Good afternoon, and thank you for standing by. Welcome to the MiMedx Second Quarter 2025 Operating and Financial Results Conference Call. As a reminder, this conference is being recorded. I would now like to turn the conference over to Mr. Matt Notarianni, Head of Investor Relations for MiMedx. Thank you, Matt. You may begin.

Thank you, operator, and good afternoon, everyone. Welcome to the MiMedx Second Quarter 2025 Operating and Financial Results Conference Call. With me on today's call are Chief Executive Officer, Joe Capper; and Chief Financial Officer, Doug Rice. As part of today's webcast, we are simultaneously displaying slides that you can follow. You can access the slides from the Investor Relations website at mimedx.com. Joe will kick us off with some opening remarks and a summary of our operating highlights as well as a discussion of our financial goals and Doug will provide a review of our financial results for the quarter, and then Joe will conclude before we make ourselves available for your questions. Before we begin, I would like to remind you that our comments today will include forward-looking statements, including statements regarding future sales, operating results and cash balance growth, future margins and expenses, our product portfolios and expected market sizes for our products. These expectations are subject to risks and uncertainties, and actual results may differ materially from those anticipated due to many factors, including competition, access to customers, the reimbursement environment, unforeseen circumstances and delays. Additional factors that could impact outcomes and our results include those described in the Risk Factors section of our annual report on Form 10-K and our quarterly report on Form 10-Q. Also, our comments today include non-GAAP financial measures, and we provide a reconciliation to the most comparable GAAP measures in our press release, which is available on our website at mimedx.com. With that, I'm now pleased to turn the call over to Joe Capper. Joe?

