INNV - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Innovus Second Quarter 2018 earnings conference call. [Operator Instructions] Please note that this event is recorded. I would now like to turn the conference over to Dr. Bassam Damaj, President and CEO. Please go ahead.

Randy Berholtz

you joining thank today. and afternoon everyone us for Good am Berholtz its My Randy I assisting name is and with call. Investor Relations With one, are Dr. from Chief today Officer, President Executive me and Innovus and Executive Bassam myself Corporate General and Mr. Randy Financial as thirdly, Damaj; Vice President Vice Berholtz Development President, and Officer, Chief Counsel; Ryan Selhorn.

pipeline. brief second remainder provide provide XX, the June questions. financial XXXX XXXX. well as Securities Litigation management statements During overview provision also overview We'll everyone the on ended and then today's to covered Act. will like Reform call the provide call, the discuss that for company's Harbor of quarter of the corporate roadmap update Management under up conference will and the a information Safe brief discussed products of today's a of line progress for in Private remind certain the open I'd is an as the

management financial pipeline. to cash expectations as and materially. Please events launch Pharma the clinical process forward-looking the and call, the relating results product these and and at the Forms Commission, amount on the of and the and and revenues, the website Securities business. other Pharmaceuticals' InnovusPharma.com. may reports most could and differ the company's the Pharma's can certain that the The XXXX developments, the plans and regarding and for development quarter press objectives company's company's actual and such statements product reserves to be products XX-Q for These XX-K will expectations the Bassam candidates, making financial release Dr. conference based outcomes future company's use on out-licensing website. that, Such was predictions recent to results, of the the company's the quarterly With Innovus timing expected Innovus over Damaj? approval launches, for company, released affect products, statements acquiring refer also additional upon for the products results and the SEC S-X trial of the including today. of by are accessed earlier XX, XXXX Innovus source ended current product commercial the future discussions of today's Dr. today will documents found candidates, June XX-Q turn of Form filings risks call timing Damaj. business now filed second or with regulatory During Exchange with Form company including be quarter and annual was future on of around can regarding of be statements I first performance

Bassam Damaj

Randy Thank everyone. afternoon you, and good

for profitability. we to to Another against short to starting for exciting continue the as I this am quarter grow people the path serious to us revenue it not I around would the as company, revenue a and yearly feel trying in profitability. to the sorry start for accelerating this growth to and quarter our who and guidance amazing are that very at I I that company of are fight messing reach shows putting million and $XX quarter Innovus stock realize have very on And

net be of by are sales the of over to is still percentage We increasing able a scale loss where for increase of realize we platform being as our to This Europe. G&A expand are continue as the grow products we multiple profitability. in to platform expanded us several We've amazing to stronger achievement to revenues into but our our Beyond sales the an we path will on revenues, start and potentially efficiencies without Kingdom we decreasing XX% our negotiating quarter. have already where Canada Spain the added Human channels our and we've to keeps and marketing approved sales United and to platform, growing and

to also call keep approval a awaiting and Canada I detail portfolio Ryan, for Chief are our results, five our introduction, feed products growing in products turn financial followed over to adding in With and our Ryan? overall We by our growth. States discuss United our and the Financial more short sales our this to discussion Officer corporate performance. will the on business and

Ryan Selhorn

This all Thank on revenue million XXXX net increase net XXXX than with months XX.X total current three XXXX, puts more you, X.X than over by of prior us for obtained the revenues and to record first revenue is for net of to Bassam, puts the half quarter which XX, the report for our reaching more we pace X previous XXX% are another we XX% June the a than very our excited ended revenues quarter’s year. total at million revenue. from million greater increase our

replenishment, this product introduced significant greater net a increased growth our months range we those past namely our which the and of the typically customer We to sales of the platform. especially high-quality same drive auto-ships revenue hit and to managed percentage credit approximately to of within expansion this see While a level that loyalty forward increase to sales started human net nine three have on with purchases as our a education, were mailing. owing in in to our marketing Apeaz, DiabaSens, loss we the product Vesele. loss and months results repeat focuses of able keep our which marketing, We lower G&A the and to after look at UriVarx, platform investment wide to consumption, products and decreasing beyond

our advertisements strong market are sales or in currently which postcards, care During for our due product Human marketing brochures, the marketing to page in potential million to products We of revenue with allow margins, marketing their following ideal proven platform our which and type with rapidly traditional the revenue fifteen ten sales our channels to core mail are inserts. sheet, to of target has Beyond Along and XXX reach fulfillment consists named grow us direct have this print and magazine, us has marketing and which and [indiscernible] customers quarter, effectiveness, this our and we above for marketing allowed over segment. expanded Human newspaper Beyond strategy platform population.

