NXGL - Earnings call transcript Q4 2023

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Operator

Good morning. My name is Todd, and I will be your conference operator today. At this time, I would like to welcome everyone to NEXGEL's Fourth Quarter and Full Year 2023 Earnings Conference Call. I will now turn the call over to Valter Pinto, Managing Director of KCSA Strategic Communications for introductions. Please go ahead.

Valter Pinto

operator. you, Thank welcome, Year and NEXGEL's Quarter Fourth Good Earnings everyone, Conference Full XXXX Call. and morning, to I'm joined today Adam by Adam Levy, Chief Financial Drapczuk, Executive Officer. Chief Officer; and

other during remind Before results statements forward-looking may And to Litigation of factors. of due that like Reform begin, harbor meaning call a to differ safe risks, Private we statements be materially I'd within uncertainties made variety actual the today's the deemed Act conference may XXXX. and everyone of Securities of

discussion intention that, to or otherwise, detailed company the to morning risks my release SEC. whether information, a or forward-looking the statements, SEC of of update For ahead. go of business, law. With a reports or as turn future Levy. ongoing call events to obligation well the this by company's and any the some The company's it's to on as filed required the I issued Mr. revise as with result Form Adam and with new uncertainties the in filed over refer Adam, pleasure please X-K the you press otherwise disclaims unless any periodically

Adam Levy

full and operating year our for to everyone, thank fourth and Valter, transformational financial NEXGEL results. for XXXX joining today quarter respects. us you, Thank XXXX you, was record and year and discuss a many in

significant partnerships forward. several investments, company current believe strategic into strategic be growth the solidified have quarter, our we multi-billion-dollar first made Over key significantly what and prepared have our of our the going we collectively infrastructure, course expanded operational corporations will that year for key with and

nearly by branded $X.X This year in contract an of year-over-year XXX% respectively. XXXX, growth and by XXX% to year-over-year approximately driven full million. of XX%, manufacturing For increase both and was products we increased the revenue

in see QX recurring February beginning current peaking sequentially branded to I in slightly to QX. We, decreased revenue from has products of revenue consumer increased A in been and business. slight throughout sales both details in manufacturing provide seasonality will quarter, our the in shortly. due which a on QX mainly remainder historically fourth and decrease the QX in upwards to the therefore, pattern our more contract to expected trend and For year, our

the to revenue XXXX and was million. $X.XX $XXX,XXX our and our between by reminder, approximately joint manufacturing quarter revenue in quarter with in Converting second have contribution a product contract branded of As Texas. XXXX, to full grown revenue of venture our Segmenting first branded are XX.X% CG Packaging proud we products, or from

branded growth XX%. approximately year-over-year quarter Kenkoderm an fourth products, the revenue the sequentially. quarter branded the When of $XXX,XXX, in XXXX, products increase was XXX.X% of XXXX fourth exclude of For and year-over-year XX.X% from you was

Europe and we within Today, in hero drive continue demand into XX to strategy a have sold market. products, North consumer. direct Silverseal, will From grade have with in wellness hydrogel and a that burns consumer line grow expect Our OTC of dressing retail future continue care to several and products place, including ground to America. health we strategies year-over-year health and the direct-to-consumer wound we up, wounds a for hospital foreseeable the built expansion for products the beauty

year, compared XX.X% were full to in margins the For gross XX.X% XXXX.

Class our medical I will earlier, fully we compliant, are compliance. devices in do To mentioned As of into must our Once we the up opening to so I MDR growth able us. facility to Europe. regulation our sell self-certify operation European or medical in thereby products, have European market several branded all opportunities be be for MDR

our as MDR are SG&A. fees, to the and for of inspections, accounted expenses application process of of which the compliance such quarter fourth fees approximately During XXXX, the in relating receiving had consulting we $XXX,XXX

Therefore, to further totaling we insight year look also at Our as like MDR QX of would an levers some cost gross approximately final in compliance well, NEXGEL. the where growth margins ways $XXX,XXX. I margins inspection is We expect at provide are. and QX X additional scheduled how some into this QX and in profit analyze for we

sell First, a a profit and margin our in branded fairly the this we There as products XX% some we direct-to-consumer that quarters. contribution XX%. and between scale, should but occur coming company the for currently see of stable carry stable are optimize efficiencies as we

to gross margin medical converting on our on to carry Secondly, and packaging products. operations XX% XX% products retail of and contribution XX% device a approximately XX%

arrived We comes will facility equipment as state-of-the-art range steadily move new automation the this and of online. the end at higher towards

before, with will process we along doubling expand as to in approximately increase forward. to the landlord with The expect significant space, facility the footage not in lines significantly mentioned Additionally, square we have our we this additional machine meet are X, demand efficiency. our going X by operational automated having already increase

our facility. Pennsylvania Lastly, and growth in lever manufacturing is our biggest gel

branded grown facility sales have still our XX% only X% While at this are product of we we utilization as operating to have approximately increased, capacity.

