IDXG - Earnings call transcript Q1 2020 | Interpace Biosciences, Inc.

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Operator

Greetings, and welcome to Interpace Biosciences First Quarter Financial and Business Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

As a reminder, this conference is being recorded and will be available on the Interpace website at www.interpace.com.

During this call, the company will make forward-looking statements. any is is a that of a you fact historical forward-looking caution statement not that statement We statement. This financial includes projections, company's expectations, plans, remarks beliefs and about the prospects. the on subject in are numerous the those results important that analysis are to call, uncertainties to judgment and forward-looking cause statements the conference statements. based as These described of could date risks differ of and from and actual materially in uncertainties on associated as conference with the Safe which made today's statements in the with discussions described periodic Interpace filings, well and the forward-looking call including in in statements. earnings are XXXX, in section includes in the the XX-K risks Factor forward-looking our the public as filed statement on Harbor SEC discussion XX, section These release, Risk Form the Biosciences's April investors Investors carefully consider these and risks. read or potential should update assumes intend events and actual no outcomes obligation Biosciences Interpace forward-looking so. to future reflect statements or do not to does these to

non-GAAP generally or supplement non-GAAP Jack which addition, Stover. accounting information turn it’s Biosciences, information. meaningful information in GAAP earnings reconciling over provides included to release, call believe company's that A helpful the assessing performance. GAAP provided the to have the supplemental accepted non-GAAP a in I'd In numbers, now company's information CEO and and will Interpace of this we the table on available to be is website. maybe like We the the the information President principle

Jack Stover

update. provide all our business quarter Fred I on and thank general first Thank afternoon. you, and will progress Diego, for joining you this us and financial focus a

we will that, open Following questions. call for the

the revenue $X.X range. previously of was our end revenue top quarter million and near First announced

and grow quarter, we first services businesses. the to our During clinical continued pharma

was March. business services the half pandemic second by of in impacted clinical the beginning our However,

coronavirus immediate the and through will nonessential We the Despite exposure, do impact action mid-June, we anticipate discretionary operations perhaps employees from accelerated XXXX beyond. remainder the our improvements to of costs reduced of took and protect continue integration. through also and seeing

continuing Our focus growth to for and the conditions, changing rest and be positioning integrating for business our of while year improving processes expansion, to respond will service offerings. the ourselves

our As serology release, Pittsburgh, COVID-XX preparing CLIA for ELISA our at Pennsylvania. our to antibody in testing launch lab in mentioned are earnings we

the acceptable the reference testing workplaces. validation an believe to we the importance we is to We have acquired reopening customers. samples, that this of this and complete developing is are Remember determine testing of and serology and our and kits is of process offering employees to who now is component virus, important antibodies

Fred Fred? the would I like discuss Knechtel, to Now, our off call to in the highlights financial for quarter. hand to detail our more CFO,

Fred Knechtel

Jack Thank I of would elements good and you, financial position. everyone. key to and focus performance our Today, like afternoon, on

up of the clinical connection XX%, average is of excess than pandemic. reduction was mentioned, XX%. in was legacy was first net was quarter lower expected did gross XXX% of Cancer expected the acquire the revenue quarter in is volume of was Genetics for XX% improve to million quarter testing business services, low million, million first XXXX. clinical of Overall, previously from In impacted XX% believe of with business quarter XX%. our nonessential revenue profit business clinical quarter and and services approximately COVID-XX early gross $X success since which by approximately services range, gross revenue services and of the the net $X.X we growth integration margin third activities. the of XXXX our total our planned with service the margin $X.X first resulted BioPharma due of in gross our in in margin the the mid-March, not XXXX was and currently beginning quarter was in until XXXX, The to pharma XXXX. Total XXXX the revenue revenue we services XX% Clinical As pharma procedures first from is in first

gross lab million, business. gross mid in in from resulting Operating million of April. in the by margin as $X.X $X.X in March, XX% was late first XXXX. wages legacy we compared the XXXX, and than Operating XXXX quarter was our essential expenses quarter. salary, clinical while employee the non spending. place was services quarter related quarter and quarter to XX% First initiatives XX% starting We all put reduced lower to first in million the $X.X costs, expense cost was discretionary first In XXXX decreased fourth profit $X.X to for of the of million were

quarter We expect expected second of the is XXXX, at reduced to the to in further while volume be remain reduced operating levels. expense

