NEPH - Earnings call transcript Q2 2024

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Operator

Good day, and welcome to the Nephros Inc.

Second Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please note, today's event is being recorded. I'd now like to turn the conference over to Kirin Smith with Investor Relations. Please go ahead.

Kirin Smith

Good afternoon, everyone, and welcome to Nephros's Q2 2024 Earnings Conference Call. with Smith Kirin is PCG Advisory. This all, Conference Call. you, for participating XXXX Quarter Second Nephros's in Thank

Before I the call will results we that Nephros. include you begin, of forward-looking would like statements regarding operations future remind and to this

not are sell in please may events limited Nephros's For the service filings, Nephros's from company's by to which specific but differ including affect other forward-looking cause may cost described of and XX-Q, SEC factors include, successfully, and materially hospitals review that a the XX-K actual these to market that offerings. discussion adoption health and services its to, timely products identify of of results ability forward-looking and statements, and its and The statements. Factors Forms effectively rate results those or products of care time-sensitive that content its success and and regulatory except efforts requirements date effect the other the this undertakes August Nephros's update of X, or only revise reflect of conference competitive call new and the by required conference statements today, company information economic to to of business is obligation this call, of or contains any and accurate existing on circumstances no date as events XXXX. of after as law. factors. The providers, The live the the commercialization call

ahead. Nephros's Chief Executive and President Officer, would I to Robert, the to like please Banks. over Now go call turn Robert

Robert Banks

our quarter and their start XXXX the work expressing everyone. to good call. Kirin, my you, dedication. Today, hard you for we second us to continued Nephros our afternoon, and results. appreciate by team entire earnings Thank joining on I XXXX want We reported QX gratitude

XXX very consistent we I over the highest business why have the QX, adding retention response control last to to Nephros level. In X solid compared quarter management XX that to of half previous in response past we nonemergency and XXXX, sites and was core a solution year, to resulting executing the ever an In of in a the quarter, last as customer our XXXX, over experienced onetime a such increase response while business. the can of proud orders the in fluctuate for due with the of of an describes proud business, second the number nature growth that's positive we the the of in year. very pathogens of report filters managed we total the emergency long-term all in decline part first just in and provide on XX% order in business customers highest overall revenue. of X% out sales QX response QX active business. I'm ongoing, the in a XX% water, the business the This team that break year-over-year X% in health of high decline water by achieved increase months. These clarity smaller large the Programmatic have emergency with rate As offset of quarters. in began business, past programmatic to up greater reasons emergency am for of

reduced believe emergency We response as committed the and risk robust loss focus generation response is net stringency to to corrective improvement territories on also XX% just waterborne to filtration continue overall and and in the cash in a previously of decline reported actions. we proactive year-over-year profitability. We flow one both our business measures that the contributor

and online filter to speed to met not growth. One and as that tracking significant platform initiatives We replacements. the expectations yet ensure has engagement enhance which of drive of continue The digital long-term focus on operability. achievement key our consistent we expansion app, is filter designed tools, our including to continue the fine-tune is implementation the customer

market, excellent advancing we solution unique our an pore [ a growing us to ] to position in to this capabilities the and with the offer the dire problem. competitive allows our around smallest is Additionally, and size plastics, nano are leveraging NMPs, which concern address key micro strength

and entities We enabling other the are their and make seeking OEMs claim the with that relationships solution may our integrate NMPs. of mediating purchase to them to offerings,

as clear Looking processing in dental remain like and growth ahead, are beyond proposition about where demands. I while detail. our overall its to excited long-term focusing also there strategically Krandel, the meet now to we value opportunities CFO, financial and we water growth processing our and sectors Judy? to prospects, capitalize the profitability world on growth stakeholders, in are we our turn scale over endoscopy areas Judy filtration to positioning on ourselves for practices, will seeing various critical hospitals help is opportunity. I performance our investment discuss on return call

