Milestone Scientific Inc. (MLSS) Earnings Call Transcript
August 14, 2026
Earnings Call Speaker Segments
Thanks, operator. I want to flag before we get started that forward-looking statements will be part of today's call, as defined under the Private Securities Litigation Reform Act of 1995. Risks and uncertainties apply to those statements, and they could make actual results come in materially different from what has been projected. For a discussion of these risks, please look at our earnings release and our SEC filings, which include our 2025 Form 10-K. Shortly after this call ends, a replay will be made available. Having said that, I'll hand things over to Eric Hines, our CEO.
Thanks, James, and good morning, everyone — appreciate you being on the call with us today. The results we posted for the second quarter show we're still carrying out the strategy introduced at the beginning of the year, keeping costs under tight control and directing investment toward the opportunities with the greatest growth potential. Revenue on a total basis came to $2.8 million for Q2, which is 22% higher than the same period in 2025, and that puts our revenue for the first six months at $5 million, up almost 10% versus a year ago. Our base business turned in a strong performance, adding $2.4 million during the quarter, with roughly $500,000 of additional upside coming from orders placed internationally. Within the Medical business, momentum keeps building for CompuFlo, as revenue for the Medical segment rose 231% against the second quarter of last year. Medical is still expanding off a small base, but the value proposition of this technology is genuinely being validated, and we're continuing to scale the CompuFlo Advisor Program that we launched in February, bringing on more physician advisors and broadening procedural use across additional Milestone Administrative Contractor jurisdictions as well as commercial payers. When it comes to reimbursement, our healthcare providers are submitting claims actively and have seen favorable payment outcomes from Medicare in the Novitas and First Coast jurisdictions, and also from commercial payers, including personal injury protection and workers' compensation plans. At present we have $325 payments established under the Novitas and First Coast fee schedules, covering three regions and 13 states, and we're still pursuing the remaining MACs. Together with our three distribution partners in these areas, we intend to start launching direct sales efforts in each region right away. We also hit a significant milestone this quarter with third-party validation, after a peer-reviewed study from the University of Texas Medical Branch was published in Operative Neurosurgery, linking CompuFlo-guided epidural access during spinal cord stimulator implantation to a 91% reduction in the odds of composite complications. This compelling evidence strengthens CompuFlo's differentiated value proposition and backs the growing acceptance among physicians and expanded utilization across critical spinal and epidural procedures, such as epidural steroid injections, spinal cord stimulator implantation, obstetric epidurals, thoracic and cervical epidurals, neuromodulation therapies, and surgical epidural anesthesia. To date, CompuFlo has been evaluated or utilized at more than 40 universities, academic medical centers, and teaching hospitals around the world. After the quarter closed, we broadened the addressable market for CompuFlo through a strategic distribution agreement with Red One Medical, a well-established federal healthcare distributor, to bring CompuFlo to the U.S. Department of Veterans Affairs, Department of Defense Health Agency, Indian Health Service, and other federal healthcare organizations, systems that together serve over 18 million enrolled veterans and military beneficiaries. We think this partnership provides an efficient pathway into one of the biggest and most strategically important healthcare markets in the country. On the Dental side, we brought on a new national distribution partner to widen our sales network and complement our e-commerce business, and we're continuing to grow our international footprint, with a recent registration approval in Uzbekistan and further registrations targeted in Japan, Mexico, Turkey, and India over the coming quarters. This quarter, we kicked off the initial stage of our AI plan as well, with Milo making its pilot debut — that's our digital engagement platform powered by AI — at the ASPN 2026 conference over in Miami Beach. Milo's purpose is to respond to product inquiries, deliver educational content, assist with qualifying leads, and link healthcare professionals up with our sales, clinical, and customer support groups, which lets us interact with prospective customers whenever it suits them, and we think that opens up a significant opportunity with small commercial teams. ASPN proved solid on the commercial side too, bringing in over 40 qualified leads, and it's where we introduced our #NoWetTaps campaign, which builds on the complication reduction data we're observing with CompuFlo; on the governance front, our board of directors got stronger, with Benedetta Casamento moving from chair to executive chair, plus two new independent directors joining, Greg Shilling and Kelly Ann Ulto, who add further expertise in healthcare, technology, finance, and governance. As for our capital position, we're still running off the $2.51 million private placement that closed in April. At present we have no plans to raise more capital, and we keep assessing incremental sources such as our net operating loss carryforwards and R&D tax credits programs, while staying committed to funding the business through the disciplined execution that has substantially reduced our losses over the last year; we're reaffirming our 2026 guidance of $9.8 million to $10.2 million in total revenue, which means double-digit growth for the year, with CompuFlo anticipated to expand at a quicker pace than the business overall through the rest of 2026. I do want to frame expectations properly for the third quarter. Two large international orders lifted our second quarter, and we don't anticipate those repeating in the third quarter, and because of the summer months, the third quarter tends to be seasonally slower for us. Please bear that in mind when you model the quarter. With that said, we expect our medical initiatives — among them our growing Medicare reimbursement footprint and the direct sales launch we're now undertaking together with our distribution partners — to keep building and to add more meaningfully in the second half of the year; we'll share more detail on the trajectory when we report third-quarter results in November. I'll hand the call over to Keisha now to go through our financials. Keisha?