Thanks, Matt. Good afternoon, everyone. We appreciate you all joining us for today's call. I'm pleased to report that we had an excellent and, as you will hear today, action-packed second quarter. We grew our top line by 13%, generating the highest quarterly revenue and highest adjusted EBITDA in the history of the company. Both our Wound and Surgical franchises rose by double digits. We also posted improved margins and generated solid cash flow. Naturally, we are very happy with this exceptional performance and expect it to continue. Therefore, we are raising top line guidance today to reflect the strong momentum we anticipate in the second half of 2025. We are also preparing the company to operate under the long overdue reform to the Medicare reimbursement system, which is now set to take effect January 1, 2026. I will discuss these steps in more detail shortly. But first, let me touch on some of the highlights of the quarter as well as an update on our strategic priorities. During the second quarter, net sales grew year-over-year by 13% to a record $99 million, representing another excellent performance by the team. Our adjusted gross profit margin was 84% in the quarter. Adjusted EBITDA was $24 million or 25% of net sales. We continue to build cash, ending the quarter with $119 million, an increase of $12 million for the period, and we expect to end the year with a cash balance of more than $150 million. Our Surgical business grew by 15%, with contributions across the portfolio, including another uptick in HELIOGEN sales as adoption gains traction. We continued enrollment in our randomized controlled trial for EPIEFFECT. We began collaborations to offer a few complementary wound care solutions, and we continue to evaluate additional products to expand our portfolio for both our Wound and Surgical businesses. Turning to a quick update on our strategic priorities. As articulated on prior calls, we have our team's collective efforts organized and focused on 3 primary areas. Our top strategic priority is to continue to innovate and diversify our product portfolio. As a reminder, this objective stems from our belief that there remain numerous unmet needs in both the wound care and surgical markets for which placental-derived allografts are uniquely capable of assisting. We are confident we can continue to strengthen our market position by adding complementary skin substitutes and other adjacent products and services. This was the thinking that led us to add HELIOGEN to the portfolio and that continues to guide our evaluation of additional solutions. To that end, we have made recent progress worth mentioning starting with EPIEFFECT. As a reminder, we launched this product at the end of 2023 and began a randomized controlled trial late last year. We are still in the enrollment phase and expect to soon be positioned for an interim report. This is a critical milestone given the reliance the LCDs place on RCTs. Next, we received a TRG letter, which confirms the product is regulated under Section 361 by the FDA for another product line extension named EPIXPRESS clearing the way for its launch later this year. EPIXPRESS is a fenestrated allograft designed to be used in cases where the flow or extraction of fluid is of critical importance to the healing process. As mentioned on our last call, to remain competitive in the private office marketplace until reform is enacted, we began marketing CELERA, a higher-priced amnion chorion allograft. During the quarter, we also began selling another iteration of this product called EMERGE. Naturally, we expect these products will be deemphasized next year as Medicare reform takes hold. Last, we are excited to begin pilot programs for a few non-skin substitute complementary wound care solutions, the most notable being the collaboration we began with Vaporox Inc. to co-market their vaporous hyperoxia therapy or VHT device. At the same time, we made an investment in Vaporox, providing us with certain limited acquisition rights. VHT is a 510(k) cleared device that delivers ultrasonic mist and concentrated oxygen for the treatment of 9 types of hard-to-heal chronic wounds, including diabetic foot ulcers, venous leg ulcers, and pressure ulcers. Vaporox's VHT has been researched in 3 IRB clinical studies, demonstrating wound healing rates exceeding 80% at 20 weeks when combined with standard wound care. Additionally, VHT is an adjunct therapy that has shown promising signs of efficacy in real-world use cases with MiMedx's advanced wound care products such as EPIFIX. Together with our leading placental allografts, VHT provides clinicians across numerous care settings another innovative option to treat chronic hard-to-heal wounds. We view VHT as highly complementary to our portfolio. Our second priority is to develop and deploy programs intended to expand our footprint in the surgical market. In addition to seeking opportunities to expand our offering, this objective requires significant commitment to the production of real-world clinical and scientific research. As such, we continue to fund work to produce tangible evidence in support of our technology for a variety of surgical procedures. The May 2025 issue of Journal of Drugs in Dermatology included a study on the cost effectiveness of using MiMedx placental allografts following most surgeries. We also had the opportunity to highlight the growing body of evidence that supports the use of our products in certain surgical procedures while attending high-profile conferences during the spring months. These efforts and the expansion of other commercial activities continue to pay dividends as evidenced by our Q2 top line surgical growth of 15%, led by AMNIOEFFECT. As stated in the past, we believe we are in the early innings as it pertains to the use of placental-derived products in many surgical applications. The development of these markets will take time and perseverance, but the potential clinical benefits for patients, the healthcare economic payoff, and the immense business opportunity for years to come make it well worth the investment. Our third initiative is to introduce programs designed to enhance customer intimacy. As we prepare for the transition to a reimbursement environment where profit potential is no longer a primary driver in product selection, we believe the company's comprehensive value offering will heavily influence vendor selection. As such, we have been focused on developing programs which improve customer relationships and ultimately lower turnover. We have several initiatives underway aimed at institutionalizing customer-centric behavior throughout the organization. We continue to experience excellent adoption of MiMedx Connect, our proprietary customer portal, and we are actively developing additional features designed to improve workflow and strengthen the bond between MiMedx and our customers. We believe our commitment to this approach will lead to enhanced customer relationships, improved Net Promoter scores, higher margins and ultimately an increase in the average lifetime value of customer. In addition to our superb performance in the quarter, the other big news of the day relates to recent announcements by the federal government on the steps they are taking to finally address the wildly inappropriate Medicare reimbursement for skin substitutes in private office and associated care settings. As you know, we have spoken about this issue at length on numerous occasions and have been long-time advocates for action necessary to address the obvious fraud, waste, and abuse that have plagued this industry and taxpayers. We have met with or spoken to nearly every relevant agency that could enact reform, and we enthusiastically welcome these recent developments. First, at the end of June, CMS announced the introduction of the Wasteful and Inappropriate Service Reduction or WISeR model, which is focused on leveraging artificial intelligence and machine learning in concert with human clinical review to curb fraud, waste, and abuse in healthcare. This voluntary model, which aims to encourage safe and evidence-supported best practices for treating Medicare beneficiaries, will run from January 1, 2026, to December 31, 2031, in 5 states, and will examine several product categories, including skin substitutes. Next, several weeks ago, CMS posted the proposed physician fee schedule or PFS, and the Outpatient Prospective Payment System, or OPPS, for calendar year 2026. CMS will accept comments until September 12, and the final rules are expected to be published in November to take effect at the start of the new year. According to the proposed schedule, CMS is moving away from the ASP methodology in the private office and away from the bundle in the wound care centers. Instead, CMS will move to a fixed payment for skin substitutes of $125.38 per square centimeter in all outpatient sites of care, private offices and wound care centers alike. We plan to submit comments in support of the new reimbursement methodology with certain recommendations regarding payment levels and requests for clarification. Before I turn the call over to Doug for his detailed financial review of the quarter, I want to share with you a few comments regarding our updated guidance. As a result of our strong performance year-to-date and the current momentum in the business, we increased our full year revenue growth outlook from the high single digits to the low double digits. We also expect our full year adjusted EBITDA margin to be above 20%. Importantly, our expectations regarding long-term prospects for the business are even more positive given the changes pending to the Medicare reimbursement methodology. Now let me turn the call over to Doug for a more detailed review of our financial results. Doug?

