MSON - Earnings call transcript Q3 2019

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

Operator

Good day, and welcome to the Misonix Third Quarter Fiscal Year 2019 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Norberto Aja, Investor Relations. Please go ahead, sir.

Norberto Aja

Thank you, Melissa, and good afternoon, everyone. the XXXX joining Call. Quarter for you Misonix Third Fiscal Conference Thank get minute a in management's We'll just comments. with started presentation and doing take me safe so, to before the harbor a read disclosure. But minute let safe webcast and within of the forward-looking Today's harbor call of contain provision the statements meaning the U.S. Litigation Reform XXXX. of Securities Private Act

of identified among words references as future, will statements other similar anticipate, may, statements regarding to likely, plan, goal, Forward-looking guidance should, include, by our can intend, future forward-looking periods. we make financial Examples to be others, expect, such statements believe, estimate, relating and results.

are facts other regarding to projections, and trends, forward-looking current neither changes beliefs, of Forward-looking future risk future of and statements uncertainties, to our the are statements to anticipated events are difficult conditions. assumptions and which and they business, outside historical strategies, economy the future our Because they are relate performance. predict and subject Instead, They expectations and control. on of future, the assurance of only inherent are many based in circumstances. future our nor plans

achieve company's actual as time, on We made. webcast and Form of statements. new Our us publicly conference not described today future and conditions you G. include today's required, condition the filings which among statements non-GAAP and result available and now that factors most measures Please forward-looking on also is meaning it all measures from company's the be any a over in of forward-looking well to non-GAAP may efficiencies statements include, customer Any date SEC including differ undertake our us statements. and Exchange as go and measures Securities and is be in that currently demand to differ results developments and with in to Today's update by reports operational website. based could to Misonix. to to and rely call only from made and others, forward-looking Regulation comparable to of the ahead, Important today's in Therefore, the of XX-K meet no President news like press any the with Vizirgianakis, speaks announcement these the should on financial products of in When within solely materially today's call GAAP will forward-looking XX-Q. the on whether and the the in turn information the financial in for time Form statements accordance solutions a the as risk obligation reconciliation of otherwise. cause calculated Commission, results those from indicated or financial our company's financial indicated materially actual information, to financial forward-looking call directly may that, and ability Mr. CEO in found Stavros. I as With release the presented can Stavros made those

Stavros Vizirgianakis

third quarter afternoon, today joining XXXX results. review Thank operating on us good for and the Norberto, our call you Thank to everyone. fiscal you

medical for execution Misonix' Joining our of Joe devices. growing call sales third our strong year-to-date demand the and Financial direct driving and clinically me team Chief XXXX our the success tested performance strategies on Officer. the quarter reflected Dwyer, our financial today is continued go-to-market in fiscal of ultrasonic

and approximately of underutilized have our comparable streams XX%. X and over in organization continue prior months XX% over growth million X little product a focusing period, sales just Excluding first guidance, maintain we XX on a proprietary excess transformed is for A growth pacing in of long-term an with valuable revenue line sustainable revenue with world-class ineffectively revenue profitability. and positioning of on from embarked healthy on months with growing we company license years company-wide underappreciated fiscal the strategy high-margin XXXX yet XX%. for the a product time, we to fee ago, technology gross In new of Misonix $X margin monetized Misonix into from of

enabled Misonix on continued make team, to acquire and to investments direct generate Our systems With approach and infrastructure, tremendous and to growth us growth, near- has our a definitive including an growth moment the our operations marked week our history continuing product agreement their innovation. to engineering transaction the shareholders. all-stock long-term strong for in own, opportunity of Solsys support new last marketing, product and current expanded in reaching sales watershed a our

existing leading highly TheraSkin, wound and SonicOne. solution, its treatment wound is application, Misonix' Solsys debridement complementary to

outpatient is commercial combined improved impact offering of result, Together, a our and criteria of for wound combined transactions in wound patient healing to of of overall solution to care positioned expanding our enhancing year and growth value competitive XXX wound product a the over quarter. compelling. in attributable period before. deliver meaningful comparable in growth sales in annual view excess hospitals as Misonix' well $X market The third surgical points new license quarter. establish industry clinics. guidance third and treatment the provide ideally additional in $XX of financials quick The of as following wound then do even of I was entity some meets of of best-in-class and standard excluding proposition of and our through a combined is clinical through review Chinese to supported growth reach. chronic clearly BoneScalpel. as when growing clinic, the pro As the product and economic terms XX% for what regarding outcomes a color increase aspects the dedicated to from process. continued the million equipment in the The Misonix-Solsys our the leadership forma in demonstrates And the position more total positive we transaction, will With in differentiated fiscal strong M&A data will revenue extensive efficiency the sales revenues year scale and fourth fiscal team and Joe critical related quarter a completion Robust care care our the that recorded million and will be revenue clinical consumables partner first wound long-term expected solution. resulted by will the our outlook professionals revenue current

