Nicholas Sherwood

Nicholas Sherwood inquired about the success of Mama's Creations at Walmart from a marketing perspective, the evolution of that relationship, and its outlook for the rest of the year. He also asked about the experience and expansion in the convenience channel, and how the Crown acquisition might affect planned improvements to the East Rutherford facility.

Answer

Chairman and CEO Adam L. Michaels highlighted significant growth at Walmart, from zero sales last year to 1,800-2,000 doors for a chicken product, emphasizing collaborative partnership and consumer momentum in club/mass channels. He confirmed that the convenience channel is a focus, noting that being in all major distributors now facilitates C-store expansion, with new products being tested for this channel. He explained that while East Rutherford improvements continue, Crown provides existing equipment that Mama's would have otherwise purchased, effectively reducing planned CapEx for East Rutherford.

Nicholas Sherwood asked about the success of the Walmart partnership from a marketing perspective, its evolution, and future outlook. He also inquired about Mama's Creations' experience and priorities in expanding within the convenience channel, and how the Crown acquisition might impact planned improvements to the East Rutherford facility.

Answer

Chairman and CEO Adam L. Michaels highlighted the Walmart partnership's growth from zero sales last year to 1,800-2,000 doors for a chicken product, emphasizing collaborative efforts and consumer shifts to club/mass. He confirmed that expanding into the convenience channel is a focus, noting that established distributor partnerships (Sysco, Dot, KeHE, McLane) are facilitating entry into C-store banners. He also explained that while East Rutherford improvements continue, CapEx might be reduced as Crown provides additional equipment, effectively acquiring some assets for free.

Nicholas Sherwood asked for more details on Mama's Creations' success at Walmart during the quarter from a marketing perspective, how the relationship has evolved, and its future outlook for the rest of the year. He also inquired about Mama's Creations' experience expanding into the convenience channel, specifically with Sheetz, and whether this channel is a near-term priority or a future focus compared to club and mass. Finally, he asked how the Crown One Enterprises acquisition would affect any planned improvements to Mama's Creations' East Rutherford facility.

Answer

CEO Adam Michaels highlighted the significant growth at Walmart, from zero sales a year ago to nearly 2,000 doors for a chicken product. He emphasized the collaborative, non-transactional partnership focused on consumer needs and leveraging momentum from consumers shifting spending to club and mass channels. Michaels affirmed that the convenience channel is 'absolutely a focus,' as Mama's Creations aims to be a one-stop deli solution everywhere. He explained the strategy of first penetrating distributors (now in all major ones) to enable C-store expansion and mentioned ongoing testing of different products at lower price points for this channel. Michaels confirmed that East Rutherford development continues, but the Crown acquisition will lead to reduced CapEx. He provided a specific example of acquiring a shredder from Crown's facility for free, which Mama's Creations would have otherwise purchased new, highlighting how Crown's equipment and capacity provide significant flexibility and cost savings.

Nicholas Sherwood from Maxim Group LLC questioned the progress of the Walmart rollout regarding SKU or store expansion, the strategy behind recent decreases in trade promotion spending, and the potential impact of tariffs on sourcing for facility expansions.

Answer

CEO Adam Michaels reported that the Walmart rollout is proceeding well, with products becoming top sellers in their set and store count increasing, though the approach remains "slow and steady." He explained that trade promotion spending was deliberately reduced from 2.6% to 2.1% of revenue to protect margins, with plans to increase it back towards the 10% goal as gross margins strengthen. Regarding tariffs, Michaels stated there is no current primary impact as sourcing is almost entirely domestic, and the company proactively stocks key equipment parts to mitigate future risks.

Speaking for Anthony Vendetti, Nicholas Sherwood asked about the promotional strategy for the Walmart launch, the rationale for the initial 2,000 stores, and details on the Costco national buy's scope and timing.

Answer

CEO Adam Michaels outlined a promotional plan for Walmart that includes in-store and digital marketing, such as geotargeting and QR codes. The initial store selection was a partnership with Walmart to concentrate distribution for efficiency. He described the Costco win as a major expansion, now covering six regions with a growing number of items beyond meatballs. He noted the most significant top-line impact from the Costco national buy is expected in Q4.

