Good morning, and welcome to the Aurora Spine second quarter 2024 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Chad Clouse, Chief Financial Officer. Please go ahead.
Good morning, everyone, and thank you for joining us for Aurora Spine Corporation's quarterly earnings conference call. We look forward to discussing our performance for the second quarter of 2024. Before we dive into the details, I'd like to remind everyone that this call will contain forward-looking statements. These statements involve risks and uncertainties, and actual results could differ materially. For a full discussion of these risks and uncertainties factors, you are encouraged to read Aurora Spine's documents on file with SEDAR+, including those set forth in periodic reports filed under the forward-looking statements and risk factors section. Statements made during the course of this call may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. These statements reflect current expectations concerning future events and results.
Words such as expect, intend, believe, may, will, should, could, anticipate, and similar expressions are words that are used to identify forward-looking statements, but their absence does not mean that a statement is not forward-looking. These statements are not guarantees of future performance and are subject to risks and uncertainties and other important factors that could cause actual performance or achievements to materially differ from those projected. Aurora Spine does not intend to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. On the call, management may refer to EBITDA, adjusted EBITDA, adjusted net income and adjusted EPS, which are not measures of financial performance under generally accepted accounting principles or GAAP. Management believes that these non-GAAP figures, in addition with other GAAP measures, provide meaningful supplemental information regarding the company's operational performance.
Investors should recognize that these non-GAAP figures may not be comparable to similarly titled measures of other companies. These measures should be considered in addition to and not as a substitute for superior or any measure of performance prepared in accordance with GAAP. A reconciliation of non-GAAP measures and the most directly comparable GAAP measures in accordance with Section or SEC Regulation G can be found in the company's earnings release. We're joined today by Trent Northcutt, our Chief Executive Officer, and myself, Chad Clouse, our Chief Financial Officer. We will present an overview of our financial performance, followed by a Q&A session. I will now turn the call over to Mr. Trent Northcutt, President and Chief Executive Officer of Aurora Spine. Trent, please proceed.
Thank you, Chad. Good morning, everyone. I'm pleased to share our results for the second quarter of twenty twenty-four, which is our pivotal period for Aurora, with notable progress in both our financial performance, the market, penetration. Our strategic focus on expanding the sales force and targeting underserved markets has yielded strong results as evidence of our significant sales growth and improved profitability. On Wednesday, we issued a press release detailing our financial results. Hopefully, you've had a chance to review the news release, but if not, a copy can be found on our website at auroraspine.com, under the investor section or other financial websites. I'd like to discuss some of the financial and operational highlights from the quarter.
We recorded revenue of $4.1 million, marking the third consecutive quarter of over $4 million in sales, which represents a 14% increase compared to Q2 2023 and a 24% increase year over year. The quarter benefited from strong demand in the pain market sector, particularly for the SiLO TFX and the ZIP 51 implant, driven by targeted marketing, training, and product innovation. Our net loss for the quarter was $0.15 million, significantly narrowing the net loss from $0.482 million in Q2 2023 to earnings per share of $0.00 in Q2 2024. Gross margins improved an impressive 62.4% in Q2 2024, in front of 56.9% in the same period last year.
The margin improvement is a direct result from the increased sales of proprietary products and the higher profitability, participating in markets with favorable pricing dynamics like ambulatory surgery centers. Operating expenses for Q2 2024 were $2.74 million, up from $2.51 million in Q2 2023. The rise in expenses was primarily due to the increased commission and travel associated with expanding our sales force, partially offset by reductions in research and development and professional fees. We generated $0.348 million in operating cash flow, reflecting a strong operational performance and effective working capital management from the management team. Notably, SiLO TFX grew by 20.4% from Q1 2024 to Q2 2024, reflecting the success of Aurora's expansion into the interventional pain market. The ZIP 51 has doubled in 2024 compared to 2023.
The robust growth was attributed to the intensified marketing efforts and increased adoption among surgeons. Aurora continues to scale its sales team throughout Q2, directly contributing to the sales surge. The additional and new sales professionals is expected to further drive growth as they onboard more surgeons and more customers for Aurora's ecosystems. The company maintained its commitment to excellence by conducting advanced training sessions, cadaver lab, and for top orthopedic, neuro, and pain interventional physicians, showing the clinical advantages of the ZIP, the SiLO implants. I'll now hand the call over to Chad Clouse for further discussion of the financials.
