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Good afternoon, and thank you for standing by. Welcome to the MiMedx Second Quarter 2025 Operating and Financial Results Conference Call. [Operator Instructions] 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 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 out. 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 health care 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 ardent 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 3-letter agency, which 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 the curb fraud waste and abuse in health care. 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 performed -- 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 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. 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.

[Operator Instructions] 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, first of all, let me start with a couple of high-level comments. I think as I stated in the prepared remarks, we welcome this change and we firmly believe it will be better for MiMedx long term. Number two, reform was inevitable. We can all agree -- hopefully, we can all agree that things have got completely out of control, and reform is a good thing for not just U.S. taxpayers, but our industry and for Medicare beneficiaries. Number three, the fee schedules are the proper mechanism to address pricing. Number four, fixed pricing is a better way to reimburse for skin substances than either the ASP methodology or bundling. We can debate the most appropriate price point, but the fixed price method is a better methodology. Number five, the future state is certainly better for MiMedx in the long run. Why am I so confident about that? We have the most robust evidence in support of our technology. So when we are back to competing on product efficacy, we feel very confident in our ability to prevail. When the market is acting rationally, we win as evidenced by our double-digit growth in the surgical market and we do not compete primarily on price. Instead, product performance typically drives the decision. Next, we're a fully integrated company. We have our own donor network, our own manufacturing, again, the best evidence and the most evidence and our own high-performing direct commercial organization. While there may be some short-term choppiness in the industry as things adjust, again, we're well positioned to compete relative to our peer group and certainly in the long term. We have full access to all care settings. We have the most private insurance coverage, which is important for Medicare co-pays. And we're certainly going to be in a position to pick up share, and we have the capacity to handle any ramp in share. So again, we're certainly going to advocate for clarification on some of the rules as well as certain modifications. But again, when the markets act rationally, it's better for us. We're going to win. It's certainly better for the industry. The industry becomes more investable. And last, we also have an excellent balance sheet, which provides us maximum flexibility as the industry goes through some change. Second part of your question in terms of market size, it's just too early to tell, right? So obviously, we've done a lot of internal sensitivity modeling at this price and at a range of prices and certainly a range of volume levels. So again, we're pretty confident we're going to pick up a fair amount of share. Suffice to say, we feel very comfortable that we're going to be able to compete regardless of how these rules ultimately shake out.

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 super confident we can do it. And again, clearly, we're doing a lot of modeling around this. But I would say kind of high level, we would have to pick up some share, but not a ton, right? And so if we -- these price levels are not foreign to us. If you go back and look at what our average pricing was a few years ago, we're not that far off. Obviously, ASPs crept up a little bit with the introduction of some new products, but we're in really good shape.

Got it. And just last for me. Just on EPIEFFECT, is there a time line 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's 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 wondering if you have any feel what CMS' flexibility may be in the comment period on the single fixed rate of $125.38 In other words, I mean, I would expect that, that might -- and should migrate higher, but sort of what is your anticipation with that process? And then I have a follow-up as well.

Yes, Carl, I can't handicap it. Have they done it in the past? Yes, they've made modifications throughout or I would say, as a result of comments, but I can't handicap it, right? I'm sure there's a lot of logic that went into the price point that they selected. There's a lot of pricing available in the market that would direct them to kind of settle in on a price like this. But we'll provide our comments and some recommendations on other ways to look at it. As I'm sure a lot of other stakeholders in the market will. So -- but I'm not going to handicap whether or not it's this price or at some price point higher or how much higher. 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. It's a good question, right? And that's something that we're going to stay really close to as we start to close out the calendar year. We'll monitor kind of inventory levels very, very closely. And clearly, we're going to have more clarity as we get closer to the end of the year, whether or not LCDs are going into effect and what the final price point is and the final rules associated with OPPS and the physician fee schedule. So we'll just watch it as tight as we can. As far as prestocking, et cetera, I don't know yet. We'll have to wait and see. I would just say, look, we've been managing inventory closely as we rotate products in and off the market for years. So we know how to do this. And we've had to do it for a long term because we're operating under the ASP methodology, which requires you to manage inventory a whole lot tighter. So I wouldn't -- I'm not that concerned about it, but it is something that we will watch incredibly closely as we close out the year.

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.

Yes. I don't want to speak for the mobile wound care sites. I will -- let me just put it this way. In comment, we're going to support providers as much as possible. And one of the things that we will advocate strongly for is a higher application fee for providers. We would like to see them get paid more for what they're doing. I do think that the circumstances we are in now partly created because they weren't getting paid properly for what they were doing. So frankly, they were living off margin that they could get on skin subs, which is not a healthy way to pay physicians for what they're doing. So we will advocate strongly for that. And again, I think it's a much better way to go. In terms of what -- and I think the mobile health market will be affected or will be impacted a bit more as a result of that. So hopefully, they could be compensated properly for the work that they're doing because I think it's a very important segment that's developed over the years and likely reaching more patients, patients that frankly wouldn't get the care necessary short of having that site of service available. 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 probability that, that ends up going through.

Yes. I think that's been a little quieter as naturally, last word -- last official word was they were delayed for Jan 1 implementation and -- we still have all the same advocates and advisers, and we'll try to get our position heard. But I think it's important to note that even if the LCDs went into effect back in February or in April, we still would have needed this action by CMS because again, the proper way to regulate pricing is through the fee schedules. So this step would have had to happen. As far as putting requirements in for -- to prove clinical efficacy like RCTs, that's -- it's hard to argue that that's not a good thing for health care, right, to prove that your products are clinically viable to be marketed. How that requirement comes into play remains to be seen, whether it's through the MACs, whether it's through FDA, but hard to argue that that's not a good thing for health care.

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

Congrats on a strong quarter. Maybe I'll stick on 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.

Well, as far as like impact on volumes, et cetera, it's again, too early to tell. We need more clarification on that. I think what they attempt to do is recognize that there's different regulatory pathways that are established and potentially setting tiers or categories, however, you want to look at it. But at least at first pass, they recognize it, but set the price per square centimeter to be the same for all 3. So we're working closely with -- or I would say, advocating strongly on the regulatory side as well. We think some changes need to take place on the regulatory side.

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. I mean we're speculating, right? But it's safe to say that a fair amount of that goes away. First of all, even if all the current volume was at the lower price point, by definition, the math changes and the market is smaller in terms of total dollars in the market. But I think it's also safe to say that some of that volume is going to disappear because there was probably a fair amount of over utilization, right? And you don't have to take my word for that. There's been numerous enforcement actions announced already. I think there was another one announced today. I think you're going to -- this is going to be on the DOJ work list for probably the next decade. We're going to be reading about these things. So there was a ton of bad behavior. And typically, that means overutilization. So my guess is some of the volume goes away and certainly price gets adjusted down. We know that it's a sizable market because we competed in this market very effectively before we saw this run-up. And even if we adjust back to -- you can kind of adjust those old volume levels just for demographics, and it's going to be a pretty sizable market, right? So we're very comfortable. And I've said it numerous times, in a rational marketplace where providers are selecting product based on product performance, safety and efficacy, we're going to win those battles. We have in the past, and we will continue to win those.

Our 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. Not -- 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.