NEPH - Earnings call transcript Q1 2022

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Operator

Good day and welcome to the Nephros, Inc.

First Quarter 2022 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Kirin Smith with PCG Advisory. ahead. go Please

Kirin Smith

This you everyone. XXXX Smith PCG with call. Good for is participating Thank all quarter in Advisory. afternoon, Kirin Nephros' conference first

to and events Andy Before turn please I and cause or over update actual may required forward-looking date now economic new to Securities develop, Andy, The care Nephros’ sensitive including, live effectively differ results call services requirements the statements products include, that to the to factors to date call operations statements of information pandemic, the products its revise with health described only those as obtain call and of business to XX-Q the other accurate effect today, its conference as would May The the results successfully Executive existing undertakes time and and by any and success conference Chief by to the I to contents by in and of company's seek, of regarding we ahead. of ability except to of X, without of XXXX. of events the of forward-looking call or but and hospitals this review that clearance of and future would company's during filings Officer, Nephros. commercialization President other offerings. that timely call to contain Commission, obligation made Factors on Forms you after and this Astor. factors. services and efforts adoption specific impact or Company limitation, this like and go contains for caution providers. will materially competitive its management not regulatory rate reflect and law. its circumstances the conference begin, limited COVID-XX I encourage the that no is from cost Exchange statements. are XX-K The comments regulatory identify the results may like the the affect Nephros' Nephros'

Andy Astor

Good my Thank afternoon, Kirin. you, I apologize voice. everyone. for

in building in show second half XXXX. results progress up of us accomplishments not all QX growth importantly, optimism. for scalability the sets cause and will a of of have Filtration, strong indicators retention topic for all-time each to segments. XX%. XX% well year-over-year our X,XXX example, of unquote. business on has rate Water not over perspective active a this with increased three cold. me return also is our progress. listing our during to not last call from who provide you, Net today Just year-over-year will an remind comments I and Wes I'll increased that loss on I my that With the on on update with also though revenue are over XX% Officer net were Commercial earnings begin I the commercial has of getting results a acknowledgement our significantly. also said Chief And long for or bigger significant remain these call, In accomplishments of Leading even want will an our XXXX QX, of quarter first recent the strong. My Lobo, financial count indicators sustainable XX after these customers quote, our call But customer run, decreased February to in strong the changed. call high in an more believe

review XXX-K the Our clearance schedule, are FDA Specialty significant two activities. over go services Lobo, our And provide our products a financial pathogen request closer sales for now pursuing return And in turn on our look product. HDF our Chief generation the marketing waiting to provide please second to for Wes, some we partners. of at completed our Officer comments. brief to I'll closing agreements response and systems to call results. Commercial the to and group ahead. Product And subsidiary, and actively Wes our now to detection agency's then Renal is response to our for I'll

Wes Lobo

It's today's afternoon, be call. Good joining privilege Andy. a on you everyone. to you, Thank

As we progress tough results. our true it that we've fell a are sets quarter we for of is marketing true the it short our financial up mentioned, on sales made off in Andy just us success. front of of expectations, coming financial that is while terms and that And great also particularly

better our shared measurable easier easier our communicate provide marketing on making XX wider initiative proposition new an easy digital on product value our to customers. solutions relevant earnings important deliver way. this and press Nephros to February milestone and launch and to and and our proposition April well value website to who understand thank as budget. department I'd was for as this our team In I goal announced and articulate as on discovery commitment our to new First, release, for time contact of call, as was like stated website find now officially to our the of we branding. our have architecture timely in of and clearly procedure the our The materials we Nephros, that to an

received or of Search platform of chain the customers. causing months, control us feedback times our and the say weeks of infection industry even To we support targeted such peers having campaigns. Optimization, to the them push example a healthy or lead lead and for favorable in one levels the constraints, recently were is addition, filters challenged position some out campaign, inventory Nephros that of deliberate our in to to by In supply to market Engine better allows generation power leverage run SEO

campaign and on capitalize launched not this ago. have This an of generation awareness we type was opportunity. possible campaign months so to three even lead And

onto Now our segment. Filtration Business

one healthcare grow unpredictable or or response to emergency our the lower programmatic to reliance For business market, business. is our planned goals main of on

