NXTD - Earnings call transcript Q3 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Nxt-ID IR Update Webcast Conference Call. At this time all participants are in a listen only mode; later we’ll conduct a question-and-answer sessions and instructions will follow at that time. [Operator Instructions] I would now like to introduce your host for today's conference, Mr. Gino Pereira, CEO of Nxt-ID. Sir, you may begin.

Gino Pereira

much. very you Thank morning. Good everyone, discuss for the for you, XX, our months joining unaudited financial to XXXX. September Nxt-ID's ended for nine today and and Thank months call operational three results a you business. give also will general on of the update our progress I

will assumptions forecasts, this performance we'll regarding be such are differ our in and no cannot update underlying of that any including our place statements, statements, should results consists making statements and on applicable morning's call, except cause during information, confirmed including by discussed Please duty forward-looking the to such not statements. filings. that note projections by beliefs, be actual undertake statements that recognize to Please from future that reference of our So you any number and the expectations, we statements, the SEC which goals, and statements. to forward-looking undue existing as there factors materially factors reliance identified required forward-looking law,

So and President on Stan Revenue Operating Orlando, and Chief Chief Chief our Pay. Washington, Fit Health our is Financial Officer today with our Vin the of Division; and Officer; our Officer Care Mike me of Head Miceli, call

then from payments, quick care few couple the Stan because health brief a and So then the I'll say and calls a morning, on it's call a Mike And are updates and and over Vin to analysts words the waiting. we'll for results, of of financial relatively for this for call turn then respectively. take that a review

last business a Nxt-ID. the business, spin to reflecting discontinued activity off the financials FinTech we FinTech as as So intend prepared we that filed were are announced, and for night previously our

that. steady be and and year the a same I show you the Vin our clearer forward. at compared profitability, both into public core will on which health revenue more to income, care in think little take The periods into our results of last business growth moving the bit and the activities this insight detail will gives a

continue of Pay before On through can Fit There's we lot complete side, to number a work have need completed spin-off. finalize need a the We the audit. we of a we spin-off documentation. that to items to

we by updated, end business suited FinTech of so we're targeting believe care this the better we separate to and And year. both operate have And previously the to as the as done the that business are entities, they're businesses, and developments. the kind And we you've in that that that just I seen believe now it's stages value. of clear different of shareholder two the of will that this their maximize think separation health

think both But are lanes. able to think those about I sectors. we're operate of in we and tremendously their businesses, separating them, they'll both by enthusiastic clearly that respective be XXX% more exciting

-- development started line and very XXXX. I a our product on to Nxt-ID, strong, for company so increase a our think strong introductions that And for of profitability number with certainly, track is And pipeline continue the is building to new we've show. to now we're product

Chief our I will call the So over Miceli, Officer. Vin Financial with that, turn to

Vin Miceli

nine year, increased periods to the of on were well -- 'XX up XXXX rate quarter nine quarter from revenues of 'XX million -- for and like XXXX higher VA is XXXX XX, third Thank million, shift months the sales ended year versus for an primarily a everybody. our $X.X about the last months a just you, a a shift, on Revenues have unit for million, September comparable periods rate respectively. both the products, three year the on up basis the the I'd mix for annualized and quarter respectively. year, Miceli, this attributable the were to about $X.X par on XXXX to year second XXXX increase mobile perspective, which to revenues sales versus $XX from volume sales our XX%. in increase with morning, three price comparable months this Vin nine in and about run versus three were million nine $XX.X this On the under a revenues And ended basis say, Gino. $X.X comparable Good revenues should months were quarter months September and were for months favorable percentage The revenues for land-based and $XX.X I CFO is versus XXXX. LogicMark's period. a last the This nine per as typically million review in continuing for basis. the the results Revenues operations the run XX, Nxt-ID. as at Sequentially, products product XX%. cellular million our

at profit Looking gross our margin.

