TLGT - Earnings call transcript Q1 2019

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

Operator

Good day, ladies and gentlemen. And welcome to the Teligent First Quarter 2019 Results Conference Call. At this time, all participants are in a listen-only mode. Later we'll conduct the question-and-answer session, and instructions will follow at that time [Operator Instructions]. Except for historical facts, the statements in this presentation, as well as oral statements or other written statements made or to be made by Teligent, Inc., are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties.

or statements current company's for efforts, or the of limitations, future growth its and without and U.S. success the offerings to operations, expected current and the example, company's about and file anticipated the and products, the ability For research products for development obtain future market size are and Administration Food statements. Drug approvals forward-looking for future products

as materially the The actual will merely that are that company's the differ statements results approvals or profitable anticipated. inherently statements of assurance events. its FDA current make herein. Forward-looking future achieve made filings will and are uncertain, could no obtained levels There and from statements completed predictions be operations that the is sale company the and

of update latest please information company's The uncertainties, Form its description report a latest introduce refer for XX-Q. obligation and Jason Commission, and to today's like its CEO. conference, risks with filings developments. Grenfell-Gardner, reports your would including additional and reflect and to host quarterly the Mr. company now statements forward-looking annual XX-K Exchange its and I President Securities assumes the on no Form to to new on For

You may begin.

Jason Grenfell-Gardner

the then Officer. our I'm more update our and to breakout And and joined on joining provide ladies the for Skyler the quarter significant today. afternoon of than CEO over will performance Jason today you I'm gross better our will financial that at basis detailed plans. good you our first by Damian Thank us this gross business adjusted a Damian Thank $XX.X you, of quarter for Revenue at XXXX. from largely our of of negative was Teligent. injectable business and result improvement on providing points first This came I change quarter core This by elements the our Today, in be gentlemen. afternoon, update a first an ahead Welcome latest Teligent largely of of the and Financial Chief performance covering Grenfell-Gardner, of the Finio, expect with our for was of and quarter driven expectations for an things. EBITDA a X,XXX at million we released XX.X%. were prior with guidance. improvement margin expectations in line XXXX of quarter million. the XX%, XXXX. results to in $X.X margin three President the

year on on margin. level us of First, and quarter. penalties we providing that the and low first failure allowed rationalizing were to last better higher-margin This products customer a began in resources supply manufacturing focus a high-volume eliminated service process products to that

on list independent Second, chains, to of and service including more our strategy we smaller customers, regional a distributors. executed longer

briefly with have us Although, in development a between And Canadian the more may the they came to line margin effort sequential point we will require biggest quarter And in remarks, XXXX these top to label XXXX first I they the these while channels that on business to generally in executed compelling drive results provided wanted from the the decline revenue out revenue Dan but guidance fourth in speak and in difference our in quarter lines. his the finally, business. for us first tentative, volume, reinforced quarter contract our plans. manufacturing the were the private opportunity better profile. more and

primarily in the our Canada fourth year. Europe. this strong a expected to prepared serialization, challenges for baked very as last year and guidance Now, system related for had was into quarter customers

the market. begun have from partners the recover manufacturing serialization, by caused business contract is to beginning to recover disruption implementation supply Our and for

quarter the quarter over by to of XXXX. supply the course Canadian and of back second expect third levels the be full We normalize to supply

New Jersey the Turning manufacturing to in Buena, U.S. we today. site now where are

towards injectable prior on transfer plans. progress developed significant products supplements, approved track approval already with of either existing four exhibit PASs, continue readiness make seek to approval ANDA team. to Teligent's to drugs We've batches by generic products support R&D We our and for new site or submissions to made are to the

already begun In may also on capacity, manufacturing consent are allow given FDA have to Teligent we discussion quickly NDA data as our team shortage. for regulatory has basis. We industry sought welcoming with first capacity submit approval, ability and our our inspection and currently grow an accelerate is will submission partner opportunities that to received FDA FDA to have to shortage need specific together review to our product with drug product. and drug an approved is the review to the the that FDA, stability continue Working and ease that who concurrent submitting utilize drug industry the expedited this to peers on program move this contract consent target with the for drug first with and site the to has utilization peers. order