Thank you, Trent. I'll take you through some additional financial details. Sales for the six-month period of June, ended June 2024, were $8.05 million, up from $6.48 million in the comparable period of 2023, with a net loss of $0.42 million. It is significant increase from a net loss of $1.145 million in the comparable period of 2023. The decreased net loss is a combination of increased sales and cost controls while we continue to expand the sales force. EBITDA, a non-GAAP figure and a non-IFRS figure, measures, is defined as earnings before interest, tax, depreciation, amortization, stock-based compensation, was $0.11 million, compared to a loss of $0.16 million in Q2 of 2023. This marks the fourth consecutive quarter of positive EBITDA.
We ended the quarter with $0.52 million in cash and cash equivalents, up from $0.37 million at the end of Q1. This increase is due to strong operating cash flow and improving capital management. The net loss of $0.15 million was offset by a reduction in accounts receivable, prepaid assets and inventory, with an increase in accounts payable. The company has increased collection efforts, which can be seen by the reduction of the trade accounts receivable by approximately $300,000. Inventory levels have been steady, and the company has not had supplier delays in replenishing inventory. The company is currently manufacturing ZIP and TFX implants in our facilities, along with associated TFX instruments. The company invested $145,000 in instruments and trays in the current quarter.
These instruments will support the increased sales of Aurora's implants. The increase in accounts payable is nominal and a product of the increased business. Our related party loan was extended by another year and has a current balance of $2.6 million at the end of Q2. The company issued no shares during the quarter and recorded a $6,500 expense for stock-based compensation. Company issued 130,000 stock options, and 1 million options expired in Q2 2024. I'll now turn the discussion back to Trent.
Thank you, Chad. To summarize, we are very pleased with our performance from this quarter. Our strong results reflect the hard work of the team and our commitment to executing our strategy. We're optimistic about our growth prospects, and we're confident in our ability to deliver the value to our shareholders. Operator, we'll now take open calls on the floor.
We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question is from Tom Fedichin with MicroCap Connection. Please go ahead.
Hey, good morning, guys. Thanks for taking my call.
Good morning.
Nice to see that we had revenues close to $4 million , or actually over $4 million, two quarters in a row. I believe that's a company record for you guys, so congratulations there. The company's moving in the right direction.
Three quarters in a row. Three, three quarters in a row.
Wonderful. Yeah, no, there's definitely a trend here. So the year-over-year sales growth for TFX grew from $800,000 last year to $1.7 million this year. Can you speak to what's driving the sales increases? Is this from the addition, just strictly the addition of new doctors from these new director of sales? Or is this just a continuation of, you know, doctors increasing the usage? So, like, what's the average use per doctor per month, for example, for the SiLO TFX? And where do you see this going as we move into the latter half of this year, given we've got so many new sales directors brought on?
Yeah, so directly to the SiLO Allograft and also SiLO TFX is already. We've already shattered some records for the product. It continues to grow and expand even going into here into Q3. So it definitely is tied to doctors that were trained. We actually have coverage now in that region, that location, city, that state. We've added more people who can get on a plane or get in a car and drive and get those procedures covered, giving the doctor some support in the field, which was really important to us. Also, the training continued. People sometimes even came back for a second training because time had lapsed.
So we gave them more confidence that they were able to see that they could see the technique and that they weren't say the first ones from last year now to this year, because the revenues have really started to show strong TFX. Unit counts are going way, way up. We're even internally, you know, looking to build some more inventory on that. The cost of those kits is very low, so it's an easy deliverable for us, but getting more implants sold is a top priority, and getting more coverage is a top priority.
Yeah. How many kits or how many units per doctor do you use that as a metric, you know, are being used per month per doctor? Are you able to hit two yet on average per doctor that's trained?
I don't worry about it if it's if a doctor does one or if he does, you know, 10 in a month. You know, there's just gonna be those accounts that do, some do less and some do more. Our goal is to sell as many units as possible. You know, we first targeted, how do we get to the first 25 in a month? How do we get the first 50, 75, and then we're over 100 implants a month. You know, and now we're shooting for the goal of getting to the first, you know, 150, and then it'll be up to 200 and implants in a month, and then consistently hit those marks.