to the months Our favorable nine September about XX% compared periods. and profit gross for three margin XXXX to in XX% again, increased of XX%, comparable sales the margin profit primarily in mix. And the the sales volume healthy and in gross was ended the shift for as both XXth a very a attributable increase came at periods, favorable

a million were operating months third the three last for at nine-month September down versus the year basis. respectively, compared operating versus the three about about just our operations for an was comparable of loss $X.XX income and expenses XXXX quarter down $X.X the about months to XXXX $XXX,XXX of on from nine of $XXX,XXX XX, this Looking Operating our continuing nine nine operating and and the months for period. and $XXX,XXX, $XXX,XXX just under million year, ended months year this and expenses in

on -- So turn year-over-year profitability quite basis. a there in a a

the exchange Interest to And quarter, three our nine expense September the notes, in helped us the Looking months XXXX. the and both both expense the to in the acquisition facility notes was the months finance as expense to attributable $X.X convertible million quarter incurred LogicMark nine of XXXX ended mainly interest as interest the as XXXX. issued same both in for we interest that XX, for expense LogicMark which credit by revolving in is compared lower were the back November million the decrease $X.X period. and as the well related call of second that indicated originally on third solar to and

continuing the loss $X.X XXXX for net compared comparable respectively, nine and three of ended million from approximately $XXX,XXX, the operations months a $X.X and XXXX for loss Finally, the XX, September period. $XXX,XXX was million and to

the So noncash months loss XX, Company's approximately included in X.X ended during charges. the net million nine September

about if Inventory $XXX,XXX, was I'll to year at from of LogicMark. mainly Cash, quarter the in up the sheet. Looking will, increased end. prior closed the $XXX,XXX just because cash. highlight about our of balance fluxes, significant at the you more some volume we

and up inventory payables $XXX,XXX. are So like I say, about,

from down September million, at And mainly XX.X were we you interest the cash is Equity forward pro a XX actually thing the about had generated -- in refinance In puts and at operations plus. about terms accrued here which from we forward, you view. expense, of believe facility. and take that would X a calculation great flow generated going because had related if for a of have cash million. to look lastly, flow the favorable ended from to cash that from accrued a operations to interest, credit expenses, on at $X cash us I paid a of And real point like you operations, I'd we former from position actually the they our one January had think assume we that revolving if interest actual forma do it

over it Gino turn with to that, back I will So Pereira.

Gino Pereira

Thanks very much, Vin.

Vin Miceli

Yes.

Gino Pereira

the And care the Stan Stan? health over on Washington side to up of business. let's turn catch call us now to

Stan Washington

everyone. you, and Thank Vin. Gino Good morning,

As LogicMark you've to heard, very perform continues well.

to very opportunities Company's base multiple with strong this the seen we've a terrific through performance In continues LogicMark provide in channels. fact, year, growth the business best history.

up at As QX performance you XXXX year-over-year. was revenue third the look quarter, XX% its in

QX, through that's year-to-date our For XXXX XX% year-over-year. up revenue

that is in very For which particularly of X.X% year-over-year, VA, margin our government strong in margin percentage ability channel we our performance the percentage relationship our continue strong and increase in year-to-date gross X.X%. under-penetration This, in increase of our have within to reflects very percentage, and grow. is XXXX, to terms course, gross

to two a and agreements, launching that volume, more to looking the those headcount companies, while while major few our higher costs. months. we're managing build and over flat remained continue operations some our efficiency, lot forward We also scale. with opportunity finalized partners retail come growth we big-box next supplier in reporting We've And to our segment. major So particular improved has

market PERS for other new segments we markets increase which XXXX, within for I'll new to hospitality to from including look devices. the our mobile of types also, a LogicMark again, security, transition also are growing the the channel, today products areas it within the over again, from And we and is That within designing other and our for and of serve, which in We're turn growing provides to expand forward, will growth. emerging needs we're VA reach we see vast which very veteran are segments. a new safety the develop show, population, continuing to As landline overview good further strong PERS, where traditional of you. and products developing platforms continuing we key we're And which back business. as Gino,

Gino Pereira

of date Stan. on And the much, going very to side what's us up FinTech Orlando Mike? on bring will on, Thanks Mike the business.

