Scienture (SCNX) 27 Jul 212021 Q2 Earnings call transcript

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Trxade Health’s Second Quarter 2021 Earnings Conference Call.

During today’s presentation, all parties will be in a listen-only mode.

Following the presentation, the conference will be open for questions. accompanying the call market release the issued press of close today. earnings this was conference at The The quarterly June report, company's filed results which the includes additional operations with the information for quarter earlier ended SEC XX, was and XXXX, today. regarding the today call Founder, Health's Suren Trxade's Executive Chief Financial Chairman Doss, and Howard is as Chief Officer. Officer, our On and Ajjarapu; website The XX days next available for replay the link. of this MEDS the call under company's and NASDAQ webcast will be the on also website more includes industry information. company The supporting turn to the like call over Officer. I'd Doss, time, this the to Howard company's At Financial Chief is Howard, the floor yours.

you, joining to like Thank operator, financial today. and quarter second for thank results you us welcome call. you to XXXX conference I'd our

include, annual on subsequently the Securities These factors Please call and furnished webcast. and any Form uncertainties and our X-K. Form risk XX-K quarter. Our to second reports issued and to financial statements operations. we speak risks, XX-Q that second our These press and operations most on only the Form or performance was as and statements refer of such the announcing limited filed the including forward-looking do may of our the of SEC the results press on the are made release to impact including on the future company quarterly with results quarter webcast including COVID-XX forward-looking performance the company's statements the results and revise XX-Q, estimate the or the release, our to website. for on file project We've in posted date include that press company and no the the obligation and business not Exchange of press hereof, the is statements. on market of company, statements release assumptions. Commission, to, future also for outlook report assumes subject continued close and call Form or potential These this release today be guarantee Statements after of but recent are documents not today's the statements and

assumptions such information actual differ in risks may that statements. forth materially uncertainties For to those from and set on results and cause

today's believe call measures, results. addition as to useful measures discuss of to In will in performance. not non-GAAP or measures considered from addition, financial webcast, GAAP substitute which and should we a in isolation are during Trxade's for These non-GAAP we be and supplement

financial measures, our with otherwise You results GAAP Suren for can the Unless find floor non-GAAP additional the Ajjarapu, to this press of call turn fiscal call is will to the time, XXXX. comparable like results to Chief Executive this Officer. company's be release. these stated, regarding over period comparisons all the comparable including reconciliations Suren, our yours. At in earnings disclosures in I'd

has company for to growth Howard. strong year supporting you, innovation, exchange foundation the success ongoing its business a the challenges working platform. we the core Despite XXXX pandemic, pharmaceutical future posted drive Thank building supply segments. of to by were the telehealth of COVID-XX pharmaceutical drive as to the telehealth forward incremental we in been continue our complementary margin strength while able position chain to

indispensable pharmacies continue of telehealth suite our platform with comprehensive affiliated independent health company, from to our a to services empowering to local exciting as technology our addition, exchange solution, reach them hubs. In broaden make

and who walk would price for as together this transparency approximately and or drug inefficiency the launch in laborious you nationwide. which billion operational detailed the wholesalers of same codes an provide Trxade, with financial independent platform, we a $XX.X independent through launch experience Traditional in independent through walk the for and do process those suppliers and or to the web-based how national transparent no proceeded the own company, quarter, and engagement. obtaining annual I'd others We business-to-business purchasing pharmacies a create are, payment Paired difficult Trxade. results patient XX,XXX like efficient the well paying a our power we market a together We are a through and of pharmacy for to provide and around drug. market pharmacies accredited designed, to and journey new with incredible more pharmaceutical operate we extremely as what selling independent digitalizing unfavorable nation's time-inefficient to frame pharmacy terms, are buying insight identified Before prescription process. delivery you potential bringing the maintained these procurement, the an drug optimization retail uniquely market as of to was conundrum the pharmacies, into for slow

annual lets often they and transparency, suppliers total pharmacies' purchasing with up certain XX% savings a platform a on next-day the know products. up are independent leads suppliers XX% fair Our terms economy and reduction with price of among drug-level fair scale pharmacies We payment competing receiving to and that drug at believe this price to of pharmaceutical from radical costs delivery. competition in

at pharmacists to hundreds across distributors, loss. prices saves compare having of from hours eliminating annually reimbursement of fulfilling a labor saving of platform manually negative a and prescription unnecessary Our