processing. in to account new grow defined acquisition responsiveness health a sites care further that of on they've new improve visitors, Of we to getting ice the Account program or come great and To with to and our customer even grow customers regions customer customers recently sales XXXXs and are often to growth. year-over-year. low plan sites XX% the healthy XXXXs. serve connect and goal systems. quick on our as I'm urgency targeting started our sinks, with leading and on and February, be reach with to for anticipated stated these we a demonstrations in mean? land strengthened small dedicated ready expand course, a are to to to with of to expand model allow beverage support national such we large patients, In new dollar locations as steady by demonstrations our initial expand we In the It strategy. were overall support to shipping staff, XXXXs. a QX and Taking supplier and agreement continue can of land planned that treadmill. landing as To will sales active from report Nephros. customers in and overall Therefore, the does land showers, coverage indicators our our values growth, happy pilots of aforementioned What water, filters we the for growth emergency we points value over to customer a trust restaurant hinges central The we form grow more our dialysis provide to or service filter active lead our more and or X,XXX to customers team sterile customer XXs, chain. low and the always business, machines, hundreds US. with had of sales touch filter QSR in was be the to customer is support additional tends a new Chipotle filters commercial transaction their and also an sites business Nephros. Nephros to ability growth that expand customers. extent, and filtration, Our include In sense through saw pilots

QX, shipping six months. be on about opportunity this majority this the is every will expected replacement We of opportunity cycle in an

execution our the we As to involved. parties prove capability

expect We relationship space forward. additional from foodservice and to in beverage this the unlock the equity brand going opportunities

closing been and relationships upcoming on other strategic in the anticipate new and QX Now potential has We Detection two these on testing to sales focused quarters. team opportunities partners. generating business, to of our revenue Pathogen with agreements build yield laser steady a

Our XXXX are growth, we goal demonstrate sustainable to the on this business for confident are is and that trajectory. right we

turn now a Looking achieve infrastructure, the call and a with more structured a sales complement Thank digital confident our in back retention. and customer I and and we're and profitability. putting close growth and I'm more over team to to Andy. customer capture you approach to opportunities place right acquisition of ahead pieces will that full ultimately expected the new the

Andy Astor

a financial I prior you, will We primary decrease quarter revenue results. reported $X.X the our Thank fourth And million attribute over net factors. year. XX% two We decrease to Wes. the review now of

First years. prior response first emergency unusually more XXXX in high of revenue components, XXXX results while an quarter included was typical

Primary increased to Net margins, was consolidated contributing with the the SG&A large and XXXX. and to loss first delayed. two quarter $X.X expected loss customer gross sales, factors and or in orders were admin. Second, the general lower lower in close for sales, were million $X.X quarter compared investments million,

$X.X to the the increase primarily the forgiveness margins our adjusted PPP XXXX will and XX% in months, the trends EBITDA skewed which XXXX. in margins $XXX,XXX gross expect in we addition XX a quarter with In was quarter compared by negative XX% negative gross from improve in Consolidated expiration, inventory in in million million, second were compared $X.X This implementing with decrease to XXXX. June. first beginning addition, inflationary are supply quarter we global results were in favorably price of due last loans. is our chain some Consolidated

on results future prudent expenses $X.X expenses XXXX, XXXX. revenues, million. we the to We research million, be $X.X XX% And to $X.X of million, our Consolidated continue approximately our from and XX%. compared guidance. unchanged the sales, of million withdraw revenue general was our in XXXX development administrative and were volatility financial the in our target to the it and gross In quarter light $X.X of to Consolidated March XX, cash to is believe range balance XXXX. QX in were margins quarter in

foreseeable press balances income suffice the about for to calculation future. this we high, Our adjusted reconciliation reassert expected that for GAAP are Please cash and to optimism net to for details refer release EBITDA more year or our loss. of today's its remains the current and

we our as about concludes sustainable just decided Additional the comments. a Detection, today. Most the to stated as Form Water this year financials. recognize couple this file such and information on Filtration, repeatedly, scalable, filing perhaps including to That week XX-Q, to long results, balance a segments our quarters business of operational expect for in are But Pathogen we challenging we brief in now which Products we results be found will growth. And our Renal ago with short and for invest commercial co-investors. have one term and importantly, infrastructures, our term about closing

pay to believe off continue year. these We this investments will

to employees devoted for presentation of each our providing As continue during unsurpassed our especially stay and This our formal focus always, And unwavering like continued challenging to quarters. concludes touch. also thank would to Nephros your in on customers. strategic Please remarks. their our our you partners investors services for confidence, I and thanks to products

Jason, call the We from questions. please take questions audience. for now open the will

Operator

Anthony first Our comes Instructions] Group. from Vendetti Maxim [Operator question from

Anthony Vendetti

you large approximate could quarter. And one you the have closed those you of that close the if Are or provide value customers, since color in if Andy, the of total each two conclusion little those an you hoping do deals? have this said quarter? first Did Thanks, more on those either pending? of were a still to

Andy Astor

today. between There's disconnects not just in closed has their We the and timing. they're them own this as about have close expect story, that. to vendors suppliers They no concern terms of of but do Each quarter. normal

So I've no concern about that.

