growth. With more than $20 million in expected cost synergies, we would anticipate reaching an annual adjusted EBITDA margin of more than 20%. Taken together, these attributes illustrate why we view this as a highly beneficial combination for MiMedx and the people we serve. Turning to the highlights of the quarter and additional details on our two businesses. The headline for Q3 is similar to that of last quarter. We continue to see solid growth dynamics in surgical and a gradual recovery in wound care with a few notable bright spots. For the third quarter, net sales were $62 million. Surgical revenue increased 9% year-over-year with volume up in the mid-teens. Wound care center Unit volume grew 7% sequentially, a positive indicator for the business going forward. GAAP gross profit was 80% in the quarter, a sequential improvement of 11 percentage points. Adjusted EBITDA was $2 million, a $10 million sequential improvement. We received a significant ruling in our favor from a U.S. district court in our challenge to the FDA's regulatory classification of axial fill. As announced today, we reached a $25 million settlement and licensing agreement with one of several parties that we believe infringed on our patent portfolio. This party elected to settle rather than litigate. We continued to litigate two other potentially larger cases. And we made substantial progress on our 510 case submissions for two new surgical products, including one for a placental-derived product. As you know, our strategic priorities have been, number one, innovation and diversification to support both our wound care and surgical businesses, and number two, targeted investments to expand our surgical franchise. This strategy has been highly effective. As a result, we have continued to deliver excellent growth in our surgical segment while navigating the industry dynamics affecting the wound care market. Again, we believe the scenario acquisition will play an important role in advancing our portfolio reshaping strategy. Moving to our Q3 surgical performance in more detail. As mentioned, surgical net revenue grew 9% year-over-year. A closer look shows that a few discrete items in the quarter dampened an otherwise strong underlying growth rate, specifically Q3 2025 surgical revenue included close to $1 million of opportunistic business-to-business placental tissue sales driven by outsized market demand. Following the significant shift in the market, demand for these third-party sales did not recur, and no such revenue was recorded in this year's quarter. Additionally, rebate adjustments increased as a result of short-term promotional activity. Excluding these items are surgical growth rates would have been in the mid-teens. We continue to see growth across our entire surgical product portfolio with accelerating demand for our human placental and bovine-derived particulates as physicians expand their use across a variety of procedures. To that end, we were pleased that the U.S. District Court of the Northern District of Georgia issued a favorable ruling in our litigation challenging the FDA's regulatory classification of Axiophil. are human placental-derived particulate. The court vacated the FDA's determination that axial fill is not a Section 361 product and should instead be classified as a biological product rather than a medical device. The court remanded the matter to the FDA for further consideration. The ruling stated that the FDA had erred in its interpretation of the minimal manipulation regulation and that the agency did not adequately explain the reason behind its divergent classification of Axiofil compared with similar products available on the market. Since its launch in 2022, Axiofil has demonstrated a strong safety profile and has supported many patients through the surgical healing process. We hope this ruling addresses any lingering concerns in the market regarding the use of this product. During the third quarter, the wound care market continued to work through the aftermath of the new Medicare reimbursement framework. a process that is proceeding more slowly than we had anticipated. That said, the expected migration of patients into wound care centers where we are well positioned competitively continued during the quarter. Our wound care center volume grew more than 20% year over year and 7% sequentially. Utilization of skin substitutes in other outpatient sites of care remains well below prior year levels due to the disruptions we described on previous calls. We remain confident that our position in the wound care market will benefit us over time. We are also beginning to see early traction with our PRP offering. While the proposed 2027 Medicare fee schedule did not include any meaningful changes for skin substitutes, We remain optimistic that CMS will ultimately establish baseline requirements for evidence of product safety and efficacy as a condition of reimbursement. Accordingly, we continue to fund randomized controlled trials on two of our most recent product introductions and expect publications in the near future. It remains to be seen whether any changes will be included in the final rules when they are published in the coming weeks. As I mentioned on our last call, we submitted our first two 510K applications for surgical products. In recent months, we made substantial progress on both submissions and now anticipate at least one clearance before year end. In summary, we right-sized our cost structure to support a return to positive adjusted EBITDA and cash flow, which we achieved in Q3. Momentum in our surgical business remains strong and we are making good progress as the wound care market works through this reset phase. Once the market normalizes, we believe our market leading technology supported by an unmatched body of clinical evidence will set the standard. Speaking of our technology, as I mentioned, we recently entered into a $25 million out of court settlement and license agreement with a party we had asserted had infringed on our patents. We have two other active cases currently in litigation. Both cases have completed claimed construction hearings with rulings that were highly favorable to our arguments. Additionally, a recent attempt by one of those defendants to invalidate our patents through an ex parte reexamination at the US Patent and Trademark Office was unsuccessful, and the PTO once again affirmed the validity of the patents we are asserting. We will continue to vigorously protect our patent portfolio. With that, I'll turn the call over to Doug. Doug?