NXGL - Earnings call transcript Q2 2024

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Operator

Good afternoon. I will be your conference operator today. At this time, I'd like to welcome everyone to NEXGEL's Second Quarter 2024 Earnings Conference Call.

I would now like to turn the call over to Valter Pinto, Managing Director of KCSA Strategic Communications, for introductions. Please go ahead.

Valter Pinto

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

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

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

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

Adam Levy

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

$X.XX record XX.X% consumer quarter to in was second XXXX totaling as company, increase driver, was $XXX,XXX, a quarter revenue June XXXX. year-over-year compared products $XXX,XXX an a of the for totaling and The XX.X% Branded of million, of revenue sequentially. key growth

Silly eyelash alternatives as eyelashes full half base product comparison quarter and product offers eyelash of George our lash December which line products, customer in product and our revenue lash of XXXX, acquired is of from new of accessories. the a serum branded extensions, year-over-year customer about Silly such Included in various George. we and Kenkoderm for contribution eye acquisition care, and loyal hassle-free line, including a its

and consumer consumer, large George customer XXX,XXX Silly database, Instagram unique well. as XX,XXX over United following in Facebook e-mails. XX,XXX built social George but a has direct includes predominantly sold the only and Silly internationally media is followers not as to States, as well which

its When to products new apply extensions such the $X approximately last non-toxic, lashes, million. easy technology for that neutralized long-wear have could brand, a days. we was are line acquired eyelash and remove revenue Since of leveraging launched create we then, pop-on new to as rate X and XX to

also implemented strategies. marketing We new

a George May only. common in We as and stock, In $XXX,XXX and earnout. marketing, products $XXX,XXX, pleased to new July, Silly sales cash, Silly am announced to future we were acquired George as continues July perform plus on I in result for short confirm order over well, Shopify a of and in alone that

sales can to be product consumer While we with our continue excited fluctuate, acquisition.

just are releasing now Amazon. only Additionally, our lashes we on pop-on

our support In the square and of the of completed capacity side the expansion have. facilities. we invested business, relationships in automated client manufacturing state-of-the-art Texas to room and doubled related that our footage machinery clean in we new our contract We

the During amount that capital back to be we have this half expansion. $XXX,XXX, we completed of some the expenditures in to had the and expect that related the minimal expansion quarter, now number year of remaining the in

validate Due a operations. to for to period facility of quarter, revenue in as restarting we equipment down move shut was our expansion impacted, the and time prior the it to

forward We QX to in and going normalized more QX. expect be revenue

issues which annualized Europe. and to million well. oxidase in well enzyme in as conditions. progress recently headache, We is product, DAOSIN This intolerance, our selling with skin $XX relationship Our STADA Histasolv, supplement, over is revenues migraines, diamine Europe's #X sold histamine cause announced food which treat generating first continues can to gut

this our marketing on launched month. just Histasolv Amazon have and campaign We starting

services customers uniforms, first to distribute product, many to supply Silverseal. leading over its America, provider products Subsequent million and will across flagship and of X a Corporation, Cintas and with service. Silverseal announced the identity agreement Cintas in businesses our to quarter, such corporate to sectors a safety North we public hospitality distribute aid as

and the product. dressing This of As for ideal Silverseal's the Cintas' for for a significant not customers this the are revenue, audience burns, but wounds target partnership us awareness. employees to associated brand also hospital-grade for hydrogel only is

expect quarter first of order We be fourth XXXX. delivered the the Silverseal during to of

increase the $X.X issued of XX% third increase the $X.X recently We and million, revenue XXX% guidance quarter year-over-year, for year-over-year. of an an quarter million, of of over fourth for

At Pulse cellulite to for XXXX, start Our Acoustic flow AbbVie from not still operations. partnership still in the continue launch. of in any and incorporate RESONIC for of from does guidance with we their the positive We are level and pads reduced quarterly QX appearance. getting with revenue close our expected our generating to this revenue supplier on their revenue gel device closely goal achieving cash Rapid team as QX very QX, higher of to we revenue exclusive work expect

the financing we completed week, for dollars proceeds capital to working increase with Silly of This us Lastly, attractive the also for million for our replenish provide earlier a sheet and by we spend spent balance and led this with investment $X.XX will insiders terms. at gross marketing the buy financing brand. inventory George