eventually already FDA have this teams this should reviewing depending these supporting made able approval quarter. the PAS on results generated, the and We regulatory and for batches the our prior be the submission that be to from believe supplement data We generated of trigger to to submit FDA. submission R&D we to this the will data the batches to

bit like about our I Finally, little to pipeline. talk would a

approval this us Teligent During drugs. the remaining three quarters year. we for this to received in the FDA continue launched growth first to profitable and products drive also will four year, launches These quarter help

products to underway. for Also, XXXX, Moving our XXXX respect with this and development PAS be to transition generic in this forward, into over drug preparing development orphan well our is ANDA anticipate submissions our to and injectable will and program anticipated exhibit injectable submissions. We support more application. based of year XX on injectable batches

our XXth response press year. mentioned development to April XXXX, release on our the FDA's submitted this As XXnd complete response in on our partner letter of has April

not based any to As XXXX facilities. a result, a of FDA new re-inspect us on the needing has associated date December assigned goal XX, PDUFA

which competitive that guidance FDA's draft CGT may granted the therapy been per ask means has of our FDA review expedite submission the Our to to designation, or generic ANDA.

for we access an do FDA that review patients However, personally need that to efficient process. see am the drug that hopeful this I will we life-saving guarantee better cannot will so.

now to over key the and for the CFO guidance, also that call we've review performance Damian hearing questions a me stakeholders. financial quarter our to Finio, our turn of and to the from Let on couple been Damian? touch

Damian Finio

sequential line our highlights I Starting quarter Then the XXth close, performance. our explain expectations, debt we posted revenue foundation a Thank deliver highlights sheet, will from decline everyone. of the on for $XX.X the balance the and to financial that our you, XXXX quarter revenues Jason I of I performance March with million the and important to and of will and address quarter XXXX. revenue On financial decline in Today, call, from XXXX fourth XXXX good quarter quarter before market afternoon we quarter first fourth net approximately XX%. laid with of XXXX how guidance. cash. anticipated reaffirm review posted million I a first first XX.X% of XXXX of mentioned In our earnings our first $XX.X items two line quarter, first the

fourth expected caused supply by is and topical decline of revenues revenue decline, XX% revenue increase U.S. more our This Canada manufacturing offset serialization products in line Canadian quarter was than disruptions the new generated did of X% chain to of the over quarter-on-quarter top the increased portfolio XXXX. our implementation decline The generated was related standards our European by directly more than the by by Although, contract by business. of the partners.

related working are partners manufacturing and towards in our revenues European Our normal other The returning quarter. in across manufacturing the timing products mainly revenue injectables, streams, to second differences remaining development. U.S decline to contract

of prior Gross of a improvement XXXX line margin for gross over in change margin mix. was X,XXX addressed guidance gross his The in XX%. in driven of by improvement remarks. XX%, with the gross We our encouraged customer was quarter. a both and Jason quarter the point are in primarily by opening this margins favorable full-year in product margin basis first excess

inventory quarter's of realize supply consequences one-offs recorded prior our and fees a and are ongoing actions. this clearly of from quarter, in summary, positive relates we addition, In gross In variance to the perspective, improved were the in quarter year minimal. gross recorded to XXXX margin the first write-offs starting prior margin

expect with will margins line improvement which line top and drive normalizes continue supply product to guidance We revenue in as positive gross adjusted follows. EBITDA

primarily quarter pilot incurred to $X.X $X first quarter $X.X to compared over of batches. operating the the the includes attributed, we or quarter the and first of of SG&A This administrative expenses selling, XXXX. million fees fourth in the million delaying million The in XXXX. the Turning invested incremental expenses, legal in development quarter first general We manufacturer in product certain to was of decline XXXX. million in fourth $X.X

ongoing matters And We not on we expect merit. recent note it's as class although, we moving believe legal without specifics that decline conclusion. forward fees are certain of important the a litigation, do to lawsuits to action comment approach the

