IDXG - Earnings call 3 2020 | Interpace Biosciences, Inc.

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Operator

Greetings and welcome to the Interpace Biosciences third quarter financial and business results conference call. [Operator Instructions] As a reminder, this conference is being recorded and will be available on the Interpace's website at www.interface.com.

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

this have the supplemental in available numbers, website. In information. earnings assessing to We addition, company's or helpful reconciling be performance. principle to the that is information non-GAAP is GAAP information information the release, accounting in supplement company's on generally A non-GAAP provided and which accepted may non-GAAP table provides GAAP its we the believe included information meaningful

call like Biosciences, and Thomas now over Burnell. turn I'd the CEO to conference President to of Interpace

Thomas Burnell

Fred update. and provide some Accounting year-to-date progress financial is Thank quarter comments general and third today business all thank Fred afternoon Chief me our for Interpace's business the on and you review you, call of results and Financial and And I our for Officer; brief highlights. Devon. joining us a this will on make Freeburg, Officer. With Tom Chief Knechtel, financial a our

will questions. the open Following for we that, call

conditions was I'm through investors private continued started, will Together before Jack shareholders, about and moment to a excited instrumental in of we I'd the XXXX. retirement. market his to our goals in equity wish support But accelerate common company with a to that opportunity the Jack so leading creating. improve our Stover well be get take as our we like

excel myself. I'd company clinical laboratory the worked diagnostics, briefly with Interface with biotechnology XX areas of company services the in nutrition is resources, companies. create to experience, coupled of revenue introduce It services, growth. like to sustainable, multiple the services, patient to confident existing and corporate Having health care core am I physicians Interface in lab align years to strength health to and having continue -- with that profitable order expectation in will care, its leadership of care, led pharma drug I the novel come operations strength its supporting spectrum, of developments. our

XXXX goals we year meet full presenting anticipate We in objectives XXXX to review March. results when again and the

into second payer the improved the quarter XX% We contributors continued to market the quarter and as volume, with significant third of test slowdown. the performance fourth result ThyraMIR range. molecular services quarter. was rates the as third pleased conditions from price Clinical quarter exceeded end of are lows were million, COVID-pandemic improvements, relative up second quarter revenue the increase a Net our higher and to our top reimbursement a which $X.X

realizing of increase, as this which XX was price the December of ThyGeNEXT addition, on we reimbursement month, date In Medicare began effective service.

quarter quarter. testing However, third in and continued services slowed the fourth our pharma business and testing down in activity the

to quarter in $XX be recent to $X these trends, million range. we net expect revenue the Given fourth million

for detail hand like to Fred? the Now financial in discuss highlights quarter. Fred the our I'd to off to call more

Fred Knechtel

you, good afternoon, Thank and Tom, everyone.

of XXXX. net million XXXX quarter third revenue was million, $X.X up $X.X the in X% Third from the quarter

in represented period up early million, revenue quarter. business net XX% included QX of Clinical revenue starting XX% net in revenue from which same XXXX. year-to-date in Services Services third the XXXX, the the of Our $XX.X total was Pharma

quarter net price driven and increase. lows the we the revenue was ThyraMIR from declined through molecular Pharma higher volume Services XX% second realization as down in of Increased quarter the the was fourth. Third recovered than second quarter. third continued in rates by revenue test pandemic quarter, the revenue higher our reimbursement and better

Third $X.X quarter XXXX. quarter XXXX gross gross in XX% $X.X and and profit profit total gross was XX% the margin was third compared margin million, to of million gross

Carolina one of supporting We have and are capabilities we roof, the New pharma offers our pleased to our lab Morrisville, XX, Rutherford December and our lab terminates from for optimization North Rutherford, Carolina March lease allowing partners. an testing in solution efficiency XXXX. all transitioned North announce under successfully lab. to The Jersey The as end-to-end CRO

we business backlog. completed have building accounting activities to on related addition, finance and integration focused and acquisition In the

Third expense $XX in in $X.X million million of $X.X but higher of the million million XXXX. lower quarter third quarter operating $X.X million, the quarter was XXXX, $X.X than second than

to As to lower improved were added added reinstatement of of transition. to The expense million costs pandemic. XX% and nonrecurring volume clinical services was related in pharma reduction employee costs, reduced XX% response salaries through callback due of employees. quarter, the the volume to In and quarter, there $X.X the third lab back third which the in the investigation we included furloughed employee billing

availability. with no XXXX their company. which Concurrently, secured commitment Partners and services Improvement expenses. bridge clinical quarter for the which which expense, the by strategic of primarily investors, SBB and EBITDA Capital we terminated Third higher on the nonrecurring $X to successfully partner operating we EBITDA is X, in of adjusted million. January Capital further XXXX revenue our million loan Ampersand loss demonstrate line equity closed Partners, a adjusted lower a On was had $X.X as driven borrowing existing credit,

of of net we $X.X cash. million, restricted January had of cash XX, As a balance

amortization XXXX, continue through using impacted years relative clinical in performance charge On recorded from in XX-K and Form the the intangible which gather and impairment XXXX. X restated comparable which filed with from on currently is future which to reflected net first provide our it to safety amended operating evidence X primarily of under data to an with us and information amended from months we will to in expenses program for books reimbursement. compared and cash connection clinical collecting company $X assist million. as Barregen physicians XXXX for During of used in fiscal test XX, $XX.X the the Barrett's statements is we an a $XX.X XX-Qs, approximately Form our charges support The us the financial the XXXX. current January after of recorded also period payer that value million asset, potentially million Barregen evaluation these activities

commercialization we no guarantee is still we efforts, revenues. support continue Barregen fully While there a will and is believe reimbursement test asset, we viable successful the in that realizing be and and to launching

stockholders' loss requirement. minimum net negative As a stockholders' the impairment result XXXX, is listing amortization with equity currently charges, NASDAQ's XX, September million, equity on $X.X compliance and of in and we $XX.X million our year-to-date, not are

