April 2, 2021
RICHARDSON, Texas–(BUSINESS WIRE)–Fuse Medical, Inc. (OTCPINK: FZMD) (“Fuse” or the “Company”) an emerging manufacturer and distributor of innovative medical devices for the orthopedic and spine marketplace, announced that it has filed its annual report on Form 10-K for the year ended December 31, 2020 with the Securities and Exchange Commission (“SEC”) on Tuesday, March 30, 2021.
“2020 was a challenging and ambitious year, which began on the heels of the COVID-19 global pandemic, along with the ensuing government restrictions on elective surgeries in the largest markets we serve,” said Christopher C. Reeg, Chief Executive Officer of Fuse. “Despite these conditions, and an approximate 6% decline in revenues for 2020 as compared to 2019, which can be directly correlated to the government imposed quarantines, we were still able to increase our gross profit margin by approximately 10% during the same period. Our results of operations for 2020 and strategic milestones, along with our multiple new product launches, provide us the positive momentum for 2021 to be pivotal for the execution of our growth and profitability strategies,” said Mr. Reeg.
“In response to COVID-19, we took immediate and appropriate steps to align our business with the changing market conditions, as well as the necessary right sizing of our infrastructure and related costs,” said William E. McLaughlin, Chief Financial Officer. “As a result, we were successful in minimizing disruption to our revenue line, while reducing our net loss by $1.9 million or 57% from 2019. Further, we strengthened our balance sheet by improving accounts receivable collections, reducing inventory levels, and reduction of our borrowings on our credit facility.”
Fiscal Year 2020 Highlights:
Fuse’s 2020 has proved to be an exception and pivotal for Fuse’s growth as a Manufacturer and innovative product developer. Our focus to shift our business model from a sole distributor to an integrated Manufacturer and distributor was exceedingly successful during 2020, with continued growth and success serving as a spring-boarding into 2021. Highlights of Fuse’s 2020 strategic milestones include the following:
- In August 2020, we were listed as the one-hundred thirty-sixth (136th) largest public company by revenue in the Dallas-Fort Worth Metroplex, by the Dallas Morning News.
- In November 2020, Deloitte recognized our Company for our fast growth with a ranking of forty-third (43rd) on their 2020 Technology Fast 500TM.
- In December 2020, we launched FuseChoiceTM, FuseChoiceTM Plus, and FuseChoiceTM Max, part of our amniotic and umbilical membrane product line. We also announced the planned 2021 launches of three additional Biologics product lines including the FuseChoiceTM Derm, FusePureTM DBM, and FuseTrilogyTM Viable Matrix products.
- In January 2021, we entered into a marketing agreement with CarePICS Telehealth to increase our wound care offerings.
- In January 2021, we entered into an exclusive agreement with Orthovestments, LLC for the manufacturing and commercialization of the novel OrbitumTM Staple System, which increases our Manufactured product portfolio.
- In February 2021, we launched our Fuse ACP Anterior Cervical Plating System, expanding our offerings in our Spine division.
- We were successful in adding 10 new distributors for 2020 and adding an additional 7 new distributors during the three months ended March 31, 2021.
Fiscal Year 2020 Financial Highlights
Net revenue for the year ended December 31, 2020 was $21.4 million, compared to $22.9 million for 2019. The decline in revenue was largely attributed to the impact of COVID-19 and the related deferrals in elective procedures that began in late March 2020. Elective procedures have recovered to some extent in the second half of 2020, partially offsetting this impact.
For the year ended December 31, 2020, gross profit was $12.7 million, or 59% of revenues, compared to $11.1 million, or 49% of revenues, for the year ended December 31, 2019.
Selling, general, administrative, and other expenses (“SG&A”) for the year ended December 31, 2020 declined by $1.9 million or 23% to $6.5 million compared to $8.4 million for 2019. The reduction in SG&A reflects our continued commitment to our strategic cost containment initiatives.
Commissions expense for the year ended December 31, 2020 increased to $7.0 million from $5.9 million for the year ended December 31, 2019, an increase of $1.1 million of approximately 18.5%.
For the year ended December 31, 2020, net loss was $1.4 million compared to $3.3 million for the year ended December 31, 2019, reflecting a reduction in our net loss of $1.9 million or approximately 57%.
The Company’s primary sources of liquidity are cash from operations and its credit facility. At December 31, 2020, the Company’s current assets exceeded it current liabilities by $5,372,651 (“Working Capital”), which included $1,187,458 in cash and cash equivalents. As of December 31, 2020, the Company had sufficient collateral and had approximately $1.3 million in credit facility capacity. The Company expects to renew its RLOC maturing May 4, 2021.
About Fuse Medical, Inc.
Fuse is an emerging manufacturer and distributor of innovative medical devices for the orthopedic and spine marketplace. We provide a comprehensive portfolio of products in the orthopedic total joints, sports medicine, trauma, foot and ankle space, as well as, degenerative and deformity spine, osteobiologics, wound care, and regenerative medicine products. For more information about the Company, or if you’re interested in becoming a distributor of any Fuse’s products, please contact us at info@fusemedical.com or visit: www.fusemedical.com.
Forward Looking Statements
Certain statements in this press release, constitute “forward-looking statements” within the meaning of the federal securities laws. Words such as “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend,” or similar expressions or statements regarding intent, belief, or current expectations, are forward-looking statements. While the Company believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based only on information available to the Company as of the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including, without limitation, those set forth in the Company’s filings with the Securities and Exchange Commission; the failure of the Company to close the transaction; and integration issues with the consolidated company. Thus, actual results could be materially different. The Company expressly disclaims any obligation to update or alter statements whether as a result of new information, future events, or otherwise, except as required by law.
