CSBR - Earnings call transcript Q3 2019 | Champions Oncology, Inc.

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Operator

Greetings, welcome to Champions Oncology Third Quarter Fiscal Year 2019 Earnings Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note this conference is being recorded. to conference like Morris. to now would turn over the Ronnie I Mr. you now Morris, begin. may

Ronnie Morris

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

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

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

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

Our and consecutive of excess million of fiscal third strong of revenue and quarter revenue $X of year-over-year another demand excess financial for We in for growth third revenue continued our the XX%. a growth quarter in reflect results quarter services. a recorded

our least year. we towards we the end of for the XXXX fiscal growth at guidance reiterate revenue As of head XX%

specific Now I will turn highlights. to

Our and continued new to customers bookings demand to trend as our designs, bookings from strong services continued continued we we quarter This continued our use the coupled for with next fiscal stage demand into head our our study of incremental customers. innovative growth line seek the for expanding setting of as see Within core products upward existing is their platform. for revenue the year.

as leverage demonstrate significant cytometry pharma bank services. our our quarter, services our two our to expand relationships on launched pleased achievement and power have discussed clinical in for announce products These our am ex both As I capabilities. existing flow represent developing our products vivo we line. to and to new new with calls to tumor to addition to the product in been services a add prior they our Champions we platform

an our entry focuses by interest to studies We're space. our into leading create excited products both further early the screening the ex while offerings. Our of flow on pre-clinical PDX services clinical vivo large early studies ideally in

flow clinical we the traditional conversion reminder offerings. until not bookings same time provides any expenses these which from limiting are space we fiscal longer year. we our offerings as lab the including opportunities. half up to a new typically next business. our room capabilities our securing quarter PDX expansion service support revenue do Accordingly of within incurring this and for expect without to core lab to we second additional capacity will ramp meaningful space these a PDX completed have The contribution At from As the operations cycle revenue additional sales of

selling coming and offerings quarters as our share on pipeline additional details. we we the Over these will focus building some

Although speed operational studies than with We've summarize us the and along bookings lighter priorities continue to absorb to an a some current to constantly into which the higher to position, execution to year. for to operational we way. revenue quarter financial along rapid were our expected expense models slightly increased challenges outlined caused the was in expected. successful to growth has the and on growth. study getting allow some Without the strategic having got results specifics guidance processes revenue our the expenses and inability our enhancing had recognize To our course and our than bumps quarter. are has in quarter we our are of be led bookings the That to repeat had a some delayed where leading the

and confident launches future. operational expansion. We're and accompany two excited aggressive that business improving product challenges the We despite in have a set we're growing often our new tackling occasional quarter-to-quarter financial that results we're growth fluctuations for that is up about the

for our the Miller Now financial to let results. me turn highlights the of David over call

David Miller

Ronnie. Thanks

for Our had of We revenue will another $X.X on good in quarter the year. same XX-Q million of fiscal with full for XXXX, today. recording last be filed later SEC quarter compared $X.X million third period results the XX% increase to Form an

Excluding depreciation profitable $XX,XXX basis to in million. and consecutive we quarter period third January year through bringing total for and our on stock-based comp operating our income recorded net ago the $XXX,XXX an $X.X versus XXst

have costs Our in period. total year million expenses ago the to or XX% $X.X $X.X and operating increased million by compared

due $X.X $X.X mostly an $X of $X.X were total increase Excluding of year stock-based in increase million combination This was approximate cost the an million our The is of operating on factors. compensation by depreciation, with increase in and ago a increase expenses and total million million cost sales. period, to expenses compared XX%. driven or the

revenue has remain bookings and strong. Our our increased

we As advance rising in of costs expected future cost of the is an result. sales incurred revenues,

quarter period. In while led recognized revenue addition on results to same fronts. time expected completing impacted as than experienced study the correcting some led challenges Ronnie some the during two lower costs some to at mentioned unanticipated those studies delays we execution negatively which of our have in issues the The in incurring