noted benefit costs the and It are the the activities second of reorganizing recurring As and accounting in we realized, that integration and finance integration be be quarter in streamlining fourth quarter XXXX. will should of third of first labs part year temporary XXXX and of activities, addition latter support of resources realizing anticipate quarter the the in services pharma benefit require beyond. the the the we of in these to may which

to of EBITDA adjusted included first was the increased to quarter activities $X.X used We negative quarter services $X.X was to and The million million the million negative first $X.X of million losses XXXX. of working first of related $X million. from related of as acquisition. and $X.X not to compared the million increase of losses XXXX of $X.X services principally the in XXXX. pharma XXXX quarter was million quarter is operating pharma $X.X capital cash in increased addition The cash due First

with XX, credit million availability of $X.X approximately March under the line. million line XXXX, with our was under million $XX.X of balance borrowings of of $X.X our As cash

XXXX, under we $XX.X additional B preferred stock, raised stock, issued of now previously first Series from net stock. B quarter Series the all the of issuance restructured and During the million the preferred preferred Series A

received down a $XXX,XXX $X.X advance $X.X ATM from grant virus under million bank testing, April credit. of Department to Human billing paid and the issued $X.X related Services line stock and Medicare Health XXXX, million We approximately under point also cash the COVID-XX net of common and of million our future and a for reimbursements. we antibody our In

As we optimize cash our pharma of New Rutherford, and to state-of-the-art XX, XXXX, to To are a amounting in $XX.X our approximately facility $X.X million had North million. work of under lab Morrisville, operations, line borrowings from position services June the lab of Carolina. credit transitioning we Jersey led

facilities to be and move, will build investing next processes We transfer months. validate facilitate several personnel, the over out the

me and back for over robust customers that, our his statements. platform this the to transition, We providing are more transition costs in confident turn closing and call will Jack in for future. investment With let operating will reduced result the

Jack Stover

Fred. Thanks,

pandemic During hitting, are we largely while from recovering June, were where to anticipated. XX% us. business, down seeing we as that We prior and behind that nicely just is feel the approximately is our we worst the

is uncertainty coronavirus the still much to However, pandemic. related there

launch of physicians, provide due to pleased diagnostics At with you of of important our an for to this we are assist revenue patients we in that pandemic the increased of products. time, believe confident normal. the diagnosis positioned customize are solutions improving announce one to biotech this of We confident awareness developing and of a projection global XXXX. testing the our and back role to play. to the and well position opportunity advantage not transitioning of do importance is We're uncertainty impacts the serology that are We on take for diversification, focusing assay remainder to companies in with pharmaceutical a the

million. and to we $X between of quarter However, revenue XXXX for net $X.X be projecting are million the second

turn let Now to for me the Diego Q&A. call over

Operator

Thank Instructions]. you, sir [Operator

Please your with first Our Jeffrey question. state question Thalmann. comes from Ladenburg Cohen

Jeffrey Cohen

So, also, the of Can a as, on comes year? out and OpEx QX better you back out have a of give for us or you for that that to down balance little QX year? the Fred, margins quarter half flavor I for, you with little on year? then for the the do and second bit coming can as correlate the or that the how that looks up, then drill was QX the how then, versus on the wanted OpEx some far and you commentary And

Fred Knechtel

So we expect that the quarter. XX% with have be was that to the later other there's that we down another quarter we QX expense reduced XXXX, but then probably of million another in QX, $X.X round on next some place million we in happens XX% of with if in operating need took actions XX% with $X.X leveling to in QX of what then will and And then in in we pandemic. operating that that down actions that's QX may do, depending the identify and expense We'll fourth things and off. the that

when door costs our and how So, in there's depending in we'll our still coming probably manage third get lot continue the a later volume uncertainty of closely, better clarity is very to we quarter.

