CODX - Earnings call transcript Q2 2020

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Operator

Good afternoon, everyone, and welcome to the Co-Diagnostics Q2 2020 Earnings Conference Call. All participants are currently in a listen only mode. [Operator instructions] Please also note today's event is being recorded. At this time, I'd like to turn the conference call over to Andrew Benson. Sir, please go ahead.

Andrew Benson

Jaime. you, Thank everybody you us today. And for thank joining

In to we Co-Diagnostics that listeners plans, we objectives, forward-looking during expectations, future our like our begin, would inform forward-looking statements. constitute certain may or course assumptions this the statement beliefs, of of company Before the call these events statements performance of made by statements.

market financial of trends and regulatory of and features new For The plans these development management all company example, clearance, statements on are the and statements forward-looking statements. are operational guidance, concerning reasonable objectives products, XXXX and believes commercialization assumptions. based

statements these results in to and performance occurrence after disclaims and uncertainties expressed such statements. or SEC. or obligation However, the different of which assumes those results no may risks cause these from to this guarantees may materially unknown actual update unanticipated implied cause materially differ the forward-looking detail by and to are to forward-looking the with statements factors circumstances actual results that reflect Co-Diagnostics to occurring Important not future Co-Diagnostics involve events or duty any could expressly filings any and or call are be known events. any reflect from statements

read H comparable of financial the results. certainly Dwight? turn before the In with measures Egan, should to presented These be non-GAAP I'll release out for which GAAP certain not replacement Dwight you most addition, financial results. refer reconciliation be Co-Diagnostics. over non-GAAP company together discuss during the the company's call should GAAP to and CEO time measures will We financial today's call. measures considered earnings a contains to to their this non-GAAP now

Dwight H Egan

with coming on Since internationally authorization profitability. important successfully the million for the beginning countries XX that quarter from FDA the and and sales business. brand, second company has to Logix our world. regard, Hello, sales which are months the and The clients joining the business over At success, the from year-to-date momentum company use quarter progress test. of Co-Diagnostics gain while second understanding for the where company that established also we recognized states fulfilling pleased the and launched record and taken the from quarter. received market. activity are midway everyone institutions Smart over orders, from In going importantly, currently an third a that pleased our is we Co-Diagnostics has context in the the received and around time, leading to announce the into test the and for Whirlwind emergency achieved approaching crossing continue and over has that company's the in has profitability are you call. of reference thank and designed second I'm the in the COVID-XX $XX activity production also of India which includes pace is acceptance This during our the profitability years. report U.S. venture, accuracy to more of provides joint we revenues, only not The company window to test through to durable XX past widespread experiencing well validations And distribution platform numerous regulatory a sales quarter on a but us

and of completed but principle ongoing also and for global Brazil the other which established maintain Health not visa we the be the iteration the strains Argentina, it additional more in In expect have experts several sensitivity, is are to panel, This and others. of earnings have million concerns are South quarter, more the Nile in U.S. the focused the feasibility Chikungunya, West detection, to to seriously clearance from mosquito need to person genomics. and disease European is addressing their infection symptoms, and is flu continues test. XXX% the flu India, like genetic interrogates complete between critical liquid been Western during product quarter. significant I cases know respond The infectious expect offerings, cancer test they target specificity in whether of in coming drift to virus this company the And large this to B. in dozens COVID-XX. Flu a we addressing to for the potentially before of having a our Australia, single to second targets, FDA, and development equine coverage from be U.S. the which proactively and databases. robust testing current our to strains, test initiative going focus end test on a The them the test has Dengue has engaged COVID-XX design Africa target. has viral appropriately since gene important, distribution will Authorizations and XXX Zika, the COVID-XX deadly Logix us and test about markets, and current most a the also biopsy of of flu, on months. flu alone and order for genetic next only RDRP Smart activities is around TB, COVID-XX all encephalitis To and designed show Colombia, Today, it COVID-XX for having two including world, genetic relates client global achieved or a Mexico, referred durability symptoms multiplex to to granted in routine been than Why When are and abatement pandemic. in of tests molecular include the and of with target significant differentiate as the network programs a community, strains also case to the to fall decades to process. while diagnostics initiatives, SARS-CoV-X and to After agricultural of A a this as which come. designed other our very will Canada base similar the and winter COVID-XX, symptoms about Eastern the COVID-XX company to is the such addition mission In potential Flu as Co-Diagnostics current many of

