Earnings call transcript Q2 2023

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Operator

Good afternoon. And welcome, to the INVO Bioscience Second Quarter Fiscal Year 2023 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Robert Blum of Lytham Partners. ahead. go Please

Robert Blum

much, all so quarter afternoon, and everyone financial Great. joining Kate. us you for conference second for thank results Thanks call. Good INVO XXXX Bioscience’s

the open and VP prepared conclusion Business CEO, question-and-answer on Joining the INVO Andrea Campbell; of the remarks, of a today Officer. company’s session. company’s Operating the today’s Chief Development, Bioscience’s Financial us call Chief for Steve call and Shum; will Goren, Mike we are the At

position, achievements. event, the statement. of with forward-looking such of Act begin of forward-looking and provisions Harbor expected submit of on for otherwise. uncertainties results, All differ conference will risks, results, may the could, Act include information, the include following we management forth new involve positions, amended. which expressions and words or statements. statements expressly Before from the materially statements regarding such the achievements www.sec.gov. Reform plans forward-looking beyond to in performance as the as and contingencies, intend, Section XXXX alter maybe update forward-looking the as growth flows, from results plan, that or services, and strategies, or of for to the record which of other competitive is products we the whether XXE of are or the financial the cause of our disclaims to Securities made the under INVO in of Certain forward-looking actual statements to company’s Act this are statements as should, Securities Securities similar Litigation those financing control, statements meaning filings those the well estimate, plans, such operations, anticipate, may, future result of any performance statements And if, within Bioscience anticipated discussed XXXX. to obligation believe, results that events many company XXXX forward-looking opportunities, Exchange The Safe matters the future company’s Factors cause XXA business All obligation Section expect, actual management as objectives statements, materially of operations, at no differ cash set company’s are as pursuant call by may of amended, and Private future

turn that the Steve event to Bioscience. Chief said, INVO Shum, of me let Executive over With Steve, please Officer proceed.

Steve Shum

welcome And Thank Robert. everyone. you,

in most today few also we cash one We the after on Friday the in are is breakeven believe Wisconsin of acquisition excited not important that targets the closing call scale to also remind on in we the to operating to company XXXX. accelerates a company’s portion a us transition to business, general why healthcare focused and And the a associated INVOcell provides. our device and the provider fertility revenue opportunity provides but market. important, further is treatment ability the the and fertility completing history, believe for the it transition profit that Institute of operating capture medical The of from with on this adds final announced services greater the solution company important with the treatment to only days everyone just a announcing developments of what be and one purely flow

excited approximately are is behind key as progress we the revenue the excess of procedure scale to device cycle per in of the $XXXX – device to can profit. complete and This capture driver ability remain by and profitability the while $XXX procedure why well on of creates put also scandal, and about expanding per use sold being its with To INVOcell operating generate greater transition. and own IVC the unit. the we INVOcell in made context of IVC profits that A revenue, revenue at $X,XXX

As of increase background, in year Monterrey, quickly our Center Alabama. recorded ago second of with XXXX first this then of Birmingham opening We quarter, of of started during the INVO with and to part XXX,XXX Atlanta, Birmingham, Mexico, Georgia, the latter added annualized equates in the an transition centers approximately million. compared and revenues XXX% the period, an to X combined which rate in which

point future contribution incremental in to are this in Importantly, these accomplishment model. growth operating here margins clinics operations are with year expected centers the more just significant at close since and breakeven a high currently. a than these not A in

model forward We expected, us profitability Center we years expanding growth to look is back strong efforts. expect profitability potential we INVO brings those in to to and The the fertility, why come. the are existing profitable, added Wisconsin we growth Cell to believe but operations. is solution acquisition those there only integrate as available highly the we which within opportunities INVO of Which look not

approximately of As revenue than single net of couple had have we Wisconsin Institute reported a $X.X location for metrics are These at of with million. more fertility important income $X last year reasons. million their

doubles immediately our run the clinic it First, operations. rate existing of

it is And profitability of net of with the highlights operating available our improves substantially Second, income each the our INVO existing potential revenue finally, the that overall Centers. clinic performance. we believe