Newspapers, and and Sensum following this we XX% our UriVarx, DiabaSens, the channel, Apeaz. Plus revenues currently Vesele, have ProstaGorx, in products about represents net of the

and expect in started fourth we and is We of represents channel ProstaGorx. we Retention launch and following add postcards, currently sheets, currently products in represents this quarters. Apeaz, Sensum revenue significant to following DiabaSens, we net margins channel the currently expect of to third the have we additional to net it our products We in this three QX and Sensum net based our and UriVarx, revenues, QX the a in Vesele, to revenue growth. represents great including response X% channel in that approximately products [indiscernible] U.S. program the in new Canada this ProstaGorx our X.X% in UriVarx channel program of in this started, we our this are our currently Musclin, of sheet the just have Plus, this this and year. seeing revenues, have direct mailings, DiabaSens products the Xyralid. care UriVarx, and Brochures, GlucoGorx, channel, the newspapers, we on and just this and Care launch we working in Vesele, in XX% approximately are

second and us expand third products. the our revenues, year shipments catalog, X.X% our our X.X% all pieces, DiabaSens. Fulfilment this it expect And with quarter the our magazines, which working following to products Vesele, of this marketing net catalog this of another have to Vesele, revenues expand Pharma UriVarx of to and represents Innovus for we marketing including will all to began our all materials In contain purchase Xyralid, this educate the products. and other we mailing our for customers approximately include Apeaz Apeaz, of are Musclin. currently start in It program to in incentive quarter. FlutiCare, our GlucoGorx, we in channel, of net channel products UriVarx, expect products. and and to to finally, new this We include with other represent and DiabaSens, We products

growing discuss program. to like subscription I'd monthly Next, our

sales Our per order. our to approximately the three average month units encourages order customers and purchase an during customers and multiple units initial platform marketing three in period,

to customers Additionally, order. our of of time our lasting units after approximately average of the The month. our with monthly join of subscriptions completion subscription agreed on at one the begin XX% about the each new initial order

for example, initial an units, XX subscription day. will begin For order the order of days three from

to increase we new from experienced $XXX,XXX monthly, March to While monthly fourth the third into ex-financial their as our subscription. XXXX and June anticipate the begin we quarter second customers growth XX% a from quarter XXXX in subscription

June ended sales annualized was e-commerce Moving e-commerce XX, increase approximately June, channel, million. $XXX,XXX in in also an And $X our our three experience run continue the months to to which represented XXXX. rate approximately our we in

increased We from awareness increases marketing strategy base, continue e-commerce in brand our best see customer our the our product suited rapidly various to expect for and materials, growing to to identify sales. online our due business to

customers platform our on mail Beyond we for and Additionally, enroll working print of on using to our base. advanced and customer We sell second our technology that to improve our approach in for beyond. should be customer our subscription and the systematic retention able year, believe expanding be improving our not online marketing all capabilities a we to model. Canada through sales our did to of to will elect cross acquired marketing especially the platform half in those direct who Expanding Human

indications expansion direct to market representing prints for the mail initial with of that more under will net of marketing the second geography future strategy in optimistic the into our profitable grow quarter being a are revenue Canadian XX% We continue periods. approximately and

and there. EjectDelay cognitive week, hemorrhoidal in directly to Xyralid, a Zestra, in last Beyond and of UriVarx XX. and our of promote Canada country levels we being products additional and that selling in including maintain will sold sharpness and future awaiting testosterone the sell approval in RecalMax approved total These swelling, for directly through distributors five Human addition announced our third-party sold and of the Glide, under products Canada Pharma we products Testosterone been including health four other a AllerVarx Canada for for for men, at products Xyralid name, and ProstaGorx, are that Suppositories total Innovus launched have are to also Vesele, we eight As in number Apeaz, three Zestra that are mental product in have

both as marketing strategy Our the in identify marketing such on world of later as strategy and is to this offerings. Kingdom as online improvement, other the with and United just the our including Bassam and Europe wellbeing as which working mail pain well are expanding as Canada on sexual to OTC call. management, print well this health product receptive and direct expand to sales will platform product are areas continue as Spain

During we distribution quarter, Canada. the to sales customer services under platform and in Acerus for service, sales, partners revenue related Beyond reported marketing, of fulfilment marketing second our Pharma, service Human providing our and one

recognized have least valuable our from expertise how some we marketing such have investment gained to power our us to with overall are the at knowledge in to cost that be structure the and other buying more leverage organizations can that and sales marketing. platform evaluating We of and offset provide

FlutiCare Apeaz, quarter of platform. UriVarx, DiabaSens, to Additionally, our now this relates our source as Vesele, Human time continue of to or significant we net anchor sell XX% and brand, marketing recognize business and companies product second cooperated parts Beyond of inducing side products core other core We Vesele the of UriVarx, will marketing during Apeaz, products quarter for represented products. company and sales the we and a revenues their have Four believe to Sensum revenue have company revenue including this more ProstaGorx, become for platform first We XXXX. our the seven grow over DiabaSens. the our Plus, of using which

units, in for significant XXX% units revenue the disclosed launched pipeline be UriVarx introduced three months expected We ArthriVarx these increases drive as the to the quarter units ended in were and two ended June fourth net in will from third to as Apeaz, as seen three our attain XX increasing DiabaSens XX,XXX June the DiabaSens, month X,XXX year. continued revenue in of sales at X,XXX XX-Q, in months XX, with we expect have XX,XXX We've second XX,XXX we’ve discussed also Apeaz to our and our units FlutiCare sold did quarter at products the units, that well to products new not in units, sold, as at and XXXX. I by million and XX, which In units the three growth regard XXXX XX,XXX to ArthriVarx X,XXX XXXX XXXX. units.

