ANIK - Earnings call 3 2023 | Anika Therapeutics, Inc.

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Operator

Good evening, ladies and gentlemen, and welcome to Anika's Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, today's event is being recorded.I'd now like to introduce Mark Namaroff, Vice President, Investor Relations, ESG and Corporate Communications. Please proceed.

Mark Namaroff

Thank you. Good afternoon, everyone, and thank you for joining us for Anika's Third Quarter Conference Call and Webcast.

our release and after Investor the then located anika.com press the close Relations discussion earnings that at today slides the market available as are today.With QX me was used call the issued of website will on Our be PowerPoint today for Dr. supplementary on our Blanchard, and Chief Executive Financial Chief President, Treasurer. President Executive Levitz, Cheryl Officer Vice Officer; and and Mike please moment a forward-looking Slide open the that and during presentation made to begin, in statements the constitute and slide #X.Before Securities of refer the we Exchange Please understand defined today statements certain Act take call XXXX. as These risks statements expectations certain and and uncertainties. beliefs our are based current to and are subject on performance or company's achievements. from The differ could results, actual results materially future any anticipated obligation should or statements no make today. future from forward-looking these update occur events statements to data the presented differ that financial We most Please several with adjusted which risk affect gross EBITDA, that net could about results also which filings we margin, per are adjusted to include see income financial accordance refer share, information measures. addition, presented call our in for GAAP financial used earnings more adjusted measures, factors or the non-GAAP addition may performance.In in recent our adjusted SEC and during adjusted to believe operational viewing provide performance. We that an our measures of aspects of non-GAAP additional way an they But complete when considered with understanding GAAP the reconciliation even more provide our financial GAAP measures, and of measures of business. CEO, I'd deck to in like financial now call most end are non-GAAP reconciliation GAAP XXXX measures the at the President to of our the quarter turn press our of and adjusted these and over slide A the Dr. available to comparable third release.And presentation measurements Blanchard. Cheryl Cheryl?

Cheryl Blanchard

for afternoon, Slide everyone, Please and Mark. us. to joining Good Thanks, thanks turn X.

in third our powerful the results, the reinforce with growth confidence our strength of pleased underscore we've engine our strategy and created. are which We quarter

see in we've Preservation our for and growth and and been the we to has serve. toward Restoration led Restoration which in working transformation Joint being to lot some interest business and the accelerated products, in in the the gaining by growth acceleration the quarter Following X-Twist generating is traction now purposeful The RevoMotion, in momentum newest positions building Management, highest preservation double-digit grown higher-than-expected the of us we joint quarter The markets We market, growth the are OA of a largest a and Pain areas by pain we as which growth double-digit outside Cingal are follows of and delivered Joint and across Preservation into and XXXX.The our period XX% head Monovisc enable growth year-to-date. beginning investments OA XX% our U.S. opportunity a growth in in time. QX for quarter, growth the second well business continued globally led into strong and

raising guidance we a minute. our our are strong the go which Given will Mike business, for and across margin EBITDA the year, performance revenue into in

in attracting Our Restoration arthroplasty portfolio very release September key Joint OSET from third in reverse the at number and of a surgeons. milestones continued RevoMotion strong system quarter.Our in Preservation growth, to full successful and Meeting expanding achieved our shoulder Annual interest a we had important the has Boston, market been

the We our and for for of FDA System clearance we're also final first Implant launch on from the received Integrity full XXX(k) track XXXX. in the quarter

cuff patch reminder, differentiated augmentation system Integrity for HA-based regenerative rotator our repairs. and other truly tendon a As the is of

cuff of year. The XXX(k) the market. million achieved receiving allows clearance USD complementing also Fixation this System a that now address was biocomposite released biocomposite milestone earlier PEEK version Anika significant XXX full clearance this X-Twist version, X-Twist to quarter, the Our for rotator the