Mike Orlando

Good Gino. Thanks, Great. everyone. morning,

all credit. of continues platform we know, at and that we've of cases. our in Pay, XX this debit in our that is banks. Garmin platform. XXX the grow. our to I And that's flagship networks the customer of additional footprint includes footprint tokenization Since an growth banks. cards activity also you that other increased majority think, to see is six And technology tokenization which Europe, launched, the the in to countries, with continue level our quarter debit network also one increase Europe taking at we activations added ended largest launch, three there. in that Maestro countries as proven And with show purchase Part in footprint holders the of We which, So live use favor in the and versus on additional since to event, --

their details TSP the more the that and merchant are, credit platform we today. the merchants the providers. secure, credit as were card along to open with have today. first information their using companies so with or would information up of partners, obviously, providers provide our The will benefits large And And a the online upgrading one This security them for file for product both for will service we house housing on some ability more targets to those card gives tokenized the payment Visa, subscribers service. tokenization be billing need that to card online merchant other to credential And It we convenient well file the that as essentially, of announced card midsize or management on way card more consumer. or data. credit eliminate become

the lost be while an for don't the or approval they update So go result if to those that and there's them updated. automatically will to And of need and, back ultimately, factors, or to or faster upgrade. bank because the card, file increased consumer expiry to two stolen rates it's increased revenue

technology push continue forward for the our The time. done has been some to quite of We approval Flip product.

We our get any to network payment closely card to This through. through payment it of scrutiny same bank and to have been product approved. working device similar would very needs the with go card that any product, device the go type partner is and

completed, not only branding, but security through to testing, interoperability So we've also the cetera. go for and network which we et approval need

we're so products of have done, end begin we pretty initial is approval shipments. close to once we'll that. been The think the And manufactured. And

towards is team As the quarter, spin-off. we event. The that this work excited entire Gino going mentioned exit for the

of the with of should I and acquired season been for a it relates quarter, synergies holiday IT that relationship expertise helped to our a The we'll team, there's develop we've one We footprint this us. our particularly -- we've technology think grow. believe see the Nxt-ID our through lot the hardware strong to that as fourth prove products far. thus some continue

at XX% look year-over-year. we shipments they previously, to continue While if grew QX, grow,

I as growth continued and so market that And and features will devices consumers gravitate it's towards see, more types more those think, of anticipated the more devices.

hands working new down developing So launching and these is and our to dedicated continuing in products. team

with exit the And leave looks I'm Gino. as So XXXX, as about standalone you, like we what company. bullish it go to and prospects a I'll to very that, XXXX

Gino Pereira

so much, Thanks Great. Mike.

please. now, questions So let's up open for

Operator

[Operator Instructions] And our first Brian Partners. question with Kinstlinger from Global comes Alliance

open. now is line Your

Brian Kinstlinger

in million operating X.X would overhead isn't Gino, I But $XXX,XXX the costs. XX was nine said in X you months EBITDA that of the profit ballpark. think previously adjusted LogicMark months, million around about for last be and over trailing there the that really

Or it what should forward do be million as guide? about adjusted think we the growth year? thinking XXXX? look Is XXXX going EBITDA plus X.X as we better enter a profit to is how you So we next operating

Gino Pereira

No.

both. really think combination it's a I of

So EBITDA a had as of looking and mix, we're number savings the move basis, ongoing And factored that office some more quickly. stated wireless particularly necessarily We're earlier. improved than landline. that's in products number we cost an to Vin is that as at expect kind the continue is with not head to On over there. product more level. towards rather profitability, make updating And there

volume profitability for that's sales, high So resulting us. in and higher

combination a it's think I So those. of

are right kind think of of I the expectation. numbers So next net type for those year

Brian Kinstlinger

then quarter. of were And was that of How this estimate the you a LogicMark's then sales year And rough a can unit mobile? percentage many the when from give ago? us

Gino Pereira

I the one significantly my but increased. the other. the mix head, the off from don't number moving it's percentage of have definitely top to It's is

Brian Kinstlinger

And are we range, XX-XX? closer a just XX% to Or I starting? we it's mean, because are just wide about talking

Gino Pereira

it's No, moving.

