MSON - Earnings call transcript Q1 2021

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Operator

Good day, everyone, and welcome to Misonix, Inc.

First Quarter Fiscal Year 2021 Earnings Call. Today's conference is being recorded. And at this time, I'd like to turn the conference over to Norberto Aja, Investor Relations. Please go ahead.

Norberto Aja

good and operator, you, afternoon, everyone. Thank for conference call. you joining the quarter first XXXX Fiscal Misonix Thank We'll in just comments. management's start just a with minute But me the before let minute doing read to take safe a language. harbor so, webcast and harbor safe the of of call within the contain Today's provision meaning U.S. the statements forward-looking be periods. other estimate, Private likely, expect, can XXXX may, Securities similar such words should, of Act by Litigation and references future, future to as Reform will and identified anticipate, believe, guidance regarding and to of forward-looking statements Examples include results. financial relating statements our

update Forward-looking and will within accordance of website. G. financial in measures press financial Please in of well release calculated Officer be turn found neither in go not to should in from statements today's the of historical I'd as may With the They and new to Today's these can forward-looking ahead. now call future to reconciliation GAAP statements, most meaning statements Misonix. changes facts to and time information, the measures as are otherwise. company you non-GAAP subject to all measures and Mr. the non-GAAP nor because a any the rely publicly future of required, a on assurance inherent Executive are Regulation President directly When be that in percentage relate SEC result comparable made undertakes call whether to Chief and Therefore, company's over that, the performance time, uncertainties, the any with as no risks to or of like developments forward-looking forward-looking of statements Stavros circumstances. webcast future. obligation Vizirgianakis, include financial

Stavros Vizirgianakis

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

some and first the then Officer. overall be first, of providing be XXXX different discussing the aligned. in The Joining some Dwyer, fiscal expectations the call Chief I to going are slightly is guidance Joe today's than quarter as format not be that we past, is call as Financial well we our results will feel me on will

As XXXX. a had has previously impact company in our discussed, the worldwide COVID-XX on pandemic significant

had ways. tested decisions a our on many unimaginable been in team and to have has We daily make tough basis,

We have to practices but only be and in adjust to and our behavior this to had business survive able disruptive uncertain environment. prosper not

we we While when us, this worst the and pandemic disruption things behind cannot predictable. will COVID-XX believe the will be is that of when more end say

of versus decline a our a year. represented organically we for sales exceeded we QX and domestic surgical over grew in fronts, International many Although our prior declined on sales in growth business. pro overall The business year. XX.X% in $XX.X that expectations XX% our forma wound reported business, of X% prior million XX.X% of our included decline revenue

and growth domestic had wins of platform revenue some helped Our in the neuro. drive both in significant Nexus we quarter, XX.X% spine and

and that significant the As procedures further spine we not do for future will significant generate foreseeable profits hospitals, as as neuro have healthy for this we shutdowns. both long segment remain most believe

keep to hospitals, surgeons, patients environment. and We adjust order in in functioning are seeing nurses this behavior

In we of a customers, the by Our new neuro of looking with at innovative market. second and spine end this hire recent found fiscal are times a likely a six to individuals five sales stability ways quarter to teams to more Medical patients of were with XX least have engaging also as Podiatric overall titled, in Association pandemic, we experienced pandemic spoke tragedy amputation. Amputations, where clinical two in publications the within severe between unfolding more diabetic during COVID-XX, but undergo Diabetes-related an to infections a Journal of

XX% rate, patients needing experience diabetic implications associated care, not with are but five-year it's also delay. a do major that relative As essential any mortality we know,

numbers in we as effects significant uptick catastrophic have could delays globally. the seeing a of As amputations are with

care the a a in going been the to of physician We not either sites centers XX% reduction to resulting receiving of patients were XX% care forced as to treated of pandemic, in alternative number has care that patients wound centers. in or between there wound During such lot care close, offices. estimate

We grow share. have reason restricted, it a Access our launch and and new members be this in particularly or in also tissue our for during found decline to and even business. patients to products this impossible almost your the challenging making market limited time centers, to is very key are these

seen certain We markets quarter. more also others disruption this in during than have

setting to providers less have that chain We care also is with fact success and profitable are due to management than it our the of product most to established cold profit-orientated. is that more not favored the had some solution others but the physicians' offices, requires

ever which debridement matrix, Ginza during ultra bilayer to grown hospital, their at XX% the OR. bodes OR. quarter, with distribute a well recent wounds the larger in result sale And as wound increased have business is We of in hospital our this for in us, our over given deal the aimed the the focus very