Judy Krandel

provide the Thank for quarter performance you, pleased Robert. overview second I'm to XXXX. our financial an of of

Our million, to QX QX was XXXX compared net revenue XXXX. down $X.XX X%

reflects this to, contribution decrease from alluded revenue. emergency continued low Robert the As

response to increased emergency due in the revenue, the hired sales increasing sales and in part longer-term our from XXXX. Excluding success personnel X% newer

strong period. EBITDA of the indicating in our gross professional XXXX. margins and second performance. We healthy, primarily by XXXX. XX%, decrease before achieved sequential our a was The year products. prior gross due very in XXXX from quarter product from noncash the a due net quarter the commissions to underlying lower SG&A XX% loss the first primarily stock improvement for improved shipping slow-moving and product at quarter by commercial declined XX%, $XXX,XXX which Despite in expenses, second $XXX,XXX and stayed the these decrease flat reserves a shipping in reserves of driven of bonus loss to This a margin year-over-year remained additional of increased $XXX,XXX, loss slight $XXX,XXX was Our of compensation, from of strong reduced and challenges, to fees. Adjusted loss down XX% expenses in accruals,

increased half the the margins Gross X% XX% But improved year Moving by excluding on to XXXX first the XX, X-month by of half X sales period. XX% in for year sales salary decreased and period. SG&A XX%. expense from the in prior decrease to period. compensation expense, XXXX from year the again, June XXXX the fees, an revenue, in period response commission stock accrual, in of a the versus Sales first offset due X% bonus in professional expense. ending to declined by in months increase emergency the prior prior expenses part by

$XXX,XXX in $XXX,XXX Our net in first year to from period. the XX% loss decreased of half XXXX loss the prior

the inventory mainly of payment accounts Despite annual cash a sheet to us receivable and -- we increased of remains operate is of with growth XX, continue as to and decrease providing the at these XXXX, approximately end balance flexibility the of invest last the XXXX. year, a Our initiatives. strong the June first million in million $X.X end with of $X.X from This bonuses. due changes, to debt-free, balance

financial strategically As exploring optimizing we This in call drive will to areas while efficiencies now turn product maintaining back strategic expansion. I look concluding our includes investing Robert? will some opportunities Robert to on that long-term pricing, future, focused discipline, we and for the are the value. remarks. operational improving for

Robert Banks

you, Thank Judy.

their needs evolving high-quality we innovation, our by expansion. grow positioned remain continue to strategic customers. I sharing our the look the and water concludes to providing more forward team solutions to engagement and continued filtration in forward, extend dedication. presentation. support our my on meet customer to coming As progress Nephros to gratitude to our of We partners updates that on well and investors, focusing its formal the want We committed trajectory for quarters. This entire move is Nephros

Q&A. floor We open Operator, for the please call the will questions. now for open

Operator

first comes today's And with Instructions] [Operator question Tom from Maxim Group. McGovern

Thomas McGovern

Just you standard guys of if So if specific little is stringency? And a a ASHRAE first believe that to for territories? bit then for could so question it risk identify yes, question, in I just there could see response reason follow-up on reduced that guys the kind you certain the wanted is, more that I waterborne stringency came wondering reduced XXX, with a out. was on the the maybe elaborate

was I last year. it think end the at of

curious job helpful. you of you very terms are that? reorder of have clients color that, inform give seen could I on be trying a that to clients to if that rate? on Any update shift you guys in kind applies a in good but of guideline an would know maybe guys doing of Just

Robert Banks

the Thanks for question. Yes.

on system positive was their identifying specific things or look may with I if Health, actions the overwhelmed first test happened, So have of number specifically any the urgencies at basically of that and Department question, and a Ohio in cases responses.

stopped individual entity So to in of reverted handle the order that they a so the change They testing the stance. and excessively back system, situation. method each mentality letting not to changed overwhelm that

