Release Date: August 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aurora Spine Corp (ASAPF, Financial) reported revenue of $4.1 million for Q2 2024, marking the third consecutive quarter of over $4 million in sales.
- Gross margins improved significantly to 62.4% in Q2 2024 from 56.9% in the same period last year.
- The company achieved a net loss reduction from $0.482 million in Q2 2023 to $0.15 million in Q2 2024, with earnings per share reaching $0.00.
- SiLO TFX sales grew by 20.4% from Q1 2024 to Q2 2024, reflecting successful market expansion.
- Aurora Spine Corp (ASAPF) ended the quarter with $0.52 million in cash and cash equivalents, up from $0.37 million at the end of Q1, due to strong operating cash flow and effective capital management.
Negative Points
- Operating expenses increased to $2.74 million in Q2 2024 from $2.51 million in Q2 2023, primarily due to higher commissions and travel costs associated with expanding the sales force.
- Despite the revenue growth, the company still reported a net loss of $0.15 million for the quarter.
- The company had to let go of a sales director who did not meet performance expectations, indicating challenges in sales force management.
- The average selling price of SiLO TFX has stabilized at a lower level than previously, which may impact future revenue growth.
- Aurora Spine Corp (ASAPF) is still facing challenges in the Veteran Affairs market, with slow progress in approvals and sales.
Q & A Highlights
Q: The year-over-year sales growth for TFX grew from $800,000 last year to $1.7 million this year. Can you speak to what's driving the sales increases? Is this from the addition of new doctors or a continuation of doctors increasing usage?
A: The growth is driven by both the addition of new doctors and increased usage by existing doctors. The SiLO TFX has shattered records and continues to expand. Training and field support have been crucial, and we are building more inventory to meet demand. (Trent Northcutt, CEO)
Q: How many units per doctor are being used per month on average for the SiLO TFX?
A: We don't focus on the average per doctor but aim to increase overall unit sales. We have surpassed 100 implants per month and are targeting 150 to 200 implants per month. (Trent Northcutt, CEO)
Q: Can you speak to the size of the SI joint space market and your growth expectations for SiLO TFX?
A: The SI joint market is estimated to be over $1 billion with 279,000 procedures annually. We believe TFX can continue to grow, and we are targeting a significant share of this market. (Trent Northcutt, CEO)
Q: How are the new sales directors performing, and what is the expected time frame from hiring to seeing sales results?
A: We have 12 sales directors across various states. It typically takes two to three months for new hires to start generating sales. We have set a target of over $1 million in annual revenue per sales director. (Trent Northcutt, CEO)
Q: How are DEXA sales progressing, and what can we expect moving forward?
A: DEXA sales have spiked this year, and we expect it to contribute significantly to our revenue. We are targeting $1 million in sales for DEXA this year, with further growth expected in 2025. (Trent Northcutt, CEO)
Q: What are your expectations for ZIP product sales moving forward?
A: We are targeting $5 million in quarterly sales, with ZIP products contributing significantly. ZIP 51 sales have doubled this year, and we aim to maintain this growth trend. (Trent Northcutt, CEO)
Q: Will Aurora Spine be net earnings positive in Q3 or Q4, and do you have enough cash on hand to reach profitability?
A: We are very close to net positive income and have controlled costs effectively. We do not anticipate needing to raise additional capital and are focused on achieving profitability. (Chad Clouse, CFO)
Q: How are accounts receivable collections progressing, and what is the current status?
A: Collections have improved significantly, with a reduction in older receivables. Our day sales outstanding is around 88 days, and we are in a much better place with our receivables. (Chad Clouse, CFO)
Q: How are sales through Veteran Affairs progressing?
A: We have received our first bulk purchase from Navy Balboa and are working on getting more VA facilities approved. Sales are contributing decent numbers, but it's a slower process. (Trent Northcutt, CEO)
Q: Are there any new initiatives or staffing changes expected in the second half of the year?
A: We are focusing on expanding our distribution channels and adding new sales directors. We are also targeting new markets and expect significant growth in spine-specific sales. (Trent Northcutt, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
