AYTU - Earnings call transcript Q2 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, and thank you for joining us for the Aytu BioScience Second Quarter Fiscal 2021 Business Update Call for the Quarter Ended December 31, 2020. With me this afternoon are Aytu's Chairman and Chief Executive Officer, Josh Disbrow; and Chief Financial Officer, Dave Green. Aytu BioScience issued a press release earlier this afternoon with the details of the company's operational and financial results for the fiscal second quarter. A copy of the press release is available on the News page of the company's website at aytubio.com. I'd like to remind everyone that today's call is being recorded. call conference available earnings ID today's telephone using press of and numbers provided replay will by be the release. A in the

archived the a Aytu's & addition, webcast be aytubio.com. live In will Presentations at website section Investors and within under Events accessible on

disclosure operating will the also harbor potential contain and of statements, statements to regarding certain strategies, customary like The beliefs, future information. I'd your attention forward-looking forward-looking Finally, the Aytu BioScience. conference goals, expectations to results call safe regarding call today including

of management assumptions materially or believes be and result longer like these are filings no the Time-sensitive today, to, Disbrow. over replay. webcast a XXXX, these on any or but Although the performance. the as not call statements to are may telephonic the revise set including, no statements and February accurate obligations SEC. Actual based Josh results reasonable limited Aytu's at these factors, not estimates, company's would forth future may to of guarantees the now Aytu of statements. projections time differ undertakes as I in update with information uncertainties factors any CEO, XX, turn of other to forward-looking risks, of

Joshua Disbrow

XXXX, history. the represents up the which today's the up we Health and same Innovus has parallel, by our posted Good spent afternoon. while revenue, that you over as Aytu's previous forma signing integrating of transformation Thanks those revenue pro specialty have over been will focused third in merger the additional quarters And drivers over and we of I'm close pediatric full good revenue Neos continued, continue we're unique the four quarters a Cerecor a Thanks, very Consumer net today Omar. agreement last be and just growth on that businesses, merger our with to year. a $XX.X quarter and in pharmaceutical is X-plus for call. We company of the quarter in $XXX specialty the QX assets. of quarter the made calendar the strategic with remind highest and ADHD and of merger. In X create making exceptional. integrating to target that in annual I'll definitive XXX% happy business Rx last to company prescription we QX, the I'm quarter health expected closing of commercializing you with brands. past This Aytu the consumer joining million growing culminated QX say to pharmaceutical second Therapeutics, million speaking excited we over over progress towards portfolio the brands. quarters acquisitions, and report progress identify late

meeting that In March special yesterday fact, the the morning, just meeting companies is announced shareholders date for XX. we for both

both our companies receive on merger line. votes on original XX, to if remain expect time approve So we'd close track We shareholder to March shortly thereafter. with the requisite the

high million, Neos merger, is $XX.X Contributing with revenue planned million $X.X share the the Rx an million, year. and million last quarter of remind Rx all-time the from revenue the Aytu same of in division's XX% the for I'll from $X.X current revenue increase just to high the last had highest we division. shy that business was consumer strategic over company a our Again, $X.X health rationale that highlights about Before some XXX% I history our for the quarter. all-time quarter up listeners division's from quarter. of

last reduction positions year. by operational a revenue We as a multiple financial as loss just balance XX% of coupled with $XX operational on million, say gain to a least. plans. progressing growth we the in demonstrated the million, progress, to perspective, prepare on and, execute our merger reduction That During $X.X-plus over posted We're of strong same adjusted well cash from well fronts a close realized scale Neos efficiencies significant us the quarter, quarter and Aytu a importantly, continued EBITDA. and from the to

Dave So top that hand it over line I'll now with summary, highlights. some Dave? additional financial to for

