Milestone Scientific Inc. (MLSS) Earnings Call Transcript

Thanks. Morning, everyone — I’m glad you could all be with us for Milestone Scientific’s conference call covering our monetary results for the third quarter of 2025. Joining us are Eric Hines, who serves as Chief Executive Officer, and Keisha Harcum, our Vice President of Finance at Milestone Scientific. Yesterday, after the market closed, the company put out a press release that included our third-quarter 2025 financial results; you can also find it posted on the company’s website. Should you have questions once this call ends, or if you’d like more details regarding the company, reach out to Crescendo Communications by calling 212 to 671 to 1020. Management will now deliver prepared remarks that go over the financial and operational results for the third quarter, which concluded on September 30th, 2025. Prior to beginning, we want to remind all of you that while speaking on this conference call, we might issue forward-looking statements about the timing and financial impact of Milestone’s capacity to carry out its business plan, anticipated revenue, and success in the future; such statements carry a variety of risks and uncertainties and rest on assumptions and evolving judgments concerning future economic, competitive, and market conditions as well as future business decisions, all of which are hard or impossible to forecast with accuracy, and many of which lie outside Milestone’s control. Among the significant factors that might lead actual results to diverge materially from what those forward-looking statements suggest are general economic conditions, a failure to achieve expected revenue growth, changes in our operating expenses, adverse patent rulings, FDA or legal developments, competitive pressures, changes in customer and market requirements and standards, and the risk factors detailed from time to time in Milestone’s periodic filings with the Securities and Exchange Commission, including without limitation Milestone’s report on Form 10-K for the year ended December 31, 2024, and Milestone’s report on Form 10-Q for the third quarter ended September 30, 2025. The forward-looking statements made during this call are based upon management’s reasonable belief as of today’s date, November 14th, 2025. Milestone undertakes no obligation to revise or update publicly any forward-looking statements for any reason. With that, we’ll now turn the call over to Eric Hines, CEO of Milestone Scientific. Please go ahead, Eric.

Thanks, David. Morning, everyone, and I appreciate each of you taking part in today's call. It means a lot that so many individuals have faith in Milestone Scientific, and we're moving forward. In Q3, we kept carrying out our blueprint to create a slimmer, more targeted company that can achieve lasting expansion and better earnings. Thanks to strict expense control and restructuring of operations, our operating costs came down by more than $500,000 versus the equivalent quarter a year ago, all while revenue held steady. What these figures show are the initial gains from our transformation plan, built on 3 key objectives: making operations more efficient and streamlining them, boosting commercial performance across both dental and medical, and pushing ahead with our reimbursement and payer efforts so CompuFlow is positioned for widespread use in pain management. Within dental, we achieved meaningful strides by growing direct sales initiatives across North America and moving forward on international registrations for our STA Single-Tooth Anesthesia System. We've additionally upgraded our omnichannel marketing strengths, and our increasingly mature e-commerce channel kept generating brand awareness and repeat customer involvement. Dental revenue abroad rose compared with a year earlier, helping to partly counterbalance the drop in US sales. Turning to medical, use of CompuFlow disposables ticked up modestly as we begin re-energizing existing customers, reassuring them of our even stronger commitment as we keep pursuing a structured, well-supported Medicare reimbursement approach; we're especially heartened by responses from top pain centers both in the US and abroad that rely on CompuFlow to boost precision, enhance safety, and build trust in epidural procedures. We further bolstered our team by bringing Dr. Dawood Syed onto our board of directors. Dr. Syed ranks among this country's leading authorities on interventional pain management and holds the role of division chief of pain medicine at the University of Kansas Medical Center. Adding him sharpens our clinical and payer know-how and backs our plan to speed up uptake inside hospital systems and integrated pain networks; at the same time, we keep pushing our reimbursement efforts for CompuFlow, and as we mentioned 3 months ago, the system has obtained Medicare payment rate assignments under CPT code 077T across 3 jurisdictions backed by Novitas and First Coast, covering heavily populated states such as New Jersey, Texas, and Florida. We're now leveraging that base, talking with more payers, and broadening our commercial coverage reach, which are vital moves for medical growth over the long haul; to wrap up, Q3 shows disciplined follow-through and real headway on our operational and commercial targets. We've become a more efficient company, our cost base is slimmer, and our strategic goals are tightly concentrated on expansion and profitability. I'd also like to mention that we hope all of you will follow us on Instagram, Facebook, and TikTok. Our Instagram handle is the.wan.sta. You can find us on Facebook at thewan.sta, and on TikTok we're at the.wan.sta. We keep investing a great deal of effort into our digital marketing approach across all channels, and we're confident this will help more folks get to know what our organization stands for. With that said, I'll hand things over to Keisha Harcum.