You know, I'm not gonna pull out a crystal ball and try to figure out if one doctor can do more or less in a month. There are certain doctors that are very consistent, and we're gonna keep finding those doctors that are the most consistent, but we're not gonna shy away from anyone who wants to use this once or twice in a month.
Perfect. So just to be clear, so you've surpassed 100 SiLO TFX unit implants per month. Has that been accomplished for one month, or is this kind of like a newly hit target that's just been hit? That's news to me that you're saying this, that's why I asked.
Yeah, it's a new trend for us. We're up and over the hundred mark, and we know that there we'll still feel some ebb and flows. It'll be higher, it'll be lower, but we know that it's now, it's trending every single month upwards.
And would you say that the average SiLO TFX is sold, it's returning for $9,000 per unit?
No. What's our, are we running the average on that now, Chad?
I think it's a little over $7,000 .
Okay. All righty.
And the other thing that comes up just on that is that, last year, the allograft was, you know, had gone second half of the year, had dropped off significantly. It's now between, you know, 6%-8% of our monthly number is in the allograft, where the, you know, the TFX is over 30% of the monthly number. But it's nice to see that the allograft number is back and adding on to revenues for the company.
No, no question. Now, for newer investors who are new to the story, can you speak to the size of the market of the SI joint space? And I only say this because you're hitting new record numbers and, like, where do you see this going in another year or two with the SiLO TFX? Do you think you can maintain this growth rate and potentially double sales year over year in the SiLO TFX?
I certainly think that the TFX will continue to grow. The market is based upon some of the SI-BONE market estimates out there in the ortho world and some other independent companies that put data out on the SI joint market. It's a very high number. They estimate that there's over 279,000 procedures performed. Now, that's a big number, and none of us are there yet. You know, SI-BONE owns 60% of the market, per their own words. But that means that the 40% of the market is people like us that are in that marketplace, starting to chip away at it and are moving our way up in units and customers. And our focus has been with ortho neuro and the interventional market.
We do have still have a blend of that. So the market's been evaluated per SI-BONE as over a $1 billion market estimate. So it's a very large opportunity for everyone involved in the SI joint space.
Yeah, incredible. No, that's awesome. Now, you brought on a number of new sales directors. How many new sales directors do you currently have, and how are sales from these members going?
Yeah, we have sales directors, Florida, Texas, Nevada, Illinois, Oregon, California, Arizona, all around the country. So we've got a total of 12 people, you know, selling in the field. We've added some additional, like more than one person, you know, in Texas. It's a big state. We've got what we call TMs, territory managers, where they act as, excuse me, as sales role, case coverage, and also in going out to try and get more sales in their area. But they don't travel as broad. Like, they don't. You know, they typically stay right around their area, like the lady we have in Utah.
She'll go back and forth to the border of Nevada and Utah, but up and all around between Salt Lake and the lower part of Southern Utah into the southern part of Nevada, so she can make those trips in her car to get that covered. Where our regional sales directors, they can live in Oregon, but they're going all over to Washington, Idaho, down to Northern California, Northern Nevada, and so forth, so they're traveling around on planes and trains and cars.
And we've got more people in the queue to bring in in areas that we need more coverage, and we think that'll have a big impact on sales because we actually have some sales in those areas. Our two VPs of the company, east and west, one lives in Illinois, the other one lives in Nevada. You know, they're traveling all over the place, covering cases, trying to identify those people to come up underneath as regional sales directors. Most notably, that we added to the company just here at the end of Q2, we added a new VP of spine, Ron Eccles. He's now joining us. He comes from big spine companies such as NuVasive and DePuy Spine.
His sole focus is to really put an impact on our spine sales, and he's already hit the ground running. We've already started seeing results from him, which is directly gonna be, contributing to the Q3 numbers, driving more spine sales.
That's fantastic. So, so when it comes to bringing on a new member, it takes time to train them and, of course, get them out in the field and have confidence to sell. You know, what's the expected timeframe from hiring to training to the point where you actually start to see sales show up on the earnings statement? You know, is it three to four months? Is that a good guesstimate?