production Once Given we online demand increase customers minimally to these that increase will only on come the flow. cash and increases, our throughput our and improvements fixed expect our significant meet continued margins as we costs in partnership agreements.

of for Resonic $XXX AbbVie for were we supplier AbbVie of chosen demonstrated the cash this improvement used technology, due AbbVie appearance of in an to be a procedure with a is technology. hydrogel for in Resonic pulse significant XXXX, done. hydrogels the which major improvement of with exclusive and the XXXX, validation from is to its gel the One executed a Rapid these razor model diligence AbbVie cellulite. After be December to for months, many of required cellulite. of device owner appearance extensive In in our our after company which razor each Acoustic as agreement to supply blade the acquired provides for million important driver of Soliton, device, pads customers the our who of be October In key growth exclusive

uniqueness the proud fact and we technology of demonstrates company meet that the Our of ability that of a is us select size to of. will high our standards their are AbbVie the something very

as date one AbbVie been that engaging approaches. We has the to ensure off with weekly Our to the we, it speak launch of this and goes collaborative on dialogue many flawlessly. as suppliers that launch

is first XXXX. deposit launch, is $XXX,XXX said that many targeted We more launch not ours. AbbVie but like have mid-XXXX times looking AbbVie's a this against of now likely received had We for we the the their order. end nonrefundable In from QX, as

a the is capital this in reflected deposit certainly helpful. not additional While is and revenue,

December, drivers European in addition line commercialize In to we consumer to XXXX. In for we an important partnership distribute and product in AbbVie, consumer other North America. health important health STADA, OTC growth a of a announced several leader have with products

Europe in in acquired MDR of symptoms marketing a positively of end of Kenkoderm and well the immediate psoriasis. financial include wellness line be revenue in perfectly QX, the of of mud the and first our new privately well. and mid-summer. in feel September cash completed for in investment QX. December, for our a over company The is launch of just treating as aligned Kenkoderm, we at Subsequent XX, revenue. owned partnership the we optimization to was direct conditioner by operations. In for quarter in with The as million to which this line will bringing XXXX, supply X offering, at salt with our focused shampoo, runway. our bode also insiders month addition $X.X reflecting X multivitamin products QX. Our product forth SKUs, recognized contribute cream, support and full in attractive paid future soap, and Kenkoderm we our very a skin we on a product these comfortable chain $X This December quarter synergies registered of soap, $XXX,XXX at cash for profitable $X.XX is led care health to Also to Cash payment the on as year, terms, and compliance first will offering planned schedule million will XX, results of million and XXXX, current compared

but yet as full $XXX,XXX not revenue we $X.XX which deposit. revenue, does deposit that Looking rather expect the will booked as the and include a from discussed into of QX, be reflects of from revenue earlier, quarter Kenkoderm, but not million, AbbVie

be of or fourth margins the slightly quarter also in that to line with We improved. expect

lot future. With the about our in thank excited team our to I growth turn be like Adam? I for Adam have entire to want would for XXXX. foundation that, to CFO, We for over a Drapczuk. laying to call the the

Adam Drapczuk

results. I'll highlights you, our review full Thank Adam. XXXX year Today, fourth quarter of financial

branded totaled year sales ended products contract XXX% to The compared XXXX, million XX, was XXXX. December increase in of and manufacturing December $X ended the $X of the million revenue increase primarily $X.X million, for revenue growth year to or XX, in XX% as XX.X% year-over-year. For due an