$X.X $X.X on into significant evidence to the to in of reduction adjusted further million XXXX. for initiated the XXXX even. improvement taken the XXXX, gross million Our quarter those of first the SG&A SG&A of The subtract and $X.X fourth EBITDA impairment the our $X.X In $X.X expenses reported. compared is quarter in first that’s consideration, a increased we an XXXX, the first led taking back million quarter-on-quarter reported fight XXXX these quarter that of of operational assets legal fourth efficiency the of expenses million calculate million XXXX incremental is a broke $X.X margin adjusted a of quarter comparison million earlier, May in was and those vigorously. legal quarter in subtractions expenses mentioned subtracted amount and quarter in After SG&A. $X.X of from XX% SG&A, XXXX improvements Adjusted quarter more of of loss we operating cases meaningful I reduction intent from charges adjusted to of EBITDA. To intangible focus for adding fourth the

guidance XXXX our that's in invested same of constant, in performance margins, and Although, year market anticipated $XX revenues Keeping and is first than supply EBITDA all deliver XX% normalization to we about million. can EBITDA the quarter achieve XXXX. an reaffirm of the else our but in of quarters trends several our excess this in that, greater of come improvement with to prior financial guidance. both quarters XX% in foundation We've the are the full over margin There our lay encouraging

double-digit after than $XX.X gains margin adding or and to R&D $XX to back losses of Our achieving million top be consistent a an with $XX million line in EBITDA revenues margin greater growth gross and adjusted currency in expenses. guidance XX% non-cash foreign percentage million, investment of consolidated XX%, a excess any continues above stock

the our debt commitment XX, December. on cash. of a form the items P&L, million debt Now, moving the Each March to the a changes XXXX of debt, and interest convertible LIBOR. million, depending debt million form term between but in total Of $XX $XXX May of relates value in address X% is I the of in carries of rate a of last with two line to sheet, rate, to $XX $XX of which fact the in million about from in debt interest our the average different matures like related this $XX million and the balance revolver Ares bonds, XXXX of million and is and matures $XX $XXX component The million. X%, is financing weighted away loan. is $XX on executed would million important at Beginning $XX XXXX. remaining which December million

pay defer the $X.X some $X.X components In point, our relates cash option to the needed term the on payable we expense. to million, the LIBOR liquidity discounts our these quarters $X.X the non-cash. interest give first considered the million $X.X And of not When of accrued convertible paid expire relates the can we first remaining, issued and this address incremental of pick Ares highest of periods interest Ares flexibility pick Of paid million million continue in quarter. exercising term the interest. the which this is the pick right relation accrued interest. was fourth six on in choosing defer of Interest have revolver $X we in payable or million with contract in or the to although, pick contract pick bonds. this $X.X second summary, company to In million priorities. relates Remaining LIBOR for payment At structure, on quarter, interest, bonds our million debt convertible are of Of convertible or to next $X.X option with to loan. now was to quarter. chose million months paid We to million loan. choose We're three the relates $X.X amortization is year. calendar our period. of the and is to provide second our to interest the or months, remaining first the accrued the to The million, our not of Of us whereas million $X so $X.X contract the original first bonds, loans. we option to to the relates our quarter, $XX of in and $X.X interest to each to quarter, pick in cash that’s every this $X.XX until million interest

address the also projected interest non-cash and addition first to quarter, compliance. quantifying In I wanted covenant cash to in