Yeah, it's starting to come off a little bit of the four-month period, but yeah, it's between two and three full months that it takes them to get themselves ready. A lot of it has to do with the training part. They pick up pretty quick, and usually we identify people that already know the industry. They know a lot about the technique, you know, for an SI or an interlaminar fusion or what's a lumbar fusion, what's a cervical fusion. They already know some of these things.
It's getting to know our systems, and then the second part to that is getting out to their contact list and getting those appointments on the books, and then meeting and having those contacts, and then having that independent distributor or that particular doctor in that region, then working with them and then that hospital system to, one, make sure that we're already on the either the national contract or the regional contract or just that specific facility contract or that surgery center contract, and that sometimes adds some additional paperwork. So that process just by itself, that's thirty days easily, right when you're coming out the door, and then that second and third month is getting those patients scheduled on from the doctor onto our calendar, our surgical calendar, and that's usually the how it works.
Okay. Okay. And on a go-forward basis, after being fully trained, what's the anticipated annual revenues that you, you know, you set as a goal for each sales director? Would it be a million, million and a half? What's the expected results you expect to see on a go-forward basis?
Well over a million. Obviously, we set everyone with a quota, and you know, some people do as much as $300,000 in a month, and so that's much higher than say a million. You know, we're now towards a $3 million territory. Some people are right around that, you know, $85,000-$90,000 a month area, so now they are that million-dollar customer, but they're identifying more customers because they can they got the bandwidth to pick up more customers. But the first target, of course, is to get to that million-dollar mark and then take it above from there.
Perfect. And so far, you're finding your new sales directors are on the right path? Like, you don't see anyone that is slumping? Everything's going well there on that front?
Yeah. Well, we had more that just didn't hit the numbers, so we had to let them go. You know, we appreciated their efforts. Didn't work for us with that particular location. We're already looking to replace that area with somebody who we believe will be better for the company, and we shook hands with the other person, wished them well. Yeah, we've got a lot of people on the list, all above the million-dollar mark, as a trend in the monthly trend. So we're really pleased.
Fantastic.
People are really working hard. Yeah.
Awesome. Now, switching gears a little bit, can you speak about DEXA and how sales are going on this front? I did, I do understand you brought on a new team member, that's well-versed in the space. How's it going for both him, for you, and what can we expect moving forward?
DEXA still is my darling project, as you guys all know. It has spiked up this year. I still need more focus on it. Ron Eccles is putting a lot of focus on it. Part of the efforts on that is to get more distribution behind it, getting more people in front of it. We, you know, we just didn't have the focus on it. A lot of our sales management was focused on SiLO TFX and ZIP and that's why those sales, like, you know, ZIP 51 doubled this year so far, right?
So it's, that's where the focus has been. And Ron's job now, he joined us here the second half of Q2. He's already. We've already. I strongly believe that our Q1 sales will be beat in in Q, you know, in Q3. And you know, the product now is on its way to do $1 million this year, and more. And that'll then be a direct contribute to cervical sales, and then Lumbar sales that will be based on ortho and neurosurgeons using our newer devices. We also incorporated, it wasn't in a press release, it was more of a marketing release.
We've added more Lumbar products. It's called Osteo Onyx. I've put some posts out on it, and so has the team, marketing team. This is gonna start to show up here in Q3 and Q4 numbers as an add-on product, in line with our HYDRA system. So with HYDRA and Osteo Onyx, and DEXA, and Apollo, all that's gonna really snowball into, I think, improved and robust spine sales, spine specific, spine surgeon sales only. All focused on outpatient approaches, so it stays in line with our, you know, our philosophy of getting this more of an outpatient setting. But also some bigger construct procedures, you know, people that maybe have scoliosis, deformity, and some other, you know, traumatic injuries to the spine.
And this will also help embrace us, you know, with the spine and the ortho neurosurgeon, keeping all of us together and focused on training of the interventional doctors, in collaboration with the ortho and the neuro, and all of our training programs often have ortho and neuro at these trainings with the interventional doctors. So it's adding that continuity that we've always wanted, and I think we've done a good job of being thoughtful about the marketplace and being good stewards in the space.
