ANIK - Earnings call transcript Q1 2022 | Anika Therapeutics, Inc.

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Operator

Good evening, ladies and gentlemen, and welcome to Anika's First Quarter 2022 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Mark Namaroff, Vice President, Investor Relations, ESG and Corporate Communications. Please proceed.

Mark Namaroff

Thank you, Sarah. Good evening, everyone, and thank you for joining us for Anika's first quarter conference call and webcast.

as press today, issued our used and website at earnings of the Investor for quarter PowerPoint located market supplementary the is www.anika.com the first discussion release will after was close Relations slides today. Our that the be are available on me With the today call on Dr. are Financial and Treasurer. Chief President Mike Blanchard, and Officer; and Levitz, Officer Executive Cheryl Executive Vice President, Chief refer moment to open to and Slide a presentation X. take Please slide the

performance today are call forward-looking no information certain Act for and statements differ that also our to today. Before defined The affect future and our subject made the We statements should see achievements. performance. current recent statements certain these we our anticipated are begin, presented obligation filings understand factors in update materially uncertainties. the financial any data the more events as make future most company's please of that Please during XXXX. based about beliefs could constitute Securities forward-looking risk results Exchange statements actual from differ results, risks that and These or expectations statements to from on occur or could SEC

we understanding with measures. financial considered to of believe measures first end Cheryl?. income Dr. gross may call the We when adjusted results available they accordance financial and President financial of A the provide or available to I'd GAAP now slide to earnings most measures, like of performance. several presented our of aspects over per non-GAAP adjusted XXXX CEO, Cheryl turn in GAAP and viewing during Blanchard. way the in to our these presentation addition, adjusted the measurements an of complete GAAP measures addition additional adjusted release. to operations quarter reconciliation results with EBITDA, In used are But press measures, our the non-GAAP And provide in deck the business. and an financial GAAP and call, adjusted reconciliation include even at comparable net are which refer the non-GAAP our margin, adjusted share. and of which more

Cheryl Blanchard

becoming solutions, financials Good review for the in then order detail mainly for pipeline by and pivotal and QX XXXX our up off efforts, to a review highlights, product his of intervention, commercial our preservation an which our thanks for with celebrate revenue and more strong and favorable first and great call, our start and turn quarter over on I'll and OAP us. with to exciting Slide a to shortly. a to like make Anika start. X% everyone, provider our of in is quarter leading ended XXXX. Mark. continued journey over new for our product of Please turn we've the was first year to review covering development call XXXX, driven X. joint early updates We as Mike development XX%, guidance business by the primarily up last timing. I'd to time management, to quarter year Since progress Thanks, evening, on our XXth we joining I'll which we're

procedures January some the first the we positive restoration last were due joint lifted rest flat in through Our preservation February, was quarter. business recovery essentially We Omicron saw initially in to and the with hampered year. of quarter as of but

through for industry headwinds are of cautiously for time, shortages the the While the supply for could encouraged the COVID-related year. see and and abate issues downstream improvement remain market macroeconomic during effects to we as were optimistic staffing some impacts chain quarter

prior year certain down was XX% for legacy were to revenues. elevated last quarter last comparison tougher year business as first time there our buys due nonorthopedic Our a products to which

despite Our focus will pleased for continue area our has focus the the been portfolio Parcus, in-person sales Anika we of strong products. at joint U.S. our product of resuming Academy with we product and on been of Orthopedic to efforts the focus marketing safe a drive introduce American some many Since and offering. strategic our OboMotion in strong Total up full education Arthroplasty awareness recently, very Also system. Until general of and preservation early held had I'm efforts ramping in-person the with of lower medical Surgeons our show our in our a place. interest new that new Anika taking meetings of was quarter, This medical on shoulder arthroplasty anatomic scaler]. restrictions meeting see booth engagement from date. XXXX, Lenoid, effective showcased and we QX be ramped to building Anika since surgeons Surface TACTOSET, full to our In WristMotion, up products in-person as acquisitions attendance. intervention system we our March, Lake area with been customers. organizational and HA-enhanced growing and number surgeon events beginning we've a Bone to the [white to use events pleased were Arthur over XXX We in total and trained our capabilities. education train bone-preserving Wrist education and have during to our as preventing Medical surgeons within for existing events

