RICHARDSON, Texas – April 18, 2023 –(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, filed its annual report on Form 10-K for the year ended December 31, 2022 with the Securities and Exchange Commission (“SEC”) on April 14, 2023.
Fiscal Year 2022 Financial Highlights
- Net revenues for the year ended December 31, 2022 were $18.6 million, compared to $20.4 million for the quarter ended December 31, 2021, which was a decrease of approximately 9%.
- For the year ended December 31, 2022, gross profit was $11.5 million, or 62% of revenues, compared to $11.9 million, or 58% of revenues, for the year ended December 31, 2021, which was an increase of 4%.
- Selling, general, administrative, and other expenses (“SG&A”) for the year ended December 31, 2022 was approximately $6.5 million compared to $7.0 million for the year ended December 31, 2021, a decrease of 7%.
- Commissions expense for the year ended December 31, 2022 decreased to $5.7 million from $7.1 million for the year ended December 31, 2021, a decrease of 20%.
- For the year ended December 31, 2022, net income was $3.1 million compared to a net loss of $1.59 million for the year ended December 31, 2021, reflecting a gain in our net income of $4.69 million or approximately 151%.
- For the year ended December 31, 2022 Adjusted EBITDA loss was $997,407 compared to Adjusted EBITDA loss of $2,026,414 for the year ended December 31, 2021, reflecting a reduction in our Adjusted EBITDA loss of $1,029,007, or approximately 50%.
Christopher C. Reeg, Chief Executive Officer of Fuse Medical, commented, “We are pleased with the improvements to our margins and anticipate further growth as the Company continues to adjust to the new economic outlook as a result of the pandemic. Despite a slight decline in revenue as compared to the previous year, we still witnessed an increase in gross profit margin, a decrease in SG&A and commission expenses, and a positive net income for the year.”
Mr. Reeg further added, “For 2023 our focus is the continued design, development, and commercialization of unique medical devices for the orthopedic marketplace, while investing in our direct sales force, and expanding our national distribution footprint. We expect to drive growth in the near term, while increasing our visibility as an emerging manufacturer of relevant medical devices.”
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 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.
Note Regarding Use of Non-GAAP Financial Measurements:
The financial data contained in this press release includes certain non-GAAP financial measures as defined by the Securities and Exchange Commission (“SEC”), including “Adjusted EBITDA”. The Company is presenting Adjusted EBITDA because it believes that it provides useful information to investors about Fuse, its business and its financial condition. The Company defines Adjusted EBITDA as net income or loss from continuing operations before the effects of interest expense, taxes, depreciation and amortization, and excludes certain non-recurring and non-cash items. The Company believes Adjusted EBITDA is useful to investors because it is one of the measures used by the Company’s Board of Directors and management to evaluate its business, including in internal management reporting, budgeting and forecasting processes, in comparing operating results across the business, as an internal profitability measure, as a component in evaluating the ability and the desirability of making capital expenditures and significant acquisitions, and as an element in determining executive compensation.
However, Adjusted EBITDA is not a measure of financial performance under generally accepted accounting principles in the United States of America (“GAAP”), and the items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Therefore, Adjusted EBITDA should not be considered a substitute for net income (loss) or cash flows from operating, investing, or financing activities. Because Adjusted EBITDA is calculated before recurring cash charges including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the business, it should not be considered as a measure of discretionary cash available to invest in the growth of the business. There are a number of material limitations to the use of Adjusted EBITDA as an analytical tool, including the following:
- Adjusted EBITDA does not reflect the Company’s interest expense;
- Adjusted EBITDA does not reflect the Company’s tax expense or the cash requirements to pay its taxes; and
- Although depreciation and amortization are non-cash expenses in the period recorded, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect the cash requirements for such replacement.
The Company compensates for these limitations by relying primarily on its GAAP financial measures and by using Adjusted EBITDA only as supplemental information. The Company believes that consideration of Adjusted EBITDA, together with a careful review of its GAAP financial measures, is the most informed method of analyzing Fuse Medical, Inc.
The Company reconciles Adjusted EBITDA to net income, and that reconciliation is set forth below. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is susceptible to varying calculations, Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures of other companies. Revenues and expenses are measured in accordance with the policies and procedures described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