Because year. delayed In speaking, high response we terms large specific. customers roughly in said between I emergency roughly and last which last size, lower was uncharacteristically year, as weren't XX:XX of but was than shortfall QX the

Anthony Vendetti

high Okay, – least the at year year, lower this last emergency was response or than expected the but so uncharacteristically is related just shortfall half to

Andy Astor

comparable. colder of from, months, low yields that. the was four to And due to years, In the interrupt, five challenging Anthony, last we quite It actually it year response about QX was is basis uncharacteristically actually talked sorry was an high last emergency on weather and a which pretty normal.

Anthony Vendetti

any Okay, that's helpful. And then that on quarter, the signed you updates customers how last QSR that's progressing? up

Andy Astor

to And Wes we be We ship during Yes, was of this it locations. chat. did and that expect updated is bulk his quarter. say those X,XXX the that in Chipotle, will

Anthony Vendetti

The bulk then this quarter, – okay. And

Andy Astor

I’m replacement basis. be And a there And month would six sorry. will be, it on

Anthony Vendetti

Every six months.

is the ramp pathogen very update up other Is to early? that starting still Any or detection business? on Okay. it

Andy Astor

described, opportunity venture. Both. testing stage two in that it quite It we're an about. -- with is early was significant with we negotiations as And optimistic is, organizations are two significant

Anthony Vendetti

Now at other Chipotle so contracts you increased that this first most difficult, well, you've increased QSRs very because from is very expect to you do you seen see or announced the do right, Have Chipotle see actual interest seen from point? is well the the an and known. interest expect other QRS the obviously have to or you QSR,

Andy Astor

Wes, do. question? the like you certainly would answer I to

Wes Lobo

to equity on that different that current brand opportunity, I for I Sure. order. looking going to Andy. and relationship Thanks answer the from additional prove it's execution opportunities beverage the is short the we capability with we're know, foodservice space as did the say you involved as Anthony. parties this mean, about Yes, And and really executing forward. unlock us, is absolutely yes. in something specific this the Chipotle the our

Operator

Our Riley Securities. next comes B. Wiesenberger, question Marc from

Sahil Kazmi

Hey, At pricing update. year. believe got question. an high comprehensive that is last a of instituted Thanks strategy increase price Sahil for Kazmi the about on I Nephros in this good X% quarter for the afternoon, third of Mark. the level

about in near in term. any additional general, maybe increases your strategy Just talk near in about pricing you just wondering think you the the for plans term, how if long can price and

Andy Astor

from first is quarter in gross the to year. couple mention of increase largely costs, second price our part last a quarter increase which the XX XX why margin that that XX Yes, And in is necessary significant of months. along weeks, price it pass to which -- I this in is are depressed the just year last our a implementing did was this more is we

try increases, price prices So XX% months we've also will margin our as we as we over -- low as our and increases said we a to are target price have customers. we the, we gross to I will simultaneously over stated. XX two past will XX% the for as can keep And

Sahil Kazmi

and And Excellent, then of involve medical talked of how if capabilities your across in I leveraging that both thank believe commercial also your frame and maybe expectations customers. current to wondering penetration bundled about And you and the both you. I'm filtration and your you've term. could healthcare sales near medium

Andy Astor

of understood you of understood could bundling I and sorry, your question. not the, I'm -- the but medical I'm premise repeat sure commercial I understand quite I points the fine

Sahil Kazmi

Just commercial healthcare how you're leveraging capabilities to medical thinking about customers across both filtration. the and

Andy Astor

I see.

odor, we, filters way do. filters not also viruses nature bacteria, pricing removal filters. So taste endotoxins. focus of and of And kinds medical the the they our of are do different just of to on very the commercial That's address But of the our have profiles. designed they

better opportunity say believe cross-sell time, is that it's not we only cross-sell the often. our shattering. will them be to we that So And we tasting I quite ultra-pure combine significant. two And But but earth to of give also water there over as important tasting. water, -- water ultra-good customers. also and medical the be wouldn't water also continues changing keep to place cross-selling will where We operations issues just safer, take this water quality more in and in to not believe purchasing drinking quality be the continue commercial the direction, their other filters world. will more