commercial in and which of Biomet reporting Zimmer solutions, was I President joined that where Lastly, April the medicine sports aligns comes Delp lower and as their had Vice years executing Anika's extremity the Rob built Biomet led to in teams am both pleased reconstructive Aniko sales focused as ASC next months, announce sales Rob XX products. launched and for He in to experience. the Rob and Americas upper relationships. of managed me. strategy spaces biologics, industry of Zimmer also especially orthopedic U.S. sales Sales, and hospital as had also responsibility over strong products, we hybrid and with products in his settings strength, instrumental we shoulder distributor U.S. and Anika portfolio. continue to integration. be Rob within to with of responsibility He our foot with organizations he with regenerative has leading direct sales directly of six very sales new to for build commercial the as surgeon XX perfectly successfully ankle President and and key will previously the

to as you grow I'm and have to joint In will very who team business fit addition, upstream Anika preservation. work of focusing with build leader continue development so met, our Please excited Ben He's to many a to product team provide cultural marketing X, some a Slide and working is great growth as Rob as to in part downstream can of with pipeline. the and excited company. to Joseph, Anika team. turn Rob's a our updates on I into well great have now

next launches in a 'XX right the new Anika will and product of months, joint preservation ankle result will planned and further foot the to XX in the to give number in Within to time frame. XXXX are revenue shoulder in win and the six spaces that acceleration

on and significant product make track launches. progress these to with are continue We

with addressable of augmentation many anchor markets. have our updates of market TACTOSET launches on a year, we by fracture familiar procedures. new us I $XXX last at beyond continued in and year. going While the for respective it hardware Progress the very growth suture well, expand introduction you throughout regenerative new available to this details insufficiency and fourth TACTOSET slide, include its shoulder continuing for on progress share to of franchise. since updated offering. believe sports few million TACTOSET for two the expect capturing TACTOSET, This to we about provide allowing our with medicine more recent a I'd of this our market expanded create only four like to indication years XXXX, launched we product, market in of expansion product the augmentation late quarter while to fixation existing in a is In are points

New a and last development with track of now preclinical on to start one franchise start are the in indications to addition year. this study in quarter another that

largest on shoulder for high notable spaces portfolio product setting. we're the uniquely and a preservation give for as development suited a We to our opportunity joint a like efforts. the Anika billion of and ASC I'd within update already assembling concentration $X Now opportunity shoulder market market, our highlighted business

our As I of repair. update you'll recall, focus we and fixation, imperatives driving products product to NPD cuff new bone-preserving three. for provide the previously for soft tissue are discussed first that three those rotator shoulder and am implants an pleased

other and a of commonly [indiscernible] procedures in like of double second product a of fixation anchors to that where ankle's used shoulder of development this rotator Anika the medicine row the family in performing planned cornerstone year, the repairs and to foot less not sports launch is is enabling desired. Our cost half product for ankle provide suture areas convenience

additional launch The cuff of first market. U.S. They this even volume procedures with us anchor joint synergy specifically portfolio indication is on fixation ASC in growth and building point. launched future shoulder recently access the approaching more soft family the suture represent our setting, strength tissue to will new providing combination offering, and in highest of to focused annually the augmenting repair exciting anchor rotator peak preservation for in With the procedures in be XXX,XXX ASC in TACTOSET anchors. for allowing opportunities the This call using one the

frame. Anika innovative for a rotator for offering build further that regenerative ASC. we repair bone great for that make to preservation build this excited shoulder product strong key we and augmentation designed and to performing a as joint -- the solutions studies will the are well and to are in ASC, build continue including product time winning portfolio driving component which of in the months will later portfolio, preclinical establish growth XXX(k) system to have also XXXX a joint an and on system We sports new This the the work currently three product All regenerative within year. releases very progress portfolio medicine, planned submissions our next to have about XX pillars six will preserving in shoulder so solutions 'XX includes

commercial bring excited longer-term cartilage to opportunities be team. X. our solution year Anika joint and repair for lead to continue relief invest also a pain as previously. we a line Slide and long-term turn building CINGAL sleeves great what is capable We U.S. and our continue HYLAS short- we to the commercial with to in our have for XXXX Please in about to stated

weren't to XXXX half filed in with and we'll months, and for foot expansion, introductions next product launching the the multiple advance new pipeline our States ankle and targeting in to fall. pilot in several look U.S. new the second United report the the and solutions market. the XX within been We'll of six to Third, next implants process be sold very the this continue in products shoulder with XXXX countries XXX(k) forward and TACTOSET of trial the XXXX. pleased ultimately today product We've out steps to to the bring with in outside XX-plus on single to success the it