Thank you, Joe, and good afternoon to everyone on today's call. I'm excited to review our results with you all today. As a reminder, many of the financial measures covered in today's call are on a non-GAAP basis, so please refer to our earnings release for further information regarding our non-GAAP reconciliations and disclosures. Moving on to the results. As Joe mentioned, our second quarter 2025 net sales of $99 million represented 13% growth compared to the prior year period. By product category, second quarter wound sales of $64 million increased 12% versus the prior year period, while surgical sales of $34 million were up 15%, which marks the second consecutive quarter of mid-teens growth for Surgical. We saw significant contributions across our business in the second quarter. In Wound, our second quarter sales faced a tough comparable due to solid EPIEFFECT sales last year. However, this was overcome by strong sales of CELERA and to a lesser extent, initial contributions from EMERGE. In our surgical franchise, AMNIOEFFECT and AMNIOFIX once again delivered strong year-over-year increases in sales and uptake of HELIOGEN accelerated in the quarter as well. Our second quarter 2025 GAAP gross profit was about $80 million, up nearly $8 million compared to the prior year period. Our GAAP gross margin was 81% in the second quarter of 2025 compared to 83% last year. Excluding the incremental acquisition-related amortization expense from intangible assets of roughly $2.5 million in this quarter, our non-GAAP adjusted gross margin of 84%, roughly flat compared to the second quarter of 2024. We continue to expect our full year non-GAAP gross margin to be around 82% to 83%. Turning to our operating expenses, sales and marketing expenses were $48 million in the second quarter compared to $42 million in the prior year period. The increase was due to a combination of increased sales costs, including higher commissions associated with higher sales as well as the changes we made to our sales commission plans in the middle of 2024. Looking ahead, we continue to expect our full year 2025 sales and marketing expenses to be between 50% and 51% of net sales, which would be a flat 1 percentage point increase on a percentage of sales basis to 2024 and up in absolute dollars. General and administrative expenses, or G&A, were $16 million in the second quarter compared to $14 million in the prior year period. Over the balance of the year, we continue to expect G&A expenses to be around 13% of sales on an adjusted basis, which would be a decrease of around 1 percentage point on a percentage of sales basis to 2024 and up in absolute dollars. Our second quarter R&D expenses were $3 million, just up slightly compared to the prior year period. Our R&D expenses are primarily comprised of the costs associated with our ongoing EPIEFFECT RCT as well as additional spend related to the development of future products in our pipeline. As we continue to ramp enrollment in the trial this year and prepare for an interim readout, we now expect our full year R&D expenses to be about 4% of net sales. GAAP income tax expense for Q2 2025 was around $3 million, reflecting an effective tax rate of 26%. Please note that this tax expense number does not reflect the third quarter tax reform that was enacted earlier this month. As a result of this bill, we expect modest impacts in our effective tax rate. We also expect the new tax reform to significantly decrease our cash tax payments in the near term as a result of immediate expensing of domestic R&D expense. We continue to expect our long-term non-GAAP effective tax rate to be 25%. Our second quarter GAAP net income was $10 million or $0.06 per share on a diluted basis compared to GAAP net income of $18 million or $0.12 per share in the prior year period. Adjusted net income for the second quarter was $15 million or $0.10 per share compared to $11 million or $0.08 per share in the prior year period. Second quarter adjusted EBITDA was $24 million or 25% of net sales compared to $20 million or 23% of net sales in the prior year period. In addition to the highest ever quarterly sales in this company's history, our second quarter adjusted EBITDA was also a new record and a testament to the work our team has done to scale our business as we continue to grow our wound and surgical footprints. Turning to our liquidity, we had $119 million of cash and cash equivalents on June 30, 2025, a sequential increase of over $12 million. During the second quarter, we generated free cash flow of $14 million, representing a sequential step-up of $9 million compared to the first quarter. In turn, our net cash balance now sits at about $100 million, up from $88 million just last quarter and also double our $50 million net cash balance from just a year ago. We continue to pursue several opportunities to deploy our strong balance sheet and borrowing capacity on growth opportunities that support our strategic priorities. I will now turn the call back to Joe.