Nicholas Sherwood of Maxim Group asked about the incremental physician and hospital network gained from the SciVantage acquisition and the status of cross-selling efforts. He also questioned the reimbursement landscape for the Symmetry products and requested more details on the launch timeline for the upcoming Symmetry Plus system.

Answer

CEO Steven Foster explained that the acquisition provides both overlapping and incremental network access, and that cross-selling and training have already begun. He clarified that the SciVantage products utilize the same existing CPT reimbursement codes as Catamaran and are supported by their own prospective clinical data. Foster detailed that the Symmetry Plus system is slated for alpha surgeries in Q4 2025 (October timeframe), with a full commercial launch anticipated in early 2026 following a 2-3 month feedback period.

Nicholas Sherwood from Maxim Group asked about the expansion of the total addressable market from the new spinal fusion indication, the physician reaction to this approval, and the effectiveness of the company's targeted physician workshop strategy.

Answer

CEO Steven Foster explained that the new FDA clearance to augment spinal fusions significantly increases the addressable market by targeting thousands of complex spine procedures annually. He noted that physician reaction has been positive, as it addresses a well-known challenge in sacropelvic fixation. Foster believes existing SI joint fusion codes will apply. He also confirmed that a more targeted approach to physician training, including convenient in-clinic sessions, is improving engagement and adoption.

Nicholas Sherwood of Maxim Group questioned the impact of recent clinic sales on back-office expenses, potential restructuring costs, long-term savings from refranchising, and the methodology for testing prices under the new dynamic revenue management system.

Answer

CFO Scott Bowman explained that G&A reductions will be phased in carefully to ensure a smooth transition, with long-term savings expected from payroll, insurance, and other corporate overhead. CEO Sanjiv Razdan elaborated on the dynamic pricing strategy, stating it involves smaller, more frequent, and tested price adjustments in collaboration with franchisees, moving away from the infrequent, large-scale increases of the past.

Nicholas Sherwood inquired about the expected revenue contribution from the new Pop & Go product line, the state of customer relationships amid recent production challenges, and any customer concerns regarding potential education department budget cuts.

Answer

Executive Riccardo Delle Coste stated that while it is early for the Pop & Go line, positive feedback and active bids are factored into the 2025 guidance, which has potential upside. He acknowledged that production issues tested customer relationships but noted strong underlying demand, with a resolution expected by the end of Q2 2025. Regarding potential education budget cuts, Delle Coste reported no negative customer feedback and suggested some changes could even be a net positive.

Nicholas Sherwood of Maxim Group inquired about Milestone's strategy for balancing the growth of its sales pipeline with converting leads, the utilization and reorder rates for the CompuFlo system, and the key drivers behind the strong performance in International Dental sales.

Answer

CEO Jan Haverhals explained that the company focuses on simultaneously building the sales funnel and converting leads through a continuous process. He noted strong reordering patterns from early adopters, like Dr. Dinesman's clinic, and mentioned a new clinic immediately purchased a significant volume of consumables. Regarding international dental sales, Haverhals attributed the strong quarter to resolving previous logistics issues and underlying business growth, stating the goal is to surpass the previous year's Q4 sales.

Nicholas Sherwood from Maxim Group inquired about the operational timeline for the Lovell Government Services agreement, the current demand for PoNS therapy training among new physical therapists, and the company's strategy for ensuring adequate geographic coverage of trained therapists in the U.S. pending CMS reimbursement approval.

Answer

Executive Dane Andreeff, with a clarification from executive Jeff Mathiesen, explained that Helius expects to begin receiving prescriptions through the Lovell agreement around early June 2024, following necessary training. Andreeff noted that demand for physical therapist training has been 'steady and upwards' in both the U.S. and Canada, driven by commercial payer interest and existing patient inquiries. He added that upon securing CMS reimbursement, Helius plans to partner with regional physical therapy chains to rapidly expand its U.S. network.

Inquired about the long-term runway for AviClear's international expansion, the company's R&D innovation strategy, and requested more detail on the impact of GLP-1 drugs on the body contouring business.

Answer

The executive described a long runway for international expansion, with a gradual, multi-year rollout across different markets and territories. R&D efforts are focused on expanding the clinical applications of AviClear for new indications. Regarding GLP-1s, they acknowledged a near-term negative impact on the body contouring business but anticipate a future rebound as patients seek treatment for residual fat and skin laxity after weight loss.