Thanks, Eric, and good morning to all of you. During the quarter that closed on June 30, 2026, we brought in total revenue of $2.8 million, versus roughly $2.3 million during the matching stretch of 2025, which works out to a gain of about $518,000, or 22%. Growth in Dental product sales, along with the fact that our medical products remain in the early stages of commercial adoption, drove that rise in total net sales. For the quarter that closed on June 30, 2026, gross profit came to $1.9 million, up from $1.6 million a year earlier. Gross margin stood at 67.2% for the quarter that closed on June 30, 2026, versus 69.6% during the comparable stretch. Product and customer mix, plus higher product costs—among them tariffs levied on certain imported products and components—were the main reasons for that margin decline. Greater sales volume in the current period partly counterbalanced those cost pressures. Operating expenses fell by roughly $500,000, or 4.2%, landing at about $3 million for the quarter that closed on June 30, 2026, against roughly $3.1 million for the quarter that closed on June 30, 2025. That drop stemmed largely from reduced quality and regulatory expenses, consulting, professional fees, research and development, rent, occupational costs, and other segments. Net loss came to $1.1 million, or $0.01 per share, versus a net loss of $1.5 million. Across the six months that closed on June 30, 2026 and 2025, total revenue reached $5 million and $4.6 million, respectively, a gain of $447,000, or 9.8%. Gross profit for the six months that closed on June 30, 2026, was $3.5 million, or 69.4% of revenue, against $3.3 million, or 71% of revenue. Operating expenses declined by about $1.4 million, or 20%, to roughly $5.4 million for the six months that closed on June 30, 2026, versus about $6.7 million for the six months that closed on June 30, 2025. Net loss-
Did we lose you, Keisha?
Right, my apologies for that — the call dropped. On June 30, 2026, we held $2.1 million in cash and cash equivalents, working capital stood at $3.7 million, and convertible debt still outstanding totaled $466,000. With that, I'll hand things back to Eric.
Okay, thank you, Keisha. First off, I'd really like to express my appreciation to everybody who sent congratulations regarding my one-year anniversary, which fell on August 1, 2026. I'm grateful to all of you who got in touch with me. Regarding the business, what I can tell you is that things look completely opposite — 180 degrees — from the situation back when I came on board, and I mention that because we've brought in many excellent team members, we're accomplishing many excellent things, and many excellent initiatives have been put in place. Before I hand things over, let me just say this to everyone on this group: thank you for holding shares, thank you for your interest in Milestone, and thank you for standing behind us. Above all, I believe the finest parts of our story still lie in front of us. I appreciate it, and at this point we'll open the line for questions.
Morning, and thanks for the chance to ask a few things — nice work on the quarter. One thing I'd like to get straight from the press release: at this point, what number of MACs do you have where reimbursement is already set up? Should we expect you to bring on additional ones, and if so, on what timeline?