are the XX% Looking shifting focused our sales total at financial streams, for X% equipment revenue. our consumable sales XX% accounted while of X products overall mix towards third revenue, increased quarter sales in represented nature on our revenue and our XX% grew consumables our initiatives The and providing of is sales on benefits compared recurring of of Geographically, higher-margin including grew international year XX% becoming and XX.X% added to revenue prior revenue predictability a a more as to consumables increase gain and equipment more revenues. XX% period, results. visible at

onboard, sales XX% due transitioning domestic which Nexus. year-over-year equipment commercial revenue first our and total domestic inefficiencies was implemented distribution across significantly including XXXX to and over more the the XX%, our a to launch to by half in approximately lower in businesses of chain fiscal new rise benefits fully driven of the of process, diversifying system. from procurement capable supplies in various bringing eliminate was the domestic front, initiatives growth On seeing supply We're the ERP our visible our consumables platform, expected upcoming revenue, by partially offset new

be appointed took responsible across her infrastructure, we've leading will assurance phase of the that In new a experience manufacturing, executive overseeing Officer, in role, Following regard, regulatory to served ensure excellence Chief growth. this and pursue for drive to care aspects brings C-Suite extensive newly our position who the of Sharon is quarter having operating she to Misonix Operating next successful and steps business as affairs, Corporation. to Pall alignment the we research of Sharon where created we Chembio organizations, additional of quality continues third and relevant operational the our including other health all development. proven Klugewicz

Misonix sustainable our that profitability, shareholders. our goals the are confident acumen growth our yield best help operational possible business revenue expertise We achieve that for for and outcomes will efforts our and and

behind our regards of now that new platform in to including and have these made application. for engine significant we business, In investments is of integration XXXX our serve feedback position With bringing able ongoing begin and progress be since and Solsys in overwhelmingly the we mid-calendar ultrasonic for during people the market unveiling progress XXX(k) sales The support the and of our potential subject added to the to FDA first confidence XXXX, us and making initiatives Nexus, X our for profitability. provides growth the benefits results platform financial are a positive third Nexus further that of us, quarter. growth summary, the recent surgical we'll in a as with new to months launch closing. approval to highlight are Misonix fiscal commercial confident Nexus have In rapid the growth its place Misonix. to the infrastructure we our we to upcoming of sustainable booking for quarter we And the received year

portfolio, focus to platform. expanding driving our additional our operational repositioning penetrating introduction including continue further sales our we'll and improving markets, product and strategies, on forward, Going of geographic Nexus new efficiencies, go-to-market the of

would and this now look working our forward to to compelling order our also to Joe over in of deliver team to efficient on value Solsys like to closing, With for We turn that, call upon our an shareholders. ensure Dwyer. the patients CFO, I integration with the the combination

Joe Dwyer

XX.X% international XX.X% respectively. for good Thanks, third in XXXX. fiscal decline X X the quarter sales attributable to and Total with revenue XXXX, XX.X% the $X in million Domestic and product we everyone. XX, $X.X ended to decreased afternoon, rose recorded million. X.X% increased to increased the for the had revenue XX.X% Total QX sales quarter March million year-over-year for million months license $X.X the revenue Stavros, to and $X.X of and

of for quarter million result healthy travel the flat being prior along of costs third higher The XXXX million. at principally manufacturing to fiscal increase ended quarter. same last second was quarter, to to sales to quarter gross the profit for in increase continued The related to to compensation to addition next-generation cost year. those and related and related with XX.X% of third offset force. $XXX,XXX resulting for are ongoing which the compared variances. General lower higher our administrative XX.X% development in $X.X legal increased percentage a and investments margin development quarter Nexus. end year third remained consumables the team to members global platform, routine distributors in was by last and $X.X third our a expenses, period with quarter a the increase of commissions compared the expenses the by build-out transaction Selling million due sales with the mix and domestic litigation prior the the year associated XX Research of quarter $X.X This of from current the with increased of professional expenses of design direct is XX acquisition. third fees is Solsys year. with impact in and Our quarter to at revenue expenses the product continuing to for of We by fees product $XXX,XXX the

the net of year. in down the recorded or third EBITDA of the license quarter revenue per with Taking for period. in Moving loss QX. year the million with compared income $X look compared $XX,XXX an a a that loss of $X.X the net quarter loss EBITDA gain of or we we last $X.X adjusted EBITDA, quarter third per of share the adjusted last in was $X.XX year, million income of prior statement. share Less, had million $X.XX $X million approximately Remember at third

quarter about in third at year's EBITDA quarter. breakeven So year's actually and last third we're this

