Earnings call transcript Q1 2023

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Operator

Welcome to the NovaBay Pharmaceuticals First Quarter 2023 Financial Results Conference Call. At this time, all participants are in listen-only mode.

Following management’s prepared remarks, we will hold a question-and-answer session. [Operator Instructions]

As a reminder, this conference is being recorded. to conference like Cain. to now would turn over the Jody I go Please ahead.

Jody Cain

Cain you LHA. today’s is with This Jody Thank call. for in participating

and Joining Chief Law, are NovaBay Chief General Officer Interim me Tommy Counsel; Officer. Justin Financial and from Executive Hall,

from listeners within could be like statements involve during this include meaning risks anticipated forward-looking cause statements of to federal any and comments call I’d that different made that management actual by results materially remind will These uncertainties to the forward-looking results. securities laws.

operations, In uncertainty that circumstances interest the impact between the time its means beyond the contemplated the rising best based at is and impact This estimate Russia and particular, as and that the on about there’s change company’s outlook the results the and Ukraine. today’s broader control any discussion. economy NovaBay’s rates for financial could information its available conflict on that results circumstances such impact of broader economy

please risks sec.gov. For a at list with uncertainties, Commission of and and Securities review Exchange filings description and the NovaBay’s

content of this of to that law. as or obligation only the undertakes circumstances the date any reflect events NovaBay except contains to circumstances, as call update required of XXXX. accurate broadcast, the is live revise information no or May conference XX, Furthermore, by

Now I’d over the turn to call Justin like to Hall.

Justin?

Justin Hall

warm by of and care our such driven reporting by increased Today, Thank and with you, vertical, companion Jody. our our compress, Good sales increased oral core dry afternoon supplements. physician Avenova products thank Spray you good through news we’re eye channel from to joining us. of everyone sales wipes as for dispense and revenue Avenova our higher

our spend optimize of the marketing lower ability advertising good side programs. expense due on things More to with digital news to

introduction also new evidence-based took needs. effective that of the product future and steps meet with consumer We products growth innovation support to

launched products our three this and first So product. new we’ve introduced far year, co-promoted

that sales and care care three I’m of like care skin eye Avenova specialists and our relationships our with to Now eye verticals, on with care, wound deepen updates to to care, each efforts share franchise. report our our our has paid off beginning I’d pleased and professionals eye their channel channel with physician eye who NovaBay dispensed represents uptick practices. the products This win-win patients care a an available for directly make during quarter. their high-quality in through to our in

and mentioned platform reaching out optometrists meet and As programs we customers our educational for proactively by a dry with These requirements products. our disease. investor ophthalmologists the discussing partnering March us on our attributes care discussing accredited CE help are provide call, organizations programs of with eye education continuing to eye

eye of complex I’m more than also Avenova a and products condition pleased sustain one with gain and relief. the as companion that dry may is high-quality to performance require our approach multifaceted

portfolio each commercialized several years, Over products of treatment standard dry eye that step a we’ve address the past the best-in-class of regimen.

These of brand products customer ophthalmic-related those build and seeking eye making from our conditions. dry eye for recognition one-stop other and base, a symptoms relief upon destination loyal our NovaBay

market branded for Needless XXXX. up billion our full effective industry are the million for to dry of opportunity we products. eye factors about disease is for and dry growth of to $X the global driving of growing the prevalence growth rising plenty awareness treatments, treatments increased market from symptoms to Recent demand have condition. suffer XX line and Avenova by eye that the expected the reports this nearly reach Americans state Among say,

product and the + psoriasis. symptoms we Cream the on DERMAdoctor formulated Moving care Therapeutic This of the and first specifically the Joy relief offer. our special introductory for network Last exclusively Moisturizing now Psoriasis products. Comfort skin treatment QVC launched of to through collection is our DERMAdoctor month, of a

a common afflicting of in those cells This worldwide half U.S., make Psoriasis about is than million to and more represents in nearly people body XXX days it million everyday the than the skin with X skin skin life. in condition new claiming causes weeks. a condition their problem people rather significant

the feet. anywhere ears, up mouth, including show body, and hands in eyelids, can Psoriasis