Right now there are 2 MACs — Novitas and First Coast — and together they handle 3 jurisdictions and 13 states. Over time, additional MACs will be brought on. At the moment we're collaborating quite closely with Palmetto, and after that we'll head somewhat westward and begin bringing on CGS Administrators, WPS Health Solutions, and Noridian Healthcare Solutions. So today it's 2, spanning 3 jurisdictions across 13 states, which works out to roughly 30%-35% of the population.
Alright, that's helpful. I'd like to get some clarity regarding the sales guide for Q3. I understand it will decline on a sequential basis, but I'm trying to work out the size of that drop relative to the second quarter.
As things stand, our projection — and I'll repeat what I've said before — falls somewhere between $2.3 million and $2.5 million, and that's the range I would give you.
Alright, the final thing I'd like to ask about is that study referenced in the press release, the one showing CompuFlo lowered composite complications — I found that quite interesting. Could you talk a bit about the reason behind that?
It really comes down to how many, I suppose, insertions they sometimes need to perform. Take the precision we provide with CompuFlo, for example — it lets them be far more exact regarding the spot where the implant goes in. Frequently they'll need several sticks, so to speak, that must be done using a traditional LOR syringe. Within that study, when CompuFlo was used, they managed to cut missteps, or misplacement, by substantial amounts.
Alright, that's all I had. Appreciate it.
Thank you, Bruce.
Hi there. Thanks for letting me ask. My first one concerns the Advisor Program. When you last gave us an update back in 1Q, the figure was 8 physician partners who were active, plus 6 that were still pending. I would just like to know if you can bring us current, and apologies if this was covered before in the prepared remarks, but I am wondering where things stand right now.
Sure, a handful of additional ones have come on. My guess is that we are at 10 or 11 now; at this moment we are not really bringing on additional advisors in an active way, since our aim is to get — our focus is on claim submission. Reimbursement is genuinely driven by that claim submission. Since we have now largely finished that effort with Novitas and First Coast, our attention is shifting toward other MACs. The purpose behind establishing the Advisor Program was to have people using the product, beginning to submit claims, obtaining feedback, and restoring Medicare reimbursement; at this point we are moving into Palmetto and, out west, a few of the remaining MACs, where we will begin bringing advisors on in those regions. Scale holds us back somewhat. Right now just a couple of individuals are working on the medical side. Over the coming several weeks that is set to change fairly dramatically. Even so, the capacity of the staff is what constrains us.
Got it. Thanks for the detail there. Moving on to the next one. Looking back at 1Q again, you shared some positive developments around the digital marketing campaign. It was bringing in 20 to 30 leads each week. I'd like to know whether that pace held up through 2Q, and also what the conversion rate looked like for those Q1 leads.
Right. Things have gone very well with that campaign, and we're now seeing somewhere in the range of 150 to 200 leads every month. We're basically maxed out on capacity, honestly. That's the reason we rolled out Milo — an AI bot designed to help work through some of those leads while calls are happening, since we simply lack the manpower to follow up, to be blunt. Lead volume keeps climbing, to the point where more staff are needed to manage them. Actually, we're about to add two more people whose sole job will be handling lead follow-up, because these campaigns have created so much demand that we've got to figure out a smarter way to stay on top of it. Milo is one piece of that, and resources are the other. Versus Q1, lead flow remains at least as strong, maybe stronger, particularly since we've now folded medical into that cadence. It isn't only Dental leads anymore — there are hundreds of medical leads too, and that includes the fantastic turnout we had at ASPN, where I'd say our booth drew more attendees than any other at the whole event. Leads are definitely not an issue for us.
Understood. For my last question, I want to ask about that distribution deal with Red One Medical. I'm hoping you can explain how it's put together. Does this arrangement include any required buying or inventory levels? If the initial shipment hasn't gone out yet, what does the contracting process look like involving the VA and the DoD? Has everything already been approved, or will you need to work out deals separately for every channel—or should I say, every sub-channel?
No, it's going to sit on the price schedule. The FSS schedule is where it'll be, and that's something we're continuing to work on. Red One and we have the agreement finalized. No minimums are required. You're likely aware that within the veteran community, they're a highly recognized national brand. Right from the start, we're going after business. That said, we're still waiting on certain details to get added onto the FSS schedule. After that's done, purchases will happen through that schedule rather than us negotiating with every agency one by one.