$XXX,XXX sales is of on exceeding paid result year XX% Our commissions quotas. sales increased the a expenses or over mainly marketing and which ago period

year from we As a of loss new a compared third with our period On $XXX,XXX reported of of compared generated. last with same and loss the in generally operations basis sales a and GAAP quarter are in is higher an of $XX,XXX the expenses year. latter business a result marketing the half indicator

the approximately $X.X for last $XXX,XXX generated end months operating quarter we cash, the our trend same Now cash operations had million of XX, turning sheet. and cash cash compared position At our January three the from strengthening of the ended to million $X.X activities XXXX year. continuing of cash, of net balance was period from to net for generated

while our delivered in we and opportunities continued XX% of and accelerated to XXXX up track this we on short-term of success. call we would and year we're setting profitability, in expect period invest business. the with confident a open are growth. growth full summary to of like strong for future new in quarter encountered We excess of continue we some growth XX%, fiscal achieved bookings business In operational challenges strength in even for the another as revenue line remain revenue future the in your for for the We excess underlying I now questions. us long-term guidance and deliver to of pipeline

Operator

Instructions]. [Operator you. Thank

be question will Craig with with your coming of Please First question. from Matt proceed Hewitt line the Hallum.

Matt Hewitt

you the Good for afternoon taking and thank questions.

Ronnie Morris

Matt. Hi

Matt Hewitt

noted any studies the a was First maybe them, and bumps the as margin up a on from perspective? what to you from those there impact revenue way regarding quantify is speed both

David Miller

somewhere as redo think had looking and like we would've that another we so in the that range other expected and examples go that. the expected. expense studies quarter to expenses of felt this probably $XXX,XXX were as We that Yes, some had on -- we of revenue $XXX,XXX at that of on we having recognized in side incurred probably everything been because

Matt Hewitt

looking where earlier this Okay, a this of you target? on Thank and to you couple year update maybe that guess that's year, a helpful. sit XXX-XXX first, your had at tumors target I maybe then I set be you think tumor bank with an to different items, added

Ronnie Morris

a number more talked speak Yes, collaborations. were our the for earlier for adding to the cohorts but about we very of in so we're so we lot much tumors. bank think I as unique with looking We're of looking we unique different had tumors not as actively year

to about. the be that on are So we adding we track tumors had talked

think the year certainly I we're track this we've XXX been but more for. than I for probably to think bank what on looking

Matt Hewitt

traction, maybe interest if the flow you're cytometry, as details the seeing offerings there? ex new base then you customers, more far as us and give vivo and from Great on bit installed a of the your little color could any that

Ronnie Morris

platform they're think our drug seeing of two ex earlier excitement in a from lot models. pharmaceutical evaluating so, when larger companies platform always us they a Yeah vivo for first, update. the ex against on separate The can screen many, compounds their for They've development where just platform. do pipeline many a we're asked I vivo

So of finding lot we're that. interest a that's in -- been

we a day one where clear vivo it's have you Just in like next the don't. so ex we're not switch one the light day platform

We have development research platform. platform expanded installments rolled do vivo more out and our a the of continue to first and we ex on

we're the this platform. But and we seeing platform as coming roll which we revenue that quarter to development over interest have that past we've revenue we're I rolled lot with to ex will plan year a out would least to we continue vivo this are and we've seeing to a to this product and already going expand initial grow bookings the to this into quarter. turn turn next is quarter say So bookings at continue of more out going next of had the aspects multiple quarter

very, interest and of actually there's to a that very currently going for currently seeing be offering lot and seeing shortly. that's a is revenue we're So bookings it

that on interest But currently sales do the going but in do said us revenue side because seen year clinical the -- we're a it's space we we're the In patients much offer. pharma able some terms side, a again this trial flow be also taken on up pre-clinically are we to we and see much cycle, and that the much our and they like That something be as longer identified it in is flow we've clinical a samples followed doing larger. to partners but We to something is of we've identified of longer again, trial. that that to contracts something again. cycle have also to other before it's capabilities clinical would the it's the clinical almost set cytometry that's to

trials course we the then clinical trial. of XX the So over if that revenue take months the recognize