to position Preservation OA XXXX.We the capture growth surgeons biocomposite Joint expand U.S. OA Cingal's and J&J's training We're #X and of over milestone non-opioid this year consistently osteoarthritis in our Pain QX share includes as to benefits clinical is over in We outperform. continues This also their continue has demonstrated pleased highly-differentiated above-market version market double-digit growth. a its Pain the of across to in are XXX pain education, and full the Management that international on Management they reached next-generation delivered in product and growth see the its real-world U.S., Restoration XX launch have choice track underpinned portfolio. to segment. Cingal countries. profile medical Outside

with significant select U.S. and with We regulatory continue engage from continuing opportunities Cingal advance on the Cingal we so We're FDA a reminder, feedback to work explore that and Type an in towards file this possible. the with approval.As parties. meeting C quickly interest can earlier had year our them proposal on several to to complete partnership nonclinical as to Asian the we awaiting FDA a U.S. steps countries also NDA we to as are next

keep to continue everyone updated will We process. on this

suture the product would arsenals few Integrity strength collagen be clinicians' value with for U.S. Cingal game-changer System, in the This hyaluronic growth key X, OA addition retention Anika capacity. that both through to HA-based the the capacity in hybrid the it meaningful a surgeons the reviewing patient. stronger compared cell Xx compared its patches feature from structure, to reinforces The is or which during scaffold like the manipulate infiltration, than and and and resulting in excited. intraoperatively the XX% Our their a strength, with over a is other U.S. head-to-head healing delivery reproducible comes market current regenerative tissue augment staple on to tacks product.On to provides getting inherent value remodeling patch confidently driver key its the is for spend the market. our patch leading scaffolds adoption surgeons really a suture patch of and repairs. In a to Integrity's That data next-generation and to outside driver structural This tendon integrity and ability strongly a what demonstrated collagen patch that hyaluronic combination regenerative double-digit and patch. minutes capacity for regenerative hydrated. tendon the pain improved a affix thickening. when study, support repair.Another Integrity even this leading Integrity's tear acid non-opioid surgeon to Integrity cuff resistance, system the the strength, and key be acid-based efficient The is in increased Slide how rotator collagen is is the treat I'd important differentiating an animal will of about tensile

recently-launched drive become a rotator with Integrity to surgeons standard and of for launch. it confident We from early X-Twist, cuff to years investing addressing come.Please RevoMotion for establish orthopedics. in to to turn are a feeling X. needs that in We've pull and us along will growth as to our the been unmet care intervention, excited We're leader augmentation position Anika global Slide with purpose

management, Arthrosurface portfolio We acid OA medicine are fruit. we've beginning to leveraging pain Solutions.The in regenerative, our now sports past and and across made are bear hyaluronic investments over the Joint core expertise X years

in up exciting most on launching or year. markets before business, this of fact, the entered in larger XXXX Anika launched either the slide products are are than as In direct has of quarter an setting XXXX our first into

Hyalofast products been both have to addition Cingal regulatory they have line now ever are filings sight with value-driving closer our products. of U.S. In than those and advanced and to products, for

opportunity billion Cingal served regenerative $X an a win. off-the-shelf additional Orthovisc and by market plus pain billion-plus product. cartilage to OA next-generation Cingal the market expect the perfectly positioned repair Hyalofast adds our existing single-stage billion by $X to Monovisc addresses is served market We and with $X

opportunities and history Anika's U.S. in on has recent investments market our support internal with short, fully pathway to to are flows. cash we a and breakthrough product and has flows long-term Anika of X, growing commitment is pivotal generating and long used enrolled highly-differentiated being XXXX. and cash these market that focus by key realized.On new products growth Slide to profitability. our device execution In We've expand well-defined a Now in profitability. trial, profitability critical our years commercial launch sustainable our discuss the significantly strong new in this I'll pipeline to growth

growth and PEEK of of and and market beyond. and launches XXXX full double-digit XXXX XXXX the Biocomposite, joint in the X-Twist RevoMotion sustained in With Integrity we're expecting X-Twist launch preservation

pain the above-market and are outside products We the confident continued U.S. core also led globally Cingal management Monovisc growth by OA our of in