Sure. Just so we're clear, I get that this kind of thing can drag on somewhat, like anything involving the government. I was just wondering, from your side, what sort of timeline are you considering for getting through that first — I suppose it's logistical or contracting-related — effort and moving over to orders?
Yeah. We're aiming to start accepting orders in Q4.
Okay.
So.
Okay, that's helpful context. I'll drop off the queue now.
Sounds good.
Hello, John.
Morning, Eric. Great to be speaking with you today. During your remarks, you mentioned that this organization is 180 degrees different from what it was 12 months back. Congrats on completing your one year. Even if you hadn't mentioned it, I definitely picked up that impression while going through the quarterly report I just wrapped up; it is hands down the most thorough and encouraging quarterly report I've ever seen come out of Milestone. I genuinely sense we're gaining some momentum with Milestone, and your capacity to expand this business gives me a lot of hope. I've got one inquiry about Red One Medical and any distributor; previously, particularly with the Dental side, distributors would be brought on, and that would be the extent of it, just the distributor. Nothing ever came of it. What does a distributor agreement entail, what is their role? Are they selling? Or do they merely facilitate? With any distributorship you have anywhere, whether domestic or international, what kind of arrangement do you have with them and from them?
Pricing is controlled by us when it comes to distributors, unlike some other approaches to market where they're permitted to offer discounts up to a certain threshold. We want to ensure we have cost control as, I suppose, a baseline; after that, they clearly earn points on the sales. The distributors, as they'll operate for us, say in Florida, will serve not just as extra feet on the street, but they bring substantial technical expertise. Once again, we're somewhat limited from a resource standpoint. In certain situations, the distributors will function as our clinical specialists. In other situations, they'll function as our salespeople. Beyond that, we'll have some hunters in Florida, and we'll also have what you might call a strategic rep who will oversee that entire group. We'll have a strong medical technology salesperson who will collaborate with the distributors, collaborate with the hunting team, and sort of pursue the business in, say, the state of Florida; after that, we'll rinse and repeat and do the same in New Jersey, Pennsylvania, and Texas over the next handful of months. In each state, we'll have multiple distributors. We're not going to rely on just one single distributor. For instance, we might have two or three different distributors covering various parts of Florida, west, east, and north Florida. That provides us with technical expertise, feet on the street, and then having a single point of contact or two who are actually Milestone employees overseeing that and being compensated for the efficacy of the distributorships as well as their own sales.
Great.
Hope that makes sense.
Eric, I really appreciate it, and I hope everything goes well for you from here on.
John, thank you.
Hi there, Gary.
Good morning to you, chief. How are things with you?
Things are going well for me.
I wish you would stop scheduling these calls at such an early hour for me. Let me just congratulate you on how things stand now compared with how they stood 1 year ago when you took over this difficult situation. My apologies for not acknowledging your anniversary. I believe I was occupied attempting to bring some reps on board for you. In any case, I thought the report was excellent. It seems to me we are headed the right way. Some investors who, like me, have held positions for a long time — and I have heard comments from others as well — are asking whether you could get Eric to say a bit more about our current position compared with where things stood precisely 2 years ago at the ASPN meeting, which is also when Medicare approval first came through. The prior management — I will not name him, since it might make me ill — received that and did nothing; reimbursement came, yet nothing followed through. I believe a major change is underway now, since clearly you and we recognize how important it is that, having secured that, we must move forward with that code and begin filing. I understand we are already filing cases with First Coast here in Florida, which naturally is where I am and what I care about. Do we actually have a group, or that group, in Tampa? I believe there were some individuals in Tampa who were really instrumental in helping us refile the cases we required so that Evelyn could help restore us to the position we now occupy, where we can run with the ball. From where you sit, what is different? Because I know you were also present during that period alongside Arjan. How do you see our situation now compared with how it was then? A lot of people, I think, are eager to know that we finally have it. We are going to get this finished. Could you illuminate what you believe accounts for the difference?