XXX puts or prior numbers X.X% months XXX% increase year units, XX,XXX about ended XX,XXX to X,XXX of and increase FlutiCare XX,XXX, This for year, UriVarx for units, over Sensum the units, at up XX,XXX an Vesele units, our seen to at we've X,XXX Vesele, units. at Additionally, at date XX, units units, three June XX,XXX DiabaSens Apeaz at XXXX. the at

Our full and warehouse all XX% was gross fulfilled sales from quarter margins quarter previous that a slight second prior reported quarter. in remained consistent the our the to at our centers. first the increase non-Amazon compared This new from year have we and fulfilment XX%

implement The as growth see coming We see are success which we is strategy latter phase supply shipments. the technologies fulfilment management the as benefit chain especially lower while number the in enthusiastic inventory our to in such hope turns to already gross out maintaining to over starting the of in about to well in The gained our continue manufacturing significant cost quarters. have efficiencies building identifying products. of and the center next experiencing are we to some of our as improve profit of

Our the XX% general XX% and expenses, and compared compared in Of and decreased XX% X.X quarter. decreased administrative noncash general to depreciation, in represented prior administrative amortization. XX% the stock-based percentage a the quarter including million expenses in XX% of same XXXX in to sales as to XXX,XXX approximately compensation, expenses and by

same I'm We company we past to continue keep and profit confident the costs consistent to the operating marketing consistent compared expect of of percentage company decline continue to XX% administrative implement the a G&A the percentage such expenses revenue four and to help percentage efforts the remain After with control to working remains that percentage with a or prior growth. as of decrease a the sales. months, and expenses that technology, continues - our expense over that in as automation, minimum headcount can and at general of for to sales period the our Sales the the sales as experience a exert year. will sales as expense

to [indiscernible] and marketing we inserts During This the direct tear identify and marketing new previously magazines. increase quarter, second the the continued copy and mail includes creative in and for investment well sheets, of as enrolment. newspapers materials including mentioned invest to our for as subscription advertisements customers postcards

and expenses upon explanation be able and customer overall of we includes product reaction, As advertisement factors marketing expect identify our that benefits, offer which incentives, reduce of we are successful efficiency to cost. customer the our improve the overall to acquisition

from increase to to Apeaz, quarter and cramping product customer and ads of issue product Vesele, provide Neurite our sensation and a to carvacrol support piece of time, of minor with a distribution advertisements Iowa. a in blood marketing to percentage late the improvements and products continuously [indiscernible] year. which require an of our RecalMax with ads new such product, most campaigns. for mail As each UriVarx, glucose print upfront proprietary To when perspective implemented is currently you expanded or the established, would GlucoGorx, a see the new expect, planned new on are second new marketing, monitored investment. license to products a our are and test strategies case new cost decline. expect with are daily basis tweaks ProstaGorx, Once muscle growth and made the in we on direct cream Rx, runs perform each determine we from must profitable we management the for oral of as University the a variety revenue to leg Over portfolio the to help type the nerve in third quarter, from as this DiabaSens, added with marketing subsequent in with

UriVarx, should resources ProstaGorx Plus, our for the Apeaz, products in marketing stages mail UriVarx, indicate Vesele or ProstaGorx and expert with would for to also that either perform mailing of Tear it have our been well. [indiscernible]. fourth all mailed with for Sensum sheets DiabaSens, extremely third to sent [indiscernible] have plans future Vesele, direct all [indiscernible] Our from RecalMax, created DiabaSens, be the Apeaz, indications a encompass catalogue add been of in We're which final quarter. and and

you rest that need the the cards initial our launch which all market our coming channels. The the of for and of for expected primarily mailed the investment we We're third quarter. higher growth of products more to is our on the have post cost achieve and existing under our base return have if the sent we UriVarx why know channels, high reason customers. our in more acquiring the the for products of proud and few been not that are efforts we'll and the what months. DiabaSens Apeaz income be over of Finally, accomplish most to we months product to customer the our past channels I'm and with growing over is of adding The our a through few very coming our that from marketing have the we about reached able platform excited potential additions are been the without detailing

We also which multiple we the as new expect cost to us customers efficiencies to acquire promote start more allow products year. seeing throughout

XXX,XXX the and for stated second Additionally, as as according. mentioned Loss which geographical has respectively amortization. includes during investment returns our us for second non-cash therefore, as X.X on allocate compensation sales allow of helped marketing spend than the first identify and other and XXXX from XXXX which quarter provide markets of the quarter regions and million and the million of was to stock-based previously such better strategically Canada previously operations investment us half X.X XXX,XXX

we showing handle much to revenue volumes clarity marketing and of in products. key expenses I for platform it is to benefit plan the here without this investment of previously not we direct the overall a during in We scale able which the result did loss it the towards is feel the provide direct increase the larger note to believe is the from believe of XX% increase increase loss to certain in even operation that be from marketing our core with highlight As as aspects the important period current to critical mail sales in efficiencies continue introduce noted, profitability will our expenses. the in our strategy.

invest We awareness. identify in subscription brand efforts to critical additional will to and markets, enhance and revenue, continue our grow product marketing

the enhance cover to and life to We G&A the will of to subscription revenue accumulate with XXXX. creative extend incentives by enrolment with methods customer first continue expenses subscription to goals identify the half

non-subscription improve will for value increase products cross-sell lifetime to repeat purchasing We well customers as to customer existing as customers.