compensation pertains XX.X% was as totaled XX.X%. Cost $X.X XXXX. fourth in for development of compared quarter million the XX.X% XXXX, $XXX,XXX company XX, our is of loss for December other than Net $XXX,XXX decreased XXXX. benefit by million for Gross was XXX% was in the technology. In increased fourth quarter for ended ended of the well drug XXXX. gross XXXX. of delivery XXXX for ended $XXX,XXX with selling, million Selling, reducing of as December due for of $X.X quarter XXXX. The growth. million increase increased as year $X.X to and to $XXX,XXX fees. same $XXX,XXX as same $XXX,XXX expenses compared the year cost studies in XX.X% is of year increase notes gross for to $XXX,XXX in and finished to ended of $X.X period million increase and compared $XXX,XXX to to compared for XX, increase Selling, and Amazon The million increased to equipment, the for $XXX,XXX quarter quarter fourth the was Gross million, year of to XX, revenues. an to fees for to the XX, XX, XXXX, XXXX interest increase the the X expense in totaled expense, administrative XX, year-over-year cost for the XXXX, of totaled December expenses profit profit was to XXXX. proof-of-concept in professional from revenues year or and profit The $XX,XXX cost as general period ended million of in ended and paid administrative quarter year. Research for consulting the profit hydrogel XXXX, for December $XXX,XXX XX, the $X.X December revenues $X.X attributable the general $XXX,XXX Gross fourth $X.X Cost profit December quarter and compared for an of December expenses. These for in XXXX increase December year or For as XX, XXXX, fourth margin of $X.X XXXX, the XXXX, $X expenses to materials to administrative utilizing December of expenses the the December efforts gross revenue a compared million XXXX increase align XXXX, XXXX. Gross revenues and profit ended revenues same ended year our the XX, candidates prior XXXX. compared in compared December to approximately sales. advertising, million products the XXXX to increase primarily prior. million as decrease year the approximately as the less the XX, and of convertible increases of from directly production the The an marketing of attributable off The the company's $X.X to general higher margin ended an revenue $X.X as in profit period ended $XX,XXX for XX, for XXXX. was the year the XX, December margin and primarily the for ended correlates year for to for completion by approximately $XXX,XXX XX.X% compared development to by the

insiders. by in December approximately the million cash registered subsequently had offering million XX, XXXX, company As Adam closed $X.X as mentioned, on direct and $X led of

As shares Operator? offering. is common outstanding of of now registered X,XXX,XXX direct outstanding, to XX, to questions. primarily NEXGEL has X,XXX,XXX shares which increases open XXXX, common of call December QX. The like QX for a stock in the would I of result the stock increase aforementioned

Operator

[Operator Instructions]

Odenthal Capital. will come from with Our Bill Cove first question

Unknown Analyst

MDR questions. Two be in is product to and compliant expect selling you -- Europe start year this One actually do when overseas.

Adam Levy

hear me? you Yes, -- I'm can sorry, Yes. Yes.

be at So June. through. Billy, to all But in self-certified. scheduled maybe pre-inspections final several Class expect we've The allow and to of the end devices be are compliant, us X of week QX inspection in our is we there already the first to that MDR point, of at gets gone will May, pushed that release begin

might clearance the but interest our bit little and Xs, like targeting moving for Class start lot SilverSeal Europe, end of longer. Some that the on of flow for the of a those, out will from into take the year a parties we different products market. of We're have it

Unknown Analyst

but When cash the tough to to So question, flow? positive ask company going anyhow. I'm a can having expect we it start

Adam Levy

of that's is objective. I our but you stay coming, as of obviously simply motivating as Well, MDR like our know, one stay had little of initiatives as these money to We've primary say a tuned. it for some spend would well bit expansion, tuned.

Operator

comes question next Sher. Our from Kenneth

Unknown Analyst

sheet, already for large orders? are And I'm tied Are orders you looking AbbVie confident and with that net just enough and or cash at like long runway used you that your accounts whatnot. Health. some your these STADA half -- is to there's from that hoping cash like have AbbVie. guys be payable question these payment fund But assuming I'm balance My and assuming capital. it regarding terms up working with can looks

could that? on you So some clarity provide

Adam Levy

opposite Yes. true. is Actually, the

and for So cash flow, jerk retail think ones the for big think accounts about our retailers, around move when to about the I tended that concerns like box I cash. they're these into

in big Our in arms. have early pay already day very you on is been and so experience these a have I offered of they fact, we've or that with they financing relationship X because has X with we've with can all been the now very, deposit. share a And want you them to multinational that far, one payment

Medtronic, pay anxious fast payment It companies as So as fast those super terms. AbbVie, but the opposite all retail, when always to are like they Minor, go possible. or for & a companies for to point two we you Owens have is