Yeah. I do not truly know precisely what took place before. Back then I was a shareholder, as all of us were, but I did not devote much attention — though enough to grasp that things did not appear to be heading the right way. What I think is different today is that we have proceeded somewhat more systematically. We have, I suppose, at times moved a bit — people sometimes say you must go slower in order to go faster. That is something I firmly believe. We have established things such as reimbursement teams to assist the medical offices in pursuing the claims; that is a substantial help. At present we are assembling a team in the state of Florida, and it will consist of 4 or 5 individuals whose sole focus is going after the CompuFlo business, approaching it in a far more methodical manner. Honestly, what this really comes down to is that we aren't simply going to spray and pray, crossing our fingers while scattering CompuFlo everywhere across the globe. What matters here is focus — staying focused, doing things properly, and making sure the correct systems and processes are established, after which we duplicate that approach throughout the remaining parts of the country. Until we've demonstrated substantial success in Florida, I wouldn't expect us to charge ahead at full force, continually adding MACs. Naturally, we will expand into the Novitas regions, covering Texas along with Pennsylvania and New Jersey. Even so, our approach will be methodical. We'll carry it out with proper programs in place that back up the offices and the office managers. It's somewhat understated, I suppose, but the idea is to move a bit more slowly so that we're able to speed up once a critical mass is reached.
On that same topic, Eric, will we have designated staff members trained to visit places like — you know, I'm located in Southeast Florida, and everyone here is eager about the launch of this product. Will there be a support representative or representatives who travel here to teach the office team how these claims should be filed? Since, if I understand correctly, there needs to be some justification involving the physician's use of CompuFlo, say, in a particularly challenging cervical case. This is an older patient suffering from significant arthritis. Some documentation must accompany that claim, right?
Yes, there does, correct? What I mean is, proper coding is required, with every detail handled carefully; that's genuinely a strong suggestion. I've just noted it down — offering some training. We have Evelyn and all her colleagues at a new firm named Omnicare, which possesses a great deal of resources, and their whole business revolves around securing product approvals and navigating that entire process. I wrote that idea down, and I believe it makes perfect sense, since we already do a bit of this, though we likely should expand those efforts.
Yeah, I'd say so, since when our reps walk in and land that account, the physician is eager to use it, we bring it on board, receive an order, and begin utilizing it. But if that rep then has to pause and spend his time instructing the office personnel or the billing team, that will drag out the sales cycle. When we've got that support person backing us up on the things you just mentioned — the billing, the claims, and getting those folks trained — number one, they'll be reimbursed much faster, they'll file everything properly, and we'll obtain whatever we require in terms of tracking so these cases can be followed.
100%. We see it the same way.
That's good, I think. There was another thing I wanted to ask, but at this point we have a group over in Tampa. The people who gave us a hand are still submitting, right? We still have users — ordinary users who assisted us in getting through that period — and those folks continue to submit cases.
That's right.
That matters, doesn’t it? We have to keep it moving.
Absolutely.
Hold on a moment. Regarding that order worth $500,000 from overseas, was it, incidentally, a sizable Dental order that arrived?
Yes.
All right, so as you just mentioned, we don’t actually expect that to repeat during this quarter.
No, not as things stand right now; it was a one-off.
Okay, so I realize the time here is 9:00, and, well, once more, congratulations. My sense is that many of us — actually, the majority of us — are quite thrilled about the progress you've made. It seems to me you're assembling a solid team. Jason and Josh are putting in serious effort. Down in Florida, Josh is performing really well. From what I've been told, we may soon have a new person in Florida, which would be wonderful for getting us moving. After all, this territory is the largest one in the entire country, my friend. So if we manage to get it going, I believe we'll be sitting pretty.
Gary, we're grateful for your backing.
All right, pal. Thank you.
Yes.
Okay, once more, I appreciate all of you. That was a solid quarter. Our intention is to deliver additional solid quarters; that is the objective. I am extremely grateful for your backing throughout this journey. We will reach out to you. Thanks. Enjoy the rest of your day.
That brings us to the end of today's call. At this point, feel free to drop off your lines. We appreciate you taking part.
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