Wound Management Technologies Reports Financial Results for the Third Quarter Ended September 30, 2014

Addison, TX / ACCESSWIRE / November 13, 2014 / Wound Management Technologies, Inc. WNDM, an emerging commercial stage company with its primary product, a patent-protected and FDA-cleared collagen product, CellerateRX(R), today announced its financial and operating results for the three month period ended September 30, 2014.

Recent Operating Highlights

- Increased revenues 51% to $1,905,766 for the first nine months of 2014, compared to the first nine months of 2013
- Launched the Surgical Assurance Program, a risk sharing program to help hospitals and surgical centers lower their uncompensated costs associated with surgical site infections (SSI)
- Established 32 new accounts for CellerateRX(R) wound care and surgical products in the third quarter 2014
- Appointed Dr. Blaine Farless as Medical Director of Resorbable Orthopedic Products subsidiary
- Elected Dr. Ronald Goode and Jeffrey Lewis to the Board of Directors

"The company remains on a growth trajectory with a reported 51% increase in year to date revenues. The sales and marketing strategies are beginning to take hold as more physicians and healthcare settings recognize the clinical efficacy and cost efficiency of CellerateRX(R) for both wound care and surgical procedures as we were able to establish an additional 32 accounts. As we advance our discussions with the hospitals and surgical centers for the Surgical Assurance Program, we believe that aligning ourselves with the providers will pay dividends in the future. With no standard protocol for wound care and the sheer size of the market, the company expects to maintain its growth with its initiatives still in the early stages of development," commented Robert Lutz Jr., Chief Executive Officer of Wound Management Technologies.

"We have built a very strong team to support an array of opportunities that are ahead of us as we broaden the company. Dr. Blaine Farless, who was recently appointed Medical Director of our Resorbable Orthopedic Products subsidiary, will be invaluable as we are in the final stages of development of our resorbable hemostat products. His extensive clinical and surgical experience in orthopedics will be of great guidance with the opportunity we see in orthopedics. The company is eager to have this division be a greater contributor to our growth," stated Mr. Lutz.

Mr. Lutz, continued, "We are also excited to have Dr. Ronald Goode and Jeffrey Lewis join our Board of Directors. The company will greatly benefit from their strong background as well as their extensive experience in the healthcare space. The solid infrastructure that we have assembled will be the backbone to our continued success."

Financial Results for the Three Months Ended September 30, 2014

The Company generated revenues for the three months ended September 30, 2014, of $679,122, as compared to revenues of $472,753 for the three months ended September 30, 2013, or 44% increase in revenues. The increase in revenues was the result of the successful implementation of the Company's strategic plan to introduce CellerateRX(R) into hospitals, operating rooms and wound centers and the successful launch of the CellerateRX(R) Surgical powder product. 

Cost of goods sold for the three months ended September 30, 2014, was $235,171, as compared to costs of goods sold of $238,737 for the three months ended September 30, 2013, or a 1% decrease. The fluctuation in cost of goods sold was due to the company's decision to present the cost of external commissions as general and administrative expenses beginning in 2014, reducing the overall cost of goods sold for the year along with non-cash transactions which included building reserves for expiring/damaged inventory and expired inventory write-offs. 

General and administrative expenses for the three months ended September 30, 2014, were $1,074,075, as compared to G&A expenses of $545,575 for the three months ended September 30, 2013, or a 97% increase in G&A expenses. G&A expenses increased in 2014 due to reclassifying commissions from COGS to G&A, increased payroll, the cost of strategic marketing and shipping agreements with Welldyne, as well as increased non-recurring legal fees in response to the surgical assurance program, shareholder meeting, and various strategic relationships and product development opportunities.

Interest expense was $48,967 for the three months ended September 30, 2014, as compared to $94,608 for the three months ended September 30, 2013, or a decrease of 48%. Most of the Company's interest bearing debt was paid off or converted to stock in 2013 and the first quarter of 2014. The debt remaining in 2014 has lower interest rates resulting in an overall decrease in interest expense for the year 2014.

Debt related expense was $0 for the three months ended September 30, 2014, as compared to $401,755 for the three months ended September 30, 2013. In 2013 the Company incurred numerous fees related to debt extensions. No such fees were incurred in 2014.

We had a net loss for the three months ended September 30, 2014 of $671,007, as compared to a net loss of $1,687,496 for the three months ended September 30, 2013. The Company was able to reduce net loss in 2014 by increasing sales and significantly reducing interest and debt related expenses.

