NXGL - Earnings call transcript Q1 2024

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Operator

Good afternoon, everyone. My name is Bo and I will be your conference operator today. At this time, I would like to welcome everyone to NEXGEL's First Quarter 2024 Earnings Conference Call. [Operator Instructions] Also today's call is being recorded, [Operator Instructions] And now at this time, I'd like to turn the call over to Valter Pinto, Managing Director of KCSA Strategic Communications for introductions. Please go ahead, sir.

Valter Pinto

operator. you, Thank welcome, Results and NEXGEL's Quarter First Good Call. everyone Financial Conference XXXX afternoon, to I'm Adam today Chief joined by Financial Adam Officer; Officer. Drapczuk, and Levy, Chief Executive

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

For company update a discussion or and some you obligation the uncertainties disclaims any well company's law. filed issued with of in press as future the refer X-K new required reports intention by filed this or whether as the as any The to a I forward-looking the of detailed Form ongoing result statements, of SEC unless afternoon and the otherwise risks company's events to information, on release periodically with otherwise, SEC. revise or the business,

that, turn Levy. pleasure over ahead. call to the my please go Adam Adam, Mr. to With it's

Adam Levy

and Valter, to XXXX joining results. us and you, our first Thank you, quarter everyone, discuss financial operating thank for today

growth first I'm for demonstrate in year to report levers pleased we our growth significant record a growth year-over-year Following XXXX. quarter of that results preparedness financial XXXX, steady and expect in

year-end provided our $X.XX our first exceeding during to at quarter of million, First of revenue approximately XXX% guidance $X.XX by quarter million, year-over-year increased the revenue April. conference beginning

against the deposit during reminder, of revenue include $XXX,XXX a first order. this their nonrefundable quarter not does purchase As

margin and to 'XX. in increase as our approximately quarter, sequentially as period the of gross prior was first an XX% For same compared QX gross to negative the margin for compared XX.X% the profit

XXX%, Branded segment from consumer Our strong quarter and approximately an the acquisition revenue increased the by Consumer XX%, increased Kenkoderm. reflecting XX%, increasing manufacturing top revenue year-over-year results full in product Products our approximately and of increase XX% contribution Sequentially, by reflect approximately respectively. total while first segments, contract business branded with revenue both line by of

on continue we in are year-over-year, steady growth the in and we investing While of future branded our growth contract business. sales path of manufacturing, also both

during were investments twofold. made quarter the Our

in capacity purchased in installing secondly, our we facility European compliance Texas, new expansion making investments for and we equipment; alongside state-of-the-art and in meeting converting packaging are are the final requirements. First, preparations and

also optionality In an only addition in XXXX, The not to CG business to and its we facility stream of our robust ownership new acquired Converting additional capacity packaging added new and facility in pipeline the given increase with expect, in customers. provide this us relationships us, but order revenue of we for that Texas. client support

in process its facility Packaging we with we square providing of double the mentioned, us Converting increased that As footage, expect have to we this expansion demand CG see manufacturing to completing and needed our the year. capacity to of are the the existing support

facilities. terms for room we While is construction, machinery landlord in the CapEx our quarter, building funded the during automated related and in of invested state-of-the-art expansion the by $XXX,XXX clean

this additional targeted minimal to CapEx have for we project the expansion currently forward, summer. Going for this complete

and the appearance. A is device free their closely continue exclusive the expect with We Resonic their by rapid team. AbbVie for investment driver of work of GeLPads launch end supplier the Acoustic for our to to partnership reduced this with device this for as Pulse cellulite still year

included yet we to as orders. invoiced be This deposit As them in against has I revenue. a will have above, nonrefundable quarterly our applied be mentioned that future $XXX,XXX

our strategies portfolio in current of is the In offering driving place Kenkoderm X This The revenue complements to addition expansion in symptoms line. psoriasis. Kenkoderm and our products, contribution our treating product which eventually newly quarter into stronger Branded The XX and and full new line focus have product direct-to-consumer several of presence America contributor acquired are Europe. from we Kenkoderm retail sold our growth. health Consumer revenue on currently our has products, products first key product beauty North a growth quarterly which to is and our been

potential In QX, the sale devices market. will extremely long-term other to began European our is as which of as the the into opportunity attaining amount compliance STADA with growth, MDR $XXX,XXX. the Costs we compliance, QX the carried of partnership Class as the the expected our enter given Achieving MDR ability certify we European with well with I in provide of market to important have sell associated process for distributors. us certification all for into our through

to We lesser commercializing MDR relating of in in amount compliance Europe distributing this and summer. final anticipation in expect first fees our later of products QX the