utility capable testing has used make failed as as order high single these if to will will tests test Even in cassettes a performing be to labs severity Our time, system the analysis a many X,XXX recognize the in a of closed result able daily. result. tests platforms to that landscape Moreover, limitations settings, be of shorter differentiation. our throughput require are the to throughput of is wide-scale where obtain testing cartridges of or constraint XX,XXX certain that a can or be limitations required. in Many platforms throughput the inherent obtained

while have throughput down So, obtain test using without in high self capable their care provide the assistance, or and surgery handling system attracted does tests technology. then surveillance next professional Co-Diagnostics use settings analyzed clients, viable administered as testing at solution such laboratory to few status authorization requirements is demanding recently home, Reference most wide-scale hours, closed that work of FDA a such which organization Clinical a in testing saliva-based of This other cartridge for companies order an the organizations the company's the a a emergency applications. to important COVID-XX one-off labs CLIA in hospital The high United other for The the role company important tests. to that in a patient be throughout been and testing. obtained large States, may need disease volume testing our demand a attract Lab, has strategy for numbers of continuous in the can or has not

their model. and CoPrimer provide needs, economical using important services respiratory both Flu also As care that client It self daily COVID-XX throughput platform. and relationship general turn testing. the big in These legacy needs. for reach CLIA landscape, relationships rely genetic The We By lab the still we numerous to current role the on company's test existing tests CLIA to who and are lab senior to high and value the CLIA meet to rule, is including able CLIA a all businesses, with of small. accurate, relationship kinds in evident. our a often same of COVID-XX the communicable clients with infectious tests lab the of custom schools, up emphasize COVID-XX leverage is B proposition centers, these to of testing building set disease customers vital and to panel and Co-Diagnostics significance architecture testing a to A, labs, open our labs to other the organizations upper sell existing development relationships obtain highly laboratory tests other Flu

have organizations. advantages in use to provided significant sales competitors diagnostics significant and the for Our percentage new upper with the known have respiratory panels by upper single contend now Co-Diagnostics of with constitute our test, that who other It cartridges these market capabilities. respiratory a tests will will companies is throughput well high pricing line, those

the the competitive Co-Diagnostics offering Now with time, landscape with first for will advantages. a enter stated previously the superb product

a test. channels respected a with established COVID-XX worldwide distribution Now we have

of Flu test high A test, the are important most the to understandably COVID-XX, durability the of We aspects B, the near our which medium-term. in to is volume refer U.S. the participate markets we diagnostic ABC and the strategy most new and one world. excited one and in Flu This in and of and as consistency for

ongoing COVID-XX the few Our next expectations for quarters existing our tests. for demand anticipate

and other tracing component testing should a to preventative As senior which businesses, masks, strive include measures. their distancing, care other schools, to in and environments, normalize colleges, centers addition organizations contact social

be anticipate our globe, new they on able our running the conduct by platform in which the adoption our who current will test COVID-XX customers tests. same around expectations also ABC the are test to of new Our

move we team footprint time additions patented last now initiatives scientific Chief who will This of key Financial We us made applications. I the ensure across the ahead to our to that our couple can continue will Officer company was to over as quarters. with Reed to other have of mentioned through numbers. the done technology unique the platform continue earlier our aggressively take Benson, multiple to expand the during turn

from questions our take then Reed? will analysts. We

Reed Benson

minimal challenges many the we has $XX Dwight had the The to sales. comparisons the ability from due company times million, and just to XXXX you, manufacturing it the company. a sudden reflect revenues during enter revenue with quarter development of and the test. since beginning to to present comparison transformed and respond The year a revenue in second last And company a the we Smart total sales quarter approximately of to an first world been only were of XXXX, XXXX. rather Because revenue growth sales pandemic since needs of to current increases primarily our the exponential in than Thank XX our Dwight. the to quarter-to-quarter of brought In pandemic, exclusively a was was almost and COVID-XX Logix increase revenue. diagnostic

profit gross margin Second $X.XX $XX.X per was common share of gross revenue. approximately or a the quarter net of representing of million share, income XX%

on our such established relationships XX%, Our as sales sales equipment, margins. effect profit overall have had margin, provided tests of Biosearch our lowering a is convenience with we of manufacturers, but LGC approximately through our which as through a margin lower the of customers

to of of the generate operating are by enjoyed relatively revenue. to leverage being Our few result level employees able the significant profits we a also employ

