MEDS - Earnings call transcript Q3 2020 | Scienture Holdings, Inc.

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Trxade Group's Third Quarter 2020 Earnings Conference Call.

During today's presentation all parties will be in a listen-only mode.

Following the presentation, the conference will be opened for questions. recorded XX, being is conference today, XXXX. October This this was today. issued earnings press the call accompanying release market An at conference close of The XX, the the quarterly the includes of report, for operations SEC Company's today. quarter was XXXX, results September filed with ended which Ajjarapu; today Suren Howard our Executive call Chairman Chief Chief Trxade is On Doss, Founder, as Group's and Officer, and Officer. Financial days the this be available next link. XX will NASDAQ: call under for website webcast on and of Company's replay A the MEDS the more industry information. includes also website Company's The supporting At Company's Howard, the Doss, is this to over call turn time, I'd Chief like to Howard yours. the the Officer Financial floor

Howard Doss

you, to you welcome Thank XXXX for like our to today. third quarter I'd call. thank and you conference financial joining operator, results us

issued posted of today Our press release our announcing on our was the and market after third is results quarter website. close financial

on our COVID-XX outlook business results or the operations as only of hereof, including statements These date of that published We copy statements. impact this furnished the include, the the this are made X-K. presentation call website future that but Company's results These limited release to, of Company project Statements webcast or the potential the speak statements Company, on SEC performance and accompanies for of and the include on not of forward-looking presentation we and materially and Securities in to webcast recent results our uncertainties such Form press have and Commission, to estimate statements performance differ also on call operations. a and of release on filed the actual to press statements. subject press risks, documents our may the statements information and call from risks, Form These on the and and made in and or forth obligation no those most Exchange XX-Q that today's assumptions cause future Please the and and revise assumptions. to not statements Company assumes for factors release, are guarantee refer uncertainties may risk quarterly do be report forward-looking including the to today in any that with set webcast.

in today's in as an Trxade's as supplemental non-GAAP we to discuss measures be for a considered measures and results. believe addition, of In webcast, substitute performance. not isolation from which call These are should we addition and non-GAAP useful measures financial GAAP or

Company's find can reconciliations press measures regarding over our like earnings results year comparable release. our results Ajjarapu, all our disclosures You Suren for Unless the time, financial to Officer. the stated, Suren, otherwise the additional this is these this in floor including to period At comparable non-GAAP in comparisons Chief XXXX. will the turn fiscal of Executive with call I'd be to call GAAP yours.

Suren Ajjarapu

Thank you, Howard.

approximately and the market for the selling to a the accredited Trxade. I'd efficient obtaining to through and are, process. pharmacies walk Before and or we we We Traditional cohorts laborious bringing and procure in independent operational business-to-business in others billion for as purchasing well terms, to difficult drugs. suppliers these price inefficiency pharmaceutical pharmacies Prior the new for provide a are process with a fair transparent market create those independent we together same maintained the how to power We extremely $XX payment independent approximately would of are an like insight drug. launch results market or quarter, an conundrum paying nation's platform of who annual our to operate company, proceeded designed, the pharmacies potential together for delivery, unfavorable which uniquely own provide independent national slow who you no with pharmacy was time-inefficient transparency the nationwide. drug financial this launch and pharmacies, web-based Company, revolutionizing a through as opportunity you and independent what into are identified walk as XX,XXX for way incredible wholesalers the our buying

are and price up annual pharmacies fair We to that costs, pharmacies price to often transparency competition savings a Our independents believe know lets level leads a total scale and they next-day from this receiving and supplier's XX% of in of amongst pharmaceutical fair competing certain with purchase platform reduction up on radical with economy XX% delivery. a drug payment drug suppliers products. terms on

unnecessary Our labor reimbursement having fulfilling at compare loss. prices a eliminating saving negative hours of across to platform manually from or annually, a pharmacists saves prescription distributors, hundreds and of

of our our based Our Visa-like revenue drug we fee model have similar is seen To on around validating the business incredible have model. nationwide. representing model. purchases a on over our to value market garnering the pharmacies a nationwide transaction penetration XX,XXX pharmacies from We XX,XXX into X% or currently date, to attention pharmacies on platform, we simple; XX% transacted X% charge independent a PayPal independent success platform, in

platform two-fold: continuing expand that the network. increasing average high so second, our purchases are purchases transact to increasingly Trxade pharmacy per Our total an of percentage market new penetration, their adding the to pharmacies growth pharmacies the platform; Trxade one, drivers our drug for through independent

our the Now, XXXX revenue while returning financial platform. and see profitability same continuing quarter average spend third operational to and quarter grow our results; strong on continue pharmacies and net to growth proprietary compared to in from income proceeding we to to XXXX,