Ares As we to facility of are filed covenants term revolver with loan disclosed financial than detail revolving the financial via The loan. in and XXXX, meet agreement loan. term required on credit covenants the more restrictive the and in SEC the mid-December the are further on the certain Form-XK

to is Ares we million, EBITDA refer to revolver requirements. fourth $X covenant the XXXX, quarters consolidated So Note agreement. and the the meet third loan current required In covenants XX I’m for to consolidated to required respectively. the XXXX, $XX million meet and I trailing XX than are million. second revenue we that are month trailing today, in first of of of than here greater referring defined the quarter a month EBITDA greater $X and purposes of discussion of will In

guidance. As mentioned financial we year's into plan remarks, results our and EBITDA the in Executing for guidance this translate adjusted my earlier our passing year XXXX our covenant. quarter delivering our exceeded our expectations first full reaffirmed and

offset $X.X our words some basis. preparing will ensures on deliver quarter on of In fund consolidated to the and to evidence our our sheet, debt, and the There margin, quarter share four expectations. We market line We for building lay two ended drive highlighting: cash needed approval on million. turn the Jason operational XX% With capital. normal a priorities, position. a levels any factors the FDA internal financial let to three, this are important quarter to major and a was XXth. the efficiencies approval take line movements of first performance a builds; XX-Q last million capitalized; that, $X.X foundations fourth back changes due movement, in be over our our covenant provided One, the inspection filed highest May $X $X.X decline a few million and me $X.X our we be and reaffirm to another our Moving up of on guidance, closing million which draw prior maintaining of closing, readiness on by XXXX million worth draw available bottom continue details quarter summary, million cash and gross major Form exceeding in with cash More our before prior Friday the the item inventory the XXXX questions. expenses by; me let inspection. inventory scheduled first two, used began call which These to on about we for to ability business. encouraged balance comments In the XXXX $X.X cash passing debt scaling with of working a million, revolver in revolver, are cash $X are on in

Jason Grenfell-Gardner

you, thank right, Damian. All

the to personal Teligent I make teams Before have our my would to successful. in Estonia, to thanks Canada working who extend States, United questions, been and Teligent opening like up for again

they we day. margins During let's and for meaningfully spirit quarter, and you these all company. open them Skyler, dedication of into moved levels, inventory proud forward, what grateful that, poured of teams managed up remain Teligent's questions. this as to business this regained I past generosity all improved and they Thank every have that costs. and this to their With do of

Operator

from [Operator Matt Craig-Hallum instructions] question Our first comes Capital. with Hewitt

line is now open. Your

Lucas Baranowski

for is Lucas Craig taking on Thanks question. Baranowski Hewitt, This Matt Hallum. at for the

I think that. briefly Are remarks. touched the you doing relate envision question our are prepared Or that those rationalization portfolio little activities, do rationalization first in the upon at this a complete more maybe to -- you point? those of

Jason Grenfell-Gardner

peers. in in more we If And venture at middle were profile compared us customers were of perhaps as challenging we in that meaningful at where well we erosion, through together sense XXXX, the supply number business, on for what the we not cycling technologies a made have basis. the or were we're our long-term could that look we have hard we're of a as systems or higher price there to products with look the they to of whether that had, had really

we quarter I derived to of from failure had think the some that in fourth challenges the that related to complexity. supply was

And so of in QX quarter. product we levels the that in and certainly inventory that QX in was to remove restoration seen of of the good velocity we've that the work helpful first some did

I that’s important moving forward. that our of back drive that the what always can in most be To product. good to going the portfolio we the margin EBITDA make continue we're that But we’re and thing extent targets we stewards that think markets into to to for looking we positive the of us, here to sure have our go change, ahead achieving the need business. business. is And do

Lucas Baranowski

application. And then regarding and food the drugs

get to respond? again be CRL. long has a you quickly might that that launch? once receive Can to also us submitted you the approval, the the how announced FDA to response you You able you how And remind