XX, to In In compared total, will facility February Cash a and our at XXXX, December received net the million our also direct $X.X million XXXX going as completed with runway more XX, expansion we normalized cash half expenses of the we to of March of $X.X our XXXX. MDR under compliance. be insiders terms. led on by as reduced just very was in second proceeds and we operations million at is at for hand registered have comfortable of $X attractive fund XXXX, completed forward. offering I feel

to our I would over call Drapczuk. CFO, the Adam? Adam that, to With like turn

Adam Drapczuk

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

in ended XX% increase $XXX,XXX $XXX,XXX quarter XXX%. March as branded revenue of products $X.XX to driven XXX% an The of was compared consumer XX, quarter manufacturing the increase or the sales in of ended revenue For and XX, XXXX. XXXX, for approximately million, March totaled growth contract by

March of primarily $XXX,XXX ended products. March increase due of branded ended loss profit a for the X X the increase in year-over-year the gross Gross months XXXX, gross months $XX,XXX profit consumer was to XXXX. XX, in compared XX, The totaled for to $XXX,XXX

the profit XXXX quarter first XXXX. X.X%, the Gross compared for to of of XXXX for a gross in a first quarter gross quarter profit margin margin of XX.X% XX.X% of was fourth and negative the margin

revenues the March ended $XXX,XXX increased revenues XX.X% with or to XX, XXXX, increase primarily to months revenue XXXX. X increase by The ended months of of XX, $XXX,XXX March growth. X is for the in $XXX,XXX the aligned cost as compared Cost in for

and XX, the expense. ended general to months increased expenses end or attributable as marketing XX, advertising, to XXXX. consulting and compared to for increase Amazon March benefits XXXX, and increase months of selling, March by is and ended $XXX,XXX for X X expenses professional million XX.X% compensation in administrative fees, fees, in administrative $X.X Selling, an $XXX,XXX primarily The general and the

XX, XX,XXX for by March net for from in XXXX. the of $X,XXX expenses March X decreased to ended ended months Net compared was ended the XX, a loss ended X X and the development XXXX, Research $XX,XXX $XXX,XXX March March XXXX. to for XX, as XX, $XXX,XXX months the X loss months XXXX, months

which million balance As of $X.X approximately a led had million, direct the included March an $X cash of by XX, offering insiders. registered XXXX, company

As there in was of strategic of investment the nonrecurring investments Adam quarter due explained earlier, several and a to key cash acquisition first net XXXX usage for costs.

Operator? open I would to questions. now call like the for

Operator

[Operator Group. Naz at Maxim Instructions] Rahman this go We'll afternoon to first

Nazibur Rahman

have Congratulations progress. few. a on I the

your start to strategy talk what than initially you States? commercializing potential I First, about little Also, market? you on could Could more out products United Like Europe bit bit a want the you Europe? commercialization European in initially or to how different in similar in launch. may talk terms of which enter about a is the And countries or initially? little sell the

Adam Levy

hear Sure, Naz. good to It's again. from you

devices. will the device Class have medical MDR products, company, when So be I first you compliance medical a as

be our inspection, pass and in countries Australia, we the will release Hexagels, the then scheduled is the which Class this those when U.S. our So May end and the for for which is the and a We products have to immediately. able in here self-certify of selling month, second product U.K. do largest I is we currently Nordic interest

in also We have a lot Silverseal. of interest

is However, it's Class III. care Silverseal, a because device wound a

you can't realistically, until self-certify quarter. And quarter, be maybe cleared realistically, So fourth first at earliest that will -- not fourth the quarter it.