Matt Hewitt

thank back more helpful, in hop one queue. me from the will and really that's Oh maybe I you

be I that margins gross or then this it speed how are back As or realize quarter bump quarter next as bounce I timing sometimes and about the should this is? thinking will far that we quarter guess there in margin gross some QX

Ronnie Morris

you want take or to me David do you to… Do want that

David Miller

a Sure, more exact we delays exactly if switch sure, and comments increase. that we improvement when some [indiscernible] to are of will mean QX, a -- I will in and our of in when QX see the it, timing that greater exact difficult to because margin the them, us this that But that we the will actually way see going see get anticipate mean some read revenue still And the we be had answer really to is figuring simply we're percentage I expect will anticipated we see I so when question we to revenue. had determine but in sure. out QX recognize certainly we small I will hits best

Matt Hewitt

much. you very Understood, alright, thank

Operator

The Paul your Scott. Please proceed comes Knight Montgomery next question Janney with from line of with the questions.

Paul Knight

you're that pre-clinical, Hi, can the it to, on the academic, to profile is you that? Thanks. it customer little vivo side it and talk can is about the pharma, talk cyto talking ex a you bit flow is

Ronnie Morris

biotech all So, ex it is on pharma, on side. the pre-clinical really of vivo primarily the it's and side the

it's anyone that's a the before studies a So pharma, clinical pharma, which from doing do they company to more biotech to regard With into that's vivo later that I and assess screening large want to do compound, expensive a modeling. move in the want signal clinical is cytometry more already and trials. small stage actual mid flow

that So there they clinical that's trial to a space. the so and be that company do in would pharma have point at usually a plans

Paul Knight

part that linked you be of guess in than seeing large to of your are studies that would and these to side we're on flow trials? the in these follow-up the world world immuno-oncology PDX -- projects size the then the be projects the increase larger is be and question that would traditional to I expect And would

Ronnie Morris

of order study let's PDX to studies first clinical I where was. as the of question your thousands first would the study of somewhere in in ex So, the I so about of our cytometry the of think all would dollars average flow the and be hundreds regular, PDX the linked millions answer dollars the are say it's where vivo contracts half say

of terms of magnitude are different those in order studies. the differences So of

question second of terms which -- your question the is sorry/ In Paul, what I'm again second your is

Paul Knight

just was offering, what part linked this is to your in I surge flow of immuno-oncology work is immuno-oncology? the interested if category it in it's the or cytometry not

Ronnie Morris

both. it's think I

doing companies as for both points end they it's think need flow well other as where cytometry. immuno-oncology I

combination So it's of a both. think I

in seeing our type to lot Oncology a I an oncology, of there's all just oncology that both it's increase, of thing it for in a an a of of investment fact specific there's of a it's oncology budgets we're and the oncology that lion's other get don't demand lot the in oncology. R&D continues think increase when if it's obviously. in immuno-oncology other to R&D know necessarily services. comes share to think I specific I and

R&D need it's work being both the I pre-clinical initiatives different of all done. clinical think So and that

Paul Knight

the they flow Okay, obtain trying are and and or length, they specifically are biomarkers -- lastly, sorry what for side? the looking on safety, to for the

Ronnie Morris

looking for the patient for to looking a patient just for happening a marker trial. on who's trial. to they're or understand What They're is an on expression the what's an a endpoint

Paul Knight

Got perfect, you, thank you.

Operator

next Bostman [ph] proceed of The line Please with with Bob James the is your from question question. Dustin [ph].

Unidentified Analyst

thanks some progressing partnerships, and for Hey, some I being partnerships could give but in of the step you and the too your on datas Puma X-D the much focus go and don't AstraZeneca some are good back how one future? and signed back, to see how on bit on color just additional those and whether current but with really little congratulations us are the some want maybe quarter quarter question you a

Ronnie Morris

have Those we the so pharmaceutical way our forward well that of primarily studies less have some -- around a would think specific some we you still I co-clinical ongoing larger with them study. outstanding. we is a one Yes, have the going partnerships we of trial of mentioned where say were was companies.