+ also head and to on sensitive the of dermadoctor.com is essential scaling, salicylic is use moisture. toe includes August, and cream the the product fragrance-free helping prevent acid help most in appropriate while to redness, Comfort and Our for Beginning this skin’s on on to be and Joy relieve available and steroid-free, It even restore will itching, Amazon. skin. flaking reoccurrence irritation,

week, in Corrected Dr. Product + featuring Kunin, Officer, for this our flare-ups. Balm an as spring Chief are guest triggering Calm our when Earlier eczema just time Eczema QVC Cool honor Audrey returned allergies to

provides Just dryness relief and from using rashes, redness, itchiness. balm temporary eczema’s

is this on whole psoriasis balm suffering our cream, those family for Association product life we balm suitable the invite eczema to the use -- DERMAdoctor invite the those Acceptance and eczema real suffering by body. Seal Like after We the actual website view from the featured our proudly We dramatic label. to Eczema on before see anywhere product from of National users. pictures

Now turning care. to wound

NeutroPhase Our are and under cleansing and superficial for and are States wounds, brand Wound used abrasions. the products under Skin the the minor and China Cleanser burns United PhaseOne in marketed and brand irrigating in postsurgical

to antimicrobial represents of are NovaBay’s Like formulated wound its Spray, biofilm, hypochlorous penetrate our Among advantages acid acid. the and Avenova wound healing. a which ability of is hypochlorous barrier FDA-cleared and our kill form with products significant care proprietary to

care chemicals they NeutroPhase Importantly, in marketplace contain because other PhaseOne toxic not the wound are found many the and do in products. differentiated

is and broad-spectrum range of against tissue. skin yet to non-irritating Our a new formulation and exhibits gram-negative it making and gram-positive non-sensitizing bacteria, it effective, activity highly gentle,

batch wound through ensure hypochlorous care and to for most in bottled quantities the proprietary purest United process the safest, they’re Cleanser stability acid large on in market. and amber in Care States glass here products a the Wound our manufacture powerful We

medical branded to With million Pioneer marketer recent and devices. leading announce from and pleased partner, order pharmaceuticals China a Pharma NeutroPhase, $X importer our we’re a Holdings, Chinese of

revenue quarter XXXX. expect this the shipped order from the have second sale We to of recognize in and the

world, available and a ideal non-profit the of side exclusive have broad Ukrainians our for helping to the the for It’s is to as with medical can Ukraine PhaseOne other we Foundation. due donation with to commend stable its PhaseOne Ukrainian potent Health of it partnership formulation PhaseOne distributor, frequently wound facilities Ukraine a the privilege Russia. spectrum conflict use in hospitals in ongoing their PhaseOne be On during its Health as to needed. on Health through used

from We take step Lastly, another appreciate note our in investors to us this we and who closed balance in proceeds last sheet financing $X profitability. will believe to who million month. a strengthen The towards financing allow the our this and mission. participated continue convertible

to call Financial our our conference first like our Tommy? over Interim review Law, I’d Now to turn financials. Chief to Officer, Tommy quarter

Tommy Law

product of the sales of Thank $X.X million first revenue you, quarter DERMAdoctor $X.X branded and was $X.X and of million sales, $X.X afternoon, and XXXX million Net our of product product. Justin, product good million Avenova included care wound for everybody. PhaseOne branded

launch quarter Avenova margin This impact and Spray margin returns product for sold to on of first Avenova XXXX the favored XXXX. the of with was XXXX, our the quarter first the in mix on sales XX% of XX%. product to with Gross net product first revenue of product results that increase expired of over-the-counter Spray XXXX unanticipated the from compares products prior higher for and channel due quarter primarily

costs. the in compensation for Total primarily first a decreased XX% quarter costs. which decline to included and lower to million, This XX% prior $X.X Avenova marketing due over million, of XXXX variable sales expenses decreased expenses reflects digital year. the X% operating lower advertising expenses to G&A $X

first with for the net $X.XX per The of $X.X first was and loss $X.XX fair fair the non-cash value of quarter gain loss non-cash liability warrant XXXX This were quarter net of contingent the a XXXX. no for $X.X of or comparable gain million. $X.X on share, included of on in of million of of for million XXXX changes share. items first million compares There which liability in value $X.X quarter per or changes the

We with December as of March compared million $X.X XXXX, XXXX. of $X.X XX, as cash reported cash million and of XX, equivalents

subsequent convertible we of the notes completed and Justin warrants As private million quarter. placement a close $X of to mentioned, the

now, the back turn to And I’ll call Justin.