experienced will We cost explore similar indications of market. And marketing also We've This with products be the consistently will to be Spain able the new using prospect and have especially DiabaSens and selling develop continue as and additional pipeline. success period as strong introduce to such across will a in to larger which confident successful. products and products quickly we Apeaz how use know-how materials are such maintain help short Europe, similar to spread be we other regions become product time the can U.K. top Canadian that we’ll will lists. of

chain a or to to distribution international And our awareness print, retailers retail stream evaluate large different significantly enhance customers through help such only products and product our Due two this fit. channels improve opportunity will allow an will identify and either as cross-sell and compared directly. through awareness revenue or would direct mail and finally, lower seeking will cost marketing. channels we opportunity retail We our the feel the to with product product as with appropriate online opportunities. we well our with their we're complement enhance for feel distributor e-commerce We

the Human cash then and can we revenue perspective. Bassam. into drive a significant With turning we quarter, into platform to a Beyond our ultimately from that have and growth now This call self-sustaining are back and with I on that, such growth focused marketing will proven profits turn business flow

Bassam Damaj

a our detailed perspective financial description plans for profitability Ryan for of forward. and on from this quarter, products core second you, for details the and of Thank moving overview the channels the our

on through channel focus to in and six strategic FlutiCare our detail, the for and months have So, major chains, our in rest additional product I revenue increased focus would like and our product net net select of profitability expansion six and themes OTC the additional development commercialization, then of in we our XXXX franchise retail I'm expanding platform going on that more products, and modern to markets, new presence drug our strategic replication plan. and continued of our increasing income

and to our would was the the point, our is Moving expansion so think commercialization. Ryan I product of platform, understand different to in from go increasing our come through channels. channels important revenue for and the not from most And forward net all which through that this first channel shareholder channels specific right now revenues now

on So, identify increased put focused our marketing in-house direct we've that, analytics channels, we channels those to other and magazine, and the print of quarter largest product Canada, can that we've And sales the and for to distribution last we we to newspapers, number through have for Human MERs target proprietary multiple Beyond expanded our to customers added mailing. do mailing platform. increased growing the that platform channels we've and specific utilized so, to geography our of

demand. the as and need and third we Apeaz developed products such increased quarter consumer and when In been internally have DiabaSens cost a we we fourth that of have adding market and add that have addition, the see XXXX, publication continue to company. on channels of tailor to will the products more the of channels ads we those impact the the profitability to all and biggest In to

I platform the is that the increasing go where quarter think Ryan's we same message had we invested we've understand discussion from. this in. loss I a to came look important profitability. of are, platform, platform, good it the in the are but to And coming to is take we very efficiency where we've admit revenues important to where last as now we the is proven our think towards I from

platform able to to really increase close we this of how strong And investments is. amount the I and efficient For XX%. revenues have were we this proves by think done, same

the products. to point, Going franchise the other our and continuous development OTC second of FlutiCare

when all started years over [indiscernible]. Glide, we we recall, in and Zestra where to products as four started acquire you As ago we off brought company our Zestra

supply the and to lower of our with now the to could pressure would we yearly supply partner selling are and product needed NDA will by relieved that we took provide approval little the US. It with marketing with company a so very happy blockbusters the after both with time, before from through the with enable our acquisition a pharmaceutical Novalere our entered inform we We that provide way agreement we the continue market. FDA Pharma, were for we price the and the And into potential the the but FlutiCare to agreement believe expect West-Ward you us bit the allow which to through company of the source the to cash us shareholder Nevertheless, long will would as supply second major is we that the the additional - the manufacturing do approval taken the frustration waiting us supply they a the our had acquire minimum, which in to better overseas. they easing [indiscernible] it ANDA first chance get the of that ANDA actually lower last flow. this of in actually because FDA’s informed the product side review on management understand process and US with floor end have quickest a year,

over months-worth have on continuously fulfill inventory you the to As you as takes be US, large cash in-house, a orders keep able keep the toll in we inventory to that to know XX our know have and to of we flow. amount about products tend six we

we’ve calls were are doctors, and of side the many for companies insurance and on prescribing to and regarding learn FlutiCare many still reimbursing call, e-mails that So, the prescription dismayed we we received mentioned product. as another

XXXX. XXXX the and So, that we I in had invest sales of the the tremendously this twelve-month early important is that back decision or the it's originally made Nevertheless, late not sampling have think reached we where expected has a physicians. level to in product to

several patients, started to to the the product that the users, FlutiCare try physicians. us both sales response let now to do, patients the has and the but generated very a We pick months And actually of from up. took have positive the this we have and see that

sampling have So, finished we of seen the over X,XXX sold - to we have since you our physicians, FlutiCare. know units we

are and We we the We about the single that seeing ship in channels. quarter. were increased for of sales we be FlutiCare our second in units channels sales to a increasing. And are the FlutiCare. continuous have our continuously growing to core quarter several sales mainly currently units phase forward of total that moving from in for over shared So, units growth believe sold the product for We X,XXX a company we and the of is the now. the XXXX still the demand we first actually in XXXX is channels FlutiCare. one still It important shipped that product the note six that majority of will

Amazon, independent wholesalers have have the we and pharmacies. distributors, We

in online direct our continue relationship as direct a through we FlutiCare, which we pieces. we the And to now increase ad. shipped in We actually centers will channel the limited call an for retailers, have think sell I on to increase product US. for fulfilment our see consumers with units We we the the sell will, and through

continuing increase FlutiCare in I sales So are to significant I'm actually forward actually for our I'm that very and we in seeing and look product. happy progress the optimistic

we over erectile as market Sildenafil we for its in we for to drug for impact pipeline. us exclusive terms seen, on and FlutiCare working credibility, adding value, believe counter And FDA to portfolio essential of additional of have that Now portfolio. our of it’s drug, our the expanding approved towards Innovus in to that, terms its are our the dysfunction