these very will we've a is and spending our where X-Twist stabilizes, channel are reps expansion. accounts the hybrid newest products cost-effective our cash in targeted such move the on deliver confident direct same on to to the to to very are accomplishments regenerative commercial with be better OpEx, strengthen time timed can products realize our works the front for products. R&D, balance with with managing At with years.As force we to hybrid investments and and scaling underperforming sales the going still coming and a Integrity, quarter Mike sales the geographies. reps where force outlook augment of the the growth actively make and Tactoset sales turn opportunity launch to healthy opportunity company investments hires solutions we've of leverage focus while our strong and and position investments and and on as direct focused to execution on in penetrate over thoughtfully costs the already distributors augment now us.Now the do front debt us. to sales The focused the targeted clear, Mike? growth like are to we These will we With we we made we're results keeping toward forward this in and and channel a be into significant launch and These summary, to as medicine of made year. I'd hybrid investments significant we exciting new no as a products.In our areas XXXX. business establish The model to focused sheet significant year total execution develop the are and are continue shifting we sports of third addressing have begin call committed in we well our direct stable commercial the as drive supporting the the MDR, meaningful to acceleration remainder our profitability review

Michael Levitz

grew expectations, growth Cheryl. Please pleased I'm turn the Management. growth you, quarter report our now revenue and quarter driven in Restoration $XX.X Thank results I'll the Preservation for million, our accelerated for X. exceeding XXXX. financial in walk better-than-expected third OA of you and double-digit to by Joint to total to Pain Slide through

launches product first product the revenues driven our the reflected by joint well OA lower period revenue the have revenue do recent the quarter. year, following prior X-Twist increased non-orthopedic order demand, grown United by was and on lines United our continued some growth on X% of the reflecting as a the also discussed fit States is by not global XX% Monovisc international have points.Our quarter recently-launched million units results The transfer our benefit months States.As Restoration Management quarter family, in the compared XX% This revenues the product X see impact to X led Pain first in market to $X.X increased Monovisc Revenue Pain acceleration order second and largest strong down continued as the international timing XX% accelerated States RevoMotion objectives. both the we OA outside revenues million. year-to-date, growth company historic high our XXXX United XX% objectives. customer million the $XX.X in that non-orthopedic our revenue the Joint Our from non-orthopedic in on growth our by not reduced preservation total increasing quarters, States of our same from quarter profitability early Through with reflected to our legacy and following this growth, exit demand approximately the in to of percentage Through as compared global same in of declined planned exit above in which profitability of from lower grown support months and United product products to by a offset XX% and lower rates did Preservation that period third XXXX, nice the we X $XX.X growth. Management, favorable the and of year expected, rising our timing. in Cingal of and growth lines

as Our we third gross impact includes million quarter to product to acquisition-related in rationalization and non-cash $XXX,XXX the with margin XXXX products expect acquisitions approximately sell. of $X.X expense of of associated increased XX% no amortization the longer from as in legacy made well non-orthopedic reserves

down of $XX.X million and due the operating from standpoint, as were of rationalization product excludes XX% mix primarily higher offset amortization favorable million a our associated the the the project. $XX.X product discontinuation in and by to Our the in year in $X.X adjusted from the quarter expenses third XX% gross improved charge operating quarter, non-cash spending margin, in last reserves acquisition-related largely which million efficiency.From totaled with in costs quarter, was the period nonrecurring XXXX, development a quarter same up software a same

loss first share XXXX.Our quarter income a the improved per to spending the an share share compared the the breakeven, million growth quarter this same up for basis, from last was quarter than or in $XXX,XXX our was from the business year of of we management reflecting net per the the ] in $X.X year. of products XX%, On in or as last last up were of launch lower and the Excluding loss EBITDA the our in or an prior $X.XX continued adjusted period last $X.XX expenses launch $X.X in generated quarter $X.XX [ net quarter million $X.X EBITDA expense in in completion in charge, adjusted support million, up net and third $X.X operating management. development in margin new to quarter adjusted readiness year. per of of of of Anika our FDA-cleared the on approach their planned adjusted from net XX% the and year of third year, loss million