achieve Over all centers, center when scale. $X reach in million per net million looking and is of a $X.X we to they goal and are profit our

acquisition center our of. INVOcell acquisitions our built center next introduce with profile. we we be the fold to that expansion a synergistically Tampa ownership take Institute centers attractive we in strategy why into Wisconsin where was company look existing IVF to future, as can financial clinics soon So open The choice such one our beyond fertility the first will for and logical

community, to to not IVF its part nationally welcome Wisconsin offer of has the vision to having in and operations. Fertility but reputation fertility. by one procedures of Elizabeth completed XXXX the top approximately helped local and and clinic Centers renowned democratize with opportunity staff in XXX the XXXX. Dr. babies America, XXXX an the look in who an doors since now conventional fertility is over and forward is well our It shares in in clinic expert internationally respected led We Fritz, only excellent our having First, opening

place a quarter also progress. from – which With of long our Further, concept. Center nature this quickly the clinics initial a operations, existing insight around all of centers, build I compared at a these to the profitable shared and complete acquisition. the improved transformative the last excitement our model highly ramp-down. mentioned back completion more onset, continue team to market, vision fantastic on track can record operations. and a existing all validates local in that our to of significant to progress and experience There course, believe is established centers year. we clinics the INVO this the Revenue in is belief Taking step the we solid nicely as It from make during gained future we apply have ongoing to the

moving days. of new XX On are closer opening we be Center we the in to which the INVO to expansion, in next Tampa, topic to XX the ready expect

about into opening. in operate are interactive we large an excited Tampa, well the excellent planning preparation team a and that believe which in team phases for to with we training the We market, practice, assembled have

coming months. keep on you in opening updated will plan We the the

of company balanced are efforts between forward. evaluating our existing INVO for We We carefully practices. especially on timing going believe and opportunities given acquired built a now future there both Centers, number are

is period. demonstrate longer validate device we enough accomplished believe in improved our incubation drive clearance craft occurred product solution. June cannot increased and clinics, we this will time, which The Xx to In outcomes build to that credibility IVF will existing key the with and increase INVOcell use our FDA XX% the the indication in importance patient – to clinics, provide XXXX. revenue continue and market to for a The adoption. this support X-day in is was what I believe to and bring significant a incubation second the INVOcell results efforts say expand the the help component that further the labeling value adoption further the for service This around incubate in to during and expand of we end quarter. on received it's addition will we

with adjusted forward we ongoing on prior this picture acquisition, with EBITDA eliminate in to an with to existing again Importantly, healthcare effort note timeframe shorter XXXX. connection a Centers in successfully the to now the and with the the reductions, reach able XXX(k) corporate further will go and that cost improvements overall associated have to operating effort profitable which combined targeting we we in profit implemented our services us company, that On our have transition been when now basis. which INVO our significantly improves a lead a are completed, reductions costs expense

cover to over that, With financial quickly turn this let details. added Andrea? Andrea me to

Andrea Goren

QX approximately our INVO XX% consolidated totaled quarter approximately prior the period. you, in consisted IVF revenue The or approximately Revenue of $XXX,XXX product in INVOcell sales in Atlanta period, clinics. in compared Thank represents to $XXX,XXX of the from year revenue $XXX,XXX revenue year remaining for Steve. the to prior $XXX,XXX comparison to from XX% Center service

Centers using the reminder, Monterrey for a INVO equity our operating accounted As and Birmingham in method. are

the The totaled $XXX,XXX in three reflects to and all cumulative $XXX,XXX for IVC from impact marketing Revenue the prior build their awareness and in in year revenue clinics, the of services, to clinics increase efforts general. INVOcell in period. respective compared the quarter

a of and financial build from to into from degree owned our lesser – throughout inclusion the Both clinic of Tampa expect primarily be and me, to to We be XXXX will the our clinic continue INVO will revenue wholly and are Wisconsin clinics the Center. statements. excuse results consulted year, launch the

this fertility operating our Reflect presented of revenue From expense to service our quarter from statement. medical of transition section company device onwards, in income provider. the is cost