Thanks, Eric. For the quarter and the nine-month period that closed on September 30th, 2025, we brought in $2.4 million and $6.9 million in revenue, respectively, versus $2.5 million and $6.6 million during the equivalent stretch of 2024. Gross profit across the nine months that ended September 30, 2025, and 2024 came to roughly $4.9 million in both cases, which means there was no significant change from one year to the next. That steady performance was driven mainly by steady margins on our products, good control over manufacturing costs, and a sales mix that stayed balanced between domestic and international markets; SG&A costs for the three months and the nine months that closed September 30, 2025, came in at $2.7 million and $9 million, respectively. Research and development spending during that same window was $16,000 and $437,000, respectively. Operating expenses totaled roughly $1.1 million and $4.6 million for the three-month and nine-month periods that ended September 30, 2025, respectively. As of September 30, 2025, Milestone Scientific held cash and cash equivalents of about $1.3 million, along with working capital of roughly $3.1 million. That wraps up my financial review. I'll hand the call back to Eric now.

I appreciate that, Keisha. Going ahead, the mission stays straightforward: we need to run things effectively, increase our top line, and set Milestone Scientific up for sustained profitability over time. Our sales operations are being bolstered, the way we interact with customers is getting better, and we're pushing the CompuFlow commercial launch forward via collaborations, working with payers, and educating clinicians. Within dental, we keep drawing on the power of our brand and the ways our products stand apart to fuel expansion abroad and grow repeat business via our direct and e-commerce avenues. The strides achieved in so brief a period make me genuinely proud — cutting costs, bringing revenue to a steadier place, and laying the groundwork for growth down the road. What lies ahead involves executing with discipline, achieving operational excellence, and making sure we keep generating value for shareholders, customers, and patients around the globe. My gratitude goes out to each of you for being on this call, and the lines are now open for your questions.

Thanks. Eric, from what I can tell, you're putting a lot of emphasis on getting the business steady, and clearly that's a necessary step when someone first steps in. When it comes to the dental side, which still clearly accounts for the overwhelming majority of revenue, in the economic climate we're facing right now, dental offices and dental clinics have always been — at least in my own experience — quite hesitant about putting new capital to work or purchasing new equipment. What's your approach to persuading them that this product is something they truly need? And could you also discuss the clinics you're in at present — is there a target utilization rate, or some method to guarantee a particular level of utilization for your STA unit? Thanks.

Thanks, Anthony. Those are excellent questions. The dental business serves as the company's foundation, correct? When all is said and done, 80% or 90% or perhaps an even greater share of revenues is generated by the dental business. What we're discovering is that customers really fall into three tiers: low users, mid users, and high users, roughly speaking. We genuinely think a major issue for us in the broader marketplace is that, once we shifted to the direct sales e-commerce model, many customers got the impression we had more or less shut down and knew very little about who we are. We're devoting substantial time to genuinely reconnecting with former customers who may have believed we no longer existed, but even more importantly, we're really beginning to grow our digital marketing so we can reach additional dentists. Frequently, when dentists hear from us — whether in my own hometown or when Jason talks with them in Dallas — they aren't even aware of the company or of The Wand at all. Given that we hold 1.5%-2% of the market share domestically, and roughly the same amount internationally, we figure it's largely a matter of spreading awareness and truly communicating to people what The Wand's advantages are. Then there's the other side — education, correct? Getting the low-end users to become high-end users. Usually, we observe that high-end users spend roughly $2,500-$3,000 annually with us on disposables. We have to get the rest of them heading in that same direction. Because of what the unit is called — the STA, or single-tooth anesthesia — what we've come to understand is that plenty of people aren't using it for all the remaining injection types. As I believe most people on this call are aware, The Wand is capable of performing every injection type a dentist requires while running their clinic. We truly must improve at teaching the low and mid-tier users so they grasp this, and so it becomes obvious that The Wand works for far more procedures than single tooth alone. I'm not sure whether that answers your question, Anthony, but let me know.