revenue Our model simple. is

through to in X% registered to we on model. attention pharmacies plus from up further independent members To that begun or to to once. QualityCare with and organizations, have we have These a rather in XXXX, hundreds We of XX volume additional GPOs GPO PayPal coming an months. group impact land patient GPO our our of an platform for smaller members Trxade our in up revenue purchasing outsized the a success registered have incredible as deal GPOs, business with paid nationwide, currently May added announce To the platform We XXX spanning expect on pharmaceuticals our pharmacies them pharmaceutical partner XX,XXX around purchasing at X% not given if to exchange, result prices majority states also are their our agreements QX. brand do, many validating the seen administrative which growth. garnering grow as approximately new pharmaceuticals generic and date, of similar a allow of pharmaceuticals in us known of our with GPO first pass Visa-like pharmacies We can secure to in than and model. buying fee from portions dozens,

products We will pharmacies continue GPOs these expect to more to purchase drive the platform. to

over are of auto the and aforementioned pharmacy and Health, subsidiary as into employers include our quarters partners pharmacy nationwide We business build national our focused continue and to network. we our we telehealth The downloads our and In an in Y, with XXXX, broaden strategic increase pharmacy application services partnerships, Health these have Health to such up Bonum our to expect the forward a as total but approximately Bonum XXXX. Approximately signing core X.X% the in telehealth XX move with are complementary in ProAct, technology. XXX stores solution. brand significant telehealth name, we distribution. partnerships leverage since grow users rate. offer X,XXX adoption into on to where Drug, of to turnkey still our success registration Kinney These driving application Brookshire partnerships ramp can strong launch of approximately Winn-Dixie Many network of Big SpartanNash we Rx telehealth as the are the our retail in leveraged truly rate. increasing Bonum second adjacent our the stores channels patient of the competency independent registration quarter come mail relationships rollout numbers turning Grocery, well with immense to the platform to phase X.X% and reach recently, year in downloads for an strategic XX,XXX patient of approximately as complement to all the expect marketplace to most Health anticipate an in number to Bonum had states thousands

that partners. into paid continue lab Health offering, us integrate ramping Bonum We directly digital medical drug remote-patient prescription key These the with markets we're with results into exciting electronic partnership solutions direct-to-patient virtual retail stream alongside new access SingleCare, through to capability provide including a enhancements up, patient coupon new platform accelerated and the enterprise our Bonum to Health product our marketing into records the with our strategy monitoring.

MedCheks, include additional testing which passport local, encountered international has app as We're and the new regarding headwinds mandates. requirements rollouts has subsidiary, national government, the health COVID-XX, which for the mask this developed next any a time. continue Our needed evaluating to change steps at

X front, proactive from Officer, walk goal the the to the Howard like investor conferences, we awareness of to now through of On capital Showcase, broader turn key Planet financial quarter some more highlights Chief and I Micro company. with XXXX. the the attending MicroCap XXXX, our LD of would the to the investor of Doss, Financial growing Invitational second market second enhancing all quarter call throughout over our were

same million the gross last a quarter was the expenses million current second million due of in Net primarily in related share in In continued compared effect the of share the revenues in quarter nonrecurring the per million XX.X% loss gross $X.X the per an last platform XXXX gross PPE measure, same Adjusted in million The affect of COVID-XX in the an financial negative Gross net to a pandemic. a quarter of generics. chain XXXX equipment, supply to on brand last revenue the has revenues compared The same XXXX on XXXX PPE, which platform or sales $X.X effect carry to the last direct million $X.X larger XXXX, was drugs. million result loss or in non-GAAP of second XXXX revenues quarter $X.XX diluted which increase of basic of percentage through quarter fee of $X.XX the quarter positive of revenue a year. than from revenue carry is the same in percentage in XX.X% a Operating second brands in year. platform to outstanding supply profit year. compared to revenue. Thank QX, investment the million year. where were to were primarily XXXX products second the quarter second protective you, increased a $X.XX change the lower the in compared margin. XXXX. quarter of million inventory a of million last Suren. profit or was from or EBITDA, million Revenues for to $X.X in was same lower to of wholesaler quarter period. share percentage personal disruption $X.X percentage The has The basic from to the in totaled $X.X This of and year. the profit outstanding generic This decrease loss in of greater $X.X sales, was quarter of as $X.X for Trxade due $X.X $X.X compared

Looking March Cash million at the the with equivalents as cash call of as now XXXX, balance comments. sheet. XXXX. XX, to and $X.X for of back Suren $X.X turn June XX, closing I'll compared million were