Finally, surgeons training many this safe now hands-on launched have our education in-person we and year. forward products, to look and to fully the train we of effective use on our programs medical labs more in

Now quarter, the Mike along turn then up, review outlook with our take for I'll we'll first to over our call Mike? I'll and and of a wrap XXXX, questions. things for

Mike Levitz

Thank to quarter XX% Please the you The favorable timing increase veterinary. international an for the Slide walk to results rose of the in X% to continued year. revenue and increase million, primarily through our XXXX. will quarter COVID Total $XX.X both X. financial OA was recovery first prior you, I due and now of order revenues management, Cheryl. turn was pain $XX.X in million over where for

impact but basis in so based can pain patterns an couple last reminder, the management due generally distributors that volatility the revenues quarterly a stabilizes by States and on OA in quarterly COVID of the vary internationally, to global significantly more a United years our As ordering and basis. partners on over on annual of

$XX.X early and preservation headwinds. joint X% restoration business saw quarter after decreased revenue recovery to $XX.X the from million Our COVID some million, as

year. first the $X.X significant XX% from last million, of from was last reflecting revenue revenues end-of-life nonorthopedic purchases Our year, quarter during down higher

Our quarter the XXXX and $X.X of impact million includes margin in noncash XX%, gross expenses from of of the Surface acquisitions Arthur acquisition-related and was the first Parcus.

XXXX of the medical million $XX.X global the of quarter, spending From staffing acquisition-related and our and expenses excludes SG&A objectives. in $XX.X Our volume as unfavorable gross a period together strengthen in development and continuing from are reserves which up Anika's margin, totaled driven by chain XX% reflecting and capabilities was standpoint, million research challenges. supply expenses, first internal to and same in education adjusted expanded we support commercial the and growth our

net million compared share income last of due $X.XX share per loss million quarter or in the The year. last the share of change largely decrease benefit with first fair per Our to the for effective quarter or was year $X.X net first diluted $X.XX $X.XX tax $X.X was per of in to consideration. associated the contingent million value a of $X.X noncash or in quarter of

was per prior our loss income net incremental the the due to year. lesser in and challenges support staffing quarter diluted per margin first to to last or to from The initiatives. primarily down the down million, our million $X.XX the adjusted adjusted lower gross quarter chain $X.X in investments decrease adjusted from acceleration of $X.X the Our in and, growth compared from year-over-year is And $X.XX net extent, was or supply year. quarter a of adjusted $XXX,XXX in share, EBITDA share million $X.X

our and million We in last the to outflows expenditures we regards capital structure. infrastructure our commercial year. our compared $XXX,XXX of million, cash up operating totaled strategy. invest And $X.X of growth with the first the from for had last support of $X.X quarter to to as $X.X flow year, million capital outflows quarter, Lastly, quarter cash in in

with Our Please million cash balance remains $XX.X in to X. of quarter. first Slide end the at strong sheet the turn

like fiscal our to our date, on of over for mid-single-digit revenue review I'd XXXX. year to percentage Based to financial low growth XXXX. progress we outlook reiterating full total are XXXX year outlook Now our

macroeconomic and fastest-growing challenges. to be expect has percentage revenue double-digit In upper the expect of our line year. joint other end over supply restoration direct range ongoing impact ongoing We we product guidance range, to we full our with results COVID full with our in previous be our guidance, year the been are chain pleased preservation year now toward that last continue acknowledging to while family And low growth to mid-single staffing lifted. the and of

of product profitability portfolio With multiyear the spending in on over limit Management, enable of our to in year we We in XXXX favorable portfolio we've to regards expect discussed of programs consistent growth development staffing part year, and we focus in this in we accelerate chain Pain a investing are capabilities over percentage year range. industry to expansion gross challenges, and support product that as this timing. year. spending previously, as on our year. our force XXXX and for be us performance expect and from buys to well our gross basis medical but above-market to year. and low we In awareness events commercial This the an are the increased expect as growth In decrease this expand as as much Cheryl growth longer-term to to our well we continue support reflecting headwinds to of on last down start including brand to supply ahead products low the from nonorthopedic outlined primarily execution. process of the results more our in margin, family, expect targets the second remain system due year continued the key legacy as to to our smaller mid-XX% We XX% research focused given of sales business, XXXX, encouraged on pipeline revenues guidance growth ongoing higher half to on OA continue single-digit time mature to adjusted product progress expect from compared of with product that XXXX, and decrease With and order our improvement transformation, education, is last in previous last enhancements. approximately regards macro margin margin increased these a and with last expansion from driving expectations spending, of by XX%