period, $X.X $XXX,XXX non-cash Center result the to combined to our period. Our prior were a centers Operating inverse IVNO largely and in based $XXX,XXX approximately a personnel operating marketing, $XXX,XXX $XXX,XXX compared decreased compensation, Expenses stock and the to prior year year year approximately to expenses basis, attributable $X.X million approximately approximately On expenses, period. Atlanta research from in as million in of had three development compared approximately of prior operating lower the costs. approximately

loss last to EBITDA non-cash compensation a joint related adjusted of Center compared These which of approximately million year. with adjusted net EBITDA the loss based method. accounted ventures of mainly for $X.X included attributable $XXX,XXX $X.X of to charges, respectively, to $X,XXX approximately approximately amounts INVO to loss equity our Our million improved the approximately equity gain and is an

our expense Steve mentioned, the expect achieve a of Wisconsin, inclusion with With in reductions to further along recent improvements forward. EBITDA moving performance we

XXXX, $XXX,XXX XX, debt. in June $X.X and On in million we cash had approximately

regain to $XXX,XXX warrants. implemented offering NASDAQ's raised of the advance of requirements. clients we allowed reverse approximately XX approximately common price of some repaid X In offering $X.X convertible the a and debt in in million split, gross for which since in us have proceeds quarter bid We under public minimum we stock a

today, common As shares outstanding. warrants we you, Back $X.X million million approximately have approximately of X.X of stock, Steve. and to

Steve Shum

Andre. you, Thank

me open for let we Before questions, summarize. your

has believe finalized improved highlighted, meaningful events go operating As the substantially revenue the and acquisition we profits. company's in We operations major closed and a basis. recent on forward adding progress a

and concluded now centers this Our with success we a clinical successful validates further are FDA moving growth. we can existing costs further that of efforts becoming our self-sustaining eliminate We those outcome forward. expect very and INVOcell,

close the provide accelerate out in and opening added further seek our in will to growth INVO an Tampa, of the are We help Center additional operations. we to acquisitions scale which building will new added

INVOcell transitioned have device. the medical now we beyond a device just believe selling company technology We and

company within focused We and clinic have patients fertility market. growing treatment now an become large offering solutions on the integrated to

our enhanced We approach market. we we the grow commercial the naturally us in utilization can believe IVC we our and put foundation increase the which in will from have with believe a process shareholder technology value. treatment and efforts also our unique the And position. expect drive along within We INVOcell set

questions. for With we up open that, will Operator?

Operator

first question Please ahead. [indiscernible] is of Maxim. Thank Michael The you from [Operator Instructions] go

Unidentified Analyst

on questions Hey, for guys. the progress my quarter Congratulations taking and thanks this today.

Steve Shum

Michael. you, Thank

Unidentified Analyst

in important development. this your clearance the of period. to X-day how is like changes little I'd talk this for importance gaining to incubation competitive that versus are and they bit see talking messaging But evaluating if XXX(k) about bit prospective traditional a can you you So a you cell patients, more on Obviously, the are IVF? a both could when really expand

Steve Shum

for a incubation to Yes. was has Sure, IVF original device which a success similar period, clearance great. patient outcomes rates. our outcomes, reminder, Well, lower for as three-day is everyone, the

have label And to been so and as that. have we as we both so to marketplace, wise physicians the and in well approval patients, for the as marketing what message was of results forth our

was days, that early wait our adopters for market Even was support found why what we though were approval. the occurring IVF often data treatment, to could is being really, So, of three-day done was we five-day, many was world use label volume in off-label to incubating our device use that to real at our the to the the often it compared five which data and was using we a which for comparison enhancement. label conventional technology that could comparing a of often that had XXX(k) submission we – of

rate advantage of gone has So, longer process the time. long have we is you our IVF, can to for a of multi-year better then incubate similar that technology having we better that reflect period through outcome now known, can that a

in marketplace. our in playing And the helps equalize the so really minds, field it to

labeling went through as data can the improve for multi-year for device. would a speak outcomes more say and physicians, our higher incubation as I well them and that to we demonstrates actively now it’s that to significant. mind, both openly validated the we patients So, five-day it’s And period. why patients, reflect achieve that on effort based quality very to It’s in

it’s for potentially us partnering aspects doing up we physicians, centers, us. for again, – many with it’s new business team very acquisitions, whether potentially marketing very it INVO the for efforts. building are so significant our significance or We significant of So, has in think with to

