AUVI - Earnings call transcript Q1 2022

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Operator

Good morning, ladies and gentlemen. I would like to welcome everybody to the Q1, 2022 Applied UV Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation.

As a reminder this conference is being recorded. call Riccio, John Chief the Officer, Chief on Mike and Financial me today Andrews, are Executive With Officer.

www.applieduv.com. Investor As today's a website company's live for at Relations presentation are reminder, available on all material the

forward-looking Before we begin, the take a press statements read release. moment earnings in to please the

subject reflect events assumptions financial risks today's make results. to During that these we'll that and about views statements certain make current call, certain expectations We’ll future on future are statements and uncertainties. predictive our performance and and

Our risk Form Andrews. prediction. John the XX-K differ actual most most turn lists recent to our some factors results John, the you of With from cause now over important that, may I'll that begin. could call to

John Andrews

with quarter. the of elimination of acquisitions year-end The Thank now our you and our progress good The call pathogen morning, traction. strategic is everyone. air and our to be continues our highlights you XXXX established. first It's integration firmly surface three platform discussed to business an we in a gain QX to create diversified to review that pleasure

serve address company any Simply cleaner, demand that are growing as a leading U.S. pure, people people EPA, born businesses, the devastating safer indoor is we clean the House’s put, of out all that work EA-ENSX to facilities of reach quality. and where and initiatives, the global market them. aiming well live, as solutions for air of offerings capitalize on move providing in as billion positioned expected as improve announced play. air to protect increasing we safer market of that So well through in that impacts business who provider pandemic, XXXX the environment the White $XX the pathogen environments elimination the by a and a to to recently demand well for are CMS, positioned government's indoor air We're

a launched long-term initiative stage social aimed stated markets sophisticated logistics, health driven the food includes was That that and and increased at and targeted April organic quarter for initiative schools, by following was care we started in growth cannabis, preservation, facilities, dental, campaigns marketing including the QX. other care, key vertical last have and We media hospitality. digital set beginning the

we Monica soon. acquired was investments of And announce share three will marketing was strong marketing Woo. expect world's and the marks recognition, we a seeing largest the recently, As to verticals demand one cannabis announced top-line both drive targeting brand increase appointed our push recently the with significant many of prioritized first director the growers market campaign interest and is in cannabis we market relationship that space, companies. expect by targeted key are very The cannabis The high a directed which revenue. first initiative planned market into already marketing

the of Secondly, for U.S. and we and to countries have we that facilities, mobile to were conferences platform cannabis, due pandemic Europe, nine the first time, purification correctional throughout begin and air at a of scheduled fixed since number serve are medical the technologies our conferences targeting industry preservation. exhibit sanitation, janitorial we and to many the food shuttered of to returned reopen,

expand We initiatives market these continue drive and marketing to beyond. will expand and in to share XXXX

air a end see to quarter QX uncertainty last of As users overhang for positive that shift XXXX purification the we displacing an a and funding can XXXX and was still we of policy energizing last decisions way and the as keep some stated well allocations. market, quarter, of in into much

war, related temporary the Europe. our and to Ukraine-Russia hand, increasing other seen the uncertainty the growth we have fear On down pressures slowing inflationary and in

Protection for pursuing are business Agency Medicare commitments have of continue Centers to been the Environmental that agencies, including and contract opportunities initiatives Medicaid the among to by of announced, see advancement As the towards others we award. new government the funding we and more and

being announced, of partner expected a those non-Public multi-million recently state distribution we dollar purification used a demand be of As from the of awarded which the accelerating with large Schools allocation is contract purchase air funds Washington solutions. in Program are for our

on As logistics we across also sectors. care, announce call, several to Care, stated and pilot our we QX placement the urgent long-term program expect product hospitality

in We a tools air U.S. available improve and the indoor potential its have announced of what the detailed quality. toolbox best class two government to tools

like to product for you the and are development varying seemingly list sales, opportunities scalable, ways from globally seeking in levels our when returned venues further of to roadmap are keep of awards R&D. I'd is contagions patrons all pre-pandemic of cover sizes operations. to our Next, the solutions endless safe our and and that progress Clearly, consider

to in We process of to headcount support expect additional add before are business the growth the increasing seasoned our end our of QX. professionals and development

of well President talent. Development and engineering added as Marketing We recently also Market as Senior Vice a

wholly of asset of our their model fiscal subsidiary which December our reported recently announced room deeper, approximately ended diving on $X to XX VisionMark, result $X will VisionMark primarily acquisition industry. product revenues on pro expand approval hospitality upon contract owned a the a forma follow Hotel, year million million our This offerings of should the to XXXX. order. basis in a Cleveland Renaissance the is lead Before for product MunnWorks which win

we sales attractive on XXXX to accomplishments. build purification provide a continues identify for contribution and to that business air positive opportunities build as we our financials pipeline believe to new will Our continue

of Importantly, expansion channels to distributors our continues. increase sales throughput international network and product

XSixty as includes others. Solaris Batta among global channel [ph], Our Africa, distribution such Lootah Water Biopharma in leaders

the beyond partners, XX and base seek distribution distribution our current increasing presence growing our partners and of global We beyond our XX continue countries. new distributor to