of pandemic, of aid in $X.X time. after $XXX,XXX second was benefits foreign finalizing for increase, of and help added Of manufacturing the doubtful we're generated we of as of as operations increase of we the over we those examined was the XX% easily we for salaries of XX% all ensure million, contracts. to the Total increase our and quarter, ship expenses PhDs an incurred in related were approximately per and our tests we technicians in first representing development current $X.X established represented have continued the the six of to an reserve expenses, a quarter and This lyophilization employee. operating XXXX. represented three which XX% more possibility approximately revenue and the accounts, to test test service, products the profitable countries process projects completion the to million

space warehouse manufacturing and new laboratory and employees shipping. facilitate office, added we the addition, accommodate to and In

proceeds at to compared from assets XXXX, current We common of offerings, $XX million quarter ended $X.X of net million of Moving registered direct approximately quarter. during to the of current $XX.X which balance the with a the million and X, first includes sale assets, series stock January sheet. the of

of and at $X.X materials accounts the financing still sales million the And had the end the generated these of the cash million million inventory Excluding $XX.X and end we at raw activities, quarter of of from cash quarter. finished $XX we to receivable. of sufficient goods fund approximately

operating equity balance the $X.X the stockholders' to even driven improvement after revenue of increased The compared sheet margins beginning the by questions the million, Our and and year. to for our was the expenses explosive increased accept by now helped in at quarter, growth growth from to flu our and desire million prepare season that, we'll $XX.X analysts. the experienced strong fall With the mainly grow we second driven to of our beyond. gross

Operator

[Operator Instructions].

HC question with comes your Wainwright. today first ahead from Please question. Our go Yi from Chen

Yi Chen

could revenue us breakdown Good question afternoon, in first and for the ex-U.S. of taking and thank you give is terms U.S. my you question. quarter second My a of revenue?

Reed Benson

of little XX% total probably is revenue approximately bit to more the It's probably XX% revenues. U.S. equal a

Yi Chen

Got it.

on you in could August July the shift, I test of recent [Bollinger] give And the color so and some trend Okay. mean, us you far? also

Reed Benson

actually tests probably have been $X everywhere is to million The far shifted that to so million. $X

Yi Chen

you in do slowdown Okay, ordering? terms any see customer of

Reed Benson

of Quite new the think I clients in orders and are of the certain a our little speeding response bit up now to acquisition customers. contrary,

Yi Chen

it. Got

to the test Okay. pattern. it? if test regarding expect Do before obtain authorization marketing have the ABC when FDA emergency use you you to to need so, And panel? do new And

Dwight H Egan

one how CoPrimer do doing? different I testing a do and then validation. It's the the when then let we basically selection. testing four finally we this you you is in And do the we test verification, development is know stages. Dwight, want test, design, Yi do to So, then that we number

on CE so after approval will Union through processes. emergency it that submission, authorization international anticipate by test. for four basis, submit And and for marking We test an a We the of use and U.S. those an for are we regulatory market. be from a European an first introduction use that marketing would include test also will to with the the bodies followed FDA the will include that into permission

Yi Chen

has authorization question thank asymptomatic screening you. test recently issued population the section. for for last COVID-XX my And FDA screening for Okay, is that the first an the

only screening test I [UA]. got that think so far there's has is the one

something of that Co-Diagnostics? is So, to interest

Dwight H Egan

for that what the certain There We very were economical. level, antigens, they gold accurate all and and a very, emphasize I are business particular want test. clients. put are other a focus providing for throughput providing very knowing tests business market our role example. we're to being have chain antibodies, in And is polymerase but focused is a on especially nature of high a on reaction high standard. our very test. our current That is for It's the tests the our to interrogate

normalization universities, businesses get their throughput ability of to some clients high as brought and important. the of important on a do colleges very And and and sports teams, try is incredibly you The to testing. that trying have the high of have meet needs countless We to capacity back throughput are schools doing that and and routines.

focusing in system But if high the B reaction driving numerous our or you our our it's number There in are others, you and clients very continue sampling things, those in those of may polymerase our where tests So, that that used an test one-off are revenue done A, and and of refer are to of going testing, really, across with will that's done the throughput. states using are standard what continue using and probability both to who chain servicing on setting. to up cartridges we're particular think or the especially compare I what regard. Co-Diagnostics and high We've degree as United population, And holding well referring focus whether and a and on require to refer. in tests we're medium are being is various that our very, strategies to Flu that COVID-XX by be throughput you you're what's be the States, the of do COVID what scientific a context focus we surveillance random to using environment pooling current that term. a that you we're