Perfect. Well, and you hit on a couple topics there. You mentioned Lumbar. The DEXA-L, the DEXA Lumbar, when do we expect to see that? Is that gonna be rolled out in the second half, or is that gonna be a 2025 rollout?
It's been in the hands with the FDA for the approval of the device. We wanted to see more of that come out. We're close. That's all I can say. It's right there, but I don't have a crystal ball with the FDA.
Okay, no worries. And the second one was the HYDRA screws you mentioned on our last call. We could see the sales up to $100,000 a month, I believe it was. How's the HYDRA screws going, the sales of them?
HYDRA sales are not at $100 yet, but with Osteo Onyx, which is another screw, we are past, you know, screw sales are over $300,000 a month in sales as a total, and it's going to increase, you know, from there. Second half of this year, we'll see. It could double.
Wonderful. No, that's, that's great. Now on to ZIP, which you did just cover. The sales continue to impress. You know, what are your expectations moving forward? Do you see Aurora doing $1 million per quarter as you bring on more doctors, clinics, et cetera? Is that... was that attainable in 2024, or you think, 2025 for that?
I'm still bullish on getting to the first $5 million quarter. That's what our goal is right now, is obviously we wanted to get past, you know, maintain and have a sturdy floor beneath us, which is that $4 million plus club. But for us, hitting the $5 million a month is something that we're absolutely set after to get to, here. That way, we can really show everyone that we're way up and over a $20 million run rate, company and an over $20 million, you know, average as a company, and we're on that doorstep right now, especially going into the second half of the year.
Last year, you know, the ends of the coding reimbursement in the SI joint market were a big deal, and that's, you know, that when I say market, it's ortho, neuro, interventional, it's everyone. That coding reimbursement seems to be settling, and it has settled a bit. There's still some things that are still rumbling around in the reimbursement markets of SI Fusion, but there's been some things that have been talked about that would make it an even bigger market. And we'll have to see how that plays out. Right now, we're getting great results from the SiLO TFX. We're still continuously getting great results from the SiLO Allograft system.
And we have more and more interventional doctors that are revising old legacy non-fusion interspinous devices and replacing it with our interlaminar fusion device, the ZIP 51 . We are the gold standard, in our opinion, in L5-S1, the lowest part of your spine with the SiLO, I'm sorry, with the ZIP 51 implant. We see this constantly growing. Like I said, we've doubled sales on that, and I talked about that last year, how I was gonna put a big 51. So for those of all others, you know, that's something they could earmark on their, you know, on their schedule that says that, "Well, CEO said that they were gonna do something to support sales of that product, and we doubled it. So if we continue these trends, yeah.
Would you say that ZIP 51 sales, you could do $1 million in a quarter? Like, I know you're trending, I think you're at six seventy, was it? I don't know, six seventy or whatever the number was. I can't remember, but in the latest quarter. Do you feel you could do $1 million in a quarter from the ZIP products alone? Is that? I only say that because it seems to be trending. You've doubled your sales year over year, and you know, to double that again, you'd be at $1.3 million approximately. So is that attainable?
ZIP sales are already over. Or, in Q1, we ZIP sales were $1.6 million.
Referring to ZIP 51 , sorry.
Oh, ZIP 51 . Sorry. Yeah, ZIP 51 , well, ZIP 51 . No, it won't, but it was close. I mean, in Q2 here, we, you know, ZIP 51 sales were $669,000 in sales, and ZIP LP was $820.
Yeah, those are good numbers. Yeah. No, and, and I guess, from a standpoint of the company breaking out, like, you've had three quarters in a row around $4 million. When do you feel that Q3 is gonna be the month that you actually get a major breakout and you bust through, and you maybe get closer to $4.5-$5 million? Is that what you guys are targeting, especially now that-
100%
Will you be net earnings positive? I think every investor, you know, they look at EBITDA, and unfortunately, it just doesn't move the market. Net positive income is something that will move the market. So I guess will you be net positive earnings or show net positive earnings Q3, Q4? And I think the important question to ask is: Do you have the capital, enough cash on hand, to be able to see you through the tremendous growth that you're experiencing?
