Company: MDXG
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001376339-25-000009
Chunk: 133

Company: MIMEDX GROUP, INC.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7
Chunk 133
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 discuss certain performance metrics that management uses to assess the Company's performance.

Our Annual Report for the year ended December 31, 2023 (the “2023 Annual Report”) includes a discussion and analysis of our total company financial condition and results of operations for 2023 compared to 2022 in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations. 

Components of and Key Factors Influencing Our Results of Continuing Operations

In assessing the performance of our business, we consider a variety of performance and financial measures. We believe the items discussed below provide insight into the factors that affect these key measures.

Net sales

Our net sales are derived from selling to a wide range of customers, including hospitals, wound care centers and private physician offices that have clinicians using our suite of products to aid in the management of patients with chronic or hard-to-heal wounds. These customers choose products like ours based upon a variety of factors, including clinical efficacy, availability, handling characteristics, and reimbursement coverage and payer sources. Net sales are recognized based on the consideration we expect to receive from the sale at the point in time when control of the goods is transferred to the customer, which generally occurs upon our delivery to a third-party carrier or implantation for consignment arrangements. Net sales consists of the gross selling price of the product, less any discounts, rebates and other customer incentives, fees paid to GPOs, and returns.

Cost of goods sold and gross profit

Cost of goods sold includes product testing costs, quality assurance costs, personnel costs, manufacturing costs, raw materials and product costs, depreciation and facility costs associated with our manufacturing and warehouse facilities. Fluctuations in our cost of goods sold correspond with the fluctuations in these costs as well as sales volume.

Gross profit is calculated as net sales less cost of goods sold. Gross margin is calculated as gross profit divided by net sales. Our gross margin is affected by product and geographic sales mix, realized pricing of our products, the efficiency of our manufacturing operations and the costs of materials used to make our products. Regulatory actions, including with respect to reimbursement for our products, may require costly expenditures or result in pricing pressure, and may decrease our gross profit and gross margin.

Selling, general and administrative expense

Selling, general and administrative expense consists of both selling and marketing (“S&M”) and general and administrative (“G&A”) expenses. S&M includes costs to execute our sales strategy, which includes personnel costs pertaining to our sales force and sales support functions,