of our $X.X in business last the period spending during in generated cash year management. the to quarter, cash from third growth same up million We $X.X Lastly, operating million and with flows structure. capital regards the on flow and

debt. instruments the with investments Our key the in of to reflected growth outstanding balance product cash a positioned to and capital quarter no were our X. is quarter ended to continue support and third sheet turn expenditures self-fund We Slide to $XXX,XXX in primarily in maintains approximately such as drive value.Please million healthy well our initiatives in launches and $XX.X RevoMotion. Anika shareholder

like outlook year full fiscal of I Now with total for on for current an XXXX. outlook our momentum, review date raising are company to we financial XXXX million, to million fiscal our $XXX results representing year revenue updated Based would and guidance to updated and and reduce $XXX our accelerated non XXXX non-orthopedic total offset year in revenues. Pain X% growth are of above-market over X% part growth to revenues in on Joint Preservation growth growth lower lower orthopedic OA in X to by this Restoration, Management percentage by expected The approximately points. year

to a million, we reach our of year-to-date revenue non-orthopedic, year.In to such, $XX.X of and Preservation up business to the X% million Restoration, Joint milestone United primarily up XXXX.In globally excluding Anika's over XX% revenue is XX% year OA $XXX to new X% over launches to As continue we market-leading now our core X% products to year, an adoption over revenues as million $XX and over our growth gain $XX.XX in momentum million as expect to continued well to Management, $X XXXX $XX.XX product up this million this our positions due This and million, expected outlook key previous States Pain $XXX million to as of $XX.X of expect range internationally. are increase globally. this last progress part million from to the positive of strong XX% on now acceleration

million. Our previous range $XX $XX.X million was to

veterinary year expect on adjusted decrease products X% We for line in our digit. XXXX.We to margin over margin order for revenue year, are from non-orthopedic X%, continue of the legacy to we million. with due previous higher guidance to continue That's buys the to our from expect of $X.X primarily gross last year. the EBITDA to a roughly last-time timing last approximately adjusted just XX% we of revenue year of single reported And raising guidance guidance, the also be based XX.X% in up low to and

third some of and non-recurring XXXX, of based to on the we as prudently expenses primarily in look by discontinuation shareholder we've as a settlement we project.As in and above-market led we OA quarter, X development in the to a arbitration, first manage software joint the activism we be Parcus upcoming launches fourth with Medical are into our Management. preservation the revenue and year of ahead associated operating continued product double-digit and the momentum quarter with saw continue now expired expect We XXXX seeing move growth, quarters, growth above-market in growth costs to recent and Pain

earnings outlook the With and are pleased providing into adjusted as the and approaching in to execution to normal call.In XXXX, breakeven year. Cheryl. on to and and schedule to bottom stock-based part revenue focused of coming our Anika expect year-end also income for is in look adjusted for turn revenue the EBITDA long-term margin forward head or [ EBITDA reflected we cleared increased with our now and non-cash momentum, growth to call RevoMotion ] growing and our in we remain which We additional market, our position all stabilized was increase back the fourth line operational We compensation. delivering that the on excluding spending summary, growth we FDA on transpositive success.I quarter, over are now will on net as our margin details X-Twist, Integrity

Cheryl Blanchard

and Thanks, and products to the Q&A. for up about our gain Restoration action. our before as in new Mike. portfolio we Please of excited turn growth and Preservation X traction market we We're Slide acceleration our call strategy open see the Joint

expansion pleased our OA both U.S. also the products, management are in the OUS. with market-leading pain We of and

as portfolio come. to growth bottom positioned and for in to as regenerative with Anika is our creation committed Cingal well top the years strength and growing Hyalofast, opportunities well line HA-based continued and the With of very value differentiated our

we joint self-funded restoring Importantly, transformation as up sheet the of real with line momentum we'll a employees and balance restoration. we a like we our position for preservation efforts to around driving take for solid open Anika dedication in our leader our living as moment a thank to with no with healthy that, hard world.And continue people maintain have this all to cash and debt.I'd into of Together, work active continued a and to to for we're questions. build supporting the achieve work mission their