Yeah, we've focused, you know, deeply on making sure that we were running more operational-wise. We were focused on making sure that controlling the cost. You know, obviously, salespeople and headcount can be expensive, but that's really the con-
[crosstalk]
Tom, we're really close, as you can see. I mean, we've lost $1 million less this year through six months than we did last year. You know, it's right on the cusp, right? We've controlled our costs. We're with you know, if we get an increase in sales, we could probably see net positive income.
Mm-hmm. Yeah, well, I say this because I know you're close, and I know you've got more expenses with the additional sales directors, et cetera, and I know the market today, if you look at any microcaps, they're being rewarded for showing positive net income, and that's the reason why I ask this, because I know others are listening in on this call, and they want to hear kind of from the horse's mouth that profitability is something that management is very keen on, and that's important that is. And that's the reason why I asked.
The board wants to be profitable, and they've said it over and over again, and we've continued this year to control our costs while even while adding people to, you know, the sales force to increase their sales, and it's paying off. I mean, look, $1 million less in loss this year so far. You know, it takes. If we get two big quarters coming up, net positive income is a possibility, yes.
Okay. And you have enough cash on hand to reach profitability, no need to raise any additional capital?
I don't think we need to raise any additional capital.
I'll update you a little bit on what we've done recently is, I actually hired a support person who just collects money for the company. His whole job is collect money, and as you can see, our cash balance is up through from Q1 to Q2, and I think our cash balance will be up again through Q3. So, he's doing a very good job of collecting some older stuff. Lindsay sent me some details this morning. It shows our DSO is down twenty days, or I think it was twenty days, from quarter to quarter. So, we're collecting. We have cash in the bank. I don't think we're gonna be raising money.
Perfect. Perfect.
So there's no plans, and we're not talking to anyone about raising money.
Okay, good, good, good. And maybe you can dig into the accounts receivables since we're on the topic. I know you did have some older receivables. You've mentioned this in previous calls, that you have been collecting. Of the receivables that you have, you know, it appears as though most of those receivables are newer now. Can you elaborate on kind of like what your receivables look like, what the percentage of your receivables are, say, beyond ninety days and but are being paid, and what the expected payout is from a new client that you bring on, whether it be a doctor, clinic or what, so forth? You're expected to get paid in ninety days, but what's the average payment for most of these clients that you bring in?
Most of, so, we set all our bills at net thirty, some ask for net sixty or, or something like that. You know, our Days Sales Outstanding is, I think, 88 days right now. But, the majority of the customers pay in the 30- to 60-day range, so they'll pay us within 60 days of surgery, normally.
... Perfect. Perfect. Okay. And the older accounts receivables, percentage-wise, you know, of the total sum, is it a small proportion now? As I know, a year ago, it was quite a bit larger, but maybe you can elaborate on that.
Yeah, it's gone down significantly, even after the close of Q2, it's gone down even more significantly. So, I mean, I don't have the specific numbers in front of me, but, it's been a significant reduction in everything over ninety. You know, the sixty to ninety is way down because we're collecting, things aren't rolling from the thirty/sixty into the sixty/ninety anymore because we're collecting. Yeah, it's we're in a lot better place with our receivables right now.
Perfect. Perfect. No, I appreciate that. Back onto the business. The previous call, you had mentioned about doing performing surgeries through Veterans Affairs or selling into Veterans Affairs. How has that gone? Has further training occurred? Have you witnessed any sales during the quarter? Do you expect to see more sales as we go throughout the balance of the year?
Ask the question again, 'cause I kind of missed it. It skipped on my end, on my earpiece there.
Okay.
So ask me again. Sorry.
Sure, no problem. I was asking about Veterans Affairs, how sales were going, if you're still training with Veterans Affairs and what we can expect for the balance of the year through Veterans Affairs.
Yeah, we are. We, we've actually got our first, we got a bulk purchase from Navy Balboa, so San Diego. They put in their first order for multiple units. They have to get through those units, but yeah, we've already got. They're looking for, they went forward with the approval, bought a few implants, and now they're getting those patients scheduled on the books. And then they've already said, as they put in one implant, that they would, you know, then want to replenish and replenish. So this, we've gotten started there, and yes, there's more, VA facilities that we're close to getting approval in, and Navy Balboa is a big military hospital and some other military facilities, in the country.