As close the it's more, to said, I -- have XX%. than it's I a don't XX-XX

Brian Kinstlinger

and give can us land? the mobile for difference gross then in versus margin price And you

Gino Pereira

No.

Brian Kinstlinger

VA, And customer be about Okay. what obviously, as, of some No? concentration? customer the then now comes going there's revenue from to that how percentage

Gino Pereira

largest Yes, is get is the some prefer, concentration. for too But is customer VA into deep our We split. purposes, not there to significant our certainly, and customer competitive customer.

Brian Kinstlinger

think big-box about the stores? to And when impact you retailers, do in two the then you you of expected did that? how that say be And

Gino Pereira

this have that happens two fourth will do launch that have We're that unable a retailers the coming process we're moment. we signed two hopeful two large the in in that's agreements be with announce of but we until but big-box So that, have online. quarter to we customers at year, date,

Operator

Instructions] from next Tuttle our And comes [Operator question with SoundView. Kris

Kris Tuttle

that a Filings I I'd but detail questions, and love many everything have else, so more get I to areas don't of do have on. couple

the Is You we'll sounds in and big-box potential companies. about reasonable LogicMark, the sales market talked little a pre-holiday that bit that, expectation? get with a those It there's some products start to like season.

Gino Pereira

think We a... that's

Stan Washington

Yes.

Gino Pereira

Stan. ahead, Go Sorry.

Stan Washington

going we'll still we're say the strategy. holiday, to which was was with I No, to the out say, I partners the by going launch you're on We're -- Gino, hopeful going on what we're is working to details that be those through probably launch. but now working

Kris Tuttle

to does just to sort going And sort of be will it, be is staged, local like is how finalizing you're these be of specific long the like to it in in What's my -- but it it know Or -- that area scale Walmart? something be a I relationships? country? of that's it'll -- what's going your take

Gino Pereira

Right.

clear, was be So it first never of all, said to just Walmart. we

Kris Tuttle

I example. know. instance. an an have for I'm just giving example, I

Gino Pereira

and online As an example, of a physical they combination stores stores. will be

likely in a strategy different that rollout, we so as marketing. So size, it's will scale types available the our a certain will And combination of our develop it stores be test given of they those and we just of two and ways outlets. be

team. As that we'll success, we up find the expand to

So roll the structured the I the we in is of fashion are but day, at and we whole of will opportunity that across think range them fairly as the be available, stores a cautious out. proceeding end

Kris Tuttle

the so available online product are the anybody retailers picture these that the has that to access who to building? being will you a of launch, online, big-box part But be channels

Gino Pereira

Yes.

all store their strategy as strategy. today, as is I big-box think for online important retailers their

be will available it both. yes, So at

Kris Tuttle

details thoughts areas delivery really around monitoring could I provide PERS here. LogicMark new more well, some service if with some and like think, of -- some I'm about maybe hospitality, hopefully, have interested details and stick -- we now. care talked what are you health for around your to entering you discussed. the and/or information, home timing is like, area which, They right products hot instance, home a And in the the

You just expectation the about our what what I'd timing I saw doing, mean, I that this really more be is what feels about -- should Humana and is know entry market. it into to and LogicMark's love like is right. Apple doing mean,

Gino Pereira

I'll one. you take Stan, that So let

Stan Washington

Yes.

the and the also about We very of excited market. see growth are the direction

long-term hard developing is able cornerstone launch our strategy. and a to of get your to really into QX. on have opportunities, we'll the as early telemedicine, growth insight We more working be we been next hopefully to in talent year, that and on believe we specifically into provide question around sometime real telehealth But growth

So as we we're key how see on strategy top of that market. our component building PERS on a the of top

Kris Tuttle

is that information for that on And put look start XXXX? something in will to Or be and about shelf should talking in XXXX? about more the there we

Gino Pereira

it I think there'll in XXXX. be information on

You from until won't that but later see begins in sales QX. that it sometime hopeful XXXX, we're

Stan Washington

correct that's Yes,

Kris Tuttle

think I would more learn information where we about all right. to might because, share I Yes, your great be go. that about really have think, can we'd All strategy more that a once lot

a of of lot Just small Fit Pay. the follow-up couple on of in things -- questions A a couple on. the

on are So see world? that this I'm very your some the of that or part or curious, credential interesting. And in what of the of initial the transaction you file, scenarios users application is