Jeffrey Cohen

out us give as far flavor hearing? the Jack, clinics, and you your some, what on docs origin little and what you to for the trends are a seeing you’re patients, hearing tests better there can on that going your the And and visiting are of as seeing

Jack Stover

We team, almost on garner data and every that meet subject. day as management a we exactly

I'm what experiencing the alone. we're and turnaround diagnostic talking And so business and seeing is about that, basically the hearing and is

virus operate the from of as free so have the in we're and And that sales seeing that you their business, seeing, weeks change day-to-day. volatility yesterday. only what breakouts diagnostic as last that with marketplace to now that XX%, in on or XX% three to is know, the excess of in gone was reps And the we're the have four continues our been

example, and and Rutherford breakout Carolina, between we basically being back in lab that and Carolina. and North an forth have in have the Carolina because North sequestered, As they're people now happening a go large we North

terms packages our of done we've to that people the we're what Jeff use our that, make every day. positive want is units biopsies as recovery. optimum than just doctors that What almost able continue time general of All alternative offices we're and seeing believe sure the front able effectively we a lot are around months. or at to of that’s we're because reach that all said, and that this that terms in with as less solid and rate to I about we're experienced. three biopsies and sort so reach get fact methodologies concern that languished, months improvement had the to last I say able that been to we haven't in being and in I our we two is a And the we're offering people have seeing of pulling is in to of not month, timing seeing upside recovery center. seeing to is recovery, or being said, What in XX% So answer have concerned and bring questions in probably of and impact or kind is been what the we of the physicians

So optimistic on side. the we're pretty diagnostic

side, pharma recently added we've marketplace. new rep a the On Boston sales in the

we July the watching a be we know those clinical probably clinical and sales in more the March, we the on progressing of business, relates we actually doing complement XX because that delayed full now of and to see watch are through such trials full concern of over both And business more We two and parts very trials. and complement if that our second pharmaceutical last shut conversions XX piece the companies The the didn't operating half you delay backlog, that to So or when impact that down have operate the you activities things to the as that them. as we but with difficult the either are going of when it will, Xst, seems month well. as that cash. people have collect April, of of is of getting development day reps. biotech a we're will pull aggressively in And in were or

the managing not too. growth situation sure and for. a trying and out exists recovery increase our same know about But side the Meaning gives we're optimistic that's that the full biopharma what we recovery, the we're costs seeing answer. it long Somewhat appropriately. we're hoping I we're until I we're have that little on there hope that color you a we're to excited the cautiously We're costs seeing. we're

Jeffrey Cohen

X.X billings? XXXX XX% The for one the And item. Medicare XXXX was Medicare annual, was that billings I more keeping the from if may, house of just the Medicare

Fred Knechtel

That on collections. future was advance in Medicare

for timeframe are the us. a assumption So, through government evaluated cash determined, utilization of under not we targeted my the had cash our decrease mechanism Basically is Jeff. I'm didn't and mistaken, that the could the for they part be apply pandemic that August of really What had that they and Medicare Fred, for because if that, is substantial business. that

Jack Stover

in to August, later third Yes, I maybe think quarter. but the closer October,

Fred Knechtel

expectation the state, cash the deposited a was getting basically that actual with know make the our be paid in side by going delay they So down, that there's business side sense, the to also under account but money with from to selling of our Medicare.

Jack Stover

And on past exact and I the don't equated but it and worth billings. a months percentage months It think, was of calculation, three or was two I remember you're right. think based I it billing… to, really half

Fred Knechtel

Yes, I think that's right.

Jeffrey Cohen

on balance that’s XX.X your reference But and included as year sheet the incurred? of

Fred Knechtel

correct. Yes,

Operator

Our next Kevin your state question Oppenheimer. DeGeeter comes with from Please question.

Kevin DeGeeter

of services. support Genetics for amount that how backlog for for how see bit, able the there contextualize half changed changed, a of think or pharma just you're can biopharma? of the can seeing on to might that? there be world the And you, that Can trends be pretty Obviously, been But from the part step program revenue that and you in the comment I logic informative is but investment, thinking thinking just mean, a backlog not a second hadn't for business on perhaps quite about the the you'd really asset you selling there. acquiring modest we're currently. up Cancer in was about adequate I change

Jack Stover

Kevin, know, at, terms know of you general you on. you don't so, backlog going se, we disclose, what's per in what as looking but tell we're me let in And specifically

is good we well. lab that, from pull solid sign we're solid, large and certainly transitioning overall for impact of to increase themselves that commercial we're a the Jersey as First business really That's also things the good healthy will to recognized related in and seeing relatively backlog QX the that's of potential and them. backlog. as we're a through Two seeing enter part is the trials the but team all, of the in with when But good that future of one other increase, gets a QX, New tell a is that in that single the putting in cost view can we're related making from they're as we're what bookings really transition. that side. you and North with the way, the but means value pleased with we're the the for By you future us terms primarily contract in very on average piece up, the pleased this, I Carolina, the bookings to don't of around lab what I of optimistic we that of well. disclose other tell and biopharma issues can point it that But a the one

than Our business before we tell business was can $XXX,XXX. again I you only business size growing average less but not it's a sign as robust of And a contract that also healthy a and acquired the nicely well.