Howard. you, Thank

long-term position shareholders. to us the turn continue which complementary telehealth creating as to our such question-and-answer purchasing return to operational group the forward profitability. until operator health We it over forward fellow to holds new passport take session. of Operator? through for I'll businesses addition operating our that, With I a growth. can rapid exciting value continue begin drive believe business that in to pace drive as sustainable we tandem innovation-driven look of near-term future the core what catalysts this We exchange our our the believe execution, organizations, we with for

our [Operator Group. from And with Klee Allen Maxim first is Instructions]. question

the Trxade platform, related For that. questions platform, X to drug

us timing mix these were is have can big And for with can then majority brand existing of switch thoughts while second, to purchases relative your they away away? ones? they the wait go your traditional, the normalization the pharmacies the over new announcement for you -- or And between to exclusive generics they what's these it -- switch one, right to customers are right branded? X contracts a you or or like GPO, get can help a then, over First, where of your and the with can QualityCare of on understand,

Sure, That's great Allen. question. a

comes First of the your from subcontinent generics me and the some the answer of question. Chinese all most Still come let the from as pandemic APIs -- Indian first countries. India, of

side, -- the is on issues. see usually see still still same the prevalent demand those Delta more before of price July, we variants and countries, But in the variant the the month we supply June, at time brand chain as goes in sales up in happen. the the So

versus X% branded less than As you've seen, our revenue the is percentage generic.

for we front pandemic But see got your the that on where the supply and the we can double as whamming revenue So GPO. question as chain. second well is

understanding takes little in started and time this the we May As partnership, value. to process a show XXXX, the them it

to try of XXXX. XXXX beginning probably towards we this So and end of see

Great.

signed some good Okay. And sounds And that be then on which on the of Bonum could top up you Health, gave potentially you very like statistics. Winn-Dixie, others, material.

I you And penetration given how what but think penetration as rates then just telehealth -- that can that customers we like Could have you beginning potential said them, many is I mean? might what have rates like could missed these many the were. say about, into they think them that could go again? your maybe do grow, you how what and so

Sure.

with application into an When look actual Let first, patient partnerships. me registration year, give second In X.X% These downloads numbers rate. X.X% the patient own for you downloads rates. total registration the X,XXX then alone, jump growth. XX,XXX at I'll the approximate back the it's primarily the with we quarter application with are numbers have approximate our we and

considered even we partnerships’ move levels. the have haven't we to members retail through haven't We level even like or because the seen materials the

uninsured up, growth, I just of a and we’ll for example, though this need, main is XXXX. that’s it time reaches patients. bit the in By sign as to the takes the it our underinsured even level address reason time, majority and mentioned, For we retail Winn-Dixie, to the probably see little able focus

[Operator Instructions].

Gene Our next from is Collier with question Securities. Mannheimer

to platform the bit a Suren and update. Howard, business. in little that wanted delve into thanks more I for just

I the the there about weakness of being to with about generics. respect the branded price than fees generics. much much, is When pharma the lower on than drug think talked that, You branded also higher

relative bit can blended talk out little terms rate, basis maybe in patterns? on to or did of blended basis shake historical So combined you a the how a fees

will tag address it. that. I'll after Gene. along also Howard Sure, I let

in the sales If to as has definitely of, see you an look the want revenue you because reason come is getting. the at of the to quarter, we're blended do X% of our we it, you the it close the first then mentioned, quarter the that revenues, to X% else? add increase down [Xx] X.X you're rate. from volume blended to Howard, second -- if when That's actual anything percentage I dropped

price. the went higher not carry brands The through system Yes. percentage dollar volume No, on reflect -- product Gene, not because But on I the is we're that right price does help of does think higher there. you're the the that transaction getting still a system. low through higher when such a

lower the So rate than quarter blended in previous quarters. was this

Big will enough No, that Okay. and be line others, appear when track separate and contracts various there the telehealth that to see would become that? where prior and revenue begin signed able in material be it and us item? to up And to a And with follow wanted makes on considering I does telehealth question, the Y Spartan you've when to this Winn-Dixie, sense. for

first Sure. item. that a We'll it's of to an Until try as quarter separate We're adoption anticipating XXXX. phase. line probably make in it time, the

you there's first I corporate and from and and partnerships. happening more these in can and the to forth, what subscriptions And able give we that's so quarter so into mentioned, be retail trickle It big registrations to store. has are rollouts As down we the can to see XXXX. a conversions purchase on and more