Unknown Analyst

any hear. that Have it acquisition. with you Okay. my guys accretive? That's wonderful revenue to And second question has acquisition? Or the been seen then Kenkoderm was regarding synergies really

Adam Levy

was how for the one been the in been margins so the equals of this really, website, our successful project deal, consumer already start, didn't that profitable. of which completion we waiting able is accretive be. it's some So that cross-promoting advertising. the our one updated new infrastructure we're we're optimizing is products of which something by at three the But the true another plus say, and in. We bought we investing to bonus, know improve would We've

really at if interest products and synergies. a by And of So there, completed seen U.S. NEXGEL lot have as have we is Kenkoderm it's that also begun discussing cross launching gone a these you then one interesting The [indiscernible] to get be we'll should need the and Europe I've the Kenkoderm. There's go for also here and website, synergy distribution then in certain way, considerable June, there's in retailers to for on project updated, front be and phase. a $X,XXX that website. -- good We that early the

bag. another Kenkoderm in my So is product

under see later that those those year, synergies think deals revenue the but coming. until probably in definitely we You are won't

Operator

Group. Naz with [Operator our and ahead Instructions] And we'll next go from take Rahman question Maxim

Nazibur Rahman

in Congrats XXXX? on recognition on progress. related you to to Or AbbVie will resonic planning from see now revenue the might be think of launching think the preorders now the you you end for any that is of device See considerable XXXX. XXXX? at -- Do do look

Adam Levy

delivery to looking that them. gotten we're at no, of Well, XXXX end from at latest we've the according the

quarter now in will of But will QX. So in the there But revenue see some be is full obviously, looking big revenue. QX. we preorders first definitely like revenue

Nazibur Rahman

it. Got

you summer. amblyopia the launched year, over [indiscernible] last your So guys

you if of and launch data, gone color how could on that you've any reordering put some had seeing that several and metrics you're from worth Now has months patterns docs?

Adam Levy

growing. So the answer is seeing is short we going it's -- are slowly. It

seen have docs that have it. We patterns from reorder the

made that I in about that errors selling little turned the assumption associated case. issues with on not think a out talked to profit of docs but be the would interested might or this a call, I the we That office. one has be margin have last in bit the was

let patients of just fact, docs this we easier Amazon. to lot a In the could most our send be if said,

be available product is XX to product days, us. result, b, directly will out a refer the the much to on it think their be a As a, seeing good patients docs efficient This you will Amazon of the buy simply the able next getting from there. with for and margins in we method more

but things growing answer And the again, been change speed distribution we're help it's hoping is will in that method up. So slowly. this

Nazibur Rahman

little into you Or also as products? talked just the as far including going offering do a Silver bit. your going mean plan into guys retail, [indiscernible] also go product is you're include Kenkoderm potentially When Got it. you about And and you to retail, I brand?

Adam Levy

that's to So Because hero retail double-edged retail your is want question. great can at The a idea you go sword. with be products, a right?

to wrong a end get get want you. lot to you in with It begin If get Ken A fortune occur. was you'll destroyed, product flow product, on there. go a about paying retail sell, will they to or problems too up you'll the early pay of returns, the that you'll it to worried cash won't

because beginning, then products for the start strong be ability it Amazon and of limit to to there. certainly the and we'll good It we're sales, is are focused from Kenkoderm we'll go in those hexogels, a going and should has product So there. in the very sure, SilverSeal see specialized to for it with, has retail types

Nazibur Rahman

plans your is, Got on where status potentially an What in for that XXXX. it. put could are [indiscernible], devices And the of medical give you XXX(k) the update you my question in development? last those

Adam Levy

Sure.

so on for equipment extrusion only for deliver do we those pushed bit is AbbVie the process little of have is products, and us it to need what mechanization while will cetera. we there, can we on necessary all kind many the a priority that because things we've are our now STADA and hold a et identified there So allow first products the

sterilization seems a still been on drape. cataract surgical for that's interestingly like we're a with also and enough, running it but another kind experiments So of shift, protocols opportunity there's us

still do. there's really but #X to us now still our we're because kind of right priorities experimenting. of just the list So it's product, for so much We're in developing

Operator

Full today's NEXGEL and will [Operator Instructions] this Call. in at time. We Conference have questions queue no Quarter XXXX the Fourth Earnings conclude This Year

your a and may at have wonderful You line this day. time, disconnect

NEXGEL (NXGL) 1 Apr 242023 Q4 Earnings call transcript