Justin Hall

Tommy. Thanks,

We’re a best-in-class passionate bringing clinically proud customers. innovative, of about proven products of to of these and number our evidence-based portfolio products growing and are

DERMAdoctor, foundation established of brands the we Avenova, NeutroPhase, and skin solid PhaseOne large care, eye have care and care markets. growing a in With wound and

base our steps marketing aimed expanding demographics. customer targeted to with broaden taking campaigns We’re at

Importantly, advancing of all while managing expenses. we’re these prudently growth initiatives

I thank you take your With ready that, Operator, questions. now we’re to for attention.

Operator

Thank Instructions] you. [Operator

Justin Hall

coming the the be want intend mention as of dates to our we’re will honor on Audrey an to as to be products discussing. pricing for that, appearances promote but her waiting and she’ll conditions. often the several guest While overlooked QVC times common well returning that skin address to our as special question, in DERMAdoctor first We announce I products for weeks,

we Operator, the are for Okay. ready question. first

Operator

Khalid go Capital [ph] Ascendiant Our Markets. first question from comes from Please ahead. Rafe

Unidentified Analyst

Hi. It’s Edward Capital roll to Markets. more Woo, out quarter. Congratulations year? bit Can products talk little Rafe on you you a plan your the and for that about on how QVC Ascendiant this

Justin Hall

Yeah.

have that during I call. the the talked two that has So that we up about products on two products and Audrey been the main are QVC promoting

launched Cool Calm Comfort Corrected + Cream + So the recently Psoriasis balm. it’s the then Joy also Eczema and

two the are those QVC. air on Audrey on promotes So that

Unidentified Analyst

non-recourse are for they one-time China And the and sales, were -- you. Thank those Great. there or was recourse sales?

Justin Hall

Yeah.

a been has of ours really partner years. Pioneer very many for So great

for NeutroPhase many years. job have really in increasing market done distributing been great demand. over They have they expanding and there So a the

purchase not us. particular product. with this the largest It anything ever new a order certainly order not it’s is that they’ve is while new placed So purchase and

Unidentified Analyst

Great. Thank you.

Operator

Anderson Please comes Thalmann. from from Our ahead. question next Schock Ladenburg go

Anderson Schock

the Hi, of on on questions. Justin couple for week. Anderson had This this Tommy. Congrats We showing a and just Jeff. is QVC

various discuss channels any about you there? trends First, a could out your macro calling bit worth and

Justin Hall

Yeah.

think, sales are sort are on and of, we diversified interdependent very the one in would another. not have I we’re, lucky all multiple sense channels say, that very I So that

OTC both heavily on channel. and So the Avenova rely online sales DERMAdoctor

don’t directly sales trend is there and website. to sort any out then that that macro our consumer DERMAdoctor the website of online think is there. call I So the also to from

sales about that is performing channel think I as anticipated. that particular

have sells in But sales East. we the DERMAdoctor Middle also international

As in States. our wound wholesale sell products China. where to wound And distributors products, here our in care and just have sales I channel, we wound we professionals mentioned, care saw United the care also the wholesale we

as Avenova, physician with do And that mentioned, as anticipated. that is channel, I well fairly and we doing about in channel dispense sales also our

isn’t, I we rely source revenue any sales there particular channel channel. call one on, and can for sales that particular think, So we varied do out have, I to think, any a trend

Anderson Schock

then so have few products year new Okay. And you mentioned far. other for had released this any Do XXXX? planned you product Great. you a introductions

Justin Hall

No.

through selling down inventory a lot to the on new product little a going and slow more actually of bit the and launching had. we’re on the products we of So that focus innovation

planned But really have then So and year to year, of product to inventory. through last year. this launches them, those sort fruition glad for and terrific were going our innovative And selling products. on they’re midyear spend earlier and to just ad rest we’re the focusing optimizing of the be existing we’re came

Anderson Schock

Okay. Great. Thank you.

Operator

would back our question-and-answer concludes the remarks. This any for to Hall closing I like over conference to Justin turn session.

Justin Hall

and Yeah. to everybody for today interest for their in I’d like thank NovaBay. joining us

conference about again our nice We quarter August. our promising recent Thanks day. we company. investor envision a the have excited and to for call updating progress forward everybody look We’re future on our and second in

Operator

attending now has Thank concluded. presentation. today’s you Conference for

You disconnect. now may

NovaBay Pharmaceuticals (NBY) 11 May 232023 Q1 Earnings call transcript