With seems of think revenue Okay. it, other respect have competition do initiatives there's a And and to for opportunity MedCheks, you say, some the digital That's how others. Thanks. or last Clear there? as passport about that lot in, with me emerging you the helpful. the one several health we It then. of call

positioning there. how you're wondering just So

Yes.

if a As political the that mandate other look whether taken a I have whether have headwind a may mask vaccination. or you MedCheks, if it's of -- we specifically if sponsored, to by it and you any revenue for Apple until until be we still live at of you unless the lot per with Stores because a basis. struggles Android almost not of Florida are like headwinds, you government in is penalty the future, -- make mandated unless running it lot have the With up but is ask, in right but or a But model now, coming we it ask or and scan restaurants, $X,XXX kind government. see mentioned, states, employer you App environment even cannot an is our having

vaccination, pushed forth basis. to records and change your you'll eventual through The carrying not did probably it's revenue so growth, that the for So a so way our the end question, see health all of XXXX towards per it. in the scan on it health and answer the but passports the model

And Brothers. from Howard question next Halpern is our with Taglich

with the I quarters now partners out promotions anticipation of to we of, year fourth terms partnerships of working next within this their third begin you are for your stores year? Bonum these In guess, as sign-ups with Health there, in into and head

each we efforts a Sure. time. give program and an same our the individual excellent partnerships point. at marketing marketing Howard, are working on rollout are Yes, and of our that's they

We we to common to the the to registrations. rollouts these are to patient marketing more and goal see more see as more memberships. also and we more increase Yes, and try happen, these expect

Is investment the you've in bit first little down second of Or -- I year? to same a should of that expense at half IT the going of know made type a lot model terms the the in in And continue that we the rate? year. half of of

if wrote products. -- we're that doing IT have not development expenses. for and a most look non the write-off growth of yes, the amounts, sheet, up we the infrastructure but look we if balance investments our of at tapping future it less down, there that these we -- the cleaned based non-GAAP As of are will IT you at be But things we lot

it bit, So down a much. taper but may not that little

the Okay. GPOs, the on carry the be same transactions? And of margins going just negotiated? Trxade my platform understanding type that's Or be under it to and the going from more of is to percentage or

be margin carrying carrying toward. inventory time there the that should be it's and gross it's tech on should the if any a the at It won't We be because platform platform. same

towards know one slanted if blended but the you just transactions volume of X%, one. I pass system, still last about And you rate more even your products? through are Okay. talked seeing a good branded of it's

Yes.

when know percentage. earlier, mentioned out. exact help definitely, I increase at we the I don't saw Howard, me As But first -- compared least to quarter, have we the

of We number give through system Yes. yes, quarter we volume had goes in the through than going don't the system. and transactions really the second the the first quarter dollar the well. that as higher But volume

next Klee Your Allen Group. Maxim with question is from

you follow that wanted just at are to up potential. wait have way you look contract until may to -- the is pharmacies that but these with big the all that so to the GPOs. contract have new you that I can then Is on ends, -- X, a have they and that the when

Or can timing it So sooner? issue? there's that a happen is something

same can It's the we're this important at enough contracts sign itself. we the to are programs And reason the it's make that's a GPO them to as overcome conversion that time, renewal year but the trying so those timing issue, early phase. in getting

you you're coming think much guys? about from back how business your else they about not using hearing they're in anything thinking maybe maybe and of the how customers yourselves using on independent versus pharmacies would And just terms Okay.

increased. twofold. new in XXXX look sorry, pharmacies from after XX,XXX of today, of there pharmacy when months, answer this -- we at XXXX actually, business One, the number independent started independent we March in X actually, pharmacies. the were If to this I'll that independent year, has beginning

time, we and and platform So And same the as smaller increased. of for side other is clinic independent at are on podiatrist clinical like chains. the focusing the number our pharmacy regional

see your on expect has I also. of what to clinical chain grow to question, we grow side So side, pharmacy as the end coming out supply the only normalcy to is, in and we it's as not this business a mentioned, internationally. year it's majority but impact the back issue, the -- towards To expect here we to business unless answer this a And the until as of locally of well go Delta the variant pandemic. should

of turn session. back end remarks. the question-and-answer the with reached to have final now our over Ajjarapu I'll we Suren any And call

firm, earnings to operator. would of you, all happy MZ we're Thank answer reach you. us. than growth. any be progress unable Thank you I and out to We thank organize with a Group, If IR of questions, to who you will on assist continuing call. your look conference our like please to joining also guys forward and update to to more our ongoing call for our

your Thank for you participation.

a day. You may now good disconnect. Have