platform expand during about trust We a a Bonum+, problem secure and through resolves affiliated purchasing a enhances COVID-XX discounts safety, telehealth, prescription regional to and pharmacies free to benefit combat equipment savings the continue communities. partnership offered fundamental to assessment a COVID-XX SingleCare, the with bundles with partnership as tool underserved prescription offering launching policies or solutions national, a QX Health, our telemedicine subsidiary, platform enterprise promote corporate it We're workplace. announced patients in protective for personal prescription more local service. to security effectively BXB tool, Bonum services mobile savings This product dashboard uninsured telehealth also our with impacts Bonum's that a excited to a this Bonum clients. and

capital Colliers and Conference, the markets all proactive were throughout H.C. broader LD Annual awareness the now Conference, like third enhancing Financial three Wainwright attending front, XXnd Officer, investor Investor Conference, the investor the we investment Doss, conferences; Institutional walk with to third quarter of XXXX. of Global the goal Investment some Chief key quarter company. XXX Virtual growing the I'd Howard On our through turn highlights over the to of -- to call from financial XXXX our

Howard Doss

in third profit increased to the unit. quarter pandemic. primarily Thank third expenditures high-volume last $X.X to $X.XX XXX% the quarter XXXX determined diluted the sales quarter the outstanding to Trxade in of revenue profit to profit and of expenses, million in to income to $X.X the same per of of sales revenue quarter you, platform million $X.X $X.X million Suren. to strong quarter profit quarter year. XX% income increase attributable compared also the of or Gross personal outstanding non-GAAP the Integra was $X.XX will for in by financial quarter by primarily revenues primarily due basic same and compared $X.XX in same PPE, the per the lower-margin The expenses. Operating of increased PPE personal XXXX last same in of for a million the $XXX,XXX million to the in compared expenses $XXX,XXX COVID-XX sales. This XXXX last $X.X Revenues continue due non-cash The increase to compared percentage $X.X and and known driven of of XX.X% million stock-based quarter IT increased mix marketing equipment XXX% [ph] of share to quarter increase gross quarter or gross to protective last revenue protective in compensation million year. the as same year. EBITDA year. in of gross a was last equipment, was year. or Net compared share net in measure, diluted XX.X% be third million XXXX or or third were Pharma in The $X.X is to basic our Adjusted of third

XX, was million cash $X.X compared June XXXX. to as the of in were September due of balance Looking and as sheet, XX, at increase The with cash cash $X.X a XXXX equivalents million the and a support quarter. our need We at business. foresee not in to capital end Suren? to further accounts currently quarter for the current do the last receivable compared of decrease inventory

Suren Ajjarapu

Overall, in to the over third revenue profitability I'm as increased productive personal drivers the our growth growth continue equipment sales our of and year-over-year pleased in with strong quarter business. be key XXXX core platform same and period

the beyond. are operator I the stockholders. execution Trxade, of into to XXXX question-and-answer that continue to fourth turn Founder a believe With the look well for our I'll over a sustainable positioned in session. well continuing Operator? it to operational and value forward we create that, firmly to and I begin quarter As to

Operator

you, Thank sir.

Instructions] Markets. Please Brooks begin is now Capital We our first proceed your question. O'Neil will [Operator session. with question And the Street with question-and-answer Lake from

Brooks O'Neil

Yes. evening, breakdown related I And as revenues. any guys. little you give between us about you to the was hoping your telehealth if there could the us Trxade of pharmacy-related perhaps information PP a was the could more and well? Good revenue initiative tell revenue

Suren Ajjarapu

question? Howard, take to you want do that

Howard Doss

in -- the The we breakout segment. by XX-Q absolutely. Yes,

Brooks O'Neil

Sure.

Howard Doss

nine the revenue. in ended Trxade's million months about $X.X for XX, So September had platform

we're just about Integra some Health our about starting at revenue. And Our is in had million pharmacy is had $X.X $XX,XXX identify revenue. $X.X there. which about wholesaler in revenue, million Pharma, Bonum to

Brooks O'Neil

little a about how maybe see you year over talk Okay. And margin unfolding bit next can trends so? or you the the

Suren Ajjarapu

future we will I mentioned, company. tech to usually operate, away as book projections the don't a give as but continuous We be

see on will the the supply margin tech and to because for and looking those margins. dictate the to still are you have But platform, demand PPE them. drug continue we If side, from procure we

on ahead. coronavirus, effects the want please Howard, to but we to side. As determine of add PPE anything, see go continuous unable you if the the

Howard Doss

No.

be think I the percentage to as gross by going are Brooks, I a to to it. the percentage right, revenue. how Because Suren. mean, -- going sales that's that's drive is driven PPE that's platform the really what's margin really --

have gross we're compression don't, margin is forward, the you'll to get if larger. you enough then profit net margin; a revenue be the to PPE a going good if sales going So, fortunate on

Brooks O'Neil

Sure. profitable, aren't those But sales PPE they? are

Howard Doss

Absolutely.