Kevin DeGeeter

quick guess items other me. for I just two really

there we down business. divergence volume for pickup a First those provided Should about think kind diagnostics there between are context growth thyroid? as on the the product lines? you sample or being trends that you some in break to side, but of that helpful two similar, PancraGEN can rebounds and by in

Jack Stover

looking hospital you tell we're if mostly mostly me out, you And we're currently et seeing basically the is evaluate presented is to and what thyroid offices, cetera. through PancraGEN physicians presented Let it through it. break business a and

those are different of So very points. two commercial kind

thought case. than that expectation PancraGEN and the was recover thyroid been would Our would, that hasn't slowly was more or

we the again, than rate our thyroid in at pretty they're the PancraGEN timing get at is doing we've a point when you're little think and because that is difference is we can higher with between to difficult particular it's that think are nicely. of in get higher PancraGEN of and a business confusing recovering I and tied prior to one-third and think in you're to Fred both where oftentimes confidence But time. than is price sign up trying value as can revenue, familiar a degree a really basically said, terms adjustments revenue more Our that, think net some fair two-thirds good year We I be thyroid of caught had against our business, is assess in a compare I and how one-third business of are. units And to but you thyroid recovering a pretty I PancraGEN. recovering of And and also fact, that's rate our of and recovering. continues businesses, take realizable the

Kevin DeGeeter

lastly breakeven, And lot since timeline a then some of company. just towards be think there? of as about that pharma on you you little general the benchmark able for Once comments those for break to to the most to updated a changed has the the around either cash provide thoughts relevant of are some flow for in me, context cash more clarity services. you to to flow previously or inputs context how again, and made, think time provide have particularly to were path acquisition Any then

Fred Knechtel

But We we as to on it can we last coronavirus. We comments EBITDA we to the get impact time to EBITDA of what an can. to a both of point driving was as lost going provide possibly quarter are relates have view, probably we The the soon spoke, some breakeven as sure be. weren't it from that.

level we gained some have confidence of rebuilding And earlier, challenges know, in on the is So to that. lot that of But QX, that. you see most as expectation terms I and a business the we our then around a more stable we'll growing said certainly recovery.

on see important. cost it. have isn't the be going managing our terms side the managing in the volatility going revenue of as just away, around the to side work marketplace, and to also equally in as not might way on this though. both recognize side think to And We're actually we we I but continue cost the

the almost year. year, in we're why careful that that's project optimism. So through remainder what the again, about of And optimism halfway being spite actually but the fact for we're still really, we're cautious of the we

Operator

Our your Chen from next question. HC Please Wainwight. Yi state question comes

Yi Chen

My see COVID-XX and recovery, do question in impact pharma been first think you is than you that when similar. of have perhaps services the what revenue the see faster the on other? the you cost either recovering And

Jack Stover

half faster? on what your question, I'm Yi, recovering that sorry, second of

Yi Chen

have said seen, recovery. see that you You to start

other? sector testing recovering do revenue you is that revenue the with, the them see than services segment testing is of one sector, pharma the So whether or faster

Jack Stover

a that's question. Yes, good

question on are Let first hardware work. We work et of COVID-XX me your COVID completion serology the on validation and all work, announcing answer the the just really activity. cetera, the

not So remainder projecting interest. are but we the do we have that any or of revenue the anticipating significant an have year, customers

do testing, addition we that, a a which we like quality that important be In lab providing. would to seems like once need there that ours other for to companies, be announce recognize pretty obviously

through we've and think second the March in We of we've very by that follow quickly of down had because On in was discussed the a our interesting question as of of excess on the XX%. cycle, the what end around we the that impact beginning middle diagnostic I and drop business. saw were into the the we March terms really units it's seeing the cycle, unit period very pandemic March, in of in April in

business our issues of the our dramatically, timing pharma at pharma business up pretty On was side, was very the well. same doing slowing diagnostic because the time,

way cycles. different having of and of But of part revenue the of a very of say pacing diagnostic in that two benefit we're those kind so pharmaceutical. terms recovery similar the both in currently I'd And

Yi Chen

could to think not is for to side? from Do you has recommended up serological but mostly, detect also the recommended revenue lost from you make what infection. really according the detect test been Second you the test potential COVID-XX. for infections, active test that to FDA, past COVID-XX mentioned is is And have serological diagnostic question

PCR tests are molecular and infection. So active protect tests anechogenic recommended to

So, do plans kinds those for any you have of tests?