at some a European smaller want countries regarded quarter we that So second Nordic next Eastern also and Silverseal. and for to release actually you're well. of interest, have Kenkoderm looking as is distribute year that

that So as the that's that thing moving. you'll first see get probably we

Nazibur Rahman

a a difference of what that. you commercializing experience you different terms in in Europe C, it. the Got do -- talk about bit commercializing Could expect in or little

Adam Levy

or products market. Spain brand. how in market England and in are where one a there's lot And the reasons partners, really Well, That's attempt reason or we're a to a of of explain the differences. help why successful they right? to looking them market they for distribution important. to us into somewhere is they understand selected and have The place understanding would really a never like STADA already our go same they U.S. them I So should

of having good they because partners key. we experts So And defer they're good what territories they there. having really their what want do partnerships, and to is to the do distribution the in kind

Nazibur Rahman

That's it. helpful. Got

other FDA the might I The be? with And inspection equipment, that is required? work capacity have the and construction done timing of all you you're there inspection? on Are like question all is expansion. is an validating the Once expecting your that an what

Adam Levy

inspect for are. XXXXX for non-drug Yes. a like facility. only but No, a ISO come and in very were really sure. very would unlike. We're probably we device in doesn't only oven, the FDA medical sporadically inspections if like comes be That equipment that there The not. would facility usually FDA your

Nazibur Rahman

Got just sort a any expect the plant by on also inspection or AbbVie partners other of of inspection, regarding an And it. sort some your you would some point, similar expansion? of

Adam Levy

to to inspects facility completed like of inspections. do the shipping requirement them, normal inspection They'll STADA us. they'll product at have we Well, they yearly So in they'll manufacturing we come our be do their a inspect -- just right?

regular a business. part So time. They inspections the the on are all of go

have inspections ISO. ISO always is inspection of. though, the I'm timing regularly The The we'll yes, exact count biggest not you scheduled. sure on, are So can

Nazibur Rahman

about where was first On it. quarter under it label? in it and XXXX NEXGEL you of had sort talk Kenkoderm's that full about first full your from on when and where progress you quarter the talk launch under it back you sort shifted Could a was was of private -- anything Kenkoderm, how of Got

Adam Levy

thing we the that So We that's advertising is there optimizing thought could in the to pleasant about start help -- very it going that only main were with. well. surprises

and goes Of course, optimization the along. continues

when already are call, now -- we something As to you the all interest of smaller in asked I in Europe. earlier the incremental that question, couple we and distributing have on other in territories own. the a additions mentioned These

In haven't addition, cross begun the we still promotion.

So on XX,XXX When retail X,XXX and and update then our Facebook begin We'll X good and news, update begin e-mails an sister they started we cross-promote code Kenkoderm, that Kenkoderm website. a use of the between will will completed announcing kind in followers And we're is company, that that, about the XX% products. the off, customers, Midge got That to hasn't upgrade working to June. completed, have is check yet. start these to hey, get when we've website out companies.

Nazibur Rahman

Got had one it. I question. the last

I the reception on about been shows. train if going potentially talk the a guys and and NEXGEL's feedback verticals relative Could in-person with you call technology? to bit or technology So trade you getting new back industries little have to you're

Adam Levy

Yes.

-- So show was get trade I didn't question the the the there? about first part what

Nazibur Rahman

kind getting trade you from What feedback of have been shows... the

Adam Levy

huge their making that their our really medical get technology. And end stage. ordering applications for so And $X,XXX are we seems all projects. could successful getting and been to interesting of worth them have now in or that most There's cool But still be $XX,XXX we not companies are that be? roles early up of -- very of run being gel we experiments device. or early think they'll there's -- we've of applications stage to they're very very of How but some big, lots because $XX,XXX great we've they're few for Well, been sorts a really develop them customers feedback. test

Operator

[Operator this no gentlemen, Instructions] have questions And appears further it we afternoon.

all to a us Earnings for for NEXGEL's we Again, Conference bring Ladies and XXXX joining conclusion thanks of thank gentlemen, great will Call. wish evening. that the Quarter Goodbye. and joining, you First So you today's call.

NEXGEL (NXGL) 13 May 242024 Q1 Earnings call transcript