We and actually the need in acquire sexual dysfunction for are category license -- rights, company strong. we to are OTC is where exclusive in the this especially

the a -- go our our can awareness on we strong the well push combination products, such have already the have with Having Vesele franchise, brand our we products. we of the on inhibitor of preclinical that rely multiple especially and We version OTC our studies very on -- PDEX marketing, will product. have potential actually Vesele to customers, Vesele on

to continuously we that exclusive are a of rights ahead for category negotiating products in this I'm and evaluate with be to is Sildenafil, dysfunction switch a And and of forward third-party ANDA an OTC. of currently in a license for US the this which completing our happy the anticipation to competitors right RX for we erectile for potential So report area. sold look OTC FDA we XXXX the this by end in from transaction in

to replicating markets. have the that Going we human model third which the additional point, beyond is in

to stores that is have third print, profitable have distributors market, and revenue us in has Ryan and as we marketing the or the there I for using significant more the now US, pleased country sales again, of mailing use introduce and Amazon months sell to while XX grow X more maybe Canada. for mean, we products from accounts the to our that have than net we found to our of of for look of products we Canada XX% partner over number in traditionally there. to been it some Canada As very is growing only of be our six it forward the XX% sales for than with X product said, to we party next to much from us that we directly sales direct expect a and accounts and into continue to

platform human so to postcards In expand include the and include forth. addition, and catalog beyond to on sheets, are to channels of marketing sales sales we looking to include and our

In marketing platform any stores replicate Kingdom and and US and beyond we into and Europe Spain. now to looking specifically human Canadian our addition, are sales Amazon the into and to United

we direct the very United United States. mentioned the As and in marketing Spain print have similar earlier, mailing tend the Kingdom to to and

marketing Europe, believe be have start we would products those call our we sales So in several -- and our actually already with center and with we direct to countries. into able approved

and Spain approved Europe. five the markets have countries, the we sell Germany, Italy, In main we in in addition, and which Amazon European the to as constitute and press UK. France, main five earlier mentioned largest on release, been

we So, when in be will those good more news actually future. able hope near announce to start to the on

to Going profitability. which fourth is point, net our and the income

subscription about. of net in chains. our great a with to we Ryan our our kicking from of the net our the did, than which for expanding six our mean, when for outlined should are five, our percentage retail we rate. XX% quarter our we achievement, sales into net as product mean, more as this loss we as result So select million the quarter will a just over and what we last extremely that in coming the to still increasing whole XXXX start did well and efficiencies the at from We still have. see months, believe proud losses terms loss a Number same the decrease decreasing revenue, revenues the increased we is by of increase sales I kept XX%. where I am I profitability without that $XX.X of that the in presence have as revenues to plan is G&A able

am multiple we products currently Now, retail have chains. several I in pleased announce to that

in we us exposure UriVarx, to in and products. Canada, credibility have retail United United announced before, our we chains States in As ProstaGorx, Glide giving the more multiple Zestra chains States Apeaz, and -- Zestra,

why to work in detail to to the we all we questions stores tend on and you be will additional retail continue we actually your stay past. be used I in chains not and again as select see more answering mass Now, stores select and will in

strategic our by is months, is than net monthly is end double our what board. really exit plan more plan? it positive six for our that coming So cash six think the our the revenue flow the I XXXX important So across of from months end and

now focusing our profit. actually are into for efforts growth coming We This our main turning goal the months. really the six into is

have We million in XXXX our to net current increased annual $XX guidance revenue.

much company as we more discussed. addition, the In previously to work profitable will making

to plan product licensing, distribution, also the through add year to X with acquisition. through this We to products add additional organic potential X growth an additional

our to increase call other plan that which that profitability our In put In today into in of that continue reduce the among a is important internal is shareholders have realize handle a we a place. consistent will is in center, activities, has closing, goal such our that that sales It work increase fulfillment company. burn Innovus we to generator I it help and countries. is matured completely internally revenue think as addition, for company different team, we strong and multiple to amount the our center, significantly can

for of as higher our on that have some multiple observed of also sales lot companies the growth the board, bulletin this is channels we on our from platform channels Our will sales impressive like few our our growth not we products half and year but in and first only just continue. continue growth of significant will and the NASDAQ. And space, exchanges in a

the decrease channels, higher As and rest levels, to continue our in percentage our explode and of a continue be we to in launch while situation. profitable our G&A sales much and all to will our products healthy loss

we experiencing think products maturity We the this by Operator? and will and a future will have momentum, with of the provided are updating at the additional look analysts. we great have long very questions you questions to of path now, We shareholders answered of in we number the have be the I for have answering, extremely our that the this end we believe a think through sales a term actually near of been growth the I and I our experienced that pleased the half well product call, forward to first your good this, positions launches your the floor I for our And With continued year. a our have particularly to from going in I profitability of but us whole on our news. lot be I of open and will are and questions much continued we growth. with list