Rule #XXXX-[ you'll in the membrane in license, Now, Administrative have say But ], a care that a patients. order it's some same that Code for Ohio show testing. obtain lax importance of is you And you've coming over [ ] of not hospital ] a region, to requiring in period. to there future tested in that to out [ XX-XX the

this on that X starts So year. October of

see and similar the as seeing So Jersey states areas suit. legislation in a following in level could of New responses return some and other those to emergency we well. I'm higher region in

your So that, the and I think, well. ASHRAE question on that's requiring based guidelines, second influence of now part as the testing big of is a

noncontrollable it as state pipe going forecast change think influences part cannot is rely the forward, that But X could those I I of business. -- in the response the that. emergency something on So since more coming will on of

So still that average maintaining today. question. which that impressive that I emergency an strong, growth double-digit that hope time the kind is trajectory, answers Despite response, that, you'll that in your we of core see have around is

for that thanks So question.

Thomas McGovern

then and it. the back more, And have Appreciate can you. in Got queue. jump I one I

the is this filter on just trackers. So

are seems through as quite to kinks kind platform. ] working as maybe adding improvements to be not you guys rapid you for had So obviously, as expected the [ of maybe some rollout

seen clients changes maybe end the time on was that was if second initial platform of on time spoke, the be, of you're seen have this quarter? And of line? kind the just the -- you implementation of that expect Is in been this? update helpful delays that success to [ be in of from reorder have how I you time to just Have the kind you case as the have rolled possible kind and first it 'XX. the we kind said was would rollout? Last kind give you got pushed an that that we So of that working? just it then prototype it on Any it's you you a rates of line, ] would wondering kind still the which can commentary follow-up integrated of have of fully quarter XX-month just Or you by into be of now cooked seeing of kind could out end well. do guys

Robert Banks

talking were have to than and Many issues, better we have that, app tracker name issues, but knew version some facilities having are filter it. the about, we of name. And we parts with that reception. offline a in they have the was filters located these question. of But Great boring come hospitals don't or would up didn't app patient care of good the

So all [ was phones tool on the part works and not -- some. revamped scanning it phones on updated and most ]. the that It be fine had or to and [ working so of then ]

as reorder your That's out problem water rate. are getting were question So they that for other a aren't so regular the recently. to a a a online programmatic place regular good their able changing alluded But better accounts not up that to have basis. They worked regular using the easy is and using that addressing but question. on complain, forget this underlying them to basis. changed These on problems for our then low-hanging once the business. Thanks tools I kind full-service why whole of filters, in have [ [indiscernible]. are Places plans rectify don't nurses have A is be kinks of long-term with not that's -- people reason may it as a monitor whatever -- out that number they on are are kind changing treatment where -- problem we the filter seem who in basis, to digital fruit, The but of and asking. keep we'll those reasons tracker or filters we ] staff, very get of about believe and already do filters been

Thomas McGovern

planning the you of added the used still Got not you. if active last the commented you sure end you did doing was -- I active the quarter? second number And that? total I've past of X just one back give thing. guys accounts know it give. you XX But check. a -- accounts I you're months, as possibly recently over to figure that. on guys appreciate I of that's on us go XXX to months I'm know and accounts

Robert Banks

one Yes, X about seconds it, -- find in ]. let [ Judy, me have second, unless I'll you it

Judy Krandel

look Yes, we at number for that you. will

Robert Banks

[ of Pull end it the QX, X,XXX. ] back ] to at sites [

Operator

question-and-answer [Operator company Instructions] I'd our over to remarks. session. to And conference this the turn concludes the closing for any back like

Robert Banks

appreciate talking future. forward we Please to everyone I today, day in of your and look and you, week. Thank great the the joining have again a rest and call

Operator

attending call. This you. today's conference We for Thank presentation. concludes you today's thank all

You have and a disconnect lines, may your day. now wonderful

Nephros (NEPH) 8 Aug 242024 Q2 Earnings call transcript