We will are wound to products able again introduce care confident once the range our of full return centers growth in overall are that segment. when and to the to we physicians, we

comps, restore to Our international from to China year. quarter we've and came part last the report some during look QX of forward latter better-than-expected renewed the during the sales happy in that which I'm managed XXXX. below year included prior significant Chinese revenue in XX% fiscal spite during to business at tough of revenue

European lockdown know, certain the into going surgeries elective major started As for rest you may year. back canceling of the and countries

I'd year. to remainder before continuing the CFO, call Joe, international updates. of over the calendar With challenging of with turn my the rest for So our markets will now the that, like to be the

Joe Dwyer

XXXX. growth a quarter look And fiscal driven a had our Stavros. of X%, basis, XX.X% XX.X%. compared fiscal the at XXXX. increased in everyone. first first results, surgical $XX.X Thanks, forma total acquired million On the Taking Good revenue $XX.X Sure. with of afternoon, quarter assuming financial for pro million decreased revenues domestic to quarter Solsys by full we

a decline quarter million year. revenue sales to of year. last revenue achieved line wound first as quarter and of top international quarter with by percentage expenses on forma coming XXXX with the acquisition first last reflecting Operating margins, maintaining gross compared was associated margin $XX.X first million XX.X% pro of of XX.X% compared of increased September XX% of year, the the at and with expenses the incremental The decline with healthy $X.X during XX%. our in Our the in first primarily Solsys ended while quarter last for growth

We expense. I on look for had to if and last and we year forma highlight assuming also debt want that quarter. that pro first we excluded Solsys in first full our fiscal basis, had bad operating also expenses the acquired higher bad fees debt a expense quarter M&A at

actually over last compared Our down to OpEx XX% year year. this is

other We in instituted across discretionary of a the number effectiveness. and see shows, leverage cost where board, trade business room marketing activities spending have including our for without and reductions we and salary headcount, areas T&E, impacting

good In of at we've have from drive efficiencies Solsys taken merger addition, cost the of savings of two and our look additional the been a back on the acquisition hard companies. to incremental cost able

where of this done $X.X a diluted necessary revenue a per the per of our that -- $X.XX we $X Importantly, headcount or including while or supported sales net share to year increasing growth, loss have share led initiatives. compared gain we million of million loss with This a in period. $X.XX adequately supporting in R&D XX% ensuring prior

with benefit reminder, gain sequential $X.X significant a our prior year marks of a XX. of As million. tax for loss included adjusted the in $X.X This a a period ended onetime of was a compared Adjusted million loss the year income in of EBITDA prior $XXX,XXX quarter our EBITDA the from reduction $X.X prior million June quarter period.

flow had in $XX.X and XX, September ended in We sheet. the debt. cash million balance million with cash QX to on at approximately $XX and Moving

and in liquidity We our with continue be covenants to very with we're all our compliance position. comfortable debt

to capital, relates with September at XX, working we million $XX.X it June compared had at $XX XX. million As

$X XX, for XX our accounts to to in use reflecting For inventory mid were fiscal addition This receivable, cash in good position. front, to in approximate which efforts support down Lighter in net strength news $X.X providing the our used quarter on and we quarters issues October, of XXXX, payment added In to capital efforts $X.X compares $X.X was operations for and cash our operations unprecedented ended ahead in to in Chinese by the September cash, June three quarter. times $XX the third three during to the long-term. and our to for our which our a our million partners, used drivers the in With us each with quarters of business. further second adequately invest in working our replaced resolve of growth these million near, to opportunities lower favorably million, cash incremental the have burn we loss ended a of of able million and proof strengthened last $X.X of last of our leverage position able resulted the the million the further in for of -- used million been streamline and the during South. improved We've in cash closing, ability operations. of Also the and cash, months

So with some to for over additional Stavros commentary. the call to like turn that, I'd

Stavros Vizirgianakis

Thanks, Joe.