Operator

first [indiscernible]. from The question comes Instructions] [Operator

Unidentified Analyst

good. Oh,

Okay. [Technical Difficulty]

Bassam Damaj

Beth. hearing We’re trouble you, Hello. having

Operator

of Ajay comes Tandon question SeeThruEquity. from next The

Bassam Damaj

phone unmute Hello. Hello. think, your session Q&A the Please with in the I we’re order issues to from ask having Operator, analysts. questions.

questions proceed received We able have later if them we on will we’re we and to will. bring on, the to

a from our of received shareholders. questions number So we've

through We will them, as along. go go we

Seed, question So shareholder. Julian from our comes first our

meticulous like I’d Julian welcome net is welcome his to will with for for he question the what’s question. first of fees and on sales the is and Julian what’s XXXX, the Amazon discounts, instructions First, His Amazon and included not as call, always returns is projected and very included. we call. X million

we per is, report don't revenues yes, we as GAAP. revenues, answer only report only gross net the we do So

So to for everything. is revenues And wants what fees. our Amazon net yes, on are of the just also, know rate return

So, Amazon, we have return a low very rate.

products. efficacy both at the $X.XX rate including and stands and high date, due currently stores and US our to to Our return is this of Canada quality

Our stores are in is actually the of Amazon and have it all since public fees that XX% knowledge charges reviews SVA by products and very Amazon and Canada. now, they’re the our US impressive in fulfilled about

We don't are in Europe, yet, through to the one have another. fees working it differs country from we feasibility but as a

much is answers. this give we able on will operational wants as that, ahead. go up So we there. But really more the please to detail hopefully once there, give in are How Amazon don't statement? be to fees answer Ryan an This -- give recognized to we the future, income are

Ryan Selhorn

Yeah.

So on our so you will located currently, in they’re them net G&A that’s find standpoint. the where numbers,

Bassam Damaj

Ryan. you, Thank

Third question. for centers. and all but towards end lot central of this working logistics a and distribution Amazon stores Amazon on European the launching requirements in the the with their fulfillment stores five we’re Well, launched Amazon the depends QX, year, before so

will five are got fourth market shareholders. he from as that to we the the The closer I question We launch we’ve have this think and update date.

a for on we a is Amazon eliminate in basically, which people weeks So of recently? bought FlutiCare seem unavailable our order FBA by reviews, lot the we shareholders have fulfilled was the or them grown what have merchant, listings. and why stands Innovus logistics to to as on diligent they FBM with negative decided case unverified shipping by all Amazon of to orders, mainly of or question product Our couple who competitors be not done our The which the for Amazon. a in our listings are And the to FBM to switched from have this Amazon. with to amount, in and Amazon fulfilled cancel reduce substantial have is

recovered US reviews all Canada So with this our this was and -- in listings the we one the country were stores but for two both the did US Canada, done, UriVarx in were and the and in sales. and both FlutiCare and affected, writing listings

those on were why unavailable Amazon. So briefly products this is

Another to will H. Jim questions you up NASDAQ. from When list

we better decision our We the to believe observing lot the say, and in I we So consumer share would but to We with hope once always to growth position to when of enough. we list a profitability, appreciates that. a want as would up we like to that believe that price make don't and and have NASDAQ, split. that. a be path not in do I do achieve

clue We shareholder. lot have release. special we is who but chain, another retail that from about in it CVS have understand what press another your no We question a is is of showcased and

the important versus XXXX is I market has whereas example, has a the market market. Canada. is I an and drug in you us think US It question bigger Drug XXXX The market. the for largest think the much important Canadian this over Mart. the to stores To it’s CVS is Canada stores US clarify an retail Shoppers only chain give in in US

that in So is this with deal retail Canada have stores, chain like Apeaz chain importantly in Canada. and when a Showcase hot we high demand very a a is XXX actually a in specializes sizable very Showcase most and in products has

deal. may recall from release we you the when our As announced press

Apeaz in Canada launched We over since units. we to XXXXX have mid-April shipped

really compared us Canada the US. in is this a high selling as product So for to

So Zacks actually we best Research. is questions received who from Anish banker, at

be go through able and to them. maybe we question her will So answer

the year. what Ryan? of for the expense remainder third is the is So question from R&D quarter for the expected first Beth the and

Ryan Selhorn

Yeah.

anticipate our per lab to So se. significant a expect the we invest about add and products outsourced mentioned, XXXX, expenses, to in don't R&D while we in in of six fact because as four we that the increases don't we majority R&D of

up and our to and we scale able to down level should being We keep benefit into expenses the able so a be of minimal to have those future. the

Bassam Damaj

a as marketing of can targeted the percentage expect. that is we question, Second revenues

Ryan Selhorn

of revenues our about advertising our you'll filed, that So for represented our we see as second from net the Form XX% just XX-Q expenses quarter.

go our marketing. period any to As including new help will which don't which shorter increase we're period, percentage to percentage, closer timing require we this decline new a the to increase decide in are because a but in the us subscriptions new discussed, the expect growth additional time. could and customer of over a into drive quarters, range, given XX% cause modeling spend factors over products there lot this time, And of geographies, a that the we of to to

monitoring will slight see you fluctuations, pretty So but we on daily are a much basis.