Brooks O'Neil

great. that's Yes,

you bottom or curious; Okay. you appreciate I'm just your And about of I needing think Are general about doing the close tonight capital. you additional that then, corporate after I kind and shelf how [ph] I saw $XXX it? governance file prudent do think that just comment million

Suren Ajjarapu

quarter. Not tonight, in filed It's the been Brooks. last

shelf aware. earlier, So you're definitely, as has I the X-year shelf but been the as placed mentioned

come For definitely our like that and needs play, that's capital operations, would it we don't into play. where cash the shelves we to will but and come need into strategic the raise opportunities

Brooks O'Neil

that sorry. all clarification, my sense. you Thanks Okay, and makes for I'm Thank for taking very that much question.

Suren Ajjarapu

you. Thank

Operator

question. And question Mannheimer is with from Gene our your Company. & Please Dougherty with next proceed

Gene Mannheimer

a -- on Congrats afternoon. quarter good you Good the what flattish attribute platform guys. or would degree what to Thanks. what sequentially? To to revenue

Suren Ajjarapu

Thanks, shot Howard first then let give it, a it at Gene. I'll and I'll explain.

coming the the quarter-on-quarter, tissue collect band performance flat we from in the we increased As growth that versus purchase percentage we generics. metal a of

the So still see revenue. -- brand, effect the our in remote this and that's of of increased an flag platform happening on where the have those as stuff, we might the revenue. are where our some are two these And growth we had riots pharmacists flat effect so locations you are shutdown, the and quarter see and maybe some second

Gene Mannheimer

Okay.

Howard Doss

No, no, on Suren. right the head, you it got

Gene Mannheimer

Okay.

I'm so is a of brand right. It's heard I So that of it generics -- just versus part mix you, clear ordering? Suren,

Suren Ajjarapu

Correct.

Gene Mannheimer

one, those growth adding -- increasing the network. of during drivers net could you trending? you to you terms rate pharmacies. maybe in average new the could a the bit about quarter same-store pharmacies purchases little -- new and other your And what per talked characterize is the What about which growth base talk is is And new pharmacy added of if you how at pharmacy Okay. that if

Suren Ajjarapu

gone think over growth to please seen the numbers, last XX% now to And it this almost Sure. X.XX% we over. Howard, Year-on-year And the per that last growth. the month we've quarter, we've pharmacy purchase see take other see. quarter like XXXX we we

Howard Doss

And of one sequential as of little in with we've little a which far bit quarter, think a previous COVID go of third to on things the spend than your I and of saw I of second think is now different focusing that per this the the to part think other quarters. average we a a pharmacies the quarter less are we actually No, number about added from the right questions new I Gene, think, quarter. I XXX added on pharmacy, And that purchase. third pharmacies, end up is headwind basis as to opposed as the outlets is

Gene Mannheimer

we the sense. that Howard. wondering in of those there. QX, would are question in is saw Integra at how know of the QX. us big the like Thanks, onset level PPE I And -- Is think, pandemic, demand that sales? looks in right revenues? spike other be Makes a modeling you. terms of the sustained are Thank PPE sustainable to this of the I It it run my sure line, be, many rate

Suren Ajjarapu

that's or hitting. a all month purchase and staff. for Gene, wave across We the slow still because the see like, usually a right world, see same is demand and it's effect I -- No, is second still don't still expected unless to have there the of whether a maybe not the see mask that December situations pharmacies will supplier the and model. supply -- growth the glove disruption there's a couple until there. But APB, we

similar you impact can quarter little this the don't a at some But see I bit So PPE least also. anticipate on a sales growth.

Gene Mannheimer

Makes me And Did if expectations QX? what's sense. I Last your could. the for see during from question vaccine any you quarter? demand then, flu from impact

Suren Ajjarapu

are be That's to and of see goods That that, unable another out some most China see coming Sure. the still that could we're meet are Gene. coming issues especially of also. in the Yes, we APIs from are and a our demand. we supply we suppliers finished it growth question, why revenue from flat reason India, great or that a and have the

medication. could not [indiscernible] that we supply So

Gene Mannheimer

see. I

Okay, thanks you. Thank progress. great and

Suren Ajjarapu

you. Thank

Operator

Halpern Brothers. Please Taglich Howard with from with proceed is question question. next your Our

Howard Halpern

the on quarter, guys. Congratulations

Suren Ajjarapu

Thank Howard. you,

Howard Halpern

school the the strictly On work from for PPEs? you your or demand is contracts getting Or have may be though, PPE independent business some it side, state, pharmacies? towards from local

Suren Ajjarapu

Yes, great so -- Yes, yes. we schools question, that. schools look question, your a to stuff That's like and outside answer and do still high [ph] Howard. pharmacies