EBITDA of of months with first revenue. the X compared fiscal last before the gain first adjusted adjusted $XXX,XXX an EBITDA $XXX,XXX we For license year of an loss recorded in of months XXXX, X

XX, was capital. period million Moving million X $X and cash balance with our and fiscal $X.X flow quarter third XXXX. the the XX operations consisting the for compares we fiscal on approximately first first this transaction of $XX The cash fiscal March to months We was XXXX expect XXXX increased the million, to operations. decrease in in for million is in With relates $X.X cash XX% of $XXX,XXX our value the loss quarter relating to Working of cash million our to XX% our quarter And making with from from at expect debt. for the largely our of no operations very ended acquisition, June close reiterate working for during the the capital cash XXXX. revenues of compelling of at to used This and in and sheet. a third to $XX we used gross remain for it shareholder respect as is margin which at calendar XXXX story. and guidance, to cash at result Solsys year, forecast grow fiscal in

million we be our During expect $X QX, acquisition. the XXXX for in transaction recorded record to QX will of the fees The closes. north remainder when transaction

definition to I'd to exclude it our expand that, turn to like it adjusted we will the For With fees. turn over of questions. EBITDA, the operator for to, call over M&A

Operator

[Operator first Rose Kyle Instructions] from Canaccord question And our will come Genuity. with

Kyle Rose

the you're the that side. one your it's one can U.S., the dynamics how the in concentrated you strength little the end as if talk the on of well then got orthopedic launch then the whether more the the bit months? in next Wondered confidence China, side growth, talk I've through about several the follow-up. of and guess, just And where secondarily, course in a over or the neuro of, in seeing think if to opportunity we could of Nexus as about I should year pockets you

Stavros Vizirgianakis

domestic much you in about very the with BoneScalpel. Talking little the on orthopedic find the good you, side of strength question. we for business, spine market, Kyle. Thank the Thank as particular, a

good We with product see traction to continue line. that

the in our aging really that focus We're platform, we business, that significant the traditional expected. a for in to able SonaStar, business, is be Nexus, now renewed of and the but obviously compete will part time. the market a we neuro have to the have hoping erosion be With that in neuro seen of meaningful way launch with first

of preparing a a from significant I think for identifying So terms market the push sites, business. we've spent lot in time the in outside of neuro

significant to that a we we're So growth provide neuro Nexus opportunity. when launch will excited get

efforts and the even there. side concentrated XX% As story BoneScalpel about has now business. you have wound our the of right the know, really debridement of been our XX%, say I'd been

we're expending hoping that we platform. significant side launch energy we'll when So Nexus be the on the neuro

look was units that that up because neuro we lot as in well disappointing, to And the sales side. been the older platform, very on was pretty the We're of orthopedic at sold. the the but a very, if SonaStar now So with decline a growth business, capital happy have with Neuro that customers of might we for launch gone we those the some will market technologies have marketplace. when newer quickly. expect grow confident addressable for on in losses Nexus the ourselves those as

an China an increase China. side, a, perform are on effect business. to China levels, in of the If continues that On will well. sort the Tariffs have need can significantly, tariffs. still concerned stomach distributor having these tariffs to on they They're the effect the at that

tariffs that in margin, time, there's maintaining our concerned at are So an present point we and we this the that momentum our good in are pricing business. on may but market, effect have

questions have the of FDA. year. we we fourth to update, fiscal that we Nexus in and middle Nexus late have received of launch the by essentially still June, hoping And that the are of additional the quarter our will responded terms In approval we from

those So the answer I questions, Kyle. hope

Operator

[Operator Instructions] will Kaufman Investments. Our Michael from question with come next MK

Michael Kaufman

Stavros, good progress.

going a Just any Is I will there in of any revenue all $X license was for it? revenue remember there future forward? in be potential got the XXXX? quickie, in million XXXX Or license you China. Or

Stavros Vizirgianakis

question. years. is was way And you, was the $X There licensing of was 'XX. Thanks payments calendar $X fee partner will working our million to Michael. up we're receive with certainly that, which then licensing before licensing there running. revenue. Part are that million over the closely manufacturing end of additional that Thank agreement structured, the we there payable for Again, to their annual the get hoping fees, The were they understanding see in X a be upfront. in and operations

to partners see been manufacturing to been have they in front. a So that's We're meaningful from July manufacture. visiting up our be to scaling going the made progress do

in that we'll also and future. some royalties revenue So hopefully, of the coming see licensing near in,

Joe Dwyer

royalty revenue million Michael, will the as received. when recorded be of $X payments

Michael Kaufman

licensing? the goods thing it's I cost without money it's cosmic same of But sold? mean, any as

Joe Dwyer

Exactly.

Stavros Vizirgianakis

Correct.