Operator

Private Next from Investor. Henry question a comes Link,

Unidentified Analyst

the Yes, Hi, Company? Andy. of Renal what's the status Products

Andy Astor

of assist that SRP, benefit So of operates we our middle the second XX subsidiary as is And But everybody that are own received its the we schedule. year. FDA the generation for QX, deliver for is promised hope we of HDF news soon has for FDA built we Products Renal positive the that And is subsidiary. we Specialty from for the looking further just of for which did. FDA. FDA. clarifications to was And dialysis to approval machine. those as when else you the And we to And end will the what as -- FDA June, by waiting know, from submitted was But news that questions most -- have the last are we the that's that now part. on from the many the the hope submitted obviously the be

Unidentified Analyst

June? By

Andy Astor

are by obviously of from but control we before FDA, the to hoping year, the that's we it that Well, don't something middle hear the that. we that I but significantly will not here, expect be

Unidentified Analyst

Okay.

it? after have up approve Now have inventory do to you any they or you it build

Andy Astor

have as our inventory, clearance And operational experience. we'll quickly. not then for FDA quick too need is small years roll to this out of wide we've goal No, This you a a said, a on basis is great. couple now,

our convenience, clinics its second That's in do plan that been is so its a it of the to half any and this to out are a just and year. tweaks so hope demonstrate And make plan roll and that can couple for this our in efficacy rollout to year of necessary XXXX. we

Operator

Robert Our Performance next Investments. from from for question comes Center Smith

Unidentified Analyst

Hi, Andy. my for taking Thanks question.

surprise a of So late the kind the imagine this I just February's was showed real quarter. first that for of in comments that performance you didn't connect possible me. your that I kind to can with

me as revenue I that trying to year maybe circle then withdrawing long-term in to you is the a interested the but also in the question I as you some am a am enthusiasm this get am investor, more connect And the can, I to second particularly my clarity targets next usually half. whole, not quarter, interested your that difficult unfolds. how or the for and so year looks So for it's

So with that me share you in what can respect?

Andy Astor

if the QX you or can't we are very behave. year it's possible. something very, just better our that are and we the in to changes, we with things indication to greater not that that volumes we will have and out was the wore many other or to particularly a reasonable which you're have be We tell a things products, and stuff QX that because aren't And did can optimal. -- with can communicate we time excellent quarters believe infrastructure Well, with too quarter sort tell customers, when level honestly, question and up that the again. take you building back have say increase XX% a how customers We What we make have didn't you small change. of about are we you high give the sometimes again but XX% sure that on this quarters certainly the and is customer the results in we that a sure to of on the our count. openly I’m as really it drive pile certainty. of you this we don't And individual taking, an in our when we think shareholders can and to leave QX know taking and I I know each and that some XX% that when how and factors excellent And investors. we when the quarter, of what buy fickle, built it there answer number will is you we take I have But share snapshot, come the they're because did growth company, and happen themselves certainty want prudent when still snapshot, guidance

Unidentified Analyst

so feel first any month you speak second additional the I mean quarter. do this? to ends the in with for And have

Andy Astor

quarters to and many in, results. Nephros’ a we that of revenue that really We in tend be -- it make so don't like patterns you weeks I back doesn't sense the tell quarterly are reporting will evaluate have to loaded companies quarterly not four practice

Unidentified Analyst

I surely Okay, accept yes, that.

coming So price send in, you with in increase June, the right.

be that the fully will implemented second So in half.

Andy Astor

Yes.

Unidentified Analyst

second So half the your powerful. quite be seem enthusiasm to for would

Andy Astor

I concur.

Unidentified Analyst

don't are? or kind the Alright. [Indiscernible] of goes, the And units what then that units -? as I their far as actually Is Chipotle have the

Andy Astor

just it's about of believe I them. all

Unidentified Analyst

and your feather cap, Okay, name. a great. that's Well, in certainly a it's great

Andy Astor

sir. you, Thank

Unidentified Analyst

a see company. So and I again. and board, can bit. the this I'm promise took a little the investor me you long-term aback well, and of hope I implement execute I wish Thanks on but it. I'm you

Operator

There session. are no our concludes more has and answer Thank today's conference concluded. This The question in now presentation. attending you queue. for question the

may now You disconnect.

Nephros (NEPH) 7 May 222022 Q1 Earnings call transcript