Gino Pereira

Yes.

to if services. number online merchants your everything club Kris, billers credit you online your house information one-at-a-month that think our card So to from of today, music and the it's your about gym streaming

keep record. them credit these of on card files All

our be And a stored allow allow be network card that that to data service -- data. with can stored so and with them to would platform the leverage component of this tokenization the token network

both forward, moving of and as essentially said on data for then comments, and payment gateway I we essentially my in subsequent a token token. would the that that both token requester card -- with benefits And network-based behalf payments to whether behalf as payment transactions. And only that act So be a that the those the in a all used number would replacing to to or on that token vast instantly large of payment not that us providing mid for a be of service included would to ability that's but provide it's merchant them, would updated. connected the services provider we merchants, token to being

merchants system's cards, cards of their their in or failure date large their come the lost consumers payment up stolen see or today, as a replaced. data but been their So never expiry amount

that's card networks, activity wouldn't the to that outreach type And necessary issuer an update And or to anymore so tokenization that activity with record. that updated there's our program because of other or the needed be at card it's file level.

all So of that...

Kris Tuttle

Yes.

I think it's is, the -- it's -- -- a so the terrific. context? that it can Garmin a your great yes, think guess, like you're the I How into with you what I'm it's platform. offer? in provide -- they So specifics interact you're I asking embedded does Garmin

Stan Washington

Yes, yes.

So it's market for a whole us. new

channel So and us our for -- up we online opening a online would be billers. customer becomes new new merchants

putting the So been this on today, at devices. we've specifically -- credentials through device point, specifically up and targeted these onto OEMs and

credential to all TSPs of shift our it and become now the those to online file, on up the all platform merchants we of online tech. As opens customers of

Kris Tuttle

we like And companies these Shopify like is service -- Stripe? providers that are like more about e-commerce like are talking or

Stan Washington

the of all above. It's

the and in team previously the you so And at targets at that was those -- customers I we those are in business the serve. Visa if were look days, was of our CyberSource most my that

in to offering got to that out marketplace pretty experience of some we've of plans, building those the service understand go-to-market face. bring and the so challenges this systems, And each would significant relationships

all so. the do the and we're confident partners do our in ability of to quite have to of So support network this

Kris Tuttle

have pilot And yet? this or for any do you customers customers

Stan Washington

we'll we we'll when the that of as launch. the customers, have pilot launch part announce service, Pilot customers

Kris Tuttle

the mean, timing I And like -- that? something what's on what's rough

Stan Washington

of QX XXXX

Kris Tuttle

-- the Is then process. Flip guess, briefly what in, that And about you correct? call I talked so I'd is certification the

Stan Washington

is exactly exactly right, right. That That's yes.

Kris Tuttle

Whose And in? who's right hands holding now? that up that is

Stan Washington

Yes.

-- haven't payment of announced we one So the the networks. it's

hands yet gone a the completed our they've questions by is time. back We're the the been branding, until certification until that their approval some it's consumer that complete. on factor, clarifications bound certification with process. up who in quite announced and and is for number nondisclosure haven't the offer the forth different we've But experience. And of and to We form

at I feel be of the and down before. like although we're very said with some the process this given end, we'll think -- last the we're But we're over I to soon. now, few end close of I them information at days, launch that the

Operator

back And any like Pereira at any this time, to Mr. I'm showing closing further questions. I'd not over call now to the turn remarks. for

Operator

like to any the And not time, showing for now at any closing this remarks. Mr. further Pereira back call I'd turn to over I'm questions.

Gino Pereira

very you Thank much. Yes.

and So for hopefully, and both on this morning, about progress got exciting of an to planned very show future thank We're on we've been we've able making joining that them, call. we're you businesses us the both them. that for excited much

Operator

all Thank conference. have conclude participating does in a Everyone, wonderful disconnect. you today's program, and today's for This may you day.

LogicMark (LGMK) 16 Nov 182018 Q3 Earnings call transcript