Operator

comes question Research. first [Operator Instructions] with Barrington Mike Petusky Today's from

Michael Petusky

Congratulations on guess, some about to of guys ask disappointment what's as I relative was can of that? detail sort ago. maybe hoop and the last level like. wanted the on you sort timing some quarter's talked the sort of planning about of on some as to of, you're this call, progress. would distributor to you just just days making curious, I XX in could maybe driving maybe you investments Cheryl, the base whatever where not distributors around status hard of of your it talk And all the I'm you

Cheryl Blanchard

are is out. fully a we not same distributors fully to I focused the very force are Thanks, opportunities do very the we've us, you we see understanding as and them are addresses them. them possibilities for the hybrid advantage direct we've XXXX seen of Absolutely. we not taking Mike. full compromises the necessarily of great It as on when around growing a that make are for though Yes, up lot time that deploy see appreciate distributors know We model chosen signing on we really we a really the some a that At of reasons. what distributors have obvious that size other for and there done love the you are of expect getting to that to you question. work fixed in very the cost that number surgeons not do. because have business they that those the are these doing nicely driving tell products see focused they sales really you.I'll are. we to What would business large go

that our are get advantage geographies want a with on make started to we've we're focused folks And so so situations going and it of the it's ourselves to kind to like again, solutions, of but growth some to that truly sure and into limited approach to reps is analytics that be sure that specific focused a speak the medicine able up portion going excited see pretty approach we something the sports we not with regenerative of those move a kind make else.We specific feel And where highlight sports next really really we're is hiring a that. those making And and med I'm careful this very process, data specific sales I some hiring we're that to portfolio. to and focused of take be to taken to and effort. direct geographies understand using moving numbers, regenerative and the use of year very fully seeing focus we're we sort not we're everywhere solutions. before that we running just seeing to

Michael Petusky

like I look don't the but sort currently the change them that -- managers, this of, at sales change that relationships, is number all if distribution manage strategy out? know call those you you that the guess of -- as essentially, numbers does Will folks I

Cheryl Blanchard

folks with managing a the network, on the including RevoMotion. are we reason And launch doesn't. recent of the No, And that with for is have Arthrosurface distribution it product across those lot that the going Solutions. Joint

opportunity work to regenerative making some And have we we're have the execution. will to this we've we drive terms be current won't committed to I -- continue comment we're are additions we really now are focused that we'll investments that -- focus sports of So commercial that while in solutions. we the shifting in in our -- additional driving we take geographies and force to very those hybrid sales

this. So doing we're not adding to OpEx by

Michael Petusky

said that I the for it's everyone. but in prepared good a it reminder I appreciate think remarks, you when

is saying, but -- the I want patch, to did could confident, just hey, impact standard know could care. and the a be I I early So guess about as excited that products, talk Integrity make 'XX? of you essentially you about I are have real can kind confidence quick, material obviously of year why full you new this ask this actually product all mean, the Cheryl, guys on that as

Cheryl Blanchard

was some coming product tell number up unmet We a a from strength of heard does clinicians existing addresses you And provide in pieces really today I'll of collagen that that or just of the significant the the retention which intraoperatively. toward Yes. that with the strength, energy confidence we wet, feedback patches first-generation things. suture kind ensuring it from the clinical true don't were are comes one market especially we of when big gets put it immediately needs.

we that. address So

We was also give a There and to a the instrumentation the addressed be for feedback of fixation capacity. surgical around -- greater always regenerative the hear to surgeon that efficient simplifying We've lot that. the and ability confident in increasing technique there's need also obviously and repair.