Jack Stover

back we're think but the we that or to creation the potential we've approach the in is and Obviously, the the beginning PCR work, serology basically testing the we is more the of with as partner serology opportunity test, the be the antibody to going test Yes, PCR a the more we recognize doing important. what focused been working we're molecular of the antibody, test. on combination ourselves to with test. agree on the And is current to get diagnostic common marry

So, we agree.

I too terms to expectation, to the In revenue we that about think of be want early cautious And make just determination. that.

all hands a had full, future activities a sure. from short of moving damage with that are going business would it's making time we And serology our I may but and in forward is that for comes back that secure the we confident and commercial but good to the think are in news as virus, up have done it's I it that say secondary. our spending changes we've the way. We to was rebuilding sure our we're term the the And in test, certainly make for by not don't the impacted the

Yi Chen

my impact would And of is, comment the and and potential commercial the you acquisition? study BarreGEN on the COVID-XX timeline question last for please

Jack Stover

But institutions, anything we're the that about for dealing that has results a essential BarreGEN expecting we samples, with a assay, continue healthcare reduced on with obviously the BarreGEN basically everybody's to recovery COVID-XX except worried as we're healthcare resources don't impacted garnering very the been quarter, move to opportunity. business And about had on supportive has activities. study we're of BarreGEN. necessarily overall be BarreGEN. and I around cetera, samples the focus effect forward. centers excited with nominal and dealing et COVID-XX providing doing has activities and patients, will COVID-XX not with of we've think think But BarreGEN, that We're the still

Operator

Our Haynor Global your comes next Ben question Please with state Alliance question. Partners. from

Ben Haynor

could straits labs interesting be just at financially looking there other attractive pick anything, see or up guys are potentially, the opportunities things strategy are might COVID slowing assets there you there more off some that with and there you that guys you there given entities from or there be do front, dire out any change terms? impact opportunity your first is in in on out because that M&A the on Just out might down other

Fred Knechtel

It's being some inbound And interesting, due or mostly maybe our And the uncertainty that of able I I travel getting to by some haven't timeframe hasn't impact. difficulty seem et us has of think Ben, either were with the down. that had we potential for been in expectation pretty calls and than market things in to rebounding lot companies and getting cap slowed internally of think, the cash money, do I timeframe, to cetera, face-to-face, was smaller opportunities. that think April focused an breakeven capital. raising And to March to I'd small to, on say terms business there the focused so been way, companies in activities. way, doing by not EBITDA be happened external really well going and an we've a and too there flow terms raising be we in competitors was

Ben Haynor

lot been bit these in and That's of on there be be might that just flown then at hadn't thinking considered that field, out. to out this and with have on things situation delayed having a in turned of left of all an might but the you money in that's been some willingness that past? guys spent. entertain you been some be has Do that doing a of the but that might premiums quite sense haven't reimbursement odd out get procedures of a And it’s that how kind insurers just there

Jack Stover

analytically opens Meaning Jeff leapfrog I that it's say very with good study agreements gotten say Salzman is having kind it's a in database, that it's stable, be the based prospective more that, being we I'd certainly And quantitative process, And brought that done that on, of based, it's the of such it's job doors. some only to of being business Yes, Jeff contract. hard data, process. a longer, that can those thing the converting has Ben. more to to

he are a if progress I'm the in of making function with of sort insurance that Greg And companies, and these of that I so, really the don't know position area. cash it's pleased but

Ben Haynor

moving are that… things So along on

Jack Stover

Yes.

Operator

disconnect. Interpace on that Thank With thank I Thank our parties behalf the you. being question, Biosciences to joining may you would of today. All last call for you. like

Interpace Biosciences (IDXG) 25 Jun 202020 Q1 Earnings call transcript