Bassam Damaj

of question and the increased customer you fans subscriptions? Third complaints regarding talk returns subscriptions? percentage your talk you is, about about can Can

Ryan Selhorn

these categories Sure. The in are lower actually from average are industry returns on XX% these we're the than to about that standard for consumer. a seeing platform. direct And the direct

attempt the them. at to the there's rate. programs restrictions incentive subscriptions, we any regarding customer And no return implemented customers have on Therefore, reduce We to time. cancel allow to

the membership. the earlier. subscription will continued increase that are with and or our as marketing as And mentioned about complaints program. joining of naturally expect spend don't We regarding I is mentioned XX% subscriptions we the earlier, our advertising on So customers believe

do we to those over time. So expect increase

Bassam Damaj

established The can take one. I'm about brands and this you core the is, to distinction your happy brand. between talk question

brands Plus we and on Sensum brands, is are products them, the they brand consistently that and we are that are in define for our we brands our as call top basically that the revenues those those generating are much income. cannot core marketing company. So ProstaGorx, are majority of sales the Diabasense, marketing we heavily significant What brands Apeaz, the what actually invest established, spend but established UriVarx, going represent Those and Vesele.

So those include [indiscernible].

Wal-Mart, externally and campaigns I your in about big and fulfilment types details the the went the beyond for our as such are channels, Amazon, sites segment The addition human as and e-commerce so question advertising channels marketing postcards mail Those you newspapers, direct through including four on well different and of magazines, can internal eBay other e-commerce the is, to talk think, Ryan thesis. marketing platform? print sites forth.

the your that, from So accept return don't for returns accept the policy active in are orders. international We comes return policies orders? We don't what US. question from

US US actually discriminate those Is from the into first US US. So versus US aggregate the consider and sales. terms We sales Will the our so you significant parsing outside outside at as for get for gross international US. of Canada outside don't and of be we in gross through warranty order, there same US in margins margins in a distributors? we no difference and returns Canada Ryan?

Ryan Selhorn

Sure.

both by We the US will well and as and be different products managing evaluating of various sales by the ways business a outside the number US and we as also have. that numerous of by channels the

to of in product margin margin marketing. There to campaign data. be outside US successful type carve the of lot the of I marketing by is ways the in most geography US the right the evaluated and the right our in up currently. has a consumer different key gross to significant each that believe isn't the to to direct So, success gross difference and this be

discussing the which as cost thus for postage. Canada our offset to the sales, shipping customer fees outside of charge an to improvement in cost the see in to helps increase been have in tend outside acquisition any we US specifically As of do We we've US, far.

than profit the net the that US of the moment. at expect stronger we outside the be the so within US of may And

Bassam Damaj

that, is improvement margins how in channels. much question Ryan? on expected retail you once gross reduce Next reliance

Ryan Selhorn

to the see as our our and there much revenue think change online from is of you're the majority channels consumer to I a direct significant going don't So platform.

So don't expect there. change drastic a

Bassam Damaj

non-cash for to or the over levels years percent dollars. of target sales compensation a total next four three as in The

Ryan Selhorn

I the here compensation growth, any our We three as non-cash of level is four by themselves revenue being our and will stock as out expected Certainly We stretch. think But at to months, continued keep into rises this with expect I think for supersede don't our increase. when the our mapped non-cash translate headcount a compensation our do moment. haven’t to growth structure. we growth out should as dollars far can non-cash four down I compensation that management mentioned, as years after

Bassam Damaj

any on take to sense monthly orders, of long happy Next question persistence their one i.e., authorship Beth. how renewing customers are this subscriptions,

seeing customers on initial about we're after appear subscription the on their months stay to on and So three order average that currently, product. that depends

we stay areas time is and to this customer attention a where they the and this can metric length on improve the program. increase us we behavior pay of to, further So special that very with understand identity

know, So profitable really us. to is actually, no in for because do that. you as shift, It's the cost for order marketing very there auto that,

on as we So the product. long want customer to as possible stay our

was started really through length Arginine of -- Vesele mechanism the and new which increase we to with with the several to and So Vesele, product again is subscription monthly the Citrulline is of measures our actually production implementing health. which Vesele, help first of trial the in sexual increase nitric will action blood, the oxide the

introduced oxide we've that the X. the are nitric So strips, Saliva

mouth The recently to the to I mean, orders or one And orders, calls, immediate actually this month their that see see an we supply cetera. if up nitric Ryan? question we user exactly actually seen can again, with give longer percent MERs next program and working. the -- initial have are of metrics make what is and of upselling, in we call these oxide of that of converted do. incentives we're subscription can center the you and not strips seen would increase that on it levels put the orders and So started stay the type how provide be the Vesele we see to they able et a just monitoring incoming now they have we

Ryan Selhorn

astute well type. rather. product. product about from to XX% there, $XXX over depending values from XX tend and we're which about to million to can average convert we average, range from XX% bit readers And XX marketing million our our on On is to order vary experiencing quite about $XXX to circulation, sales and rate very in X.XX% call that a it and a a by question we're seeing It’s by newspapers

So there. we're seeing return significant

our mail, seeing average rate a with about For response over we're orders, $XXX. X.X% the averaging direct

will from mail there. about initial and continue gather we're We on direct results full to excited data quarter go which we'll managing marketing the is of this, and business first in the our the essential to

Bassam Damaj

Thanks.