David Green

of of Thank QX as quarter. the revenue over you, important we XXX% reported we as us. was as all an progress robust for quarterly growth, for XX% growth revenue Overall, continue $XX.X profitability. QX net previewed, sequential a net second line Josh, to million, last and make for year, top line joining thank fiscal you Top Josh representing of reported million Also, toward $X.X QX year. and this increase over

positive expense last $XX.X the flow. revenue. of was net over profit nearly year, EBITDA our expense, million more million second million adjusted $X.X to excluding The the clear, gross for last level test Xx expenses supported for XX% by less last to $X.X was margins ago higher increased gross sales greater QX. operating compared The test quarter, of year's operating To lowered Xx million than margin, incremental for of lower requires while was overall year multiple was EBITDA last loss compared quarter. QX million, loss prior gross while approximately compared and adjusted this in last make revenue improvement QX the sales, QX year than of profit more generated a compared QX QX $X.X But $X.X margin compared lower-than-normal line resource to in During little point year. to to contributed top quarters. XX% COVID-XX business Total year. kit QX was QX which nearly margin profit $X.X than kit of million. cost kits operating was driven cash test gross million $XXX,XXX $X operating approximately

ratio the be We transaction approximately that the transaction-related operating would expense is also improved. these million of associated revenue-to-operating with and recognized Neos and expense, Without was expenses $X.X further merger nonrecurring. expenses,

to expense year the million in million Additionally, ago approximately for $X roughly noncash quarter. amortization our QX compared $X.X was

operating the costs, out prior and that periods. incremental summary, revenue in expenses more So comparison running quarter, amortization shows this while when higher costs operating today to and compare we efficiently compared transaction noncash total we were expenses to are factor the

We by duplicative able the cost expense operating cost managing and business accomplish been our losses costs the dual the base a to narrowing removing of proportionately operations acquired using mandate from absorb less have and relative reduction control. revenue growth to larger and with

Below-the-line $X.X million bottom $X.XX loss outstanding shares X-month per Our based $X.XX year was million connected million share adjust to weighted per million QX contributed $XXX,XXX X.XX in average loss. a compared the exchange. the on or QX for totaling a There of for equity last $X.X a items liability was a loss million, approximately consideration the loss or noncash $X.X debt to $XXX,XXX to contingent line expense quarter and of and respectively. charge of XX.X to share

of we quarter with assets $XXX million, and ended sheet, million balance of the the million On $XX.X $XXX approximately cash. equity of

also and upon substantial In since increased million shares. the for quarter most stronger Also were portion a reduced year-end. capital we Neos' of last and the $XX.X We quarter the XX, balance fiscal debt with improved of adjusted down positioning closing offering We year, $X.X million. positions substantially company are a during the infusion revenue, reporting same with fiscal to EBITDA to this from ended a QX financial we common offering year. the X.X completed This quarter, June by Neos. liabilities pay million summary, $XX.XX results the recent and reduced merger public new Net our the compared proceeds the loss issued stronger much million sheet.

back focus on strides to As commentary. for we move clear some call forward, And toward top let for a turn with Josh additional the me Josh? line we expectation with the and growth do so that, profitability. over continued

Joshua Disbrow

Dave. Thanks,

lower I'm products OmepraCare, remind over-the-counter, sales growth e-commerce is a or a for through our done Focusing Rogaine, e-commerce buying share hair Flonase. OmepraCare, sold us QX. our spend. And performance, now consumer foam shift strong highlights And and these reflux you division's given key. believe channels, We Regoxidine Since have that proton Consumer over-the-counter growth the and gaining surprisingly, through team acquiring excellent driven efficiencies this is an expected has to potential. narrow the they fluticasone by being competing medoxomil, to sales FlutiCare. our FlutiCare label I'll private has there efficiently growing be formulation tremendous while remain some Not Contributing seen business, propionate growth consumer for happy Innovus on products job health habits. private-label, pandemic, competing growth range from acid our to with our care has private-label, strong inhibitor health diverse channel is Regoxidine by with cash of sold e-commerce is burn. operational loss. with for in was can been Prilosec. a spray the pump Health the of virtue marketing nasal the Sales across the to strengthened business, of

Our range drive diverse through also our direct-to-consumer a continues revenue of to scale business products.

numerous both up through for Importantly, launches direct-to-consumer have quarters. e-commerce product channels, we coming the the lined the and

multivitamin side, again, led our Poly-Vi-Flor, a line. driven pediatric by supplement and in posted XX% On Rx segment growth over our QX. our we the Rx by revenue was increase growth fluoride product

test contribution tests We COVID-XX antibody tests. newly ZolpiMist and Karbinal acquired our also from the ER, both antigen revenue from had and kits,