broader about I think partnerships just with on work the forward company we and think basis. more the way a doing more pharmaceutical is going

and of a of moving flow based So, pipeline seeing. with a platform, go and more project that pre-clinical we're And large a a that's to to on clinical the we're going working companies more basis with we pharmaceutical working kind with moving doing more to companies moving looking Syngenetics of Cell PDX, them working broad to with a us basis with Lines, earlier [ph], more the we're some that's pharmaceutical of things. our the strategic on more study pre-clinically partnerships not seeing vivo partnership. what of of partnership that companies more on with flow, on to pharmaceutical ex on way in using going kind view where for into we're but forward have We're

Unidentified Analyst

Okay, again. well and congratulations thanks

Operator

Next question line Pivotal Arnold questions. ahead your for line of from [ph] Please live Arnold the Ventures. Mr. go is with Mike your with question. is

Unidentified Analyst

revenue just to about the talk the guys, Hey and second, for back I was quick there's nice XXX,XXX bump quarter. in it wanted I go speed way a mix about in understood been in quarters in which expenses of be GAAP earnings the that higher, $X should million couple I'm quarter the a coming next so your an additional is have hearing? should XXX,XXX what

Ronnie Morris

the It's what correct. we quarter would have expected before

Unidentified Analyst

to sheet curious open $X.X cash confidence cancel balance I that XX XX you million Okay, with I XX-Q cash then job people? also have quick your to the not your or line in your I'm credit these then hire a careers and you in want million just know did you group million credit deal -- million requisitions page, of have a all balance gives in or and and you what $X.X second, line noticed your also XX renew to latest for that XX

Ronnie Morris

would points. two in answer I So,

we can credit to The advance, canceled we see the this pipeline pretty quarter. that what's we in first can far because book line going our see is

have a we excitement insight to quarter see we're marketplace. the We products the going from terms offering in what's that good and the and of book on pretty the next trends see new we

money where raise actually certainly period raise. from we could felt we shied we've we was and we've is did a And that line So money away credit as associated with there if actually the also we operational to well. a the the credit like that passed and we cost money comfortable because didn't need pretty felt from that need line there risk of felt losing perspective that we

zone, of felt our balance we we it along. thought we with we balance felt So could was cash like down pike coming danger we were like out the the current we our go increasing plus and manage as cash easily

teams. have we've to for new looking open our we're I to we that continue are fill open tomorrow. expand that for for good In good expanded, looking we're terms certainly grown, have as looking positions grow wouldn't people constantly to we we're people, of the do going but those tomorrow. we're But positions we positions looking XX open We're and people not say

Unidentified Analyst

just is hires of and have lot Okay, that choose which know a to people noticed larger Champions? Crown one are why that of come I'm new I've for competitors. Linkedin to point to Biosciences according work from to your you curious just coming

Ronnie Morris

question. great a That's

work as of certainly try some other us come to So, to from we've competitors people our had competitors lot not a Crown well. only for but

the being speaks excellence the people our think of customer they the a like that they speaks to were the of necessarily of came relationship. in over really last quality and when data it both from I've looking Champions, the to join that have I of years kind high that culture company interviewed quality couple I to think where wanted terms felt Champion. strategy it some of of driven And a for think I and they work what they've these perhaps from didn't provides organizations

from very a think good to against on our perspective us and to it a I were side come competing that happy was have people bunch thing of just our them. who So we're our wanted

Unidentified Analyst

capital I near back around sheet Okay, balance on warrants the capital to go did how just bit, will structure, expire plan am some there's and when future? And obviously little what's the okay bring a these in cash good. curious and it it then much the in the warrants

Ronnie Morris

You want take to it.

David Miller

that. take will I so Yeah,

cash that So, expires XXXX. or there they time or the January money the put sheet. warrants the are Obviously in are now, on right the of the regular balance next couple of it money [indiscernible] [indiscernible]

Unidentified Analyst

have if you avenue raise money one that's you to. guys to need Okay,

Ronnie Morris

Yeah.