We are the exploring currently liquidity stockholders' position meet improve requirement. our options and to also minimum $X.X listing million

assurances However, will can remediating in be there -- the we successfully no deficiency. that

Tom, you for closing statements. to back

Thomas Burnell

Thank you, Fred.

well technology-based caused as with observations our a Interpace, with Over organization implications of the the of support leverage as and to support needs course team details I've company reimbursement quality-driven, the of business. and strong is My have platform a will adjusted weeks patient to focus to to the with by resources this novel as Board continue that a the challenging COVID-XX Interpace the the pandemic, simultaneously be It foundation to been understanding commercial accounting it current The drug company, the the while well the of profitability for a of solid certainly gain revenue year company as I and development. care growth. a time past was aligning with as to worked the issues. X investigation associated the

trends for and growth updated there improved strong platform remains we on and options support our the and to business support well overall from we improving efficiency currently options. evaluate as I'm in are our of strategy. to to of making improving the business. our with Board our profitability, all investors company, third growth I shareholders our we intend diagnostics with services If keep our continuing working we and in have the saw a quarter streamlining business that as see quarter, fourth operational all the with progress We're growth, are to capitalize pleased you pharma strong as our PE finalize in to the consistent our progress and the

improving offerings. We proactively our will continue conditions, to be responsive business to changing integrating processes further while and service

operator So back to for Q&A. to turn over the I'd with that, like it

Operator

question [Operator from Wainwright. H.C. do Yi a have Instructions] with the Chen of We line

Yi Chen

what goal the first be for My strategy would company XXXX? is the main a or question in main

Thomas Burnell

breakeven flow Carolina to would happen. and our to North is for the with laboratories through you in actions company that diagnostics to the our of position the for number services our question. Thank biopharma achieve focus allow along and business, to in cash resources those business XXXX The allow put itself grow to a us grow align that strategy in

Yi Chen

think service? it And testing Or services? the which biopharma is potential you during Is segment the it diagnostic this has year? do biggest the

Fred Knechtel

This is Fred.

price really going a up on a increase volumes you the the year. nice on us. going substantial to just it's picked contributor, announced, through that's increase, to if It's have we I the up and as $X,XXX. And things ThyGeNEXT in exciting think some that it, Diagnostics start be We improve are to business. and particularly going quite for

priced at are $X,XXX. now ThyGeNEXT So and both ThyraMir

to to that the we're Medicare quite good really this Medicare for we be We're contracts, also but that's strong the going Advantage. reimbursement upside signed as XXXX Advantage. through. pull-through due really board pretty price a provide in continue see some PancraGEN year, reimbursement. on in -- continue us starting into seeing to improved few some XXXX. Blues to So particularly will the continues opportunity across We rates increase, of to good growth Medicare to in go the And a foster lot

really some our not see we on end, Tom the the of that alluded around in gross more to end automation also going the forward. just nicely with will opportunities exciting projects of the making year. volume, should efficient And margins but improve there's front more be lab higher lot able as through much to, efficient, that quite a footprint nice our So we leverage

Yi Chen

Okay.

biopharma to service? potential has the the services, do terms that the think In you outgrow of testing

Fred Knechtel

is And an business operate. seeing with The business bit backlog of we the started a the still, revenue rapid this we'll is longer-term see grow year, the I and us some challenge and the year, end contracts to but go nice that year. through next some for little as not think, that backlog. And through the seeing with to will provide from continue bigger contracts still getting little we in we term. participation with the build a of and Certainly in impact but COVID where diagnostics. continue near -- just some We're pharma growth

So diagnostics. really that probably until the really up into in not that XXXX year pharma start business later seeing it's to to we're going catch

Yi Chen

it. Got

XXXX, occur? So catalyst within we what can the share expect first to of half

Fred Knechtel

Catalyst as? far as

Yi Chen

Yes, for catalyst company. in terms -- the

Fred Knechtel

I think...

Yi Chen

agreement For payers. example, additional with

Fred Knechtel

Yes.

the Florida, -- less And COVID. So from California, COVID recover and our less catalyst recently and of of the clinics some and catalyst hospitals like Midwest regions more of bit that's -- in a in in to down. more patients how the starting important are where is York, regions screenings patients see to and the some the little start to slow the are watching or some slowness New starting of some main of we're

backlog, shorter-term to hit first quick on bit then and, North first bigger continuing -- to slowing the vaccine we're going see signs build revenue, is more to contracts think, how little quarter a a we're in to of the in Carolina. big business, maybe some particularly year-on-year as pharma be I our as quarter And catalyst in down. be and recover, a to comes contracts that going particularly the lot So we able in state-of-the-art that the get the leverage catalyst our freely, focusing to is in starting with some the slowness that's learn we facility customers, more contracts, of operate

we'll margins cost -- footprint, seeing now our consolidated a that lower one breakeven see which that start all we're on it's some lab, lowers Now operating point. into good we'll

that So of the some business quite in margins going dramatically as that into going we're we quarter. year-on-year improve more revenue, to second probably produce see the

Operator

like at you Biosciences I joining to for [Operator Instructions] time. would questions further thank today. no call of the behalf are There Interpace on this

everyone. you, You have now lines disconnect wonderful Thank may and a your Yes. day.

Interpace Biosciences (IDXG) 21 Jan 212020 Q3 Earnings call transcript