Howard Halpern

in also part and the going masks equipment? and will And and protective other PPEs -- Okay. as addition rapid pharmacies part state of products local independent of testing forward include for to

Suren Ajjarapu

regulations. tests in their pharmacies great that That opens, a tests these independent CLIA I tell these site. for have on-site but yes, That's until cannot us execute follow the we question, we FDA execute a But these you spike can I for a block on see Howard. CLIA pharmacies conduct left road If or could unless suppliers identified these guidelines. to kits, it's the CDC alone, wish gave some of rapid they these independent sales. test certification. the that or unfortunate the have waiver the

the they play test we So, but Once still we a are we follow. following your the the -- along -- to up, going yes, with of to PPEs, guidelines, one -- kits yes, the can PPEs CDC answer question, the role. the open unfortunately see have to are

Howard Halpern

back winter Because are couple home. Okay. of the and months Bonum And be occurring, just over more into if spike could a would people you the you initiatives telehealth the the undergoing Health services? go probably we're on is heading as

are business? that what you so, And doing grow to

Suren Ajjarapu

I employer And have aspect thing, of to going the So, trustworthy partner a want SingleCare get safe the they our so have discount -- we'll patients the if Bonum+, discount their a get using patient to our our to environment leave pharmacies. on was, in them. have launched independent around should never the to company second growth it. all with XX service, Health Bonum -- card, provide Health, offer it. the reason Eventually, can our program. we prescription to bring goal mentioned, should talk million able a card the They drug see drug can tool the you called in [ph] is Bonum that be non-emergency as seen, workers, that to house, for that our primarily solution we be for and provide to doctor, and delivered as And the

Howard Halpern

start And question. Okay. coming should model modeling last it to that that down? Or Share-based continue at level? going question, is to $XXX,XXX one we compensation,

Suren Ajjarapu

He Okay. that? take to not want Howard. there, you do Howard, is

Howard Doss

I'm fourth compensation into probably the down sorry. quarter. Yes, come non-cash The will

how what look up year. the like at As Committee bonuses and Board -- more in end how they they really and the to years? and to structure That's the of the of the it's far as future Compensation going kind

Howard Halpern

the Okay. Thanks work, great a lot, and keep guys. up

Suren Ajjarapu

Howard. Thanks,

Operator

next Corzine question. with your question from Dawson And is our proceed Please with James. Carlo

Carlo Corzine

great course. stand see on sheet per guys, something balance the medications quarter a -- out. couple -- of Hey, up -- to things Wanted you deposit inventory inventory also inventory. aren't of Deposit million, considerable normally

PPE? So this all is the

Suren Ajjarapu

trying the that the -- likely for thanks Carlo, we're because Yes, these more all PPE question. are They're line. production to

Yes, PPE. You've supply got production the answer that's to the yes, to to meet demand. get question, your and into

Carlo Corzine

the logistics, inventory the send you as having out it are far and yourself? receiving as So to

Suren Ajjarapu

as yes, plan them are they in stuff, coming XX and from -- concerned, deposits XX the advance. to to have the so you to are some far logistics in are overseas As days of put the

Carlo Corzine

other during Got work independent March till period over some with you August. quick it. of of during has because financial and half I this had through, -- what temporarily down that did of opened -- Did that pharmacies, One percentage time? them of who had have shut talked XX,XXX time, those, not kind question, in or we yet the know the actually of and knows of maybe what it closed you

Suren Ajjarapu

we Carlo. supply continuously keeping are monitoring for and are pharmacies how are But the don't, many on. it buying we going demand Specific and number, disruptions as

figure So, right have I don't handy stores down. shut now, how have many that

Carlo Corzine

sure a again them that are were sales. of future Did of down a open most which bit, percentage, them couple months, now -- a of the hurt sales I'm little for not closed but for most your

Suren Ajjarapu

Correct.

Carlo Corzine

all Thanks. it. That's right. Okay,

Suren Ajjarapu

Carlo. Thanks,

Operator

the return call And and the question-and-answer Suren our remarks. any over reached for we back closing will have end to session, I of

Suren Ajjarapu

you were joining please questions, your firm, call of joining on I'd to of to answer we'll available information the more the like will any be MZ replay all be call and the our the to information progress again and under webcast. If non-GAAP that which press you call all. information, the webcast reach this XX NASDAQ: including the that today. you you releases, ongoing for on or link; can update look the in close after growth. you, for to today. assist. of we our webcast, financial be than we financial of of a and on our operator. this Remember website happy regarding out more MEDS Thank our you next to Group; Company's forward IR unable disclosed Thank reconciliation continuing to us days found Thank for We filed market thank and

Operator

Thank you for joining our call.

may You Thank disconnect. day. a have great you and

Scienture (SCNX) 26 Oct 202020 Q3 Earnings call transcript