We've done some surgeries, not a lot, but it's a process there. They move much slower, but once they get started, they're really great accounts, and we're optimistic about it, but it's hard for us to measure right now. We don't have a forecast built into it yet. We're just still trying to work through the process on it. It's contributing some decent numbers to the company.
Okay. And two more from me, and then I'll open up to the other members and whatnot. But is there anything that maybe you didn't mention, say for example, that you want to implement with the company, add or change as we move forward, whether that be new staff members that you still want to bring on? Or you know, is there anything of significance that we can expect as we move into the second half of the year from a staffing perspective, and so that can open doors?
Yeah, I think, I think with Ron and the more regional sales directors that are out there, new distribution channels are gonna be opened, so it's gonna expand us into some new areas that we're not in currently. And we're able to actually pick up a couple of some new distributors. Some of you may have read in the market Aesculap, which was a, you know, European company, is pulling out of the United States and sold off one of their major products, which was their disc replacement product. They sold it off to another spine company here in the U.S., so they're gonna cease operations in September.
And, we've already been in contact with those existing distributors that are here in the U.S. to take a closer look at Aurora's products, and we see that as an opportunity that could come our way. A couple of new distributors were not selling us, and they were selling Aesculap, now would look to sell our devices. And so there's some chances there that are opening. And, also, you know, the consistency of weekly sales in spine is a big focus of mine personally and Matt Colson and Ron Eccles is here in the Q3. And with Osteo Onyx and with HYDRA and with DEXA, that's gonna be one of our big goals, is to get those orthopedic, those neurosurgeons to utilize these products for us. I think you'll see a big jump and a spike in that category in the second half of the year.
Perfect. And last but not least, I think the one commonality I've heard from shareholders is they'd love to see you, whether it be at investor conferences or whether they would see you, even just getting interviewed, on a more regular basis. I know at the moment you don't have an IR team in place, maybe bringing in an IR team after reaching profitability. Is that something we can expect to see from you guys moving forward and maybe in the second half?
We were really close with Lytham Partners and Adam Lowensteiner. We, you know, still really close with them, and we don't, you know, we haven't been pursuing other IR firms because we have a good relationship with them. And, yeah, I have had some invites to participate at some events, and I'll look into getting out there and putting more out. I am gonna talk to I think it's was it Alpha Wolf, you know, in Las Vegas, and he does that video broadcast, and so I might do a second half of the year. We did a broadcast last year on that, so I might do another one of those, if he'll have me back. And want to get some more stuff out there.
We've really, as I know, and I know, Tom, you followed it a bit, is we've continuously keep our foot on the throttle for marketing and getting information out there on what we're doing as with our products. And more and more doctors are posting about us than ever before, and we see it in the analytics from Google and LinkedIn and Instagram, that we're, you know, we've added nearly a thousand more people following us just this year alone. So that's... Those are all steps and indicators in the right direction and getting as much of the word out there. I think that's something that we lacked on last year, and we improved on that this year, in multiple folds in that respect.
Perfect. Perfect. Thank you for taking my, my questions, guys. I appreciate it, and congratulations on a, a good quarter, and look forward to the second half.
Thank you.
Again, if you have a question, please press Star, then one. The next question is from Lindsay Leeds, a private investor. Please go ahead.
Hi. Congratulations on a strong Q2. Let's go back to the SiLO TFX average selling price quoted earlier in the call around a little over seven. Do you see continued pressure on that pricing, or are we reaching a point where we expect that to stabilize?
I think that price is stabilizing. Yeah, I think it's stabilizing. That's the question, and it was at such a high mark, how sustainable would it have been to stay there? I don't know what the other people are saying, you know, as far as our competitors, but I think that the price is now starting to settle, and we see that settle, you know, that price point because we're very focused on the outpatient surgery center. So it's a good collaboration with us and the members who own those surgery centers, that they're running a profitable business, they're getting a great product, something that fits well within that pattern of that surgery center. And so, sure, in certain locations, we'll get more. Certainly, government pricing higher.
Even the HCA facilities around the country, which is the largest in the country, you know, even their price point, is palatable to us because it's such a high volume, possibility of it. So yes, to answer your question straight, I think it's settling at that a good price point.
Okay. You talked earlier that ambulatory surgery centers, they help support your gross margin. Can you elaborate on that a little bit?
