CSBR - Earnings call transcript Q2 2018 | Champions Oncology, Inc.

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Operator

Good day, ladies and gentlemen. And welcome to Champions Oncology Second Quarter Fiscal Year 2018 Earnings Call. All lines have been placed on a listen-only mode and the floor will be opened for your questions and comments following the presentation. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Ronnie Morris. Sir the floor is yours.

Ronnie Morris

afternoon. Good the Oncology. Morris, of CEO Ronnie Champions I’m

Joining you quarterly for is David earnings CFO. Thank Miller, our joining me today call. us for our

will today’s Before forward-looking from results what begin, I in remind materially that I those described statements. will could differ statements and call we during is that actual you make

discussed Forms to financial that XX-K. A Form financial factors on to measures information available earnings and may cause results in call differ release. of XX-Q non-GAAP during is measures is Additional could available GAAP that be in the our the reconciliation

the The past second fiscal significant markets structure quarter progress our for expanding the have of and the XXXX sustained over position our cost exhibited to made addressable streamlining we year Company profitability.

discussing would operational to we been revenue. quarters. an record our expected operating bookings, For The during income in report future generated revenue we the drive drive profitability us. important am revenues second spearheaded several stock-based expected for achieve is pleased to defined compensation the quarterly milestone excluding as profitability. record I This that have which increased we elevated quarter, quarters, our

outlook reinforce Our confidence our visibility the year. and achieving half year positive flow results in and of cash and at the the revenue for second full reiterating over at fiscal into growth annual last year midpoint the for our of XX% strong our least net profitability

at lab for run have Maryland, to studies We state-of-the-art capacity and own our facility efficiently creating additional Rockville, movement capacity, also completed us more the doubling new growth. enabling to our

at of realize our cost annually approximately million we result, As expect savings to lab a current revenue levels. $X material

for higher a Models the government understand and $X prostate goal prostate competitive Innovation better million the a signed models. preclinical cancer novel cancer. project PDX PDX patient-derived to ethnically in program, Advance metastatic Disparity cancer opportunities primary development contract American study Ethnic for oncology studies. Business we Not disparity under-represented Small of higher. to banks, Fully Health Animal-Based incorporate Cancer scale response quality and mortality are models create is this The are A prostate among Research ethnic to Research. tools is men leverage quarter, contract men management project through incidence new two-year diverse SBIR and to xenograft the an The health approaches cohort efficiently the our PDX project to prostate for limiting only than build is Cell to During in and prostate the prostate ethnic industrial will of characterized, African ethnically models. of translational African and in PDX techniques study and build rates strategies groups, new other from American diverse

our PDX significant part and dimension expected strong to new and TumorGraft. These current biopsy of the high-sensitivity are to pivotal development. the to standard scientific clinical the areas. has a in strong InnoGenomics unique reflect we As generation widely clients not drug partnerships deliver key combining partnered the for activities. perform techniques are key of enhance to capabilities expertise next of in These represent specific These to to models to This R&D prime project R&D and portfolios examples drugs. models PDX the development support project, another support available their development care, are our of expand highlights drug be benefits liquid to focused PDX cohort will a partnerships Champions’ in also their along of the has SBIR creating opportunities award of to with AstraZeneca this oncology Champions programs in models. the of new develop other announced market investment strategic multiyear collaborations collaboration recently models with with are This

strategic our as are we terms of operations. and direction We where are energized by company, day-to-day a in both

are operating clients shareholders. improving enables business results new create opportunities a while deliver for our We financial that us to and within business our for framework

revenue are it flow. trajectory that We Miller, and talk from relatively accelerating results. strong over costs positive that delivering us for turn places With about consistently financial a profitability to I’ll CFO, of growth cash fixed David our our on to a base

David Miller

Thanks, Ronnie.

revenue I quarter XX.X% primarily growth XX-Q than revenue quarter is increase full of year-over-year want in but quarterly the year. December quarter prior TOS sales the to growth XX.X% million, the in the increase XX% was XX% revenue our The the filed lower Our our our an increase annual over in Revenue high This revenue segment. rate, the driven results a October million fiscal growth. on of by Form XXXX, is year. plus highlight sustained for TOS second the quarter-over-quarter our XXth. an on exceptionally second months in revenue another percentage in with year, last will strong increase in compared pipeline. the for of record result SEC be or and second XX.X% result XX, before $X.X to second a last million of By $X.X quarter segment, $X three ended business was

year margin second head we second our quarter, higher was to fiscal XX.X% XXXX, the XX.X% we trend will half period. anticipate the quarter. than growth percentages ago in current of TOS compared for As our the into quarter-over-quarter gross the

fluctuations. quarter-to-quarter, fluctuate completed. expenses the gross throughout typically and while is recognized which reminder, the and may life business manner in study, revenue expect the recognized and to our time margins study at as a GAAP. time a the are is continues our quarter-to-quarter we revenue given narrow in grow, Over recorded generally margin to are Expenses gross accordance incurred the As with

in we savings gross base expect this new was $XXX,XXX to fixed revenue improve XXXX, the in leverage our quarter a POS margins same against business facility. prior our which strategic variable segment the also The our higher quarter, to In is growth. primarily revenue will year. also earnings second business. last leads in not in due the the decrease $XXX,XXX expected a cost TOS over to realize current POS as lab as addition, fiscal of generated I decline to time And to our some drive operating the we and by last as implants study compared our for shift revenue. Revenue efforts of cost we our calls, decrease period is primarily in and over several decrease said a