So the Jay X.X mail direct the seeing return you that to experiencing are from Are strong stronger also you as revenues growth you’ve Albany now So question. which the MERs first close we of of have from are the Canada this there Jay’s of spend, to experience X seen a in from direct had strong we set products first than were mail from with in newspapers expected? company's where especially actually, areas of every SeeThruEquity. any have are very example, we we’re Diabasense, for questions we dollar XX% for we in product. we

this we're now multiple So preparing to launch in products channel.

our to the you strength of and specifically and and strong to proven center five main have for join to Our to Amazon segment a in due US. be and the very e-commerce Amazon the has the in been the company invited, store vendor FlutiCare as know, markets income now Canada, for US expand

doesn't we the any question strength because product. is retail lot are stores. FlutiCare our actually in on pricing our store. put this a area. the It seeing selective map the lot see from distribution of understand retail we to what but a mean, a is stores approach question, and be -- other take to to So store, it of here, are shareholders, keep is it The the and important to able questions to control in on product important from airing goals and FlutiCare next shelf. that put Well, on info a you your the or margins your the charge I you this tend it for is don’t in product -- in to shelf, our the if you you get don't it we on sell, product put can will the high why our retailer remove It’s of good why

product, newspapers a now are known, exception. sales an have get that and we on the the pushing again, not if did, are is it don't and the we they a now it. way the putting and the think I is they how experience Zestra in IVS the a to our to the we things UriVarx did press And A using other brand CVS. they that is retail two is know when so that extensively marketing patients and Zestra, things brand that established. product distribution then to our pricing we retail again want And the for from believe distribution. things good with and very started into product, in we pushed in example they is This the the feel it control lost. in stores. retail share deteriorated the work stores release clinic, established. good use the we for example a ProstaGorx we we is was two us. to for are you then in the I they until to physicians with by be add a tend condition until important expected to is has in push then that our brand the purchased of examples media the now from side sales US tremendous they directly, to tried The wasn't to FlutiCare amount our can spent return. push and didn't and do the actually not and And way did years, year-and-a-half that is been differently. which We the recommend magazines they FlutiCare the capital So

I’m at shelf sales are the establishing you that generics filings going customer it are our cheapest, important other their you're I know There the on the Because are outside down competing other is sees and and growing. the brand. putting are companies products, and for sales from And if XX We multiple product GSK it and goes I’ll are look you’re that think FlutiCare. standing public, product, a their there the so Why? take for done. with there to

Mckesson and and sampling. the they product the is So need look used it this if to actually for have and it, feel how on vendor happy we now, again, Costco’s to easy stores establish Cardinal. Amazon, us, be FlutiCare little patients, and will the have a from wholesalers and many for direct the when they exists Flonase and people important major they Amazon they Ryan? the to is to actually, sent for difficult really product. chains Well, bit have email, verify we people bought precisely, because the retail and this you answer question that of more is central they And how and why big brand. tend is of pushed is chains, use to Amazon our they a physicians, competitor that’s in of pushed different it there this product like a lot are pushed shareholders they to tools and like a The it people because certain use that we how now the Kirkland buy brand although who it sell lot think now going we’ve – The product, a with have we more our who like. they we’ve product next we’ve to they use I question

difficult several the Canada. in thousand and it's we the product is believe number, the both So stores, for know in exact us to but US

is call. update the information billing FlutiCare an there the question, from last for Next on

they people product. not moving we the So as percentage what the that, which good now we very information insurance concrete the towards and tends of product is they're reimbursed us to don't a uptick But are -- of believe more in have ourselves, a seeing are product in OTCs. the like that’s

more can the on at Next them. you CVS that potential and program you [indiscernible] information pilot for question, with announced So the deal a provide larger

So X to the vision the results, to coming the into a national XX results better distribution. in have the to on we expect the Based sales results, know we weeks. have

us product. does CVS know, a of to restriction have details discussing the on Just

the details adamant call discuss definitely, product stores you on forth. the even. you websites very find to But details really have product can not were cannot those our actually they can where, and we So themselves so on go to information which into as go the and more

So those were the questions from Jay.

We have Roger two more questions. M.

does recovered nice to acknowledge we and share of price price the a Okay. company This the company the XXXX XXXX our of to the aware and the diligently of the grow we and compensation is share has equity question. So, progress sure levels working Why has make and value getting keep not is market appreciate CEO recovered level? company. not that the to the are

increasing We're of value but in new awarded think as CEO, right been The price price, equity I is well. XXXX. think haven't any I going understand to it's we're the recovering that the I way. since a important

your information, he know when know, where equity X to a with be So has you getting CEO, I from a gets his don't as form but company, you’re filed SEC. the

can So the equity in and last the I that XXXX. you Form and SEC I is to X see website welcome you received search go

have any I compensation. been not new taken So

can our your thank them this questions, like your diligently the you we with And would last this, calls is ask sending With think our would all to Thank like have. on I day. to to progress I look Have forward I look very to quarter call. detailed keep we you for a your like forward our on so you that, to to and time. updating I and you for continuous next you thank Operator? answer questions I continuous and question our would and and much. great I growth

Operator

concludes This session. conference Selhorn to for would Ryan like back closing I the question-and-answer remarks. turn our any over to

Ryan Selhorn

Thank you think much. very we all I are set.

Operator

today's concluded. for has attending conference The now you presentation. Thank

You now may disconnect.

InnovAge Holding (INNV) 15 Aug 182018 Q2 Earnings call transcript