Yeah, no, that's excellent. Right now there's a real push to boost how much The Wand gets used among clinics that already have it, plus to spread awareness. As you mentioned, the potential is enormous since penetration remains low at present, despite the fact that it represents most of your revenue; on the medical side, perhaps you chose to concentrate again on the clinics currently employing it and to grow that foundation ahead of wider commercialization. Could you update us on where things stand with that renewed focus, and then what the roadmap looks like for broader commercialization? Will that happen during this quarter, or does it lean more toward being a 2026 objective?

That's another solid question, Anthony. Allow me to add one more point regarding the dental side. Jason presented me with 11 objectives for the dental business going forward from a sales standpoint. Together with education and similar efforts, we have goals to pursue certain dental schools. We have the DSOs included in that blend. We have digital marketing aimed at existing customers. We have lists from our former distributors that we're now beginning to work through and hold conversations with those people; it amounts to a multi-tiered program on the dental side targeting 10 or 11 distinct objectives, DSOs among them. To address your CompuFlow question, and as I mentioned during the previous conference call, my impression upon entering this role was that we had many initiatives pulling in many directions. Essentially, the strategy now is to direct our efforts toward a limited number of states, a limited number of jurisdictions, but more crucially, to establish the proper structure to assist physicians once they begin using CompuFlow. Even more crucially, it involves gathering data in an extremely rigorous manner so we can present it to the Medicare people regarding reimbursement. We also intend to pursue the commercial aspect of that equation. In parallel with Medicare, we also intend to examine at least one, perhaps a couple, of the commercial payers to determine whether we can gain some momentum there too. While all of that is underway, we'll begin to take on perhaps one additional jurisdiction. Once more, the strategy is to remain as focused as we can. I'm somewhat restraining things until we complete a proper assessment of the business case, or the value proposition, for pain management. As you remember, we initially went down the labor and delivery path before pivoting toward pain management. I want to ensure we have a clear message for the pain management clinics, since the value proposition differs somewhat from labor and delivery, where fluoroscopy isn't utilized.

All right, excellent. I just want to confirm — we're concentrating on the territories in Texas, Florida, and New Jersey, is that right?

That's right. The two MACs backing those three territories are Novitas and First Coast.

It might be premature to comment, yet regarding the schedule — you mentioned gathering that data, coordinating with Medicare, and confirming reimbursement details. Would that take 6 to 12 months, or where do things stand right now concerning your outlook for when wider commercialization will begin? Can you provide any clarity on that currently?

Yes, so broad adoption is difficult, though we intend to relaunch the program within the coming handful of weeks. We're conducting substantial due diligence quietly with individuals possessing considerable expertise in that field; and we're preparing ourselves to be positioned to re-roll out CompuFlow. The sooner we gather data, the faster we can move toward a bigger commercial rollout. Once more, we simply must be — I don't have an issue with people wanting to use it. The greater issue is ensuring those who begin using it send the correct information back to Medicare.

All right, that makes sense. I appreciate you taking the time. I’ll jump back on with you shortly. Thank you.

Thank you, Anthony.

Hello, and good morning. I appreciate you taking my question. I'd like to briefly address the tariffs. During the prior quarter, you mentioned that regarding your supply chain, you were in a fairly solid position. Inventory was held in the States, and for international accounts, kits are shipped from China. Has anything shifted on that front over the course of this quarter? And second, when it comes to international customers, has the present situation caused them to alter how they make purchases?

That's a solid question. Thank you, Bruce. When it comes to the tariffs, honestly, the impact we're experiencing is minimal. As you pointed out, we have the capability to ship internationally out of China in order to sidestep that, plus ample supply in North America to serve our business in this region. The impact we're seeing is not particularly significant. On the matter of altered behavior, we would prefer to see additional customers placing orders originating from China. It's come in somewhat weaker than we'd hoped. We're looking into possibly establishing a bonded warehouse in the U.S. should the tariffs keep lingering, which would let us ship from the U.S. and/or China. The tariffs aren't really producing a massive impact for us.