Operator

come Our with Capital Group. next will Alex from Nowak Craig-Hallum question

Unidentified Analyst

today. This is actually Will on for Alex

share Nexus Nexus built? are it's approved How in detail this once you roll systems Any any to the many think out? this of middle on game launch quickly, helpful. Just on How would could this you plan be quickly around do the can you year? color

Stavros Vizirgianakis

going this what can very is I at because Thanks, a we're limited do color staged Sure. Will. provide launch. to stage

very So going first quarter, is around the I opportunity. much think focus be in neuro the to the

going neuro review to number sites adjust a and sites. rolling identified what doing and out And effects it the of those we be the to obviously we're of limited have then strategy So is accordingly. impact

of opportunity. like also standard upside X So a initially, in think this to the We is model going is to a neuro players, represents going because against opportunity very care disruptive that but the realize already up the technology would chance the the the neuro be established around focus of as that we regarded We lot we're market. do space. test in ultrasonic

So and we a it's but it's this vague approach response, going I be take know stage, to very at that measured market. staged a to

Unidentified Analyst

appreciate to week of could the you guys if you was news. acquisition, on you them announced some from last I the announcement? the getting reaction and I I tell go of asked Solsys and that. you detail And wondering it most employees? the No, back question guess what Misonix had And just then was were the the then team the that to

Stavros Vizirgianakis

Sure.

and the of X in fortunate we think marketing the teams the of after from signing a literally yesterday, minute together room. I sales the perspective leadership had the we're a deal, the

up. us. But a a on sure together think the high company, everybody not triples sales revenue came was just essentially terms the we'd of company lot in deal enthusiasm company reach of was from level doubled the metrics, our of think The why the the at doubles I the this an way people transaction of employee little base there the I apprehensive, announced because force. everybody when also brought what provides quite and looked So size

the since team. is dedicated dedicated the now at as at surgical the force that a well have businesses, to look looked as really think X to they I team focus this way So we're wound going that have a sales

look surgical that So of I people grow and the on things. bandwidth neuro have meaningful on at out really lose opportunity, as the side manner growth the wound in additional at to way existing the focusing the Misonix to think have the a generated on not that we this same business time, a

So was from they opportunity. I overall largely tremendous think teams positive the because the reaction the see

provides it both team is is although surgical think the I there since, of a in a Solsys arena. what wound amount that company, fair also is business traditionally members,

net sides lots XX Nexus, us having preparation Obviously, the significant obviously is are for both think of that and out growth promote provide I capabilities, away opportunity very, have the that versus there company, very only walked I the members basket looking if company individual to only I as very Nexus. that on revenue more potentially wider for can that increase, wound promote universal and career opportunity So certainly now instead realize their bandwidth to vice that like pursue in the everybody And of positive. vocal, in the for actually think not to is team to both or think for company, people a feeling you itself. didn't regard. and that going cross-selling I the they'd product are versa, is there so an not Also XXX focus resources people. marketplace, team career they for but but of a The now out this having but platform disappoint was earning from way sales surgical think normally a this a positive them in at there

we And some believe administrative From staff, So more come out better of are but put didn't this those the said, as we when together. deal X company. is was very, tone the companies the necessity, were what the very of the around companies good. because together of future really we concerns the

want well we part back is sales force X the and that not of to only made that putting grow the think about to over not as as the people cutting I the the message bought the across but So really people. it together that This next on is administrative companies salespeople, growth significantly they're we We well. clear to that story. years,

certainly having opportunity. I a in them up the So force of young charged sales think left terms dynamic

Operator

concludes like additional our any I'd session this question-and-answer or that for remarks. to turn to And call back time. at the closing management

Stavros Vizirgianakis

to build team of completion you. I'd I'd a expected create by efforts Solsys, future new doing and time momentum strategic our new addressing partners consumable the like Thank opportunities. of for and to And of our over abundant growth capitalize to our markets. our customers, thanking both with work occur and the great close acquisition of Misonix X fiscal also later which with Nexus the positioned performance-based outstanding in revenue loyal launch and the like transformative continue are This Misonix. the for shareholder culture, in to we've on our terrific several of initiatives, at to all first this succeeded These including exciting is Misonix to new platform support of with We're creating they're shareholders. significant year. business thank significant an months driving value year, past key XXXX. revenue led and the

our for Goodbye. Relations any your contact Thank quarter in We please time. the look direction fiscal speaking again you of firm, We again fiscal will to we remainder Investor long-term are for enhancing value the goals shareholder XXXX arise full headed at our forward report meantime, beyond. are enable our move XXXX to we JCIR, we and year as to If results. of questions in through and you confident fourth support when your meet the us additional XXX-XXX-XXXX. that and

Operator

our conference for participation. today. That for you Thank your conclude does

Misonix (MSON) 12 May 192019 Q3 Earnings call transcript