Thanks, Doug. As you've just heard, we had an outstanding quarter, and MiMedx is well positioned to have a terrific second half. Importantly, we are in an even better position to excel once the industry resets to the proposed more orderly reimbursement guidelines. We set record highs for revenue and adjusted EBITDA with strong growth in both the Wound Care and Surgical businesses. We continue to generate strong cash flow. We kicked off a few pilot programs to co-market complementary solutions in the wound care market and increased our guidance meaningfully to reflect our strong momentum. In closing, I would like to sincerely thank the MiMedx team for an outstanding quarterly performance and for your unwavering commitment to the company and to the many individuals who rely on our products each and every day. With that, I'd like to open the call to questions. Operator, we are now ready for our first question. Please proceed.

Our first question today is coming from Chase Knickerbocker from Craig-Hallum.

Congrats on a nice quarter here. Joe, maybe first, would love to get your thoughts on kind of how you see this market post reimbursement change. It's certainly going to come down a bit as that $12 billion of spend is reduced. If we assume $125 sticks and there's, call it, limited product discounting, do you guys have a first blush estimate on kind of the skin sub market size across physician office and HOPD together that you'd be willing to share?

Jason, to begin, I would like to make a few overall points. First, as mentioned in the prepared remarks, we embrace this change and strongly believe it will benefit MiMedx in the long run. Second, reform was necessary. I believe we can all agree that things had become quite chaotic, and reform is advantageous for not only U.S. taxpayers but also for our industry and Medicare beneficiaries. Third, fee schedules are the appropriate method to address pricing. Fourth, fixed pricing is a better approach to reimbursement for skin substitutions compared to the ASP methodology or bundling. We can have discussions about the ideal price point, but we believe the fixed price model is superior. Fifth, the future is certainly looking more favorable for MiMedx over time. I'm confident in this because we have the strongest evidence supporting our technology. When we are back to competing based on product efficacy, we feel assured in our ability to succeed. In a rational market, we perform well, as demonstrated by our double-digit growth in the surgical market, where we do not primarily compete on price. Instead, product performance typically influences purchasing decisions. Additionally, we are a fully integrated company with our own donor network, manufacturing capabilities, substantial evidence, and a high-performing direct commercial organization. While there may be some short-term fluctuations in the industry during this adjustment period, we are well-positioned to compete against our peers in the long term. We have complete access to all care settings and the highest level of private insurance coverage, which is crucial for Medicare co-pays. We are confident we will capture market share and have the capacity to manage any increase in share. We will advocate for clarity on some regulations and propose certain modifications. However, when markets act rationally, it works in our favor, and we will succeed. This is definitely beneficial for the industry, making it more attractive for investment. Lastly, we have a strong balance sheet that offers us maximum flexibility as the industry undergoes changes. Regarding market size, it's too soon to determine. We have conducted extensive internal sensitivity modeling across various prices and volume levels, and we believe we will capture a significant share. Overall, we are quite confident in our ability to compete no matter how these rules ultimately evolve.