change with investors very forecasting During history, XXX% single it's this as difficult data can basis and unprecedented been on a daily analysts time in our a or announcement. provide things accurate to

credibility. we speculate as we course and rest insight business will to a pre-announcing in like of results we we to pre-announcing have be business. intend our the but things optimistic give this revenue We've in those timely more to management going For come of forward, the ordinary to a don't of an constructive. found know overly fashion, or business. do this team, track understand and into more you Thus, who of course disruption the important results to know Joe reach in we take to of differentiated as are that And the of we we view the pandemic you that have on so been our staying are transparent you during remain value not by that challenges in as can possible we building goals. the spite a and facing, It's are be me

the wound a company, but technology pure-play surgical disruptive that direct today. have company a neither are not or in ultrasonic a does comparable company market We

companies market. medical different, truly center size cannot improve the of universe, lower Nexus costs. be in in and proprietary other markets, patient So and technology bring to leveraging to as is compared healthcare disrupt on model solutions both overall we are we our of various the and to intent our our outcomes business at our we're we the

bundle and complete both an matrix, would product tissues bilayer phase, acquisition first COVID-XX channel human in was done healthcare and In more world constraints way Solsys across the and larger business have ultrasonics be important Ceregene, launch our fiscal so a disruptive integration not we've When the a to solution, midst much given we offering. opportunity and period, relevant very added hit. to revenue made to to is skin struck not model our the that in just that challenges, that acquire and more acquire short time. disruptive of winner over before the and face but even a of a and we a Theraskin, our Our sales most have before more been now providers wound Medical, was our reasoning allograft COVID-XX In amniotic, today. the a product,

two longer is originally so than operating streamlining integrating So results vision, locations platform. in almost environment started planned. effective different team Virginia taken done and a normal yield more our efficient in the operations a we're have the we'd But consolidating only we our bit organizations and seeing to challenging things early a of

As all the aware, product space. is space failed competitive tissue you're acutely a

the over We and are getting private a XX,XXX enduring in more our that we the hope good are the So foot end believe our long-term private year of regenerative time. over we ultrasonic unique clinical controlled investment term. confirming expanded while portfolio, payer debris Theraskin short the the study help will a coverage in funders will combined or a a of end we have see that We This ultrasonic the company, overall diabetic that Since April products Perion the insurance to with which drive XXXX, for significant chance We some March to long-term positioned over give of enrollment have Theragenics, in technology, with have fiscal with significant resolution ourselves that choppiness sold disposables, ulcers. well globally. by are made leading of growth exited in XXXX. trial having for ultrasonic we growth randomized space, and limiting healthcare finished data. XXX-patient as completed relevant reimbursement us the by player

are is goal game-changer we room, to during in XXX XXX convinced hope achieve a placing fiscal We operating units than ever the that year. another Nexus our and of more to this

care. to data spine Microdiscectomy gather is the could and the patients of We our microdiscectomy CTX Nexus the great continue limited handpieces projects procedures company be setting, microdiscectomy solution have to the for R&D year-end and added pressure solution go related of as do ultrasonic development launch advanced of to have and and phase we able to for numerous clinical OR agreement surgeons a year. the calendar to as opportunity in an ASC during the we launch important hope from move we're setting the on probe before the to seen disposables a soft the for offer

XXX have issued last XX% patents, the five the IP we years. front, of healthy more with portfolio during than On over issued a being

have applications. also pending XX over We

So been pipeline I'm product has new healthier. that confident our never

supply are fully vendors Our any they accommodated with disruption. transparent and has and us, problems have our behind chain relationship during squarely request have we without been pandemic our as our the grown

business we've continued to Nexus launch registrations when can product world around the conditions During the markets in many in in we that international normalize. pandemic, invest XXXX

this Our will we to force is start and select XXX resources almost quarter adding domestic again additional sales resources, in areas. back

cash to position has a we already Joe in undertaken As so limit shared, a overall various we're financial have perspective. initiatives our from good burn,

I'd now thank we on to back we'll team XX% we year to my expect And we over the revenue by growth their this right getting our are for In time, and fourth challenging dedication fiscal period. plus While focused work are closing, return to during prior return like base coming months. of hopeful sales loyalty, over that to growth hard to quarter.

With business XXXX shareholders over turn I'd call operator our go we for as patience will the to to as as year everyone. build that, well continue great the like loss to As down their as for a for Operator? questions. the

Operator

we Nowak Alex Instructions] [Operator Capital from with today our take will question Craig-Hallum And first Group.