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

Adam Drapczuk

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

Contract totaled revenue impacted consumer normalize XX.X%, increase by The XX of facility grow driven and QX. quarter products, in QX days or new will in move contract CGN's was XXXX, in revenue George, an revenue to $XXX,XXX compared branded XX, XX, its from for into the as including and ended partially $X.XX increase a XXXX. and sales growth by ended of quarter was the approximately June $X.XX June million, For by offset million manufacturing. in Silly decrease manufacturing

first due the primarily to was Gross of to profit XX.X% June a the gross margin XXXX. $XXX,XXX for in consumer quarter totaled XXXX profit quarter XX, X branded ended for margin the products. XXXX. increase months for was months the to $XXX,XXX quarter $XXX,XXX profit compared a second the profit of a profit and The June XX% XXXX, for gross margin XXXX in XX, of Gross gross of of of of compared the X second ended in increase year-over-year XX.X% gross

revenues compared of XXXX. XXXX, by ended $XX,XXX, June manufacturing consumer $XXX,XXX products, decrease XX, a increase in in lower for $X.XXX the of The cost to offset XX, revenue. is as for months from of X.X% increased months X June partially revenues sales to by million of contract or revenues with the Cost X branded cost primarily aligned ended

to in X XX, months XXXX, George. $X.XX or and to Selling, expenses administrative increase XXXX. Amazon general in expenses ended promotion for to XX.X% million selling, and ended to Silly is as X the attributable $XXX,XXX The marketing and the June an compared increased related Kenkoderm advertising, $XXX,XXX months fees, by for attributable to June increase administrative and general primarily XX,

with costs of George quarter these expect further QX Silly increase products. revenue with a consumer to growth full We in branded in and

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

a of million. of $X.X the cash had company approximately June As XXXX, balance XX,

into of of proceeds capital, is The direct for use million, $X.XX Subsequent to working by company closed additional and operate for for of end higher-than-expected to requirement the for George XXXX. its securities brand immediate cash led the marketing plan on it The inventory financing Silly products. sufficient the the quarter, meet business has the to the demand believes and marketable insiders. a company and offering the registered

our offering. shares X,XXX,XXX which had issuing outstanding, NEXGEL with does XXX,XXX XXXX, common shares of connection XX, we August anticipate of common include of the not As stock stock in recent

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

Operator

We'll Instructions] Bill from Capital question, wait, first COVA take our [Operator from Odenthal Partners. we while

William Odenthal

to on In revenues, I Amazon. just get Silly One than to relative little clarity Silly in have and $XXX,XXX said did I'm you two on Shopify your questions. that not the July George. quarter only and a release, more it. press more in George is including trying

Adam Levy

That's correct.

William Odenthal

sequacity your expectations revenues. of just the an So you trying get to annualize that, idea if I'm of of

You annualized $X.X the and $XXX,XXX the on year. million

Your sales. fourth million for is for quarter guidance sales $X.X the and is in in third guidance $X.X the million quarter

of should will you if So of business? continue year, How July is at -- is they in if -- look this do second if the -- indicative stays this it half the guys impact the what's something this? going on

Adam Levy

are only We made tough. run very are So rate, appears consumer products the Billy. tough a products lower were unpredictability. always very, We it Right run Thanks the projections. their is Consumer for question, rate growing. strong. those of and because at now, always

grow there's that, and are is are amazing our an increase because acquisition. that chance line and end continues product to spend believe excellent being we the to up We reason going a an bit will little hopeful, we

that half. perform it going pace, second at we're then really continues So yes, if to probably the well grow in to

William Odenthal

Okay.

Adam Levy

product, it in for always It's consumer the buddy.

William Odenthal

I I Yes, And the got relative second to got Cintas. is it. question it.

be? So as should kind expectations Cintas? to guidance dealers expect what given -- from we to when I'm not any or And revenues start have you of sure could

Adam Levy

Cintas to fourth the So going quarter. revenue is from in start

with in will manufacture, fact, product to been QX. In is make products for already that packaging already placed have the orders the but CG us. in for the required converting gel And ship and gel the

because fantastic dollars line, because part to our It positive is flow manufacturing contract very the drive revenues very almost actually X:X. to products to more costs, NEXGEL, good, and important margins CGN at the mean of fixed both and are try of are our cash a become consumer while at bottom

excited onboarded. as very recently starting stream that we're large about well as So customer that we revenue another

in revenue. of be fourth a will reorder And And Cintas as with the The significant certainly, of said, quarter, hundreds will it it I is continue dollars. opportunity pattern. multiple thousands

William Odenthal

last AbbVie. question. I relative I'm to And one sorry, have It's

So Can AbbVie? an third quarter, that in expectations -- timing, of quarter, you -- stated are quarter also these what kind with if from where idea and the the the give that on down your of status fourth quarter put And what revenues you predicted is a in July, maybe with revenue. little drill you're first expectations -- second without And expecting? can you these us AbbVie. any you press release

Adam Levy

Yes.