As of September 30, 2014, we had total current assets of $1,664,868, including cash of $849,661 and inventories of $492,274. As of December 31, 2013, our current assets of $654,459 included cash of $44,553 and inventories of $307,502.

Financial Results for the Nine Months Ended September 30, 2014

The Company generated revenues for the nine months ended September 30, 2014, of $1,905,766, as compared to revenues of $1,263,170 for the nine months ended September 30, 2013, or a 51% increase in revenues. The increase in revenues was the result of the successful implementation of the Company's strategic plan to introduce CellerateRX(R) into hospitals, operating rooms and wound centers and the successful launch of the CellerateRX(R) Surgical powder product. Additionally, the Company received over $190,000 in revenue year to date from the development and license agreement the Resorbable Orthopedic Products, LLC subsidiary (ROP) executed with BioStructures, LLC in 2011.

Cost of goods sold for the nine months ended September 30, 2014, was $673,340, as compared to costs of goods sold of $683,522 for the nine months ended September 30, 2013, or a 1% decrease. The fluctuation in cost of goods sold was due to the company's decision to present the cost of external commissions as general and administrative expenses beginning in 2014, reducing the overall cost of goods sold for the year along with non-cash transactions which included building reserves for expiring/damaged inventory and expired inventory write-offs.

General and administrative expenses for the nine months ended September 30, 2014, were $2,986,175, as compared to G&A expenses of $1,520,302 for the nine months ended September 30, 2013, or a 96% increase in G&A expenses. G&A expenses increased in 2014 due to reclassifying commissions from COGS to G&A, increased payroll as a result of adding new staff and converting non compensated members to compensated employees, non-cash employee stock compensation expense, the cost of strategic marketing and shipping agreements with Welldyne, as well as increased non-recurring legal fees in response to the surgical assurance program, shareholder meeting, various strategic relationships and product development opportunities.

Interest expense was $254,627 for the nine months ended September 30, 2014, as compared to $264,646 for the nine months ended September 30, 2013, or a decrease of 4%. Most of the Company's interest bearing debt was paid off or converted to stock in 2013 and the first quarter of 2014. The debt remaining in 2014 has lower interest rates resulting in an overall decrease in interest expense for the year 2014.

Debt related expense was $0 for the nine months ended September 30, 2014, as compared to $463,900 for the nine months ended September 30, 2013. In 2013 the Company incurred numerous fees related to debt extensions. No such fees were incurred in 2014.

We had a net loss for the nine months ended September 30, 2014 of $1,992,894, as compared to a net loss of $2,662,187 for the nine months ended September 30, 2013.The Company was able to reduce net loss in 2014 by increasing sales and significantly reducing interest and debt related expenses.

About Wound Management Technologies

Wound Management Technologies, Inc. is an emerging commercial stage company with its primary products in the $5B worldwide advanced wound care market. Wound Management's primary focus is the distribution of its Wound Care Innovations subsidiary's unique, patented collagen product line, CellerateRX(R) which is FDA-cleared for all wound types except 3rd degree burns. The wound care product line is reimbursable under Medicare Part B and the surgical products are reimbursable as part of procedural billing. Wound Management has other advanced biotech products in development including a patented resorbable bone hemostat line that is in late stages of development. For more information visit www.wmgtech.com.

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Information about Forward-Looking Statements

The statements in the press release that relate to the Company's expectations with regard to the future impact on the Company's results from new products in development and any other statements not constituting historical facts are "forward-looking statements," within the meaning of and subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Since this information may contain statements that involve risk and uncertainties and are subject to change at any time, the Company's actual results may differ materially from expected results. This document may contain forward-looking statements concerning the Company's operations, current and future performance and financial condition. These items involve risks, contingencies and uncertainties such as product demand, market and customer acceptance, the effect of economic conditions, competition, pricing, the ability to consummate and integrate acquisitions, and other risks, contingencies and uncertainties detailed in the Company's SEC filings, which could cause the Company's actual operating results, performance or business plans or prospects to differ materially from those expressed in, or implied by these statements. The Company undertakes no obligation to revise any of these statements to reflect the future circumstances or the occurrence of unanticipated events.

Investor Contacts:

KCSA Strategic Communications
Todd Fromer / Garth Russell
+ 212-682-6300
Tfromer@kcsa.com / Grussell@kcsa.com

SOURCE: Wound Management Technologies