really labs number of the we've pull And incredibly a gone already with from surgeons this a surgeon to done come and so number from community we're really directions. get into their practice. We've a and at labs of all feeling have well, it the

our what on. that's based So is really confidence

Michael Levitz

team the quarter. first pleased plays when Cheryl in it's is be so Integrity were ramp the that as that I'll first we clearance question XXXX we product very get here her more in take the here we double-digit We real expect and launch for seeing continuing quarter.We're launch from direction other it would growth in remains to speak set that. distributors. and excited our But and that really a in But said new be we'll expect the Mike, XXXX excited, on solid I seeing we you of normal We're from everything able said, the get pull as on role going to community to track our And the normal your on Cheryl that to a are said, could a get comments, and product. in around the cognizant XXXX in product, the part schedule. to did it's new impact very surgeon and to we're to a

roll how year. And it we're that next so driver very meaningful about expect growth the being of to we we're but do to a thoughtful be going double-digit out,

Michael Petusky

just then, Mike, I Okay. guess, And me for for last a now. one

X% think did than commentary to what I you right? your heard Was adjusted that not and follow next Or range this say year. some EBITDA, year So on that actually to meant I X% then number I say? you higher that

Michael Levitz

have single you that digit said year. that low our correct. was Mike, I Yes, expectation this

products drive that have and growth. the even driving the growth margin year have on Cingal. into But the we spending next we We date as EBITDA even with next we'll with we to year, focus may all stabilizing hopefully the are launched earlier that is the revenue now raised the this want -- our confident the it feel need to be FDA. now from of increase to that next the different expect to things for our have we range year. we We see things to we're to to of progress and expanding we in are We X% here year that doing next year, year, we it we'll drive X% launching now get to that say feedback go and as some

Michael Petusky

you in have One by it Is you if any front like CapEx $XXX,XXX? quick housekeeping of you exact figure? have have this $X.X any you. chance there Do that chance beyond million the

Michael Levitz

$XXX,XXX. exact figure was The

Michael Petusky

Perfect. $XXX,XXX.

Operator

question next with George Stephens, comes our from Sellers And Inc.

George Sellers

contribution X-Twist? additional start quarter. some a the the contributed you quarter. details Could Congrats RevoMotion you as the with just Maybe well on in segment to from the good Preservation Joint And noted in on give Restoration and quarter.

RevoMotion? for guidance, curious how much related follow-on of Just to of how material that the to the launch that, contribution then And raised that as a is? is

Michael Levitz

George, this is Mike.

X-Twist what growth. growth that's your RevoMotion, quarter. So double-digit first -- was around driver the that the And us would the drove that I to primary say in the of of and first the from question contribution part

strong international really saw the in preservation quarter. revenues also in We joint

Now that through distributors. of of is quarters. I this previous our will say that some part We've about That talked business is timing. in

quarters. you sometimes And can so lumpy get

second quarter, lower strong here. a so had quarter And a a strong then we third quarter first and

of that so is nice a but our year. is of business full part part And for that business, growth lumpy our the a

-- we've what on see growth RevoMotion -- is and that coming Biocomposite release seeing excited the of part as with market PEEK the remind now to of been together. RevoMotion, So me in first X-Twist there.Can we year. It's in X-Twist are nice the the full driver X-Twist was of since primary to September the and first you next said, quarter your we're momentum into question? on moved second growing and part the market

George Sellers

Yes.

increase to how the guidance, the of that is full Just much commercial curious RevoMotion? launch the in of on related

Michael Levitz

Okay.

we So across guidance the increased business. the

which in double-digit the by by performance and Management, where Monovisc, United driven the international but increase $X by year-to-date Cingal, to and expectations guidance the Monovisc the million mostly led was over continued we States on growth. So led we increased by in see OA the Pain

now So risk also we market, like with that but low we've associated end in increase, was raised and products the those the biggest driver of on retired of and those new preservation that the our products. joint the range now are launched RevoMotion

again, growing the release September. here in we're for just launched we the market And So seeing momentum X-Twist. RevoMotion for

George Sellers

Yes.

already of and your using one, the to question are revenue on I patch in guess rotator Okay. figure different many How XXXX? already be And a many out maybe really helpful. cadence system, current that then cuff a the. using customers Integrity how what contribution I'm of growth a That's really system. obviously, patch device? And trying are but might that surgeon