So since AbbVie we now done we're communicate much design not with as although the regularly, lock. in

Our did original that due AbbVie announce now. we start in And that expectation a had right to console. their then would was QX delay revenues

was into The delayed revenues delayed. the puts months. starting And was launch project us so revenue everything X whole in That QX. --

is launch the that part. soft Now

will move into So decent start launch but full QX, in in QX, the we and begin as then and are in the revenues and revenues will QX. they QX, ramp will

AbbVie So to to accretive when bottom expected have our become we line. that's

Operator

[Operator go Ramos next Instructions] Capital with And Management. Eric to Titan we'll

Eric Ramos

the kind One of George. And with okay? questions, that's to quarter. wanted is congrats I I Silly just them if starting say on few a have of

kind looks Or revenues then rate of expect kind win You just the I evolve gross kind guys those you Amazon high what to of that wondering you decline? fees of margin with are obviously have like of paying seller that with how you guys of start of that as you kind Shopify. Amazon? consistent? saying well? think Is And to that addition And kind really was as is the

Adam Levy

great quite question. how frankly, a seen this affect don't is I Shopify Amazon a on sales, about answer Shopify The Amazon That's big never the even will existed. product I've before go know.

anticipate So accretive. overall, Amazon to we be

As does so of don't we from go, How we Amazon, do for stealing Shopify? the the results is dollar them audience create we we that are as both for stealing that yet And at and break the just that tolerable allowable $X.XX already advertising. shoppers that Are your know What have is I of on ACoS an where TACo that similarly. you and the call look the a that every we we billing allows Amazon in same. I for down? commission cost the are of the charges on margins of that is very business that biggest $X.XX much about advertising, lower Shopify? control far And do -- extra exists, direct-to-consumer Amazon, it, that

sure. We to to where simple get Shopify as journey your make that seen same be kind to customer of cannibalistic it both on want never before. goes. agnostic Did be, question? will as the try not possible. customer Amazon how the just But the we as us and Amazon as margin as I'm I've answer So far to

Eric Ramos

these as give I of don't of can baseline machines? pricing much see expect then for well us I agreement. as of expectations on like monthly, yearly basis Yes. amount of a share, the No, kind curious maybe the was And thing, AbbVie you're about kind kind to treatments for to RESONIC know each able but how either another of daily, your you treatment for you definitely.

Adam Levy

They're be, of I many success is we we will than determine So which that that tell going don't know uses from internal a selected, of can large are got it's at $X pad, somewhere under of really that And depending Each to between some X per NDAX XxX of choice least $X.XX the machine packaging course, these there of on treatment. And were AbbVie double pads. the AbbVie. the it's demand, projections other pads. has the range either so procedure how you to -- them. that treatments that.

Eric Ramos

to That's really are of you insight on you able the what helpful. going those are kind like? of sales think margins And to any then into kind gross give look

Adam Levy

Yes.

going call they're range, it, places to CG, XX us. So margins because and that an we between and and -- XX, contract through much gel manufacturing or treat length medical I CGN, like have arm's packaging, from XX%, the in gross somewhere flow transaction, XX%, they're XX% as as device but buying margins converting kind the X of

So additional make we margin also on that.

not it's to than XX% overall. expect So margin unreasonable greater

Operator

with further Mr. to back Adam in the Levy Instructions] the going to no remarks. turn final [Operator queue, call questions we're for And

Adam Levy

and everything fruition worked We joining I up Thank that in of hard towards and in very think And call. built everybody, sort QX the success thanks, we've to QX QX and you, QX. to QX. operator, will for for set and come in QX ourselves

and quarters made results get we've of lot very get at investments a point. work to us we're this and from lot anxious So of those get to excited a and done there the to because

all, you. and the company. be QX thank will with for I hopefully, And by QX. what you, and staying So happened us supporting you impressed in Thank actually

Operator

today's you Thank for conclude does That your participation. program.

may You at disconnect any time.

NEXGEL (NXGL) 14 Aug 242024 Q2 Earnings call transcript