last and was second decrease and three primarily the year. compared October POS the for However, The $XXX,XXX million compensation in to XX, last of for compared million in to is The value of development provides increase same second for decrease compared operating XX.X% the and year. period expense is were compared in research XXXX, a expense of strategic the for fiscal pharma, expense the was administrative year. XXXX last for and group the segment in our $X Sales same same last $X.X XX.X% of XX, period the $X.X sales October the gross ended Total million period months for collaborators. in resources new $XXX,XXX for the fiscal $X October XXXX marketing margin R&D million result last primarily expense. year-over-year quarter G&A XXXX marketing Research POS second year. year. to $XXX,XXX for quarter for the same was result months division. compared reduction the The period expense a the reduction stock-based expenses in to ended XXXX XX, mainly three quarter ended was development result $X,XXX,XXX General was three to cost. same model a the period and in of months of in the academic

you results know, focus expense. excluding operating compensation As we based stock on non-cash

draw to non-cash they our stock-based expenses point important if I second in of earlier compensation to representing depreciation do appear is the the want on attention sales, period it favor. XXXX, the even $X compared results, and to the excluding such, million to As cost those expenses quarter our XX% not $X.X on call. were work million operating Combined, to a reiterate year, for same last the of made for increase. surface,

expenses quarterly were than run quarter strong, the prior same second rate. our quarter period exceptionally our as revenues lower second average Just our were total for

our structure. increase to this year same last indicative systemic the of quarter a the expenses such, As is rise not cost our cash-based in relative period in

fiscal recent levels expectations resulting low-single-digit total XXXX historical increased of percentage primarily cash-based We for from at year workflow. our expect will of increase growth, expenses

excluding positive income earlier, achieved compensation that and the of highlighted for non-cash Ronnie stock-based expense, As depreciation $XXX,XXX. we report to we approximately excited quarter are

same was period increase Now, revenue turn last activities is let in the results. The me to of quarter, due cash operating [ph] cash. used by $XXX,XXX our operation for year. generated cash to and for to $XXX,XXX growth excluding cash generation our in compared operational Net the

on approximately the end our first More XXXX, of of importantly, the $XXX,XXX sheet. cash balance we at had quarter

was new quarter along on our course due fixed $X rate investment in the to million accelerated quarter $X.X rate The accounts normal of approximately cash call, lab our that first was run sheet an related assets As million. for business. to negatively the balance our flows impacted other of burn of with discussed

positive $X this cash our balance as of our we flow as generated However, this cash as expected, over of position cash call, well and stabilize again. date quarter million is once

remain to can receivables, the be operations. position fund to cash we we have there some in of confident While our cash our timing sufficient due fluctuations that

fiscal least our revenue financial quite the to day-to-day a This as second your sustained about to call working the quarter, pleased We results like year in at growth of forward to and XX% of fluctuations are capital. additional small look on to look achieving open In quarterly we we updating operations. full We the We’d you fiscal short-term our profitability. reiterate for closed performance XXXX now guidance any forward accomplishments progresses. and year the support line quarter for questions. of credit also summary, our with

Operator

Please question first comes state from Horowitz. question. our And your Joshua

Joshua Horowitz

you. business? the some we’re some that and way on to specialty could in bidding potential Hi. additional that pipeline contracts other look that Is terms you think maybe a guys other not about of of Thank other really source competitively-bid at Good about we as revenues base or are quarter. thinking programs there

Ronnie Morris

Yes.

in we’re other of quarters, the past currently where couple we months a bunch I’m and for of since or or SBIR, past AstraZeneca So, that certainly as couple well. both avenue collaborations that looking we’re partnerships other of certainly, at grants did some the applying

not take the dollars -- of another helping because up and something the to so in as for it we’re ourselves, build away we only also that us that having grow we’re see to for doing, we’re possibility definitely as our looking expend continue a of but avenue without because that R&D it’s growth. our of we what some space of So, some expense, the importance

pipeline, applying pharmaceutical other them we’re for area partners. So, engaged And don’t a we’re we’re it’s certainly certainly really working that certain in. We with to yet it’s and that an something certainly expand. have looking stuff

Joshua Horowitz

on margins types of the Thank projects? you. these about How do we think

Ronnie Morris

answer Do to you want that, David?

David Miller

Sure.

I similar think margins the to part, our very business. the be will most Most normal in work of for the margins similar. the TOS is

be for with our but TOS will a the different of the need revenues be line, expenses in revenue in and pricing just the line also deal you product the So, relatively should stream, different cost with same, type current business. the

Joshua Horowitz

Thank you Great. much. very

Operator

[Operator no questions Thank And you. appear to be this further there Instructions] at time.

Ronnie Morris

to joining the in much you Thank everybody the on call. us everybody to continuing call. very conference forward for We update look

Operator

Thank call. you We participation. conclude you. This does your today’s for thank

time, You day. your this at and may disconnect great have lines a

Champions Oncology (CSBR) 7 Dec 172018 Q2 Earnings call transcript