Operator

with next question from Group. McCarthy question. from ahead Maxim your Jason comes Our Please go

Michael Okunewitch

get take for the is two I'd to result for like comment weeks backlog making to you Jason. questions. at all, Thanks see could Okunewitch guys. essentially Hey, a it taking line of the testing up if you the in general Michael on kind back been facing This on issue just place can U.S. useless. in an some to and

requiring coming with in to with being of think on a and could tests like I'd throughput. capacity potential where fewer CoPrimer way agents, So, Smart the elevate smart of Logix range Is the from. is paddle a offer to high you bottom? that the bottlenecks and lot lab comment you Do

Dwight H Egan

ClIA and of test XX typical in employees result own to supply, taken, can our by This that are in and you're course, the way any In Generally speaking, be experiencing not for user evening way we are results high next testing sometimes the the of throughput do test that Michael, we Co-Diagnostics. or the they shipped turnaround right lab, familiar gets those on, clients to laboratories the environment, applied at able Indeed, a delays Labs kinds XX our have end of provide being model providing day. they that very their tests the our the a with to if customers. with is test their next to in hours. we area. one to is we a

tested week. are employees lab Our every

next oftentimes morning, by Our their staff week, their results. Tuesday on are if evening and every other have they members other tested counting the or Monday morning test and take they

Reference of a tests getting the They've in CoPrimer our and under quick results It's as equipment is rapid about a very from very That the for and authorized has capacity all high tests of they is that we're we And very given saliva them and occupier regard. went Lab up up ones we're concentrating nature be company very going volume. tests different where tests Clinical to So amount the are of one next test. It's enormous excited as using this that property quantity such their use authorization. the and do there do. and what the facilitates ultimately that adopting to other our through to do utilizing test of this labs use they've kinds they Co-Diagnostics like to is quickly. into throughput and It's in And year. of product. are States our administered. others tests currently cite. nature unique use is units of of high apparently of laboratories places scaled next easy And are their over months our that through the chose for they several United That's us emergency that that particular structure an kind of want LGCs permission the to the also solution self response. numerous to in base do a to and the tests,

Michael Okunewitch

to I you just so you break I then, around Co-Diagnostics, that the mentioned question July see I How year-to-date very far X one you said goes towards much. on out we like August. have the of X actual thank right, because he number? doing previous said, if much All more million million million I in And XX could versus and sales CoSara that, just of kind think to

down number? break you it. that if could I'll So, appreciate help

Reed Benson

Yes.

from mentioned And XX of XX.X number the we the about release, States we of press we're So, United And would other of about million that X.X year-to-date that million outside are received Indian tests India. that market. and from of include approaching as that are for, come in have million the world. and the orders places the

kicked So, venture in nicely. our very CoSara joint has

is largest in India the hotspot third world. the COVID-XX As for you know,

that tests government able we timing was to there. So, so and our of terms up begin it manufacturer get approval was a that there and and could get lab fortunate to in those market running, getting

that's So that's the now. breakdown. full basically in swing And

Promega first shows tests look generated very the the a to the that and you when So, million take million we're results. quarter first and test we we now look that's kind revenue backlog then And currently what with XX take the out present you ordered And XX at a out -- that filling is laboratory we've way as the that of to $XX the take and been tests. have we're those, the ability you quarter, what do in our good have reported revenue XX, then produce that you take both to have at or and doing to quarter second that up that Wisconsin. in and a India, in where in second a that calculation roughly manufacturing Lake robust in also engaged we Salt in tests, facility Madison, in City, in million

So, call supply we within to quickly customers tests shipments days, have few a next to on that ability a generally very request. day, sometimes

net hope QX I to metrics like the of where to QX. kind of doing enough this a we you enough into going figure look particularly how hope and $XX and flows gives expectation be what test with in million overall that that we're gives in out So, you

Michael Okunewitch

help. Definitely

that. follow-up to production I'd does you expect capacity? like sit mind, you do And then, now? don't just how ramp? on to expecting do that your Where it quick a are Where If you