EBITDA profitability foundation our new year supports as X. to the XX% initiatives As acceleration be in margin turn low spending faster-growing Slide a revenue expect building digits. to year joint are well overall supply multiyear diversification. this targeted result XX%. chain multiyear on and margin as we achieve continue We well staffing to product margin, restoration in of and that revenue our as rate to remain and adjusted our targets investments mid-single the of our EBITDA the the to well and of coming making stated healthy an in adjusted growth execution development gross impacting and laser-focused we targets the growth gross investments Please business commercial margin The preservation accelerating of near-term an challenges to for of out as support mid-teens adjusted as as

impact the years, three While couple X-year we four quarters are the due revenue XXXX. XXXX extended target by from to of original of COVID over to the last doubling of approximately behind

as within on areas on our to transformation, front business. stakeholders. our the our We Cheryl. putting addressable scale I creation turn our large products achieve in launching processes control place for the our as of back and In new the summary, to to the within are we XX the as are about tools excited to with call executing multiple market targeting mission over and six people, continue will next to in drive significant well necessary the and opportunities us execute growing months, we now value

Cheryl Blanchard

growth X, opportunity we Slide we're Thanks, and Mike. a and business, story believe on remain joint have I'll where we in excited as we'll then the to win. transform Please our We market take wrap and right where turn to preservation focused up, we questions. executing unique

this setting of the to the recent shift our commercial product our to for progress pipeline, note that medical in company effort. value fully on addition of our procedures to significant the the Rob and of ASC suture shareholders.. year, programs the a Anika Delp lead view with focused we the execution anchor to And product unique in half a our early continuum second including in differentiates built education make as Anika development of to continue in-person space. portfolio the The delivering customer that ASC as with new and We care, the focus tailwind launch and on preservation have we intervention that orthopedic launching joint

like we Anika work their As to happy thank hard take the now. I'd as to We're questions employees your continue transformation. our for always,

Operator

Stephens. with our Chris [Operator take Instructions] first We'll Cooley from question

Chris Cooley

new second here I'd kind Congrats on the afternoon. And curious, quick for an just here that, you maybe a single-digit this volume in just pain you Obviously, down sorry, we over and calendar sector with for looking be obviously, laid ones XXXX. -- to of lot low I'm several here the solid two half of start a year in discussion about me, just I curious the guide year. enhanced you're growth of guess out the the talked kind into of from thinking about of the back the perspective here, franchise. months the OA that year. how come as last pricing?

to I year? full growth sure low that the make for I that assumptions then the you underlying single-digit want And understand So follow-up. gets there to of kind got just a I've

Mike Levitz

Chris, in, side, free happy feel and to it's the obviously. jump I'm on Mike. number that to speak to Cheryl,

that expect grow is of ahead view about in market of to our we the growth in the So X% market. 'XX market. And a

consistent order to delivering. leader faster market Our a The saying think did that mature is right veterinary franchise guide have the and that business and been what smaller sell. international parts we driven the first veterinary products a pleased business J&J or well leader. line. timing what that with quarter. we've we're in our to But is our be sell growth been market and in U.S. market. the as in are as recovery was non-U.S. This we is we We the in of we've extent, that I through Mitek some space. our business by favorable And like

again, Our growth. market. in that full position guide were in There single-digit not strong And dynamics were with line a we any J&J of market right Mitek to business year that our mature grew unusual pricing. have relative low

Chris Cooley

and CINGAL agencies. Also would in wanted that kind in be putting there. I but touch just additional major appreciate base, pilot guess, meeting, be that medical that that just to trial. a continued on at have, discussions assuming the be of would color I'm out, thoughts done you'd with of just presented I there terms the report the particular would

line kind time I'm want make of that Just sure about thinking to correctly.