That's helpful. Maybe kind of another one along those lines just as it relates to kind of your model specifically. Kind of based off your ASP today, is there a way that we can kind of think about, if we assume the sticks again, how we should kind of think about the dollar impact that you'll need to make up with volume? And then just can you kind of speak to your confidence level that with all those points you just made that you can kind of take enough share next year to kind of counteract any headwind that would be there and then grow and to be able to grow wound in 2026? I'm just kind of trying to get some initial thoughts on our model next year.

Yes, we're very confident we can achieve this. We are conducting extensive modeling around this. At a high level, we'll need to gain some market share, but not a significant amount. These price levels are familiar to us. If you look back at our average pricing from a few years ago, we're not too far off. While average selling prices have increased slightly with the introduction of new products, we are in a strong position.

Got it. And just last for me. Just on EPIEFFECT, is there a timeline that we can kind of think of for that readout as we have the LCD potentially still going into effect next year? Just kind of a little bit more specific on that readout, if you would.

Yes. Hopefully, later this year, we're going to have some good data to take a look at this. The RCT is going a little bit slower than we had hoped for, probably because there are 1 million of these things being run at the same time and there's capacity issues to run RCTs in the marketplace. There's only so many patients, so many doctors that are qualified to participate in studies like this. So we're moving forward. We're making traction, but knock wood, hopefully, we'll have something to report out by the end of the year. Good news is we have 2 really high-performing products that are already on the list and the LCDs go through as proposed.

Next question today is coming from Carl Byrnes from Northland Capital Markets.

Congratulations on the results. I'm curious about CMS' flexibility regarding the comment period on the single fixed rate of $125.38. I expect that it may increase, so what are your thoughts on that process? I also have a follow-up question.

Yes, Carl, I can't predict it. Have they done it in the past? Yes, they’ve made changes based on feedback, but I can't predict what they'll do this time. I'm sure there's a lot of reasoning behind the price they chose. There’s plenty of pricing in the market that might influence them to settle on a price like this. We'll share our thoughts and some suggestions on alternate perspectives. I'm sure many other market stakeholders will do the same. However, I'm not going to predict whether it will remain at this price or go higher and by how much. I think it's impossible for any of us to know at this point.

Fair enough. And then a follow-up, considering the potential for the LCDs to become effective in January 26, would you foresee any anomalies in stocking given that you've got 2 of the 15 products that will be eligible?

Yes, that's a good question. We are going to stay very focused on this as we approach the end of the calendar year. We will closely monitor inventory levels. As we get nearer to year-end, we will have more clarity on whether the LCDs will take effect and what the final pricing and rules related to OPPS and the physician fee schedule will be. We will keep a close watch on this. Regarding pre-stocking, I am not certain yet; we will have to wait and see. However, I can say that we have been managing inventory carefully while rotating products on and off the market for years, so we know how to handle this. We have had to do it for a long time under the ASP methodology, which requires tighter inventory management. I am not overly concerned about it, but it is something we will monitor very closely as the year ends.

And Carl, this is Doug. I would also add, we've already done this a couple of times as we are gearing up for the February LCDs to take effect that got delayed until April. We were prepared at that time. So you've seen us with our balance sheet and our capital wherewithal, we've been able to invest in carrying a little bit more inventory. And with our capacity and the strength of our donor recovery network and the other items that Joe articulated a second ago, we feel like we're in a good position to be prepared.

Our next question is coming from Ross Osborne from Cantor Fitzgerald.

Congrats on a stronger quarter. So starting off, maybe I want to put a finer point on the market next year, assuming the PFS goes through as proposed. Where is the low-hanging fruit for you guys to take share? And as a follow-up to that, curious to hear your thoughts on the opportunity on the mobile side of things.

What was the last part of that opportunity where?

On the mobile wound care market, with the proposed price, assuming a lot of those players will go away, curious to hear if that's an attractive market opportunity for you all.

I don't want to speak for the mobile wound care sites. Let me say this: We are committed to supporting providers as much as possible. One of our main advocacy points will be for a higher application fee for providers. We want to see them compensated more fairly for their work. I believe the current situation partly stems from their inadequate compensation, forcing them to rely on margins from skin substitutions, which isn’t a sustainable way to pay physicians. We will strongly advocate for fairer compensation. Additionally, the mobile health market is likely to be impacted by these changes. Hopefully, those in this segment can receive proper compensation for their vital work, as it has evolved significantly and reaches many patients who may not otherwise receive necessary care without that service. What was the first part of your question?