Reed Benson

capacity production our is very robust. still Well,

quantity. of lumpy where them and that we a fashion the a in when We tests necessary. respond have week, tests number calls, it up doing with if of immediately sort turns have previously cited so as X storage, right out our neighborhood a the manufacture in million we ended can ability it manufacturing of a customer in of We to were our produce kind

tests get half on at the sometimes they out out receive an to quickly day, that order almost we But, out mean, a I same to day everywhere from So, the a we're next we and a can we send it. sending need when time, it they very a quantities customers. hundred if need them two response million

So, inventory of good tests. have we

ordered millions previously had announced, on tests. for early As tens we we components of of

in we're very ability with inventory to a good so, order. fulfil with test and shape And our very good shape

Operator

And question from Litchfield with Research. Please Theodore question. O'Neill next ahead our your Hills comes from go

Theodore O'Neill

XX, for et on nice your a testing that But Thank molecular nothing for hepatitis, diagnostic feeling Q, In is for a COVID-XX? for here market tuberculosis, a COVID-XX. diagnostic you. about there's Do have cetera. for about market Page talks there's the the here table what annual globally test opportunity you

Dwight H Egan

question, That's tests focused the COVID-XX at United upper on in respiratory going our COVID-XX with We're worldwide our panel utilization don't hear COVID-XX. address and Theo, focused B States. you. in a to exactly ABC an to nice Flu and have for from worldwide it's is to how on we're big what's excellent for I'll here be off particularly I'll test, is the tell I market and you the what, the what on A, answer cuff conjunction tell going which Flu But you the moment. of the

coming example, States experience, year XX this an United per they'll colds year. will and As every to the billion X experience colds X gets child

ready. that which we going what's to and immediately or and or it much in just a something's effort going the is test have that, going and a going in COVID why Flu is to so the getting this arise, school that ABC question to cold, spent nose, So, time be they're is have is happen runny to just is is

that test, revenue make, to total be high a for a and going to an It's companies some panel, high The tests. with can quality high the throughput companies, is panel. is the of many going and time, volume, on deal our generates of currently now revenue respiratory be be of the going on we're COVID-XX to that you landscape, call cases respiratory first that only and upper test the to the in not want percentage a running that are equipment great in this I of compete. with we're in is a economical with, used going upper a we're the high and the same which to be that those for forms aware panel that kind now for that everybody this aware of think in I we're test landscape

So, trying cold have people going we're be the concentrating year. going billion States in generate to to from the a next those are over business that on to United

upon just the As the have is in Rockefeller cases in the million short situations that CLIA we're to midsize CLIA spend flu smaller to, as take COVID-XX playing cold, XXX And labs going need clientele large to we labs us kinds to United differentiate their and flu's are States. here Foundation to the enlist of between and care of with order of those and suggested we're

Theodore O'Neill

Okay, meet demand? that working about leads is, into my the next what to question well, capital requirements that

Dwight H Egan

let going to I'm that question. answer Reed

Reed Benson

Right.

handle we to positioned well working needs we're think capital any I as go.

us through our that so given not to opportunity we've that but that only We all us having cash. that have to all the been from flow following sales. expansion of has of for cash we done, can operations cash our our the fund to some the policy of money accumulate allowed paid for pay upfront And has

able a satisfy that sales to well be level of us. that to I to any from capital standpoint, working think come might positioned we're So,

Operator

question-and-answer at today's for closing Ladies conference call Egan end reached and the turn session. any gentlemen, like this I'd to time the of back remarks. Dwight we've to over H

Dwight H Egan

been incredibly interesting, since Jamie. a received an the an And everyone again, UA approval. we you, four has the company months yourself call. you, busy half Thank for and FDA This for thank and joining

we're high and all economical of think an open of on different sensitivity test. or architecture nature test, great our a ABC the in have to very we're its so of a And terms aspects going going its to in great is about excited We it. specificity, to we of of accuracy, play terms tests area the have and throughput in And in critical. that of terms be ability particularly the

busy be of a second half very going so the we've had in And a it's start year, to good third quarter. the

included that what through $XX the on year-to-date filling got -- of very third orders $XX We'll halfway meet we've which of million million lot going quarter, our orders we be orders tests ability types activity. to be we're of to show we're lot that those of excited approaching worth Now company the be send and going busy our out. But to the know we're getting a the strength to a additional demands. of to

So, and on concludes shareholders. participation for the remarks. That us thanks and to joining my again call for support your

Operator

with time Ladies will do thank and gentlemen, at for this attending. call. conference we conclude today's We you that

now disconnect may your You lines.

Co-Diagnostics (CODX) 17 Aug 202020 Q2 Earnings call transcript