I think all of our procedures, you know, we're not a big trauma company. So trauma, you know, big surgeries should be at big hospitals, and if you're coming in for your elective SI fusion or your cervical fusion or your low back lumbar fusion, an outpatient setting might be best for you. And more doctors are opening up surgery centers than ever before. I think surgery centers constantly have been grown, growing up. You know, I'm not in the surgery center business of opening surgery centers, but the stats show me online that more surgery centers are opened up every year across the country. And I just think that that's the future, especially for elective procedures.
Okay. Any chance that you could give us kind of a mid-quarter update on where accounts receivable are, or would you rather not say?
Chad, that's on. Chad, go ahead, if you want to give him an update.
Collections are strong. I don't... I haven't looked at specific numbers in a couple of days, but what we were telling Tom earlier are over 90 days and way down from last year, like $800,000-$900,000. So our collections have been strong. In, you know, the beginning of Q3 here, our, or the person I hired to collect, he's actually was just in at the tail end of Q2, so most of his work and good work is going to show up in Q3.
Okay, awesome. Very happy to hear that.
You and me both.
That was, yeah, everybody was happy. The board, everybody was very happy with that. Yeah.
I guess, you know, I'm hoping that, let's say, reducing the accounts receivable maybe frees up another $500,000 or $1 million, as we're driving down the days sales outstanding. With that additional funding sitting on your balance sheet, is there any chance that you can ramp up your sales force growth? Or I guess I'm wondering, if we set a goal to double the sales force in the next year, what would be the hardest part? Would it be recruiting? Would it be financing it, or would it be training? I'd like to understand that.
... Well, recruiting, I think there's, you know, finding talented people is always a challenge, but it's also within our wheelhouse. It's not, it's not so far out of bounds. We also have, you know, contacts with great recruiting resources, people that, you know, do this for a living. We don't actually, we have contracts with people, but we're not paying anything on those contracts unless they actually place people for us. Most of this has been word of mouth and people who know each other in the industry. Financing them, obviously, we have a budget that we're running to, you know, tighter than ever than we've run in years past, making sure that we're...
Our goal was to be profitable and still remains to be that goal. So if it fits the model of the budget, then we add those people in. We offer fair compensation and great upside in sales commissions with the company so that the people who would want to join us could make a great living and have a real solid platform to work off of. You know, we're one of the rare interventional companies, especially the size that we are. It's actually a publicly traded company. We offer the full medical benefits and 401(k) and you know, cover expenses and all the things that people who are looking for a sales job are looking for, and we think we offer that.
We'll be able to fund it as long as it fits within our budget. If you know, the board's always said, if the sales are there, you know, we'll make it work to get the—what we need, the resources we need to add on, to continue to grow. You know, we're still targeting trying to get towards $20 million this year as a company and exceed that. Then where we land this year, we'll certainly set the mark and the budget mark for 2025.
Okay, awesome. So it sounds like maybe we have a shot at $5 million in Q3. It's not a slam dunk, but a window of opportunity?
Yes, not a slam dunk, but certainly what we've already done in the second half of the year has been quite strong. It's directly, you know, sprung off of. You know, we had to show growth in Q2. You know, that was our goal. We knew it. We said we must show growth. And not only did we show growth, but we also showed balance to make sure that we're, you know, we had some uptick, but that was because of hiring more salespeople, and we're going to continue to, you know, hire the right salespeople, but then hit a stride with that. I mean, certainly all who are on board with us, because we only departed with one person, and we added a person. So, those strides are being hit and it's already reflecting in Q3.
Okay. Thank you. I think that's, that's all the questions I have. Thank you so much, and congratulations on a strong quarter and trajectory here. I'm very pleased.
Thank you.
Thanks, Lindsay.
So are we.
This concludes our question and answer session. I would like to turn the conference back over to Trent Northcutt for any closing remarks.
Thank you. As I'm queuing up this again, sorry, I came, clicked off here. Yeah, I've lost the link here.
Okay. Well, we just wanted to summarize that we're pleased with our performance for the quarter. The strong results reflect the hard work of our team and the commitment of our executive management. We are optimistic about growth prospects and are confident that we'll be able to deliver value to the shareholders. And, so thank you, everybody.
Thank you, everybody.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.