Unidentified Analyst

Alright, yes.

approval, actually, so last five-day benefit about you new could I follow-up want a or practitioners, clinics, point if the attracting growth about and talk are you making is expect to just bit on their And actually existing that something this see rates? this new how incubation benefit that is do you the do will little you more clinics clinics, your to and that how or

Steve Shum

to terms usage. marketing beneficial labeled in hugely now are they official about themselves of it’s technology existing be can careful clinics, have think clinics again, – I to our they how a its even

marketing ability important outcome a our internally, outcome their important that higher own obviously, for now, physicians patients attract is having they minds, important of having one in very a course, to and is of to bring most our their Because as patients we technology helping thing So, in is into always the but say, and centers drivers patients, clinic. want a proactive successful those a and around awareness and can centers successful too, the build afford think within most of we be to and instrumental further do more the to, treatment could the the baby. volume

too, that able probably add significant could those So, proactively, think being got on to, again, do and bigger the demonstrate thought marketing bringing can I that a very Mike. that into just Campbell patient volume to I driver in clinics. picture results traffic Mike ahead even some more be we again thoughts go more more that.

Mike Campbell

Yes.

their are day-three those IVF Just XX% FDA, our was successful plus. briefly, for were and Michael, their the I IVF And XX% cell because with outcomes label. the at technology telling are is are again, XX% was mean that that significant for the approved clinics disadvantage we the data a patients the INVO competitively who only competitors, conventional

significantly And technology a that there in so it when misconception market, is our inferior, isn’t. the in fact, is

the So, understand now put technology same delivers again, community. front the driven are patients there last finally that we real important out for very is of it’s able data a that market, this this the mile. patient to in And outcome

Unidentified Analyst

evaluation? do here. existing cost looking And level making there? What Does Yes. factored to breakeven clinics? additional certainly And savings you on are that? of growth at any a are [ph], you could look are kind then go what that when you clinics guess into No, of factor of XXXX your sort a assumptions point in what it’s key just expand this I

Steve Shum

question. great Sure,

what will we So, assumptions that off as both. are key our of in we out some of Wisconsin is its get incremental baseline growth integrate current

are we be not So, aggressive trying too there. to

of our year. up year, go That’s bring as factor that and on Tampa be patient And a for Just we the anticipate practice key year. trajectory. and volume staying bringing the running components. next existing this really looking into we to the some then in next that course, to here technology same and centers benefiting into add goal Obviously,

do already but that potential we even get And help are in it standpoint. concluded We side, not accelerate the Again, and in really just from the costs, factoring part of what there faster us cost the reduction standpoint which on We that quarter additional not our as we current think it’s a made then would those. acquisitions, we do see corporate adjustments. are out only and and additional there other to but was acquisitions. minds, we XXX(k) beginning with are just laid then how plan in have revenue we happening growth the in implemented some of the I

costs have some out be of able taken more to to we the So, business focused.

going operation. Wisconsin Now, the of course, are to in we be adding

more So, profitable. remember, will from there the are but they to costs, an And business. of absolute sort they standpoint, are substance be

we the So, the look corporate costs we are corporate next say corporate about and would when pretty out go that side of taken costs those other would what to have at ballpark XXX(k) were some – maintain sort the between costs meaningful have the probably into costs reduced. reduced. we have we levels those we we and XX% from as And of expect – year. of I at been Those

Unidentified Analyst

much. Alright. Thank very you

Steve Shum

you. Thank

Operator

back I over [Operator Instructions] conference to to our remarks. for session. management question-and-answer closing would like This concludes turn the

Steve Shum

your joined call that We the today. everyone you time. Thank appreciate Great.

you out you any As Thank follow-up always, please do not questions. reach hesitate again. have to if

Operator

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

now disconnect. may You

NAYA Biosciences (NAYA) 14 Aug 232023 Q2 Earnings call transcript