Damian Finio

XX, use prepared in over result of have remarks, FDA may so see our own generic that no control expedite we'll authority response how the of designation, new has drug the date So to assign us competitive the have we CRL.As its to guarantee review. that, because that that we do I of a XXXX begins FDA FDA my to a response. the the mentioned as But December goal as much nor PDUFA therapy did involves that process

decided hope the As a is date best approval But or we FDA that It could informed. whether the that again action inspect February as all for December inspect most or to out the move have on change. the change it as way the But not. throughout application, the date facilities of XXXX. facilities XXth appropriately of right the in FDA to answer get part facilities we review this as depending date application. believe that goal to an requires for the through what may any application XX, year, FDA of we now, that needs the through it to needs we better been Should

of in have since launch, product ready this terms its had product back original XXXX. goal In we plans launch date drug for

it's get looking review as go a approvability those quickly cycle action. the to of as and of So we to the through the into ready file. be FDA's as with We'll year we function of really executing third at comfort better again we respond that that this fourth the as as just get quarters able be to to be possible

Lucas Baranowski

look quarter? just it this taking may been at gross were -- be last best And think we've is that gross level this question margins one-time a sustainable while. of those things then or you those, Do a that boosted a the some there have in in seen from margins,

Jason Grenfell-Gardner

in mentioned achieve remarks, for his our guidance gross target Damian to margin the than XX%. year As greater was of a

it’s out. on very with based of outside XX% target quarter that consistent laid mix is number. was pretty was sales obviously, a pushing of but a It so goal And much the a strategy we've that, good the that

It think really usual portfolio that mix. of the more mix was that result was of I the there made mix we've over So in respective, nothing a as function product time. a that in the decisions customer in the and

Damian Finio

we was Luca. protection outside of any language, I full the were quarter first where that this or contractual would add compliance to that price

as took we quarter clauses protection actions of six second in price third although, So can months. the last long primarily year, as these last

quarter full So first quarter were any beyond those of agreements. contractual is where XXXX we the first

Operator

And our from next Raymond Wilbur with question Elliot James. comes

is line Your open. now

Lucas Lee

This Elliot. for is Lucas on Lee

So during quick question experienced you on of that quarter? did the failure to issues, any supply

Damian Finio

is of supply quarter has reported none were reported quarter. the million the In Teligent. in U.S their charges of supply We numbers minimal been mentioned. to-date that fees never the but million of last at third Prior X.X fourth year first in the we in $X.X there last fees and of failure-to-supply there to quarter the quarter that today,

Lucas Lee

And were call? changes launch timing material earnings last to there the since any

Jason Grenfell-Gardner

pretty since approval. No. of have been products our launched Actually, quickly most

As in three prepared launched I we mentioned the in my remarks, quarter.

in of I launched think quarter we've two this the Canada. subsequent products in that, of second in in U.S. the the year and two this to quarter further products second year

year has to team the not U.S. added of launching in but the guess products far products and levels, inventory the incremental Canada. I five so only complexity in So managed also this rebuild incremental

So to hold. those timelines continue

Lucas Lee

And that expected for file number share the of lastly planning you handouts this you year? could are to

Jason Grenfell-Gardner

it’s a a as supplements as well approval answer, because new complicated to question combination of submissions. It’s prior

we of that stability submissions that going injectable mix for to XX in be make to my supplements year if the support during submitted and prior say required be Obviously, look drugs is So the would data this intend with this year new batches Those probably, order mentioned that to will I applications exited that will there we are up XX injectable with or and preapproved I to drugs as submit. take during approval over next year remarks, them, data. longer stability those a in are can year. at

well. what down exhibit looks the and we nail do we're year for to batches of what going as XXXX. fully is number we inspection we drive indication I probably to go pipeline have of to preapproval down handful that into will best get submission we'll that are drugs the that this it's a done, There through until also number. that's like. But probably Right hard nail health think of So a year tropical now, the

Operator

to no Jason would now At questions. turn back to for remarks. I’m this like over call I closing showing the any time, further

Jason Grenfell-Gardner

for afternoon. I forward some us. And thank some evening. Okay, everyone Have spring. you for coming this the conferences joining look a you, of up various great of And this you Skyler. you at seeing thank participating thank to

Operator

program. thank for Ladies you today's This and participating the conference. conclude in gentlemen, does

disconnect. a You day. now great have Everyone, may

Teligent (TLGTQ) 6 May 192019 Q1 Earnings call transcript