African as increased demand the fact, In of product be continent Africa. to partners related for are offering cannabis we hosting our to will beginning see the they month, earthside this in

competition. global market companies share and domestic our our As are scaling QX, our between we differentiation key clear stated in international reach partners distributor a us and and to

improvements first each in points distribution our finished QX. from to our announced base improve late as supply order purification recently expect chain planned beginning and the from patented see continue formulate stocking roadmap, partner tighten division to based of it and air We to integration that our stage believe our to the IoT in our our to as further as including our were UVC-carbon set to and we perspective, mobile we a in SteriLumen Operationally, new our substantial and globally which both chain analyze app, today, in join the all the OEMs, well will companies. making world are competitors, an PCO quality product devices solutions of well standard R&D optimize of that recognized disruptions line fixed creation exploring contract supply From and control, leasing large ecosystem. our differentiate set against the for mitigate our of use of so inventory, entire prevalent as products, to

expect consumer from include in air we established market As and call a transaction hospitality some verticals further QX purification Box and in the Big strategic of and wins product term. new to in and we pilot strategic venture programs, continue leaders to markets our the explore with near joint our stated into penetration announce increase airside Retailers products to to perspective, market placement other adoption

internal be further plan meet continue by XX execution. the forward. to existing needs with obligations to to foundation global and to operations develop close to signed XXXX product has upon will of contracts year contracts a our opportunities opportunities, market, on for saying We about in and opportunities. continue a going been growing demands to capitalize last the into business enhance months market build expansion all capabilities our for new and plan adjacent meet invest existing optimally the new laying and that these market of me we business performance Let the

into latter at to As results half which level performing our in and year, the of its in past today, business of show XXXX begin is of will highest XXXX. the the

the over turn will Mike to the Riccio, quarter, call our Officer walk I'll Mike. the results who Chief through Financial of financial us Next

Mike Riccio

and XXXX, Net sales $X.X sales as representing three to KES John. million, of due QX supply approximately respectively. months as multiple approximately or primarily to order acquisitions largely decreased the billion, million net XXXX $XXX,XXX, the XX, in to [Technical fulfillment which $X.X with Difficulty] compared of XX.X%, disruptions approximately of XXXX. a strategic [Technical chain for of result of Difficulty] QX million segment, increased of an of ended the delay disinfection increase $X.X Thanks, Science March QX $X into

disinfection primarily by commercial municipal fine to segment. XX.X%, specifically XXXX, the segment healthcare, disinfecting markets. hospitality XX, mirrors growth increased for months the March the from reminder ended The industry. residential driven a and the XX, distribution $XXX,XXX months hospitality ended and As and profit XXXX, approximately of the design segments and and includes for furniture, manufacture, used assembly or for of March compared Gross the three manufacture hospitality, the as disinfection volume includes in design, three

profit sales However, of as the gross higher sales, segment. hospitality to a in Difficulty] absorption [Technical of factory costs increased in QX decreased overhead logistical an [Technical in XXXX Difficulty] percentage and approximately

costs This ended year-over-year their realizing $X.X of [Technical and to cost for manufacturing months the Consulting increase mostly to company acquisitions. the SG&A million Difficulty] increased three March headcount with XXXX. as focus related Difficulty] on integrate consolidation costs from and at the at by synergies of to March approximately million XXXX. the total compared $X.X $X.X million amortization months $X.X operations. As [Technical be three to continues the expansion for XX, accounting to legal XXXX, our acquisitions, XX, strategic and from approximately March $X.X ended increased primarily million XX, and distribution streamlining will XXXX intangible increased was XX, the as of March million driven the increased XX the expense, equity XX

due where expenses fully our coming and [Technical leverage acquisitions advertising possible. as in we integrate and synergies Additionally, Difficulty] the promotional year,

XX, Air, value $X.X event that a of quantitative on as value quarter XXXX a was million XX Scientific ended net on a $X.X of XX, XXXX to [Technical compared market March the shares March fair $X.X loss agreement determined Difficulty] of of costs the loss, was impairment of XX, settlement compensation part EBITDA that of and below mainly is as million excluding and increase underlying million. due approximately Also million settlement adjusted profit result of a months to three months to and ended as had support compared change increase Difficulty] the increase company this consideration the months the assist in loss net amortization, which a to Air impairment original for as the items the XXXX. On not recorded a to Difficulty] EBITDA company's the the operations the test Adjusted a XX, [Technical months And stock-based consolidated on SG&A site. loss do agreement, loss of certainty settlement incurred carrying $X.X with of approximately million the owners on the of approximately X, was of the gain the settlement were determined the recorded ended agreed that ended ended of company March was goodwill of the believe analyzing of XXXX. performance result, for of a occurred March by or disinfection company result operating a EBITDA an fair company Difficulty] our loss The a on three the recorded goodwill recorded of operations. operating XX. Scientific March of three during a impact loss triggering expansion goodwill. the the previous approximately as During the three we non-GAAP net The of March impairment of removing We million the ended a depreciation [Technical agreement, in use approximately reflect that of a excluding the contingent $X defined months XXXX, result charge million in statements XX, condensed full for XXXX, value. in restoration three [Technical $X.X $X.X in

sheet. Lastly, available quarter unrestricted million cash $X.X with approximately on the our we balance ended of

can year efficiency integration our the call further momentum XXXX, open ending synergies. increase questions. concludes the expect our we gains remarks. prepared with as we our This during for ahead, and leveraged Looking December we fiscal XX, Operator, targeted acquisitions, of

