Release Date: May 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- E-commerce sales increased by 31% over the same period last year, reflecting a successful shift to a direct sales model.
- Gross margin improved to 74.5% in Q1 2024 from 72.7% in Q1 2023, indicating better profitability per unit sold.
- The direct sales model has enhanced customer relationships, leading to potential repeat orders and improved customer service.
- Significant progress in the medical segment, particularly with the CompuFlo technology being adopted by new pain management clinics.
- Strong balance sheet with $5 million in cash and cash equivalents, and no long-term debt, providing financial stability.
Negative Points
- Overall revenue declined to $2.2 million in Q1 2024 from $2.6 million in Q1 2023, indicating a drop in sales performance.
- International sales decreased by $274,000 compared to the previous year, showing challenges in global markets.
- The company recorded no revenue from US distributors due to the strategic shift to direct sales, which might limit market reach.
- Operating losses increased to $1.5 million in Q1 2024 from $1.3 million in Q1 2023, suggesting rising operational costs.
- Withdrawal from the Chinese market until conditions improve, potentially missing out on revenue opportunities in a major market.
Q & A Highlights
Q: Can you provide an update on the 160 claims submitted to Medicare?
A: Jan Haverhals, President and CEO of Milestone Scientific, explained that the 160 claims represent patients treated with their technology, with all necessary documentation submitted to healthcare insurance providers. The claims have been uploaded into the systems of these providers, which is crucial for the identification and processing of the technology by healthcare insurers.
Q: What is the current status of the reimbursement process for these claims?
A: Jan Haverhals noted that some commercial payers have already paid for the technology, and certain motor vehicle insurance cases in New Jersey have also seen payments. The focus is on Medicare because of its significance in their strategy, particularly due to the patient demographics that benefit most from their technology. Discussions with Medicare are ongoing, with Milestone engaging directly to educate them about the technology and its benefits.
Q: How is the dental business performing, especially with the shift to a direct sales model?
A: Jan Haverhals highlighted that the dental business has seen a 31% growth in e-commerce sales and an improvement in gross margins due to the direct sales model. This model has allowed for better customer relationships and support, leading to increased sales and customer retention.
Q: What are the plans for expanding the dental business internationally?
A: The CEO mentioned that while they are not restarting but rather refocusing on international markets, they are working closely with top distributors to ensure a steady and consistent business. They do not plan to implement an e-commerce model internationally but will support distributors with online platforms and services.
Q: What is the potential market size for the CompuFlo Epidural System, and what are the expectations for market penetration?
A: Jan Haverhals outlined a scenario where capturing 20% of the epidural market could lead to $400 million in revenue with a high gross margin. The key to achieving this is securing reimbursement, which would accelerate adoption and usage across various medical facilities.
Q: Are there any plans to increase analyst coverage or investor relations activities to improve stock visibility and value?
A: The CEO acknowledged the need for greater exposure and mentioned plans to increase presence at conferences and investor meetings in the second half of the year, aiming to attract more analyst coverage and investor interest.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