Cheryl Blanchard

is patch a currently some significant that primarily there now. mean, that using and frankly number what are I using is patch. fairly it's leader George, that's the market is one right anybody Yes.

do with very how months wait our who very and go their of a that who practice. terms couple, well, they get I this meetings surgeons to for product ramp, a into to patients the very see to patients do, they're right their now familiar for having make adopt like a excited this kind we of fully are learn, it, serving training uncommon with not some few are their It's sure they're before good In mean want surgeons education, system.

in needs some going launched we I excited get product But there's they're QX. the next pretty unmet as a think addresses have, I understanding this to that they adoption expecting So that very see significant it. all again, this with year and over we're think get real to

George Sellers

run And your as perspective. rate both maybe the Mike, [ look on sort good R&D OpEx. one some of rep SG&A the quarter going a I'm ahead, costs? direct cost sort going and That's some on forward of some helpful. is curious, As line? switch costs really for Clearly, on you MDR-related Okay. from third maybe ] out controls also line sales we good the

Michael Levitz

pleased to are savings the I'd stabilize bottom say, first, OpEx XXXX, are to able yes, the that's look our be drive side, and line and to grow on to business. Well, as drive as what's we going OpEx expecting into we we the here we

that we the took a there the of were was quarterly of couple savings -- -- that there quarter, a decision. we normal have was the charge the that in some and no to took not we OpEx. terms by discontinued we In opportunity able drive system to phasing were cash make third things stalled that be phasing, a improvements that project and in making quarter software process project had a but improvements and to was other for One charge within

that was a just some in compensation quarter in around we upon from of was quarter-to-quarter other million. specific phasing stock basis quarter. the R&D, that some quarter, -- the so have the business. the about had been of quarterly that depending terms side We in that works. thing was reflected then some can the lumpy And the the $XXX,XXX forfeitures of And of on QX.In in is changes $X.X making So the be

are in through to date. process wrapping success having the getting real with how up that been We and we've MDR pleased

of that far expect continue to quarter. is MDR in a to less not yet of launched, yet that.But Integrity not part launch be investment that's story we because going here is an of first had finished so and our the successes we've So to the from retiring going in standpoint

year. will whatnot we'll the the year, And continue of to see those and next so end wrap-up of down through and start then that coming kind costs

hope that's helpful I So directionally.

George Sellers

really Yes. helpful. That's

Operator

question our & Sidoti comes Sidoti from Jim And with next Company.

James Sidoti

hear that. about Sorry Can now? me you

Cheryl Blanchard

We can.

James Sidoti

Great. Okay.

primarily So that charge. comments the about software Is SG&A? following in on just up that

Michael Levitz

Yes, it is.

James Sidoti

were that that a detail give the developing just you software us was little stopped? what can you And you

Michael Levitz

we cost-effective have a allocating money the the it a use looking not it was also more systems project, we're the that and spend place look, as made process we're where -- to sense resources solution. because to multi-year found was that It the have to improvements had decision side. the we And we operational more to And commercial pursue we on project in support we business that software across already were constantly and made at drive and able stalled. our

we discontinue that And this made so project. decision software the why quarter that's to

James Sidoti

to how the how give can will and to And think expect Okay. quickly long many -- sense bring on how take ramp up? or you sales some it them folks then for you on would team, you us

Cheryl Blanchard

augment just regenerative started sales just just Yes, going going really targeted. geographies This in performance and Jim, seeing be I'll and hiring. tell be that everywhere focused the we've seeing you, focused in a very, It's we're where country. else already of very we're the not to hybrid force. is to and on the It's kind to few sports

we'll So But more process it that and next go continue will the begun, into I we think forward. be year. updates as has providing on

James Sidoti

X-Twist. Integrity preservation, in at from you and if then and early you quarter, that's And without for the right. very contribution reported cycle launch XX% any sales joint new All look the growth and RevoMotion folks, and for the you're

but to disappointed -- fair you from joint that's is said be a you preservation you know Would term. it the growth, pretty So double-digit say didn't I that general XX%? if accelerate