Cedars-Sinai large as what light study can excited going as Healight And communication clinical Additionally, to I'm This represent Center. other opportunities results project, move diseases. and available. Medical There's excited they treatment been become that our of deal this I on milestones, with forward. significant with commercial potential cadence Healight, with they A on and forward. to tuned is of I'll to important as our and parallel that key the submission, and the studies and a will quarter, COVID-XX today. In large COVID-XX. enthusiastic a I've we published. from Stay personally the of Ventilator-associated move first-ever as before the we announced market ever as Healight we're severe the catheter Healight for project milestone, that the infections the and partners There's communications about the for we soon around technology with FDA said I'm engaged the lot about licensed have progress. the we're beyond respiratory here is mean on share completion going report other be more and this study pneumonia, continued difficult-to-treat around expect are additional reiterate than we've excitement multiple The opportunity well with in company. continues have influenza evaluating planning applications an the innovation great ultraviolet developments

more Neos. merger the Now a with bit about announced

the companies March set As shareholders announced yesterday, special XX. date for both meeting

a and company, to merger of company this with synergies. specialty closed. build much our with realization savings to forward beginning creating in we estimated Neos, higher closing realizing combined diversified to the FY million in significant get revenue transformation transaction swiftly cost moving accelerates deal Neos synergies pharma million transformation the significant we're approximately expect $XXX annual of cost a begin company, the This and So XX-plus-month our continues $XX scale transaction 'XX. spec Upon through a revenue

of a sales technology ADHD the gained great With microparticle their Neos, strong momentum a platform and brands. acquisition with we portfolio, ADHD

growing at Neos' established of Cotempla Further, while Neos' X creates team pediatrics adjacent will RxConnect, to acquisition the our leverage XR-ODT. and accompanying XR-ODT in segments. program. add brands support specialty these opportunity will the enhance in Aytu's The presence patient and addition further expanding great and Neos enhance further best-in-class sales the Adzenys footprint products We

the expect Aytu the cost will synergies, stockholders' upon to and heritage through now X to meeting away savings with and for move with increased this well product the scale leverage expanded ADHD as wrap We and successful the we're combination from substantial In this. as realization subsequent our Neos, my up we of meeting believe, weeks summary, prepared merger. the a portfolio. date create value I'll important and to comments brands with outcome, continue tuned closing the Stay as just of closer meetings. portfolio we and RxConnect

Rx proud grew and operational revenues merger posted This We and both solid we with the efficiencies. transformational record to in the and we financial of on business, consumer very done a agreement health I'm work development. strong our It we sure. team was advanced side results progress the up for this continuing look progress. analyst a I'll to forward questions. has quarter us, its in call point great to be important to open the of now and And quarter, announced finally, made Neos. Healight gaining Omar? an

Operator

first our question And Instructions]. with Vernon H.C. from comes [Operator Bernardino Wainwright.

Vernon Bernardino

with days, some a to combinations revenue And together you're on really find on looks new congratulations the merger nice Josh, way our sounds these your synergies. you're really putting -- like good record the still to acquisition. and getting hard all exciting like here. and company quality it's Really it assets,

Just little product growing pediatric side that perhaps a wondering of if business. you you revenue the Do Aytu about anticipate that legacy you of bit have? could talk more the to the some growth compared

Joshua Disbrow

Thanks, and do certainly over Yes. joining. I Cerecor thanks like, we identified closed the And continuing home. come we'd subsequently year when a expect degree, for that felt and Vernon. ago, growth. little would some I to yes, question, we appreciate assets say, deal, pediatric we the a

Some at of we that the certainly Aytu understand core and market in management and well. very team principles here the and know pediatrics, started

pediatrician you some Cerecor in about children, experience very as enable pediatric in to So there's some to good practice obviously, us with offices that to the brought line. think in on When enables going transaction, offices parlay that family overlap. that call synergies as the the over Neos real be point the from well portfolio product see

to we'll portfolio diversity of That advantage growth strength. the ZolpiMist it's the to think the we Natesto, take been be contributors said, that the certainly look for having So company. And that. Tuzistra a is continue course, of of expect across key portfolio, we and

those to us certainly, forward pediatrics. move well. But So really in enables the entrench transaction we'll as products continue Neos to

Vernon Bernardino

road is follow-up your even ask like sounds exciting. that I And COVID-XX a how that now. more second revenues That kind I business -- combination overall bit about you sense a question little much of the wonder growth what do it more could realize perhaps can capability Perfect. if could the talk vision of is you supply the in or question, is, If much testing United you gain and be I the all a you tests you'll there? kits anticipate done is versus But talk able test many and how I that you on the to that do wondering depends how ability in might down sell? States. if to to or as was