Low-hanging fruit.

Yes. I'm not going to talk about that. We think we can pick up market share in a variety of different ways. I think we're in every site of care you can imagine; some are stronger than others. I think there's going to be migration from one care setting to another. So we're going to make sure that we're well positioned in every one of those care settings. But in terms of like tactically where we think we'll compete best, I'd rather keep that to ourselves.

Yes. Fair enough. And then lastly, regarding the LCD, any feedback or conversations with the MACs? Curious to hear the probability that that ends up going through.

Yes, it has been a bit quieter on that front. The last official update indicated a delay in implementation until January 1, but we continue to have the same advocates and advisers on our side, and we will work to ensure our stance is heard. It's important to highlight that even if the LCDs had been implemented in February or April, we would still have needed action from CMS because regulating pricing effectively should occur through the fee schedules. This step was necessary regardless. Regarding requirements to demonstrate clinical efficacy, such as randomized controlled trials, it's difficult to argue against their importance for healthcare. Proving that products are clinically viable for marketing is essential. The manner in which these requirements will be enforced is still unclear, whether it will come from the MACs or the FDA, but it's hard to dispute that these are positive developments for healthcare.

Next question today is coming from Anthony Petrone from Mizuho Group.

Congrats on a strong quarter. Maybe I'll stick on the physician fee schedule and hospital outpatient, and I just have a follow-up on core wound care. Maybe one of the nuances in there, Joe, is on the distinction of Level 1, 2, and 3 classification of wounds. And I think there was basically a linkage into or at least a read-through there on max utilization based on that classification. So maybe walk us through that a little bit and maybe bridge that to what is the actual mix of patients that are getting treated according to those classifications? And does that present any risk to volumes? And then I'll have one quick follow-up.

It's still too early to determine the impact on volumes, and we need more clarification on that. They are trying to acknowledge the various regulatory pathways and possibly categorize them, but at first glance, they have set the price per square centimeter to be uniform for all three categories. We are actively engaging and advocating for changes on the regulatory side, as we believe some modifications are necessary.

Okay. And then the broader question is, and Joe, you've been great in just calling out the expansion of billing in the category to $1 billion a month. And obviously, a lot of players in here. There's still the 17 approved products on the LCD side. And so just any updated thoughts on the shakeout as we finalize potentially physician fee schedule and outpatient to a final rule, but also these LCDs come in. How much of that $1 billion per month do you think goes away? And then ultimately, where can MiMedx kind of land in terms of share here?

Yes, we're making some assumptions here, but it's reasonable to believe that a significant portion of that will decrease. Even if all current volume operates at the lower price point, the overall market value will shrink. Additionally, some of that volume is likely to vanish because there has likely been a considerable amount of over-utilization. This is supported by several enforcement actions that have already been made public, with more being announced regularly. It seems that this issue will continue to be addressed by the Department of Justice for many years to come. There's been a lot of misconduct, which typically indicates over-utilization. Therefore, I anticipate that some of the volume will diminish, and prices will definitely be adjusted downward. We recognize that this is a substantial market, as we had previously competed successfully in it before this price surge. Even if we revert to previous volume levels adjusted for demographics, the market will still be quite considerable. We are confident that in a rational market where providers choose products based on their performance, safety, and efficacy, we will succeed. We've done it before, and we will keep succeeding.

Next question is coming from Carl Byrnes, a follow-up from Northland Capital Markets.

With respect to the partnership, when would it be realistic to see a material contribution?

Not anywhere in the near term, Carl. I mean it's a collaboration. We still have to work out some of the details in terms of how we'll work together. But if something hitting our numbers, that won't be for a while. You won't see anything until next year.

We reached the end of our question-and-answer session. I'd like to turn the floor back over for any further closing comments.

Thanks, operator. Thanks, everybody, for joining today's call. I appreciate your interest in the company. We'll talk to you next quarter.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.