Operator

questions. your question Thank question? Moore Thank EF and of you, Instructions] coming Mike. you Chip for is is please, the can ask Ladies Chip, open Hutton. now you floor first from your gentlemen, [Operator

Chip Moore

And if there, April nice initiatives? you win for a first, marketing Hi, good You've morning. Wondering, Thanks. maybe the about, just bit expand could talked start? few there. sort I think the a maybe initial sense launching a you just cannabis the us potential I of guess referenced some next give these on more the potential in over to of of the quarters, and of how feedback? about efforts a think the size broadly, rollout

John Andrews

the very per we question. really customer a Chip. for initiative our cost about excited sophisticated, Sure, We're is to April. in approach Thanks expansive acquisition And initiative the The down. marketing driving launched leads.

-- And globe. will the it. to time, launched We've terms we're As at we're well as next month of this probably we've results one then at of that verticals media, move in in think as cannabis, several producers earlier, close gotten. we seen which of food we’ve I other And and/or those And done we've or that said very And disclose as We're earlier, good. the targeted we other the our going towards. to one going and can't social two. preservation We largest first we'll what mentioned of early migrate very the marketing. of are also I And doing to very, traction I digital are post-harvest. announce cannabis forms have leads, that And the with three we'll cannabis. once deal. convert with to processing, on leads is good we're initiative

Chip Moore

that? assuming think it. to to of or Got That's right about way the think that the enough, cannabis and potential you we large an from then should with that, helpful site, the I initial grow sort to think, there, how about convert producer

John Andrews

expansion large following. with Yes, that I way, with it that site capabilities would initial think about

Chip Moore

it. Got

sort of of specifically the versus I sort dealer it's similar then, And sort again, the buildings Washington, opportunity. site in spend. And What some know to sort initial they've contract? is about think money about Okay. the on of of initial XXX. addressable award multisite? that timeframe happening I got

John Andrews

did you many Correct. Correct. facilities How mention?

Chip Moore

thought like was it XXX. something I

John Andrews

correct Chip. that's Yeah,

allocation numbers, award. that can't next any those of award towards a dollar our the there go will solutions. disclose multi-million So award expected of it's is And is And is We implementation month. begin millions large facilities dollars. a multiple further but to of purification air that the

Chip Moore

some I given we that are I I And sneak of a if the us recognized a another And -- the okay. And in Yeah, supply me to Were give expect just were some chain in of Q, the sense unfulfilled that out can should you magnitude? in guess, one supply know called those trend, can for QX? orders. chain, then you challenges continue is ongoing? those

John Andrews

we issue to now planning But Hard right the answer delays, simply, plan model that accurate. one that our just predict chain rigorous that in in that being so supply likely because we're some no forward question issues really this of our and stage. going into model supply chain is most at an financial can terms for financial XXXX? But do building is for

Chip Moore

Got it.

with Scientific I hop color goodwill one and settlement more maybe a little Sorry, there. before last one, down, Air, off. write The just

just mechanics as some a Mike but like cutting of sounded little well. bit, out think I was the

Mike Riccio

settlement with realized out. Scientific I cutting But a was Air. was agreement I there yeah, Sorry,

basically, -- that event then as triggering considered so And a is and well.

of that settlement Air. have the as market a part give do. back And the So acquisition when of the was of you shares, do there's was Scientific of we to to that that, original to a asset kind mark of part XXX,XXX

although through that goodwill the agreement, were first a settlement offset, offset as of record there's able stock, write that a expense result initial were So the then, of the operating non-operating a accounting And gain in million. an And done contingent that's of the consideration basically to was that $X.X down. for quarter. sense we

of $X.X we allocation and that to million just down. the written of had reevaluate price then was triggering purchase event, approximately the goodwill because So

net is impact the Does contingent on of offset right that goodwill quarter. the by the the for net gain the really So the consideration help?

Chip Moore

Yeah, that's, that's it. Appreciate helpful.

in back hop I’ll Okay, Thanks. queue.

Operator

think line. mute. you. we question Thank I from Morgan next Instructions] Stanley. on over might don't Simeon, is Gutman Simeon’s Simeon, you. be Your you of to have, [Operator Simeon coming

be I the over hand there to in queue. questions Okay, will back now appears to further John. no

John Andrews

additional anyone want Thank have call. hesitate please us you. me Thank for to contact today's do you on any joining I to Should again. questions, Again, directly. everyone thank not

Operator

you. Ladies gentlemen, conference does conclude today's that and Thank call.

lines. day. You your have wonderful And may Thank now disconnect you a participation. your for

Applied UV (AUVIQ) 24 May 222022 Q1 Earnings call transcript