SANUWAVE Announces Record Quarterly Revenues: Q2 FY2024 Financial Results

Q2 2024 revenues were $7.2 million, up 53% from Q2 2023. This was an all-time quarterly record for the Company.

Q2 2024 Gross Margin was 73%, vs 74% in Q2 2023

GAAP Operating Income was $2.0 Million

Company Provides Guidance for Revenue Growth of 65-75% for Q3 2024 Versus Q3 2023

EDEN PRAIRIE, MN, Aug. 13, 2024 (GLOBE NEWSWIRE) -- SANUWAVE Health, Inc. (the "Company" or "SANUWAVE”) ( SNWV), a leading provider of next-generation FDA-approved wound care products, is pleased to provide its financial results for the three months ended June 30, 2024.

Q2 2024 ended June 30, 2024

• Revenue for the three months ended June 30, 2024, totaled $7.2 million, an increase of 53%, as compared to $4.7 million for the same period of 2023. This growth is within the previous guidance for a 45 – 55% increase.
• 72 UltraMist® systems were sold in Q2 2024 up from 49 in Q2 2023 and from 43 in Q1 2024.
• UltraMist® consumables revenue increased by 67% to $4.7 million (65% of revenues) in Q2 2024, versus $2.8 million for the same quarter last year. UltraMIST systems and consumables remained the primary revenue growth driver and continued to represent in excess of 95% of SANUWAVE’s overall revenues in Q2 2024.
• Gross margin as a percentage of revenue amounted to 73% for the three months ended June 30, 2024, versus 74% for the same period last year, despite some additional costs from standing up new contract manufacturers.
• For the three months ended June 30, 2024, operating income totaled $2.0 million, an improvement of $1.1 million compared to Q2 2023 as a result of the Company’s continued efforts to drive profitable growth and manage expenses.
• Net income for the second quarter of 2024 was $6.6 million, driven predominantly by the change in the fair value of derivative liabilities and the extinguishment of debt. This compares to a net loss of $7.3 million in the second quarter of 2023. Net income year to date was $2.2 million versus a net loss of $20.4 million in the first half of 2023.
• Adjusted EBITDA ^[1] for the three months ended June 30, 2024, was $1.5 million versus an Adjusted EBITDA of $171 thousand for the same period last year, an improvement of $1.3 million. Year to date Adjusted EBITDA was $1.4 million versus a loss of $1.6 million in the first 6 months of the prior year.

“The second quarter mirrored the first with 53% revenue growth year-over-year, which led to an all-time record quarter despite the typical seasonal slowness of the first half of the year,” said Morgan Frank, CEO. “We’re particularly pleased to have achieved both operating and Adjusted EBITDA positivity for the quarter in pursuit of our strategy of rapid, profitable growth. As can be seen from our guidance, we expect our growth rate versus prior year periods to further accelerate in Q3 as we seek to continue to gain traction in our markets, ramp up to serve larger customers, and increase our patient counts. We have continued to hire new salespeople and will continue this trend for the foreseeable future. We continue to aim for 2024 to be the breakout year for SANUWAVE and feel good about our progress so far.”

Financial Outlook

The Company forecasts Q3 2024 revenue to rise 65-57% vs Q3 2023 ($8-8.5 million of revenues) and for gross margin as a percentage of revenue to remain in the mid 70s.

The Company has now achieved stockholder approval for its proposed reverse stock split and anticipates undertaking this process in the near future.

SANUWAVE has also secured 100% participation in its note and warrant exchange offer, which will be triggered by effecting the reverse stock split and result in the exchange of a significant amount of warrants and convertible promissory notes for shares of common stock, simplifying the Company’s capital structure.

As previously announced, a business update will occur via conference call on August 13, 2024 at 8:30 a.m. EST. Materials for the conference call are included on the Company’s website at

http://www.sanuwave.com/investors

Telephone access to the call will be available by dialing the following numbers:

Participant Listening: 1-800-579-2543 or 1-785-424-1789

OR click the link for instant telephone access to the event.

https://viavid.webcasts.com/starthere.jsp?ei=1684060&tp_key=35ff7216a3
A replay will be made available through September 3, 2024:
Toll-Free: 1-844-512-2921 or 1-412-317-6671
Replay Access ID: 11156749

^[1] This is a non-GAAP financial measure. Refer to “Non-GAAP Financial Measures” and the reconciliations in this release for further information.

About SANUWAVE

SANUWAVE Health is focused on the research, development, and commercialization of its patented, non-invasive and biological response-activating medical systems for the repair and regeneration of skin, musculoskeletal tissue, and vascular structures.

SANUWAVE's end-to-end wound care portfolio of regenerative medicine products and product candidates helps restore the body’s normal healing processes. SANUWAVE applies and researches its patented energy transfer technologies in wound healing, orthopedic/spine, aesthetic/cosmetic, and cardiac/endovascular conditions.

Non-GAAP Financial Measures

This press release includes certain financial measures that are not presented in our financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S.) (“U.S. GAAP”). These financial measures are considered "non-GAAP financial measures" and are intended to supplement, and should not be considered as superior to, or a replacement for, financial measures presented in accordance with U.S. GAAP.

The Company uses Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA to assess its operating performance. Adjusted EBITDA is Earnings before Interest, Taxes, Depreciation and Amortization adjusted for the change in fair value of derivatives and any significant non-cash or infrequent charges. EBITDA and Adjusted EBITDA should not be considered as alternatives to net income (loss) as a measure of financial performance or any other performance measure derived in accordance with GAAP, and they should not be construed as an inference that the Company’s future results will be unaffected by unusual or infrequent items. These non-GAAP financial measures are presented in a consistent manner for each period, unless otherwise disclosed. The Company uses these measures for the purpose of evaluating its historical and prospective financial performance, as well as its performance relative to competitors. These measures also help the Company to make operational and strategic decisions. The Company believes that providing this information to investors, in addition to GAAP measures, allows them to see the Company’s results through the eyes of management, and to better understand its historical and future financial performance. These non-GAAP financial measures are also frequently used by analysts, investors, and other interested parties to evaluate companies in our industry, when considered alongside other GAAP measures.

EBITDA and Adjusted EBITDA have their limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. Some of these limitations are that EBITDA and Adjusted EBITDA:

• Do not reflect every expenditure, future requirements for capital expenditures or contractual commitments.
• Do not reflect all changes in our working capital needs.
• Do not reflect interest expense, or the amount necessary to service our outstanding debt.

As presented in the GAAP to Non-GAAP Reconciliations section below, the Company’s non-GAAP financial measures exclude the impact of certain charges that contribute to our net income (loss).

Forward-Looking Statements

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future financial results, production expectations and constraints, and plans for future business development activities. Forward-looking statements include all statements that are not statements of historical fact regarding intent, belief or current expectations of the Company, its directors or its officers. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company’s ability to control. Actual results may differ materially from those projected in the forward-looking statements. Among the key risks, assumptions and factors that may affect operating results, performance and financial condition are risks associated with supply chain and production constraints, regulatory oversight, the Company’s ability to manage its capital resource issues, competition and the other factors discussed in detail in the Company’s periodic filings with the Securities and Exchange Commission. The Company undertakes no obligation to update any forward-looking statement.

Contact: [email protected]