Alex Nowak

Let's start with sales.

weakness is debridement working And on your mentioned also you weakness. the doing is very overall Do a the maybe that, that the just the wound business plan game you right tissue cross-sell but whole going the is market and debridement of segment still You mentioned there, how the within well. and as that comment forward? the think strategy bundling strategy amid

Stavros Vizirgianakis

not the question. Yes. in Thank seeing certainly I debridement are the term. you, Thanks is get OR incremental products, these OR of What the the today are Alex. to alone. you're to bundling as that think products reps use difficult the tissue if strategy for them. increasingly seen These selling it's by know tissue is and long right strategy access marketplace to that we adding over sell physicians supervisors are how value the

whole on get So into also way during the definitely to early a to the patient team the the access healing us room gives It debridement gives OR. process.

continuum to able a care, on an a establish us at sell link we overall it were opportunity in So later gives the of early stage. if tissue to

those again have early we spending that signs a in refocus strategy in that just it you us we bigger we the at our think people sales care one, that would the just punch the call time of need find and that market. the and you believe OR. the because force traditionally more success the wound wound we tissue. centers cases in find And don't this debridement the we've We and to is get OR into to difficult offering So in having what of seen is resulted doing the in two in

still innings by. we're what rolling seeing, So, I it's encouraged And us of strategy. we're the out early think the

Alex Nowak

the about to you X, doing How those do taking do two space. going You in the you're then mentioned in the now last microdiscectomy you to what think within punch applies call I wound? neopatch, categories obviously else can that the what and neuro? think, neuro and two and over to But replicate spine pot

Stavros Vizirgianakis

Yes.

building Alex, it's about procedural think, solutions. I all

complementary of looking So the it we spine different looked neuro. we're for at or segments be products. And whether market,

at sealants. products ultrasonic number you procedures with if tumor are go technologies that as So look patches the removals, instance, a other and of for there such like

that two to the bundle then So technology. within always the our Nexus scouring we're those announce that landscape think we product. want physician opportunities. next strategically and as center is It's another quarters I the together that collaboration drag continuously universe technology access OR And for we've the our the and with use goal along our that us of said, products give complementary to will to ultrasonic to

that today, of taken rest the much we room strategy, we can So believe business. say we ultrasonic the can't at to from but and We've that it I looking are strategy. our apply

Alex Nowak

more recovery, That's in surge a on just the they then cases bit maybe what's can great. go obviously, of summer then now. a now provide couple to a right months than holiday another Europe you now happening is time And long the detail with and ago way started back had surgical

So a overall your just where thoughts from Europe there? sales and perspective is

Stavros Vizirgianakis

last be couple that months, getting optimistic pandemic of we control. definitely to we were The improvement Europe, pretty saw Yeah. some and under the seem in

essentially UK Italy the were we latest has in team the was by the my developments to surgery shutting our partners. VP came just UK and left an in told weekly in down Europe, And follow of Sales giving calls And January and this update Our year. in until sales week, me they expect with was on Spain. of and that our partners next European same the

like So significantly left going it pretty front. to surgery of shut Europe the down is looks on

But us. cases for that it away. we dampen a of bit little going not a are also was these that know So

saw things pickup. did pandemic of the during one disposable we up when again, see revenue we So opened things the that

I surgeries be But the we just was will capital encouraging there that reopen. disrupted. equipment a saw these was think patients didn't volume when sales I bigger thing think did Vanish uptick still

at as can delayed look into we really this just surgery So XXXX.

Alex Nowak

Understood. Quite helpful. you. Thank

Operator

Our Kyle Rose question Canaccord. is from ahead. Please next with go

Ian Tolle

Hi. Tolle This Ian for Kyle. is

more less spine portfolio you last before were you Is talk you the from the procedures for the mentioned of kind some that the the a farther bit can would complex there? mentioned Thank that help opportunity that you? be then what there months? few And over over missing that of Have anything you. you would now You've environment right about continue seen seeing moving to ASPS.

Stavros Vizirgianakis

the Thanks question. Sure. for

seen the pandemic, was before but orthopedic I that centers, in one a big think we've was the shift our really areas procedures spine lagging. to of ASC the

ASC So surgeons engaging the pandemic with their about I hands. spines a earlier And of time surgeons think future to the more the centers. micro had of closely move going. talking because and of like it spine they complex laminectomy them a definitely the to there's to see lot of them less those on the defect lot during pressure and on procedures single-level We're where

that other these have financial many The trend direct going these in spinal in you're interest ASC to surgeons instances, seeing centers. is are

think reasons. economic these in motivated surgery centers do for So than I before to more they're

think go have also we some procedures. I to realized that for from patients smaller is reluctance hospital into there

they've quite also from think I frankly, So patients. experienced demand,

microdiscectomy, more in XXX,XXX procedures we done procedures can sites. them Ask than look other there's they do being like a if When these these surgery of we year. know at

single look quite do it, couple them So surgical spine at on list. if you significant be because procedures, complex pretty you less a the these can numbers a could of

it's space. year. good the that And test think interesting we it be next will an So in a

there time. a I procedures overall the market moving see less think the over to be bigger if in complex shift ASC the could center, we

for this So setting really new see surgery. the of I'd as watch care say, spinal a we but space