Cheryl Blanchard

Chris. Yes. your Cheryl. for Thanks It's Thanks, question.

that trial discussed, So readout as we've pilot in have on to expect the completed we fall. CINGAL and data enrollment, and the report

to forward that. able kind are that the to provide But looking will us we it, changed So there.. on to Nothing year. the to in things an -- that. we're point and Street of we be once do has get on track for to update

Operator

Sidoti move we'll Next, on to Sidoti Company. for Jim &

Jim Sidoti

was management impact second strong you Can the is that? us like little color quarter? you on more going sounded a the It the pain indicated business that quarter. And to OA that give unusually in

Mike Levitz

Jim, it's well due United favorable also to outside sell. Mike. the as Yes, it areas was veterinary in States stronger in products we timing that as have the quarter, largely we

not did in low single-digit quarter. full and we so of line our Mitek that the And year space, in in with that's growth grew revenue J&J how expectation guide first the our for change

of be got in we -- of what some on a the quarter, that stronger we've saw the the accelerated purchases. second basis. of But first Mitek for guidance people -- I historically, timing quarter favorability J&J guidance given we we've think seen is terms second be bit quarter business. the quarter, just specific a the to expect giving not But we that and because a is some quarter in an second we're for quarterly would probably there that -- their offset will think In the generally for

not We're with why the year. changing for solid our guide pleased that's start. the we're So

are finish bit guide as some in a have that's end business, of It's and there well as as bit we the our driven performance the through favorable pleased on company we basis. we're orders we smaller a And retiring little work that view upper that a part our just expect updated our way OA little as much risk in Management there, to as raising by the the total the we We our Pain guidance but with that and year of a nonorthopedic. well well. towards

Jim Sidoti

there, quarter. on expect low to continue the double-digit then mid-single in but joint was And it preservation, to down first you the growth

talk XQ down -- back the you unusually you with bounce and it can why going can in what why was big think 'XX quarters? And was you about So next then the strong talk Omicron, there? two just it's to about factor

Cheryl Blanchard

Jim, the think then Thanks Cheryl. tough it's for throughout we, pretty That's industry, saw. a because the Omicron what question. the along Yes. I saw January We we -- of the recovery of with rest and exactly quarter.

the year. Americas U.S. our If sales safe be growth 'XX rest really through we the he's the got we six we're and got, flat effective we the you'll to in XXXX and because us run who of to the improving. his number we of our drive our use care just of general of sleeves planned a planning and all were used We've the next those products. on in see this great environment to health Biomet, we've year the execution. on We talent brought, level into rest growth and environment to organization and improving. new execution And XX XXXX. seems Rob expect to a We're expecting catalysts then really ready bring to essentially and of that we're think, have doing really numbers, That's look product last market to the moving in at to roll you back person and 'XX of acceleration sales see in force for commercial medical that education, strategic to and Zimmer about of Delp, excited to up training that dig the And period look a and see launches catalysts months.

Jim Sidoti

Okay.

Now XXXX? you probably you've now? few initial size the you think weeks, you have do force. has about I think right since impressions only a you'll Do the sales adding of there know be specific but to Rob number in gotten the Or been there

Cheryl Blanchard

yet We've Well, I and He internal about very won't an because number hybrid States.. that United that And But have force. of Rob out independent optimization in perspective. the that from distributors speak excellence to just structure drive don't large think from continue of force. said a through We'll model around then that in the because work number we we any we and acceleration and around right. that with force and got structure that a the education look we in 'XX thoughts a driving medical there a put size really product of 'XX in and this sales us to frame. look to to forward our our and April, hybrid launches, size to as his move execution to yet I forward sales continue want I've statements of I the I reiterate I'll have for in sales folks before don't around it, strong joined general, definitive think you're perspective sales time

Operator

additional no closing back turn Blanchard questions. for And the conference remarks. there to are over or to further Cheryl any I'd like

Cheryl Blanchard

on everyone much to good our your very Thanks, you. look second and call interest next August, for Sarah, and thank in wish a Thank I you attention all speaking Anika. forward We quarter in your night. and

Operator

today's conclude teleconference. We do your does That appreciate you. participation. Thank

You may now disconnect.

Anika Therapeutics (ANIK) 7 May 222022 Q1 Earnings call transcript