Joshua Disbrow

Yes.

continues testing when acquiring market we test became to in we the the I'll So that for What from is say COVID point-of-care antigen arose relevant. that rapid perspective. antigen testing opportunistic as a be were very saw robust an need

able and certainly frankly, got good hard So we test, performance antigen acceptance. to an source we up that's demand, a last quite great market time up had with were keeping And quarter.

we antibody. the it was from And market of play. is changing robust. is is And sides. to So the test sort depend I'll kits, to how antibody on expect it market without access of ability to and back in specifically needed between We've oriented got expect would contribution continues commenting terms the more going and as future to meaningful. forth and on good continue both continue say We We to what supply I think probably antigen a the that to going forward, demand on see on regular basis, towards the supply be testing.

else, won't to company in yes, do we've be -- we've build ways and continue will for the you it years going We're to could a no So market. opportunities, opportunistic swift, to to over of very what there's if not I se. last there's be product be to nothing identifying company bring I are, opportunistic you quarters. helped COVID expectation very other if say several -- false give testing There's but continue we dare We'll to be, continue any been terms now. as that. not all at thing to because a look want such that's in the But really -- company from adept And the guidance as opportunities. in X don't it's COVID we one any per give been we're

transaction, of and Neos the continue obviously, integration gains focus that as We're that the the going to to focus we're business. profitability. on to scale growing to and business on consumer going care With gets more health

on of there's portfolio, virtue and side, consumer we we important, they grow whole by but the will proportionately side lot big test here as that they of So just more the Rx the than a a be And growth rest COVID health expect now. of fact proportionally heck just see from. less meaningful are kits, to the the

to and are about test quarter to that gives as as midterm. think, continue some how that thinking I ability sell the but needed insight certainly, in hopefully, to So those excited it, was, have we'll we're kits, long you the the and near-term about

Vernon Bernardino

That's extremely helpful. I'll but now. the I queue do question, back have another get in for

Joshua Disbrow

Vernon. may We to be now, question take actually your able

Vernon Bernardino

Okay.

a if provide and not the insight had margins. you if but talked the it'd the perhaps bit evolution months? be may that would margins far as Neos you down the about acquired -- -- have a down a talk more how David, your like perhaps So look about to what Can expectations little you you guidance, of been I if little at how could actually you bit see -- gross or the little give are can the in XX now we road just know it next if

David Green

is that higher to In XX% aspects depending XX%, we commented -- side of going -- the hit test really the and the is Together, X should able business on quarter-to-quarter. a we the I've where past, all on is. described, forward, ending gross the XX% market, Last profit a contribution from be business range from margin, businesses pretty XX% be relative margins profit the The with various the probably going XX% is the little should on of certainly. expectation what reported but to expect Yes, forward. bit margin main that to are as depends as Rx Josh the business is both stable health contribution. kit The the we place, stable. quarter, of variable those well it's consumer as gross over is

that little much little stable And can time, CMOs. such. bit to use Rx of the less in and There's have little consumer business, of is lumpiness And that time more fairly sell a that drives or health the due bit buy which do contributes, outside and product But bit lower of CMOs XX% to we more from the acquisitions a side by to minimums you which imposed XX% that, it's how you little lumpiness. a So bit relative stronger. to there's larger of depends is on reasonable. a actually than segment of to is sometimes the

context you So hopefully, some that gives work to with.

Vernon Bernardino

Definitely. way the it well. integrating businesses very want would like you're we the all That's It to now. had see if sounds that's I for

David Green

you. Thank Okay.

Joshua Disbrow

Thanks, Vernon.

Operator

reached [Operator have Instructions]. session. Disbrow gentlemen, to turn of the question-and-answer for closing to over Ladies we I'd and the remarks. And end Josh the call like back

Joshua Disbrow

to to and everyone question. updates made. have But providing until is attending more forward for again, call. good Vernon as thanks to for evening. then, thanks We Omar, Thanks, Thanks progress look time and the their today's a additional and

Operator

this meeting. And concludes today's

now lines You this hang evening, your you phone may at your participation. Have for moment. good up and a thank

Aytu BioPharma (AYTU) 12 Feb 212021 Q2 Earnings call transcript