Unidentified Analyst

to a in on lot strategy, just I release from have lastly the you about on going guys frequent haven’t way? the company seen I'm of at innovative press the the then stuff company of basis going of IR forward terms an official is maybe and strategy since and obviously December, along communicate some success IR what Okay, to more the curious just shareholders your

Ronnie Morris

and I'll I press probably with the something Yeah, I like like with out you, that terms honest growth feel bunch be successes of that kind was think competitors point. to day a of we in we we've want every that's good felt do. company. a have of come the like should we just that think our of just releases don't I

So a job holding but lot can a big of big I like not it's and a we But anyways. isn't I good contracts think better job better doing bigness. announce -- sign at we or do the I lot we we we do it contract that big really that on can or we're think back a have of it's the going something it's a deals that that can't point think A

Unidentified Analyst

thanks alright, time. Okay, your for

Operator

the from Thank of The Hoffman question Please is you. line ahead your with Hoffman go Clay Clay next LLC questions. [ph], [ph].

Unidentified Analyst

for guys, on Hi thanks quarter. Congratulations taking your my call.

If at and your bookings increased you a the booking all over you have for last quarter? the seen put number out

Ronnie Morris

repeat Clay, sorry you that. could I'm

Unidentified Analyst

about the your bookings you increased. are how output, have Yeah, talking

If you've you put a and quarter? dollar that value on the percent increase last the the for seen bookings

Ronnie Morris

a give have we not we bookings amount historically continue increased one on have bookings that our never do have But historically about quarter-over-quarter. and percentages. this What we number really we talked of mentioned call So or as the increase well. have given nor we to continue to given is the

Unidentified Analyst

question. on be a more others the percentage is would approvals road of Okay, those. some other you way Puma if The FDA on getting thing, partnerships drugs, have and with royalty one you some you long-term had this down and

Ronnie Morris

we exchange type certainly or service is for currently fee it some some It for reduced we the we about existing do for would type royalty with about, we we biotech think in or that Tier payment. It's cash interested something that in to milestone something biotech drugs. not place A's is would is in future. have that think about, whether would sensitive isn't a approached we don't partner the in and the in of have agreements any in are in general. it's It pharma very of the something of of so we about at is haven't interested thought the any So don't that we royalty It's tricky future really so type but open that much I to that much -- big that. it some But are a point historically. the proposition be would model to, done early it something be

Unidentified Analyst

but Yeah, you have okay. cash color could and give and X.X [ph] you're from? That's the quarter, cash, a GAAP from other on more operations cash of obviously of more one last generated you depreciation non question little came a info some in but million you loss saying that where generation this

Ronnie Morris

you take that Sure, David.

David Miller

We operations, differences the Sure, loss which just had receivable, contributed There and of couple see you'll a and overall the income definitely stock-based you points. basically cash in as recently more GAAP comp as our operational generated. timing accounts had are to depreciation improves etc. the our accounts,

hit So a to times what there this and bit little but at is those takes time. but do collect replenishment where collect those a that's on there quarter then longer of receivables same the certainly are we receivables it

the it's turning really just of operations, improving over So net ordinary accounts. and business then operating income improving of course just

Unidentified Analyst

correct a of David. And some believe was I there of the warrants, there am in I exercise also component

David Miller

you’re to is is financial -- the specifically that that the the section operations. is but I but it Yes, is on think in you that know investing, referring

Unidentified Analyst

Okay, operations, fine. okay

Okay.

Unidentified Analyst

Alright, guys. thank congratulations you, again

Ronnie Morris

Thanks.

Operator

this remarks. I'll floor Thank back the for you. time closing turn At management to

Ronnie Morris

Thank much for very call. our joining you

stay taking future coming a and news quarters. the your in We'll about the tuned. time. excited Bye. are for more have lot you everybody We Appreciate

Operator

you, Thank today's will conclude this conference.

this You your lines Thank your at for you participation. time. disconnect may

Ronnie Morris	CEO
David Miller	CFO
Matt Hewitt	Craig-Hallum Capital
Paul Knight	Janney Montgomery Scott
Unidentified Analyst -
Unidentified Analyst -
Unidentified Analyst -

Champions Oncology (CSBR) 18 Mar 192019 Q3 Earnings call transcript