Michael Levitz

with And very that driven benefited we the how of was to pleased, and of given, that being that new are question. in number. growth we of that take from said, also new That growth double-digit international sales, timing products. early lumpiness the XX% business. the said, see is was that strong nature -- growth quarter because some I'll of product by the as were Mike. it's you launches that these We Jim,

guidance XX% that's growth preservation. our why reflected in the -- for so that's in year And for to the year joint of X%

is, that terms have the around It's now the guidance more the we're can expect in give but still we'll ramp great on feedback and it's year we're here takeaway great I think that early, clarity specifics see that getting. initial the perspective to to XXXX is we market. what growth next But products these do our So to double-digit key in of in from be excited It for year. joint full preservation.

Operator

George And our follow-up today from is next a question Sellers.

George Sellers

net how think and XXXX cost that I'm additional with point, much that we curious, the these you for controls mix of margin about improvement of product associated breakeven the just nearing question. earlier? that to Thanks just maintaining income related mentioned as is new some versus positive launches

Michael Levitz

a great That's question.

this right you at trending breakeven quarter. we where If now we're look hit

that we of we've that. sight So doing think I to line demonstrated have

XXXX, we of I a that have we think lot revenue as we're things expecting and healthy exciting happening growth to in said. be

I a new products line are higher in level, all gross our think good within margin it's that multi-year question. The with targets.

also the perspective.I as And matters, that managing is think continue helpful ramp, too. those us so side to to mix cost very that new a from products

that far, So frankly, I from it's just now. that think --we're doing right not

can finish the in products, of to it's a think new now finished what growth. the these driving manage we I we needed spending. Having combination

now control results in I think those we so to that done XXXX. work our did here it's that deliver we've on And the within

George Sellers

thank for Great. the taking Okay. additional again And question. you

Operator

Research. Mike question Barrington our And Petusky of next is a follow-up from

Michael Petusky

out Mike, balance And sort I'm I guess, of in the up part forward? to going positive with I story your the be here. sort cash would a bunch of positive are things a as of is mean seemingly see just hope that you free going be that the and converging of sort regular cool, couple Just look quick of to go cash ones. wondering quarter. a free the cash generated of

Michael Levitz

growth were yes, with it quarter. all, business. the Well, I'll pleased I of in the the in the health And of we first cash think very say, reflects

of couple terms what guidance, things. specific a of to In want I think cash is I say

given manufacturing that. that interactions our would should more guidance I all next think from That the improving believe charges other to the with we Again, -- upon think next about that the part, out that.The had to If giving I already comfortable definitely have in how guidance right I moving just we in comes and Again, year. as next first of make of and help year. the will that all, we're qualitative I profitability CapEx, that, associated year, may time already apart of in in we'll be we're place to depends timeline we're at need suggest next some from side. But investments be direction good that But to this some in we the be able the need see the this we cash in a point going line But FDA. to that the didn't is year. we've good spend the impact support on because year improving solid direction. flows it's place and feel moving non-recurring we what talked to will opposed the cash a things year Cingal this it cash quantitative. right with

Michael Petusky

look on greater going these of critical overall quantify here? products at that and to since 'XX way, communicate Integrity et cetera actual contribution then thesis actual I'm of and one or what curious the thought new is about are sort RevoMotion, and questions how just on and to any in all terms out of Great. X-Twist give in to you of some me the seems report Have how sort guys can the you're was -- some you it quickly guys as everybody ramp sure getting so Obviously, quarter. And are to, the given that trying just you more. some detail in of

Cheryl Blanchard

valuable our business way I we Yes, reporting -- trend. question. are small information provide still mean, that will we're the obviously enough make is we that the that just appreciate I sure to

these Mike. lot of think As contributions then consider definitely we that products continue we a to making we'll out, grow reporting see we and forward, going as that worthwhile are

Michael Petusky

you Ladies and session today's attending all gentlemen, today's presentation. We conference concludes call. this thank for question-and-answer and today's

You lines, may your a evening. now have wonderful and disconnect

Anika Therapeutics (ANIK) 2 Nov 232023 Q3 Earnings call transcript