Ian Tolle

great mentioned included there be CTX you XX% And any last Perfect. uptake And on same would you changes more then ordering still Pro think be months? details I also Are ratio? handpiece placements handpieces. on that the the in of well. of neuro seeing terms patterns over as that here kind of the then of last the few Nexus early that any call, Has

Stavros Vizirgianakis

is success it we of that remain on has Because hospitals. perspective, is it's you only It's from well been the to Sure. specific from efficiently time drive love also difficult into referred early than because an a see healthy our product one we will we but excess CTX handful and the introduced really products is feedback range continue and don't functions we give percentage. more during these the to new this the neuro is in able into surgeons side, with to, that device very power arena. the centers. into things enthusiastic analog numbers, power a pandemic, it received. a products It we're they're could the very, the to neuro doing in that get that We've well cases. they the trauma smaller with system, probe, the platforms. bigger on certainly a But where very There's saving, of

in of and So title physicians factor terms feel, are noticeable difference that saying a overall CTX. in there's performance,

again, looks interesting we an see to new on that, think into it fiscal what platform. So first exciting one product and year, QX go next will us opportunity we the that's the for in full But when Nexus be like. it calendar launch

an for us. So one important

Operator

Zimmerman Our Ryan with will next come question BTIG. from

Unidentified Analyst

indications some system? about the growth, maybe Ryan. follow-up. Are strategy bundling one This should from increase each there is think investors then new drivers us the contribution I on actually maybe adding? to new might on utilization discuss Carolyn new how you earlier, And And think as that mentioned procedures? incremental you, Can there? you have I could you installed or for base Nexus, be then

Stavros Vizirgianakis

Thanks for the question. Sure. you. Thank

in of Nexus seen lot number in terms the of we've specialties the a within different that a got hospital. think has driving of I utility to accounts, utilization

accurate to hospital and can higher the see system tell per systems. us is numbers utilization So system. is quote than an average we on revenue-generating telling legacy data expert it's early still you the the But of early to that

in the tissue, able test here to hard over to you the go microdiscectomy hard do start, well be tissue of First platform access our is want first thesis have the soft where to procedure. is to as and term, really we a longer soft single as tissue

model. the console and the familiar So are right handpieces selling one now, confining business thing we unit and is difficult everybody at disposable disposables, a our is but selling with probe It's that time. then

like perform compression at we look essentially then and the when using big --to actually you're aspiration probe to of the using capabilities So microdiscectomy, remove of units procedures and cutting the activating you're disk bone a the the fragment. capabilities the

in just amount one to and that use So that subtle done provide the but you on of downtime solution the disposables. the would actually with no ensure surgeons can procedural twice a other having that factor Everything way, you probes to physicians, or technologies procedure on with bring a also actual platform, two single is in different there's procedure. in

that's something project by. frankly, excited quite that an company. for is microdiscectomy the So And important we're why

Unidentified Analyst

Perion. rep kind turning traditional are Taragen, utilization? there? managers then your more account Or And to increase tissue to incremental more headcount And products? margin What's of the do and those sales regeneration, contribution appropriate specifically to need or carry you

Stavros Vizirgianakis

Sure.

to bringing idea by whole those wider also there the a provide our customers. products think in revenue of solutions I the And behind range contribution was rest. increase to to

is So sales are plug-and-play force. we that existing our can products the idea these into that

add additional people penetration this we this product. the that I I think think what force sales coming we're because as And will of to from we accounts, the our where you to deeper drive is to get continue that revenue quarter I do will seeing think today. we're expanding within stage we'll

of in XX% range to XX% margin from perspective. they're a both terms contribution, In the margin of

dilutive question. margin. this early really our in to how in and of that terms So But not days But measure the we answers overall marketplace. the success

Operator

additional session. back will like question-and-answer remarks.. I our the closing Stavros call to for turn any to And would that conclude or

Stavros Vizirgianakis

you, and Thank quarter. interest look Goodbye. and your time thank everyone, for spending us support forward to appreciate next at to We talking you Misonix. today. you, operator, with We continued

Operator

very to does for may thanks and That our for now conference conclude would today. everyone you Thank you like much. your disconnect. participation I

Misonix (MSON) 8 Nov 202021 Q1 Earnings call transcript